Opinion
No. 2:13-CV-02095-KJM-AC
11-13-2015
DUARTE NURSERY, INC., a California Corporation; and JOHN DUARTE, an individual, Plaintiff, v. UNITED STATES ARMY CORPS OF ENGINEERS, Defendant. UNITED STATES OF AMERICA, Counterclaim-Plaintiff v. DUARTE NURSERY, INC., a California Corporation; and JOHN DUARTE, an individual, Counterclaim-Defendants.
ORDER
This matter is before the court on the Motion to Withdraw Deemed Admissions or, in the alternative, a retroactive Motion for a One-Day Extension to Serve Amended Responses filed by counterclaim-plaintiff United States of America ("the United States") acting through defendant U.S. Army Corps of Engineers ("the Corps," and collectively "the Government"). ECF No. 101. Plaintiffs Duarte Nursery, Inc. and John Duarte (collectively, "plaintiffs" or "Duarte") oppose the motion, and seek sanctions. ECF No. 103. Defendants have replied. ECF No. 135.
I. BACKGROUND
The court has reviewed the facts of this case in detail in its prior orders. See, e.g., ECF Nos. 27, 63, 89. It recounts only facts relevant here in light of the pending motion.
Plaintiffs commenced this action on October 10, 2013, stating claims against the Corps and seven officers of California's Central Valley Regional Water Quality Control Board ("Board"). ECF No. 1. Plaintiffs alleged the cease-and-desist order ("CDO") and Notice of Violation ("NoV") issued by the Corps to plaintiffs violated the Fifth Amendment's Due Process Clause, applicable to the state defendants through the Fourteenth Amendment. Id. ¶ 39-40. The CDO, issued February 25, 2013, alleges that plaintiffs "discharged dredged or fill material into seasonal wetlands, vernal pools, vernal swales, and intermittent and ephemeral drainages, which are waters of the United States, without a . . . permit," and further stated that "[s]ince a DA [Department of Army] permit has not been issued authorizing this discharge, the work is in violation of the Clean Water Act [CWA]." See First Am. Compl. ("FAC") ¶ 50, ECF No. 40; see also Second Am. Compl. ("SAC") ¶ 51, ECF No. 90.
The state defendants and the Corps separately moved to dismiss the original complaint, ECF Nos. 9 & 10, and the court granted the state defendants' motion and denied the Corps' motion. ECF No. 27. On May 7, 2014, the U.S. Department of Justice, on behalf of the Corps, filed an answer to the due process claim and a counterclaim for injunctive relief and civil penalties under the Clean Water Act. ECF No. 28. On August 20, 2014, plaintiffs filed the first amended complaint. ECF No. 41. The First Amended Complaint added a sixth claim for retaliatory prosecution in violation of the First Amendment. Id. On September 12, 2014, the Corps moved to dismiss the first, second, fifth, and sixth claims. ECF No. 46. On March 24, 2015, the court granted the motion with leave to amend as to plaintiffs' sixth claim of retaliatory prosecution, and denied the motion in all other respects. ECF No. 63.
The parties and docket refer to this as a "first supplemental complaint," but, for consistency with the previous orders, the court will refer to it as a "first amended complaint."
On July 7, 2015, plaintiffs filed a motion for leave to further amend the complaint, arguing they had recently discovered facts that would cure the retaliatory prosecution claim's deficiencies. ECF No. 80. The Corps opposed the motion. ECF No. 82. On September 3, 2015, the court granted plaintiffs' motion, ECF No. 89, and the same date, plaintiffs filed the Second Amended Complaint. ECF No. 90. On September 21, 2015, the Corps and the United States filed their answer to the Second Amended Complaint. ECF No. 99.
In the meantime, plaintiffs served requests for admissions, production of documents and interrogatories, and took depositions of federal employees. Am. Doyle Decl. ¶ 2, ECF No. 107. On August 28, 2015, plaintiffs' final set of requests for admissions, numbers 370 to 424 were served by mail. Mot. to Withdraw Deemed Admis. at 2, ECF No. 101-1. The responses thus were due on September 30, 2015, two days before the close of the discovery period. Am. Doyle Decl. ¶ 4l; see ECF No. 73.
On October 1, 2015, the government realized it had made a calendaring mistake with respect to the deadline for the response, and asked plaintiffs for a one-day extension. Am. Doyle Decl. ¶ 4. Plaintiffs refused to grant the one-day extension. Id. The government finalized and served the response on plaintiffs the same day. Id. ¶ 5. On October 2, 2015, the government filed the pending motion.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 36(a) provides that a matter is deemed admitted "unless, within 30 days after service of the request . . . the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by the party's attorney." Once admitted, the matter "is conclusively established unless the court on motion permits withdrawal or amendment of the admission" based on Rule 36(b). Rule 36(b) provides, in pertinent part:
[T]he 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.Fed. R. Civ. P. 36(b). Rule 36(b) is permissive, not mandatory, with respect to the withdrawal of admissions. Conlon v. United States, 474 F.3d 616, 621 (9th Cir. 2007). The rule permits a district court to exercise its discretion to grant relief from an admission made under Rule 36(a) only when:
(1) the presentation of the merits of the action will be subserved, andConlon, 474 F.3d at 621 (internal quotations removed).
(2) the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.
The first half of the test in Rule 36(b) is satisfied when maintaining the admissions would practically eliminate any presentation of the merits of the case. Conlon, 474 F.3d at 622 (citing Hadley v. United States, 45 F.3d 1345, 1348 (9th Cir. 1995)). As to the second prong, the party relying on the deemed admission has the burden of proving prejudice. Conlon, 474 F.3d at 622. The prejudice contemplated by Rule 36(b) is "not simply that the party who obtained the admission will now have to convince the factfinder of its truth. Rather, it relates to the difficulty a party may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to the questions previously deemed admitted." Hadley, 45 F.3d at 1348.
"When undertaking a prejudice inquiry under Rule 36(b), district courts should focus on the prejudice that the nonmoving party would suffer at trial." Conlon, 474 F.3d at 623 (citing Sonoda v. Cabrera, 255 F.3d 1035, 1039-40 (9th Cir. 2001) (holding, without further analysis, that district court did not abuse discretion by granting Rule 36(b) motion to withdraw deemed admissions because motion was made before trial and nonmoving party would not have been hindered in presenting its evidence); Hadley, 45 F.3d at 1348 (focusing prejudice inquiry on unavailability of key witnesses and sudden need to obtain evidence); see also Raiser v. Utah County, 409 F.3d 1243, 1247 (10th Cir. 2005) (finding no prejudice when nonmoving party had relied on deemed admissions for only a two-week period in preparing its summary judgment motion); In re Durability, 212 F.3d 551, 556 (10th Cir. 2000) (holding categorically that relying on admissions on summary judgment does not constitute prejudice).
Rule 36 "seeks to serve two important goals: truth-seeking in litigation and efficiency in dispensing justice." Conlon, 474 F.3d at 622. Thus, a district court must specifically consider both factors under the rule before deciding a motion to withdraw or amend admissions. The court may also consider other factors, including whether the moving party can show good cause for the delay and whether the moving party appears to have a strong case on the merits. Id. at 625.
III. DISCUSSION
Under Conlon's two-prong test, the court first considers whether denying the government's motion would effectively eliminate resolution on the merits. The court then considers whether plaintiffs, the parties relying on the deemed admissions, have proved the requisite prejudice. The court next considers other factors, and finally evaluates plaintiffs' request for sanctions.
A. Presentation of the Merits of the Action
The court looks to whether "upholding the admissions would practically eliminate any presentation of the merits of the case." Hadley, 45 F.3d at 1348. The government argues that "several of the requests could be either dispositive or virtually dispositive." Mot. at 4. Specifically, the government points to Request No. 389, asking the government to admit it was "wrong in alleging that Duarte violate[d] the Clean Water Act." Id. (internal quotations removed). In addition to Request No. 389, the government also argues that deeming as admitted Requests 384 to 392, which rely on other allegations in the government's counterclaims such as whether Duarte discharged pollutants, would eviscerate the fundamental basis of the United States' allegations against plaintiffs. Mot. at 3. Plaintiffs note that district courts in other circuits have found that "when the evidence shows that the deemed admissions should have been admitted anyway the first factor is not present." Opp'n at 7 (emphasis omitted). Plaintiffs argue, in essence, that allowing the government to withdraw the admissions would not promote the presentation of the merits, because the "[g]overnment's case is meritless." Opp'n at 8.
As a sister court has noted, "[t]he Ninth Circuit has repeatedly held . . . that the public policy favoring disposition of cases on their merits strongly counsels against dismissal of a case or sanctions that are ultimately case-terminating." Doctors Medical Ctr. of Modesto, Inc. v. Principal Life Ins. Co., No. 10-00452, 2011 WL 831421, at *3 (E.D. Cal. Mar. 3, 2011); see In re Phenylpropanolamine Prods. Liab. Litig., 460 F.3d 1217, 1228 (9th Cir. 2006). Here, discovery responses were late due to the government attorney's calendaring mistake. As in Doctors Medical the responses here were also delivered merely one day late. Doctors Med., 2011 WL 831421, at *3. But in Doctors Medical, the late responses were inadequate, and the proponent sought amended responses. Id. The amended responses were never served, and thus the court in Doctors Medical found the tardy party had dragged its feet after the initial one-day delay. Id. at *8. Unlike in Doctors Medical, where sanctions were granted because the court found the responding party to be causing intentional delay and unnecessarily driving up litigation cost, here there is no dispute over the incompleteness of the late responses. Id.; Am. Doyle Decl. ¶ 5; see generally Opp'n. The Federal Rules are to be administered to secure the just, speedy, and inexpensive determination of every action and proceeding." Fed. R. Civ. P. 1. They are "not to be used . . . in the hope that a party's adversary will simply concede essential elements." Conlon, 474 F.3d at 622. Moreover, public policy resoundingly favors resolving a case on its merits. See generally Moneymaker v. CoBen (In re Eisen), 31 F.3d 1447, 1451 (9th Cir. 1994).
The court finds that denying the motion to withdraw deemed admissions would frustrate fair resolution of the case and contravene the strong policy interests favoring consideration of the merits.
B. Prejudice
When undertaking a prejudice inquiry under Rule 36(b), the court focuses on the prejudice the nonmoving party would suffer at trial, and the burden is on the nonmoving party to show such prejudice. Conlon, 474 F. 3d at 622-23. Here, as the government points out, plaintiffs omit any discussion of prejudice in their opposition. ECF No. 135 at 4. Plaintiffs have not borne their burden to establish prejudice.
Furthermore, the deadline for the government's requests fell two days before the discovery deadline. Thus, plaintiffs could not have relied on the responses to admissions to conduct further discovery. Even if plaintiffs relied on the deemed admissions in some way, their reliance reasonably lasted only one day, because the government subsequently served the requests on October 1, 2015 and then promptly filed the pending motion. Hearing on summary judgment is not until November 20, 2015, and trial is not scheduled until March 28, 2016. See Santana Row Hotel Partners, L.P. v. Zurich American Ins. Co., No. 05-00198, 2007 WL 1140464, at *4 (N.D. Cal. Apr. 17, 2007) (prejudice not found where trial date not yet set); but see Conlon, 474 F.3d at 624 (prejudice found where only eight days remained until trial, but even then noting "close question" as to whether government would have been prejudiced). Plaintiffs' insistence here makes a mountain of a mole hill, and is in stark contrast to the kind of timing needed to support true prejudice, as signaled by the Ninth Circuit in Hadley: "Courts are more likely to find prejudice when the motion for withdrawal is made in the middle of the trial." Hadley, 45 F.3d at 1348.
The court cannot find plaintiffs will suffer prejudice.
C. Other Factors
Other factors may include good cause for the delay and strength of the case on the merits. Conlon, 474 F. 3d 625.
Plaintiffs also argued that because the Declaration of Andrew Doyle, ECF No. 101, was not properly signed, the motion was not supported by evidence. The government has submitted an amended declaration, signed by Mr. Doyle, mooting this argument. See generally Am. Doyle Decl., ECF No. 107.
Although a calendaring mistake is not generally good cause, the court finds the mistake here was inadvertent, and cured immediately upon the government's noticing the mistake. The court declines to assess the strength of the government's case at this point, noting the pending motions for summary judgment will provide that opportunity. See Borges v. U.S. Bank, No. 2:12-CV-2427 TLN AC, 2013 WL 1776431, at *3 (E.D. Cal. Apr. 25, 2013) (declining to consider merits of plaintiff's case prematurely).
No other factor weighs in favor of granting the motion.
D. Sanctions
In considering a motion to withdraw deemed admissions, a court may impose sanctions, including the payment of a monetary fine or the opposing party's increased costs and expenses, even when the court grants the motion to withdraw deemed admissions. See Hadley, 45 F.3d at 1350; see also Santana Row, 2007 WL 1140464, at *5. Courts in this district have required a party withdrawing admissions to pay a sanction to the opposing party to compensate for the expense caused by its untimely response. See, e .g., Doctors Med., 2011 WL 831421, at *8 (ordering party seeking to withdraw its admissions to pay opposing party's costs of filing motion to have admissions deemed admitted); Mid Valley Bank v. N. Valley Bank, 764 F. Supp. 1377, 1391 (E.D. Cal. 1991) (ordering party withdrawing admissions to pay reasonable cost of preparing opposition to motion to withdraw admissions).
This is not a case in which the government delayed service of a response for an extended period of time, requiring plaintiffs to spend significant sums and lose valuable time. Cf. Santana Row, 2007 WL 1140464, at *1 (one response not served until year and a half after defendants originally served with requests for admission); Lamark v. Laiwalla, No. 12-03034, 2013 WL 5703614, at *3 (E.D. Cal. Oct. 15, 2013) (plaintiff granted defendants three-week extension, but defendants did not respond for three months). Sanctions are not warranted.
IV. CONCLUSION
For the foregoing reasons, the court GRANTS the government's motion to withdraw deemed admissions and DENIES plaintiffs' request for sanctions.
IT IS SO ORDERED. DATED: November 13, 2015.
/s/_________
UNITED STATES DISTRICT JUDGE