In re TFT-LCD (Flat Panel) Antitrust Litigation

Citations: 289 F.R.D. 548; 2013 WL 621791Docket: No. M 07-1827 SI; MDL No. 1827

Court: District Court, N.D. California; February 18, 2013; Federal District Court

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Alison Paul, Leveta Chesser, and their counsel, Joseph Darrell Palmer, were found in civil contempt by District Judge Susan Illston, with sanctions imposed totaling $9,254.11. The Court had previously set a hearing for February 12, 2013, following a Renewed Motion for an Order to Show Cause filed by class counsel for the Indirect-Purchaser Plaintiff Class Actions (IPPs) on December 5, 2012. Objectors filed their Response on February 2, 2012, and IPP Counsel replied on February 6, 2012. 

The background details reveal that Paul and Johnny Kessel initially objected to the IPP's Round 1 Settlements in April 2012. Subsequent requests for depositions and document production were met with Palmer's refusal to produce his clients without a court order. After the Court's preliminary approval of the settlements in July 2012, Paul and Kessel appealed in August. IPP counsel issued a subpoena to Paul in September and sought to schedule her deposition, but Palmer reiterated his refusal to comply without a court order. 

In October 2012, IPP counsel moved to compel depositions, which Palmer opposed on several grounds, including jurisdiction and privilege issues. The Special Master ultimately ordered Paul and Kessel to comply with the deposition requests. Shortly thereafter, Kessel and Chesser submitted new objections to the Round 2 Settlements, again failing to provide their addresses. Palmer threatened legal action against the IPP counsel regarding the subpoenas during this time.

IPP counsel pursued Chesser’s deposition and, on the deposition day, Paul and Kessel, through Palmer, filed objections to the Special Master’s Order compelling their depositions, reiterating previously overruled arguments. IPP counsel, upon following up, found that neither Paul nor Kessel attended the scheduled depositions on November 5, 2012. In response, IPP counsel filed a motion for civil contempt and sanctions against Paul, Kessel, and Palmer, also urging the Court to compel Chesser to participate in discovery under the same terms as the others. On November 14, 2012, the Court denied Paul and Kessel's objections and compelled the depositions of all three parties by November 21, 2012, ordering Palmer to assist IPP counsel in scheduling. Kessel appeared on November 20, 2012, while Paul and Chesser did not. Subsequently, IPP counsel filed a Renewed Motion for Order to Show Cause regarding civil contempt and sanctions due to non-compliance and Palmer's behavior at Kessel’s deposition, seeking $10,000 in attorney fees and $1,154.11 in costs. Palmer opposed the motion, restating previous objections and claiming IPP counsel exceeded permissible topics during Kessel’s deposition. On January 9, 2013, the Court issued an Order to Show Cause for Paul, Chesser, and Palmer to explain why they should not be found in contempt. The legal standard for civil contempt is outlined under Rule 37(b)(1) of the Federal Rules of Civil Procedure, emphasizing that clear and definite court orders must be followed, and a party can be held in contempt if they fail to comply without a reasonable interpretation of the order. The court may award fees and costs as sanctions for contempt, regardless of willfulness.

Objectors Paul and Chesser, along with their counsel Palmer, were required by the Court's January 9, 2013 Order to demonstrate why they should not be found in civil contempt for failing to comply with a previous deposition order. In their response, they argued that the IPP counsel were pursuing unnecessary depositions and that no sanctionable conduct occurred on their part. Palmer claimed that IPP counsel did not attempt to conduct the depositions following the Court's November 14, 2012 order compelling such action. 

In contrast, IPP counsel countered that Palmer reached out on February 1, 2013, proposing to withdraw the contempt proceedings in exchange for a future deposition of Ms. Chesser, which was rejected. IPP counsel also noted that Palmer's wife, Alison Paul, would not comply with her deposition order. During the February 12, 2013 hearing, Palmer contended that he shouldn’t be held accountable for his client’s non-compliance and criticized IPP’s service of the subpoena, asserting it was invalid after being transferred to another district.

The Court found that IPP counsel provided clear evidence of the Objectors' and Palmer's violation of the November 14 order. The Court deemed Palmer's claims of not being responsible for Paul’s failure to comply disingenuous, noting his refusal to produce his client since the initial deposition notice in April 2012 and his continued non-compliance with the Court's orders. Palmer had not provided any evidence of efforts to persuade Paul to appear for deposition, nor had he communicated with IPP counsel to schedule the depositions post-order. The Court confirmed that Palmer's arguments regarding IPP's alleged lack of effort were irrelevant.

Palmer's claim that IPP counsel sought unnecessary depositions of Objectors is rejected by the Court, which supports its decision with a prior Order compelling discovery participation from Paul and Chesser. The Court confirms that the scope of depositions and document requests was appropriately limited to relevant information. Although Palmer contends that IPP counsel was not prejudiced, the Court notes that prejudice is significant only in cases involving severe sanctions, such as dismissal. The Court has the discretion to impose dismissal sanctions for willful conduct but chooses not to strike the objections from Paul and Chesser.

Due to their failure to comply with the Court's November 14, 2012 Order, Paul, Chesser, and Palmer are found in civil contempt. The Court imposes monetary sanctions totaling $9,254.11 to cover attorneys' fees and costs incurred by IPP counsel in pursuing compliance. Specific orders include that Palmer, Paul, and Chesser are jointly and severally sanctioned and that the order is stayed for ten days to allow for a potential appeal to the Ninth Circuit.

Additionally, the document discusses the procedural aspects regarding depositions, noting that even though Paul’s deposition was scheduled in the Southern District of California, jurisdictional matters were transferred to the Northern District due to an appeal. The Court emphasizes its authority to compel discovery and enforce subpoenas across district lines, as outlined in 28 U.S.C. 1407(b). Palmer's late response to the Court's request is acknowledged and allowed, despite the delay, and his conduct could also be subject to sanctions under the Court’s inherent authority.