                                                                           FILED
                           NOT FOR PUBLICATION                              JUL 06 2015

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


BRADLEY ENGLEBRICK and                           No. 13-56067
ROXANNE HERNANDEZ,
                                                 D.C. No. 8:08-cv-01296-CJC-
              Plaintiffs - Appellants,           MLG

 v.
                                                 MEMORANDUM*
WORTHINGTON INDUSTRIES, INC.,

              Defendant - Appellee.



BRADLEY ENGLEBRICK and                           No. 13-56780
ROXANNE HERNANDEZ,
                                                 D.C. No. 8:08-cv-01296-CJC-
              Plaintiffs - Appellees,            MLG

 v.

WORTHINGTON INDUSTRIES, INC.
and WORTHINGTON CYLINDERS
WISCONSIN, LLC,

              Defendants - Appellants.


                    Appeal from the United States District Court
                       for the Central District of California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                    Cormac J. Carney, District Judge, Presiding

                        Argued and Submitted June 5, 2015
                              Pasadena, California

Before: KOZINSKI and CALLAHAN, Circuit Judges, and KORMAN,** Senior
District Judge.

      Plaintiffs Bradley Englebrick and Roxanne Hernandez brought a products

liability action against the defendants Worthington Industries, Inc. and

Worthington Cylinders Wisconsin, LLC (together, “Worthington”), alleging

injuries arising out of an explosion involving a gas cylinder. Worthington’s

defense turned on whether Plaintiffs were under the influence of methamphetamine

(“meth”) and were using the cylinder to smoke meth at the time of the accident.

During discovery, Plaintiffs repeatedly lied under oath about their history of meth

usage and when they had last consumed meth before the accident. After four years

of litigation, they admitted this perjury while testifying during the second week of

trial. The district court granted Worthington’s motion to dismiss the complaint on

the basis of Plaintiffs’ perjury, but it denied Worthington’s motion for monetary

sanctions against Plaintiffs’ counsel. Plaintiffs appeal from the dismissal of the

action, and Worthington appeals from the district court’s denial of the motion for



       **
             The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.

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monetary sanctions. We affirm the district court’s dismissal of the action but

remand for the district court to hold an evidentiary hearing on Worthington’s

motion for monetary sanctions.

                                            I

      The district court’s award of sanctions, including a dismissal pursuant to the

court’s inherent power and Federal Rule of Civil Procedure 37, is reviewed for

abuse of discretion. Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d

337, 348 (9th Cir. 1995); F.T.C. v. Alaska Land Leasing, Inc., 799 F.2d 507, 510

(9th Cir. 1986) (citing United States v. Associated Convalescent Enters., 766 F.2d

1342, 1345 (9th Cir. 1985)). A dismissal can only be disturbed where “the record

creates a definite and firm conviction that the court below committed a clear error

of judgment in the conclusion it reached upon a weighing of the relevant factors.”

Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 1983) (internal

quotation marks omitted). “The district court’s factual findings may not be set

aside unless they are clearly erroneous. In particular, the district court’s credibility

determinations are entitled to special deference.” Anheuser-Busch, 69 F.3d at 348

(citations omitted).




                                            3
      A district court’s denial of a request to continue an evidentiary hearing is

also reviewed for abuse of discretion. See Lambright v. Ryan, 698 F.3d 808, 825-

26 (9th Cir. 2012); United States v. Ayers, 924 F.2d 1468, 1481 (9th Cir. 1991).

                                           II

      “Federal Rule of Civil Procedure 37 authorizes the district court, in its

discretion, to impose a wide range of sanctions,” and dismissal is authorized

“where the failure to comply is due to willfulness, bad faith, or fault of the party.”

Wyle, 709 F.2d at 589. Moreover, “courts have inherent power to dismiss an action

when a party has willfully deceived the court and engaged in conduct utterly

inconsistent with the orderly administration of justice.” Id. We have affirmed

dismissal of a civil action under the court’s inherent power as an appropriate

sanction for falsifying a deposition. Combs v. Rockwell Int’l Corp., 927 F.2d 486,

488 (9th Cir. 1991). Here, the district court followed our opinion in Halaco

Engineering Co. v. Costle, 843 F.2d 376 (9th Cir. 1988) (as amended). In that

case, we held that in determining whether to exercise its inherent power to dismiss:

      A district court must determine (1) the existence of certain
      extraordinary circumstances, (2) the presence of willfulness, bad faith,
      or fault by the offending party, (3) the efficacy of lesser sanctions, (4)
      the relationship or nexus between the misconduct drawing the
      dismissal sanction and the matters in controversy in the case, and
      finally, as optional considerations where appropriate, (5) the prejudice



                                           4
       to the party victim of the misconduct, and (6) the government interests
       at stake.

Id. at 380.

       We agree with the district court that consideration of these factors fully

supports the dismissal of Plaintiffs’ claims. The record endorses the trial court’s

determination that Plaintiffs had repeatedly lied under oath during the pretrial

proceedings about a topic essential to Worthington’s defense, and that Plaintiffs’

deception made it “impossible for the Court to believe a word that Plaintiffs have

to say at trial about the fire or anything having to do with it.” These are indeed

extraordinary circumstances, and the Plaintiffs have demonstrated willfulness and

bad faith. No lesser sanctions would be adequate. Striking Plaintiffs’ testimony

entirely would only unburden them of their difficult cross-examination, and

holding that the cylinder was misused would not compensate Worthington for the

extensive resources it expended in order to disprove Plaintiffs’ false testimony.

Moreover, the nexus between the misconduct and the sanction is clear, as is the

harm to Worthington from Plaintiffs’ prevarication. Finally, although the district

court was not required to consider governmental interests, the court reasonably

concluded that “there is no public interest in allowing cases to proceed in which a

party’s misconduct has ‘infected all of the pretrial procedures and interfered



                                           5
egregiously with the court’s administration of justice’” (quoting TeleVideo Sys.,

Inc. v. Heidenthal, 826 F.2d, 915, 917 (9th Cir. 1987)).

      Plaintiffs have failed to show that the district court abused its discretion in

dismissing their complaint as a sanction for their repeated lies under oath during

the pretrial proceedings about a topic essential to Worthington’s defense.

                                           III

      A district court retains jurisdiction to consider motions for sanctions,

including attorneys’ fees, even after the entry of a judgment on the merits. See

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990). Here, Worthington

pressed its request for monetary sanctions both before and after the district court

entered its order dismissing the action.

      Attorneys practicing before the district court must comply with the rules of

professional conduct and ethical violations may serve as a basis for imposing

sanctions. Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1063 (9th Cir.

2007). A court has a “duty to examine the charge of unethical behavior and

impose the necessary sanctions.” Erickson v. Newmar Corp., 87 F.3d 298, 303

(9th Cir. 1996). In Gas-A-Tron of Arizona v. Union Oil Co. of California, we

endorsed the Third Circuit’s statement in Richardson v. Hamilton International

Corp., 469 F.2d 1382, 1385 (3d Cir. 1972), that:


                                           6
      Whenever an allegation is made that an attorney has violated his
      moral and ethical responsibility, an important question of professional
      ethics is raised. It is the duty of the district court to examine the
      charge, since it is that court which is authorized to supervise the
      conduct of the members of its bar. The courts, as well as the bar, have
      a responsibility to maintain public confidence in the legal profession.

534 F.2d 1322, 1324 (9th Cir. 1976) (per curiam) (as modified). Courts have an

“arsenal of sanctions” for dealing with unethical conduct by attorneys, including

monetary sanctions. Erickson, 87 F.3d at 303. However, any “sanction imposed

must be tailored to curtail the attorney’s particular misconduct.” Molski, 500 F.3d

at 1063.

      In this case, the district judge stated during the original evidentiary hearing

that “what counsel for Mr. Englebrick and Ms. Hernandez knew [was] relevant” to

Worthington’s sanctions request. The judge also acknowledged that, in order to

rule on the sanctions motion, he would “need to hear what [Plaintiffs’] counsel

knew and when.” However, the district judge never reopened the evidentiary to

allow Worthington to question Plaintiffs’ counsel on these topics. Without further

inquiry, the district judge could not have known when Plaintiffs’ counsel learned

that Plaintiffs were lying under oath, what actions, if any, counsel then took, and

what further sanctions, if any, are appropriate. On this case’s unique record, it was

an abuse of discretion for the district court not to provide Worthington with the



                                          7
opportunity to make its case through an evidentiary hearing. Accordingly, we

vacate the district court’s denial of Worthington’s motion for monetary sanctions

and remand the case to the district court with instructions to reopen the evidentiary

hearing.

      The district court’s dismissal of Plaintiffs’ complaint as a sanction for their

repeated lies under oath during the pretrial proceedings is AFFIRMED, the district

court’s denial of Worthington’s motion for monetary sanctions is VACATED, and

the matter is REMANDED to the district court to allow Worthington an

evidentiary hearing on its motion. Costs are awarded to Worthington.




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