Daniel Faerfers v. Caviar Creator, Inc. - Oregon

MEMORANDUM

Daniel and Katja Faerfers (“the Faer-fers”) appeal the district court’s judgment dismissing their complaint against Caviar Creator International, Inc. (“CCI”) and striking their answer to CCI’s counterclaim. They also challenge the district court excluding them from the damages prove-up hearing on CCI’s counterclaim. The Faerfers argue that the district court abused its discretion in granting CCI’s motion for terminating sanctions, which resulted in the dismissal with prejudice of the Faerfers’ complaint and the striking of their answer to CCI’s counterclaim. We have jurisdiction pursuant to 28 U.S.C. § 1291 . We review a district court’s findings of fact in connection with a motion for sanctions under the clearly erroneous standard, Fjelstad v. American Honda Motor Co., 762 F.2d 1334, 1337 (9th Cir.1985), and the dismissal of a case with prejudice as a sanction for abuse of discretion. Malone v. United States Postal Serv., 833 F.2d 128, 130 (9th Cir.1987) (citing Thompson v. Hous. Auth., 782 F.2d 829, 832 (9th Cir.1986)). We reverse and remand.

The district court abused its discretion when it granted terminating sanctions. Prior to dismissing a complaint or striking…