Petition for Writ of Certiorari — Loop AI Labs, Inc., et al., Petitioners v. Anna Gatti, et al.

APPENDIX

APPENDIX

TABLE OF CONTENTS

PAGE

Order of the United States Court of

Appeals for the Ninth Circuit Denying En

Banc Rehearing (February 7, 2019)........................... 1a

Memorandum Disposition of the United

States Court of Appeals for the Ninth

Circuit Affirming District Court’s

Terminating Sanctions Order (November 9,

2018) ........................................................................... 3a

Excerpts of Unofficial Transcript of Oral

Argument Before the United States Court

of Appeals for the Ninth Circuit (October

10, 2018) ..................................................................... 7a

Judgment of the United States District

Court for the Northern District of

California (March 21, 2017) .................................... 22a

Order Imposing Terminating Sanctions of

the United States District Court for the

Northern District of California (March 9,

2017) ......................................................................... 24a

Order To Show Cause of the United States

District Court for the Northern District of

California (September 26, 2016) ............................. 76a

TABLE OF CONTENTS

(continued)

PAGE

Clerk’s Notice Regarding Plaintiff’s Motion

for A Default Judgment Against Almaviva

S.P.A. and Almawave S.R.L. (November 21,

2016) ....................................................................... 80a

Order of the United States District Court

for the Northern District of California

Vacating Trial and Final Pretrial

Conference (August 23, 2016) ............................... 81a

Clerk’s Notice Regarding Court’s Taking

Summary Judgment Motions Under

Submission (July 19, 2016) ................................... 82a

Excerpts of Fed. R. Civ. P. 37 .................................. 83a

Excerpts of Notes of Advisory Committee on

Rules - Fed. R. Civ. P. 37 ......................................... 86a

Excerpts from National Archives of

Respondents’ Petition for Rehearing Before

United States Supreme Court in National

Hockey League v. Metro. Hockey Club

(August 9, 1976) ....................................................... 87a

1a

ORDER DENYING EN BANC REHEARING

(FEBRUARY 7, 2019)

LOOP AI LABS, INC., a Delaware corporation,

Plaintiff-Appellant and Cross-Appellee

and

VALERIA C. HEALY, lead counsel for plaintiff Loop

AI Labs, Inc., Counsel-Appellant and Cross-Appellee

v.

ANNA GATTI; ALMAVIVA S.P.A., and Italian

Corporation; ALMAWAVE S.R.L., an Italian

corporation; ALMAWAVE USA INC., a California

corporation; IQSYSTEM LLC, a California limited

liability company; IQSYSTEM, INC., a Delaware

corporation, Defendants-Appellees and CrossAppellants

Nos. 17-15608, 17-15621,

17-15743, 17-15784

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

Filed February 7, 2019

ORDER

BEFORE: MURGUIA and FRIEDLAND, Circuit

Judges, and HINKLE,* District Judge.

*

The Honorable Robert L. Hinkle, United States District

Judge for the Northern District of Florida, sitting by

2a

Judge Murguia and Judge Friedland have voted

to deny the petition for rehearing en banc. Judge

Hinkle recommends denial of the petition for

rehearing en banc. The full court has been advised of

the petition for rehearing en banc, and no judge has

requested a vote on whether to rehear the matter en

banc. Fed. R. App. P. 35.

The petition for rehearing en banc is DENIED.

designation.

3a

MEMORANDUM DISPOSITION

(NOVEMBER 9, 2018)

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

LOOP AI LABS, INC., a Delaware corporation,

Plaintiff-Appellant and Cross-Appellee,

and

VALERIA C. HEALY, lead counsel for plaintiff Loop

AI Labs, Inc., Counsel-Appellant and Cross-Appellee,

v.

ANNA GATTI; ALMAVIVA S.P.A., and Italian

Corporation; ALMAWAVE S.R.L., an Italian

corporation; ALMAWAVE USA INC., a California

corporation; IQSYSTEM LLC, a California limited

liability company; IQSYSTEM, INC., a Delaware

corporation, Defendants-Appellees and CrossAppellants

Nos. 17-15608, 17-15621,

17-15743, 17-15784

Loop AI Labs, Inc. v. Gatti,

742 Fed. App’x 286 (9th Cir. November 9, 2018)

Appeal from the United States District Court for the

Northern District of California

Haywood S. Gilliam, Jr., District Judge, Presiding

Argued and Submitted October 10, 2018

San Francisco, California

4a

Filed November 9, 2018

BEFORE: MURGUIA and FRIEDLAND, Circuit

Judges, and HINKLE*, District Judge.

∗∗

MEMORANDUM:

The plaintiff asserted wide-ranging commercial

claims against six defendants. The plaintiff

repeatedly violated court orders on discovery and

other matters. After issuing a detailed order to show

cause and considering the plaintiff’s response, the

district court dismissed the action. The order of

dismissal explained the decision at length and

determined, without further explanation, that each

side would bear its own costs and attorney’s fees. The

order revoked the plaintiff’s attorney’s pro hac vice

status in this case and said that the district judge

would not grant any motion from the attorney to

appear pro hac before him in future matters.

The plaintiff has appealed the dismissal. The

defendants have appealed the denial of costs and

fees. The plaintiff’s attorney has appealed the pro

hac ruling and statement.

The dismissal was procedurally and substantively

The Honorable Robert L. Hinkle, United States District

Judge for the Northern District of Florida, sitting by

designation.

*

This disposition is not appropriate for publication and is not

precedent except as provided by Ninth Circuit Rule 36-3.

∗∗

5a

proper, not an abuse of discretion. The plaintiff’s

violations made it impossible for the defendants—all

of them—to prepare for trial. Repeated valid orders

and warnings had proved insufficient to bring about

compliance. After two years of attempting to resolve

the parties’ numerous discovery disputes and the

plaintiff’s disregard for its orders, the district court

acted well within its discretionary docketmanagement and discovery authority by dismissing

the case. See Conn. Gen. Life Ins. Co. v. New Images

of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007).

Considering all the circumstances, including the

sanction of dismissal and the overall conduct of the

litigation, requiring each party to bear its own costs

and fees was not an abuse of discretion. The absence

of an explanation might otherwise be grounds for a

remand, but the district court plainly paired the

decision on costs and fees with the decision to

dismiss the action. A remand for an order confirming

the court’s rationale would not change the result.

Moreover, the defendants made clear at oral

argument that they do not seek a ruling in this court

that would remand the overall package of

sanctions—potentially opening not only the cost-and

fee issue, but also the dismissal. Further litigation

that would serve no apparent purpose is precisely

what this case does not need.

Because we affirm the district court’s dismissal,

the appeal of the pro hac revocation no longer

matters in one sense. The case is over, and, because

pro hac status is granted for participation in a

particular case, the plaintiff’s attorney’s pro hac

status would have terminated along with the end of

6a

the case regardless of any specific ruling on the

issue. The issue might therefore be considered moot.

Plaintiff’s attorney contends, however, that there is

ongoing damage to her reputation that makes the

revocation a live case or controversy. Taking her

representations as true, we agree the case is not

moot. We nevertheless affirm because we are

persuaded that any error here was harmless. The

attorney’s conduct that led to her pro hac revocation

was all but identical to Loop-AI’s conduct that led to

the terminating sanctions, so the attorney briefed

her personal defenses in response to the order to

show cause. Both in her briefing to the district court

and in this court, the attorney cites nothing that the

district court failed to consider or that she could have

said to affect its decision if she had notice that pro

hac status would be considered. Finally, the

attorney’s challenge to the district court’s statement

about future pro hac applications is not ripe. There

will be time enough in the future for the district

court to consider the attorney’s application for leave

to appear, should the occasion arise.

The parties shall bear their own costs on appeal.

AFFIRMED.

7a

EXCERPTS OF UNOFFICIAL TRANSCRIPT

OF ORAL ARGUMENT BEFORE NINTH

CIRCUIT (OCTOBER 10, 2018)

LOOP AI LABS, INC.,

v.

ANNA GATTI et al.

Nos. 17-15608, 17-15621,

17-15743, 17-15784

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

Certified Unofficial Transcription Of AudioRecording Of Oral Argument Held October 10, 2018

Before Ninth Circuit.*

TRANSCRIPTION BY

HERITAGE REPORTING CORPORATION

1220 L Street, N.W., Suite 206

Washington, D.C. 20005

(202) 628-4888

* The Ninth Circuit filed the audio-recording of this argument

as part of the appellate record on October 26, 2019. The full

audio and video-audio are available from the following Ninth

Circuit’s links (last accessed June 25, 2019):

https://cdn.ca9.uscourts.gov/datastore/media/2018/10/10/1715608.mp3 (audio);

https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=00

00014352 (video-audio).

8a

BEFORE: MURGUIA and FRIEDLAND, Circuit

Judges, and HINKLE,† District Judge.

APPEARANCES:

For Loop AI Labs, Inc.:

VALERIA CALAFIORE HEALY

Healy LLC

154 Grand Street

New York, NY 10013

For Almaviva S.P.A., Almawave S.R.L.

and Almawave USA, Inc.:

MITCHELL Y. MIRVISS

Venable, LLP

750 E. Pratt Street

Baltimore, MD 21202

For Anna Gatti, IQSystem, Inc.

and IQSystem LLC:

JANET BRAYER

Janet Brayer Law Office

456 Montgomery St., 20th Floor

San Francisco, CA 94104

PROCEEDINGS

The Honorable Robert L. Hinkle, United States District

Judge for the Northern District of Florida, sitting by

designation.

†

9a

(Minute 9:02 of audio and audio-video recording

available at https://youtu.be/WxYltxbwuY0?t=542)

MS. HEALY: … Your Honors, I would like to

make only two points regarding Loop AI’s appeal.

The first point is this: I believe the trial judge

sanctioned the wrong party. I say that because a long

line of Supreme Court cases establishes that

terminating sanctions of any kind are an extreme

remedy, to be imposed only in two situations. The

first situation is when there is a total failure to

provide discovery, and that was the rule established

in Hammond Packing by the Supreme Court, and the

total failure did happen in this case, but it wasn’t on

the side of Loop AI. The total failure to provide

discovery happened on the side of the two Italian

defendants, Almaviva S.P.A. and Almawave S.R.L.,

and that is the issue that’s discussed in our brief in

connection with our appeal of the denial of the

motion for a default judgment.

The second situation, Your Honors, where the

Supreme Court has allowed the issuance of

terminating sanctions where there is no total failure

relates to a material failure, where a party has failed

to provide discovery that is material to a claim or a

defense in the case. In the case a claim over the

defense advance by the party who obtained the

discovery order. And, even in that situation, Your

Honors, the Supreme Court case law is clear that

that type of sanction can issue only if two

requirements are met. The sanction has to be just,

and the sanction has to be specifically related to the

claim that was at issue in the discovery order that

10a

was violated. And the Supreme Court has held that

those two requirements are intended to address both

the general due process concerns, and the rule in

Hammond Packing. And that in particular, in

Compagnie des Bauxites, is referred to as the specific

due process requirement which require a court to tie

that sanction to tailor the terminating sanction or

the other type of sanction that is being imposed to

the specific claim at issue in the discovery order that

was violated.

In Compagnie des Bauxites, the 19-- I believe it

was a 1982 or 1986 case, and I believe the most

recent pronouncement by the Supreme Court on this

point. The Supreme Court went through a series of

factors that it found where the factors allowed the

District Court and the Appellate Court to show that

the general due process concerns were satisfied, and

it also then went to address a specific factors, in that

particular case, the sanction was just the omission of

certain specific facts that were at issue in the

particular defense.

JUDGE MURGUIA: So, are you arguing that

there can never be a termination of the case?

MS. HEALY: I’m arguing that there can never be

a termination of the case without the linking that

the Supreme Court has required. I believe that there

can never be a termination of the case, unless there

is a total failure to provide discovery. And there can

never be a total termination of a case involving

claims against a variety of parties unless the Court

specifically ties the termination of a particular claim

to the discovery that wasn’t provided, and the

11a

discovery that was at issue in the claim addressing

the discovery order allegedly violated.

I don’t believe, Your Honors, I think in the last

two years I’ve read a lot of cases on this point,

unfortunately -- excuse me. I’m sorry. I couldn’t find

a single case where we have a situation where the

judge on its own, without the party asking for it, goes

ahead and issues an order terminating the entire

case, all of the claims against all of the parties,

without even explaining which particular order was

violated, what was the claim or the defense at issue

in the particular order, what discovery was missing

that we didn’t provide that made it impossible for

them to address the claim or defense and they

returned to Compagnie des Bauxites, because in that

case the court specifically found that the court took

extraordinary efforts to tailor the sanction to what

was at issue there, and in addition to repeatedly

telling the party you have to produce this discovery

that goes to the personal jurisdiction, that was the

claim at issue in that discovery order –

JUDGE FRIEDLAND: Can I ask you about your

Pro Hac Vice status? So, you argue that you should

have had notice that the Pro Hac Vice status was at

issue. What would you have done differently, if you’d

had notice of that?

MS. HEALY: I would have presented my case,

Your Honors.

JUDGE FRIEDLAND: But didn’t you? I mean,

because you were representing the client and the

issue was whether there were violations of discovery,

12a

isn’t it all the same thing whether you had done -you were the lawyer, so if they violated these

discovery orders, it was you. So, what’s the

difference? What would you have -- I think you did

argue we didn’t do that, it didn’t matter, all these

things you are arguing now, aren’t they the same

kinds of arguments?

MS. HEALY: So, I don’t believe so, for a couple of

reasons, Your Honors. I think my understanding of

the TSO, as I refer to it in our briefs, is that he -- the

trial judge revoked my Pro Hac Vice because of the

five charges that he identified in the inherent power

section of his Order. And those were nowhere

addressed in the -- in the Order to Show Cause that

was issued on September 26th. He didn’t address

any aspect of those charges. I had no idea that he

was considering revoking the Pro Hac. I had no idea

what the legal basis for that would be, and I still

believe that he did not have the power to revoke the

Pro Hac, because even under inherent power, you –

JUDGE FRIEDLAND: I don’t really understand

how you can say that. The Order to Show Cause

listed a whole bunch of orders about improper

conduct during depositions; listed improper

responses to interrogatories; listed a whole -- I mean,

on and on and on, listed all these things that

basically you were accused of doing. I don’t

understand that there is a difference between those

and the ones that the Judge then talked about.

MS. HEALY: Your Honor, I would respectfully

refer the Court to the case of Asa -- I think it is Asa

v. Carey. In Asa v. Carey, which is a case that we

13a

cite in our briefs, there was a similar -- it involved

the sanction against, issued by the State Department

and the sanction had a similar notice that was very

similar to the Order to Show Cause, except it was

much more extensive, and the Court found that

notice was insufficient. I don’t know -- looking at that

Order to Show Cause, as we try to explain in the

brief, how I could have addressed any what the

Judge put in his terminating sanctions order just

providing a bullet point list of orders doesn’t tell me

anything. I certainly would have been able to

address in very much detail what he said in his

terminating sanctions order. I don’t believe, I mean,

we had the opportunity and I asked Your Honors for

the opportunity to address, to understand what the

Judge had in mind, why he believed it was necessary

to issue an Order to Show Cause, what specific

sanctions he was considering –

JUDGE MURGUIA: Were your -- were your

rights, I mean, really impinged by revoking the Pro

Hac Vice status at the end of the case, when a Pro

Hac Vice status only confers, you know, the ability to

appear in a case temporarily for the purpose of

conducting a particular case. I mean, it seems like

the case was over, so whether you got what you claim

sufficient due process, or not, your Pro Hac Vice

status would have been over anyway.

MS. HEALY: Your Honor, I was greatly damaged

with respect, by the revocation not so much because

as Your Honor indicates if the case is over the Pro

Hac Vice terminates, but here it was imposed as a

sanction and I am facing everyday what remains of

my career that sanction being put in front of other

14a

courts for reasons that have nothing to do with that.

It’s been greatly damaging, and I think the case law

recognizes, including in Kohl, that a sanction –

JUDGE MURGUIA: The Pro Hac Vice has been

damaging, or the substantive order on the Order to

Show Cause?

MS. HEALY: The Pro Hac Vice revocation as a

sanction is greatly damaging. My practice, Your

Honor, has been for years I practice in business

litigation, and I’ve appeared Pro Hac Vice in many

cases. I mean, mostly I appear Pro Hac Vice,

actually, and to have the -- I don’t know if I’ll be able

to appear again in other cases. There is many courts

that require the disclosure of sanctions. Some courts

don’t, but aside from the disclosure, Your Honor,

having that revocation is a very, very significant

smear on my professional reputation, and I believe at

a minimum before I’m taken away the possibility of

practicing Pro Hac Vice in that case, or having to

have this on my career, I should be given at a

minimum the opportunity to address in detail what

the Judge believe I did wrong.

JUDGE HINKLE: So, if we just vacate the Pro

Hac revocation, that takes care of that, right? I

mean, if there is a remand, it’s another issue. But if

the case is over here today, and all we do is vacate

the revocation of your Pro Hac status, because it

doesn’t matter, the case was over, that takes care of

it, doesn’t it?

MS. HEALY: I think if Your Honor writes an

opinion saying the Court will vacate because it

15a

doesn’t matter it will still be substantially prejudicial

to me, because the issue, Your Honor, is what the

Judge wrote that led to the Pro Hac revocation. I

have to have the ability to -- I want to give the Court

an example.

JUDGE MURGUIA: If we vacate that ruling,

then you don’t have that. Then it’s not there.

MS. HEALY: Yes, of course, it’s no longer there.

JUDGE MURGUIA: So, that would address that

concern, it seems like. You still have the Order to

Show Cause substantive ruling that I think would

cause more concern.

MS. HEALY: Your Honor, I think -- I would like

to spend one more minute, if I may, because I realize

that actually time does go by much faster than I

thought, to address one point about my client, which

is the most important part of the appeal. I think,

Your Honors, I understand that the TSO reads in a

way that makes us look very bad, and all I’m asking

the Court here today is for fairness and for the Court

to review the actual record. When I say the most

irrational thing in this case is that we actually

moved for a Hammond Packing default judgment,

because we were given no discovery by two

defendants, and what we instead got was an order

sua sponte by the district judge addressing things

that -- no defendant requested the sanction that the

court issued, and I think to me that’s the most

important part of the case, and I obviously was

greatly personally damaged by the sanction, but I’m

here today really for my client, and Your Honor with

16a

that I will –

JUDGE MURGUIA: You want to reserve the

balance of your time?

MS. HEALY: Yes. Thank you.

[….]

(Minute 47:51 of audio and audio-video recording

available at https://youtu.be/WxYltxbwuY0?t=2871)

MS. HEALY: Your Honors, I know I have very

limited time, so I’ll try to respond to the points I

believe are more important.

First, I met Mr. Mirviss here for the first time

today. He was not counsel below, as Judge Hinkle

noted. If he represents to this Court that there were

no merits to the case, why then did they not pursue

their cross-appeal of fully briefed summary judgment

motions that had been pending in front of the court

for eight months? I couldn’t not find a single case

where parties fully briefed summary judgment

motions, and Ms. Brayer below represented only one

of the three parties that she now represents, there

were four -- excuse me, there were three summary

judgment motions and a motion to strike that was

filed by the Italian defendants and Almawave USA,

concurrently. Those motions were fully briefed. They

addressed the merits of every single claim. If there

was no merit to our claim, it would have been very

easy for the court to simply rule on those pending

motions.

17a

Second point I would like to make, that Mr.

Mirviss again repeated to the Court that his clients

produced everything apparently today saying 54,000

documents in his brief. At one point they say 36,000

documents that they were all one and the same, and

all I ask the Court to do is to please review the

record. In particular, ER9753 is a portion of a brief

filed by the Italian defendants, and several pages

below, 9756, 9773, 9774, where the Italian

defendants repeatedly represented to the court they

are entities legally distinct from Almawave USA,

with separate offices, boards, and books, and records.

In every single one of the responses to the discovery

requests, which I hope the Court takes a moment to

review, the Italian defendants represented that they

were producing nothing. Your Honors, we did not

receive the discovery, and I’m not asking the Court

to believe me, but I’m asking the court to believe the

record.

JUDGE HINKLE: But you did get discovery from

Almawave USA?

MS. HEALY: Your Honor, we addressed that in

the default judgment. Almawave USA actually

represented in its discovery responses, which were

filed with the default judgment, that the word

Almawave Italy and the Almaviva were vague and

ambiguous, that they were just producing what was

in their possession, custody, and control, and in the

default judgment motion we specifically address key

evidence that we requested that was never produced

by Almawave USA, so we were faced with a record of

500- plus discovery requests which, Your Honors,

begin at ER1145 to ER 1358, and then ER1359 to

18a

ER1576. That’s the section of the ER where the

Court will find everything related to the default

judgment, so we received 500-plus responses that

said specifically they are not responding, each of the

Almaviva SPA, or Almawave USA, objects to each

interrogatory, document request, and does not

provide a response on the grounds that the court

does not yet determine personal jurisdiction and

obligating them to participate in discovery would be

a Constitutional violation. This was the response

several iteration of, sometimes they change some

words, in every single request. When we filed the

default judgment motion this is what we had, and

that’s why, Your Honors, we spent substantial time

trying to request specific relief against the two

Italian entities. We did not move for a default

against Almawave USA, because like I was trying to

say at the beginning of my argument, there are

different remedies when some party does some

production, but the idea that Almawave USA

produced in their behalf is not in the record, and is

not, Your Honors, what happened.

I would like to address a third point. Ms. Brayer

talked about the trade secret disclosures. Your

Honors -- and I’ve been accused today repeatedly of

violating the local rules. I was asking the court to

apply the local rules. I believe we were materially

prejudiced by the magistrate procedures, and I think

under Hollingsworth v. Perry the Supreme Court

does give a party a right to please ask the court to

apply the procedures. Those procedures were very

prejudicial. I have practiced for 14 years. I have

never had a situation like this. I am not one to tell

the court no, I’m not going to comply with your

19a

Order. Your Honors, we did the best we could to

comply, and the trade secret disclosure –

JUDGE HINKLE: Just –

MS. HEALY: Yes.

JUDGE HINKLE: I don’t want to slow you down.

One example, you were ordered to produce

documents for which you had not filed a privilege log,

you sought mandamus in the Ninth Circuit –

MS. HEALY: Yes.

JUDGE HINKLE: -- you did not get a stay of the

Order.

MS. HEALY: Yes.

JUDGE HINKLE: You did not produce the

documents.

MS. HEALY: Yes.

JUDGE HINKLE: You violated the Order. What

am I missing?

MS. HEALY: Your Honor, that’s true, but that’s a

different issue. That was a sanction. That wasn’t a

discovery order, it was a sanction that was issued by

the magistrate without notice, and they address that

in detail. The Supreme Court has held that if we

want to preserve privilege, we have to risk contempt.

And that was the basis for our mandamus. When the

court denied the mandamus, we immediately

20a

produced. At the time the court issued the

terminating sanctions order, we had produced those

documents, and I submit to Your Honor that those

however many documents were part of the privilege

log, cannot be a basis to dismiss all claims against all

parties. I want to take the example of Anna Gatti,

who was the principal defendant, individual

defendant, in the case and the former CEO. She

wasn’t represented by Ms. Brayer, she was

represented by another counsel below. The key

claims against Anna Gatti have nothing to do with

any aspect of the terminating sanctions order. She’s

barely mentioned, Your Honor. She had contract

claims. She had -- there were substantial claims that

had literally nothing to do with anything in the case.

As of May 2016, the magistrate issued an order

where she found that Anna Gatti, two months after

discovery closed, produced discovery only in response

to one of 93 discovery requests, and that happened in

May, set forth in our brief at the beginning, I believe,

where we lay out who the parties are. And I know

I’m way beyond my time, Your Honors, and I

apologize.

JUDGE MURGUIA: Okay. Thank you very much.

I want to thank all the –

MS. HEALY: Thank you for your time, Your

Honors.

JUDGE MURGUIA: -- lawyers for their

presentations here today. The case of Loop AI Labs,

Inc., and Valeria Calafiore Healy versus Anna Gatti,

et al. is submitted. We are now in recess. Thank you.

21a

(Whereupon, the audio in the above-entitled

matter concluded.)

CERTIFICATE

DOCKET NO.: 17-15608, 17-15621, 17-15743, 1715784

CASE TITLE: Loop AI Labs and Valeria Calafiore

Healy v. Anna Gatti, et al.

HEARING DATE: October 10, 2018

I certify that the foregoing is a true and correct

transcript made to the best of our ability from a copy

of the official electronic digital recording provided by

the Healy LLC in the above-entitled matter.

Date: June 14, 2019

/s/ Robin Nelson

Heritage Reporting Corporation

Suite 206

1220 L Street, N.W.

Washington, D.C. 20005-4018

Heritage Reporting Corporation

(202) 628-4888

22a

JUDGMENT

(March 21, 2017)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

Case No. 15-cv-00798

(Dkt. 995)

v.

ANNA GATTI, et al.,

Defendants.

JUDGMENT

For the reasons stated in the Court’s order

imposing terminating sanctions, Dkt. No. 993,

judgment is hereby entered in favor of Defendants.

The Court declines to exercise supplemental

jurisdiction

over

Defendant

Anna

Gatti’s

counterclaim, Dkt. No. 197 at 31-32, because it has

dismissed the claims over which it had original

jurisdiction.1

IT IS SO ORDERED.

Dated: 3/21/2017

1 See 28 U.S.C. § 1367(c)(3); see also Sanford v. MemberWorks,

Inc., 625 F.3d 550, 561 (9th Cir. 2010) (“[I]n the usual case in

which all federal-law claims are eliminated before trial, the

balance of factors to be considered under the pendent

jurisdiction doctrine—judicial economy, convenience, fairness,

and comity—will point toward declining to exercise jurisdiction

over the remaining state-law claims.” (citation and internal

quotation marks omitted)).

23a

/s/ Haywood S. Gilliam, Jr.

HAYWOOD S. GILLIAM,

JR.

United States District

Judge

24a

ORDER IMPOSING TERMINATING

SANCTIONS (March 9, 2017)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

Case No. 15-cv-00798

(Dkt. 993)

v.

ANNA GATTI, et al.,

Defendants.

ORDER IMPOSING

TERMINATING

SANCTIONS

Under Federal Rule of Civil Procedure 37(b) and

the Court’s inherent authority, the Court issues

terminating sanctions dismissing Plaintiff Loop AI

Labs Inc.’s action with prejudice. The Court

previously issued an order to show cause why

terminating sanctions should not issue, Dkt. No. 894,

to which Plaintiff responded, Dkt. No. 922. For the

reasons discussed below, the Court concludes that

Plaintiff’s obstructionist discovery conduct, flagrant

disregard for the Court’s authority, and inability to

meet its most basic professional obligations warrant

no lesser sanction.

I. BACKGROUND

Plaintiff initiated this action in February 2015.

Dkt. No. 1. The operative complaint alleges eighteen

causes of action including civil conspiracy, fraud,

breach of contract, theft of corporate opportunity,

misappropriation of trade secrets, and conversion

25a

against Defendants Anna Gatti; Almaviva S.p.A,

Almawave S.r.l., Almawave USA Inc. (collectively,

“Almawave”); IQSystem, Inc. (“IQS, Inc.”), and

IQSystem LLC (“IQS LLC”). See Dkt. No. 210

(“SAC”). Plaintiff alleges that Defendant Gatti, its

now-former CEO, conspired with Defendants to

misappropriate Plaintiff’s trade secrets and

generally sabotage its business prospects. According

to Plaintiff, while Gatti pretended to work full time

for Loop AI, she was simultaneously providing

advisory services for multiple competing startups

and took a concurrent CEO position with Defendant

Almawave. SAC ¶ 116. Plaintiff contends that

Almaviva intended to use Gatti’s assistance to buy

Loop AI for a “bargain price” or to hire away its key

employees and obtain access to its proprietary

technology and trade secrets. SAC ¶ 21. Plaintiff

alleges that Gatti’s scheme involved sabotaging

Plaintiff’s access to funding, sharing Plaintiff’s

proprietary information with the other Defendants,

and using Plaintiff’s time, property, and other

resources to conduct business on behalf of

Almawave. SAC ¶¶ 22-23, 29.

From the beginning, this case has been marked

by a level of dysfunction and inability to work

together that is unprecedented in the Court’s

experience. See, e.g., Dkt. Nos. 96 & 98 (parties filed

separate

case

management

statements

in

contravention of Local Rule 16-9); Dkt. No. 101

(inability to conduct Rule 26(f) Meet and Confer);

Dkt. No. 157 at 47-57 (Plaintiff’s counsel blocked

emails from Defendants, choosing to accept only

faxes, letters, and phone calls from opposing counsel,

because receiving emails from Defendants was too

26a

“intrusive”); Dkt. No. 288 (Defendants requested a

discovery referee because Plaintiff allegedly “refuses

to discuss any items beyond Loop’s own agenda”

during meet-and-confer meetings). Magistrate Judge

Donna M. Ryu attempted to “impose a workable

structure on the parties’ discovery dispute resolution

process,” Dkt. No. 271 at 2, and the docket highlights

the Court’s many, many attempts to advance this

litigation in a productive way.1 Over the course of the

last two years, the Court has tried numerous

approaches, such as ordering court-supervised

discovery management conferences, Dkt. No. 136 at

2; ordering the parties to audio record meet and

confer sessions, Dkt. No. 156 at 2; instituting

standing meetings each week to encourage

substantive

and

meaningful

meet-and-confer

sessions, Dkt. No. 271 at 2; and eventually requiring

the parties to provide dial-in information and

agendas

for

the

weekly

meet-and-confer

teleconferences, so that the Court could monitor the

parties’ conduct by joining the calls, Dkt. No. 415 at

2.

As described more fully below, Plaintiff’s

insubordination, through its counsel Valeria C.

Healy, was and continues to be particularly

egregious, posing a significant obstacle to the

progress of this case. The Court has given Plaintiff

many chances to litigate in a professional and

productive manner, and has been consistently

confronted with counsel’s utter disregard for the

1 On June 16, 2015, the Court referred all discovery motions to

a magistrate judge under Local Rule 72-1. Dkt. No. 113. In this

order, all uses of the word “Court” refer either to the District

Court or collectively to Judge Ryu and this Court.

27a

Court’s authority and her persistent refusal to

comply with the Court’s orders and the Federal

Rules. The following section details the key discovery

orders serving as the basis of this order.

A. Improper Conduct in Depositions of

Three Key Witnesses

As early as December 2015, Judge Ryu gave

specific warnings with respect to the issue of

privilege during depositions: “there can be no

instructions to not answer except for privilege. . . .

And it has to be clearly privilege. Because if it’s not,

again there will be sanctions.” Dkt. No. 335 at 46.

On January 25, 2016, Almawave first deposed

Plaintiff’s co-founder and CEO Gianmauro Calafiore.

Dkt. No. 884 at 1 (“Order 884”). After reviewing the

deposition transcript, Judge Ryu issued an order

regarding Healy’s conduct during the deposition.

Dkt. No. 436 (“Order 436”).

[The deposition transcript] is replete

with examples of inappropriate

behavior by Plaintiff’s counsel, Valeria

Calafiore Healy. Ms. Healy made

speaking objections, instructed the

deponent not to answer questions for

reasons other than the invocation of

privilege, and repeatedly objected

without stating a basis for the

objection. The deponent, Gianmauro

Calafiore, was often argumentative

and uncooperative in providing

testimony, thereby delaying the

28a

deposition process. Ms. Healy and Mr.

Calafiore’s

obstructionist

conduct

repeatedly stymied Alma[w]ave USA’s

attempts to obtain discovery through

this key deposition.

Id. at 1. Judge Ryu sanctioned the Plaintiff, ordering

five additional hours of deposition and requiring

Plaintiff to bear the cost. Id. The order again

provided specific instructions:

In the future, Ms. Healy, and indeed,

all attorneys defending depositions in

this litigation (1) shall state the basis

for an objection, and no more (e.g.,

“relevance,” “compound,” “asked and

answered”); (2) shall not engage in

speaking objections or otherwise

attempt to coach deponents; and (3)

shall not direct a deponent to refuse to

answer a question unless the question

seeks privileged information.

Id. at 2. Judge Ryu further warned that “[g]iven Ms.

Healy’s repeated inappropriate conduct in her

defense of the Calafiore deposition, any further

breach” would result in sanctions. Id.

On August 25, 2016, Judge Ryu issued an order

regarding Healy’s continued conduct during the

deposition of Calafiore, as well as Loop AI’s other

executives Bart Peintner and Patrick Ehlen. Dkt.

No. 884. Leading up to this order, Judge Ryu had

already twice directed Plaintiff to produce Peintner

and Ehlen for depositions as they “appeared to be

29a

percipient witnesses.” See Dkt. No. 465 (March 10,

2016); Dkt. No. 526 (March 25, 2016). Judge Ryu’s

March 25 order included specific dates, ordering that

Ehlen and Peintner appear on March 29 and March

30, and that Calafiore and any of Plaintiff’s 30(b)(6)

witnesses appear either on March 31 or April 1. Dkt.

No. 526. This Court denied Plaintiff’s motion for

relief from Judge Ryu’s nondispositive order

regarding the deposition dates. Dkt. No. 533.

Plaintiff nonetheless failed to follow Judge Ryu’s

orders. See Dkt. No. 555 (Almawave’s letter brief

indicating that “Loop and its witnesses refused to

appear for deposition as ordered”). On April 4, 2016,

Judge Ryu again ordered Plaintiff to make witnesses

Calafiore,

Ehlen,

and

Plaintiff’s

corporate

representative available. Dkt. No. 564.

Order 884 is based on Judge Ryu’s review of the

deposition transcripts of these witnesses. Judge Ryu

found that “[i]n direct contravention of the court’s

February 29, 2016 order, Healy instructed witnesses

to refuse to answer questions on grounds other than

privilege.” Order 884 at 4 (noting, for example, that

Healy “instructed Plaintiff’s 30(b)(6) designee

(Calafiore) not to answer certain questions,

unilaterally deciding that the questions were outside

the scope of the noticed Rule 30(b)(6) topics”); id. at 5

(“[W]hen Almawave asked Ehlen, ‘Can you tell us

how your particular algorithms work?’, Healy

instructed him not to answer on the basis of

relevance, again unilaterally taking the topic off the

table.”).2 Judge Ryu cited Healy’s “numerous

2 As the order further explained, “[o]pposing counsel responded

by asking Healy to stipulate that the subject matter would not

30a

improper speaking objections, in direct contravention

of this court’s order that counsel confine objections to

a statement of their basis, (e.g., ‘compound,’ or ‘asked

and answered’), and not engage in speaking

objections or otherwise attempt to coach the

witness.” Id. at 5. Order 884 found “Healy’s coaching

was so effective that the witnesses occasionally

repeated her objections, sometimes verbatim, to the

examining attorney,” and that “[o]n other occasions,

Healy actually attempted to answer the question for

the witness.” Id. at 6-7.3 Order 884 held that Healy

be raised by Plaintiff at trial (i.e., that the matter was truly

irrelevant). Healy refused, stating that such a request was

‘absolutely absurd.’” Dkt. No. 884 at 5.

3 The order provides numerous examples:

“Q: And is it true that, in June 2015, Loop

first launched to the public? Ms. Calafiore

Healy: Objection. Vague and ambiguous. What

do you mean launched? A: What do you mean

launched?”

“Q: Do you think my clients did anything to

interfere with the Objection. Without

revealing attorney work product and attorneyclient privilege, are you asking for his opinion?

A: Are you asking for my opinion?”

“Q: Did you ever think about having Loop

purchased by another company? Ms. Calafiore

Healy: Objection, vague and ambiguous as to

time period. A: During which time period?”

“Q. Not affiliated with Loop? A. Yeah. Q. Are - Ms. Calafiore Healy: And I caution the

witness and -- I’m objecting and caution the

witness as to this question because I think

he’s confusing with Manuela Micoli.”

31a

improperly asserted attorney-client privilege to

prevent witnesses from answering, noting that Healy

“inexplicably refused to allow the witnesses to

respond to questions about their own discussions

with other Loop employees or third parties,” and

“refused to allow Plaintiff’s witnesses to answer

questions about their document collection and

production in this litigation” on the basis of attorneyclient privilege. Id. at 7-8. Judge Ryu concluded that

Healy’s conduct, “including instructions not to

answer questions and speaking objections and

coaching, was both improper and in direct violation

“Q: Do you know how it would be done,

tracking -- Ms. Calafiore Healy: Objection.

Call – calls for speculation. The witness just

testified it not [sic] – it’s not his responsibility.

A: Yeah, it’s not really my area.”

“Q. Which are what? Ms. Calafiore Healy:

Cited in the declaration.

A: Yeah, it was cited in the declaration.”

“Q: Okay. As of today, you don’t know? Ms.

Calafiore Healy: Objection. Objection. Calls

for a legal conclusion. As – this is not a

question that – the witness is not here to

testify in his capacity as the CEO of Loop AI

for the 30(b)(6) deposition, which is tomorrow.

So he’s asking about – you’re asking here

questions about his personal knowledge, and

the witness – and the question calls for a legal

conclusion. A: So the – the answer is that your

questions calls [sic] for a legal conclusion and

we will find out.”

Order 884 at 6 (citations and parentheticals omitted).

32a

of the court’s February 29, 2016 order regarding the

conduct of depositions” and “[a]ccordingly, it is

sanctionable.” Id. at 9. Judge Ryu deferred to this

Court as to what sanction should be imposed. Id.

B. Refusal to Properly Respond to Key

Interrogatories.

On multiple occasions Judge Ryu ordered

Plaintiff to amend its responses to four key

interrogatories. With respect to Interrogatory No. 8,

Almawave sought the factual bases for certain

allegations in the SAC, including Almaviva’s intent

to buy Loop for a bargain price or to hire away Loop’s

key employees and thereby acquire access to Loop’s

proprietary technology. Dkt. No. 428-1. Judge Ryu

first ordered Plaintiff on March 2, 2016 to submit an

amended response by March 9, 2016. Dkt. No. 438

(“Order 438”).4 After receiving notice from Almawave

that Plaintiff had not complied, Judge Ryu issued a

second order on March 22, 2016, again directing

Plaintiff to amend its response. Dkt. No. 508.

With respect to Interrogatory Nos. 3, 5, and 7,

Judge Ryu held that they permissibly sought the

factual bases for Loop’s allegations, and she ordered

Plaintiff to serve amended responses by March 15,

2016. Dkt. No. 465 (“Order 465”). On March 24,

2016, Almawave notified Judge Ryu that Plaintiff

had failed to comply with both Order 438 and Order

According to Defendants, Loop refused to substantively

respond. Dkt. No. 428. Plaintiff did not oppose Almawave’s

discovery letter brief on this issue, and the Court thus

construed the motion as unopposed, ordering Plaintiff to

respond by March 9, 2016. Dkt. No. 438.

4

33a

465. Dkt. No. 523. Following submission of

Almawave’s brief and Plaintiff’s opposition, Judge

Ryu issued an order on May 3, 2016, finding that

Plaintiff’s responses to the four interrogatories were

“plainly and grossly deficient.” Dkt. No. 640 (“Order

640”).

For each response, Plaintiff responded

by directing Almawave to “all

productions by all parties and nonparties in this case, and any further

materials has [sic] may be obtained

through discovery or otherwise.” This

is improper. An answer to an

interrogatory “should be complete in

itself.” In response to nos. 3, 7, and 8,

Plaintiff also listed thousands of bates

numbers with no explanation. This is

an improper use of Rule 33(d); a

responding party “may not abuse the

option . . . by directing the

propounding party to a mass [o]f

undifferentiated records.”

Plaintiff also included nearly 100

pages of allegations that appear to be

cut and pasted from Plaintiff’s second

amended complaint. This too, is

insufficient. . . .

Plaintiff’s response to no. 5, which

sought the bases for Plaintiff’s claimed

damages, is also non-responsive. It

simply lists the categories of damages

Plaintiff seeks; it does not answer the

34a

question of how Plaintiff values its

business, technology, trade secrets,

patents, or confidential information.

None of the responses were verified,

violating Rule 33. . . .

Id. at 3 (citations omitted) (first ellipsis in original).

Judge Ryu concluded that Plaintiff’s responses to the

interrogatories “are not substantially justified, and

are subject to sanctions.” Id. at 4. Judge Ryu again

ordered Plaintiff to provide amended responses:

Given that discovery has now closed,

Plaintiff

shall

supplement

its

responses to interrogatory nos. 3, 5, 7,

and 8 within seven days of the date of

this order. Plaintiff’s responses may

not include allegations pasted from

the operative complaint, and Plaintiff

must provide full, complete answers

for each interrogatory which are

verified under penalty of perjury. Id.

Notwithstanding Order 640, Plaintiff refused to

amend its responses. See Dkt. No. 679 (Almawave’s

discovery letter brief indicating that Plaintiff has not

complied with Order 640); see also Dkt. No. 691

(Almawave’s motion for leave to file a motion for

terminating sanctions regarding Plaintiff’s alleged

refusal to comply with Order 640); Dkt. No. 686 at 45 (Plaintiff’s motion for relief maintaining that it

“properly responded to the Interrogatories and

cannot be compelled to change the factual basis of

[sic] supporting its complaint, which is what the

interrogatories are directed to”).

35a

On July 21, 2016, Judge Ryu ordered Plaintiff to

file a statement indicating whether it had served

supplemental and/or amended responses to each of

the interrogatories at issue. Dkt. No. 850. Judge Ryu

ordered Plaintiff to submit a copy of the

supplemental and/or amended responses that it had

served along with a proof of service. Id. Plaintiff’s

response confirmed that Plaintiff had refused to

amend the interrogatories. See Dkt. No. 856 (“[A]fter

considering the requirements of Order 640 and

reviewing the responses already provided by Loop

AI, Loop AI did not possess any further information

that was responsive to those interrogatories and did

not have any further information to provide as a

supplement to the Interrogatories identified.”).

C. Failure to Properly and Timely Respond

to Requests for Production.

On May 3, 2016, Judge Ryu also admonished

Plaintiff because its responses to several RFPs failed

to comply with Federal Rule of Civil Procedure

34(b)(2). Order 640 at 5-6 (“Plaintiff’s responses

render it impossible to determine the extent of

Plaintiff’s production and whether Plaintiff has

withheld documents responsive to any portions of the

RFPs.”). Judge Ryu ordered Plaintiff to amend its

responses to comply with Rule 34(b)(2) by May 10,

2016. Id. at 6. Almawave filed a discovery letter brief

on May 13, 2016 indicating that Plaintiff had not

complied with Judge Ryu’s order to respond to the

RFPs. Dkt. No. 679. Plaintiff’s motion for relief from

Judge Ryu’s order confirmed Plaintiff’s refusal to

comply with the court’s order. See Dkt. No. 686 at 5

36a

(insisting that “Loop AI served appropriate discovery

responses in compliance with the Federal Rules of

Civil Procedure,” and that it “cannot be required to

amend discovery responses served almost a year ago

to comply with a new rule”). The Court denied

Plaintiff’s motion for relief on May 24, 2016. Dkt. No.

702. On July 21, 2016, Judge Ryu ordered Plaintiff to

file a statement by July 26, 2016 that specified

whether Plaintiff had served the RFPs by the court’s

May 10 deadline. In its late-filed response, Plaintiff

further confirmed its noncompliance: although the

deadline for production was May 10, 2016, Plaintiff

stated that it began to produce on May 11, 2016. See

Dkt. No. 856 at 1 & n.1 (filed July 27, 2016).

Moreover, Plaintiff’s production extended far past

the May 10 deadline, continuing through early June.

Dkt. No. 807 at 3-4.5

D. Refusal to Produce Adequate Privilege

Log

On March 8, 2016, Almawave filed a discovery

5 Plaintiff contends that its May 11, 2016 production was timely

because it added three days to the deadline for compliance with

the court’s May 3, 2016 order, due to electronic service of the

order. Dkt. No. 856 at 1 n.1. It cites Federal Rules of Civil

Procedure 6(d) and 5(b)(2)(E) for support. Id. The Court does

not read these provisions to extend the deadline by which a

party must comply with a court order based on electronic

service of the court order. But even giving Plaintiff the benefit

of the doubt, Plaintiff was still grossly noncompliant. Judge

Ryu ordered supplemental responses to be submitted within 7

days. Dkt. No. 640 at 6. Plaintiff only began production on May

11, Dkt. No. 856 at 1 n.1, and did not finish until early June,

Dkt. No. 807 at 4, thus failing by several weeks to meet the

court’s deadline.

37a

letter brief regarding Plaintiff’s failure to provide a

privilege log. Dkt. No. 451. Almawave argued:

Loop’s responses to Almawave’s First

Set of Requests for Production of

Documents were due and served on

August 3, 2015. Loop’s privilege log is

now more than seven months overdue,

nearly one month overdue from when

Almawave raised the issue in writing

via its agenda and over 14 days

overdue

from

when

Almawave

expressly wrote demanding that Loop

produce its privilege log.

Id. In response, Judge Ryu referred the parties to

her January 27, 2016 Notice of Amended Discovery

Procedures, which provided that “[i]f a party

withholds responsive information by claiming that it

is privileged or otherwise protected from discovery,

that party shall produce a privilege log as quickly as

possible, but no later than fourteen days after its

disclosures or discovery responses are due, unless

the parties stipulate to or the court sets another

date.” Dkt. No. 456 (citing Dkt. No. 401 at 4). Judge

Ryu ordered Plaintiff to produce the privilege log no

later than March 16, 2016. Dkt. No. 456.

On March 18, 2016, Almawave filed an

administrative motion for leave to file a unilateral

discovery letter brief in which it asserted that

Plaintiff had refused to comply with the court’s order

to produce a privilege log, seeking leave to move to

compel Plaintiff’s production of documents over its

privilege claims based on waiver. Dkt. No. 498.

38a

Plaintiff did not timely oppose Almawave’s

administrative motion and did not refute

Almawave’s representations about its refusal to

produce a privilege log. Dkt. No. 540 (“Order 540”).

Accordingly on March 29, 2016, Judge Ryu ordered

Plaintiff to show cause why it should not be

sanctioned for failing to comply with Order 456 and

why its failure to produce a privilege log should not

be deemed a waiver of any asserted privileges. Id.

Plaintiff’s response to the order to show cause

challenged the validity of Order 540, contending that

Defendant’s initial letter brief, Dkt. No. 451, should

have been denied. Dkt. No 576. Plaintiff also argued

that its conduct was “no different than what all the

Defendants have done in this case,” and that the

“only difference is that Loop AI did not immediately

run to the Court to seek sanctions.” Id. Finally,

Plaintiff represented that it intended to comply with

Order 456 by April 11, 2016, id., almost a month

after the court’s deadline.

On April 28, 2016, Almawave filed a third motion

related to Plaintiff’s privilege log, seeking leave to

file a unilateral brief regarding the sufficiency of

Plaintiff’s privilege log, Dkt. No. 630, which Plaintiff

opposed, Dkt. No. 637. After reviewing Plaintiff’s

privilege log, Judge Ryu issued an order on May 13,

2016, concluding Plaintiff had waived the attorneyclient privilege and work-product protection as to

most documents withheld from production. Dkt. No.

680 (“Order 680”). Order 680 provided three bases

for the waiver:

[First,] Almawave was literally unable

39a

to assess or challenge Plaintiff’s

claimed privileges or protection

because Plaintiff did not serve a

privilege log until April 2016,

approximately seven months after

Plaintiff’s initial production, and after

fact discovery closed on March 29,

2016. Plaintiff’s privilege log was thus

grossly late. [Second,] Plaintiff’s

service of its privilege log in April

2016 violated three separate court

orders: the June 2015 Notice of

Reference and Order re Discovery

Procedures, (Docket No. 117); the

court’s January 2016 Notice of

Amended Discovery Procedures; and

the court’s March 9, 2016 order to

produce a privilege log by March 16,

2016. Finally, Plaintiff’s privilege log

is plainly deficient. It contains no

information about the titles and

descriptions

of

the

withheld

documents, nor does it identify the

subject matters addressed in the

documents. This is exactly the kind of

information

that

would

enable

Almawave to assess whether the

assertion of privilege or protection is

justified. It is also the kind of

information that is required by Rule

26(b)(5), as well as the court’s

standing orders.

Id. at 4-5. Judge Ryu concluded that Plaintiff must

“produce the documents described above for which

40a

the court deems the attorney-client privilege and

work product production waived within seven days of

the date of this order,” i.e., by May 20, 2016. Id. at 6

(emphasis omitted).

Plaintiff sought reversal of Order 680 by this

Court, Dkt. No. 700, which denied the request, Dkt.

No. 712. Plaintiff then sought a writ of mandamus in

the U.S. Court of Appeals for the Ninth Circuit. In

re: Loop AI Labs, Inc., No. 16-cv-71736, Dkt. No. 1

(9th Cir. May 31, 2016). On the same day, Almawave

filed an administrative motion regarding Plaintiff’s

failure to produce the documents consistent with

Order 680, requesting either the issuance of an order

to show cause why terminating sanctions should not

be imposed for Plaintiff’s failure to comply or leave to

file a unilateral brief seeking such relief. Dkt. No.

715. On June 6, 2016, Plaintiff acknowledged that it

had refused to comply with Order 680, but asked

Judge Ryu to “grant it at least the ability to have its

petition reviewed by the Ninth Circuit before

entertaining any further motions” on Order 680. Dkt.

No. 725. Accordingly, Judge Ryu directed Plaintiff to

identify “authority for the position that petitioning

for a writ of mandamus to a United States Court of

Appeals has the effect of staying a party’s duty to

comply with the order that is the subject of the writ

of mandamus.” Dkt. No. 777. Plaintiff’s response

indicated that it had no such authority. Dkt. No. 804.

On July 11, 2016, Almawave filed an opposition to

Plaintiff’s response, in which it cited authority for

the proposition that the filing of the mandamus

petition did not impose such a stay. Dkt. No. 808. On

December 21, 2016, the Ninth Circuit denied

Plaintiff’s petition for “the extraordinary remedy of

41a

mandamus.” See Dkt. No. 961 at 2. The Ninth

Circuit held that Plaintiff’s “general overbreadth

objections . . . did not excuse [Plaintiff] from its

obligation to provide a privilege log of documents

responsive to proper, more narrow requests for

production.” Id. at 1.

On December 27, 2016, Plaintiff notified that

Court that it had “now produced to Defendants all of

the documents listed on its privilege log.” Dkt. No.

963. But this was over nine months after Judge Ryu

first ordered Plaintiff to produce a proper privilege

log, over seven months after Judge Ryu ordered

Plaintiff to produce the documents listed in its

“plainly deficient” log, and nearly nine months after

the March 29, 2016 fact discovery deadline. Plaintiff

thus acted in direct defiance of multiple orders.

E. Trade Secrets Disclosure

The

eleventh

cause

of

action

alleges

misappropriation of trade secrets against all

Defendants. In accordance with California Code of

Civil Procedure § 2019.210, Defendant IQS, Inc.

requested that Plaintiff provide trade secret

disclosure on multiple occasions. See, e.g., Dkt. Nos.

118, 232. After reviewing Plaintiff’s disclosures,

Judge Ryu concluded on December 21, 2015 that

Plaintiff’s “explanation of the trade secrets in its

second amended complaint” did not satisfy §

2019.210’s requirements. Dkt. No. 331 at 6-8 (“Order

331”) (“Plaintiff’s ‘disclosure’ through designation of

certain paragraphs in pleadings and declarations is

no substitute for specifically identifying and

describing the actual claimed trade secrets in order

42a

to permit [Defendants] to ascertain at least the

boundaries within which the secret[s] lie[].” (some

internal quotation marks omitted)). Judge Ryu

ordered Plaintiff “to file and serve a statement

identifying the specific trade secrets at issue within

21 days of the date of this order.” Id. at 7. Judge Ryu

warned that “Plaintiff’s identification of trade secrets

must be thorough and complete,” and that “[a]ny

future amendment to the disclosure will only be

permitted upon a showing of good cause.” Id.

After the court’s deadline passed, Defendant IQS,

Inc. moved to enforce Order 331, seeking to require

Plaintiff to provide a thorough and complete

identification of the trade secrets under § 2019.210.

Dkt. No. 459. Defendant IQS, Inc. sought sanctions

in the form of (1) preclusion of the introduction of

evidence as to the claim and/or (2) the sanction of

dismissal for failing to specify the trade secrets. Id.

at 3. Defendant Almawave joined in Defendant IQS,

Inc.’s motion to enforce Order 331. Dkt. No. 472.

After reviewing Plaintiff’s revised disclosures,

Judge Ryu held that Plaintiff’s trade secret

disclosures fell “far short of the ‘reasonable

particularity’ standard,” Dkt. No. 795 at 5 (“Order

795”), and that Plaintiff “failed to comply with

[Order 331] to provide a ‘thorough and complete’

identification of the trade secrets at issue in this

litigation,” id. at 12.

[T]he fact that Plaintiff publicly filed its

trade secret disclosure belies the proposition

that it contains information specific enough

to be considered ‘confidential’ trade secrets. .

43a

. Plaintiff’s attempt to meet its disclosure

obligation by pointing to allegations in its

pleadings and other court filings was

insufficient the first time, and is no more

sufficient now. . . Plaintiff’s technique of

listing general concepts or categories of

information

is

plainly

insufficient;

Defendants cannot fairly be expected to

rebut Plaintiff’s trade secrets claim without

a reasonably concrete definition of the

purported secrets. . . . Plaintiff’s categorical

descriptions render it impossible for

Defendants to conduct public domain or

other research to challenge the alleged

secrecy of the information at issue.

Id. at 6-11.6 Judge Ryu noted that Order 331 had

6 For example, Order 795 explained:

Plaintiff identifies categories of information

such as “actual and prospective investors and

partners,” “key contact information . . . at a

large Japanese technology company,” “key

contacts at a major telephone company,”

“confidential target partner, client, investor,

supplier, employee, consultant, advisor

information,” and “key service providers.”

Potential investors, clients, suppliers, or

contacts

theoretically

could

constitute

protectable facts. However, as noted above,

Plaintiff’s disclosure was unaccompanied by

any supporting documentation, and there is

no indication that Plaintiffs identified these

claimed trade secrets with more specificity.

Without more, Defendants are left to guess.

Who exactly are the secret companies or

individuals?

44a

“warned Plaintiff that ‘[a]ny future amendment to

[its] disclosure [would] only be permitted upon a

showing of good cause.’” Order 795 concluded that

Plaintiff had “not sought leave to amend its trade

secret disclosure” and its “failure to comply with the

court’s order [does not] constitute good cause to

amend.” Id. at 12. Finding Plaintiff’s disclosures

inadequate, Judge Ryu deferred to this Court in

determining the ramifications under Federal Rule of

Civil Procedure 37(b) of Plaintiff’s failure to obey her

discovery order. Id. at 13.

II. LEGAL STANDARD

“Federal Rule of Civil Procedure 37 authorizes

the district court, in its discretion, to impose a wide

range of sanctions when a party fails to comply with

the rules of discovery or with court orders enforcing

those rules.” Wyle v. R.J. Reynolds Indus., Inc., 709

F.2d 585, 589 (9th Cir. 1983). Rule 37 allows for

terminating sanctions that dismiss a plaintiff’s

action where there has been willfulness, bad faith, or

fault. Fed. R. Civ. P. 37(b)(2)(A)(v); Conn. Gen. Life

Ins. Co. v. New Images of Beverly Hills, 482 F.3d

1091, 1096 (9th Cir. 2007); Fjelstad v. Am. Honda

Motor Co., 762 F.2d 1334, 1337 (9th Cir. 1985).

“Disobedient conduct not shown to be outside the

control of the litigant is sufficient to demonstrate

willfulness, bad faith, or fault.” Jorgensen v.

Cassiday, 320 F.3d 906, 912 (9th Cir. 2003) (internal

quotation marks omitted).

In determining whether to impose terminating

Id. at 9 (citations omitted).

45a

sanctions under Rule 37(b)(2), courts consider five

factors: “(1) the public’s interest in expeditious

resolution of litigation; (2) the court’s need to

manage its docket; (3) the risk of prejudice to the

party seeking sanctions; (4) the public policy favoring

disposition of cases on their merits; and (5) the

availability of less drastic sanctions.” Conn. Gen.

Life, 482 F.3d at 1096 (internal quotation marks

omitted). “The sub-parts of the fifth factor are

whether the court has considered lesser sanctions,

whether it tried them, and whether it warned the

recalcitrant party about the possibility of casedispositive sanctions.”7 Id. “Where a court order is

violated, the first and second factors will favor

sanctions and the fourth will cut against them.”

Comput. Task Grp., Inc. v. Brotby, 364 F.3d 1112,

1115 (9th Cir. 2004) (per curiam). Thus, the Court’s

determination of whether terminating sanctions are

appropriate often turns on the third and fifth factors.

Id.

Moreover, “[d]ue process concerns further require

that there exist a relationship between the

sanctioned party’s misconduct and the matters in

controversy such that the transgression ‘threaten[s]

to interfere with the rightful decision of the case.’”

Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69

F.3d 337, 348 (9th Cir. 1995). Sanctions interfering

7 “Like most elaborate multifactor tests, our test has not been

what it appears to be, a mechanical means of determining

what discovery sanction is just. The list of factors amounts to a

way for a district judge to think about what to do, not a series

of conditions precedent before the judge can do anything, and

not a script for making what the district judge does appealproof.” Valley Eng’s Inc. v. Elec. Eng’g Co., 158 F.3d 1051, 1057

(9th Cir. 1998).

46a

with a litigant’s claim or defenses violate due process

when imposed merely for punishment of an

infraction that did not threaten to interfere with the

rightful decision of the case. G–K Props. v. Redev.

Agency, 577 F.2d 645, 648 (9th Cir. 1978).

Finally, the Ninth Circuit has noted that “an

evidentiary hearing on the matter for which a party

is sanctioned might be required before dismissal if

the party had sought to show that it was impossible

for them to comply with the discovery order.”

Religious Tech. Ctr. v. Scott, 82 F.3d 423, at *4 (9th

Cir. 1996), as amended on denial of reh’g (July 5,

1996) (unpublished) (emphasis in original); see also

Wyle, 709 F.2d at 592 (“When necessary, the district

court may hold an evidentiary hearing on a motion

for sanctions. Indeed, that method best determines

the appropriate sanctions while protecting a party’s

due process rights.”). That said, no court “has said

that evidentiary hearings are absolutely required

prior to a Rule 37 dismissal,” and “the decision

whether to hold an evidentiary hearing is well within

the court’s discretion.” Religious Tech., 82 F.3d at *4

(“Wyle does not make an evidentiary hearing an

absolute prerequisite to a dismissal sanction, even

when issues are in dispute.”); see also Pac. Harbor

Capital, Inc. v. Carnival Air Lines, Inc., 210 F.3d

1112, 1118 (9th Cir. 2000) (holding that a hearing is

not necessary so long as the party has had notice and

opportunity to be heard).

III. DISCUSSION

As an initial matter, the Court finds that

Plaintiff’s discovery violations were willful. The

47a

record illustrates that Plaintiff’s failures to provide a

privilege log, submit amended responses to

interrogatories or RFPs, provide adequate trade

secret disclosures, and proceed in a manner

consistent with the Federal Rules during depositions

were not outside Plaintiff’s control. See In re

Phenylpropanolamine (PPA) Prods. Liab. Litig., 460

F.3d 1217, 1233 (9th Cir. 2006) (“Disobedient

conduct not shown to be outside the litigant’s control

meets this standard.”). Instead, Plaintiff’s refusal to

comply clearly can be attributed to Plaintiff counsel’s

unrelenting belief that she was right, the Court was

wrong, and that her disagreement with the Court

excused her from complying with its orders. See, e.g.,

Dkt. No. 686 at 5 (continued argument that Judge’s

Ryu’s discovery orders are in error); Dkt. No. 541

(contending that Order 331 is in error and that

Plaintiff’s trade secret disclosures were sufficient).

But this is not the law. It is well established that

“[a]n attorney who believes a court order is

erroneous is not relieved of the duty to obey it.”

Malone v. U.S. Postal Serv., 833 F.2d 128, 133 (9th

Cir. 1987); see also Adriana Int’l Corp. v. Thoeren,

913 F.2d 1406, 1411 (9th Cir. 1990) (rejecting the

plaintiff’s argument that failure to produce

documents or comply fully with production orders

was excused because the court’s orders were in error,

and declaring that “[d]isagreement with the court is

not an excuse for failing to comply with court

orders”); Chapman v. Pac. Telephone & Telegraph

Co., 613 F.2d 193, 197 (9th Cir. 1979) (“An attorney

who believes a court order is erroneous is not

relieved of the duty to obey it. The proper course of

action, unless and until the order is invalidated by

an appellate court, is to comply and cite the order as

48a

reversible error should an adverse judgment result.”)

Because Plaintiff’s repeated intentional actions,

committed despite the Court’s many orders to the

contrary, establish the willful conduct necessary for

the imposition of terminating sanctions, the Court

proceeds to consider the five factors below.

A. First and Second Factors

The first two factors—the public’s interest in

expeditious resolution of litigation and the Court’s

need to manage its docket—weigh in favor of

dismissal, given that Plaintiff has violated countless

orders of the Court. See Comput. Task Grp., 364 F.3d

at 1115 (holding that the first two factors were met

when party failed to provide clear answers to

interrogatories and failed to produce documents as

ordered). Plaintiff refused to produce amended

responses to its RFPs and interrogatories, insisting

(despite several court orders) that its answers were

sufficient. Plaintiff failed to provide trade secret

disclosures, maintaining (again in the face of many

court orders) that its general categories of

disclosures were reasonably particular. Plaintiff

obstructed the deposition of multiple key witnesses

through coaching and improper objections, again

undeterred by the Court’s repeated admonitions. And

this does not even include the many times Plaintiff

eventually complied, but only after repeatedly being

directed to do so. See, e.g., Dkt. Nos. 501, 584, 587

(regarding Judge Ryu’s multiple orders that Plaintiff

produce documents in a searchable and printable

format); Dkt. Nos. 456, 540, 680, 712, 961, 963

(failing to produce an adequate privilege log, or

produce the documents listed in the inadequate log,

49a

until long after the close of discovery and in defiance

of several court orders); see also Fair Hous. of Marin

v. Combs, 285 F.3d 899, 906 (9th Cir. 2002)

(“[B]elated compliance with discovery orders does not

preclude the imposition of sanctions. Last-minute

tender of documents does not cure the prejudice to

opponents nor does it restore to other litigants on a

crowded docket the opportunity to use the courts.”

(citation and internal quotation marks omitted)).8

The Ninth Circuit has held that “the public has

an overriding interest in securing ‘the just, speedy,

and inexpensive determination of every action.’” In re

PPA Prods. Liab. Litig., 460 F.3d at 1227 (quoting

Fed. R. Civ. P. 1).

Orderly and expeditious resolution of

disputes is of great importance to the

rule of law. By the same token, delay

in reaching the merits, whether by

way of settlement or adjudication, is

costly

in

money,

memory,

manageability, and confidence in the

process. . . . The goal is to get cases

Plaintiff’s conduct with respect to the production of expert

Robert Pieraccini provides another example. On March 22,

2016, following briefing on a motion to compel, Dkt. Nos. 481,

489, Judge Ryu ordered Plaintiff to produce Pieraccini for up to

three hours of deposition. Dkt. No. 511. On June 3, 2016,

following briefing on a second motion to compel, Judge Ryu held

that Plaintiff had again refused to comply with the court’s

previous order and ordered Plaintiff for the second time to

produce Pieraccini for deposition within 7 days. Dkt. No. 720.

Judge Ryu

postponed ruling on Almawave’s request for

sanctions based on Plaintiff’s noncompliance with the March

22, 2016 order. Id. at 2.

8

50a

decided on the merits of issues that

are truly meritorious and in dispute.

Id. Plaintiff’s conduct has hindered and consistently

undermined the Court’s ability to move this case

towards orderly disposition. The action is around two

years old and yet there are nearly 1,000 docket

entries to date. Taking the depositions of the three

key executives at Loop AI as a representative

example, Plaintiff’s behavior necessitated at least six

orders directing Plaintiff to comply, to make

witnesses available for deposition, to not coach

deponents, and to limit objections to non-speaking

objections. See Dkt. Nos. 436, 465, 526, 533, 564, 884.

Similarly,

Plaintiff’s

interrogatory

responses

occasioned at least five orders, all of which in some

form directed Plaintiff to provide adequate responses

under the Federal Rules and this Court’s orders. See

Dkt. Nos. 428, 438, 508, 465, 640. These orders

highlight the enormously disproportionate time and

resources the Court has been required to devote to

this action. Plaintiff’s unwillingness or inability to

comply has hamstrung the Court’s ability to fairly

manage its docket for the benefit of all litigants with

pending cases before the Court. For these reasons,

the Court unequivocally and without hesitation finds

that the public’s interest in expeditious resolution of

litigation and the Court’s need to manage its docket

strongly favor terminating sanctions.

B. Third Factor

The third factor—prejudice to the party seeking

the sanction—also favors a terminating sanction.

Here, the Court looks to the impact the recalcitrant

51a

party’s actions have had on the other party. “A

defendant suffers prejudice if the plaintiff’s actions

impair the defendant’s ability to go to trial or

threaten to interfere with the rightful decision of the

case.” Adriana, 913 F.2d at 1412 (holding that the

plaintiff’s repeated failure to appear at depositions

and continuing refusal to comply with court-ordered

production of documents interfered with the rightful

decision of the case and therefore were prejudicial).

Moreover, “[f]ailure to produce documents as ordered

. . . is considered sufficient prejudice.” Id. at 1412.

“Late tender is no excuse.” In re PPA Prods. Liab.

Litig., 460 F.3d at 1227.

With each discovery violation, Plaintiff prejudiced

Defendants’ ability to prepare for and defend this

case. The Court’s deadline for the completion of fact

discovery was March 29, 2016, Dkt. No. 411, and yet

Plaintiff’s refusal to comply with discovery orders

extended far past the March deadline. As detailed

above, Plaintiff failed to produce, or belatedly and

incompletely produced, responses to document

requests; failed to provide adequate responses to

interrogatories; hindered the depositions of key

witnesses; and failed to disclose the trade secrets at

issue in the case. These failures have obstructed

Defendants’ attempts to learn what, if any, support

Plaintiff has for its claims.9 The Court finds that

9 Along the same lines, Plaintiff’s counsel has a persistent habit

of dumping hundreds or thousands of documents into the

record, which obscures, rather than clarifies, the issues to be

decided, and makes it impossible to move the case forward in

an orderly manner. See, e.g., Dkt. No. 878 (indicating that in

the lead-up to a trial then set for September 19, 2016, Plaintiff

had designated 3,371 potential exhibits numbering in the tens

52a

Plaintiff’s conduct prejudiced Defendants’ ability to

defend themselves and hampered the search for

truth, and that Plaintiff’s actions were particularly

harmful given the discovery deadline and the need to

prepare summary judgment motions. See N. Am.

Watch Corp. v. Princess Ermine Jewels, 786 F.2d

1447, 1451 (9th Cir. 1986) (endorsing district court’s

finding that “willful violation of the discovery order

had, given the imminence of the trial date,

prejudiced North American’s ability to prepare for

trial”).

C. Fourth Factor

The fourth factor considers the public policy in

favor of deciding cases on their merits. On the one

hand, dismissal certainly prevents resolution on the

merits. At the same time, however, the Ninth Circuit

has held:

[A]

case

that

is

stalled

or

unreasonably delayed by a party’s

failure to comply with deadlines and

discovery obligations cannot move

forward toward resolution on the

merits. Thus, we have also recognized

that this factor ‘lends little support’ to

a party whose responsibility it is to

move a case toward disposition on the

of thousands of pages); Dkt. Nos. 344-46 (three motions for

relief from nondispositive pretrial orders, all filed on the same

day, and totaling 850 pages); Dkt. Nos. 549-552, 651-56 (1,626

pages of documents filed along with Plaintiff’s opposition brief,

and subsequently refiled); Dkt. Nos. 781-86 (4,096 pages of

documents filed along with Plaintiff’s opposition brief).

53a

merits but whose conduct impedes

progress in that direction.

In re PPA Prods. Liab. Litig., 460 F.3d at 1228. It is

a party’s responsibility to respond to discovery, obey

court orders, and avoid dilatory tactics, and Plaintiff

has failed to discharge these responsibilities. Despite

the Court’s significant efforts to enable resolution of

this case on the merits, Plaintiff has persistently

undercut those efforts through repeated refusal to

comply with the Court’s orders and a chronic and

utter disregard for its obligations in this matter. In

circumstances such as these, the public policy

favoring resolution on the merits does not outweigh

Plaintiff’s bold refusal to comply with multiple

discovery orders. See Rio Props., Inc. v. Rio Int’l

Interlink, 284 F.3d 1007, 1022 (9th Cir. 2002)

(“While the public policy favoring disposition of cases

on their merits weighs against default judgment,

that single factor is not enough to preclude

imposition of this sanction when the other four

factors weigh in its favor.”).

D. Fifth Factor

The fifth factor—availability of less drastic

sanctions—weighs strongly in favor of dismissal. The

factor involves consideration of three sub-factors:

whether the court considered lesser sanctions,

whether it tried lesser sanctions, and whether the

court warned the disobedient party. Valley Eng’s Inc.

v. Elec. Eng’g Co., 158 F.3d 1051, 1057 (9th Cir.

1998). Although these measures are not necessarily

required, see id. at 1056-57, the Court has used all of

them in an attempt to foster resolution of this case

54a

on the merits.10

Section I of this order illustrates that for each

discovery dispute, Judge Ryu gave Plaintiff multiple

opportunities to comply. For example, Judge Ryu

warned the parties in December 2015 that there

could be no instruction not to answer except for

privilege during depositions. Dkt. No. 335 at 46.

After Plaintiff failed to heed the court’s warning and

again obstructed the Calafiore deposition, Judge Ryu

issued another warning, instructing Healy that

speaking objections, the coaching of deponents, and

instructing a deponent not to answer on a basis other

than privilege were unacceptable. Order 436. Judge

Ryu also issued a lesser sanction, requiring Plaintiff

to bear the cost of an additional five hours of

deposition. Id. Notwithstanding these orders and the

sanction, Healy’s behavior remained unchanged

during the deposition of Loop’s key executives. See

Order 884.

Additionally, the Court has issued unambiguous

warnings that a refusal to correct course and abide

by the local rules, standing orders, court orders, and

Federal Rules would result in sanctions. As early as

July 25, 2015, Judge Ryu warned during a discovery

10 Rule 37(b)(2) does not require that the Court warn the parties

that dismissal could be an appropriate sanction. Valley Eng’s,

158 F.3d at 1056. Rather, the Court has discretion “to make

such orders . . . as are just in regard to a party’s failure to obey

a discovery order, including dismissal.” Id. (internal quotation

marks omitted). “Thus the central factor in evaluating the

district court order is justice, and everyone has notice from the

text of Rule 37(b)(2) that dismissal is a possible sanction for

failure to obey discovery orders.” Id. at 1056-57.

55a

management conference that “if somebody takes a

position that is not substantial[ly] justified, of

course, they may open themselves up to Rule 37

sanctions or other sanctions.” Dkt. No. 157 at 18.

In February 2016, the Court noted that

[t]he one-year history of this action

reflects a profoundly troubling and

unprofessional pattern of behavior.

The parties are warned to self-correct

the

wasteful

and

dysfunctional

discovery dynamic in this case,

immediately. Failure to do so will be

punished as severely and as often as

necessary to ensure the level of

professional conduct required of those

who practice before this Court. See Civ.

L-R 11- 4(a) (attorneys permitted to

practice in this Court must “[p]ractice

with the honesty, care and decorum

required for the fair and efficient

administration of justice”).

Dkt. No. 415 at 3 (“Order 415”) (emphasis added).

The parties were warned that the status quo was

“unacceptable” and “unprecedented,” and that if the

“current conduct continues, the offending parties and

their counsel” would face significant consequences,

including the imposition of monetary or other

sanctions and referral to the Northern District’s

Standing Committee on Professional Conduct (Civil

Local Rule 11-6(a)(1)). Id. at 3. Order 415 spoke to

discovery conduct specifically:

56a

Consistent

with

their

ethical

obligations, the attorneys must treat

their discovery obligations with the

seriousness and diligence required of

them.

The

parties

must

act

responsibly during discovery, and

ensure that their conduct is consistent

with the spirit and purposes of the

discovery rules (including the parties’

personal obligation “to secure the just,

speedy,

and

inexpensive”

determination of this case). See Fed.

R. Civ. P. 1. This requires cooperation

among the parties, and mandates

adherence to the

proportionality

requirement of Federal Rule of Civil

Procedure Rule 26. . . . Obstructionist

behavior will not be tolerated.

Dkt. No. 415 at 2.

In light of this protracted history (which includes

countless discovery orders directing Plaintiff to

comply as well as Order 415), the Court concludes

that Plaintiff had sufficient notice that continued

refusal to follow the Court’s orders and rules would

lead to terminating sanctions.

The Court has

considered lesser sanctions as an alternative and has

tried alternative sanctions leading up to this order,

and finds that they are inadequate in the face of

Plaintiff’s persistent

disregard for the Court’s

authority.

Because

Plaintiff

has

remained

undeterred and because there is no reason to believe

additional lesser sanctions would be effective, the

fifth factor strongly favors terminating sanctions.

57a

F. Due Process Considerations

To begin, the Court finds that no hearing is

necessary for it to issue terminating sanctions. See

Religious Tech., 82 F.3d at *4. Plaintiff has had

multiple opportunities to be heard with regard to

the underlying discovery orders, and the Court has

reviewed each of Plaintiff’s filings and Judge Ryu’s

related orders in coming to the conclusion that

Plaintiff’s conduct warrants terminating sanctions.

Moreover, the Court finds that terminating

sanctions are “‘just’” and “specifically related to the

particular ‘claim’ which was at issue in the order to

provide discovery.” See Wyle, 709 F.2d at 591. The

discovery orders described in Section I relate directly

to the merits of the underlying action, and Plaintiff’s

refusal to comply interfered with the rightful

decision of the case. For example, Interrogatory No. 8

sought the factual bases for Plaintiff’s claims

relating to the Almaviva Defendant’s alleged intent

to buy Loop AI for a bargain price or to hire away

Plaintiff’s key employees and thereby acquire access

to Loop’s proprietary technology. Dkt. No. 428-1. The

interrogatory goes to the heart of all of Plaintiff’s

allegations in the SAC. And yet Plaintiff responded

to the interrogatory by directing Almawave “‘to all

productions by all parties and nonparties in this

case, and any further materials has [sic] may be

obtained through discovery or otherwise,’” and by

referring Defendants to “thousands of bates numbers

with no explanation” and “nearly 100 pages of

allegations that appear to be cut and pasted from

[the SAC].” Order 640 at 3. Although Judge Ryu gave

Plaintiff multiple opportunities to supplement its

58a

response, Plaintiff refused, indicating it had nothing

to add to the responses Judge Ryu had found wholly

inadequate. See Dkt. No. 856. This representative

example illustrates that dismissal of Plaintiff’s

action is the only way to move forward. Plaintiff’s

violations have harmed Defendants’ ability to

prepare a defense and patently obfuscated the basis

for Plaintiff’s claims, making it impossible to have

confidence that Defendants or the Court have access

to the facts and that any resolution at trial would be

fair and just. Accordingly, “[b]ecause there is a close

nexus between [Plaintiff’s] misconduct and the

merits of [the] case, due process concerns are not

implicated.” Anheuser- Busch, 69 F.3d at 355.

On September 26, 2016, the Court ordered

Plaintiff’s counsel to show cause why terminating

sanctions should not be imposed, to allow Plaintiff

another opportunity to be heard. Dkt. No. 894.

Plaintiff’s response reinforces the Court’s conclusion

that terminating sanctions are warranted and

necessary here. Astoundingly, Plaintiff’s counsel

characterizes “most” of Judge Ryu’s orders with

which the Court has found counsel failed to comply

as “sanction orders issued in violation of Loop AI’s

rights to due process, the Federal Rules, and the

Civil Local Rules.” Dkt. No. 922 at 1-2. In other

words, the orders and findings of the United States

Magistrate Judge who has spent scores, if not

hundreds, of hours managing the incessant discovery

squabbling in this case “are not a reliable basis on

which the Court can find Loop AI engaged in

‘obstructionist discovery’ conduct or refused to

comply with the Court’s orders.” Id. at 4. Put yet

another way, Plaintiff’s counsel essentially contends

59a

that Judge Ryu’s use of the most routine case

management tools to keep control of the sprawling

and unprecedented discovery battles she confronted

here, and her insistence on compliance with the

Court’s orders, in itself violated counsel’s

(unfounded) conception of her client’s due process

rights:

All of the Magistrate’s Orders result

from proceedings in which Loop AI

was allowed to make no record, was

given no hearing, and was generally

prohibited from submitting the

briefing and evidence with [sic] the

due process, the Federal Rules and the

Civil Rules guarantee. Many of the

Magistrate’s Orders listed include sua

sponte arguments (or sanctions) of the

Magistrate made for the first time in

the order. All but one of the

Magistrate’s Orders listed in [the

OSC] were issued without a duly

noticed motion and briefing that Loop

AI was entitled to submit under Civil

Local Rule 7. The procedural

deficiencies

that

permeate

the

Magistrate’s Orders mean the Court

would violate Loop AI’s due process

rights if it relied on those Orders to

issue any further sanctions of any

kind.

Id.

This claim that Judge Ryu’s basic, routine

60a

discovery management practices resulted in a

grievous and comprehensive due process violation is

frivolous in the Court’s view. And counsel’s argument

that “[r]elying on the Magistrate’s Orders for

purposes of a new sanction . . . would be improper

because it would alter the procedural posture of the

Magistrate’s Orders by suddenly turning them into

some sort of report and recommendation under Rule

72(b),” id. at 5, is nonsensical. Judge Ryu had full

authority to issue orders regarding nondispositive

matters, like discovery, under Rule 72(a), and the

litigants are bound to follow those orders unless

modified or set aside by the district court, period and

full stop. Counsel’s bizarre contention that mundane

discovery management procedures of the type that

occur every day in this district and many others are

broadly

unconstitutional

may

explain

her

documented and repeated failure to comply with

Judge Ryu’s orders, but in no way excuses that

failure.

Counsel also cites United States v. National

Medical Enterprises, Inc., 792 F.2d 906, 910 (9th Cir.

1986), for the principle that the Court “cannot

aggregate orders that relate to different issues” when

issuing sanctions. Dkt. No. 922 at 20. But the Ninth

Circuit has clarified that consideration of all of the

sanctioned party’s conduct is proper where, as here,

“all the misconduct is of the same type: discovery

abuses.” Adriana Int’l, 913 F.2d at 1412.

In addition, counsel contends that “the gravamen

of the charge leveled in [the OSC] appears to be that

Loop AI’s conduct somehow caused the Magistrate do

[sic] more work than the Court believes should have

61a

been required.” Dkt. No. 922 at 6. But the Court is

not saying that plaintiff has simply been a busy

litigant. Instead, the record establishes, abundantly,

that counsel’s constant failure to follow the Court’s

rules and orders has resulted in an unconscionable

waste of time and resources for all concerned.

Everything about counsel’s response to the OSC

reinforces why terminating sanctions are necessary:

in the end, counsel simply thinks she knows better

than the Court what the law requires, and when she

disagrees with a court order, she views compliance as

a matter solely within her own discretion. On appeal,

counsel can press her arguments that her conduct

was justified because of the Court’s allegedly

unconstitutional procedures, or because of opposing

counsel’s claimed bad behavior, or whatever other

grounds she wishes to assert. But the fundamental

reality is this: a court cannot effectively manage a

case when its orders are viewed by counsel not as

mandates to be followed, but as suggestions to be

complied with if, when and how counsel’s judgment

dictates. See Dkt. No. 964 (December 27, 2016 order

of Judge Ryu) (“In sum, the record is replete with

examples of Plaintiff’s unwillingness or inability to

comply with court-ordered procedures regarding

discovery dispute resolution, and in particular, the

requirement that the parties meet and confer in good

faith before seeking court intervention.”).

*

*

*

Plaintiff’s conduct has clogged the Court’s docket,

protracted this litigation, and made it impossible for

this case to proceed to any remotely fair trial. “The

most critical factor to be considered in case-

62a

dispositive sanctions is whether a party’s discovery

violations make it impossible for a court to be

confident that the parties will ever have access to the

true facts.” Conn. Gen. Life Ins., 482 F.3d at 1097

(internal quotation marks omitted). This is such a

case: Plaintiff has “so damage[d] the integrity of the

discovery process that there can never be assurance

of proceeding on true facts.” See id. (internal

quotation marks omitted). For these reasons, the

Court orders terminating sanctions pursuant to Rule

37(b)(2).

F. Dismissal under the Court’s Inherent

Authority

The Court will also address the bases separate

from Plaintiff’s discovery conduct that warrant

dismissal under the Court’s inherent authority.

Courts have the inherent power to impose various

non-monetary

sanctions,

including

“outright

dismissal of a lawsuit” for conduct that “abuses the

judicial process.” Chambers v. Nasco, Inc., 501 U.S.

32, 44-45 (1991); Roadway Express, Inc. v. Piper, 447

U.S. 752, 765 (1980).

Courts of justice are universally

acknowledged to be vested, by their

very creation, with power to impose

silence, respect, and decorum, in their

presence, and submission to their

lawful mandates. These powers are

governed not by rule or statute but by

the control necessarily vested in courts

to manage their own affairs so as to

63a

achieve the orderly and expeditious

disposition of cases.

Chambers, 501 U.S. at 43 (citations and internal

quotation marks omitted). These “inherent powers”

enable courts “to manage their cases and courtrooms

effectively and to ensure obedience to their orders.”

F.J. Hanshaw Enters. v. Emerald River Dev., Inc.,

244 F.3d 1128, 1136 (9th Cir. 2001). Through this

power, courts may sanction a party that has

“engaged deliberately in deceptive practices that

undermine the integrity of judicial proceedings,”

Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th Cir.

2006) (internal quotation marks omitted), and in

conduct “utterly inconsistent with the orderly

administration of justice,” Wyle, 709 F.2d at 589.

“Before awarding sanctions pursuant to its

inherent power, the court must make an express

finding that the sanctioned party’s behavior

constituted or was tantamount to bad faith.” Haeger

v. Goodyear Tire & Rubber Co., 813 F.3d 1233, 1244

(9th Cir. 2016) (internal quotation marks omitted).

The Ninth Circuit has “found bad faith in a variety of

conduct stemming from ‘a full range of litigation

abuses.’” Id. (quoting Chambers, 501 U.S. at 46). For

inherent power sanctions to be proper, “the conduct

to be sanctioned must be due to willfulness, fault, or

bad faith.” Anheuser-Busch, 69 F.3d at 348 (internal

quotation marks omitted); see also Evon v. Law

Offices of Sidney Mickell, 688 F.3d 1015, 1035 (9th

Cir. 2012) (“[I]t is clear that a ‘willful’ violation of a

court order does not require proof of mental intent

such as bad faith or an improper motive, but rather,

it is enough that a party acted deliberately.”).

64a

Plaintiff’s refusal to follow the Court’s orders has

been pervasive and egregious. Even if Plaintiff’s

discovery failings had not cast doubt on the action’s

merits, Plaintiff’s refusal to obey Court orders and

proceed in a professional manner has created an

untenable situation. The record is riddled with

examples of unprofessionalism that make clear that

no adequate lesser sanction is available.

Plaintiff’s actions evince a persistent belief that it

is above any obligation to obey the Court’s orders,

deadlines, or rules. For example, Plaintiff’s

oppositions to the motions for summary judgment

were due on July 4, 2016. Plaintiff had earlier asked

for a three-week extension to respond to the motions,

which the Court denied. Dkt. No. 766. Plaintiff then

asked the Court for an extension until July 4, which

the Court granted. Dkt. No. 772. On July 5, 2016,

however, Plaintiff notified the Court that it would

not meet the Court’s deadlines. Dkt. No. 788.

Plaintiff then proceeded by rules of its own creation,

assuming the Court’s role in setting deadlines and

informing the Court when it would file its

oppositions. See Dkt. No. 788 (“I will be able to file

all remaining summary judgment briefing and

materials by close of business today, and Loop AI’s

Opposition to the Motion to Strike by no later than

tomorrow.”). Such a deliberate and willful refusal to

follow the Court’s orders was not an isolated

occurrence. See, e.g., Dkt. No. 796 (opposition brief

filed two days late); Dkt. No. 802 (“errata” of

opposition brief filed three days late); Dkt. No. 802-2

(redline of “errata” showing that substantial changes

were made to opposition brief, including the

65a

insertion of numerous new legal authorities); Dkt.

No. 807 (declaration of Plaintiff’s counsel in support

of opposition brief, and six attached exhibits, filed six

days late and one day before the reply brief was due);

see also Dkt. No. 850 (Judge Ryu orders a response to

be filed by July 26, 2016); Dkt. No. 856 (Plaintiff files

the response on July 27, 2016).

In August 2015, Judge Ryu described Plaintiff’s

refusal to follow the court’s instructions when

briefing a dispute. Dkt. No. 175 at 1 (“Order 175”).

Order 175 provided:

Plaintiff Loop AI, Inc. did not provide

full argument on several of the

disputes. Instead, as to one of the

disputes, Plaintiff requested leave to

fully brief its position on a protective

order, and attached an exhibit

containing its redline of changes to

Defendants’ proposed protective order,

along with one page of annotations

explaining certain edits, essentially

granting itself additional pages of

argument. The court previously

ordered the parties to follow the

structure and limits of its joint letter

process because it requires the parties

to focus on the most important issues,

and to make appropriate compromises.

The court is concerned that Plaintiff

continues to disregard this guidance.

Id. (citations omitted).

66a

In April 29, 2016, this Court admonished

Plaintiff’s blatant disregard for the Court’s rules

regarding page limits:

[T]he single-spaced argument on

pages 18-21 of Plaintiff’s opposition

blatantly circumvents the local rules

page

requirement

and

reflects

complete disregard for the Court’s

filing rules. See Civ. L-R 3-4(c) (“Text

must appear on one side only and

must be doublespaced with no more

than 28 lines per page . . . .”).

Dkt. No. 633 (“Order 633”).

In another incident, Plaintiff again confirmed its

refusal to follow the Court’s instructions and local

rules. In April 2016, the Court struck Plaintiff’s

declaration, exhibits, and appendix attached to its

opposition to Defendants’ motion to dismiss for lack

of jurisdiction. Order 633 (citing Civ. L.R. 7-5). The

Court held:

In violation of part (a) [of Civil Local

Rule 7-5], Plaintiff’s attached exhibits

and appendix, which include emails,

screenshots taken from company

websites,

contracts,

and

other

evidentiary materials, are largely

unauthenticated; there is no sworn

testimony or averment by a competent

witness that each attached item is a

true and correct copy of what Plaintiff

purports it to be. Additionally, in

67a

violation of part (b), the declaration

consists almost entirely of legal

conclusions and argument.

See id. In the interest of resolving the motion to

dismiss on the merits (rather than based on counsel’s

compliance failures), the Court permitted Plaintiff to

file revised declarations and exhibits. Id. Yet again,

despite the Court’s admonition, Plaintiff did not

follow the Court’s order, submitting the same

exhibits (including an unsworn 32-page chart in

timeline form that in no way complied with Order

633 or the local rules), and filing no declaration at

all. See Dkt. Nos. 651-56; Dkt. No. 717 (“Order 717”)

(holding that despite the fact that “Order 633 was

narrowly

directed

to

the

straightforward

requirements of the local rules[,] . . . Plaintiff refused

to follow the order, instead filing an exasperatingly

off-point 14-page response addressing Almawave’s

arguments and a host of issues simply irrelevant” to

Order 633’s limited scope). The Court held that it

would be fully justified in striking Plaintiff’s filing in

its entirety and granting the motion to dismiss based

on an absence of evidence in the record, but provided

Plaintiff yet another opportunity to comply,

explaining that it wanted the record to be crystal

clear that Plaintiff had been given multiple

opportunities to comply with the local rules and the

Court’s order. Order 717.

Additionally, Plaintiff has demonstrated a

willingness to shade the truth when communicating

with the Court. For example, regarding whether

Plaintiff’s counsel and Defendant had met and

conferred, Plaintiff’s counsel alleged that when “Loop

68a

AI returned counsel’s calls, they were not answered;

when messages were left, there were no returned

calls.” Dkt. No. 589. Counsel for Defendant IQS, Inc.

filed a response indicating that she called Plaintiff’s

counsel fifteen times between March 7 and March

31, 2016 attempting to meet and confer, and that

Plaintiff did not return her calls. Dkt. No. 596. Judge

Ryu ordered the parties to submit call, phone, and

email records supporting their allegations. Dkt. No.

612. The submitted evidence substantiated IQS,

Inc.’s position only, establishing that its counsel

“called Plaintiff’s counsel’s office numerous times

between March 7, 2016 and March 31, 2016, and

that most calls lasted between three and four

minutes because she left messages each time.” Dkt.

No. 625. Plaintiff’s evidence, however, did not

substantiate its position. “Plaintiff submitted

evidence of only one telephone call to IQS[, Inc.]’s

counsel from March 7, 2016 through March 31, 2016:

on March 22, 2016, Plaintiff’s counsel called IQS[,

Inc.]’s counsel’s office and left a message.” Dkt. No.

625. Contrary to Plaintiff’s suggestion to the court,

Healy did not make multiple calls, IQS, Inc. made

multiple calls to Healy, and there was no evidence

showing that IQS, Inc. refused to participate in the

court’s joint letter process. Dkt. No. 625.11

11 11 As another example, Plaintiff’s motion for an extension

indicated that she repeatedly reached out to Defendants

without a response. Dkt. No. 753. Almawave’s response,

however, included the email communications between the

parties showing that Defendant in fact responded multiple

times. Dkt. No. 763. Almawave argued:

Counsel for the Almawave Defendants

repeatedly asked Loop to provide a proposed

stipulation. Loop states that “[n]o counsel has

69a

Finally,

Plaintiff’s

counsel’s

conduct

is

unbecoming a member of the bar and the officers

that practice in this Court. On July 15, 2016, Healy

filed a letter with the Court indicating that she had

become so upset during a deposition that she

“slammed” her coffee on the table and spilled the

contents of her beverage allegedly on Almawave’s

counsel. Dkt. No. 832. The transcript reveals that

Almawave’s counsel told Healy to “Be quiet,” that

Healy threatened to leave the deposition with the

deponent, and that Almawave’s counsel advised the

deponent to stay because he was there under Court

order. Dkt. No. 840-1 at 40. Then the following

exchange ensued:

[Almawave’s Counsel to deponent]:

Sir, I think you should take five and

think about it [before leaving the

deposition with your counsel]. [Healy]:

No. I think you should take a fucking

agreed to stipulate to this request or to any

extension of time” and

“the Defendants

refused to agree [to] any briefing schedule.”

Dkt. 753 at 2:14-15 and 2:26-27. This is true

only because Loop refused to schedule a time

for a recorded call and never provided a

proposed stipulation.

Id. (emphasis and brackets in original). The attached email

communications confirmed Almawave’s characterization of

their communications. See Dkt. No. 763-2. Contrary to

Plaintiff’s representation to the Court, it was Plaintiff’s counsel

who failed to respond appropriately: given the Court’s order

requiring calls to be recorded, Dkt. No. 156 at 2, it was

disingenuous to repeatedly purport to seek to communicate via

unrecorded calls, see Dkt. No. 763-2 at 1.

70a

break.

You

should

take

-(Interruption

in

proceedings.)

[Almawave’s

Counsel]:

Oh,

my

goodness. [Healy]: Take a fucking

break. [Almawave’s Counsel]: I need

help. She just threw her coffee at me.

She’s going crazy. Sir, you should get a

lawyer. You’re a witness. Oh, my God.

Sorry about that. We’re going to go off

the record.

Id. at 414. When the deposition resumed, the

deponent confirmed that Healy threw her coffee in

opposing counsel’s direction, id. at 42, and that he

saw coffee on opposing counsel’s bag, computer, and

person, id. at 46. By affidavit, the court reporter

stated that Healy “threw a large cup of iced coffee

across the room,” that the beverage “landed on a

chair beside Attorney Wallerstein,” that “coffee was

all over the chair, the rug, dripping down Mr.

Wallerstein’s suitcase, across the width of the

suitcase, on his phone, computer, and on the table,”

and that “the side of his shirt and his pants were

also wet.” Dkt. No. 840-3 (Sambataro Decl.).

As Judge Ryu observed, “such an inappropriate

outburst would lead most people to apologize on the

spot – something along the lines of ‘I’m so sorry. Are

you okay? I lost my temper, and I shouldn’t have

done that. Let me pay for any damage I caused.’

Unfortunately, that did not happen here.” Dkt. No.

977 (“Order 977”) at 3. Instead, Plaintiff’s counsel

sought to justify her behavior and called the

resulting sanctions motion “outrageous” and

71a

“baseless.” Dkt. No. 853 at 1.12 The Local Rules

require every attorney practicing before this Court to

“[c]omply with the standards of professional conduct”

imposed by the State Bar of California; “[c]omply

with the Local Rules of the Court”; “[p]ractice with

the honesty, care, and decorum required for the fair

and efficient administration of justice”; and

“[d]ischarge his or her obligations to his or her client

and the Court[.]” Civ. L.R. 11–4(a). Healy has failed

to meet these standards as exhibited by her behavior

towards opposing counsel during this deposition. No

excuse (not even Healy’s belief that Almawave’s

counsel “insulted her” by telling her to “be quiet”)

can justify Healy’s on the- record use of profanity

and the ensuing outburst that resulted in her

hurling her coffee in opposing counsel’s direction.

And while these actions were “shocking and

inappropriate,” Healy’s subsequent defiance was

even more concerning: she “repeatedly refused to

take responsibility for her conduct, as she has done

throughout this case.” Order 977 at 4. Judge Ryu

aptly summarizes the arguments in Plaintiff’s

sanctions opposition brief as follows: (1) “[t]he devil

(my opposing counsel) made me do it”; (2) “I

apologized (sort of)”; (3) “[i]t wasn’t that bad”; and (4)

“[d]on’t take it out on my client.” Id. at 4-7 (emphasis

omitted); see also Dkt. No. 853 (brief).13 Overall, the

12 Judge Ryu ordered Plaintiff’s counsel to pay Almawave’s

counsel $250 in damages caused by her act, while deferring to

the undersigned regarding whether more serious additional

sanctions were warranted in light of the order to show cause

regarding terminating sanctions. Order 977 at 7.

13 Plaintiff’s counsel finally apologized at the sanctions hearing

before Judge Ryu. See Dkt. No. 946 at 39-40. Much of her

apology, however, centered on her belief that her reputation

72a

behavior of Plaintiff’s counsel during and following

her outburst is part of a consistent and case-long

lack of professional judgment, and a persistent

unwillingness to meet the standards of conduct

required of attorneys practicing in this District.

When Healy’s conduct is viewed in the context of

this case, the Court finds that only one remaining

sanction is fitting. Healy’s unprofessional conduct,

her refusal to obey the Court’s deadlines, rules, and

orders, and her inability to practice “with the

honesty, care, and decorum required for the fair and

efficient administration of justice” underscore the

necessity of terminating sanctions in this action.

Accordingly, the Court concludes pursuant to its

inherent power that terminating sanctions are

appropriate.

In addition, the Court exercises its discretion to

revoke Healy’s pro hac vice admission in this case

and will not grant such admission in any future

cases before the undersigned. See Civ. L.R. 11-3(c)

(“The assigned judge shall have discretion to accept

or reject the [pro hac vice] application. ”); see also

Brooks v. Motsenbocker Advanced Devs., Inc., 378 F.

App’x 753 (9th Cir. 2010) (noting that the district

judge below revoked the pro hac vice admission of

had been harmed by Almawave counsel’s “false allegations” as

well as her belief that she had already “been sanctioned by the

public.” Id. at 40. At any rate, the apology came over three

months after her outburst and the filing of Plaintiff’s

remarkably remorseless sanctions opposition brief. See Dkt. No.

853. Judge Ryu appropriately characterized the apology as “too

little, and far too late.” See Order 977 at 5 n.7.

73a

Plaintiff’s counsel with respect to that case only).14

IV. CONCLUSION

Dismissal is a harsh sanction warranted in only

extreme circumstances. In re PPA Prods. Liab. Litig.,

460 F.3d at 1226. The Supreme Court has held that

“the most severe in the spectrum of sanctions

provided by statute or rule must be available to the

district court in appropriate cases, not merely to

penalize those whose conduct may be deemed to

warrant such a sanction, but to deter those who

might be tempted to [engage in] such conduct in the

absence of such a deterrent.” Nat’l Hockey League v.

Metro. Hockey Club, Inc., 427 U.S. 639, 643 (1976).

This case presents such “extreme circumstances.”

Dismissal is appropriate not only as a sanction for

Plaintiff’s flagrant disregard for its responsibilities,

but also as a deterrent to others and to ensure the

integrity of the judicial process. The Court, therefore,

DISMISSES Plaintiff’s action with prejudice. Each

party will bear its own fees and costs. In addition,

the Court REVOKES the pro hac vice admission of

Valeria C. Healy in this case and will not grant such

admission in any future cases before the

undersigned.

To the extent not already resolved, the following

motions are MOOT: the summary judgment

motions, Dkt. Nos. 733, 737, 740; the motion to strike

or exclude Plaintiff’s evidence, Dkt. No. 738;

14 As an unpublished Ninth Circuit decision, Brooks is not

precedent, but can be considered for its persuasive value. See

Fed. R. App. P. 32.1; CTA9 Rule 36-3.

74a

Almaviva’s motion for Rule 11 sanctions, Dkt. No.

801; Almawave’s motion for relief from Plaintiff’s

refusal to comply with pretrial orders and IQS, Inc.’s

related joinder, Dkt. Nos. 869 and 871; Plaintiff’s

Daubert motion, Dkt. No. 875; Defendants’ motion

for default judgment, Dkt. No. 897; Plaintiff’s motion

for entry of judgment, enforcement of anti-SLAPP fee

award orders, and related remedies, Dkt. No. 957;

Plaintiff’s motion for partial judgment on the

pleadings, Dkt. No. 986; several motions to withdraw

or substitute counsel, Dkt. Nos. 892, 955, 956;

Plaintiff’s motion to file objections to the declaration

of Judge Ryu’s law clerk, Dkt. No. 938; Plaintiff’s

motions for relief from nondispositive trial orders

and objections pursuant to Federal Rule of Civil

Procedure 72, Dkt. Nos. 836, 846, 889, 905, 909, 968,

972, 974, 980, 98415; various administrative motions

to file under seal, Dkt. Nos. 490, 535, 626, 729, 735,

736, 799, 803, 805, 810, 857, 910; and several other

miscellaneous administrative motions, Dkt. No. 593

(regarding order on stipulation); Dkt. No. 629 (to

enforce protective order); Dkt. No. 794 (to file answer

out of time).

The case is hereby CLOSED. No motion for

reconsideration regarding this order will be

entertained by the Court.

15 Even if Plaintiff’s motions for relief from nondispositive trial

orders were not moot, the Court would nonetheless deem all of

them denied. See Civ. L.R. 72-2 (“If no order denying the motion

or setting a briefing schedule is made within 14 days of filing

the motion, the motion shall be deemed denied.”); see also Dkt.

No. 984 (Plaintiff’s most recent motion for relief from

nondispositive trial order, filed more than 14 days ago, on

February 14, 2017).

75a

IT IS SO ORDERED.

Dated: March 9, 2017

/s/ Haywood S. Gilliam, Jr.

HAYWOOD S. GILLIAM,

JR.

United States District

Judge

76a

ORDER TO SHOW CAUSE

(September 26, 2016)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

v.

ANNA GATTI, et al.,

Case No. 15-cv-00798

(Dkt. 894)

ORDER TO SHOW

CAUSE

Defendants.

The Court ORDERS Plaintiff’s counsel to show

cause why terminating sanctions are not warranted

under Federal Rule of Civil Procedure 37(b) and the

Court’s inherent authority, in light of Plaintiff’s

documented history of obstructionist discovery

conduct and persistent refusal to follow Court orders

notwithstanding repeated warnings. As a result of

counsel’s conduct, the Court has expended a grossly

disproportionate and unreasonable amount of time

and resources on this case. Multiple orders were

required to obtain compliance on several issues, and

in many instances Plaintiff simply continues to

refuse to comply with the Court’s orders and the

Federal Rules. The record abounds with examples:

Improper Conduct during Depositions

77a

•

•

•

Order16

436

(describing

counsel’s

inappropriate behavior, imposing a sanction,

and warning that any further breach would

result in further sanctions)

Orders 465, 526, 564 (repeated orders

directing Plaintiff to produce executives Bart

Peintner and Patrick Ehlen for depositions)

Order 884 (describing the reoccurrence of

counsel’s obstructive and inappropriate

deposition conduct in direct violation of Order

436)

Refusal to Properly Respond to Key

Interrogatories

•

•

•

•

Orders 438, 508 (directing Plaintiff to amend

its response to Interrogatory No. 8)

Order 465 (directing Plaintiff to serve

amended responses to Interrogatory Nos. 3, 5,

7)

Order 640 (noting that Plaintiff’s responses to

Interrogatory Nos. 3, 5, 7, 8 were “plainly and

grossly deficient”)

Dkt. No. 856 (Plaintiff confirms refusal to

amend deficient interrogatories, claiming that

it has no information to provide as a

supplement to the interrogatories)

Failure to Properly and Timely Respond to

Requests for Production

•

Order 640 (ordering Plaintiff to amend its

responses to RFPs for failure to comply with

16 “Order” refers to the docket number.

78a

•

the requirements of the Federal Rules of Civil

Procedure)

Dkt. No. 807 (Plaintiff’s production starts on

May 11, 2016 and extends through early June,

even though Judge Ryu ordered the

supplemental responses to be submitted

within 7 days of May 3, 2016).

Refusal to Produce Privilege Log

•

•

•

•

Order 456 (directing Plaintiff to produce the

privilege log by March 16, 2016)

Dkt. No. 576 (Plaintiff’s response to an order

to show cause for failure to produce the

privilege log states that Plaintiff intends to

comply with Order 456 by April 11, 2016,

almost a month after the Court’s deadline)

Order 680 (finding Plaintiff’s privilege log

“plainly deficient,” and ordering Plaintiff to

produce the waived documents within seven

days)

To date, Plaintiff has still not complied with

Orders 456 and 680.

Trade Secrets Disclosure

•

•

Order 331 (finding Plaintiff’s trade secret

disclosure insufficient and ordering Plaintiff to

amend its disclosure, by identifying the

specific trade secrets at issue)

Order 795 (finding Plaintiff’s revised

disclosures still fell far short of the standard)

Other Examples of Plaintiff’s Disregard for the

Court’s Authority

79a

•

•

•

•

•

Order 501, 584, 587 (repeated orders directing

Plaintiff to produce documents in a searchable

and printable format)

Orders 551, 720 (repeated orders directing

Plaintiff to produce Robert Pieraccini for

depositions)

Order 175 (describing Plaintiff’s refusal to

follow the Court’s instructions when briefing a

dispute)

Order 633 (describing Plaintiff’s inability to

follow the local rules and the Court’s orders)

Dkt. No. 788 (Plaintiff states that it will not

meet the Court’s filing deadline, and proceeds

by rules of its own creation, setting its own

deadline for filing opposition briefs)

* * *

The Court issues this order to show cause in light

of counsel’s pervasive and repeated disregard for the

Court’s authority and obstructionist discovery

conduct. Plaintiff’s counsel must file a statement of

no more than 25 pages within seven days of the date

of this order, setting forth its position as to why

terminating

sanctions

are

not

warranted.

Defendants shall not file any response. This matter

will be submitted following Plaintiff’s filing of its

statement unless otherwise ordered by the Court.

IT IS SO ORDERED.

Dated: 9/26/2016

/s/ Haywood S. Gilliam, Jr.

HAYWOOD S. GILLIAM, JR.

United States District Judge

80a

CLERK’S NOTICE

REGARDING PLAINTIFF’S MOTION FOR A

DEFAULT JUDGMENT AGAINST ALMAVIVA

S.P.A. AND ALMAWAVE S.R.L.

(November 21, 2016) (ER44)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

v.

Case No. 15-cv-00798

(Dkt. 952)

CLERK’S NOTICE

Filed: 11/21/2016

ANNA GATTI, et al.,

Defendants.

Docket Text: CLERK’S NOTICE.

Notice is hereby given that the Court takes the

pending 892 motion to withdraw as counsel and 897

motion for default judgment by the Court filings

under submission. The hearings previously

scheduled for December 1, 2016 and December 8,

2016 at 2:00 p.m. are vacated. The Court will issue a

written order. (This is a text−only entry generated by

the court. There is no document associated with this

entry.) (ndrS, COURT STAFF) (Filed on 11/21/2016)

(Entered: 11/21/2016).

81a

ORDER

VACATING TRIAL AND FINAL PRETRIAL

CONFERENCE

(August 23, 2016) (ER53)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

v.

ANNA GATTI, et al.,

Case No. 15-cv-00798

(Dkt. 883)

ORDER

Filed: 8/23/2016

Defendants.

Docket Text:

ORDER by Hon. Haywood S. Gilliam, Jr. vacating

the pretrial conference and Daubert motion hearing

on August 30, 2016, the motion for sanctions hearing

on September 1, 2016, and the trial scheduled to

start on September 19, 2016. If there is to be a trial,

the Court will set a case management conference to

discuss scheduling with the parties. (This is a

text−only entry; there is no document associated

with this entry.) (hsglc3S, COURT STAFF) (Filed on

8/23/2016)(Entered: 08/23/2016).

82a

CLERK’S NOTICE

TAKING SUMMARY JUDGMENT MOTIONS

UNDER SUBMISSION

(July 19, 2016) (ER56)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LOOP AI LABS INC.,

Plaintiff,

v.

ANNA GATTI, et al.,

Case No. 15-cv-00798

(Dkt. 844)

CLERK’S NOTICE

Filed: 7/19/2016

Defendants.

Docket Text: CLERK’S NOTICE.

Notice is hereby given that the Court, on its own

motion, shall take the (733, 737, 740) motions for

summary judgment and the 738 motion to strike

under submission on the papers. The hearings

previously scheduled for July 21, 2016, are vacated.

(This is a text−only entry generated by the court.

There is no document associated with this entry.)

(ndrS, COURT STAFF) (Filed on 7/19/2016)

(Entered: 07/19/2016).

83a

EXCERPTS OF FED. R. CIV. P. 37

Rule 37. Failure to Make Disclosures or to

Cooperate in Discovery; Sanctions

(a) Motion for an Order Compelling

Disclosure or Discovery.

(1) In General. On notice to other parties and

all affected persons, a party may move for an

order compelling disclosure or discovery. The

motion must include a certification that the

movant has in good faith conferred or

attempted to confer with the person or party

failing to make disclosure or discovery in an

effort to obtain it without court action.

[…]

(b) Failure to Comply with a Court Order.

(1) Sanctions Sought in the District Where the

Deposition Is Taken. If the court where the

discovery is taken orders a deponent to be

sworn or to answer a question and the

deponent fails to obey, the failure may be

treated as contempt of court. If a depositionrelated motion is transferred to the court

where the action is pending, and that court

orders a deponent to be sworn or to answer a

question and the deponent fails to obey, the

failure may be treated as contempt of either

the court where the discovery is taken or the

court where the action is pending.

84a

(2) Sanctions Sought in the District Where the

Action Is Pending.

(A) For Not Obeying a Discovery Order. If a

party or a party’s officer, director, or

managing agent—or a witness designated

under Rule 30(b)(6) or 31(a)(4)—fails to obey

an order to provide or permit discovery,

including an order under Rule 26(f), 35, or

37(a), the court where the action is pending

may issue further just orders. They may

include the following:

(i) directing that the matters embraced in

the order or other designated facts be

taken as established for purposes of the

action, as the prevailing party claims;

(ii) prohibiting the disobedient party from

supporting or opposing designated claims

or defenses, or from introducing designated

matters in evidence;

(iii) striking pleadings in whole or in part;

(iv) staying further proceedings until the

order is obeyed;

(v) dismissing the action or proceeding in

whole or in part;

(vi) rendering a default judgment against

the disobedient party; or

85a

(vii) treating as contempt of court the

failure to obey any order except an order to

submit to a physical or mental

examination.

[…]

(C) Payment of Expenses. Instead of or in

addition to the orders above, the court must order

the disobedient party, the attorney advising that

party, or both to pay the reasonable expenses,

including attorney’s fees, caused by the failure,

unless the failure was substantially justified or

other circumstances make an award of expenses

unjust.

(c) Failure to Disclose, to Supplement an Earlier

Response, or to Admit.

(1) Failure to Disclose or Supplement. If a party

fails to provide information or identify a witness

as required by Rule 26(a) or (e), the party is not

allowed to use that information or witness to

supply evidence on a motion, at a hearing, or at a

trial, unless the failure was substantially justified

or is harmless. In addition to or instead of this

sanction, the court, on motion and after giving an

opportunity to be heard:

(A) may order payment of the reasonable

expenses, including attorney’s fees, caused by the

failure;

(B) may inform the jury of the party’s failure; and

(C) may impose other appropriate sanctions,

including any of the orders listed in Rule

37(b)(2)(A)(i)–(vi).

[...]

86a

EXCERPTS OF NOTES OF ADVISORY

COMMITTEE ON RULES

FED. R. CIV. P. 37

Notes of Advisory Committee on Rules. The

provisions of this rule authorizing orders

establishing facts or excluding evidence or striking

pleadings, or authorizing judgments of dismissal or

default, for refusal to answer questions or permit

inspection or otherwise make discovery, are in accord

with Hammond Packing Co. v Arkansas, 212 US 322,

29 S Ct 370, 53 L Ed 530, 15 Ann Cas 645 (1909),

which distinguishes between the justifiable use of

such measures as a means of compelling the

production of evidence, and their unjustifiable use,

as in Hovey v Elliott, 167 US 409, 17 S Ct 841, 42 L

Ed 215 (1897), for the mere purpose of punishing for

contempt.

Fed. R. Civ. P. 37, Notes of Advisory Committee on

Rules.

87a

EXCERPTS OF RESPONDENTS’ PETITION

FOR REHEARING BEFORE UNITED STATES

SUPREME COURT IN

NATIONAL HOCKEY LEAGUE V. METRO

HOCKEY CLUB

(Filed August 9, 1976)

REPRODUCED FROM PHOTOCOPY OBTAINED

FROM THE NATIONAL ARCHIVES

75-1558-CFX FILE #84432

In the

Supreme Court of the United States

OCTOBER TERM, 1976

No. 75-1558

RESPONDENTS’ PETITION FOR REHEARING

Eugene Gressman

1828 L Street, N.W.

Washington, DC 20006

(202)466-8400

Leonard W. Wagman

Michael C. Silberberg

Golenbock and Barrell

645 Fifth Avenue

New York, New York 10022

(212) 935-9800

Attorneys for Respondents

88a

Reproduced at the National Archives

TABLE OF CONTENTS

PAGE

Preliminary Statement………………………………….1

I— The Court’s per curiam reversal practice at the

certiorari stage is fundamentally unfair…………3

II—Full briefing by the parties is essential where

this Court acknowledges that its decision turns

upon its review of a lengthy and complex

record………………………………………………….7

III—This Court without benefit of briefing has

significantly altered the application of Rule 37

and standards of appellate review of Rule 37

dismissal orders ………………………...…………21

Conclusion ……………………………………………... 27

Certificate of Counsel .............................................. 29

[…]

89a

Reproduced at the National Archives

[….]

Preliminary Statement

On June 30, 1976, in the closing hours of the

October 1975 term, this Court—by a 6-2, vote—

summarily reversed the judgment of the Third

Circuit in this case.1 It reversed that judgment on

the basis of the certiorari papers alone, plus seven

large boxes of the record transmitted at the Court’s

own request. And, it reversed that judgment without

notice to the parties, without according the

respondents any opportunity to brief or otherwise

defend the merits of their case. The effect of that

summary reversal was to reinstate the judgment of

dismissal under Rule 37 with prejudice to

respondents’ complaint and counterclaims in five

consolidated anti-trust actions.

This petition for rehearing addresses itself to the

proposition that the June 30 per curiam order is

fundamentally unfair and should be reconsidered

and vacated. Both parties should be given the

opportunity to show cause in writing why the Third

Circuit’s judgment should be either affirmed or

reversed on its merits. Only in that way can a full

measure of fairness and due process be restored to

this Court’s practice of summary reversal on the

merits at the certiorari stage.

Mr. Justice Brennan and Mr. Justice White noted their

dissent from the per curiam order opinion. Mr. Justice Stevens

took no part in the disposition of this case. On timely

application Mr. Justice Brennan extended respondents’ time to

file this petition to August 9, 1976.

1

90a

Reproduced at the National Archives

This case is an appropriate vehicle for striking

this vestige of unfairness from the Court’s

procedures. As. will be seen below, it vividly

demonstrates both the inequities of the per curiam

reversal procedure and the factual, legal and even

constitutional errors that can ensue when the merits

of a factually complex case are resolved without

benefit of counsel’s arguments.

We submit that a fuller examination of the

record, and of the issues that were never briefed by

the parties, would demonstrate that this Court’s

decision of June 30 is in fact an abrupt departure

from the prior decisions of this Court rather than a

routine application of Rule 37. That decision has (i)

significantly broadened the range of conduct which

will subject a litigant to dismissal of his action by a

trial court without a hearing on the merits; (ii)

focused upon an entirely new consideration in

evaluating the propriety of the dismissal sanction,

i.e., the need for deterrence of others; and (iii) greatly

narrowed the scope of appellate review of Rule 37

dismissal orders while at the same time increasing

the need for strict scrutiny of such orders by

supplanting a heretofore objective standard of

“willfulness” with an exceedingly broad and

subjective one.

Full briefing and argument would also

demonstrate that the critical determinations of the

per curiam opinion, i.e., that the Third Circuit “did

not question any of the findings of historical fact by

the District Court” (Slip Op. p. 3) and that the

District Court’s findings “are fully supported by the

91a

Reproduced at the National Archives

record” (Slip Op. pp. 4-5) are in error and indeed,

that the highly complex factual record in this case

should have precluded the granting of certiorari in

the first instance.

Above all, full briefing and argument will

demonstrate what the per curiam fails to perceive;

that a meritorious anti-trust action of public

importance has, in the final analysis, been dismissed

because of a clerical error caused by a highly

ambiguous order of the District Court, an error that

resulted in an unintended and inadvertent failure to

timely file supplemental answers to 56 of 1150

interrogatories. The action has been dismissed

despite the conclusion of the Appellate Court that

respondents’ counsel had worked “frantically to

complete discovery within the deadlines set by the

court” (App. A, p. 14a)2 and exercised an “enormous

effort” (App. A, p. 16a).

The documentary evidence of the clerical error

and the detailed chronology of respondents’

“enormous effort” to prepare this case for trial—both

of which were among the many record documents

carefully “review[ed]” by the Third Circuit (App. A, p.

16a)—are submitted in a separate Reproduced at the

National Archives Appendix to this petition.

2 “App.” references are to the Appendix to the Petition for

Certiorari. “R” references are to the pages of the Joint Appendix

in the Court of Appeals. “RA” references are to the Record on

Appeal.

92a

Reproduced at the National Archives

I

This Court’s per curiam reversal practice at

the certiorari stage is fundamentally unfair.

The June 30 per curiam reversal order brings into

sharp focus the inequities inherent in the Court’s

long-standing practice in this regard. That order

raises anew the question put nearly twenty years ago

by Professor Ernest J. Brown of the Harvard Law

School,3 the question being

“... whether the present rules and stated

practices of the Court permit summary

reversal and at the same time afford

hearing to the respondent appropriate to

the case and consistent with what is

usually expected of judicial tribunals.”

All neutral observers of this Court’s summary

reversal practice have answered that question in the

negative by observing that the practice, “unless

narrowly confined to the most obvious situations,

contains an element of unfairness toward the

parties, and particularly toward the respondents.”4

3 Brown, Foreword: Process of Law, The Supreme Court, 1957

Term, 72 Harv. L. Rve. 77, 79 (1958).

4 R. Stern and E. Gressman, SUPREME COURT PRACTICE, Sec.

5.12 at 222 (4th ed. 1969). In addition to Professor Brown’s

93a

Reproduced at the National Archives

And that “element of unfairness” lies precisely in the

fact that the respondents are denied any meaningful

opportunity to brief or argue the merits of their case

prior to this Court’s final resolution of those merits,

particularly where those merits are embedded in a

highly complex factual record.

This critical “element of unfairness” is deeply

embedded in this Court’s rules and practices to the

point where the respondents’ adherence to the rules

respecting certiorari becomes a trap that exposes

them to the “element of unfairness” without

recourse. Consider the following:

(1) Nothing in this Court’s rules contemplates or

warns a respondent that he may lose his case on the

merits at the certiorari stage.

(2) The bar has been repeatedly warned that

petitions for certiorari and briefs in opposition

should not only be short but should limit their

contents to a discussion of whether there are what

Rule 19 calls “special and important reasons” for

granting certiorari and thereby avoid reaching the

merits of a given case. And respondents in particular

have been taught that their sole function at the

certiorari stage is “to induce the Court to deny a

petition for certiorari, not to win a case on the

provocative analysis, supra n. 3, see Note, Supreme Court Per

Curiam Practice: A Critique, 69 Harv. L. Rev. 707, 723 (1956);

Comment, Per Curiam Decisions of the Supreme Court: 1958

Term, 27 U. Chi. L. Rev. 128 (1959); Note, The Supreme Court,

1960 Term, 75 Harv. L. Rev. 40, 93 (1961).

94a

Reproduced at the National Archives

merits.”5

(3) In accordance with that admonition, the

respondents in the instant case carefully refrained

from arguing the merits or the factual basis of the

Rule 37 dismissal order—as did the petitioners, who

expressly conceded that it is not “appropriate for this

Court to review such factual issues on certiorari”

(Petition, p. 18). More particularly, the respondents

were constrained not to address themselves to the

key determination made by this Court in its June 30

per curiam opinion:

“Certainly the findings contained in

the memorandum opinion of the

District Court quoted earlier in this

opinion are fully supported by the

record.” (Slip Op. pp. 4-5)

That determination does not reflect any of the

questions presented in the petition for certiorari,

which were limited solely to the interpretation of

Rule 37 (see Petition, pp. 2-3). Nor does it reflect any

of the “special and important reasons” mentioned in

Rule 19 for granting certiorari. Thus, by adhering to

the rules respecting certiorari, the respondents were

trapped into not arguing the merits of their case and

not defending the judgment of the Third Circuit on

the basis of the extensive record.

[…]

5 R. Stern and E. Gressman, SUPREME COURT PRACTICE, supra

n. 4, Sec. 6.45 at 315 (4th ed. 1969).