Hester v. Vision Airlines, Inc.

In determining whether a district court erred in ordering a default judgment, the reviewing court will consider whether the district court: (1) “explicitly discussed the alternative of lesser sanctions and explained why it would be inappropriate;” (2) “implemented lesser sanctions before ordering the case dismissed;” and (3) “warned the offending party of the possibility of dismissal.”

Gerald Hester, on behalf of a class of other pilots (collectively, “the Class”), sued Vision Airlines (“Vision”) for withholding hazard pay that was due to its crewmembers. Vision ignored court orders, failed to meet deadlines without explanation, and provided incomplete and heavily-redacted documents during discovery. The district court entered a default judgment against Vision for its regular and routine abuse of discovery and intentional delay. Vision appealed, arguing that the district court abused its discretion by striking Vision’s Answer and entering a default judgment. The Class cross-appealed, arguing that the district court erred in dismissing the Class’s claim for punitive damages. Vision focused its argument on the district court’s failure to consider less drastic sanctions. The Court determined that Vision was warned on the record several times about “case-dispositive sanctions.” Additionally, the district court order contained a discussion of why less drastic sanctions were insufficient. The Court found that the district court’s failure to implement a lesser sanction did not constitute grounds for reversal. As to the Class’s cross-appeal, the Court found that the Class’s claim was not based on an action for breach of contract, and therefore, punitive damages were permitted under Nevada law. AFFIRMED in part, REVERSED in part, and REMANDED.