THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Pohnpei v. M/V Miyo Maru No. 11,
9 FSM Intrm. 316 (Ponape 2000)
STATE OF POHNPEI and POHNPEI
ENVIRONMENTAL PROTECTION AGENCY,
M/V MIYO MARU NO. 11, CAPTAIN HISAMITSU
FURUTA, MASAYO FURUTA and NATIONAL
FISHERIES ASSOCIATION OF JAPAN,
SAPWUAFIK MUNICIPAL GOVERNMENT,
CIVIL ACTION NO. 1994-136
Andon L. Amaraich
Argued: January 6, 2000
Decided: January 26, 2000
For the Plaintiff: James Woodruff, Esq.
Catherine Wiehe, Esq.
Assistant Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941
For the Defendants: Stephen V. Finnen, Esq.
(except Nat'l Fisheries Ass'n) Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941
For the Third-Party Defendant: Ron Moroni, Esq.
P.O. Box 1618
Kolonia, Pohnpei FM 96941
* * * *
Civil Procedure ) Interrogatories
Subject to limitations found elsewhere in the rules, Rule 33 defines the scope of information a party is required to provide when answering interrogatories as such information as is available to the party. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 324-25 (Pon. 2000).
Civil Procedure ) Interrogatories
Rule 33 provides an answering party with the alternative option of making records available if the burden of gathering the information would be substantially the same for either party. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 325 (Pon. 2000).
Civil Procedure ) Discovery
When a represented party is required to respond to discovery, the party's attorney must undertake some effort to ensure that the client makes a reasonable inquiry into the subject matters covered by the given request. An attorney's responsibility to actively participate in information gathering for discovery purposes is heightened when the client is not an individual but a legal entity such as a corporation or a governmental body. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 325 (Pon. 2000).
Civil Procedure ) Discovery
Where the attorney is a party's employee, who has at minimum a degree of control over the party's procedural approach to prosecuting the lawsuit, proper compliance with discovery obligations may require him to personally assist in a diligent search for information available or under the possession or control of his client. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 325 (Pon. 2000).
Civil Procedure ) Interrogatories
If a party satisfies its duty to make a reasonable search and diligent inquiry for discoverable information contained in an interrogatory and comes up empty, it is entirely satisfactory to respond by stating that the information is unknown. When this is done, however, the responding party should further indicate whether the information is believed to exist but has not yet been located or that the information cannot be provided because the responding party does not believe it to exist. If the latter response is provided, the responding party should further indicate whether the information was ever believed to exist and if so, where, when and in what form. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 326 (Pon. 2000).
Civil Procedure ) Interrogatories
It is also appropriate for a party answering "unknown" to an interrogatory to specify that discovery and investigation continues, and that the party will provide updated answers as soon as the information is located or in compliance with Rule 26(e)(2). Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 326 (Pon. 2000).
Civil Procedure ) Interrogatories
Whether a party is directed by a court order to answer an interrogatory or not, it is never acceptable not to provide a response unless a motion for protective order is timely filed under Rule 26. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 326 (Pon. 2000).
Attorney, Trial Counselor and Client ) Attorney Discipline and Sanctions
An attorney can be sanctioned in his individual capacity for willfully violating a valid court order, for causing the needless consumption of substantial amounts of the court's time and resources and for
otherwise engaging in conduct abusive of the judicial process. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 327 (Pon. 2000).
Civil Procedure ) Discovery
The choice of an appropriate sanction to be applied when a party fails to comply with a discovery obligation is committed to the court's sound discretion. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 327 (Pon. 2000).
Civil Procedure ) Discovery
Civil Rule 37 provides sanctions for the failure to comply with a discovery order, including making such orders in regard to the failure as are just. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 327-28 (Pon. 2000).
Attorney, Trial Counselor and Client ) Attorney Discipline and Sanctions; Civil Procedure ) Discovery; Civil Procedure ) Sanctions
When Rule 37 sanctions have proven futile in resolving a discovery dispute and because they do not provide a remedy for the waste of a court's time and resources, a court may invoke its inherent power to control the orderly and expeditious disposition of cases and proper compliance with its lawful mandates. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 329 (Pon. 2000).
Attorney, Trial Counselor and Client ) Attorney Discipline and Sanctions
When a court has issued no sanction in response to a discovery motion and sanctions of attorney's fees and costs in response to a second motion and when a third motion reveals that the attorney's behavior was then at the root of the problem to be corrected, an attorney's knowing and deliberate violation of a valid court order may result in personal monetary sanctions against him because while the court is cautious of exercising its inherent powers to issue personal monetary sanctions against an attorney, it cannot and will not tolerate continued discovery abuse. Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 316, 331-32 (Pon. 2000).
* * * *
ANDON L. AMARAICH, Chief Justice:
1. Introductory Facts
This lawsuit arises from the grounding of the fishing vessel M/V Miyo Maru No. 11 (vessel) on the reef of Sapwuafik Atoll in Pohnpei State (Pohnpei) on August 11, 1994. On August 22, 1994, Pohnpei filed a complaint in Pohnpei Supreme Court against the vessel, its owner Masayo Furuta and its captain, Hisamitsu Furuta (the Furutas). The complaint alleges that the Furutas negligently caused the grounding of the vessel on the Sapwuafik reef. Pohnpei claims that as a result of this grounding submerged lands, reef and marine life belonging to the State were harmed and destroyed. It also claims that further damage was caused by petroleum products from the vessel spilling into Pohnpei State waters.
On October 20, 1994, the vessel and the Furutas removed the action to this Court. On February 21, 1995, the Court ordered this case stayed pending completion of administrative proceedings before the Pohnpei Environmental Protection Agency. On July 3, 1996 the Court lifted the stay after the parties notified the Court that they were unable to resolve the case in the administrative proceedings.
On July 19, 1996, the vessel and the Furutas filed an answer to the original complaint, and the Furutas filed counterclaims against Pohnpei and a third-party complaint against Sapwuafik Municipal Government (SMG). The counterclaims and third-party complaint set forth claims against Pohnpei and SMG, respectively, for negligence, false arrest/imprisonment, and violation of the third-party plaintiffs' rights to due process.
On August 9, 1996, SMG filed an answer to the third-party complaint and a counterclaim against the vessel and the Furutas. In the counterclaim, SMG asserted legal and traditional rights to the reef, submerged lands and marine life harmed by the grounding and claimed entitlement to the same damages sought by Pohnpei. Subsequently, SMG sought discovery from Pohnpei on the issue of reef ownership in an effort to establish that it and not the State of Pohnpei was rightfully entitled to all damages caused by the grounding.
As is further set forth below, this discovery was the genesis of two motions for sanctions filed by SMG, one of which lead to an order directing Pohnpei to answer certain interrogatories under terms set by the Court.1 After Pohnpei failed to comply with this order, SMG filed another motion seeking sanctions on the grounds that Pohnpei had failed and refused to provide discovery despite being ordered by the Court to do so. This final discovery motion, SMG's third, prompted the Court to issue an order sanctioning Pohnpei's attorney, James P. Woodruff, Esq., on the basis of what appeared to the Court to be willful disobedience of its discovery order. The sanctions, however, were withdrawn when the Court granted a motion to vacate filed by Pohnpei and Mr. Woodruff. The motion to vacate argued, among other things, that Mr. Woodruff was not given adequate notice that the Court was contemplating sanctions against him personally and was deprived of an opportunity to be heard on the matter. The order granting the motion to vacate stated the Court would schedule a hearing to provide counsel with an opportunity to be heard on the issue of personal sanctions against him. [Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 150, 153 (Pon. 1999).]
As described below in greater detail, the present order follows a hearing on the Court's motion to determine the propriety of sanctions against Mr. Woodruff.
2. Court's Motion for Sanctions
On January 6, 2000, this matter came before the Court for a hearing on the Court's motion to determine whether James P. Woodruff, Esq. should be sanctioned for disobedience of a court order and for abusing the discovery process. The hearing was noticed by an order filed and served on December 21, 1999. The order specified that the hearing would be held to determine whether Mr. Woodruff should be subject to civil sanctions as compensation to the Court for the time and resources it was required to expend dealing with the matter of the State of Pohnpei's failure to comply with an April 8, 1998 order directing Pohnpei to answer interrogatories propounded by Sapwuafik Municipal Government (SMG) on July 9, 1997. The order also indicated the Court would consider the issuance of compensatory monetary sanctions payable by Mr. Woodruff in his individual capacity as an attorney representing a party to this action and having general supervisory authority and/or direct responsibility for controlling this litigation and ensuring compliance by the State of Pohnpei with its discovery obligations. Finally, the order specified that the Court would seek to determine if the State of Pohnpei's lengthy noncompliance with the April 8, 1998 discovery order was caused in whole or in part by Mr. Woodruff's willful, intentional, reckless, or grossly negligent disobedience of the April 8, 1998 order.
The hearing on the Court's motion was attended by Mr. James P. Woodruff, Esq., Attorney
General for the State of Pohnpei and Ms. Catherine Wiehe, Esq., Assistant Attorney General for the State of Pohnpei. Sapwuafik Municipal Government was represented by Mr. Ron Moroni, Esq. and Mr. Stephen V. Finnen, Esq. appeared on behalf of the M/V Miyo Maru No. 11, Hisamitsu Furuta and Masayo Furuta.
3. Procedural History of Discovery Issues
The hearing on the Court's motion to consider the issuance of sanctions against Mr. Woodruff represents the culmination of a time consuming and largely unnecessary discovery dispute which began when SMG propounded 34 interrogatories and a single document production request on Pohnpei. This discovery centered on issues of competing ownership rights to the reef, submerged lands and marine life as between SMG and Pohnpei.
On September 4, 1997, following the expiration of the initial discovery due date without having received a response,2 SMG filed its first motion for sanctions pursuant to Rule 37(d) of the FSM Rules of Civil Procedure. Because Pohnpei had failed to provide any response, SMG moved the Court for an order deeming as admitted facts raised by the discovery pertaining to SMG's claim of ownership to the reef. On September 26, 1997, the Court issued an order denying SMG's motion for discovery sanctions but directing Pohnpei to respond to SMG's discovery requests. In denying sanctions the Court stated its belief that those requested were unduly harsh. It went on to state as follows:
the Court does not condone the State's dilatory conduct in this litigation and will not tolerate further delays in this case based upon personnel issues in the State Attorney General's Office. Pohnpei State has had well over two months to respond to Sapwuafik's interrogatories, and has given no indication that it can or will respond in the near future.
Order at 2, lines 14-20 (Sept. 26, 1997).
Recognizing that the State did not provide any response to the discovery at that point, the Court ordered Pohnpei to respond fully within thirty days or face possible imposition of sanctions.
On October 27, 1997, Pohnpei served and filed answers to four of the interrogatories, objected to the other discovery requests and moved for a protective order. No meaningful information was disclosed in these responses and the objections were asserted although they had previously been waived for failure to initially respond within the time permitted by the rules of civil procedure.
On October 28, 1997, SMG filed a renewed motion for sanctions and requested a hearing and expedited consideration of the pending motions. On November 6, 1997, SMG filed its opposition to Pohnpei's motion for a protective order. On November 12, 1997, Pohnpei filed a response to SMG's renewed motion for sanctions.
The Court heard SMG's renewed motion on December 2, 1997, along with Pohnpei's motion for protective order. On April 8, 1998, the Court issued a thirty page order, thirteen pages of which were devoted to the discovery dispute. The Court pointed out that if Pohnpei found the discovery objectionable or thought a protective order was called for, the objections should have been timely raised and the motion should have come before the discovery was due. Pohnpei v. M/V Miyo Maru No. 11, 8 FSM Intrm. 281, 286-91 (Pon. 1998). The Court concluded that subject to certain stated limitations,
Pohnpei must answer the interrogatories within thirty days. Id. at 296. Essentially reiterating portions of its September 26, 1998 order, the Court also stated the following:
The Court will not order that certain facts be designated as admitted at this time. However, the Court will not tolerate further delays in this case, and recognizes that Sapwuafik was required to make two motions which would not have been necessary had Pohnpei State complied within the time limits set forth in the FSM Rules of Civil Procedure.
Id. at 291.
On July 14, 1998, counsel for the vessel and the Furutas filed a motion to withdraw as counsel of record. A hearing on that motion was held in chambers on August 25, 1998. It was attended by Mr. Moroni, Mr. Finnen and Mr. Woodruff. In addition to hearing argument on the motion to withdraw, the Court entertained discussion on the status of the case which included the subject of discovery. Mr. Moroni indicated that Pohnpei's responses to discovery remained outstanding. Mr. Woodruff acknowledged that Pohnpei still owed SMG interrogatory responses and suggested that they would be forthcoming. However, they were not.
On January 29, 1999, SMG filed its third motion for sanctions based on Pohnpei's failure to answer the subject interrogatories. SMG's motion was "based on the ground that the State of Pohnpei has three times refused to answer interrogatories propounded by Sapwuafik, despite twice being ordered by the Court to do so."
On February 11, 1999, Pohnpei, represented by Mr. Woodruff, filed a response to SMG's third discovery motion in which he confirmed that Pohnpei had been ordered by the Court to answer certain of SMG's discovery within thirty days of April 8, 1998, that counsel for the State of Pohnpei failed to so respond and that such failure was not excusable. He concluded by urging the Court not to punish the State "for the neglect of its past and present attorneys" because neither SMG nor the State believed that the records sought by SMG existed.
On February 18, 1999, the Court held a status conference in chambers which included discussion of SMG's third motion for sanctions against Pohnpei. As he had done during the August 25, 1998 status conference, Mr. Woodruff again acknowledged that the discovery was overdue and that the Court had previously ordered Pohnpei to answer certain of SMG's interrogatories. He also reiterated the representations in Pohnpei's written response to SMG's motion ) that he had no excuse for not answering the interrogatories.
On March 24, 1999, the Court issued an order imposing monetary sanctions against James P. Woodruff, in his individual capacity as counsel for Pohnpei, for willful disobedience of the April 8, 1998 order and discovery abuse. At the time this order was entered, eight weeks had passed since SMG filed its third motion for sanctions and Pohnpei had still not answered the interrogatories. In ruling on SMG's motion and deciding to impose sanctions on Mr. Woodruff individually, the Court stated the following:
In its third motion for sanctions against the State of Pohnpei, SMG requests the Court to designate as admitted certain facts concerning ownership of the reef allegedly damaged as a result of the M/V Miyo Maru grounding. SMG points to the State of Pohnpei's abhorrent behavior in failing to answer discovery and its willful continuing disobedience of an order directing it to do so. Since the current situation appears to exist solely as a result of contemptuous behavior by the State's former and present counsel,
however, the Court believes the issuance of sanctions punishing the people of Pohnpei would be unjust. The more appropriate action at this time is to sanction Pohnpei's counsel to induce him into finally providing the interrogatory answers long overdue. If compliance with this order is not made, the Court will then be left with no other option than to issue the sanctions sought by SMG in the present motion.
Order at 3, lines 19-26, at 4, lines 1-7 (Mar. 24, 1999).
The Court went on to explain its rationale for issuing the sanctions in the discussion portion of the ruling as follows:
Eleven months have passed since the Court ordered Pohnpei State to answer SMG's interrogatories. Flagrantly disregarding that order, it has not done so. In responding to SMG's third motion for sanctions, counsel for Pohnpei State, James Woodruff, freely admits that he and his various predecessors at the State Attorney General's Office have no excuse for failing to comply with this Court's discovery order. He goes on to explain that there are no known documents responsive to SMG's discovery, ignoring the fact that the Court's order of April 8, 1998 directs the State to answer interrogatories, not to produce documents.
Mr. Woodruff has had approximately eight months constructive notice of the discovery order at issue, having been directly involved in this case since at least August of 1998. The record also demonstrates he has had actual notice of the order directing his client to answer interrogatories since January 29, 1999 when SMG served its third motion for sanctions. In view of these facts, the Court concludes that his decision not to comply with the order is deliberate and willful. 3
The Court views the position taken by counsel for Pohnpei State as tantamount to an outright refusal to comply with a valid order, leaving it with few options at this point. Therefore, James P. Woodruff, Esq. is hereby ordered to personally pay monetary sanctions for his willful disobedience of a Court order in the amount of $500.00 within sixty (60) days of the date this order is entered. The sanctions shall be made payable to the Chief Clerk of Courts for the FSM Supreme Court. These sanctions are not to be paid by Pohnpei State. They are the individual responsibility of James P. Woodruff, Esq.
Further, Mr. Woodruff is ordered to file and serve complete non-evasive answers to the interrogatories identified in the order of April 8, 1998 no later than twenty (20) days from the date this order is entered. Failure to comply with any provision of this order may result in sanctions against Pohnpei State as requested by SMG's current motion as well as possible disciplinary proceedings.
Order at 5, line 26, at 6, lines 1-26, at 7, lines 1-12 (Mar. 24, 1999) (emphasis in original) (note 3 originally labelled as note 2, but text original).
On April 5, 1999, Pohnpei and Mr. Woodruff filed a motion to vacate the March 24, 1999 order imposing sanctions. The motion argued that the sanctions were punitive in nature, that Mr. Woodruff
was not given notice of the Court's motion to sanction him individually and that he was not properly notified that the Court would be acting on SMG's motion for sanctions during the February 18, 1999 status conference. Mr. Woodruff also argued, among other things, that such a sua sponte motion by the Court without providing him express notice of its intentions and an opportunity to be heard violated his due process rights.
On April 13, 1999, Pohnpei filed and served answers to SMG's interrogatories in compliance with the Court's order of March 24, 1999 and under the terms specified in the order of April 8, 1998.
On May 17, 1999, the Court issued an order clarifying its order of March 24, 1999 and granting the April 5, 1999 motion to vacate the sanction order. In an effort to further explain its reasoning on the March 24, 1999 order, the Court stated as follows:
On March 24, 1999, this Court issued an order imposing sanctions on counsel for Pohnpei State, James P. Woodruff, Esq., for what it concluded was willful disobedience of an eleven month old discovery order. On April 5, 1999, Pohnpei State and Mr. Woodruff filed a motion asking the Court to vacate the sanction order. The motion to vacate argues that the sanctions at issue constitute a fine for criminal contempt, are punitive in nature and were issued in violation of Mr. Woodruff's constitutionally protected due process rights. Counsel also argues that this Court cannot issue sanctions such as those involved here against an attorney representing a party to pending litigation, unless all the procedural safeguards required in a criminal contempt proceeding are followed. He claims that an attorney whose conduct causes the Court to contemplate the issuance of sanctions, must be permitted the assistance of counsel, the right to call witnesses on his own behalf and must be afforded the right to refuse to testify against himself.
These arguments demonstrate a misunderstanding of the nature of the sanctions involved here and misapprehension of the Court's rationale for issuing them. Moreover, the motion does not fully address the scope of this Court's powers to sanction an attorney or the procedures required by law before doing so. Therefore, clarification of the order is necessary.
In his motion of April 5, 1999, counsel refers to Rule 37 and concludes that the sanctions at issue here take the form of a fine for criminal contempt and are punitive in nature.
First, the sanctions issued against Mr. Woodruff were civil and not criminal in nature. Although not specified in the order, the sanctions were issued pursuant to this Court's inherent powers to compel submission to its lawful mandates.4 The sanctions involved were not issued pursuant to Rule 37 nor did the Court intend them as punishment. Instead, these sanctions were issued to compensate the Court for the waste of judicial resources, the needless consumption of time and the associated delay in the final disposition of this case occasioned by counsel's continuing noncompliance with a valid order which was repeatedly brought to his attention.
Next, counsel complains that he was not given adequate notice of the Court's intention to sanction him personally and was deprived of an opportunity to be heard. Counsel is correct that the Court did not specifically inform him that it was considering the issuance of sanctions against him personally. . . .
On January 29, 1999, however, counsel was served with a third motion seeking sanctions against his client and was provided with an opportunity, and did, respond in writing to that motion on February 11, 1999. As with each of the earlier motions he was given an opportunity to explain why the discovery order was being ignored. Counsel freely admitted an awareness of the order and explained there was no reason it had not been complied with. This lack of excuse was followed by continued noncompliance.
Similarly, counsel was given an opportunity to explain himself at the status conference held on February 18, 1999, at which time counsel again admitted he was aware of the pending order, acknowledged he knew about it for quite some time but provided no legitimate reason for his continued failure to comply. Therefore, the circumstances involved here do not support a finding that no opportunity to be heard was provided. Instead, it only appears that Counsel was not given a chance to specifically address the issuance of personal sanctions against him.
Pohnpei v. M/V Miyo Maru No. 11, 9 FSM Intrm. 150, 152-53 (Pon. 1999) (emphasis in original) (note originally numbered 1 but text original).
The Court then vacated its order imposing sanctions on Mr. Woodruff indicating that a separate order would be issued requiring him to show cause why he shouldn't be sanctioned in his individual capacity for disobeying the Court's April 8, 1998 discovery order. As stated above, notice of the Court's own motion to consider the issuance of sanctions against Mr. Woodruff was provided on December 21, 1999 with a hearing set for January 6, 2000.
On December 28, 1999, Pohnpei filed a motion to reschedule the January 6, 2000 hearing on the Court's motion on two grounds. The first was that the notice of motion indicated the hearing would be held on Monday, January 6, 2000 while January 6, 2000 actually fell on a Thursday. Therefore, Pohnpei argued that the notice was unclear as to whether the hearing would be held on Monday, January 3, 2000 or Thursday, January 6, 2000. The second was that due to the then pending departure of two attorneys from the Office of the Attorney General, the number of attorneys on staff as of January 6 would be down to two. The motion requested that the hearing be held sooner and proposed the week of December 27, 1999. Unfortunately, the motion did not come to the Court's attention until on or about January 3, 2000 at which point it would not have been possible to move the hearing to an earlier date. Therefore, the Clerk of Court contacted Mr. Woodruff over the phone and advised him that the hearing was on the Court's calendar for January 6, 2000 and would proceed as initially planned.
A. Discovery Obligations
Subject to limitations found elsewhere in the rules, Rule 33 of the FSM Rules of Civil Procedure defines the scope of information a party is required to provide when answering interrogatories.
Rule 33. INTERROGATORIES TO PARTIES
(a) Availability; Procedures for Use. Any party may serve upon any other party written interrogatories to be answered by the party served or, if the party served is a public or private corporation or a partnership or association or governmental agency, by any officer or agent, who shall furnish such information as is available to the party. . . .
FSM Civ. R. 33(a) (emphasis added).
Rule 33 also provides an answering party with the alternative option of making records available if the burden of gathering the information would be substantially the same for either party.
(c) Option to Produce Business Records. Where the answer to an interrogatory may be derived or ascertained from the business records of the party upon whom the interrogatory has been served or from an examination, audit or inspection of such business records, including a compilation, abstract or summary thereof, and the burden of deriving or ascertaining the answer is substantially the same for the party serving the interrogatory as for the party served, it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived or ascertained and to afford to the party serving the interrogatory reasonable opportunity to examine, audit or inspect such records and to make copies, compilations, abstracts or summaries. A specification shall be in sufficient detail to permit the interrogating party to locate and to identify, as readily as can the party served, the records from which the answer may be ascertained.
Given these rules, an attorney may be required to play more than a passive role in determining what information is available and in deciding if the business record production option applies. Generally speaking, when a represented party is required to respond to discovery, the party's attorney must undertake some effort to ensure that the client makes a reasonable inquiry into the subject matters covered by the given request. An attorney's responsibility to actively participate in information gathering for discovery purposes is heightened when the client is not an individual but a legal entity such as a corporation or a governmental body.
Where the attorney is an employee of the party, as in this case, who has at minimum a degree of control over the party's procedural approach to prosecuting the lawsuit, proper compliance with discovery obligations may require him to personally assist in a diligent search for information available or under the possession or control of his client. Otherwise, it will be difficult for the attorney to ascertain that the client is complying with its duty to disclose discoverable information and the Court is not in a position to make inquiries of the client to determine the extent of compliance if a motion to compel is filed.
B. Hearing on Court's Motion
At the January 6, 2000 hearing on the Court's motion, Mr. Woodruff was given an opportunity to be heard on the issue of sanctions as fully described in the notice issued on December 21, 1999. Mr. Woodruff was asked to explain his position on the Court's motion to sanction him individually for disobeying the Court's discovery order of April 8, 1998. The most direct response he provided was to state his feeling that he did not do anything that should not have been done, and that he did not fail to do anything that should have been done. In association with this response, he implied that undisclosed State agencies in possession or control of information responsive to the subject interrogatories were not cooperative in supplying it to the Office of the State Attorney General. He did not, however, explain what steps, if any, he took to gain the cooperation of these undisclosed agencies
and he supplied the Court with no evidence5 that he made any efforts to gather the information personally until after the Court sanctioned him for disobeying the discovery order.
Although not a point of the Court's inquiry on the issue of sanctioning Mr. Woodruff, he nonetheless offered speculation on why his predecessors at the State Attorney General's Office may have failed to comply with the discovery order. He suggested a search may have yielded no information called for by the interrogatories. He postulated that the lack of information may have therefore caused Pohnpei not to answer the questions posed. Mr. Woodruff then offered his view that it would not be appropriate to give answers stating that the information was unknown or unavailable because such a response may only lead to further motions to compel by SMG. This last point warrants further comment.
If a party satisfies its duty to make a reasonable search and diligent inquiry for discoverable information contained in an interrogatory and comes up empty, it is entirely satisfactory to respond by stating that the information is unknown. When this is done, however, the responding party should further indicate whether the information is believed to exist but has not yet been located ) from a witness or a document for instance ) or that the information cannot be provided because the responding party does not believe it to exist. If the latter response is provided, the responding party should further indicate whether the information was ever believed to exist and if so, where, when and in what form.
It is also appropriate for a party answering "unknown" to an interrogatory to specify that discovery and investigation continues, and that the party will provide updated answers as soon as the information is located or in compliance with FSM Civil Rule 26(e)(2) which states as follows:
(e) Supplementation of Responses.
. . . .
(2) A party is under a duty seasonably to amend a prior response if he obtains information upon the basis of which (A) he knows that the response was incorrect when made, or (B) he knows that the response when made is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment.
Such a response, taken together with the duty to supplement required by the rules, minimizes the likelihood that the propounding party will make another motion to compel. In fact, if detailed enough, a response like this may very well demonstrate to the propounding party that the responding party is satisfying its discovery obligations and taking its duties seriously. Only the opposite can be said of one who refuses to respond at all.
Whether a party is directed by a court order to answer an interrogatory or not, it is never acceptable not to provide a response unless a motion for protective order is timely filed under FSM Civil Rule 26. When a court order is involved, particularly one issued following an exhaustive review of the discovery as part of a motion to compel as was done here, failure to provide answers is all the more reprehensible. Therefore, the Court does not agree with Mr. Woodruff's assessment that he did nothing wrong.
In presenting his position on the Court's motion, Mr. Woodruff also stated that frustration in gathering the information was one of the reasons the interrogatories were not answered before the Court issued personal sanctions against him. He claimed that the research and interviews he conducted preliminary to preparing answers on Pohnpei's behalf were difficult and time consuming. Yet, it appears from the record in this matter that it only took twenty days ) the period between the March 24, 1999 sanction order and service of the interrogatories on April 13, 1999 ) to compile the answers given. The more significant consumption of time was at the Court's expense.
Not including Mr. Woodruff's motion to vacate the sanction order of March 24, 1999, the parties submitted approximately 119 pages of legal authority and exhibits in connection with SMG's three motions for sanctions against Pohnpei for its failure to answer the interrogatories. Additionally, the Court generated 16 pages of orders dealing with the discovery dispute on SMG's first two motions alone. The Court conservatively estimates that prior to the time Mr. Woodruff was assigned to this case, more than 50 hours of its time was consumed needlessly. Since he became involved, the Court has devoted in excess of 50 additional hours to discovery related work on this case. This includes the time required to review SMG's third motion for sanctions and Pohnpei's response, analyze the history of the case, perform legal research and draft and revise the order of March 24, 1999. It also includes the dozen or more hours spent on the Court's analysis of Pohnpei's April 5, 1999 motion to vacate the sanction order, the drafting of the May 17, 1999 order of clarification and order vacating the sanction order, the drafting of the December 21, 1999 notice of hearing on the Court's own motion for sanctions and the hearing held on January 6, 2000. 6
Had Pohnpei complied with its discovery obligations from the outset, the first 50 plus hours of time would not have been consumed. If Mr. Woodruff would have prepared the interrogatory responses as soon as the case was assigned to him, the second 50 plus hours would not have been wasted.
The matter presently before the Court reveals a pattern of continuous, flagrant and willful violation of the letter and spirit of the discovery rules by Pohnpei and a knowing intentional disregard of this Court's order by Mr. Woodruff. Moreover, Mr. Woodruff has not shown substantial justification for the wrongful behavior he perpetrated against SMG and this Court. Accordingly, the Court finds that Mr. Woodruff should be sanctioned in his individual capacity for willfully violating a valid court order, for causing the needless consumption of substantial amounts of the Court's time and resources and for otherwise engaging in conduct abusive of the judicial process.
C. Source of Court's Authority to Issue Sanctions
This case is one of the few in which this Court has been required to analyze discovery related matters in depth. Fewer still are cases in which the Court has been required to resort to sanctioning individual attorneys. This Court feels that its needs in maintaining control over litigation and the attorneys involved are somewhat unique to the FSM and that the appropriate manner of handling such matters should not necessarily be defined by reliance on foreign authority. Nevertheless, because discovery issues have been litigated to such length in recent years in cases pending in the U.S., it is worthwhile to consider the way other courts have viewed the scope of their authority in sanctioning inappropriate discovery related conduct.
It has been said that the choice of an appropriate sanction to be applied when a party fails to comply with a discovery obligation is committed to the sound discretion of the court. Atlantic Cape Fisheries v. Hartford Fire Ins. Co., 509 F.2d 577, 579 (1st Cir. 1975). FSM Civil Rule 37, which finds
its origin in the U.S. rules, provides (in pertinent part) the following sanctions for the failure to comply with a discovery order:
Rule 37. FAILURE TO MAKE DISCOVERY: SANCTIONS
(b) Failure to Comply With Order. . . .
(2) Sanctions by Court in Which Action is Pending. If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or Rule 35, or if a party fails to obey an order under Rule 26(f), the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defense, or prohibiting that party form introducing designated matters in evidence;
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;
(D) In lieu of any of the foregoing orders or in addition thereto, an order treating as a contempt of court the failure to obey any orders except an order to submit to a physical or mental examination;
. . . .
In lieu of any of the foregoing orders or in addition thereto, the court shall require the party failing to obey the order, the attorney or trial counselor advising the party or both to pay the reasonable expense, including attorney's or trial counselor's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
. . . .
(d) Failure of Party to Attend at Own Deposition or Serve Answers to Interrogatories or Respond to Request for Inspection. If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails . . . (2) to serve answers or objections to interrogatories submitted under Rule 33 . . . the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under subparagraphs (A), (B), and (C) of subdivision (b)(2) of this rule. In lieu of any order or in addition thereto, the court shall require the party failing to act, the attorney, or the trial counselor advising the party or both to pay the reasonable expenses, including attorney's
or trial counselor's fees, caused by the failure unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
Because the Court's March 24, 1999 order imposing sanctions on Mr. Woodruff was part of its ruling on SMG's third motion for sanctions pursuant to FSM Civil Rule 37(d), it may have initially appeared that the Court was acting under the provision of Rule 37(b)(2) allowing it to "make such orders in regard to the failure as are just." However, as was explained in the May 17, 1999 order of clarification, the Court was invoking its inherent powers "to compel submission to its lawful mandates."
The Court did not rely on Rule 37 sanctions because the y had previously proved to be ineffective in resolving this discovery dispute and the Court determined they would not satisfactorily address the problems created by Mr. Woodruff's obstinacy. There are essentially three reasons for this.
First, in granting SMG's second motion for sanctions the Court awarded it attorney's fees and expenses payable by Pohnpei. SMG was ordered to submit an accounting of its fees and expenses so the Court could determine an appropriate dollar amount, but SMG did not comply and no sanctions were ever paid.
Second, in its third motion for sanctions SMG only requested issue determination and issue preclusion relief under Rule 37(b)(2)(A) and (B). At the hearing of February 18, 1999, counsel for SMG indicated he had no interest in an award of attorneys fees. He also pointed out that he never attempted to collect on the award of fees and expenses from the second motion and was only interested in obtaining answers or having the fact issues determined in his client's favor. 7
Third, the Court's principal rationale for sanctioning Mr. Woodruff was to compensate it for the waste of judicial time and resources occasioned by what it felt was behavior for which he alone was responsible. Because Rule 37 sanctions had proven futile in resolving this discovery dispute and because they do not provide a remedy for what the Court determined was a waste of its time and resources, resort had to be made to inherent powers.
The Court again concludes that the sanctions to be issued against Mr. Woodruff shall be based on its inherent power to control the orderly and expeditious disposition of cases and proper compliance with its lawful mandates.
Circumstances similar to those presently before the Court were addressed in the matter of Resolution Trust Corp. v. Dabney, 73 F.3d 262 (10th Cir. 1995). The Resolution Trust Corp. (RTC) case involved an appeal of personal monetary sanction orders against three attorneys issued in response to motions made pursuant to U.S. Federal Rules of Civil Procedure, Rules 37(a)(4) and 26(g). The Rule 37 motion was made by the defendants to compel answers to deposition questions from a
witness under the control of an RTC attorney who instructed the witness not to answer. In response, RTC's counsel of record (two attorneys) filed a motion for a protective order regarding the deposition. The trial court granted the motion to compel and found that the position taken by the two RTC attorneys in the pleadings filed on the discovery issues were not substantially justified. The court awarded defendants' attorneys fees and expenses under Rule 37 for all activity related to the discovery disputes.
Additionally, the court requested briefs from both parties addressing "`any factors appropriate to the Court's determination of the amount of a proper sanction that will deter future misconduct.'" The court stated it would base these sanctions on the amount of time it had to put into the discovery matters. Dabney, 73 F.3d at 265. Relying on the briefs submitted, the court imposed personal sanctions of $3,000.00 each on the two attorneys of record for RTC. The court also imposed a $500.00 personal sanction on an in-house lawyer for RTC because she submitted an affidavit stating she instructed the lawyer defending the deposition not to let the witness answer certain questions.8 The court's order directed the attorneys to pay these sanctions to the clerk of court.
In the ensuing appeal, the lawyer defending the deposition contended that in imposing sanctions against him the trial court abused its discretion on two grounds; 1) the sanctions were inappropriate because he acted within the law when instructing the witness not to answer since the information sought was privileged, and; 2) the trial court failed to identify the basis of the amount of sanction it ordered paid to the clerk and there could be no excess costs since the defendants had already been awarded their attorneys fees and expenses under Rule 37(b).
After analyzing the merits of the privilege issue and resolving it against the appellant, the RTC court addressed the portion of the order sanctioning the attorney for the time the trial court spent on the discovery and also discussed the source of the court's power to impose such sanctions.
"When a court imposes sanctions under 28 U.S.C. § 1927 . . . it must sufficiently express the basis for the sanctions imposed to identify the excess costs reasonably incurred by the party to whom they will be due." Specific findings allow the court to identify the costs arising from the objectionable conduct, afford the sanctioned party notice and an opportunity to respond, and permit an appellate court to review the district court's decision.
Here the district court's final sanction order did not specify the basis of the amount of the sanction it ordered paid to the court. However, it is clear from its initial bench ruling and written order giving notice it would impose sanctions that it based the
amount of the sanction on the time it spent on the discovery dispute.
"Excess costs" recoverable under 28 U.S.C. § 1927 include only those enumerated in 28 U.S.C. § 1920, which lists the items that ordinarily may be taxed to a losing party. Roadway Express, Inc. v. Piper, 447 U.S. 752, 757-61, 100 S.Ct. 2455, 2459-62, 65 L.Ed.2d 488 (1980). Neither § 1927 nor § 1920 include wasted judicial time as an "excess cost." Therefore, sanctions under § 1927 cannot be based upon the court's time or upon wasted judicial resources.
Nevertheless, even if it were error for the district court to base its sanction under § 1927 on the time it spent on the discovery dispute, the sanction can be upheld under the court's inherent power to regulate its docket, promote judicial efficiency and deter frivolous filings. See Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S.Ct. 2123, 2135-36, 115 L.Ed.2d 27 (1991) (recognizing the inherent power of courts to sanction conduct abusive of the judicial process and rejecting arguments that statutory sanctioning powers displace this inherent power); Jones v. Bank of Santa Fe (In re Courtesy Inns, Ltd.), 40 F.3d 1084, 1089 (10th Cir. 1994).
We recognized the court's inherent power to impose a sanction payable to the court in In re Baker, 744 F.2d 1438 (10th Cir. 1984)(in banc). We noted the while "the cost of the court's inconvenience is [not] a precise measure to be routinely awarded in each and every case of unwarranted delay . . ., we do not think that cognizance of the costs imposed on the judicial system are irrelevant in determining the seriousness and extent of the sanction appropriate in particular cases." Id. at 1442.
The district court gave notice to RTC Counsel that it intended to impose sanctions based upon the waste of judicial time and the cost to the taxpayer, thus giving them notice and an opportunity to respond. Its findings were adequate to enable this court to determine that the amount of the sanctions were based on the district court's estimate of the time it spent on the discovery disputes, thereby permitting meaningful appellate review. Accordingly, the district court's sanction against [the attorney] was not an abuse of its discretion.
Dabney, 73 F.3d at 267 (quoting Braley v. Campbell, 832 F.2d 1504, 1513 (10th Cir. 1987)) (citations omitted) (emphasis added) (footnote omitted) (first alteration in original).
One significant distinction between the decision in RTC and the case at bench is that this Court exercised considerably more restraint before issuing personal monetary sanctions. While the RTC sanctions came in response to defendant's first motion to compel, this Court issued no sanction in response to SMG's first motion and it only issued sanctions for SMG's attorneys fees and costs in response to the second motion. It was not until SMG's third motion, after which the Court had to confront the futility brought on by its tolerance, that resort was made to issuing personal monetary sanctions against Mr. Woodruff.
Yet another distinction between the RTC case and the matter now before the Court is that RTC only involved an improper use of procedures (under the rules, counsel should have applied for a protective order before instructing the witness not to answer) whereas this case involves a knowing and deliberate violation of a valid court order which itself recognized the same inappropriate procedural approach.See M/V Miyo Maru No. 11, 8 FSM Intrm. at 290-91. Hence, this Court was much more lenient when first confronted with Pohnpei's discovery abuses and only saw fit to issue harsher sanctions when it became obvious, based on Mr. Woodruff's admissions, that his behavior was then
at the root of a problem which had to be corrected.
Finally, this Court gave Mr. Woodruff a full opportunity to respond after carefully considering and granting his motion to vacate in an order which also further explained the Court's position on sanctioning him (and which was followed by an order setting a hearing which specifically stated its purpose).
So while this Court is cautious of exercising its inherent powers to issue personal monetary sanctions against an attorney, it cannot and will not tolerate the type of behavior engaged in by Mr. Woodruff and concludes the circumstances of this case warrant the imposition of such sanctions.
Based on the foregoing and in consideration that the Court expended well in excess of $2,000 dealing with this matter, the Court hereby orders as follows:
1) James P. Woodruff, Esq. is ordered to pay sanctions in the amount of $500.00 to the Chief Clerk of Courts of the FSM Supreme Court no later than sixty (60) days from the date this order is entered.
2) The above sanctions shall be the individual responsibility of Mr. Woodruff based on his willful violation a valid Court order, for causing the needless consumption of substantial amounts of the Court's time and resources and for otherwise engaging in conduct abusive of the judicial process. Mr. Woodruff shall not seek reimbursement of these sanctions from the State of Pohnpei.
1. This order is published as Pohnpei v. M/V Miyo Maru No. 11, 8 FSM Intrm. 281 (Pon. 1998).
2. SMG provided Pohnpei with two extensions of time to answer the discovery. SMG's motion was filed only after the second extension expired with Pohnpei again failing to respond.
3. The Court feels that an attorney in the public sector should be particularly sensitive toward the scarcity of resources available to the Court and should conduct himself in a manner tending to alleviate unnecessary burden.
4. These inherent powers are universally acknowledged to be vested in courts of justice by their very creation and are necessary to the exercise of all others. See Chambers v. Nasco, Inc., 501 U.S. 32, 43, 111 S. Ct. 2123, 2132, 115 L. Ed. 2d 27, 44 (1991).
5. The notice of December 21, 1999 invited Mr. Woodruff to submit affidavits or other writings he wished the Court to consider in mitigation of his non-compliance with the discovery order. However, nothing was submitted.
7. Counsel for SMG was also asked to comment on the Court's motion to sanction Mr. Woodruff during the hearing of January 6, 2000. He suggested that he was never necessarily interested in seeing the Court issue monetary sanctions and at various points was not in any rush to obtain answers to his client's interrogatories but acted only in the face of court ordered deadlines. These comments were somewhat alarming to the Court. This case involves a hard fought and drawn out battle over discovery on matters of significance in this lawsuit and of substantial concern in several others where Mr. Moroni is involved. While the Court appreciates what appears to be intended as a professional courtesy toward Mr. Woodruff, the record in this case demonstrates that the three motions for sanctions filed by SMG were mandated and necessary, not afterthoughts. Hence, the Court looks toward the written representations of counsel for a clearer picture of this discovery dispute and to assist in formulating the proper sanction to be applied.
8. The sanction order against the in-house attorney was reversed on appeal because she was not given adequate notice of the court's intention to sanction her. However, the court stated at page 268 of its opinion that on remand the trial court would have to give her the requisite due process if it intended to impose sanctions on her.
This is the same approach taken by the appellate division of this Court in In re Sanction of Michelsen, 8 FSM Intrm. 108 (App. 1997) when it overturned an order imposing a $25 Rule 11 sanction sua sponte. On remand the trial division was permitted to re-impose the sanction provided it gave appellant notice and an opportunity to be heard.
No other part of the RTC court's opinion regarding the in-house attorney's appeal is relevant here so it will not be discussed further.