Gary Topolewski v. URS Holdings, Inc., et al.

In Societe Internationale Pour Participations Industrielles Et Commerciales, S. A. v. Rogers, 357 U.S. 197, 209 (1958) (“Societe Internationale“) this Court held that district courts, when imposing discovery sanctions, cannot rely on their “inherent authority” and instead must apply only jurisprudence under Federal Rule of Civil Procedure 37 (“Rule 37“). Subsequently, in the 1991 case Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991) (“Chambers“) this Court held, in a 5-4 decision, that an “inherent authority” analysis could be used in place of some procedural statutes. However, the Court suggested in dicta (and in Justice Scalia’s dissent) that Societe Internationale still applies to Rule 37 discovery sanctions. Despite this, the Ninth Circuit has consistently upheld discovery sanctions through an “inherent authority” analysis, completely deviating from the protections of Rule 37. For example, in the present case, the Ninth Circuit applied an “inherent authority” analysis—without even a mention of Rule 37—to affirm $36 million in evidentiary and terminating sanctions against one defendant for another defendant’s discovery failings. In addition, the Ninth Circuit affirmed the district court’s imposition of both evidentiary sanctions (regarding damages) and terminating sanctions (regarding liability) “for the same discovery misconduct.” The Questions Presented Are: 1. Is Societe Internationale still good law, thereby making the Ninth Circuit’s practice of substituting an “inherent authority” analysis for Rule 37 jurisprudence a legal error?