On July 20, 2015, the US Court of Appeals for the Ninth Circuit upheld collective sanctions of $2.7 million against Goodyear Tire & Rubber Company, and two of its outside counsel for failing to supplement discovery responses in a products liability lawsuit arising out of a mobile home accident. Haeger v. Goodyear Tire & Rubber Co. , No. 13-16862 (9th Cir. July 20, 2015). The court also upheld a non-monetary sanction requiring Goodyear to file notice in all future lawsuits advising the court that it had previously been sanctioned for failing to meet its discovery obligations.
In the underlying lawsuit, the plaintiffs had made a Rule 34 request for production of "all test records for the [tire at issue] including, but not limited to, road tests, wheel tests, high speed testing, and durability testing." Defendants initially objected and provided no responsive documents, though they quickly supplemented with the records of one Department of Transportation safety test. The case continued for nearly four years after plaintiffs' request, during which time Goodyear and its attorneys failed to supplement Goodyear's initial responses, even as they became aware of additional test documents, and even as one attorney testified in court that all responsive documents had been produced.
The Ninth Circuit ruled that Goodyear's failure to supplement its discovery responses after it became aware of additional responsive documents was evidence of a bad faith attempt to hide responsive documents, and it was within the district court's inherent powers to impose monetary and non-monetary sactions. It made no difference that the case had already settled or that the plaintiffs had never moved to compel the production of documents responsive to their discovery request. The Ninth Circuit ruled that overlapping rules or statutes, like Federal Rule of Civil Procedure 37, did not cabin the court's inherent power to fashion its own sanctions.