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United States v. Toth

United States District Court, D. Massachusetts

December 20, 2019

MONICA TOTH, Defendant.



         The United States of America filed this case to collect a civil penalty assessed against Defendant Monica Toth (“Defendant”) for her alleged failure to timely report her financial interest in, and/or her signatory or other authority over, a bank account in her name at UBS AG (“UBS”) in Zurich, Switzerland (the “Account”) for the 2007 calendar year, in violation of 31 U.S.C. § 5314 and 31 C.F.R. § 1010.350. [ECF No. 1]. Currently before the Court is Defendant's motion to vacate sanctions previously imposed by the court. [ECF No. 130]. For the reasons set forth below, Defendant's motion is DENIED.


         On September 16, 2015, the Government filed this action against Defendant. [ECF No. 1]. After repeated attempts to serve Defendant were met with Defendant's seemingly deliberate efforts to evade service, Defendant was finally served at her Massachusetts residence on January II, 2016. [ECF No. 5-2 ¶¶ 1-5, 7-8]. Defendant then failed to file a timely response to the Complaint or to oppose the Government's motion for entry of default judgment. [ECF No. 8]. At a hearing on a motion for entry of default on April 29, 2016, Defendant represented herself pro se and was advised, given the millions of dollars at stake in this matter, to retain counsel. [ECF No. 30 (Apr. 29, 2016 Hr'g Tr.) at 11:14-22, 20:3-4, 23:8-13]. Defendant indicated that she would retain counsel and sought assistance in identifying representation. [Id. at 12:9-10]. The Court granted Defendant a thirty-day extension to move to vacate the default judgment and warned Defendant to not let additional deadlines pass without responding appropriately. [Id. at 22:6-24:3, 23:15-19].

         Despite Defendant's stated intention to hire counsel, Defendant did not do so. During hearings on September 20, 2017, and again on March 12, 2018, the Court repeated its recommendation that Defendant hire counsel. [ECF No. 105-4 (Sept. 20, 2017 Hr'g Tr.) at 12:15-19; ECF No. 131-18 (Mar. 12, 2018 Hr'g Tr.) at 14:13-15].[1] Defendant nonetheless continued to represent herself pro se until November 15, 2018, when Defendant's current counsel entered their appearances in this matter. [ECF Nos. 116; 117].

         Throughout the two years during which Defendant represented herself pro se, Defendant repeatedly missed deadlines, refused to comply with discovery rules, and failed to observe this Court's explicit orders regarding her discovery obligations. See, e.g., [ECF Nos. 61; 62; 63; 75; 80; 81; 81-1; 82; 83; 84; 86; 92; 93; 93-2; 96; 97; 99; 102; 106; 109]. In response to Defendant's persistent violations, the Government filed a motion seeking sanctions against Defendant, which it later amended following further discovery lapses by Defendant. [ECF Nos. 83, 86, 93]. The Defendant did not oppose the Government's motion for sanctions or show sufficient cause as to why its motion should be denied. [ECF Nos. 97; 99; 102; 106; 109]. The Court granted the Government's motion on October 15, 2018. [ECF No. 110].

         The sanctions the Court imposed on Defendant included accepting the following four facts as established for the purposes of this litigation:

1. Defendant had legal control over, and the legal authority to direct the disposition of the funds in, the Account (and any sub-accounts), by investing the funds, withdrawing the funds, and/or transferring the funds to third-parties, between the date the Account was opened and at least December 31, 2008.
2. Should the United States establish that Defendant is liable for the penalty alleged in the complaint, for the purposes of calculating the amount of such penalty, the Account (and any sub-accounts) contained $4, 347, 407 as of the penalty-calculation date.
3. Defendant had a legal obligation to timely file [a Financial Bank Account Report (“FBAR”)] regarding the Account in each calendar year that the Account was open, including with regard to calendar year 2007.
4. Defendant willfully failed to file an FBAR regarding the Account with respect to calendar year 2007.[2]

[ECF No. 110 at 12]. The Court also awarded the Government reasonable costs and attorney's fees incurred in making its motion for sanctions, consistent with Federal Rule of Civil Procedure 37(b)(2)(C). Defendant now asks the Court to vacate its sanctions order. [ECF No. 130].


         Styled a “Motion to Vacate, ” Defendant cites no legal authority to support her request. See [ECF No. 130]. In its opposition, the Government treats the motion as a motion for reconsideration. [ECF No. 141 at 2]. The Court agrees with the Government's characterization of the motion, which seeks relief from an interlocutory discovery order, rather than a final judgment. The First Circuit has held that orders imposing sanctions for discovery violations are interlocutory, rather than final. See Appeal of Licht & Semonoff, 796 F.2d 564, 570 (1st Cir. 1986) (citing authority in support of the interlocutory nature of orders for sanctions). Federal Rule of Civil Procedure 54(b) provides the Court with authority to grant discretionary relief from interlocutory orders:

Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.

Fed. R. Civ. P. 54(b).

         The language of Rule 54(b) is discretionary: the Court “may . . . revise[]” an order. See Fed. R. Civ. P. 54(b) (emphasis added); see also Homeowner Options for Mass. Elders, Inc. v. Brookline Bancorp, Inc., 789 F.Supp.2d 242, 243 (D. Mass. 2011) (“Whether to reconsider an order is ‘within the sound discretion' of the Court.” (quoting Campos v. P.R. Sun Oil Co., Inc., 536 F.2d 970, 972 n.6 (1st Cir. 1976))). Although the Rule provides courts with the authority to revise interlocutory orders before entry of final judgment in a matter, the Rule does not provide specific standards or factors for courts to consider. See Fed.R.Civ.P. 54(b). Courts within the First Circuit have found that, “[p]ursuant to Fed.R.Civ.P. 54(b), the Court has the power to afford relief from interlocutory judgments ‘as justice requires.'” Brookline Bancorp, 789 F.Supp.2d at 243 (quoting Greene v. Union Mut. Life Ins. Co., 764 F.2d 19, 22 (1st Cir. 1985)).

         Justice has been understood to require courts to grant motions for reconsideration “in a limited number of circumstances: if the moving party presents newly discovered evidence, if there has been an intervening change in the law, or if the movant can demonstrate that the original decision was based on a manifest error of law or was clearly unjust.” De Giovanni v. Jani-King Int'l, Inc., 968 F.Supp.2d 447, 450 (D. Mass. 2013) (quoting United States v. Allen, 573 F.3d 42, 53 (1st Cir. 2009)). “Generally, courts should be ‘loathe' to grant motions for reconsideration in the absence of these ‘extraordinary circumstances.'” Audette v. Carrillo, No. 15-cv-13280, 2017 U.S. Dist. LEXIS 37962, at *14 (D. Mass. Mar. 16, 2017) (quoting Davis v. Lehane, 89 F.Supp.2d 142, 147 (D. Mass. 2000)). Because Defendant has not offered newly discovered evidence specific to Defendant's discovery failures, presented a change ...

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