Subject: Ninth Cir. Dec(wrapped)1/2
From: mayo@lightlink.com (David Mayo)
Date: 1996/04/17
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N O T F O R P U B L I C A T I O N
FILED APRIL 11, 1996
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RELIGIOUS TECHNOLOGY CENTER;
CHURCH OF SCIENTOLOGY OF
CALIFORNIA;
CHURCH OF SCIENTOLOGY
INTERNATIONAL,
Plaintiffs-counter-defendants-Appellees
v.
ROBIN SCOTT, et al.,
Defendants.
And
CHURCH OF THE NEW CIVILIZATION; DAVID MAYO,
Detendants-counter-claimants-Appellants,
CHURCH OF SPIRITUAL TECHNOLOGY,
Counter-defendant-Appellee.
No. 94-55781
DC No. CV-85-0711-AWT(Bx)
-1-
RELIGIOUS TECHNOLOGY CENTER;
CHURCH OF SCIENTOLOGY OF
CALIFORNIA; CHURCH OF SCIENTOLOGY
INTERNATIONAL,
Plaintiffs- counter-defendants-Appellants,
v.
LARRY WOLLERSHEIM, et al.,
Defendants,
CHURCH OF SPIRITUAL TECHNOLOGY,
Counter - defendant,
and
CHURCH OF THE NEW CIVILIZATION
DAVID MAYO,
Defendant-counter-claimants -Appellees
No. 94-55920
DC No. CV-85-7197 -AWT (Bx)
MEMORANDUM*
)
)
)
Appeal from the United States District Court
for the Central District of California
A. Wallace Tashima, District Judge, Presiding
Argued and Submitted November 14, 1995
Pasadena, California
Before: HALL and NOONAN, Circuit Judges. SHUBB*, District
Judge.
Religious Technology Center (RTC), a California corporation,
appeals from judgment and imposition of attorneys fees entered
against it in two cases it brought against David Mayo (Mayo) and
other related defendants. Mayo cross-appeals judgment entered
against him on his counterclaims. We affirm the judgment and
-------------------------------------------------------------
* This disposition is not appropriate for publication and may not
be cited to or by the courts of this circuit except as provided by
9th Cir. R 36-3.
* The Honorable William B. Shubb, United States District Judge for
the Eastern District of California, sitting by designation.
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award of attorneys fees against RTC. We affirm the dismissal of
Mayo's emotional distress counterclaim, but reverse and remand the
judgment against Mayo on his remaining counterclaims.
PROCEEDINGS
In January 1985 RTC sued Mayo and other persons connected with
the Church of the New Civilization, a splinter group of the official
Church of Scientology, contending that they were making
unauthorized use of stolen documents relating to the religion of
Scientology. RTC stated that it was "the protector" of the religion of
Scientology, its philosophy and its technology "including the
Advanced Technology" consisting of "confidential and proprietary
information regarding counseling and training," and was the owner of
various trademarks registered with the U.S. Patent and Trademark
Office protecting the Advanced Technology. The coplaintiffs with
RTC were the Church of Scientology International, Inc. and the
Church of Scientology of California, Inc., both nonprofit California
corporations which RTC stated were authorized by it to use the
Advanced Technology in accordance with certain terms and
conditions in conjunction with the marks it owns. Thirty-one marks
were identified in RTC's complaint, in addition to which there were a
number of other marks for which registration was pending or marks
owned by RTC but as yet unregistered. RTC sought an injunction
against the use of this material by the defendants. In November 1985
RTC filed a second suit, ultimately consolidated with the first.
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Mayo counter-sued for false designation of origin of the documents
and for unfair competition in violation of the Lanham Act, for libel,
and for intentional infliction of emotional distress. After 1,825 docket
entries and nine years of pretrial litigation involving three discovery
magistrates, a special master, the recusal of two district court judges,
the denial of five petitions for writ of mandamus, three appeals
(Religious Technology Center v. Wollersheim, 796 F.2d 1076 (9th
Cir. 1986), cert. denied, 479 U.S. 1103, 107 9. Ct. 1336, 94 L.Ed.2d
187 (1987); Religious Technology Center et al. v. Scott, 869 F.2d
1306 (9th Cir. 1989); Religious Technology Center v. Wollersheim,
971 F.2d 364 (9th Cir. 1992), and three denials of certiorari by the
Supreme Court, the third district judge, A. Wallace Tashima, entered
Final Judgment. We set out and respond to the issues now raised on
these appeals.
I. Recusal of Judge Ideman
RTC first appeals District Judge Letts' denial of its October 1991
motion to recuse Judge Ideman, the district judge assigned to this
case after Judge Pfaelzer had recused herself. In denying RTC's
petition for writ of mandamus this court in an unpublished order
expressly determined that Judge Letts, denial was "not clearly
erroneous." This order is the law of the case, to which subsequent
panels should defer unless new evidence or law has bean presented or
unless the first panel's ruling was clearly erroneous.
See Merritt
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v. Mackey, 932 F.2d 1317, 1320 (9th Cir. 199l).
We find that none of Merritt's exceptions apply in this case. 1/
II. Rule 37 Dismissal
RTC mounts two attacks on Judge Ideman's dismissal of its claims as
a discovery sanction under Rule 37; it argues: (1) that Judge Ideman
simply rubber stamped the special master's recommendation to dismiss
without conducting an independent review; and (2) that the dismissal
order itself was improper under Rule 37. We will discuss these
arguments in turn.
A. Rubber Stamping
When the case was referred to District Judge Ideman, it was still in a
pretrial stage after four years of litigation. Taking note of the
complexity of the litigation (which involved the Copyright Act, the
Federal Trademark and Patent Infringement Act), the number of
parties to the litigation, the large number of motions and motions for
reconsideration already characteristic of the litigation, and the need to
reduce to manageable proportions what was estimated to be three
months' trial time, Judge Ideman referred the consolidated cases to a
retired state judge to act as special master to supervise discovery and
law and motions practice.
1/Even if Judge Letts mistakenly applied a subjective standard under
544, so that the law of the case doctrine only applies to the first
panel's conclusion that Judge Ideman was not subjectively biased, we
independently conclude that Judge Ideman's recusal was also not
mandated under 544(a)'s objective test.
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On this appeal, RTC objects to the way the district court treated the
special master's recommendations. 2/ In other contexts, we have
recognized that while a special master should not be given authority
to conduct a full trial, he may be given broad authority to supervise
and conduct pretrial matters, including discovery activity, the
production and the range of exhibits and stipulations of fact, the
power to hear motions for summary judgment or dismissal and to
make recommendations thereto. Burlington Northern R,R. Co. v
Department of Revenue, 934 F.2d 1064, 1073 (9th Cir. 1991)
(quoting In re Armco. Inc., 770 F.2d 103, 105 (8th Cir. 1985)). At
the same time we have observed that a district court's rubber-
stamping of a special master's order is unacceptable -- even on pretrial
matters: "[T]he district court's rubber stamp of the master's order is
an inexcusable abdication of judicial responsibility and a violation of
article III of the
Constitution." Burlington, 934 F.2d at 1072.
RTC contends that the district court rubber-stamped the dismissal of
RTC's claims as a discovery sanction for noncompliance with court
orders. To the contrary, the district court took the position that the
special master had no power to order dismissal of the case. In the
course of responding to RTC's second petition for mandamus Judge
Ideman, on June 21, 1993, filed a declaration with the court ruling in
relevant part as follows:
3. The past 8 years have consisted mainly of a prolonged, and
ultimately unsuccessful, attempt to persuade or compel the plaintiff to
comply with lawful discovery. These efforts have been fiercely
resisted by
---------------------------------------------------------
2/RTC does not in this appeal challenge Judge Ideman's initial
reference of this litigation's pretrial matters to the special master.
RTC's two previous attempts to do so failed and we are given no
reason to
abandon our prior decisions.
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plaintiffs. They have utilized every device that we on the District
Court have ever heard of to avoid such compliance, and some that are
new to us.
4. This noncompliance has consisted of evasions, misrepresentations,
broken promises and lies, but ultimately with refusal. As part of this
scheme to not comply, the plaintiffs have undertaken a massive
campaign of filing every conceivable motion (and some inconceivable)
to disguise the true issue in these pretrial proceedings. Apparently
viewing litigation as war, plaintiffs by this tactic have had the effect of
massively increasing the costs to the other parties, and, for a while, to
the Court. The appointment of the Special Master 4 years ago has
considerably relieved the burden to this Court. The scope of
plaintiff's efforts have to be seen. to be believed. (See Exhibit "A",
photo of clerk with filings, and Exhibit "B", copy of clerk's docket
with 81 pages and 1,737 filings.)
5. Yet it is all puffery -- motions without merit or substance.
Notwithstanding this, I have carefully monitored the Special Master's
handling of these motions. I saw no need to try to improve on the
Special Master's writings if I agreed with the reasons and the results.
However, with respect to the major ruling that I have made during
these proceedings, the dismissal of the plaintiff's claims, the following
occurred:
6. The Special Master, after years of efforts to compel compliance
with discovery, purported to order a dismissal of plaintiff's claims.
Although the action was probably long overdue, the Special Master
did not have the authority to make such a dispositive order. In
reviewing his order, as I did with all of his actions, I saw what he had
done and did not approve it. I treated the Special Master's 'order" as a
recommendation and gave notice to the parties that they could have a
hearing and invited briefs. Only after considering fully the briefs of the
parties did I give approval to the dismissal. It is true that I adopted
the language chosen by the Special Master, but that was because I
fully agreed with his reasoning and saw no need to write further.
Judge Ideman's pointed and pungent review of the record is the
reverse of a rubber stamp. It is the judge's own heartfelt appraisal of
the plaintiffs' actions as meriting dismissal. RTC's claim of violation of
the Constitution by unconstitutional delegation fails.
-7-
B. Propriety of Dismissal
Dismissals under Fed.R.Civ.P. 37 are reviewed for abuse of
discretion. Anheuser-Busch, Inc. v. Natural Beverage Distributors, 69
F. 3D 337, 348 (9th Cir. 1995). An appellate court should reverse
"only if [it has] a definite and firm conviction that [the sanction] was
clearly outside the acceptable range of sanctions." Malone v. United
States Postal Service, 833 F.2d 128, 130 (9th Cir. 19&7), cert. denied
sub nom. Malone v. Frank, 438 U.S. 819 (1988'. Rule 37(b)(2)(C)
gives the district court discretion to dismiss a party's claims as a
sanction for noncooperation in discovery matters. Fed. R. Civ. P. 37
(b) (2) (C). Dismissal is warranted only if the party facing sanctions
acted in bad faith. Anheuser-Busch, 69 F.3d at 348. The district court
must also weigh several other factors before imposing the "harsh
sanction of dismissal": (1) the public's interest in expeditious
resolution of litigation; :2) the court's need to manage its dockets; (3)
the risk of prejudice to the party seeking sanctions; (4) the public
policy favoring disposition of cases on their merits; and (5) the
availability of less drastic sanctions. Id. (citation omitted). If the
district court makes explicit findings as to these factors, as it did in
this case, we need not review the record independently to determine if
there was an abuse of discretion. Cf. Adriana Int'l Corp. v. Thoeren,
913 F.2d 1406, 1412 (9th Cir. 1990). Notwithstanding our ability to
rely on the district court's findings, RTC argues that the dismissal was
improper because (l) the district court wrongly denied RTC an
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evidentiary hearing; and (2) the district court's dismissal was
unwarranted because RTC acted in good faith.
As to the evidentiary hearing claim, RTC asserts that it did not have
certain documents required by discovery so that its compliance was
impossible; it contends that it needed an evidentiary hearing to show
the nonexistence of the documents. This Circuit has, in dicta, noted
that an evidentiary hearing on the matter for which a party is
sanctioned might be required before dismissal if the party had sought
"to show that it was impossible for them to comply with the discovery
orders..." United States v. Westinghouse Elec. Corp., 648 F.2d 642,
652 {9th Cir. 1981); see also Wyle v. R.J. Reynolds Industries. Inc.,
709 F.2d 585, 592 (9th Cir. 1983) ("When necessary, the district
court may hold an evidentiary hearing on a motion for sanctions.
Indeed, that method best determines the appropriate sanctions while
protecting a party's due process rights."). No court, however, has
said that evidentiary hearings are absolutely required prior to a Rule
37 dismissal; thus, the decision whether to hold an evidentiary hearing
is well within the court's discretion.
The district court in this case did not abuse its discretion because
RTC was given full opportunity to demonstrate the nonexistence of
the documents. When RTC was notified of the special master's
declared intent to impose a Rule 37 dismissal sanction, it moved for
an evidentiary hearing. In its supporting papers, RTC argued that a
hearing was necessary because of the alleged lack of credibility of
Mayo/CNC's witnesses -- it never
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argued that the documents it refused to produce never existed.
Moreover, RTC's allegations of non-credibility mischaracterized the
record. RTC first misrepresented Judge Pfaelzer's finding regarding
Mayo's credibility "with respect to his claim that he had authored the
NOTs materials and that he had produced the AA5 [sic] materials
from memory." While Judge Pfaelzer doubted Mayo's ability to
reproduce the materials from memory, she cast no doubt on his
authorship claim. In fact, Judge Pfaelzer only found Mayo not
credible on the specific narrow "issue of how he and the Advanced
Ability Center came to have in their possession the documents in
question in this law suit." RTC also misrepresented credibility
findings by a U.S. magistrate as to Mayo's wife Julia and another
woman, Jan Nash. That non-credibility finding was specifically
limited to how one of the women conducted record keeping regarding
certain documents and to the other woman's claim that she saw
certain notes. Finally, RTC takes the magistrate's statement that "the
Court now feels [counsel's testimony on a limited point] lacks a little
credibility and needs to be tested" and transforms it into a ruling that
attorney Fagelbaum was found "not to be credible." RTC's
mischaracterization of the court's credibility findings casts RTC's
credibility in doubt. Anheuser-Busch, 69 F.3d at 348 (noting that
"the district court's credibility determinations are entitled to special
deference" when reviewing dismissal sanctions). Because the special
master and Judge Ideman were able to review RTC's claims as to
credibility and other matters in light of the entire record before them
and in
-10
light of the famliarity each had with the parties and their litigation
tactics, we do not find that they abused their discretion in denying a
hearing on either the credibility or document-existence issues. Nor
did the district court err in rejecting RTC's alternative claim that it
acted in good faith and was therefore not deserving of sanctions. RTC
claims that it believed that the discovery order it disobeyed was stayed
pending a ruling on a related summary judgment motion that would
have mooted the discovery order. This claim is not supported by the
facts of this case. On July 25, l990, the district court issued an order
requiring discovery of certain documents related to RTC's antitrust
claim. On August 8, 1990, RTC filed a motion for review of the
district court's July 25 order. RTC then moved for summary judgment
on its antitrust claim. On October 31, 1990, the district court
continued its consideration of the August 8 review order pending the
master's resolution of RTC's summary judgment motion; the
continuance lasted until January 7, 1991. On April 26, 1991, the
master reordered discovery (and did not mention the district court's
October 31 order). On August 12, 1991, the district court ordered
RTC to comply with the discovery order. On April 17, 1992, the
master dismissed RTC's claims for violation of the August 12, 1991
and other discovery orders. RTC claims that it believed it did not
have to comply with the July 25, 1990 discovery order because of the
district court's October 31, 1990 continuance. Even if that were true,
the continuance ended on January 7, 1991 -- and RTC was reminded
of
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its obligation to follow the order on April 26. Thus, RTC's confusion
should have been dispelled. RTC further argues that the master's
April 17, 1992 dismissal order was tainted because it rested on the
August 12, 1591 order; the August 12 order, RTC contends, was
wrong because it ignored the earlier October 31 order. As we find
the August 12, 1991 order proper, the April 17, 1992 dismissal is
affirmed.
[end part 1/2]
Rev. David Mayo <mayo@lightlink.com> (finger for key)
PGP ID: 1024/4D5EE559 1996/01/04 David Mayo <mayo@lightlink.com>
PGP Fingerprint: 0D 69 92 87 79 2F 38 72 FE 03 CE 51 31 D5 6D E9
"So many have fallen, yet so far left to go."
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