Respondents Leroy Haeger, et. al (“the Haegers”) were injured during a vehicle accident as a result of a failed tire, which was manufactured by Petitioner Goodyear Tire & Rubber Company (“Goodyear”). After the case settled, the Haegers discovered that Goodyear did not disclose several tests that it performed on the tire; the Haegers then moved the court to sanction Goodyear for its discovery misconduct. The district court relied on its inherent powers to sanction Goodyear and its counsel. Goodyear argues that the Supreme Court should limit inherent authority sanctions to those fees and costs directly caused by the claimed misconduct. The Haegers argue that although compensatory damages must be causally linked to the sanctioned misconduct, when the sanctionable misconduct is not limited to a single, discrete instance, but instead is so pervasive as to undermine or affect the whole litigation, an award of the entire amount of attorney’s fees and costs incurred by the party who is victim to the misconduct may be appropriate to compensate that party. The outcome of this case could potentially affect the scope of district courts’ inherent power to impose sanctions for discovery misconduct, when the courts cannot rely on the Rules or other statutory authority. The case will show whether a more exacting causation standard or a more discretionary standard should be used by the district court to impose sanctions under its inherent powers.
BACKGROUND
In June 2003, Leroy Haeger, et al. (“the Haegers”) suffered serious injuries when, as they were driving on a highway, a Goodyear G159 tire on their vehicle failed, causing the vehicle to swerve off the road and overturn. Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233, 1238 (9th Cir. 2016). The Haegers sued Goodyear Tire & Rubber Company (“Goodyear”) in Arizona state court, but Goodyear removed the case to federal court.