Leroy Haeger v. the Goodyear Tire & Rubber Co

Opinion by Judge MILAN D. SMITH, JR.; Dissent by Judge WATFORD.

OPINION

On November 8, 2012, after a six-hour evidentiary hearing, and after considering the record in the case and fifteen briefs filed by the potentially-sanctionable parties, then-Chief United States District Judge Roslyn O. Silver, of the United States District Court for the District of Arizona, handed down a sixty-six-page order (Order) imposing sanctions ultimately calculated in the sum of $548,240 against attorney Graeme Hancock (Hancock), and $2,192,961 jointly against attorney Basil J. Musnuff (Musnuff) and The Goodyear Tire *1126 & Rubber Company (Goodyear) (collectively the Sanctionees). In the Order, which included forty-nine pages of findings of fact and seventeen pages of legal analysis, Judge Silver found that “there is clear and convincing evidence that sanctions are required to be imposed against [ ] Hancock, [ ] Musnuff, and Goodyear. The Court is aware of the unfortunate professional consequences that may flow from this Order. Those consequences, however, are a direct result of repeated, deliberate decisions by [ ] Hancock, [ ] Musnuff, and Goodyear to delay the production of relevant information,…

dissenting:

Goodyear and its lawyers were accused in this case of perpetrating a fraud on the Haegers and the court. If sustained, those charges could of course severely damage the professional reputations of the lawyers involved. The district court accordingly approached the task of determining whether the charges were true with great thoroughness and care. After conducting a lengthy evidentiary hearing and reviewing multiple rounds of briefing, the court concluded that Goodyear and its lawyers acted in bad faith when they failed to produce test results that were responsive to the Haegers’ document requests. I agree with the majority that the district court’s misconduct findings are supported by the record, but I nevertheless conclude that the $2.7 million sanctions award must be vacated.

The district court’s finding of bad faith authorized it to levy sanctions under its inherent power. Chambers v. NASCO, Inc., 501 U.S. 32, 50 , 111 S.Ct. 2128 , 115 L.Ed.2d 27 (1991). Those sanctions could have taken one of two forms: punitive sanctions, which are criminal in nature and intended to vindicate the authority of the court; or compensatory sanctions, which are civil in nature and…

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LEROY HAEGER; DONNA HAEGER, No. 12-17718 husband and wife; BARRY HAEGER; SUZANNE HAEGER, husband and D.C. No. wife, 2:05-cv-02046- Plaintiffs-Appellees, ROS

v.

THE GOODYEAR TIRE & RUBBER

COMPANY, an Ohio corporation, Defendant-Appellant,

and

SPARTAN MOTORS, INC., a Michigan corporation; GULFSTREAM COACH, INC., an Indiana corporation, Defendants,

v.

ROETZEL & ANDRESS, LPA; BASIL J.

MUSNUFF,

Movants. HAEGER V. GOODYEAR TIRE & RUBBER CO.

LEROY HAEGER; DONNA HAEGER, No. 13-16801 husband and wife; BARRY HAEGER; SUZANNE HAEGER, husband and D.C. No. wife, 2:05-cv-02046- Plaintiffs-Appellees, ROS

v.

THE GOODYEAR TIRE & RUBBER

COMPANY, an Ohio corporation, Defendant-Appellant.

LEROY HAEGER; DONNA HAEGER, No. 13-16861 husband and wife; BARRY HAEGER; SUZANNE HAEGER, husband and D.C. No. wife, 2:05-cv-02046- Plaintiffs-Appellees, ROS

v.

THE GOODYEAR TIRE & RUBBER

COMPANY, an Ohio corporation;…