Courts have the inherent power and under rule 37 to sanction parties for not complying with discovery orders

Minnesota business lawyers know that courts have the inherent authority and under Rule 37 to sanction parties who fail to comply with discovery orders.

“‘If a party can make himself a judge of the validity of orders which have been issued, and by his own act of disobedience set them aside, then are the courts impotent, and what the Constitution now fittingly calls “the judicial power of the United States” would be a mere mockery.’” Young v. United States, 481 U.S. 787, 796 (1987). The Supreme Court has made clear that courts have the right to use their contempt power when it is warranted. “‘[T]here could be no more important duty than to render such a decree as would serve to vindicate the jurisdiction and authority of courts to enforce orders and to punish acts of disobedience.’” Id. A court’s power to impose civil contempt sanctions derives from the court’s inherent authority as well as the Federal Rules of Civil Procedure. The Supreme Court held in Young: “That the power to punish for contempt is inherent in all courts, has been many times decided and may be regarded as settled law. It is essential to the administration of justice. The courts of the United States, when called into existence and vested with jurisdiction over any subject, at once became possessed of the power.” 481 U.S. at 795.

Fed. R. Civ. P. 37(b) also allows a court to hold a party in civil contempt and impose sanctions for a violation of a court’s discovery order.

A party seeking civil contempt, bears the initial burden of proving, by clear and convincing evidence, that the alleged contemnors violated a court order. Chicago Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 505 (8th Cir. 2000). Once that burden has been satisfied, the burden shifts to the party alleged to have violated the order to show an inability to comply. Id.

Violation of discovery orders, like other orders, constitutes civil contempt. See Resolution Trust Co. v. Ruggiero, 987 F.2d 420, 421 (7th Cir. 1993). The court may hold a party violating a discovery order in contempt of court. Edeh v. Carruthers, 2011 WL 4808194 (D. Minn. Sept. 20, 2011).

For a party to be held in contempt, it must be shown that (1) a valid order existed, (2) the party had knowledge of the order; (3) the party disobeyed the order. United States v. Thornton, 2015 WL 1522245 (D. Minn. March 27, 2015).

In response, the party alleged to have violated the order has an opportunity to put forth an inability defense: (1) that they were unable to comply, explaining why categorically and in detail; (2) that their inability to comply was not self induced; and (3) that they made in good faith all reasonable efforts to comply. Chicago Truck Drivers, 207 F.3d at 506. Alleged contemnors who fail to make any effort to comply with a discovery order cannot establish an inability defense. See, e.g., Piscitiello v. Delanor, Kemper & Assocs., LLC., 2013 WL 3789723 (D. Minn. July 18, 2013).

Civil contempt may be employed either to coerce the defendant into compliance with a court order or to compensate the aggrieved party for losses sustained, or both. Chicago Truck Drivers, 207 F.3d at 505. The Federal Rules of Civil Procedure give the trial court broad discretion in imposing sanctions upon parties who fail to make discovery.” Denton v. Mr. Swiss of Missouri, Inc., 564 F.2d 236, 239 (8th Cir. 1977).

The court has the right to award reasonable expenses and attorneys’ fees as a sanction under Rule 37(b)(2) for a contemnor’s refusal to comply with a discovery order. Hairston v. Alert Safety Light Products, Inc., 307 F.3d 717 (8th Cir. 2002) and Rule 37(b)(2)(C) provides that “the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).

A contemnor’s lack of financial resources does not constrain this Court’s authority to enter even severe sanctions where, as here, the contemnor’s contempt is willful: When the facts show willfulness and bad faith, as in this case, the district court need not investigate the propriety of a less extreme sanction. In such cases, “the selection of a proper sanction, including dismissal, is entrusted to the sound discretion of the district court.” Everyday Learning Corp. v. Larson, 242 F.3d 815, 817-18 (8th Cir. 2001)

“It is well-settled that a court’s contempt power extends to non-parties who have notice of the court’s order and the responsibility to comply with it.” Chicago Truck Drivers, 207 F.3d at 507. The Eighth Circuit explicitly has held that “a nonparty may be held in contempt where the nonparty aids or abets a named party in a concerted violation of a court order.” Id. (citation and quotation marks omitted); see also Goya Foods, Inc. v. Wallack Mgmt. Co., 290 F.3d 63, 75 (1st Cir. 2002) (“[I]t has long been recognized that a nonparty may be held in civil contempt if, and to the extent that, he knowingly aids or abets an enjoined party in transgressing a court order.”). All that is required is that the non-party be aware of the order but nevertheless cause or help the party to violate the order. Chicago Truck Drivers, 207 F.3d at 507; see also Reed, 2014 WL 6473426 (imprisoning non-party owner of defendant for failing to respond to post-judgment discovery requests to defendant); Twin City Pipe Trades Service Ass’n v. Franke Mechanical LLC, 2013 WL 309905, at *1 (Jan. 25, 2013 D. Minn.) (holding non-party owners and officers of defendant in contempt for failing to produce defendants’ business records and authorizing incarceration if they did not purge contempt).

Court has authority to enter any sanctions necessary to compel compliance with its orders: The court’s discretion in fashioning an appropriate remedy for contempt includes the power to “grant the relief that is necessary to effect compliance with its decree. The measure of the court’s power in civil contempt proceedings is determined by the requirements of full remedial relief.” Hartman v. Lyng, 884 F.2d 1103, 1106 (8th Cir. 1989)

A court’s authority to enter injunctions to coerce obedience arises under the court’s inherent authority and Rule 65(d). The Supreme Court has held that Rule 65(d) applies broadly to any “equitable decree compelling obedience under the threat of contempt,” which includes not only injunctions and restraining orders, but also “enforcement orders and affirmative decrees as well.” Chicago Truck Drivers, 207 F.3d at 507 (quoting Int’l Longshoremen’s Ass’n v. Philadelphia Marine Trade Ass’n, 389 U.S. 64, 75-76 (1967)).