                        NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1



                United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                                Submitted April 30, 2020*
                                  Decided May 6, 2020

                                          Before

                       FRANK H. EASTERBROOK, Circuit Judge

                       DIANE S. SYKES, Circuit Judge

                       AMY J. ST. EVE, Circuit Judge

No. 19-3273

UNITED STATES OF AMERICA,                              Appeal from the United States
     Plaintiff-Appellee,                               District Court for the Northern District
                                                       of Illinois, Eastern Division.

       v.                                              No. 1:19-cv-01238

COURTNEY NORWOOD,                                      Gary Feinerman,
    Defendant-Appellant.                               Judge.
                                        ORDER

        The United States filed suit against Courtney Norwood to enjoin him from
providing tax-preparation services to others because, it alleged, he repeatedly violated
federal tax law. After Norwood failed three times to meet a deadline for producing his
initial discovery disclosures, the district court entered default judgment against him as a




       *This court dismissed the appeal as to Moor Money Accounting, Inc., because no
attorney appeared on its behalf. We agreed to decide this case without oral argument
because the briefs and record adequately present the facts and legal arguments, and oral
argument would not significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
No. 19-3273                                                                        Page 2

sanction. The court also permanently enjoined him from providing tax-preparation
services. Because the judge did not abuse his discretion, we affirm.

       This case arises from an Internal Revenue Service investigation into Moor Money
Accounting, Inc., Norwood’s tax-preparation business. Between 2015 and 2019,
Norwood, as Moor Money’s sole employee, prepared over 1,600 federal income-tax
returns for customers. After a visit to Moor Money in 2017, the IRS assessed $21,560 in
penalties against Norwood for failing to satisfy Internal Revenue Code requirements
during tax years 2013, 2014, and 2015. Later in 2017 the IRS informed Norwood that it
had opened an investigation into his tax-preparation work. It interviewed 32 of his
customers for the 2016 tax year and found errors in 27 of their tax returns (resulting in
underpayments of $37,734). The IRS also interviewed five of his 2017 customers and
identified errors in all five tax returns (resulting in underpayments of $13,816).
Norwood prepared the 2017 tax returns after the IRS had advised him of its
investigation.

        The investigation by the IRS revealed that Norwood used several methods to
inflate his customers’ claimed expenses and deductions, allowing him to reduce their
tax liability and increase their refunds. (There was no evidence that Norwood took a
cut, but he benefited from word of mouth.) Based on these conclusions, the
United States filed a complaint against Norwood and Moor Money in February 2019. As
relief the government sought a permanent injunction barring Norwood from any
involvement in preparing federal tax returns for others and from engaging in conduct
subject to penalty under the Internal Revenue Code.

        The judge designated the case for participation in the Mandatory Initial
Discovery Pilot Project for the Northern District of Illinois. Under the Pilot Project, a
standing order is automatically entered on the docket providing written discovery
obligations that supersede the customary initial disclosures under Rule 26(a)(1) of the
Federal Rules of Civil Procedure. The standing order provides that “[e]very party must
provide the information called for in Part B” of that order “without the need for any
request from an opposing party.” Part B lists seven categories of information and calls
for initial disclosures broader than what Rule 26(a)(1) requires but encompasses
materials that are ultimately discoverable under other rules. The standing order and
No. 19-3273                                                                          Page 3

additional information about the Pilot Project are also available on the district court’s
website.1

        At the initial status hearing in April 2019 (held after his answer was due but not
filed), Norwood arrived late. The judge had called the case and entered default against
him and Moor Money under Rule 55(a) of the Federal Rules of Civil Procedure. Later
that day Norwood filed an appearance for himself and Moor Money, and the court
vacated the default for both. The judge defaulted Moor Money again, however,
presumably because it never appeared through counsel as required. Scandia Down Corp.
v. Euroquilt, Inc., 772 F.2d 1423, 1427 (7th Cir. 1985) (“[C]orporations must appear by
counsel or not at all.”). Because Moor Money is not a party to this appeal, we say no
more about it.

        Although he appeared, Norwood did not file an answer, prompting the
government to move for default judgment. The judge continued the motion and set an
answer deadline, which Norwood met. The judge then set a July 9, 2019 deadline for
Pilot Project disclosures. The government served Norwood with its disclosures on
July 8. Norwood did not provide his disclosures, and on July 22 counsel for the
government emailed him, attaching the Pilot Project standing order. On July 25 counsel
asked Norwood by telephone to produce his disclosures by August 8 and sent a follow-
up email confirming the request. Counsel also told Norwood that he might find it
helpful to discuss the Pilot Project with the “volunteer attorneys” at the district court.
Norwood did not provide his disclosures, and the government filed a motion to
compel.

      The judge held a hearing on the motion, and when Norwood did not appear, the
judge granted it, ordering him to make his Pilot Project disclosures by September 3.
When Norwood did not, the government moved for default judgment as a sanction
under Rule 37 of the Federal Rules of Civil Procedure. The government also requested a
permanent injunction based on the allegations in the complaint. Later that day,



       1 The home page for the Northern District of Illinois (accessible to the public
without the need to go through a case’s electronic docket) displays a link entitled:
“Mandatory Initial Discovery Pilot Project (MIDP).” The link leads to a page containing
the applicable standing orders, several training videos, a user’s manual, and a checklist,
among other resources. UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF ILLINOIS,
https://www.ilnd.uscourts.gov/ (last visited May 4, 2020).
No. 19-3273                                                                      Page 4

Norwood emailed government counsel to say that his documents were too large to
attach to an email, so he was looking for an alternative way to send them.

        At the hearing on the motion for default judgment, Norwood again failed to
appear. The judge ordered Norwood to comply with his initial discovery obligations by
October 1 or he would enter default judgment against him. Norwood again failed to
make his disclosures. (On October 1 government counsel received a thumb drive of
documents Norwood had already produced in early 2018 during the IRS investigation;
it did not contain most of the categories of information the Pilot Project requires.)

       At a hearing a week later, Norwood told the judge that he had complied with his
Pilot Project disclosure obligations by sending the thumb drive. At the judge’s request,
the government submitted a supplemental filing confirming that Norwood had not
provided the required written disclosures. Norwood failed to appear at a follow-up
hearing the next week, and the judge entered default judgment against him as a
discovery sanction under Rule 37(b). The judge stated that he had “given Mr. Norwood
plenty of opportunities to remedy his failure to comply with the Court’s discovery
orders, and he has not.” The judge also concluded that his document production did
not “even come close to complying.” Considering the many opportunities to comply
offered to Norwood, the judge found that he had “shown an unwillingness and a
refusal to comply.”

       The judge also granted the government a permanent injunction, finding the
request “appropriate in light of the unrebutted evidence” of Norwood’s conduct—
namely, the now-admitted allegations in the government’s complaint that reflected “a
persistent and serious violation” of federal tax laws. The judge agreed with the
government that given the repeated nature of Norwood’s conduct, the variety of his
methods, and the ineffectiveness of prior monetary penalties and warnings from the
IRS, only a permanent injunction barring him from all tax-preparation services would
suffice to prevent continuing violations of the tax laws. The injunction prohibited
Norwood from engaging in any tax-preparation activities or conduct that substantially
interferes with the proper administration of tax laws. It also ordered Norwood to
provide a list of his customers beginning in 2015 and to inform his customers of the
injunction by email.

      The next day Norwood moved to vacate the judgment, asserting that he had
complied with the court’s discovery orders. The judge denied the motion, finding that
Norwood had not complied with his discovery obligations, the allegations against him
were well supported, and he had been “given ample opportunity to defend this case.”
No. 19-3273                                                                        Page 5

Norwood again moved to vacate, insisting that he had complied with the court’s orders.
He added that the government never provided him with the Pilot Project questions as
ordered by the court and that he did not have the questions until he met with the
court’s pro se assistance program (after the court had entered default judgment).
Norwood attached his disclosures to his second motion, but in denying the motion, the
judge had concluded that “given the history of this case, it is now far too late” to
comply.

        On appeal Norwood first argues that the judge should not have entered default
judgment against him because he had no access to the Pilot Project questions, and thus
his failure to comply was not his fault. Specifically, he asserts that the government
never provided him with the questions despite twice being ordered to do so (he does
not identify these orders) and that he could not locate them on the court’s website.

        Rule 37(b)(2) of the Federal Rules of Civil Procedure authorizes sanctions,
including the ultimate sanctions of dismissing a plaintiff’s lawsuit or entering default
judgment against a defendant, when a party “fails to obey an order to provide or permit
discovery.” Imposition of this sanction requires a finding, either implicit or explicit, of
willfulness, bad faith, or fault. In re Golant, 239 F.3d 931, 936 (7th Cir. 2001);
see also Societe Internationale Pour Participations Industrielles Et Commerciales, S. A.
v. Rogers, 357 U.S. 197, 212 (1958) (finding a Rule 37 dismissal is improper when the
failure was caused by an inability to comply rather than a “willfulness, bad faith, or any
fault”). Here, the judge concluded that Norwood showed “an unwillingness and a
refusal to comply.” We review such a finding for clear error. In re Golant, 239 F.3d at
936.

       We discern no clear error in the judge’s finding of willfulness and fault, which
was appropriate given Norwood’s months-long failure to comply and despite the
court’s multiple extensions and references to the standing order. See Ramirez v. T&H
Lemont, Inc., 845 F.3d 772, 776 (7th Cir. 2016) (fault in this context does not require a
showing of intent and can be shown by “extraordinarily poor judgment” or “gross
negligence” (quoting Marrocco v. Gen. Motors Corp., 966 F.2d 220, 224 (7th Cir. 1992))).
Moreover, the government sent the standing order to Norwood in an email and
provided its own disclosures. If Norwood did not understand his obligations or how to
access the disclosure questions, he could have sought further clarification from the
court before it entered default. Instead, he failed for months to appear at most hearings
(including the final one), even though the judge permitted him to appear by telephone.
No. 19-3273                                                                          Page 6

        To the extent Norwood intends to challenge the judge’s decision of default
judgment as the sanction, we review the decision for abuse of discretion. In re Golant,
239 F.3d at 937. A district court must impose a sanction proportional to the wrongdoing,
but it need not impose the least severe sanction. See id.; Nelson v. Schultz, 878 F.3d 236,
238–39 (7th Cir. 2017). Here, the judge’s decision was reasonable. Norwood not only
ignored the court for months, including three explicit discovery deadlines, he also failed
to appear at the hearings to discuss his noncompliance. Further, his explanation, when
it finally came, was inconsistent with the record—specifically, the judge advising
Norwood that the standing order for Pilot Project disclosures was available on the
electronic docket and the court’s website. See Nelson, 878 F.3d at 239 (plaintiff failed to
comply with “three orders and two last-chance warnings”); Brown v. Columbia Sussex
Corp., 664 F.3d 182, 191–92 (7th Cir. 2011) (plaintiff repeatedly failed to comply with
deadlines, including a final extension with a warning).

       Norwood also challenges the denial of his two motions to vacate the default
judgment. He faults the judge for not holding a hearing on the motions and for not
accepting the disclosures attached to his second motion. We also review the decisions
denying Norwood’s motions to vacate for an abuse of discretion. Bakery Mach.
& Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845, 848 (7th Cir. 2009). In both
motions Norwood argued that he had complied with the court’s orders and blamed the
government for never sending him the disclosure prompts. Given the circumstances we
have already described (including that the government emailed Norwood the standing
order and provided its own written disclosures), we cannot say that the judge acted
unreasonably in finding Norwood’s excuses not credible or in determining that his late
attempt to comply did not excuse his earlier failures. See Salgado v. Gen. Motors Corp.,
150 F.3d 735, 741–42 (7th Cir. 1998) (finding it within the court’s discretion not to accept
late compliance with clear discovery deadlines).

       Finally, Norwood wishes to challenge the entry of the permanent injunction
against him, which is a decision we also review for an abuse of discretion. eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 391 (2006). He argues that an injunction is improper
because no hearing or trial was ever conducted on the merits of the government’s
allegations. But that is just another way of saying that a default judgment was
inappropriate. Upon the entry of default, the well-pleaded allegations of the
government’s complaint were taken as true. See VLM Food Trading Int'l, Inc. v. Ill.
Trading Co., 811 F.3d 247, 255 (7th Cir. 2016). And Norwood does not develop any
argument about why—taking those detailed allegations as true—a permanent
injunction was not the appropriate remedy. See Lisle v. Welborn, 933 F.3d 705, 722 n.4
No. 19-3273                                                                         Page 7

(7th Cir. 2019) (holding that arguments not raised in an opening brief are waived). We
therefore cannot take issue with the judge’s conclusions that the government
demonstrated Norwood’s “persistent and serious violation[s]” of federal tax laws and
that a less restrictive injunction would be insufficient to prevent his interference with
the administration of tax laws.

                                                                               AFFIRMED
