1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CHRISTOPHER E. TALAVERA, an Case No.: 21-CV-1585 TWR (AGS) individual formerly doing business as 12 TURNKEY WEB TOOLS, and ORDER OVERRULING 13 TURNKEY WEB TOOLS, INC., a DEFENDANTS’ OBJECTION California corporation, TO MAGISTRATE JUDGE 14

SCHOPLER’S ORDER

Plaintiffs, 15 DISCHARGING ORDERS v. TO SHOW CAUSE 16

GLOBAL PAYMENTS, INC., a Georgia 17 (ECF No. 47) corporation; ACTIVE NETWORK, LLC, 18 a Delaware limited liability company;

HEARTLAND PAYMENT SYSTEMS,

19 LLC, a Delaware limited liability 20 company; and DOES 1 through 229, inclusive, 21 Defendants. 22

23 Presently before the Court is Defendants’ Objection, (ECF No. 47, “Obj.”), to the 24 Honorable Andrew G. Schopler’s Order, (ECF No. 44, “June 14 Order”), discharging two 25 Orders for Plaintiff to Show Cause, (ECF Nos. 35, “May 17 OSC”; 37, “May 26 OSC”). 26 Having carefully considered Defendants’ arguments, the relevant law, and the record, the 27 Court OVERRULES Defendants’ Objection. 28 / / / 1 BACKGROUND 2 Plaintiffs Christopher E. Talavera and Turnkey Web Tools, Inc. initiated this action 3 on September 8, 2021. (ECF No. 1.) On November 9, 2021, Plaintiffs filed the operative 4 First Amended Complaint against Defendants Global Payments, Inc.; Active Network, 5 LLC; Heartland Payment Systems, LLC; and Does 1 through 229. (ECF No. 16.) Initially, 6 Stephen L. Anderson served as counsel for Plaintiffs and Meghan C. Murphey and 7 Matthew D. Murphey served as counsel for Defendants. (See generally Docket). 8 In May 2022, a discovery dispute arose between the Parties, and the Court received 9 copies of a series of emails between counsel and a recording of a voicemail left by 10 Plaintiffs’ counsel on Defense counsel’s phone. (See May 17 OSC.) On May 17, 2022, 11 the Court issued the May 17 Order to Show Cause, requiring Mr. Anderson to show cause 12 by May 25, 2022, why he should not be sanctioned for violating Civil Local Rule 2.1(a)(3). 13 (See May 17 OSC); see also S.D. Cal. Civ. R. 2.1(a)(3) (outlining the duties owed to 14 lawyers, parties, and witnesses). The May 17 Order to Show Cause required that “[a]ny 15 motions arising from the parties’ discovery disputes or behavior must be filed by May 31, 16 2022,” and set a corresponding Motion Hearing for June 28, 2022. (See May 17 OSC.) 17 The Court also ordered counsel to communicate with one another only in writing. (See id.) 18 Defense counsel did not file a motion, (see generally Docket), instead submitting a 19 memorandum in response to the May 17 Order to Show Cause issued to opposing counsel. 20 (ECF No. 36, “Defs.’ Mem.”)1 Defendants’ Memorandum also included copies of the 21 emails and a transcription of the voicemail previously sent to the Court. (See id.; ECF No. 22 36-2, “Emails”.) The emails indicate that Mr. Anderson contracted Covid in early May 23 and as a result could not timely respond to Defendants’ discovery request. (Emails at 59 24 (sent May 9, 2022, at 10:33 am); see also id. at 62, 66, 72, 78, 82–83 (copies of same).) 25 Mr. Anderson therefore asked Mr. Murphey for a 10-day extension, (id.), but Mr. Murphey 26

27 1 To avoid ambiguity, citations to Defendants’ filings refer to the CM/ECF pagination electronically 28 1 declined and indicated that he would contact Judge Schopler to compel production of the 2 discovery documents, if necessary, (id. at 58–59 (sent May 9, 2022, at 11:31 am)). 3 Mr. Anderson then replied, “Don’t be such an ass. I have Covid.” (Id. at 58 (sent May 9, 4 2022, at 11:39 am).) Mr. Murphey responded indicating that he intended to “put all of 5 [Mr. Anderson’s] communications with [him] before the Court” and seek sanctions, (id. 6 (sent May 9, 2022, at 12:30 pm)), to which Mr. Anderson replied, “Grow up old man,” (id. 7 (sent May 9, 2022, at 1:09 pm)). 8 On May 16, 2022, Mr. Murphey, copying Mr. Anderson, emailed the Court 9 describing Mr. Anderson’s statements and requesting permission to file a Motion to 10 Compel and a Motion for Sanctions. (Id. at 67–68 (sent May 16, 2022, at 9:53 am); see 11 also id. at 73–74, 79–80 (copies of same).) Mr. Anderson responded informing the Court 12 that he was still suffering from Covid and had sent Mr. Murphey a copy of his positive 13 Covid test results. (Id. at 65–66 (sent May 16, 2022, at 1:22 pm); see also id. at 71, 77 14 (copies of same).) Mr. Anderson also asked that the Court allow him additional time to 15 comply with Defendants’ discovery request “in view of [his] present fragile mental 16 condition.” (Id.) In response, Mr. Murphey told the Court, “Mr. Anderson did not send 17 me a ‘positive Covid test’ as he claims . . . but we see his [Covid claims] as simply a 18 continuation of his stalling tactics and refusal to cooperate in the discovery process.” (Id. 19 at 65 (sent May 16, 2022, at 2:34 pm); see also id. at 70, 76 (copies of same). But see ECF 20 No. 41 (“Anderson Resp.”) at 12 (demonstrating that Mr. Anderson had emailed Mr. 21 Murphey a copy of his positive Covid test results).) 22 In response, Mr. Anderson emailed Mr. Murphey individually saying, “Matt. You 23 are a creep and a liar. I would never wish covid on anyone, but you,” (Emails at 62 (sent 24 May 16, 2022, at 3:58 pm); see also id. at 82 (copy of same)), and sending a frowning 25 emoji and crying emoji shortly thereafter, (id. at 70 (sent May 16, 2022, at 3:59 pm); see 26 also id. at 76 (copy of same)). Mr. Murphey then forwarded these emails to the Court, 27 prompting another individual response from Mr. Anderson, which was again forwarded to 28 the Court. (See generally Emails.) This process continued, during which Mr. Anderson 1 sent Mr. Murphey several more emails saying: “You didn’t include the covid test result 2 liar.” (id. at 70 (sent May 16, 2022, at 4:18 pm)); “Why are you such a disgraceful jerk?” 3 (id. at 76 (sent May 16, 2022, at 4:20 pm)); and “Matt. Calm down and act reasonably. 4 You are exacerbating the issue without cause. I hope you are sanctioned or that karma gets 5 you. You deserve to hurt.” (id. at 82 (sent May 16, 2022, at 4:44 pm)). 6 Defendants’ Memorandum also included a purported transcription of the voicemail 7 Mr. Anderson left for Mr. Murphey that same day: 8 Mr. Murphey this is Stephen Anderson. If you continue to threaten and harass my personal health and safety, then consider that yours may be in jeopardy 9 soon enough. That’s all I have to say to you except perhaps that you act like 10 a grown-up and sit on it for a couple of days rather than keep exacerbating the problem in your mind that is now beginning to really irritate me. So, let’s be 11 super clear. I don’t want to hear from you, period. If you continue to harass 12 me this week you too will find your personal health and safety in jeopardy. Goodbye. 13 14 (Defs.’ Mem. at 9 (sent May 16, 2022, at approximately 4:25 pm).) In addition to 15 supplementing the record with details about the emails and voicemail underlying the 16 Court’s May 17 Order to Show Cause, Defendants’ Memorandum asked the Court to 17 impose monetary sanctions, refer Mr. Anderson to a disciplinary committee, and set a 18 hearing on the Order to Show Cause. (See id. at 1–2, 16.) 19 Mr. Anderson failed to respond to the Court’s May 17 Order to Show Cause. (See 20 generally Docket.) Consequently, on May 26, 2022, the Court issued the May 26 Order to 21 Show Cause, again requiring Mr. Anderson to show cause by June 9, 2022, why he should 22 not be sanctioned for violating Local Rule 2.1(a)(3) and why he should not now be held in 23 contempt for failing to respond to the Court’s May 17 Order to Show Cause. (See May 26 24 OSC.) 25 On June 7, 2022, Plaintiffs submitted a Motion to Substitute Attorney, seeking the 26 withdrawal of Mr. Anderson as counsel, (ECF No. 39), which the undersigned granted on 27 June 9, 2022, thereby terminating Mr. Anderson and substituting Mandana Jafarinejad as 28 Plaintiffs’ counsel of record, (ECF No. 42.) On June 9, 2022, Mr. Anderson also submitted 1 a timely response to the Court’s May 26 Order to Show Cause. (Anderson Resp.) In this 2 Response, Mr. Anderson addressed his statements to Mr. Murphey and subsequent failure 3 to respond to the Court’s May 17 Order. (See generally id.) Mr. Anderson explained that 4 he was “in a fever” and suffering from serious Covid symptoms when he sent Mr. Murphey 5 the emails and voicemail that were later submitted to the Court. (Id. ¶ 15.) Mr. Anderson 6 explained that he “did not intend that any statement [] be taken as a threat” and admitted 7 that he was “wrong to say what [he] said ‘off-the cuff’ and in pure frustration.” (Id.) 8 Mr. Anderson also addressed his failure to respond to the Court’s May 17 Order to 9 Show Cause, explaining that he “did not note any of the [Order’s] dates other than June 28, 10 2022,” and “did not realize that the Court’s OSC required a response at least until May 29.” 11 (Id. ¶¶ 17, 19; see also May 17 OSC (setting June 28, 2022 as the hearing date for “[a]ny 12 motions arising from the parties’ discovery dispute or behavior”).) Mr. Anderson also 13 explained that his ongoing Covid symptoms had seriously impacted his ability to handle 14 his cases, including this matter. (Id. ¶ 19.) 15 Finally, Mr. Anderson offered an apology for his actions. First, Mr. Anderson 16 apologized to the Court for his failure timely to respond to the May 17 Order to Show 17 Cause. (Id. ¶ 21.) Mr. Anderson then apologized to the Court, the Parties, and counsel for 18 his “own shortcomings,” stating, “I profusely apologize to Mr. Murphey for losing my 19 temper. I truly regret the experience[,] and I hope that he can find some understanding, 20 acceptance, tolerance and forgiveness.” (Id. ¶ 22.) 21 On June 14, 2022, Judge Schopler issued the June 14 Order discharging the May 17 22 and May 26 Orders to Show Cause “[i]n light of the plaintiff[s’] response and the 23 substitution of counsel.” (June 14 Order.) On June 28, 2022, Defendants timely objected 24 to the June 14 Order to the extent that it discharged the Orders to Show Cause and declined 25 to impose sanctions. (See generally Obj.) 26 / / / 27 / / / 28 / / / 1 LEGAL STANDARD 2 “A party may serve and file objections to [a magistrate judge’s non-dispositive 3 pretrial order] within 14 days after being served with a copy.” See Fed. R. Civ. P. 72(a); 4 see also Bhan v. NME Hosps., Inc., 929 F. 2d 1404, 1414 (9th Cir. 1991) (“Nondispositive 5 issues include discovery sanctions.”). “The magistrate judge’s order will be upheld unless 6 it is ‘clearly erroneous or contrary to law.’” Ctr. for Biological Diversity v. Fed. Highway 7 Admin., 290 F. Supp. 2d 1175, 1199 (S.D. Cal. 2003) (quoting Fed. R. Civ. P. 72(a); 28 8 U.S.C. § 636(b)(1)(A)). Factual determinations and discretionary decisions are reviewed 9 under the “clear error” standard, see id. at 1199–1200, while purely legal determinations 10 are reviewed under the “contrary to law” standard, see F.D.I.C. v. Fid. & Deposit Co. of 11 Md., 196 F.R.D. 375, 378 (S.D. Cal. 2000) (quoting Computer Economics, Inc. v. Gartner 12 Grp., Inc., 50 F. Supp. 2d 980, 983 (S.D. Cal. 1999)). 13 A decision reviewed for clear error will be overturned “only if the district court is 14 left with the definite and firm conviction that a mistake has been made.” Ctr. for Biological 15 Diversity, 290 F. Supp. 2d at 1199–1200 (quoting Weeks v. Samsung Heavy Indus. Co., 126 16 F.3d 926, 943 (7th Cir. 1997)). “This standard of review reflects the broad discretion 17 accorded to magistrate judges on pretrial matters.” Thunderbird Hotels, LLC v. City of 18 Portland, 670 F. Supp. 2d 1164, 1167 (D. Or. 2009) (citing Osband v. Woodford, 290 F.3d 19 1036, 1041 (9th Cir. 2002)), aff’d, 404 Fed. App’x 249 (9th Cir. 2010). The district court 20 will, however, conduct an “independent review of purely legal determinations” to decide 21 whether they are contrary to law. F.D.I.C. v. Fid. & Deposit Co. of Md., 196 F.R.D. 375, 22 378 (S.D. Cal. 2000) (quoting Computer Economics, Inc. v. Gartner Grp., Inc., 50 F. Supp. 23 2d 980, 983 (S.D. Cal. 1999)). “An order is contrary to law when it fails to apply or 24 misapplies relevant statutes, case law, or rules of procedure.” Perez v. City of Fresno, 519 25 F. Supp. 3d 718, 722 (E.D. Cal. 2021) (quoting Calderon v. Experian Info. Solutions, Inc., 26 290 F.R.D. 508, 511 (D. Idaho 2013); Jadwin v. Cty. of Kern, 767 F. Supp. 2d 1069, 1111 27 (E.D. Cal. 2011)). 28 / / / 1 ANALYSIS 2 Defendants object to Judge Schopler’s June 14 Order discharging his prior Orders 3 to Show Cause on the grounds that the decision was clearly erroneous and contrary to law.2 4 (See Obj. at 7.) Upon a thorough review of the record, the Court finds that Judge Schopler’s 5 decision not to impose sanctions was neither clearly erroneous nor contrary to law. 6 I. The June 14 Order is Not Clearly Erroneous 7 Defendants first argue that the June 14 Order is clearly erroneous “in light of the 8 egregious conduct and litigation abuses by Mr. Anderson.” (See Obj. at 11.) Defendants 9 acknowledge that the power to sanction must be exercised with “restraint and discretion,” 10 (see Obj. at 9 (quoting Zambrano v. City of Tustin, 885 F.2d 1473, 1478 (9th Cir. 1989))), 11 but assert that, because judges within this District “ha[ve previously] sanctioned other 12 lawyers who have behaved similarly to Mr. Anderson,” Judge Schopler clearly erred by 13 declining to impose sanctions in this case, (see Obj. at 12 (discussing Centeno v. City of 14 Carlsbad, No. 19-CV-2098-L (DEB), 2021 WL 2779576 (S.D. Cal. July 2, 2021))). 15 Defendants overlook that whether to impose sanctions is discretionary, Avery 16 Dennison Corp. v. Allendale Mut. Ins. Co., 310 F. 3d 1114, 1117–18 (9th Cir. 2002), and 17 judges are not required to impose sanctions when an attorney violates the Code of Conduct 18 set out in this District’s Local Rules, see S.D. Cal. CivLR 2.1(a) (“This Code of Conduct 19 is not intended to be a set of rule that lawyers can use to incite ancillary litigation, . . . but 20 the Court may take any appropriate measure to address violations . . . .” (emphasis added)); 21 S.D. Cal. CivLR 2.2(a) (describing appropriate measures such as sanctions, contempt 22 proceedings, or referral to a disciplinary body). Further, Judge Schopler is not required to 23 impose sanctions in this case simply because another judge in this District imposed 24 25 2 Defendants argue that the Court should also review the issue de novo pursuant to 28 U.S.C. § 26 636(b)(1)(C). (See Obj. at 7). However, this standard only applies when a magistrate judge “submit[s] to a judge of the court proposed findings of fact and recommendations for the disposition . . . of any motion.” 27 28 U.S.C. §§ 636(b)(1)(B)–(C). Here, Defendants did not file a motion, and Judge Schopler did not submit a Report and Recommendation. (See generally Docket.) Instead, Judge Schopler issued an Order 28 1 sanctions in a different case. Defendants rely on Centeno to support their argument that 2 sanctions were necessary here, (see Obj. at 12–15), but Centeno is inapposite. 3 In Centeno, the court ordered plaintiff’s counsel to show cause why he should not 4 be sanctioned for making disparaging statements to and false statements about opposing 5 counsel and impliedly threatening physical violence. See Order Imposing Sanctions on 6 Genaro Lara, Esq. at 7, Centeno v. City of Carlsbad, No. 19-CV-2098-L (DEB) (S.D. Cal. 7 filed July 2, 2021), ECF No. 149. In a written response and subsequent hearing, counsel 8 reasserted the disparaging and false statements and “express[ed] no regret for anything.” 9 Id. The Honorable Daniel E. Butcher therefore found sanctions “necessary and 10 appropriate” in that case. Id. at 9–12. Unlike counsel in Centeno, however, Mr. Anderson 11 accepted responsibility for his actions, acknowledged that he was “wrong to say what [he] 12 said,” and expressed remorse. (See Anderson Resp. ¶¶ 15, 22.) Specifically, in response 13 to Judge Schopler’s Orders to Show Cause, Mr. Anderson “profusely apologize[d] to Mr. 14 Murphey for losing [his] temper” and explained that he “truly regret[ted] the experience” 15 and “hope[d] that [Mr. Murphey could] find some understanding, acceptance, tolerance 16 and forgiveness.” (Id.) 17 “The issue of whether counsel acted properly can best be decided by the magistrate 18 who is on the spot.” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1415 (9th Cir. 1991). Here, 19 Judge Schopler determined in his sound discretion that sanctions were not necessary in 20 light of Mr. Anderson’s Response. Having reviewed the record, this Court is not left with 21 the definite and firm conviction that Judge Schopler was mistaken in declining to impose 22 sanctions here. The Court therefore concludes the June 14 Order was not clearly erroneous. 23 II. The June 14 Order is Not Contrary to Law 24 Defendants next argue that the June 14 Order is contrary to law because it “failed to 25 apply the relevant law relating to the imposition of sanctions, by declining to consider the 26 merits of the sanctions motion simply because Mr. Anderson withdrew as counsel of record 27 from the litigation.” (Obj. at 11.) Magistrate judge decisions regarding discovery sanctions 28 are generally reviewed for clear error and are not subject to the contrary to law standard of 1 review. See e.g., Bhan, 929 F. 2d at 1414; see also McAdam v. State Nat’l Ins. Co., 15 F. 2 Supp. 3d 1009, 1013 (S.D. Cal. 2014) (reviewing discretionary decisions for clear error); 3 Avery Dennison Corp., 310 F. 3d at 1117–18 (explaining that sanctions are discretionary). 4 In this case, the contrary to law standard does not apply because Defendants do not identify 5 any “statutes, case law, or rules of procedure” that Judge Schopler ignored or misapplied. 6 See Perez, 519 F. Supp. 3d at 722. 7 Defendants’ argument also fails because it misrepresents the record. First, despite 8 Defendants’ assertion that Judge Schopler “declin[ed] to consider the merits of the 9 sanctions motion,” the record reveals that Defendants never filed such a motion. (Compare 10 Obj. at 11, with Docket.) Judge Schopler’s May 17 Order to Show Cause required “[a]ny 11 motions arising from the parties’ discovery disputes or behavior [to] be filed by May 31, 12 2022.” (See May 17 OSC). Defendants failed to file a motion for sanctions within that 13 time. (See generally Docket.) Instead, Defendants filed a “Memorandum of Points and 14 Authorities” in response to the Order to Show Cause issued to Plaintiffs’ counsel. (See 15 Defs.’ Mem.); see also Fed. R. Civ. Pro. 7(b) (“A request for a court order must be made 16 by motion.”); Fed. R. Civ. Pro. 11(c)(2) (“A motion for sanctions must be made separately 17 from any other motion . . . .”). Therefore, Judge Schopler did not have a sanctions motion 18 before him when he issued the June 14 Order discharging the Orders to Show Cause. (See 19 generally Docket). Defendants fail to identify any law that requires a magistrate judge to 20 consider a party’s ancillary request in an unsolicited memorandum when determining 21 whether to discharge an order to show cause issued to the opposing party. (See generally 22 Obj.) 23 Second, Defendants’ argument ignores the language of the June 14 Order, asserting 24 that Judge Schopler discharged the Orders to Show Cause “simply because Mr. Anderson 25 withdrew as counsel,” (see Obj. at 11), when in fact the Order explicitly states that the 26 decision was also based on Mr. Anderson’s Response, (see June 14 Order). It is proper for 27 a court to consider a party’s response to an order to show cause when determining whether 28 to discharge that order. See e.g., Trunk v. City of San Diego, 547 F. Supp. 2d 1144, 1148 1 ||(S.D. Cal. 2007). Additionally, although judges retain the power to sanction attorneys after 2 ||they have withdrawn as counsel, Holgate v. Baldwin, 425 F.3d 671, 675 (9th Cir. 2005), 3 || Defendants fail to identify any law that prohibits a judge from acknowledging an attorney’s 4 || withdrawal as a factor when deciding not to impose sanctions. 5 Ultimately, there is no evidence that Judge Schopler failed to apply or misapplied 6 law when he discharged his Orders to Show Cause and declined to impose sanctions 7 Mr. Anderson. Therefore, the June 14 Order was not contrary to law. 8 CONCLUSION 9 For the foregoing reasons, the Court OVERRULES Defendants’ Objection (ECF 10 || No. 47) to Judge Schopler’s June 14 Order (ECF No. 44). 11 IT IS SO ORDERED. 12 Dated: November 7, 2022 —_—— 13 | odd (2 ® (re 14 Honorable Todd W. Robinson 5 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 10