                                                                           FILED
                            NOT FOR PUBLICATION                             OCT 08 2010

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



In re: GTI CAPITAL HOLDINGS, LLC,                No. 09-60039
an Arizona limited liability company,
DBA Rockland Materials,                          BAP No. AZ-09-1053-JuMkD

              Debtor,
                                                 MEMORANDUM *

TRIAD COMMERCIAL CAPTIVE CO.;
et al.,

              Appellants,

  v.

COMERICA BANK; et al.,

              Appellees.



                         Appeal from the Ninth Circuit
                          Bankruptcy Appellate Panel
              Markell, Dunn, and Jury, Bankruptcy Judges, Presiding

                            Submitted October 6, 2010 **
                             San Francisco, California


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes that this case is suitable for
decision without oral argument. See Fed. R. App. P. 34(a)(2).
Before: THOMPSON, FERNANDEZ and SILVERMAN, Circuit Judges.

      Appellants challenge the bankruptcy court’s imposition of sanctions,

pursuant to Fed. R. Civ. P. 37(a)(5)(B), following the denial of their Rule 37

motion to compel depositions. We have jurisdiction pursuant to 28 U.S.C. §§

158(d)(1) and 1291. We affirm.

      First, the bankruptcy court had jurisdiction to impose the sanctions, despite

previously granting Appellants’ request to voluntarily withdraw their complaints.

“It is well established that a federal court may consider collateral issues after an

action is no longer pending.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395

(1990). Rule 37(a)(5)(B) sanctions are collateral because they aim to deter abuse

of the judicial process and have no bearing, and therefore no res judicata effect, on

the case’s underlying merits. Id. at 396; see also Willy v. Coastal Corp., 503 U.S.

131, 139 (1992).

      Second, the bankruptcy court did not abuse its discretion in imposing

sanctions under Rule 37(a)(5)(B). Appellants have failed at all levels to

demonstrate that their motion to compel was “substantially justified,” i.e., that

“reasonable people could differ as to whether the party requested must comply”

with their motion to compel. See Reygo Pac. Corp. v. Johnston Pump Co., 680

F.2d 647, 649 (9th Cir. 1982).


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AFFIRMED.




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