decided: December 14, 1979.
AL BARNETT & SON, INC., ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED, MARINE WHOLESALE, INC., TRI STATE MARINE, INC., SHANE'S MARINE & HARDWARE CORPORATION, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, GOCHENAUR MARINE CO., PAXTON COMPANY, SETH SMITH BOAT WORKS, INC., INLAND MARINE SUPPLY CO., DIVERSIFIED PRODUCTS CO., WILLIAM H. WHITING COMPANY, GENERAL MARINE SUPPLY, INC., MARINE HARDWARE & SUPPLY, INC., JACKSONVILLE MARINE SUPPLY, INC., KELLOGG MARINE, INC., ROBERTS HARDWARE CO., INC. KELLER MARINE SERVICE, INC., RAY MARINE DISTRIBUTING CO., MARINE EQUIPMENT & SUPPLY CO., HOWARD H. BAKER & CO., INC., PAUL'S BOAT SUPPLY, INC., VITA PLATE DISTRIBUTORS, F. DOUGHERTY & ASSOCIATES, INC., MARINE HARDWARE CO., INC., OJ. MARINE SUPPLY, INC., MARINE ENGINE GASKET & PARTS, CENTRAL MARINE SUPPLY, INC., BEACON SUPPLY CO., INC., HARDWARE & MARINE CO. OF ALA., INC., NORFOLK MARINE DISTRIBUTING CO., INC., OCEAN PROPELLER CO., INC., SOUTH MARINE SUPPLY, INC.
OUTBOARD MARINE CORPORATION ROBERT HARDWARE CO., INC., WILSON TRANSPORT SUPPLY, INC., MARINE HARDWARE CO., INC., MARINE ENGINE GASKET & PARTS CO., AND NORFOLK MARINE DISTRIBUTING CO., INC., APPELLANTS
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE (D.C. Civil No. 4453)
Before Aldisert and Hunter, Circuit Judges, and Meanor, District Judge.*fn*
Appellants, five wholesale distributors of marine products, appeal from an order of the district court dismissing their claims for relief with prejudice under Rule 37(d) of the Federal Rules of Civil Procedure*fn1 for failing to comply with discovery requests. Appellants contend that application of Rule 37's harshest penalty was an abuse of discretion. They also contend that it was based, at least in part, on their failure to answer interrogatories which was precipitated by an allegedly erroneous ruling under Rule 33(c) of the Federal Rules of Civil Procedure.*fn2
The district court entered final judgment against the five appellants and, because twenty-seven other plaintiffs remain in the action, followed the requirements of Rule 54(b) of the Federal Rules of Civil Procedure,*fn3 and expressly determined that no just reason existed for delaying appeal of the dismissal.*fn4 In addition to reviewing the Rule 37 and Rule 33(c) rulings, appellants seek review of an order of the district court that denied class certification under Rule 23.*fn5 For the reasons set forth below, we find no error in the district court's discovery rulings under Rules 37 and 33(c) and we decline appellants' invitation to review the denial of class certification at this time.
This appeal emanates from a civil antitrust action originally brought by five plaintiffs against Outboard Marine Corporation, the largest producer of outboard motors in the United States, for allegedly tying its brand of remote control cables, fuel tanks, propellers and remote control boxes to the sale of Evinrude and Johnson outboard motors in violation of section 1 of the Sherman Act and section 3 of the Clayton Act, 15 U.S.C. §§ 1, 14 (1976). After class certification had been denied, see Barnett & Son, Inc. v. Outboard Marine Corp., 64 F.R.D. 43 (D.Del.1974), the appellants were among twenty-seven plaintiffs who intervened in the action seeking damages and injunctive relief under sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26 (1976).
The defendant initiated discovery by serving interrogatories requesting financial information as to actual damages and liability. The plaintiffs sought to invoke Rule 33(c) and to produce business records in response to the interrogatories, but the trial court ordered them to extract the information from the records and to provide actual answers to the defendant. Appellants did not. After issuing three orders to appellants to provide actual answers, the district court, pursuant to Rule 37(b)(2)(B) of the Federal Rules of Civil Procedure,*fn6 penalized anyone "unwilling" to comply by prohibiting them from introducing into evidence any financial data relating to the issue of damages. Subsequently each appellant filed a certificate with the trial court stating "inability" to answer the interrogatories in the manner directed. None of the certificates filed with the court explained why the appellant was unable to answer with actual financial data abstracted from its business records. All of the plaintiffs, except the appellants, however, complied with the order of the district court directing them to provide actual answers to the interrogatories.
Defendant undertook the next phase of discovery by noticing depositions as to each plaintiff. One week prior to the date scheduled for their depositions, appellants' counsel notified defendant's attorneys that none of the appellants' representatives would appear. Defendant then sought an order from the district court dismissing them from the action for failing to comply with discovery. After considering the overall discovery history of the appellants their failure to answer interrogatories, to appear at scheduled depositions, to produce for inspection documents requested by defendant the court found that the appellants intentionally failed and refused to respond to proper discovery demands and dismissed their claims with prejudice under Rule 37(d), Federal Rules of Civil Procedure.*fn7
II. The Rule 33(c) Ruling.
Before reviewing the Rule 37 dismissal, we must first review the district court's ruling under Rule 33(c), which appellants claim prevented them from answering the interrogatories. Rule 33(c) provides that where the answer to an interrogatory may be derived from business records, if the burden of ascertaining the information is substantially the same for the party serving the interrogatory as for the party served, it is a sufficient answer to specify and make available the records. The trial court's factual finding as to whether the respective burdens are substantially the same for each party will be upheld unless it is clearly erroneous. See Fed.R.Civ.P. 52(a); Daiflon, Inc. v. Allied Chemical Corp., 534 F.2d 221, 227 (10th Cir.), Cert. denied 429 U.S. 886, 97 S. Ct. 239, 50 L. Ed. 2d 168 (1976).
Evidence in the record supports the district court's finding that the burden of extracting the information from the business records would be greater on the party serving the interrogatory than on the party served. Many of the records were hand written, and apparently difficult to read. The district court further observed that each party served with interrogatories was more familiar with his bookkeeping methods and records than was the defendant.*fn8 This evidence, amply supports the finding that the burdens were not substantially the same. Therefore, the Rule 33(c) ruling shall be upheld.
Appellants advance the argument that it was error for the trial court to penalize them with a Rule 37(d) dismissal without first ordering them to appear for their scheduled depositions. Rule 37 sanctions are contemplated when there has been virtually total noncompliance with discovery. Notes of Advisory Committee on Rules, Rule 37, 28 U.S.C.A. (1979 Supp.). Yet, a direct order by the Court, as Rule 37(a) and (b) requires, is not a necessary predicate to imposing penalties under Rule 37(d). See Fox v. Studebaker-Worthington, Inc., 516 F.2d 989, 993 (8th Cir. 1975). When it has been determined that a party has wilfully failed to comply with the rules of discovery, it is within the discretion of the trial court to dismiss the action. National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 96 S. Ct. 2778, 49 L. Ed. 2d 747 (1976); G-K Properties v. Redevelopment Agency, Etc., 577 F.2d 645, 647 (9th Cir. 1978). Litigants may oppose discovery requests by seeking a protective order from the court, Cine Forty-Second Street Theatre v. Allied Artists Pictures Corp., 602 F.2d 1062, 1068-69 (2d Cir. 1979) (Oakes, J., concurring); they cannot be permitted to frustrate discovery by refusing to comply with a proper request. For courts to permit litigants to disregard the responsibilities that attend the conduct of litigation would be tantamount to "encouraging dilatory tactics." Id. at 1068 (Kaufman, J.) The dismissal sanction, although severe, is a necessary tool, both to punish in the individual action and to deter future abuses of the discovery process. National Hockey League v. Metropolitan Hockey Club, supra; Renfrew, Discovery Sanctions: A Judicial ...
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