Subject: Ninth Cir. Dec., 11Apr96, 1/2 From: mayo@lightlink.com (David Mayo) Date: 1996/04/17 Message-Id: <4l2658$c8f@light.lightlink.com> Sender: electra@light.lightlink.com Organization: Art Matrix - Lightlink Electra Gateway v2.4 Newsgroups: alt.religion.scientology N O T F O R P U B L I C A T I O N FILED APRIL 11, 1996 UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT RELIGIOUS TECHNOLOGY CENTER; CHURCH OF SCIENTOLOGY OF CALIFORNIA; CHURCH OF SCIENTOLOGY INTERNATIONAL, Plaintiffs-counter-defendants-Appellees v. ROBIN SCOTT, et al., Defendants. And CHURCH OF THE NEW CIVILIZATION; DAVID MAYO, Detendants-counter-claimants-Appellants, CHURCH OF SPIRITUAL TECHNOLOGY, Counter-defendant-Appellee. No. 94-55781 DC No. CV-85-0711-AWT(Bx) -1- RELIGIOUS TECHNOLOGY CENTER; CHURCH OF SCIENTOLOGY OF CALIFORNIA; CHURCH OF SCIENTOLOGY INTERNATIONAL, Plaintiffs- counter-defendants-Appellants,=20 v. LARRY WOLLERSHEIM, et al., Defendants, CHURCH OF SPIRITUAL TECHNOLOGY, Counter - defendant, and CHURCH OF THE NEW CIVILIZATION=20 DAVID MAYO, Defendant-counter-claimants -Appellees No. 94-55920 DC No. CV-85-7197 -AWT (Bx) MEMORANDUM* ) ) ) Appeal from the United States District Court for the Central District of California A. Wallace Tashima, District Judge, Presiding Argued and Submitted November 14, 1995 Pasadena, California Before: HALL and NOONAN, Circuit Judges. SHUBB*, District Judge. Religious Technology Center (RTC), a California corporation, appeals from= judgment and imposition of attorneys fees entered against it in two cases= it brought against David Mayo (Mayo) and other related defendants. Mayo= cross-appeals judgment entered against him on his counterclaims. We affirm= the judgment and ------------------------------------------------------------- * This disposition is not appropriate for publication and may not=20 be cited to or by the courts of this circuit except as provided by=20 9th Cir. R 36-3. * The Honorable William B. Shubb, United States District Judge for=20 the Eastern District of California, sitting by designation. -2- award of attorneys fees against RTC. We affirm the dismissal of Mayo's= emotional distress counterclaim, but reverse and remand the judgment= against Mayo on his remaining counterclaims. PROCEEDINGS In January 1985 RTC sued Mayo and other persons connected with the Church of= the New Civilization, a splinter group of the official Church of= Scientology, contending that they were making unauthorized use of stolen= documents relating to the religion of Scientology. RTC stated that it was= "the protector" of the religion of Scientology, its philosophy and its= technology "including the Advanced Technology" consisting of "confidential= and proprietary information regarding counseling and training," and was the= owner of various trademarks registered with the U.S. Patent and Trademark= Office protecting the Advanced Technology. The coplaintiffs with RTC were= the Church of Scientology International, Inc. and the Church of Scientology= of California, Inc., both nonprofit California corporations which RTC= stated were authorized by it to use the Advanced Technology in accordance= with certain terms and conditions in conjunction with the marks it owns. = Thirty-one marks were identified in RTC's complaint, in addition to which= there were a number of other marks for which registration was pending or= marks owned by RTC but as yet unregistered. RTC sought an injunction= against the use of this material by the defendants. In November 1985 RTC= filed a second suit, ultimately consolidated with the first.=20 -3- Mayo counter-sued for false designation of origin of the documents and for= unfair competition in violation of the Lanham Act, for libel, and for= intentional infliction of emotional distress. After 1,825 docket entries= and nine years of pretrial litigation involving three discovery= magistrates, a special master, the recusal of two district court judges,= the denial of five petitions for writ of mandamus, three appeals (Religious= Technology Center v. Wollersheim, 796 F.2d 1076 (9th Cir. 1986), cert.= denied, 479 U.S. 1103, 107 9. Ct. 1336, 94 L.Ed.2d 187 (1987); Religious= Technology Center et al. v. Scott, 869 F.2d 1306 (9th Cir. 1989); Religious= Technology Center v. Wollersheim, 971 F.2d 364 (9th Cir. 1992), and three= denials of certiorari by the Supreme Court, the third district judge, A.= Wallace Tashima, entered Final Judgment. We set out and respond to the= issues now raised on these appeals. I. Recusal of Judge Ideman RTC first appeals District Judge Letts' denial of its October 1991 motion to= recuse Judge Ideman, the district judge assigned to this case after Judge= Pfaelzer had recused herself. In denying RTC's petition for writ of= mandamus this court in an unpublished order expressly determined that Judge= Letts, denial was "not clearly erroneous." This order is the law of the= case, to which subsequent panels should defer unless new evidence or law= has bean presented or unless the first panel's ruling was clearly= erroneous. See Merritt=20 -4- v. Mackey, 932 F.2d 1317, 1320 (9th Cir. 199l).=20 We find that none of Merritt's exceptions apply in this case. 1/ II. Rule 37 Dismissal RTC mounts two attacks on Judge Ideman's dismissal of its claims as a= discovery sanction under Rule 37; it argues: (1) that Judge Ideman simply= rubber stamped the special master's recommendation to dismiss without= conducting an independent review; and (2) that the dismissal order itself= was improper under Rule 37. We will discuss these arguments in turn. A. Rubber Stamping When the case was referred to District Judge Ideman, it was still in a= pretrial stage after four years of litigation. Taking note of the= complexity of the litigation (which involved the Copyright Act, the Federal= Trademark and Patent Infringement Act), the number of parties to the= litigation, the large number of motions and motions for reconsideration= already characteristic of the litigation, and the need to reduce to= manageable proportions what was estimated to be three months' trial time,= Judge Ideman referred the consolidated cases to a retired state judge to= act as special master to supervise discovery and law and motions practice. 1/Even if Judge Letts mistakenly applied a subjective standard under =A7= 544, so that the law of the case doctrine only applies to the first panel's= conclusion that Judge Ideman was not subjectively biased, we independently= conclude that Judge Ideman's recusal was also not mandated under =A7= 544(a)'s objective test. -5- On this appeal, RTC objects to the way the district court treated the= special master's recommendations. 2/ In other contexts, we have recognized= that while a special master should not be given authority to conduct a full= trial, he may be given broad authority to supervise and conduct pretrial= matters, including discovery activity, the production and the range of= exhibits and stipulations of fact, the power to hear motions for summary= judgment or dismissal and to make recommendations thereto. Burlington= Northern R,R. Co. v Department of Revenue, 934 F.2d 1064, 1073 (9th Cir.= 1991) (quoting In re Armco. Inc., 770 F.2d 103, 105 (8th Cir. 1985)). At= the same time we have observed that a district court's rubber-stamping of a= special master's order is unacceptable -- even on pretrial matters: "[T]he= district court's rubber stamp of the master's order is an inexcusable= abdication of judicial responsibility and a violation of article III of the Constitution." Burlington, 934 F.2d at 1072.=20 RTC contends that the district court rubber-stamped the dismissal of RTC's= claims as a discovery sanction for noncompliance with court orders. To the= contrary, the district court took the position that the special master had= no power to order dismissal of the case. In the course of responding to= RTC's second petition for mandamus Judge Ideman, on June 21, 1993, filed a= declaration with the court ruling in relevant part as follows:=20 3. The past 8 years have consisted mainly of a prolonged, and ultimately= unsuccessful, attempt to persuade or compel the plaintiff to comply with= lawful discovery. These efforts have been fiercely resisted by --------------------------------------------------------- 2/RTC does not in this appeal challenge Judge Ideman's initial reference of= this litigation's pretrial matters to the special master. RTC's two= previous attempts to do so failed and we are given no reason to=20 abandon our prior decisions. -6- plaintiffs. They have utilized every device that we on the District Court= have ever heard of to avoid such compliance, and some that are new to us. 4. This noncompliance has consisted of evasions, misrepresentations, broken= promises and lies, but ultimately with refusal. As part of this scheme to= not comply, the plaintiffs have undertaken a massive campaign of filing= every conceivable motion (and some inconceivable) to disguise the true= issue in these pretrial proceedings. Apparently viewing litigation as war,= plaintiffs by this tactic have had the effect of massively increasing the= costs to the other parties, and, for a while, to the Court. The= appointment of the Special Master 4 years ago has considerably relieved the= burden to this Court. The scope of plaintiff's efforts have to be seen. to= be believed. (See Exhibit "A", photo of clerk with filings, and Exhibit= "B", copy of clerk's docket with 81 pages and 1,737 filings.) 5. Yet it is all puffery -- motions without merit or substance.= Notwithstanding this, I have carefully monitored the Special Master's= handling of these motions. I saw no need to try to improve on the Special= Master's writings if I agreed with the reasons and the results. However,= with respect to the major ruling that I have made during these proceedings,= the dismissal of the plaintiff's claims, the following occurred: 6. The Special Master, after years of efforts to compel compliance with= discovery, purported to order a dismissal of plaintiff's claims. Although= the action was probably long overdue, the Special Master did not have the= authority to make such a dispositive order. In reviewing his order, as I= did with all of his actions, I saw what he had done and did not approve it.= I treated the Special Master's 'order" as a recommendation and gave notice= to the parties that they could have a hearing and invited briefs. Only= after considering fully the briefs of the parties did I give approval to= the dismissal. It is true that I adopted the language chosen by the Special= Master, but that=20was because I fully agreed with his reasoning and saw no= need to write further. Judge Ideman's pointed and pungent review of the= record is the reverse of a rubber stamp. It is the judge's own heartfelt= appraisal of the plaintiffs' actions as meriting dismissal. RTC's claim of= violation of the Constitution by unconstitutional delegation fails. -7- B. Propriety of Dismissal Dismissals under Fed.R.Civ.P. 37 are reviewed for abuse of discretion.= Anheuser-Busch, Inc. v. Natural Beverage Distributors, 69 F. 3D 337, 348= (9th Cir. 1995). An appellate court should reverse "only if [it has] a= definite and firm conviction that [the sanction] was clearly outside the= acceptable range of sanctions." Malone v. United States Postal Service, 833= F.2d 128, 130 (9th Cir. 19&7), cert. denied sub nom. Malone v. Frank, 438= U.S. 819 (1988'. Rule 37(b)(2)(C) gives the district court discretion to= dismiss a party's claims as a sanction for noncooperation in discovery= matters. Fed. R. Civ. P. 37 (b) (2) (C). Dismissal is warranted only if= the party facing sanctions=20acted in bad faith. Anheuser-Busch, 69 F.3d at= 348. The district court must also weigh several other factors before= imposing the "harsh sanction of dismissal": (1) the public's interest in= expeditious resolution of litigation; :2) the court's need to manage its= dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the= public policy favoring disposition of cases on their merits; and (5) the= availability of less drastic sanctions. Id. (citation omitted). If the= district court makes explicit findings as to these factors, as it did in= this case, we need not review the record independently to determine if= there was an abuse of discretion. Cf. Adriana Int'l Corp. v. Thoeren, 913= F.2d 1406, 1412 (9th Cir. 1990). Notwithstanding our ability to rely on the= district court's findings, RTC argues that the dismissal was improper= because (l) the district court wrongly denied RTC an -8- evidentiary hearing; and (2) the district court's dismissal was unwarranted= because RTC acted in good faith. As to the evidentiary hearing claim, RTC asserts that it did not have= certain documents required by discovery so that its compliance was= impossible; it contends that it needed an evidentiary hearing to show the= nonexistence of the documents. This Circuit has, in dicta, noted that an= evidentiary hearing on the matter for which a party is sanctioned might be= required before dismissal if the party had sought "to show that it was= impossible for them to comply with the discovery orders..." United States= v. Westinghouse Elec. Corp., 648 F.2d 642, 652 {9th Cir. 1981); see also= Wyle v. R.J. Reynolds Industries. Inc., 709 F.2d 585, 592 (9th Cir. 1983)= ("When necessary, the district court may hold an evidentiary hearing on a= motion for sanctions. Indeed, that method best determines the appropriate= sanctions while protecting a party's due process rights."). No court,= however, has said that evidentiary hearings are absolutely required prior= to a Rule 37 dismissal; thus, the decision whether to hold an evidentiary= hearing is well within the court's discretion. The district court in this case did not abuse its discretion because RTC was= given full opportunity to demonstrate the nonexistence of the documents.= When RTC was notified of the special master's declared intent to impose a= Rule 37 dismissal sanction, it moved for an evidentiary hearing. In its= supporting papers, RTC argued that a hearing was necessary because of the= alleged lack of credibility of Mayo/CNC's witnesses -- it never=20 -9- argued that the documents it refused to produce never existed. Moreover,= RTC's allegations of non-credibility mischaracterized the record. RTC= first misrepresented Judge Pfaelzer's finding regarding Mayo's credibility= "with respect to his claim that he had authored the NOTs materials and that= he had produced the AA5 [sic] materials from memory." While Judge Pfaelzer= doubted Mayo's ability to reproduce the materials from memory, she cast no= doubt on his authorship claim. In fact, Judge Pfaelzer only found Mayo not= credible on the specific narrow "issue of how he and the Advanced Ability= Center came to have in their possession the documents in question in this= law suit." =20RTC also misrepresented credibility findings by a U.S.= magistrate as to Mayo's wife Julia and another woman, Jan Nash. That= non-credibility finding was specifically limited to how one of the women= conducted record keeping regarding certain documents and to the other= woman's claim that she saw certain notes. Finally, RTC takes the= magistrate's statement that "the Court now feels [counsel's testimony on a= limited point] lacks a little credibility and needs to be tested" and= transforms it into a ruling that attorney Fagelbaum was found "not to be= credible." RTC's mischaracterization of the court's credibility findings= casts RTC's credibility in doubt. Anheuser-Busch, 69 F.3d at 348 (noting= that "the district court's credibility determinations are entitled to= special deference" when reviewing dismissal sanctions). Because the special= master and Judge Ideman were able to review RTC's claims as to credibility= and other matters in light of the entire record before them and in -10 light of the famliarity each had with the parties and their litigation= tactics, we do not find that they abused their discretion in denying a= hearing on either the credibility or document-existence issues. Nor did= the district court err in rejecting RTC's alternative claim that it acted= in good faith and was therefore not deserving of sanctions. RTC claims that= it believed that the discovery order it disobeyed was stayed pending a= ruling on a related summary judgment motion that would have mooted the= discovery order. This claim is not supported by the facts of this case. On= July 25, l990, the district court issued an order requiring discovery of= certain documents related=20to RTC's antitrust claim. On August 8, 1990,= RTC filed a motion for review of the district court's July 25 order. RTC= then moved for summary judgment on its antitrust claim. On October 31,= 1990, the district court continued its consideration of the August 8 review= order pending the master's resolution of RTC's summary judgment motion; the= continuance lasted until January 7, 1991. On April 26, 1991, the master= reordered discovery (and did not mention the district court's October 31= order). On August 12, 1991, the district court ordered RTC to comply with= the discovery order. On April 17, 1992, the master dismissed RTC's claims= for violation of the August 12, 1991 and other=20discovery orders. RTC= claims that it believed it did not have to comply with the July 25, 1990= discovery order because of the district court's October 31, 1990= continuance. Even if that were true, the continuance ended on January 7,= 1991 -- and RTC was reminded of -11- its obligation to follow the order on April 26. Thus, RTC's confusion= should have been dispelled. RTC further argues that the master's April 17,= 1992 dismissal order was tainted because it rested on the August 12, 1591= order; the August 12 order, RTC contends, was wrong because it ignored the= earlier October 31 order. As we find the August 12, 1991 order proper, the= April 17, 1992 dismissal is affirmed. [end part 1/2] Rev. David Mayo (finger for key) PGP ID: 1024/4D5EE559 1996/01/04 David Mayo PGP Fingerprint: 0D 69 92 87 79 2F 38 72 FE 03 CE 51 31 D5 6D E9 "So many have fallen, yet so far left to go." ****************************************************************************= ***