UNITED STATES OF AMERICA, Plaintiff, v. $74,820 IN U.S. CURRENCY, Defendant Case No. 1:19CV347 United States District Court, M.D. North Carolina Signed September 23, 2021 Counsel Nathan L. Strup, U. S. Attorney for the Middle District of North Carolina, Greensboro, NC, for Plaintiff. Jonathan W. Trapp, Trapp Law, PLLC, Raleigh, NC, for Defendant. Peake, Joi E., United States Magistrate Judge RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE *1 This matter is before the Court on the United States’ Second Motion to Strike Claim [Doc. #26]. Pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(iii), “[i]f a party ... fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include ... striking pleadings in whole or in part.” Claimant did not respond to the Government's Motion to Strike.[1] For the reasons set out below, the Court will recommend that the Government's motion be granted and that the Verified Claim be stricken. I. BACKGROUND The Court set out the history of this action in detail in its Order denying the Government's First Motion to Strike (September Order [Doc. #25]). In short, the Alamance Narcotics Enforcement Team seized $74,820.00 in currency (“Defendant Currency”) and marijuana from the home of Claimant Antone Figuried after conducting multiple controlled purchases of cocaine from him at the residence. The United States, as the Plaintiff in this matter, instituted a civil action in rem by filing a Verified Complaint of Forfeiture [Doc. #1], pursuant to 21 U.S.C. § 881(a)(6), for property “furnished or intended to be furnished in exchange for a controlled substance, or proceeds traceable to such an exchange,” and 18 U.S.C. § 981(a)(1)(C), for property traceable to specified offenses (here, the sale or distribution of a controlled substance). Claimant filed a Verified Claim [Doc. #9] demanding the return of Defendant Currency. Following Claimant's repeated failures to comply with discovery requests, the Government filed its first Motion to Strike [Doc. #17]. In considering that prior Motion, the Court recognized Claimant's failure to fully participate in discovery but determined that striking the claim was too harsh a penalty at that time. The Court addressed each of the Government's discovery requests in detail and provided specific instructions for Claimant on how to comply moving forward. The Court cautioned Claimant that “future failure to comply ... will be taken by the Court as evidence of bad faith.” (September Order at 9.) The Court allowed Claimant 30 days to fully comply with the September Order, and warned that “failing to fully respond to the United States’ requests for discovery in this matter will expose him to the possibility of further, more extreme sanctions under Rule 37(b).” (Id. at 17.) The deadline to respond has passed, and Claimant has provided no discovery responses to comply with the Court's September Order. (Pl.’s Br. [Doc. #27] at 5.) II. DISCUSSION A. Legal Standard for Rule 37 Sanctions Pursuant to Rule 37(b)(2)(A), the Court may issue a wide range of sanctions for failure to comply with discovery orders, including striking pleadings in whole or in part. Other sanctions available under Rule 37(b)(2)(A) include: (1) directing that designated facts be taken as established for the purposes of the action; (2) prohibiting a disobedient party from supporting or opposing designated claims or defenses; (3) staying proceedings until the order is obeyed; (4) dismissing the action or proceeding in whole or in part; (5) rendering a default judgment against the disobedient party; and (6) treating a failure to obey an order (except for an order to submit to a physical or mental examination) as contempt of court. *2 The Court has wide discretion in determining whether to issue discovery sanctions under Rule 37. S. States Rack and Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 595 (4th Cir. 2003)). However, that discretion is not “without bounds or limits.” Wilson v. Volkswagen of Am., 561 F.2d 494, 503 (4th Cir. 1977). Because the sanction of striking or dismissing a pleading is particularly harsh, the Fourth Circuit has cautioned that it should be reserved for “only the most flagrant case.” Mut. Fed. Sav. & Loan Ass'n v. Richards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir. 1989). The Fourth Circuit has adopted a four-part test to guide this Court's discretion: (1) whether the noncomplying party acted in bad faith; (2) the amount of prejudice his noncompliance caused his adversary, which necessarily includes an inquiry into the materiality of the evidence he failed to produce; (3) the need for deterrence of the particular sort of noncompliance; and (4) the effectiveness of less drastic sanctions. Id. (citing Wilson, 561 F.2d at 503-06. In addition, the Fourth Circuit has “emphasized the significance of warning a defendant about the possibility of default before entering such a harsh sanction.” Hathcock v. Navistar Intern. Trans. Corp., 53 F.3d 36, 40 (1995); see also United States v. Approximately $88,125.00 in United States Currency, No. 3:10CV486, 2013 WL 98280, at *1-2 (M.D.N.C. Jan. 8, 2013) (“The Fourth Circuit has emphasized the significance of establishing a history of dilatory action and warning to the offending party of what may follow prior to imposing monetary sanctions or dismissing the action for failure to comply with discovery obligations.”). B. Application of the Mutual Federal factors In consideration of the Mutual Federal factors as set out below, the Court finds that striking Mr. Figuried's Verified Claim is an appropriate sanction. The Court addresses each factor in turn. 1. Whether Claimant's responses to the discovery requests were in bad faith When a party fails to adequately respond to discovery requests and chooses not to appear for a noticed deposition, a finding of bad faith is supported. See Cochran v. Volvo Group North America, LLC, No. 1:11-CV-927, 2014 WL 2207994, at *6-7 (M.D.N.C May 28, 2014). Claimant here failed to respond to discovery for several months and failed to appear at a hearing regarding the discovery issues. Claimant ultimately did provide some discovery responses, which mitigated the Court's concerns of bad faith in September. (September Order at 8-9.) While declining to find bad faith at the time, the Court noted numerous deficiencies in Claimant's discovery responses and directed him to update his responses to cure the deficiencies and comply with the Order within 30 days. Claimant was specifically warned that failure to comply would be taken as evidence of bad faith. Claimant has now entirely failed to comply with that Order. He has not turned over any of the requested information or attempted to work with the government to set out a schedule for compliance. Considered in conjunction with his prior noncompliance and the Court's specific warning as to the consequence of continued noncompliance, the Court finds that Claimant's continued failure to cooperate in discovery or comply with the September Order warrants a finding of bad faith. 2. Whether Claimant's responses to the discovery requests resulted in prejudice Claimant's failure to respond to discovery requests and has prevented this case from moving forward for months, prejudicing the Government. When a party's failure to act prevents a case from going forward, the resulting prejudice to the opposing party is severe. United States v. $8,369.00 in U.S. Currency, No. 1:08CV145, 2009 WL 88060, at *1 (M.D.N.C Jan. 12, 2009). In September, the Court noted that the prejudice could be at least partially cured if Claimant provided sufficient supplemental discovery responses to enable the case to go forward. (September Order at 9.) Because he has not done so, the Court finds significant prejudice to the Government that weighs in favor of striking the Claim. 3. Whether Claimant's discovery conduct should be deterred *3 “Outright non-compliance with a court order cannot be countenanced, and such flagrant violation of the rules must be deterred. No less drastic a sanction than dismissal can be effective in the face of Claimant's complete refusal to participate in discovery.” United States v. Three Tracts of Real Prop. in E. Bend Twp., No. 1:04CV00987, 2007 WL 433381, at *1 (M.D.N.C. Feb. 5, 2007). After his partial participation in discovery prior to the September Order, Claimant has now failed to participate in discovery and has completely failed to comply with the Court's Order. The need to deter such flagrant violations of the Court's orders is significant, and warrants the drastic sanction of striking the Verified Claim. 4. Whether a less drastic sanction is available in this case Finally, the Court considers the possibility of less drastic sanctions and whether any other sanctions would be effective in this case. In the matter before the Court, Claimant was warned that a failure to respond to discovery as ordered may subject him to Rule 37 sanctions, which would include the possibility of dismissal of his claim. (December Order [Doc. #15] at 2.) Then on September 16, 2020, the Court ordered Claimant to provide supplemental discovery responses within 30 days, found that an award of fees and expenses was appropriate under Rule 37, and again warned Claimant that failure to comply would lead to more severe sanction. (September Order at 11.) Due to Claimant's continued noncompliance in the face of multiple court orders and warnings, the Court is of the view that no less drastic sanction than striking the Verified Claim would be effective. III. CONCLUSION IT IS THEREFORE RECOMMENDED that Plaintiff's Second Motion to Strike Claimant's Verified Claim [Doc. #26] be GRANTED, and that the Verified Claim [Doc. #9] be stricken. Footnotes [1] Pursuant to Local Rule 7.3(k), if no response is filed, “the motion will be considered and decided as an uncontested motion, and ordinarily will be granted without further notice.” Although the motion to dismiss is unopposed and may ordinarily be granted on that basis, the Court will nevertheless examine the motion on the merits.