*1 Pursuant to the provisions of 28 U.S.C. § 636 and General Order 05-07 of the United States District Court for the Central District of California, the undersigned submits this Report and Recommendation to the Honorable Michael W. Fitzgerald, United States District Judge.

On February 6, 2023, Defendant Costco Wholesale Corporation filed a motion for sanctions pursuant to Fed. R. Civ. P. 37. (ECF No. 18.) On February 28, 2023, the Law Offices of Ilan N. Rosen Janfaza (“new counsel”) assisted Plaintiff Maria De Jesus Cruz Ramos in filing her opposition to the motion and a request to “reset” the case schedule dates. (ECF No. 22.) A declaration from Plaintiff was also filed in support of her opposition. (ECF No. 23.) On March 7, 2023, Defendant filed a reply in support of its motion. The Court held a hearing on March 28, 2023 – at end of which it permitted both sides additional time to file supplemental briefs in support of their respective positions. Both Plaintiff and Defendant thereafter filed supplemental briefs. (ECF Nos. 32, 33.)

Defendant's motion is based on the undisputed facts that Plaintiff did not serve initial disclosures or expert disclosures, did not provide responses to interrogatories, requests for production or requests for admissions, and did not appear for her deposition. The initial disclosures were due in August 2022, and expert disclosures were due on February 3, 2023. Plaintiff has not provided those disclosures – despite a reminder email from Defendant's counsel on August 30, 2022 regarding the initial disclosures. The requests for admission, requests for production, and the interrogatories were served on Plaintiff through her prior counsel on July 22, 2022. No responses were provided by Plaintiff.

On January 23, 2023 – after disqualification of Plaintiff's original counsel from Downtown L.A. Law Group (“DTLA”) – Defendant's counsel sent a letter directly to Plaintiff advising her that discovery had previously been served on DTLA on behalf of Plaintiff and that no responses had been provided. (ECF No. 18-3 at 34.) In addition, Plaintiff was advised that her deposition had been noticed for February 16, 2023. Plaintiff was asked to contact Defendant's counsel to discuss this discovery. (Id.) Plaintiff did not contact Defendant's counsel and did not appear for her deposition. The fact discovery cutoff was February 24, 2023. (ECF No. 12 at 2.) As a remedy for these failures, Defendant seeks remedies under Fed. R. Civ. P. 37(b)(2)(A)(i)-(vi), including directing that matters or facts be taken as established; prohibiting Plaintiff from supporting her claims, opposing Defendant's defenses, or introducing evidence on designated matters; striking Plaintiff's pleadings; dismissing this action; and rendering a default judgment against Plaintiff.

Ms. Ramos's opposition contends that her failure to provide the required discovery responses and disclosures was due to “mistake, inadvertence, surprise, or excusable neglect” and states that Ms. Ramos and her new counsel were not aware “until very recently” that her prior counsel at DTLA had been disqualified – even though the disqualification took place on November 9, 2022 (ECF No. 15). It was determined at the hearing that Plaintiff's opposition to the motion was prepared by a “brief writer” who had been recommended to new counsel by DTLA. In addition, the opposition includes large portions copied from a brief submitted by DTLA in another Central District of California case in April 2021 (see 2:20-cv-11415-ODW-RAO (ECF No. 19)). As a result, Ms. Ramos's opposition discusses vacating a judgment, even though no judgment has been entered in this case. The opposition attempts to justify DTLA's failure to provide disclosures and discovery responses on the ground that DTLA's email system was supposedly blocking emails from the court and sending them to a spam folder. This language in the opposition was copied from DTLA's nearly two-year-old brief from another case and was not investigated by Plaintiff or her new counsel before the opposition was filed. No evidence was submitted regarding (i) whether DTLA's purported email problems continued from April 2021 into mid-2022; (ii) how it is possible that DTLA could continue to represent clients for over a year without a functioning email system; or (iii) why the supposed blocking of court emails would have any impact on DTLA's ability to receive emails and discovery requests from Defendant's counsel in this case.

*2 The only portion of the opposition that appears to be supported by evidence and specific to this case is Plaintiff's statement under oath that DTLA did not inform her of their disqualification in November 2022 or of their failure to make the required disclosures and discovery responses. Plaintiff did not learn of DTLA's disqualification until February 15, 2023. (ECF No. 23 at 2-4.)

In Ms. Ramos's supplemental brief (ECF No. 33), new counsel presents a different set of circumstances in an attempt to justify why DTLA did nothing in this case after early July 2022. On “information and belief,” new counsel declares that two lawyers at DTLA to whom Ms. Ramos' case was assigned (Nicole Vartanyan and John Rofael) suffered disabling illnesses that prevented them working on this or any other case. (ECF No. 33 at 12.) New counsel does not provide a source for this information or why he was unaware of it at the time of the motion hearing. In any event, the dates alleged in new counsel's declaration do not appear correct and do not provide a plausible explanation for DTLA's failure to do anything to assist Ms. Ramos from July 2022 through January 2023. According to new counsel's declaration in paragraph 3, Ms. Vartanyan of DTLA was ill from “early 2022 to mid-2022” and then had a relapse in “late 2022 leading into 2023.” Thus, as alleged in new counsel's declaration, Ms. Vartanyan's illness did not cover mid-2022 until late 2022, which was when DTLA failed to respond to discovery requests. As to Mr. Rofael, the declaration of new counsel states that this DTLA lawyer was ill and “had his cases reassigned the [sic] mid-March.” It is unclear in what year this took place or how a reassignment of cases in mid-March explains why all case obligations were ignored by DTLA in the second half of 2022. Moreover, the lead lawyer from the DTLA on its last filed document in this case was Daniel Azizi (ECF No. 9), yet new counsel provides no reason why Mr. Azizi did not make the necessary disclosures or why he did not respond to the discovery requests for Ms. Ramos. Indeed, new counsel's declaration fails to mention Mr. Azizi at all.[1] Finally, new counsel's declaration provides no explanation how or why DTLA would let Ms. Ramos' case be completely ignored even though the firm must have known that two of the attorneys assigned to handle Ms. Ramos' case were alleged to be physically incapable of doing legal work.

Resolution of this motion includes the issue whether a client should be held responsible for the failures of its retained counsel. In many instances, the answer is yes:

*3 Community Dental Services v. Tani, 282 F.3d 1164, 1168 (9th Cir. 2002).

As discussed at the hearing, however, courts in the Ninth Circuit and elsewhere have found an exception to this rule where counsel has been grossly negligent: “[S]everal circuits have distinguished a client's accountability for his counsel's neglectful or negligent acts – too often a normal part of representation – and his responsibility for the more unusual circumstances of his attorney's extreme neglect or egregious conduct.” Id. In Tani, the Ninth Circuit joined those other circuits and held that a client should not be bound by his lawyer's “grossly negligent conduct.” Id. at 1169; see also Lal v. California, 610 F.3d 518, 524 (9th Cir. 2010) (applying Tani's gross negligence exception to alleged failure to prosecute). Gross negligence is defined as “ ‘neglect so gross that it is inexcusable.’ ” Tani, 282 F.3d at 1168. “[C]onduct on the part of a client's alleged representative that results in the client receiving practically no representation at all clearly constitutes gross negligence, and vitiating [sic] the agency relationship that underlies our general policy of attributing to the client the acts of his attorney.” Id. at 1171.

In the present case, Ms. Ramos relied on prior counsel at DTLA to communicate with her and to do what was necessary to handle her case. Yet the record reflects that from early July 2022 until their disqualification in November 2022, DTLA lawyers did nothing on Ms. Ramos' case – even though there were pending interrogatories, requests for production, and requests for admission that needed responses, as well as initial disclosures and expert disclosures to be made. DTLA did not inform Ms. Ramos of their failure to do this necessary work on her behalf or of their disqualification from the case in November 2022. It can only be concluded that DTLA abandoned Ms. Ramos and her case in the second half of 2022.[2] DTLA's abandonment is comparable to the gross negligence found by the Ninth Circuit in the Tani and Lal cases. See Tani, 282 F.3d at 1166-67, 1170-71 (counsel “virtually abandoned” the client by failing, inter alia, to serve an answer, failed to file an opposition to a motion to strike answer and failed to comply with court order); Lal, 610 F.3d at 525 (counsel failed, inter alia, to make initial disclosures, to meet and confer, and to participate in case management conference). While Tani and Lal included affirmative misrepresentations by counsel, DTLA misled Ms. Ramos by not informing her of their abandonment of her case or their disqualification.

*4 This was much more than “mere” negligence by DTLA. The record reflects a total breach by DTLA's lawyers of their professional obligations – or (if crediting new counsel's recent declaration) a total failure of DTLA to adjust their staffing on the case after two of three lawyers on the case went on leave due to their illnesses. Either way, the Court finds this to be a clear case of gross negligence by DTLA.

Defendant faults Ms. Ramos for not immediately acting on a January 2023 communication from Defendant's counsel sent directly to her after the disqualification of DTLA. (See ECF No. 18-3 at 34.) This short letter raised issues regarding her scheduled deposition and the pending, unanswered discovery, but Ms. Ramos' non-response does not justify the imposition of the severe, case dispositive sanctions sought by Defendant. When Ms. Ramos received the January 2023 communication, she did not know that DTLA had been disqualified. Ms. Ramos, therefore, believed that DTLA would be handling these issues. As an unsophisticated consumer of legal services, it also appears that Ms. Ramos did not understand the full meaning of the communication from Defendant's counsel, and it is not reasonable to expect Ms. Ramos would promptly handle the case by herself while she was unaware that her lawyers at DTLA had been disqualified. What she eventually did – find and hire a new lawyer after she learned of the disqualification – was a reasonable response by a lay person in these circumstances. Perhaps Ms. Ramos should have been more assertive in trying to communicate with DTLA, but that has become clear only in hindsight now that we know DTLA dropped the ball on so many issues.

Because the Court concludes that Ms. Ramos is not chargeable with DTLA's gross negligence in doing nothing on her case after early July 2022, Defendant's request for evidentiary preclusion and default sanctions should be denied – whether these sanctions are sought under Fed. R. Civ. P. 37 or under a failure to prosecute theory. Instead, Plaintiff should be ordered to promptly provide her initial disclosures and any expert disclosures and to respond to the pending interrogatories, requests for production and requests for admissions – as well as to produce all responsive documents and to appear for her deposition.

While Defendant objects to a “restart” of this litigation, there has been no showing of lost evidence or other irreparable prejudice to Defendant from delay in receiving discovery responses and disclosures from Plaintiff (assuming the required responses and disclosures are subsequently made as recommended herein). Nevertheless, the Court recognizes that Defendant has incurred legal expenses in attempting to obtain discovery from Plaintiff and in bringing the pending motion. Plaintiff's briefs in opposition to the motion (and new counsel's arguments at the hearing) have been unhelpful in many respects. In Plaintiff's supplemental brief provided by new counsel, the email theory from the initial opposition is apparently jettisoned and instead reliance is made on an unsupported and confusing declaration about the health of two DTLA lawyers. As discussed above, these arguments fail to provide a substantial justification for DTLA's abandonment of Plaintiff's case.

In essence, the Court is recommending denial of much of the relief sought by Defendant's motion in spite of – not because of – many of Plaintiff's arguments. Accordingly, under Fed. R. Civ. P. 37(a)(5)(C), the Court finds that Plaintiff should reimburse Defendant for a portion of its legal fees incurred in bringing the motion. Based on the declaration of Defendant's counsel (ECF No. 32-1), the Court finds that the total amount of Defendant's attorneys' fees and other expenses incurred in connection with this motion is $13,284. The Court further finds that because it is recommending that much of the relief sought by Defendant's motion be denied, the fees and expenses to be reimbursed by Plaintiff should be reduced to $7,500 as a reasonable apportionment in light of the relief in the recommended order and the circumstances of this case.

*5 IT THEREFORE IS RECOMMENDED that the District Judge issue an Order:

(1) accepting and adopting this Report and Recommendation;

(2) granting in part and denying in part Defendant's motion for sanctions pursuant to Fed. R. Civ. P. 37 as set out herein;

(3) denying Defendant's request for a default judgment or for an order striking pleadings, finding facts to be taken as established, or prohibiting Plaintiff from supporting her claims or responding to defenses or from introducing evidence on designated matters;

(4) ordering that within 21 days of the date of the order accepting this Report Recommendation, Plaintiff shall respond to the pending interrogatories, requests for production and requests for admission; shall produce all responsive documents; and shall provide her initial disclosures and expert disclosures;

(5) ordering that Plaintiff be made available for her deposition as requested by Defendant;

(6) ordering that the case deadlines be extended to permit the discovery responses, document production, and disclosures by Plaintiff to take place and to permit sufficient time for Defendant to take Plaintiff's deposition and to conduct follow-up investigation and discovery;

(7) ordering Plaintiff to reimburse Defendant in the amount of $7,500 for attorneys' fees and other expenses incurred regarding the motion; and

(8) referring counsel at DTLA to the State Bar of California and the Central District of California Standing Committee on Discipline for consideration of DTLA's abandonment of Plaintiff in this lawsuit prior to their disqualification.