KENDALL J. NEWMAN, Magistrate Judge.
On October 30, 2015, the United States filed a motion to withdraw admissions made by operation of Rule 36. (ECF No. 53.) Defendant Donald M. Wanland, Jr. has opposed the motion, and the United States filed a reply to defendant's opposition. (ECF Nos. 62, 63.) After considering the parties' briefing and the applicable law, the court GRANTS the motion, but issues monetary sanctions and further relief, as outlined below.
On September 26, 2013, defendant, a now-suspended California attorney, was convicted of 28 criminal counts, including attempt to evade and defeat the payment of tax (1 count); the removal, deposit, and concealment of property subject to levy (24 counts); and willful failure to file income tax returns (3 counts). Defendant was subsequently sentenced to a term of imprisonment on March 25, 2014; the judgment in the criminal case was entered on March 28, 2014; and defendant filed a notice of appeal on April 7, 2014. The criminal appeal remains pending, and defendant is presently incarcerated.
On November 13, 2013, the United States commenced the instant civil action, seeking a determination that assessments for defendant's federal tax liabilities for certain tax years between 1996-2003, which the United States alleges amounts to $1,260,040.60 as of October 8, 2012, were not discharged in bankruptcy, as well as seeking to reduce such tax assessments to judgment. (ECF No. 1.) An initial pretrial scheduling order was issued on November 24, 2014. (ECF No. 32.) Pursuant to later modifications to the scheduling order, discovery was to be completed by September 30, 2015
On August 25, 2015, defendant served the United States with a set of written discovery requests. (Declaration of Gerald A. Role, ECF No. 54 ["Role Decl."], ¶ 3, Ex. B.) In a declaration signed under penalty of perjury, counsel for the United States, Gerald Role, who is based in Washington, D.C., explains the ensuing events as follows:
(Role Decl. ¶¶ 3-9.)
Also on October 30, 2015, the United States filed the instant motion to withdraw admissions. (ECF No. 53.) The motion concedes that, because the United States did not timely respond to the requests for admission, the requests were deemed admitted by operation of Federal Rule of Civil Procedure 36, necessitating a motion to withdraw such admissions. The motion also acknowledges that defendant had previously filed a motion for summary judgment and other dispositive relief on October 26, 2015, relying, at least in part, on the deemed admissions. (See ECF No. 51.) Thereafter, on November 3, 2015, the United States filed its own motion for summary judgment. (ECF No. 55.)
As an initial matter, defendant contends that the court should deny the United States' motion to withdraw admissions on procedural grounds alone.
Defendant argues that, because the motion is a discovery motion, the United States failed to comply with (1) the court's scheduling order by filing its motion after the September 30, 2015 discovery completion deadline; and (2) with Local Rule 251 by not meeting and conferring with defendant prior to the filing of the motion, and not drafting a joint statement regarding the discovery disagreement.
The United States counters that the motion is not a true discovery motion concerning the propriety of a particular discovery request or the adequacy of a particular discovery response. Instead, the deemed admissions go to the merits of the claims in the complaint, and a ruling on the motion could be dispositive of the case. Thus, even if Local Rule 251 and the discovery completion deadline were applicable to the instant motion, strict compliance should not be required. The United States further posits that compliance with the meet-and-confer and joint statement requirements of Local Rule 251 would have been difficult given defendant's incarceration, and also asserts that defendant's vigorous opposition to the motion demonstrates that meet-and-confer efforts would have been futile.
Even assuming, without deciding, that the United States' motion is a discovery motion subject to Local Rule 251 and the discovery completion deadline in the pretrial scheduling order, and that the United States thus violated those provisions, the court declines to deny the motion solely on such procedural grounds. Denial of the United States' motion, whether strictly characterized as a discovery motion or not, would be dispositive of the case, and would constitute a disproportionately harsh sanction for procedural violations. In any event, defendant has been provided an adequate opportunity to oppose the motion on the merits, and has done so. (ECF Nos. 59, 62.) As such, the court proceeds to the merits of the motion. Federal Rule of Civil Procedure 36(a) provides that a matter is deemed admitted "unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." Fed. R. Civ. P. 36(a)(3). Once admitted, the matter "is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended." Fed. R. Civ. P. 36(b). According to Rule 36(b), "the court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits." Id.
As the Ninth Circuit Court of Appeals has explained:
The court evaluates the United States' motion to withdraw admissions under the framework outlined above.
"The first half of the test in Rule 36(b) is satisfied when upholding the admissions would practically eliminate any presentation of the merits of the case."
Here, there can be no serious dispute that the admissions involved are case dispositive. In this case, the United States essentially seeks a determination that defendant's alleged federal tax liabilities were not discharged in bankruptcy, and seeks to reduce them to judgment. However, in defendant's requests for admission, which are now deemed admitted, defendant asked the United States to admit, inter alia, that the tax liabilities at issue were discharged in bankruptcy (Request No. 3); that the tax liabilities are barred from enforcement by the doctrine of res judicata (Request No. 5); and that defendant did not engage in tax evasion at any time (Request No. 19). (Role Decl. Ex. B.) If such matters are deemed conclusively established, it would essentially eliminate the United States' ability to present the merits of its case. Defendant's briefing does not contend otherwise. As such, the court finds that the presentation of the merits of the action will be subserved if the admissions were upheld.
"The party relying on the deemed admission has the burden of proving prejudice."
In this case, defendant would not be prejudiced in maintaining his defense of the action on the merits if the court were to permit the United States to withdraw its admissions. The parties agree that the United States' responses to the requests for admission were due September 28, 2015 (ECF Nos. 54-1 at 2, 62 at 27, 63 at 10), and the United States filed its motion to withdraw the deemed admissions about a month later on October 30, 2015, well in advance of the April 2016 trial date. (ECF No. 53.)
Moreover, this is not a case where defendant missed out on an opportunity to take additional discovery because of his reliance on the deemed admissions. Given that the United States' responses to the requests for admission were due on September 28, 2015, two days prior to the September 30, 2015 discovery completion deadline, defendant would not have been able to conduct further discovery based on the United States' responses, even if they had been timely served. Similarly, defendant ultimately received responses to his August 25, 2015 discovery requests. On October 30, 2015, the United States served responses to defendant's August 25, 2015 discovery requests, including the requests for admission, and defendant acknowledged that he received the responses on November 6, 2015. (Role Decl. ¶ 9; ECF No. 62 at 27.)
Finally, the substance of at least some of defendant's requests for admission suggests that defendant could not have reasonably expected the United States to admit them, and thus can hardly claim to be unfairly surprised by a motion to withdraw such deemed admissions filed only about a month later. As the Ninth Circuit has observed:
Even if the two-pronged test of Rule 36(b) is satisfied, the court retains discretion to deny the motion to withdraw admissions. Nevertheless, the two factors set forth in Rule 36(b) were clearly intended to be "central to the analysis." Conlon, 474 F.3d at 625. In any event, there are no other factors in this case that strongly militate in favor of denying the United States' motion.
Admittedly, the United States has not shown good cause for its delay. However, despite counsel for the United States' serious shortcomings, discussed more fully below, the failure to timely respond to the requests for admission appears to have been merely grossly negligent and not intentional. Once counsel learned of the existence of the requests for admission on October 22, 2015, he took relatively prompt action by filing the instant motion, and serving responses to the requests for admission, on October 30, 2015. (Role Decl. ¶¶ 6-9.) As such, and with particular regard to the general public policy favoring disposition of cases on their merits, lesser sanctions are more appropriate.
The court also declines to prematurely assess the strength of the United States' claims, or defendant's defenses, at this point. At least at this juncture, and without prejudging any future proceedings, the court cannot conclude that the United States' claims have no merit, and the relative strength or weakness of the claims does not substantially affect the court's resolution of the present motion.
In sum, having carefully considered the record and the applicable law, the court grants the United States' motion to withdraw its admissions.
Although the court grants the United States' motion to withdraw admissions, the court also finds that some form of lesser sanctions is warranted by Mr. Role's conduct as counsel for the United States.
The facts, as outlined in Mr. Role's own declaration, suggest that Mr. Role displayed a surprisingly cavalier attitude towards his discovery obligations. As an initial matter, Mr. Role failed to properly review and calendar defendant's August 25, 2015 discovery requests, and ultimately carelessly lost them, initiating the chain of unfortunate events. However, even more troubling is the following statement in Mr. Role's declaration:
(Role Decl. ¶ 4) (emphasis added). While the court takes Mr. Role at his word that he did not actually discover the requests for admission until he received defendant's letter on October 22, 2015 (Role Decl. ¶¶ 6-7, Ex. A), Mr. Role entirely fails to explain why he took no action on the other written discovery requests until October 30, 2015; even though, by his own account, he knew that he had to respond to them since "[l]ater in September" and also must have known that the responses were imminently due on September 28, 2015. (Role Decl. ¶ 4.)
The above actions are simply not the type of conduct the court expects of a licensed attorney, let alone an attorney representing the United States government. Additionally, it has resulted in a significant amount of unnecessary briefing and proceedings, wasting the limited time and resources of a court in one of the busiest and most overloaded districts in the country. Consequently, the court finds it appropriate to impose a monetary fine of $500.00 on Mr. Role personally, which is to be paid within 28 days of this order.
The court also considers whether some further type of relief is necessary. As discussed above, the United States' actions in this case, although dilatory and improper, have not actually caused defendant to forego an opportunity to conduct additional discovery or to compel supplemental responses to already-propounded written discovery. As the court previously explained, even if the United States' responses to defendant's August 25, 2015 written discovery had been timely served on September 28, 2015, defendant would not have been able to conduct further discovery based on those responses, nor would he have been able to compel supplemental written responses, prior to the September 30, 2015 discovery completion deadline. Therefore, defendant is not strictly entitled to have the discovery period re-opened.
Nevertheless, out of abundance of caution, and in light of the United States' dilatory conduct, the court grants defendant only an extension of the discovery period until March 31, 2016 for the limited purpose of conducting any oral depositions he wishes to conduct in this matter consistent with the Federal Rules of Civil Procedure. The United States will not be permitted to conduct any additional discovery, other than to appear at or defend any depositions conducted by defendant. Because defendant is incarcerated, he will be required to take such depositions telephonically, with the court reporter, witness, and counsel for the United States located at some other venue (unless all interested parties voluntarily agree to appear at the prison and arrangements are made with the prison). Defendant shall bear the costs and expenses related to any such depositions, including the cost of any court reporters. However, the court expects the United States, upon reasonable notice, to assist with the logistics of arranging such depositions, including providing a venue at the U.S. Attorney's Office for depositions, assisting with the coordination (but not cost) of court reporters, arranging a telephone connection at the prison, coordinating with defendant to reasonably make available and show exhibits selected by defendant to the witness at the deposition, and making any government witnesses reasonably available for deposition. If either party, or both parties, violate the terms and spirit of this order, or take unreasonable positions with respect to the coordination and scheduling of the authorized discovery, the court will impose sanctions.
No further discovery is authorized, unless the parties informally agree to conduct discovery beyond the terms of this order. However, the parties are cautioned that the court will not enforce any such informal discovery agreements through motion practice.
In light of the court's grant of the United States' motion to withdraw admissions, and the limited extension of the discovery period, the court denies the motions for summary judgment and other dispositive relief filed by the United States and defendant, but without prejudice to their renewal.
If, upon conclusion of the limited extended discovery period, the parties wish to file any motions for summary judgment or other dispositive relief, such motions shall be filed no later than May 5, 2016. Any opposition briefs shall be due June 16, 2016, and any reply briefs shall be due July 14, 2016. Upon the filing of the reply briefs, the motion(s) shall be submitted for decision on the record and written briefing without oral argument, and no further briefing will be permitted, unless specifically requested by the court.
Furthermore, to accommodate the limited discovery extension and further dispositive motion practice, the final pretrial conference and trial dates of March 3, 2016, and April 4, 2016, respectively, are vacated. The court will reschedule dates for the final pretrial conference and trial upon resolution of any dispositive motions.
All other dates, deadlines, and provisions of the scheduling order remain unchanged.
For the foregoing reasons, IT IS HEREBY ORDERED that:
IT IS SO ORDERED.
