Thursday, April 05, 2007

Ninth Circuit Discusses Withdrawal Under Rule 36(b); Determines Lower Court Did Not Abuse Discretion

Per Conlon v. United States, 474 F.3d 616 (9th Cir. Jan. 16, 2007):

We review a district court's denial of a motion to withdraw or amend a Rule 36 admission for an abuse of discretion. 999 v. C.I.T. Corp., 776 F.2d 866, 869 (9th Cir.1985). “Trial courts [have been] advised to be cautious in exercising their discretion to permit withdrawal or amendment of an admission.” Id. . . . Rule 36(a) states that a matter is deemed admitted “unless, within 30 days after service of the request ... the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by the party's attorney.” Fed.R.Civ.P. 36(a). Once admitted, the matter “is conclusively established unless the court on motion permits withdrawal or amendment of the admission” pursuant to Rule 36(b). Fed.R.Civ.P. 36(b). . . .

Rule 36(b) is permissive, not mandatory, with respect to the withdrawal of admissions. See Asea, Inc. v. S. Pac. Transp. Co., 669 F.2d 1242, 1248 (9th Cir.1981). The rule permits the district court to exercise its discretion to grant relief from an admission made under Rule 36(a) only when (1) “the presentation of the merits of the action will be subserved,” and (2) “the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.” Fed.R.Civ.P. 36(b); Hadley v. United States, 45 F.3d 1345, 1348 (9th Cir.1995); see also Carney v. IRS ( In re Carney ), 258 F.3d 415, 419 (5th Cir.2001) (“[A] deemed admission can only be withdrawn or amended by motion in accordance with Rule 36(b).”); Donovan v. Carls Drug Co., 703 F.2d 650, 652 (2d Cir.1983) (stating that the court may excuse a party from its deemed admissions “only when (1) the presentation of the merits will be aided and (2) no prejudice to the party obtaining the admission will result”), overruled on other grounds by McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133-34 (1988). However, because requests for admissions have a binding effect on the parties, see Fed.R.Civ.P. 36(b), the provision for withdrawal or amendment specifically provides parties with a potential safe harbor. Id.

“The first half of the test in Rule 36(b) is satisfied when upholding the admissions would practically eliminate any presentation of the merits of the case.” Hadley, 45 F.3d at 1348. . . . The party relying on the deemed admission has the burden of proving prejudice. Id. The prejudice contemplated by Rule 36(b) is ‘not simply that the party who obtained the admission will now have to convince the factfinder of its truth. Rather, it relates to the difficulty a party may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence’ with respect to the questions previously deemed admitted. Id. (quoting Brook Vill. N. Assocs. v. Gen. Elec. Co., 686 F.2d 66, 70 (1st Cir.1982)). . . . When undertaking a prejudice inquiry under Rule 36(b), district courts should focus on the prejudice that the nonmoving party would suffer at trial. See Sonoda v. Cabrera, 255 F.3d 1035, 1039-40 (9th Cir.2001) . . . We think it is a close question whether withdrawal would have prejudiced the United States. We agree with the other courts that have addressed the issue and conclude that reliance on a deemed admission in preparing a summary judgment motion does not constitute prejudice. Kirtley v. Sovereign Life Ins. Co. ( In re Durability Inc.), 212 F.3d 551, 556 (10th Cir.2000); FDIC v. Prusia, 18 F.3d 637, 640 (8th Cir.1994). Although the United States relied on the deemed admissions in choosing not to engage in any other discovery, cf. Perez v. Miami-Dade County, 297 F.3d 1255, 1268 (11th Cir.2002), we are reluctant to conclude that a lack of discovery, without more, constitutes prejudice. The district court could have reopened the discovery period, see id., and prejudice must relate to the difficulty a party may face in proving its case at trial, Hadley, 45 F.3d at 1348. Nevertheless, this case involves more than a mere failure to comply with the deadlines. Cf. Raiser v. Utah County, 409 F.3d 1243, 1247 (10th Cir.2005). . . . In addition, when the district court issued its order only eight days remained until trial. With trial imminent, the government relied heavily on Conlon's admissions, which essentially conceded the case. . . . Although the issue is close, we conclude that the district court did not clearly err in finding that withdrawal of the deemed admissions at such a late stage in the case would prejudice the United States. . . .

[W]hen a district court finds that the merits of the action will be subserved and the nonmoving party will not be prejudiced, it “may” allow withdrawal, but is not required to do so under the text of Rule 36(b). Although the rule itself is permissive, the Advisory Committee clearly intended the two factors set forth in Rule 36(b) to be central to the analysis. . . . Here, the district court fully considered the two-pronged test set forth in Rule 36(b). In addition, it concluded that Conlon could not show good cause for his dilatory conduct. The court explained that although Conlon claimed that he was “out of touch with his attorney during part of the time for answering the requests for admissions,” he “d[id] not allude to any serious medical condition or other emergency which illustrate[d] the need for the relief requested, nor d[id] he identify which admissions were denied.” This is not a situation in which the United States used a request for admissions to gain an unfair tactical advantage. Cf. Perez, 297 F.3d at 1268 (stating that Perez used the rule “to harass the other side ... with the wild-eyed hope that the other side w[ould] fail to answer and therefore admit essential elements”). After the August 17, 2004, status conference, the district court issued a scheduling order setting October 15, 2004, as the discovery deadline and November 15, 2004, as the deadline for filing dispositive motions. The United States served its Request for Admissions on August 19, 2004, well within the allotted discovery period. Cf. id. at 1258 (revealing that Perez served his first request for admissions at the same time that he served his complaint). Moreover, Conlon had fair warning of the consequences of his noncompliance. . . . Therefore, because Rule 36(b) is permissive, we cannot say that the district court abused its discretion in considering Conlon's failure to show good cause for the delay in filing responses to the government's Request for Admissions. We do emphasize, though, that district courts must consider the factors laid out in the rule when deciding motions to grant or amend requests for admissions.


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