United States District Court, D. Colorado
MEGAN MCFADDEN, LONNIE WHITE, and ANTONIO “A.J.” WHITE, Plaintiffs,
MEEKER HOUSING AUTHORITY, a Property Management Company, MELINDA PARKER, MICHELLE BUCKLER, EDY GEORGE, and, STACIE KINCHER, Defendants.
ORDER DENYING PLAINTIFFS' MOTION FOR DEFAULT
JUDGMENT AS A SANCTION, SUA SPONTE GRANTING
ALTERNATIVE SANCTIONS, AND ORDER TO SHOW CAUSE WHY STEPHEN J.
BAITY SHOULD NOT BE ORDERED TO PAY ATTORNEYS' FEES AND
William J. Martinez United States District Judge
Megan McFadden (“McFadden”) previously resided in
the federally subsidized Karen Court apartment complex in
Meeker, Colorado. Plaintiffs Lonnie and A.J. White
(“the Whites”) are current residents of Karen
Court. All Plaintiffs claim that Defendants discriminated
against them in violation of the Rehabilitation Act of 1973
(“Rehabilitation Act”), 29 U.S.C. §§
794 et seq., and the Fair Housing Act
(“FHA”), 42 U.S.C. §§ 3601 et
seq., based on Defendants' policy (or former policy)
concerning disability-assistance pets. McFadden, who moved
from Karen Court around the time this lawsuit commenced, also
brings a claim under Colorado state law for wrongful
withholding of her security deposit.
the Court is Plaintiffs' Motion for Entry of Judgment and
Dismissal Due to Defendants' Litigation Misconduct
(“Motion”). (ECF No. 288.) The basis of this
motion is Defendants' alleged non-diligence in, and abuse
of, the discovery process. For the reasons explained below,
the Court denies Plaintiffs' requested remedy to strike
Defendants' affirmative defenses and counterclaims and to
enter default judgment against Defendants. The Court sua
sponte instead excludes certain false testimony, and
will order Defendants' former counsel, Mr. Stephen L.
Baity,  to show cause why he should not be held
personally responsible for attorneys' fees and costs
Plaintiffs would not have incurred but for his non-diligence.
Plaintiffs assert that Defendants' alleged discovery
violations merit default judgment against them, Plaintiffs do
not invoke Federal Rule of Civil Procedure 37(b)(2)(A)(vi),
which permits “default judgment against the disobedient
party” where the party has “fail[ed] to obey an
order to provide or permit discovery.” Plaintiffs
instead seek entry of default judgment under the Court's
inherent authority to assess sanctions. (ECF No. 288 at 3.)
See also Goodyear Tire & Rubber Co. v. Haeger,
137 S.Ct. 1178, 1186 (2017) (“Federal courts possess
certain inherent powers, not conferred by rule or statute, to
manage their own affairs so as to achieve the orderly and
expeditious disposition of cases. That authority includes the
ability to fashion an appropriate sanction for conduct which
abuses the judicial process.” (internal quotation marks
and citations omitted)).
guiding standards, Plaintiffs nonetheless cite to cases
analyzing Rule 37(b)(2)(A) sanctions. (See ECF No.
288 at 3 (citing Stichting Mayflower Mountain Fonds v.
City of Park City, Utah, 441 Fed.Appx. 568 (10th Cir.
2011); Lee v. Max Int'l, LLC, 638 F.3d 1318
(10th Cir. 2011); Ehrenhaus v. Reynolds, 965 F.2d
916, 920 (10th Cir. 1992)).) Defendants do the same, although
asserting that they have not violated any discovery orders.
(See ECF No. 294 at 3-4.) Because the parties appear
to agree that the Court should apply a Rule 37(b)(2)(A)
analysis, the Court will do so, reserving for another day the
question of whether and under what conditions a Court's
inherent authority to sanction extends to dismissal or
standard for imposing default judgment as a discovery
sanction is strict:
[D]ismissal represents an extreme sanction appropriate only
in cases of willful misconduct. In many cases, a lesser
sanction will deter the errant party from further misconduct.
Because dismissal with prejudice defeats altogether a
litigant's right to access to the courts, it should be
used as a weapon of last, rather than first, resort.
Ehrenhaus, 965 F.2d at 920 (internal quotation marks
and citations omitted). “If a judge intends to order a
dismissal or default judgment because of discovery
violations, the judge should do so only if the judge is
impressed to do so by evidence which is clear and
convincing.” Gates Rubber Co. v. Bando Chem.
Indus., Ltd., 167 F.R.D. 90, 108 (D. Colo. 1996).
Tenth Circuit has prescribed the following factors to
consider: (1) the degree of actual prejudice to the affected
party; (2) the amount of interference with the judicial
process; (3) the culpability of the litigant; (4) whether the
court warned the culpable party in advance that dismissal of
the action would be a likely sanction for noncompliance; and
(5) the efficacy of lesser sanctions. Ehrenhaus, 965
F.2d at 921. The Court will refer to these as the
“Ehrenhaus factors.” “These
factors do not constitute a rigid test; rather, they
represent criteria for the district court to consider prior
to imposing dismissal as a sanction.” Id.
“Only when the aggravating factors outweigh the
judicial system's strong predisposition to resolve cases
on their merits is dismissal an appropriate sanction.”
Id. (internal quotation marks omitted).
Summary of Accusations and Responses
applying the Ehrenhaus factors, the Court will first
summarize Plaintiffs' accusations of discovery misconduct
and Defendants' responses. The Court will designate each
accusation according to the outline numbering employed in the
parties' briefs (e.g., A-1, D-2, etc.). Most of
Plaintiffs' accusations stemmed from a forensic search of
the Meeker Housing Authority's sole computer, which
Defendants agreed to permit as a compromise to resolve a
Plaintiffs propounded discovery requests for documents,
including documents found on digital devices, in any way
touching upon Defendants' pet policies. Plaintiffs
received far fewer documents than they expected, and the
forensic search uncovered more, namely, Internet search
histories conducted in June and July 2016 regarding pet
policies, and a template of a compliant pet policy obtained
in August 2016. (ECF No. 288 at 4-5.) The Court agrees with
Plaintiffs that these are documents Defendants should have
produced themselves before the forensic search.
counter that “Plaintiffs are not prejudiced”
because they obtained the documents “by the discovery
methodology they proposed and which was agreed to. . . . They
have the documents they contend support their claims and they
obtained them using the methodology they wanted.” (ECF
No. 294 at 5.) This no-prejudice argument is a running theme
in Defendants' response to nearly all of Plaintiff's
accusations, so the Court will not repeat it under each
heading, below. The Court addresses it instead in Part
further assert that the uncovered documents are irrelevant,
or at least that Plaintiffs exaggerate their significance.
(Id. at 5-6.)
Plaintiffs claim that forensic imaging and public records
requests uncovered a March 2017 compliance agreement that
Meeker Housing Authority entered into with the U.S.
Department of Housing and Urban Development regarding pet
policies, thus supposedly confirming that the pet policies at
issue in this lawsuit were unlawful. (ECF No. 288 at 5-6.)
Defendants respond that this document is irrelevant to their
knowledge at the time the pet policies were promulgated, and
it is inadmissible under Federal Rule of Evidence 407 as a
subsequent remedial measure. (ECF No. 294 at 6.)
Through discovery, Plaintiffs requested documents relevant to
their claim that Defendants have retaliated against
Plaintiffs for asserting their rights under the Fair Housing
Act. Mr. Baity represented to the Court that Defendants
searched for and produced the single document responsive to
that request. But forensic imaging uncovered 99 responsive
e-mails. (ECF No. 288 at 6-7.) Defendants respond that
Plaintiffs misconstrue or exaggerate the significance of what
they have found. (ECF No. 294 at 7-9.)
Plaintiffs claim that depositions of certain Defendants show
that they did not know or did not care about their duty to
preserve and produce documents. (ECF No. 288 at 7-9.)
Defendants respond that Plaintiffs have taken the deposition
testimony out of context. (ECF No. 294 at 9-11.)
Accusation “C” ...