Tracy Nolan, et al. v. U.S. Bancorp, et al.

[8] UNITED STATES DISTRICT COURT [9] EASTERN DISTRICT OF CALIFORNIA [10] 11 TRACY NOLAN, et al., Case No. 1:25-cv-01168-KES-CDB 12 Plaintiffs, ORDER DISCHARGING ORDER TO SHOW CAUSE, IMPOSING TOTAL SANCTION 13 v. AMOUNT OF $1,400 ON PLAINTIFFS’ COUNSEL, DIRECTING CLERK OF THE 14 U.S. BANCORP, et al., COURT TO REPORT PLAINTIFFS’ COUNSEL TO STATE BAR OF CALIFORNIA, AND 15 Defen dants. REQUIRING COUNSEL TO REPORT TO STATE BAR [16] (Docs. 13, 17) [17] 7-DAY, 30-DAY, AND 40-DAY DEADLINES [18] 19 Background 20 Plaintiffs Tracy Nolan and Nolan Enterprises, LLC (“Plaintiffs”) initiated this action with 21 the filing of a complaint on November 25, 2024, in the Kern County Superior Court, case number 22 BCV-24-104080. (Doc. 1). Defendant U.S. Bank National Association (“Defendant”)1 removed 23 the case to this Court on September 10, 2025. Id. On September 17, 2025, Defendant filed the 24 pending motion to dismiss and request for judicial notice in support thereof, making the time for 25 Plaintiffs’ response thereto due on October 1, 2025. (Docs. 8, 9); see Local Rule 230(c). 26 After Plaintiffs failed to timely file an opposition or statement of non-opposition to the [27] 1 Defendant notes it was erroneously sued as “U.S. Bancorp” in its notice of removal. (Doc. 28 1). 1 pending motion to dismiss, on October 8, 2025, the Court ordered Plaintiffs to show cause in 2 writing why sanctions should not imposed for their failure to comply with the Court’s Local Rules. 3 (Doc. 12).2 Plaintiffs were provided the opportunity to comply with the order in the alternative by 4 filing an opposition or statement of non-opposition to the pending motion by that same deadline. 5 Id. Separately, the Court noted that Plaintiffs have failed to timely file a consent/decline of U.S. 6 magistrate judge jurisdiction form as ordered, and ordered Plaintiff to show cause in writing within 7 seven (7) days of entry of the order (i.e., by October 15, 2025) why sanctions should not be imposed 8 for their failure to comply with this Court’s orders or, in the alternative, file a completed and signed 9 consent/decline form by that same deadline. Id. Plaintiffs were admonished that the failure to 10 timely comply with the Court’s orders would result in the imposition of sanctions, up to and 11 including a recommendation that the action be dismissed. Id. 12 After Plaintiffs failed to file any response in compliance with the Court’s order to show 13 cause, and because the deadline to do so passed, to attempt to gain Plaintiffs’ compliance, on 14 October 14, 2025, the Court imposed sanctions on Plaintiffs and ordered them to pay the Clerk of 15 the Court $100 per day, beginning the date of the order, until Plaintiffs file either an opposition or 16 statement of non-opposition to Defendant’s pending motion to dismiss. (Doc. 13). After Plaintiffs 17 failed to file any response to the Court’s order to show cause and sanctions order, on October 20, 18 2025, the undersigned issued pending findings and recommendations that this action be dismissed 19 without prejudice for Plaintiffs’ failure to prosecute and to obey the Court’s orders. (Doc. 16). 20 When Plaintiffs persisted in failing to respond to the Court’s orders, on October 22, 2025, 21 the Court entered an order requiring Plaintiffs and Plaintiffs’ counsel to show cause in writing by 22 October 24, 2025, why daily sanctions should not continue and why the amount of $900.00 accrued 23 at the time of issuance should not be imposed and reported to the State Bar of California should it [24] 2 Although counsel for Plaintiffs, Mr. Gary Saunders, is listed on the docket by his office’s [25] address and email address (gary@saundersapc.com), the undersigned notes that the electronic receipt generated by CM/ECF for the Court’s show cause order (similar to the other filings in this [26] case) was transmitted to other email addresses associated with the same domain, including 27 litigation@saundersapc.com, which is the same email address linked to Mr. Saunders in the face sheet of Plaintiffs’ complaint (see Doc. 1-1 at 3). Thus, the Court concludes Plaintiffs have notice 28 of the Court’s show cause order. 1 reach an amount over one thousand dollars ($1,000.00) and why daily sanctions should not continue 2 to be imposed. (Doc. 17). Plaintiffs failed to file a response to the Court’s order and the time to 3 do so has expired. 4 Governing Authority 5 The Federal Rules of Civil Procedure provide that the underlying purpose of the rules is to 6 secure the just, speedy and inexpensive determination of an action. Fed. R. Civ. P. 1. To effectuate 7 this purpose, the rules provide for sanctions against parties that fail to comply with court orders or 8 that unnecessarily multiply the proceedings. See, e.g., Fed. R. Civ. P. 16(f); Fed. R. Civ. P. 37(b). 9 Relevant here, Rule 16(f) authorizes the Court to issue any just order if a party or attorney fails to 10 obey a scheduling or other pretrial order. 11 The Court also possesses inherent authority to impose sanctions to manage its own affairs 12 so as to achieve the orderly and expeditious disposition of cases. Chambers v. NASCO, Inc., 501 13 U.S. 32, 43 (1991). The Court’s inherent power is that which is necessary to the exercise of all 14 others, including to protect the due and orderly administration of justice and maintain the authority 15 and dignity of the Court. Roadway Exp., Inc. v. Piper, 447 U.S. 752, 764 (1980). In order to 16 compel a party to comply with the Court’s orders, the Court may issue daily sanctions until 17 compliance is obtained. See Shell Offshore Inc. v. Greenpeace, Inc., 815 F.3d 613, 629-30 (9th 18 Cir. 2015) (recognizing a district court’s authority to impose daily sanctions to coerce compliance 19 with court order); Lasar v. Ford Motor Co., 399 F.3d 1101, 1110 (9th Cir. 2005) (discussing court’s 20 authority to impose civil sanctions “intended to be remedial by coercing the defendant to do what 21 he had refused to do.”). 22 Similarly, the Local Rules of the Eastern District of California provide that “[f]ailure of 23 counsel or of a party to comply with these Rules or with any order of the Court may be grounds for 24 imposition by the Court of any and all sanctions authorized by statute or Rule or within the inherent 25 power of the Court.” Local Rule 110. Further, “[i]n the event any attorney subject to these Rules 26 engages in conduct that may warrant discipline or other sanctions, any Judge or Magistrate Judge 27 may initiate proceedings for contempt under 18 U.S.C. § 401 or Fed. R. Crim. P. 42, or may, after 28 reasonable notice and opportunity to show cause to the contrary, take any other appropriate 1 disciplinary action against the attorney.” Local Rule 184(a). “In addition to or in lieu of the 2 foregoing, the Judge or Magistrate Judge may refer the matter to the disciplinary body of any Court 3 before which the attorney has been admitted to practice.” Id. 4 California Business and Professions Code § 6068(o)(3) imposes a duty upon an attorney 5 to report sanctions of $1,000.00 or more to the State Bar, and § 6086.7(a)(3) directs courts to notify 6 the State Bar of sanctions of $1,000.00 or more. Cal. Bus. & Prof. Code §§ 6068 (o)(3), 7 6086.7(a)(3); Acevedo v. Russell Cellular, Inc., No. 1:20-cv-01440-JLT-SAB, 2022 WL 2092563 , 8 at *5 (E.D. Cal. June 9, 2022).3 9 Discussion 10 Here, the Court ordered Plaintiffs, at risk of sanction, to file either an opposition or a 11 statement of non-opposition to Defendant’s pending motion to dismiss by October 10, 2025, in 12 compliance with the Court’s Local Rules. (Doc. 12). Still, and despite the subsequent imposition 13 of daily sanctions prompted by Plaintiffs’ noncompliance (Doc. 13), Plaintiffs have failed to 14 comply with the Court’s orders. Aside from evidencing Plaintiffs’ lack of regard for complying 15 with court orders, Plaintiffs’ intransigence is preventing the Court from efficiently managing its 16 docket in this action. 17 As of the date of the Court’s October 22, 2025, order to show cause (Doc. 17), daily 18 sanctions were in the amount of $900.00, with additional sanctions of $100 accruing per day until 19 Plaintiffs comply with the Court’s orders. See (Doc. 13 at 3). As of the date of this order, daily 20 sanctions are set to reach $1,400.00 by the daily deadline of 5:00 P.M. imposed by the Court’s 21 order. Id. Pursuant to California law, “a court shall notify the State Bar of any of the 22 following: … (3) The imposition of any judicial sanctions against an attorney, except sanctions for 23 failure to make discovery or monetary sanctions of less than one thousand dollars ($1,000).” Cal. 24 Bus. & Prof. Code § 6086.7(a)(3). 25 Plaintiffs did not file any response to the Court’s orders, including the October 22, 2025, [26] 3 The Court does not suggest federal courts are required to comply with this law, however, 27 the Court finds its direction to be reasonable to adhere to due to principles of comity and the interaction between this Court’s own Local Rules and the State Bar of California and its Rules of 28 Professional Conduct. See Local Rule 180(e). 1 order to show cause, and the time to do so has expired. The Court informed Plaintiffs that it “may 2 accept a partial reduction of the total amount of sanctions based on a clear and convincing 3 demonstration of good cause addressing the failure to timely pay to the Clerk of the Court the 4 cumulative daily sanctions now owed.” (Doc. 17 at 4). Having afforded Plaintiffs and their counsel 5 an opportunity to explain why the total sanction amount accrued as of the date of the show cause 6 order should not be imposed in total, and receiving no response, the Court will impose the sanctions 7 accrued as of the date of this order, i.e., $1,400.00, in total upon Plaintiffs’ counsel. 8 Despite the lack of compliance, the Court finds it appropriate to afford Plaintiffs’ counsel 9 the opportunity to comply by paying to the Clerk of the Court the sanctions amount due and 10 reporting the sanctions to the State Bar of California. The sanctions amount shall be imposed on 11 Plaintiffs’ counsel Gary Saunders only, given there is no indication of any fault of Plaintiffs for the 12 failure of counsel to abide by the Court’s orders. 13 Nothing in this order abrogates Plaintiffs’ obligation to comply with the Court’s orders and 14 file either an opposition or a statement of non-opposition to Defendant’s pending motion to dismiss 15 (Doc. 8) and any objections to the pending findings and recommendations to dismiss this action 16 without prejudice for Plaintiffs’ failure to prosecute and to obey Court orders (Doc. 16), which are 17 currently due on November 3, 2025. 18 Lastly, the Court finds it appropriate, based on ethical concerns and comity with the 19 California state courts and the State Bar of California, to report Gary Saunders to the State Bar of 20 California, and shall order Mr. Saunders to comply with his own independent obligation to report 21 the sanctions to the State Bar. See Lozano v. Cabrera, No. 22-55273, 2023 WL 2387583 , at *2 22 (9th Cir. Mar. 7, 2023) (directing Clerk of Court to transmit copy of order affirming imposition of 23 sanctions to State Bar of California) (citing Cal. Bus. & Prof. Code § 6086.7 (a)(3), (b)); Seymour 24 v. Wilshire Credit Corp. Home Loans Dist., No. 2:19-cv-00564-MCE, 2023 WL 2167112 , at *1 25 (E.D. Cal. Feb. 22, 2023) (ordering attorney to report imposition of $1,100 sanction to the 26 California State Bar); Out of the Box Enters., LLC v. El Paseo Jewelry Exchange, Inc., No. EDCV 27 10-01858 VAP(DTBx), 2011 WL 13135642 , at *5 (C.D. Cal. Dec. 14, 2011) (directing Clerk of 28 Court to transmit copy of order imposing sanctions to State Bar of California) (citing Cal. Bus. & 1 | Prof. Code § 6086.7(a)(3)). 2 Conclusion and Order 3 Based on the foregoing, IT IS HEREBY ORDERED that: 4 1. Plaintiffs’ counsel Gary Saunders shall pay the Clerk of the Court $1,400.00 in 5 sanctions within seven (7) days of the entry of this order, with the sum to be paid 6 personally, and not to be transmitted to his clients by way of a charge of attorney’s 7 fees and/or costs; 8 2. Pursuant to California Business and Professions Code § 6068(0)(3), counsel shall 9 report these sanctions to the State Bar of California within 30 days of the entry of 10 this order; 11 3. Not later than 40 days from the entry of this order, Plaintiffs’ counsel shall file a 12 declaration attesting that he has reported these sanctions to the State Bar of 13 California; 14 A, Pursuant to California Business and Professions Code § 6086.7(a)(3), the Clerk of 15 the Court is DIRECTED to report the sanctions imposed on counsel Gary Saunders 16 to the State Bar of California; 17 5. The Court’s order to show cause (Doc. 17) is HEREBY DISCHARGED; and 18 Any failure by Plaintiffs to comply with this Court’s orders may result in the 19 | imposition of further sanctions. 20 | □□ □□ SO ORDERED. 71 Dated: _ October 27, 2025 | Ww VL D R~ 2 UNITED STATES MAGISTRATE JUDGE