2009 0602 - File Stamped Reply Brief_10151953_1

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No. 07-17369 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Appeal from the U.S. District Court for Nevada, No. CV-05-00121-LRH/VPC HIAWATHA HOEFT-ROSS; et al., Plaintiffs/Appellants, v. WERNER HOEFT, Trustee of the Hoeft Revocable Trust; et al.,

Defendants/Appellees.

REPLY BRIEF FOR THE APPELLANTS

Chad Fears, Esq. Jared Richards, Esq. SNELL & WILMER L.L.P. 3883 Howard Hughes Parkway Suite 1100 Las Vegas, NV 89169 Telephone (702) 784-5200 Facsimile (702) 784-5252 Attorneys for Appellant HIAWATHA HOEFT-ROSS

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TABLE OF CONTENTS SECTION

PAGE NO.

TABLE OF CITATIONS. ...........................................................................................3 INTRODUCTION .......................................................................................................5 ARGUMENT ...............................................................................................................5 I.

THE DISTRICT COURT ABUSED ITS DISCRETION WHEN IT DENIED MR. AND MRS. HOEFT-ROSS’S RULE 60(B) MOTION .................................................................................................6 A.

The District Court Based Its Decision To Sanction HoeftRoss On The Misrepresentations Of The Hoefts ....................................7

B.

Mr. And Mrs. Hoeft-Ross Missed The Hearing Due To Excusable Neglect .................................................................................10 1.

The District Court Abused Its Discretion By Failing To Apply The Full Briones Test Under Rule 60(b) ...................................................................................10

2.

Mr. And Mrs. Hoeft-Ross Meet All Four Factors Of The Briones Test....................................................................11 a.

The first factor: Prejudice .................................................11

b.

The second factor: Length and Impact of the Delay ...........................................................................12

c.

The third factor: Reason for the Delay .............................13

d.

The fourth factor: Good Faith..........................................15

II.

THE LOWER COURT ERRED IN APPLYING A DISPOSITIVE SANCTION............................................................................16

III.

SUMMARY JUDGMENT WAS INAPPROPRIATE....................................20 -1-

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CONCLUSION..........................................................................................................22 CERTIFICATE OF COMPLIANCE.........................................................................23 CERTIFICATE OF SERVICE ..................................................................................24 APPENDIX A .............................................................................................................A

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TABLE OF CITATIONS Page(s) FEDERAL CASES Cases

Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406 (9th Cir. 1990)..............................12 Bateman v. United States Postal Service, 231 F.3d 1220 (9th Cir. 2000)........ 10, 11 Briones v. Riviera Hotel & Casino, 116 F.3d 379 (9th Cir. 1997)..........................10 Freeland v. Amigo, 103 F.2d 1271 (6th Cir. 1997) .................................................18 Hutchingson v. Pfeil, 105 F.3d 562 (10th Cir. 1997) ..............................................18 Maisonville v. F2 American, Inc., 902 F.2d 746 (9th Cir. 1990) ..................... 17, 18 Merrit v. International Brotherhood Of Boilermakers, 649 F.2d 1013 (5th Cir. 1981) ....................................................................................................................17 National Insurance. Co. v. Baltes, 15 F.3d 660 (7th Cir. 1994)................................9 Ocelot Oil Corp. v. Sparrow Indus, 847 F.2d 1458 (10th Cir. 1988)......................18 Palgut v. City of Colorado Springs, Case. No. 06-cv-01142, 2009 WL 539723 (D. Colo. 2009)...........................................................................................................17 Phinney v. Wentworth Douglas Hospital, 199 F.3d 1 (1st Cir. 1999).....................18 United States v. Dunkel, 927 F.2d 955 (7th Cir. 1991) .............................................9 Ware v. Rodale Press, Inc., 322 F.3d 218 (3rd Cir. 2003) ......................................18 Williams v. Beemiller, Inc., 527 F.3d 259 (2d Cir. 2008)........................................18 -3-

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Zimmerman v. Shakman, 62 P.2d 976 (Ariz. Ct. App. 2003)..................................18 Statutes

42 U.S.C. § 1981......................................................................................................21 42 U.S.C. § 1982......................................................................................................21

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INTRODUCTION The district court’s sanctions were based on misrepresentations made by the Hoefts. During the January 18, 2007 hearing the Hoefts inaccurately represented to the district court that Mr. and Mrs. Hoeft-Ross (1) had not provided any initial disclosures and (2) had not provided a proposed discovery plan and scheduling order. The Hoefts had also inaccurately led the court to believe that Mr. and Mrs. Hoeft-Ross refused to participate in a Rule 26(f) conference.

These

representations were untrue because Mr. and Mrs. Hoeft-Ross had repeatedly attempted to schedule a time to meet and confer and because they had provided the Hoefts with initial disclosures and a discovery plan proposal before receiving the Hoefts’ initial disclosures. The district court believed the Hoefts and relied on their statements. The court’s reliance is understandable because Hoefts’ counsel was an officer of the court with the ethical duty to be completely candid with the court. As a result of the misrepresentations, the district court issued a punishment that did not match the offense. In reliance on these misrepresentations, and during the same hearing where the misrepresentations were made, the district court sanctioned Mr. and Mrs. Hoeft-Ross by prohibiting them from conducting any discovery. Thus, the district court ended discovery before it had even begun.

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These harsh sanctions were intended to, and actually did, have a direct dispositive effect. As a result of the sanctions, the Hoeft-Ross’s were unable to conduct the discovery which would have allowed their Fair Housing Act and 42 U.S.C. §§ 1981 and 1982 claims to survive a summary judgment motion. Ultimately, this Court should reverse the lower court’s denial of Mr. and Mrs. Hoeft-Ross’s Rule 60(b) motion regarding the sanctions because those sanctions were based on mistakes of fact. Moreover, the district court abused its discretion by failing to use all four prongs of the Briones Test. Had the district court properly applied the Briones Test, it would have found excusable neglect. Additionally, this Court should reverse the sanctions because the sanctions do not pass the Dispositive Sanction Test. Finally, summary judgment was inappropriate because the record provides a prima facie case that Hiawatha Hoeft-Ross was qualified to sign the rental agreement as a co-tenant and because Mr. and Mrs. Hoeft-Ross were not allowed to discover the availability status of the housing unit. ARGUMENT I. THE DISTRICT COURT ABUSED ITS DISCRETION WHEN IT DENIED MR. AND MRS. HOEFT-ROSS’S RULE 60(B) MOTION This Court should reverse the lower court’s denial of Mr. and Mrs. HoeftRoss’s Rule 60(b) motion because the lower court based its sanction on misrepresented facts, failed to use the full Briones Test when determining -6-

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excusable neglect, and ruled in a clearly erroneous fashion that Mr. and Mrs. Hoeft-Ross had not missed the hearing due to excusable neglect. A.

The District Court Based Its Decision To Sanction Hoeft-Ross On The Misrepresentations Of The Hoefts At the January 18, 2006 hearing in which the district court issued its

dispositive discovery sanctions, the Hoefts’ counsel told the court: …I haven’t received anything pursuant to the initial disclosure rules at all. Now, we’ve made our productions, and we’ve filed our report. I haven’t received anything. So I was half inclined to ask this Court for a sanction to, you know, preclude them from introducing anything if they don’t comply with the fundamental rule of the initial disclosures. I know that the Court is inclined to grant leeway to pro se litigants. And I take that into account as well. But if they don’t show up at 2:00 and they haven’t complied with any of the discovery rules and they’ve brought this massive lawsuit…they shouldn’t be given too much leeway. (E.R.50.) (Emphasis added.) These statements were not candid. In fact, the statements were blatantly untrue. The Hoefts had received initial disclosures and a proposed discovery plan and scheduling order from Mr. and Mrs. Hoeft-Ross.

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Immediately after the Hoefts made these misrepresentations and asked the court not to be lenient, the district court sanctioned Mr. and Mrs. Hoeft-Ross, in part, for failing to comply with the initial disclosure and discovery plan requirements.

(E.R.52.)

The district court later clarified that the discovery

violation was for failure to “exchange [] initial disclosures” and “propound[] a discovery plan and scheduling order.” (E.R.43.) The Hoefts now justify their lack of candor by arguing that the district court should not have relied on their counsel’s misleading statements because the case record mentions Mr. and Mrs. Hoeft-Ross’s initial disclosures and discovery plan. Contrary to the Hoefts’ arguments, the transcript of the hearing clearly shows that the district court based its ruling on counsel’s statements. (See generally E.R.4354.) Specifically, the district court ordered the sanctions immediately after counsel had finished telling the court that Mr. and Mrs. Hoeft-Ross had not given him any initial disclosures or a proposed discovery plan. (E.R.54.) Courts rely on the full candor of counsel. See Nevada Rules of Professional Conduct 3.3. Full candor is especially vital in situations where only one party is before the court. The fact that one or two pages in the record of hundreds pages mentioned the initial disclosures and discovery plan does not mean that the district court actually considered those pages when making its ruling. “District judges are not archaeologists. They need not excavate masses of papers in search of revealing -8-

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tidbits.” National Insurance Co. v. Baltes, 15 F.3d 660, 662-63 (7th Cir. 1994). Nor are “[j]udges…like pigs, hunting for truffles buried in briefs.” United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991). Instead, the district court relied upon the Hoefts telling the complete truth, and thus sanctioned Mr. and Mrs. Hoeft-Ross based on the information provided by counsel. There is no indication from the district court’s comments that it understood that Mr. and Mrs. Hoeft-Ross had provided the Hoefts with initial disclosures and a proposed discovery plan and scheduling order. (See E.R. 43-54.) The Hoefts also attempt to downplay their lack of candor by postulating that the sanction was for inadequate initial disclosures, not the lack of thereof. The record simply does not support this theory. Specifically, in its order granting summary judgment, the district court states that it sanctioned Mr. and Mrs. HoeftRoss for their “failures regarding the exchange of initial disclosures and propounding a discovery plan and scheduling order.” (E.R.13.) (emphasis added). Never does the district court discuss the sufficiency of Mr. and Mrs. Hoeft-Ross’s initial disclosures or discovery plan, only the exchange thereof. Ultimately, the record shows that the district court relied on the inaccurate comments of the Hoefts when sanctioning Mr. and Mrs. Hoeft-Ross. Because the district court based its sanctions on mistakes in fact, this Court should reverse those sanctions. -9-

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B.

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Mr. And Mrs. Hoeft-Ross Missed The Hearing Due To Excusable Neglect The district court’s denial of the Rule 60(b) motion was erroneous not only

because it was based on mistaken facts, but also because the Hoeft-Ross’s showed excusable neglect. This Court should reverse the lower court’s denial of the Rule 60(b) motion because the lower court abused its discretion by failing to apply the full Briones Test. Moreover, Mr. and Mrs. Hoeft-Ross have shown excusable neglect under a proper application of the Briones Test. 1.

The District Court Abused Its Discretion By Failing To Apply The Full Briones Test Under Rule 60(b)

The Hoefts have failed to address the Hoeft-Ross’s argument that the lower court failed to use the proper test to determine excusable neglect.

When

determining excusable neglect, a court must consider “(1) the danger of prejudice to the opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the reason for the delay; and (4) whether the movant acted in good faith.” Briones v. Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir. 1997). Failure to consider each of these factors is an abuse of discretion. Bateman v. United States Postal Service, 231 F.3d 1220, 1223-24 (9th Cir. 2000). In the instant case, the Hoefts do not rebut the contention that the district court failed to use all four factors of the Briones test. The record reflects that the district court considered the reasons why Mr. and Mrs. Hoeft-Ross did not attend -10-

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the January 18, 2007 hearing and how long the case had been pending. The district court, however, never considered what impact the delay had on the proceedings, whether Hiawatha was acting in good faith, and whether the delay had prejudiced the Hoefts. The district court’s failure to apply the proper elements of the Briones Test is an abuse of discretion that requires reversal. 2.

Mr. And Mrs. Hoeft-Ross Meet All Four Factors Of The Briones Test

Even if the district court had used all four factors of the Briones Test, the district court’s denial of the Rule 60(b) motion would still be clearly erroneous because an application of the Briones Test shows excusable neglect.1 a.

The first factor: Prejudice

In their Answering Brief, without citing any case law, the Hoefts claim that Mr. and Mrs. Hoeft-Ross’s failure to attend the January 18, 2007 prejudiced the them because a discovery “extension” would have forced the Hoefts to incur

1

Ultimately, whether Mr. and Mrs. Hoeft-Ross satisfy the Briones Test only becomes relevant if this Court finds that the district court applied the proper elements of the Briones Test, which it did not. If this Court decides that the lower court did not properly apply the Briones Test, it should reverse the lower court’s ruling without applying the Briones Test itself. Bateman, 231 F.3d at 1224 (stating that a “court would have been within its discretion if it spelled out the equitable test and then concluded that [a litigant] had failed to present any evidence relevant to the four factors. But it abused its discretion by omitting the correct legal standard altogether.”).

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attorney’s fees. The Ninth Circuit, however, has made it clear that incurring attorney’s fees is not the type of prejudice it considers when reviewing a Rule 60(b) motion. Specifically, when considering a Rule 60(b) motion for excusable neglect, a court examines whether the “plaintiff’s actions impair the defendant’s ability to go to trial or threaten to interfere with the rightful decision of the case.” Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1412 (9th Cir. 1990); see also Laurino v. Syringa Gen. Hosp., 279 F.3d 750, 753 (9th Cir. 2002) (using this definition of prejudice in the Briones test). Mr. and Mrs. Hoeft-Ross’s failure to attend the January 18, 2007 hearing did not impair the Hoefts’ ability to go to trial or a rightful decision in the case. At most, the failure to attend that specific hearing would have delayed discovery long enough to schedule another conference. Regardless, Mr. and Mrs. Hoeft-Ross’s failure to attend the January 18, 2007 hearing did not prejudice the Hoefts within the meaning of Briones. b.

The second factor: Length and Impact of the Delay

The Hoefts argue that Mr. and Mrs. Hoeft-Ross’s “unbounded requests to extend time for discovery” would have delayed the proceedings indefinitely, causing prejudice to the elderly Hoefts.2 This argument fails because the district

2

Interestingly, the record does not appear to show the age of the Hoefts. -12-

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court did not sanction Mr. and Mrs. Hoeft-Ross for requesting additional discovery time. Instead, the district court sanctioned them for failing to appear at the January 18, 2007 hearing and for allegedly failing to exchange initial disclosures and a discovery plan. (E.R.43.)3 As discussed above, the district court erred when it sanctioned Mr. and Mrs. Hoeft-Ross for discovery violations. Failing to attend a hearing would not cause any appreciable delay to the resolution of the case. Additionally, the fact that the case ultimately lasted nearly three years had nothing to do with Mr. and Mrs. Hoeft-Ross’s failure to attend the hearing. The vast majority of the three years was spent in motion practice. Ultimately, had the district court not applied sanctions, missing the January 18, 2007 hearing still would not have caused appreciable delay and would have had no real impact on the proceedings. c.

The third factor: Reason for the Delay

In their Answering Brief, the Hoefts argue that Mr. Hoeft-Ross did not have a good reason for delay because the district court felt that Mr. Hoeft-Ross was generally capable of participating in discovery.

In so arguing, the Hoefts

ostensibly confuse the “reason for delay” factor with “acting in good faith factor.”

3

As discussed, Mr. and Mrs. Hoeft-Ross did, in fact, exchange initial disclosures and a discovery plan. Moreover, although they did not file a scheduling order with the district court, they definitely gave Mr. Kealy their input regarding an appropriate scheduling plan. -13-

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The credulity of the actor is not considered in the third factor, merely the fourth. Moreover, it is fallacy to argue that because Mr. Hoeft-Ross could participate during certain timeframes that he must have had the ability to participate during all times the case was pending. A strict examination shows that Mr. Hoeft-Ross provided a legitimate reason for delay. In their Rule 60(b) motion, Mr. and Mrs. Hoeft-Ross explained that they missed the January 18, 2007 conference because Hiawatha’s mental condition caused him to confuse the date. (E.R. at 40.) Moreover, had such confusion not occurred, Hiawatha’s physical and mental condition that day still would have prevented them from attending the conference.

(Id.)

Ultimately, these are

excusable reasons for not attending the hearing.4 The Hoefts also complain that the Hoeft-Ross children failed to provide an excuse for not attending the January 18, 2007 hearing. It is not surprising that the children did not attend the hearing without their parents. At the time of the hearing, Kirsten Hoeft-Ross was only 16 years old and Martin Hoeft-Ross had been 18 for less than two months. Ultimately, the failure of the children to attend also counts as excusable neglect.

4

These reasons were also given in good faith, as is shown in the next section. -14-

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The fourth factor: Good Faith

The Hoefts argue that Mr. and Mrs. Hoeft-Ross did not act in good faith because they had previously asked for discovery extensions for medical reasons.5 This argument fails on its face because it makes no sense. The fact that Mr. and Mrs. Hoeft-Ross had previously complained of adverse medical conditions does not mean that they were disingenuous about a medical condition on January 18, 2007. On the contrary, Mr. and Mrs. Hoeft-Ross’s earlier request for a stay of discovery gives credence to their story that Mr. Hoeft-Ross was incapacitated on January 18, 2007.6 The Hoefts also seem to argue that Mr. and Mrs. Hoeft-Ross did not act in good faith because the district court believed that they were generally capable of participating in discovery. However, the district court’s beliefs about the HoeftRoss’s ability to generally participate in discovery is not relevant to whether brain damage caused Mr. Hoeft-Ross to forget the hearing; whether Mr. Hoeft-Ross was incapacitated on January 18, 2007; and whether Mr. and Mrs. Hoeft-Ross sincerely

5

The record does not show that Mr. and Mrs. Hoeft-Ross had ever previously asked for an extension of discovery. Rather, on September 25, 2006, Mr. and Mrs. Hoeft-Ross filed a motion to “extend time to extend the start of discovery until 1/9/07.” (E.R.5.) This motion would more accurately be described as a request to stay the beginning of discovery. 6

(For a complete discussion of Mr. and Mrs. Hoeft-Ross’s reasons for delay, see Appellants’ Opening Brief at 32-35.) -15-

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believed they should not attend court due to their medical conditions. Additionally, Mr. Hoeft-Ross’s own doctor’s declaration corroborates his story regarding his medical condition. It is also very telling that the district court never states that Mr. Hoeft-Ross was acting in bad faith. Rather, the district court believed that Mr. Hoeft-Ross could generally participate in discovery despite his medical condition. Ultimately, nothing in the record indicates that Mr. Hoeft-Ross acted in bad faith. Therefore, this Court should reverse the denial of the Rule 60(b) motion because Mr. and Mrs. Hoeft-Ross satisfy each element of the Briones Test. II. THE LOWER COURT ERRED IN APPLYING A DISPOSITIVE SANCTION WITHOUT FIRST APPLYING THE DISPOSITIVE SANCTION TEST This Court should reverse the lower court’s sanctions because those sanctions simply did not fit the offence. By sanctioning Mr. and Mrs. Hoeft-Ross at the January 18, 2007 hearing by prohibiting all discovery, the district court cut off discovery before discovery had even begun.7 Prohibiting all discovery is an

7

In their Answering Brief, the Hoefts state that the lower court’s ruling simply cut off further discovery, implying that lower court felt that discovery had actually already been conducted and it was simply precluding future discovery. (Answering Brief at 13.) Once again, the record simply does not support the Hoefts’ claims. Instead, the District Court’s order states “There shall be no -16-

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especially harsh punishment in any circumstance. In this case, however, prohibiting all discovery also had a case dispositive effect and thus must be viewed as a dispositive sanction. The Hoefts do not dispute that the lower court’s sanctions fail the Dispositive Sanction Test. Instead, the Hoefts argue that this Court should not apply the Dispositive Sanction Test. The Hoefts cite inapposite case law in an attempt to show that a matter is not dispositive unless it is one of the eight “dispositive motions” listed in 28 U.S.C. § 636(b)(1).8

However, none of these cases address whether prohibiting all

discovery can be dispositive. Instead, Maisonville v. F2 Am., Inc.; Merrit v. Int’l Brotherhood of Boilermakers; and Palgut v. City of Colorado Springs deal with whether awarding attorney’s fees for discovery abuses is within the purview of magistrate judges. See Maisonville v. F2 Am., Inc., 902 F.2d 746, 747-748 (9th Cir. 1990); Merrit v. Int’l Brotherhood Of Boilermakers, 649 F.2d 1013, 1016 (5th Cir. 1981); Palgut v. City of Colorado Springs, Case. No. 06-cv-01142, 2009 WL 539723 at 1 (D. Colo. 2009).

Hutchingson v. Pfeil addresses sanctions for

discovery conducted in this action” and that “the plaintiffs shall have no opportunity to engage in discovery.” (E.R.43.) Despite the Hoefts’ inferences, discovery never began in this case. See E.R.56 (Mr. and Mrs. Hoeft-Ross asking the court to stay the start of discovery until January 19, 2007); E.R.55 (order granting Mr. and Mrs. Hoeft-Ross’s request to stay the beginning of discovery). 8 For the text of 28 U.S.C. § 636(b)(1), see Appendix A. -17-

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discovery abuses, but does not discuss the nature of the abuse or the sanction. 105 F.3d 562, 565 (10th Cir. 1997).9 Finally, Ocelot Oil Corp. v. Sparrow Indus also held that awarding attorneys fees is a nondispositive sanction, 847 F.2d 1458, 1466-67 (10th Cir. 1988), but also held that discovery sanctions are dispositive if they have a dispositive effect, id. at 1462-1463. Ultimately, none of these cases advance the Hoefts’ argument. The dispositive orders listed in § 636(b)(1)(A) are non-exhaustive. Williams v. Beemiller, Inc., 527 F.3d 259, 265 (2d Cir. 2008). Instead, a court must view the terms “dispositive” and “nondispositive” in harmony with the general classifications of § 636(b)(1). Phinney v. Wentworth Douglas Hospital, 199 F.3d 1, 6 (1st Cir. 1999). Although discovery sanctions sometimes might fall under the nondispositive category (see Maisonville, 902 F.2d at 746 (stating that a discovery sanction granting attorney’s fees is non-dispositive)), discovery sanctions are dispositive when they have the effect of disposing of a claim or defense, see Phinney, 199 F.3d at 6; Ware v. Rodale Press, Inc., 322 F.3d 218, 221 (3rd Cir. 2003); Freeland v. Amigo, 103 F.2d 1271, 1276 (6th Cir. 1997); Zimmerman v. Shakman, 62 P.2d 976, 982 (Ariz. Ct. App. 2003).

9

Hutchingson also held that a motion to disassociate counsel is not a dispositive motion. Hutchingson, 105 F.3d at 562. -18-

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In their Opening Brief, the Hoeft-Ross’s clarified that the imposed sanctions were dispositive because those sanctions prevented them from discovering: - whether the Hoefts or their trust owned more real estate and thus were subject to the Fair Housing Act; - whether the Hoefts had attempted to rent the housing unit to the general public before or after they evicted Hiawatha and his wife; - what requirements the Hoefts looked for in determining who was qualified to rent the housing unit, such as income, criminal record, credit score. Each of these facts is within the peculiar knowledge of the Hoefts and not reasonably ascertainable without discovery.

Thus, without discovery, it was

impossible for Mr. and Mrs. Hoeft-Ross to prove that the Hoefts were subject to the Fair Housing Act. Moreover, the lack of discovery regarding these facts led to the dismissal of the Hoeft-Ross’s other federal claims. Ultimately, the lack of discovery directly led not just to the dismissal of a specific claim, but the entire case, and therefore was dispositive. Interestingly, the Hoefts do not dispute that the lack of discovery had a dispositive effect on these issues. Instead, the Hoefts complain that Mr. and Mrs. Hoeft-Ross never alleged that they needed more discovery during the summary judgment phase of the litigation. This argument is factually meritless. By the time -19-

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the Hoefts had filed their summary judgment motion, the district court had already declared that Mr. and Mrs. Hoeft-Ross would not be allowed to conduct any discovery in this case. (E.R.43.) Thus, it would have been futile for Mr. and Mrs. Hoeft-Ross to argue that they needed discovery. The district court had already told them that they would not be allowed any. Ultimately, the district court’s sanctions were dispositive because they had a dispositive effect on Mr. Hoeft-Ross’s federal claims. As such, the district court was obligated to apply the Dispositive Sanction Test as outlined in Mr. and Mrs. Hoeft-Ross’s Opening Brief. It is undisputed that the Dispositive Sanction Test would have shown that district court’s sanction of prohibiting all discovery was excessive and an abuse of discretion under the circumstances. Therefore, this Court should reverse the district court’s sanctions. III. SUMMARY JUDGMENT WAS INAPPROPRIATE The Hoefts put the cart before the horse. They claim summary judgment was appropriate because it is allegedly undisputed that the Hoefts’ housing unit was not open for rent to the general public before or after they rented to Monica Hoeft-Ross. This fact, however, is only undisputed because Mr. and Mrs. HoeftRoss have never had the opportunity to conduct discovery on the issue. This is

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simply further evidence of why discovery surrounding the housing claims was so important. Additionally, the Hoefts make the peculiar argument that the Hoefts could not have violated 42 U.S.C. §§ 1981 and 1982 because “Mr. Hiawatha was permitted to occupy the residence....” (See Answering Brief at 12.) The Hoefts argument fails because the purpose of Sections 1981 and 1982 is to protect the rights of minorities to enter into contracts. See 42 U.S.C. §§ 1981, 1982. Thus, the fact that the Hoefts allowed their minority son-in-law to live in the rental unit is completely irrelevant. What is relevant is the fact that the Hoefts refused to enter into a contract with their son-in-law because he is a minority. Finally, the Hoefts argue that there is no admissible evidence to show that Hiawatha was financially qualified to rent the housing unity.

This argument

ultimately fails because there is enough evidence in the record to make a prima facie showing that Hiawatha was qualified to rent the apartment at the time the Hoefts refused to contract with him. It is undisputed that Hiawatha and Monica Hoeft-Ross were married and living together at the time the Hoefts refused to rent to Hiawatha. It is also undisputed that the Hoefts actually rented the housing unit to Monica. Based on these facts alone, a reasonable jury could find that Hiawatha was qualified to enter into a contract with the Hoefts as a co-lessee with Monica. Any further analysis would require discovery into what the Hoefts considered to be -21-

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the minimum qualifications of a co-lessee.

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Such discovery was not allowed

because the district court erroneously prohibited any discovery in this case. Ultimately, this Court should reverse the summary judgment ruling and allow Mr. and Mrs. Hoeft-Ross to conduct the discovery inherently necessary to their claims. CONCLUSION The district court’s orders granting judgment in favor of the Hoefts should be vacated and its orders, denying the Hoeft-Ross’s Rule 60(b)(1) motion and sanctioning the Hoeft-Ross’s should be reversed, and the case should be remanded to district court to reopen discovery. RESPECTFULLY SUBMITTED this 1st day of June, 2009. SNELL & WILMER L.L.P.

By: /s/ Jared Reed Richards Chad Fears, Esq Jared Richards, Esq. 3883 Howard Hughes Parkway Suite 1100 Las Vegas, NV 89169 Telephone (702) 784-5200 Facsimile (702) 784-5252 Attorneys for Appellant HIAWATHA HOEFT-ROSS

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CERTIFICATE OF COMPLIANCE Certificate of Compliance with Type-Volume Limitation, Typeface Requirements, and Type Style Requirements 1.

This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this brief contains approximately 3,782 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B).

2.

This brief complies with the type face requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using a Microsoft Word 2003 processing program in 14-point Times New Roman type style.

Dated: June 1, 2009

/s/ Jared Reed Richards Jared Richards

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CERTIFICATE OF SERVICE Pursuant to FRAP 25(d), I hereby certify that I am an employee with Snell & Wilmer L.L.P. and that on the 2nd day of June, 2009, I caused a true and correct copy of the Reply Brief for the Appellants to be served via the Court’s CM/ECF system and via U.S. Mail at Las Vegas, Nevada, in a sealed envelope with firstclass postage fully prepaid and addressed as follows: Michael R. Kealy, Esq. PARSONS BEHLE & LATIMER 50 West Liberty Street, Ste. 750 Reno, NV 89501 Attorneys for Appellees Werner Hoeft, Trustee of the Hoeft Revocable Trust

/s/ Brandy Miller An employee of Snell & Wilmer L.L.P.

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Case: 07-17369

06/02/2009

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APPENDIX A Relevant Excerpt from 28 U.S.C § 636: § 636. Jurisdiction, powers, and temporary assignment (a) Each United States magistrate judge serving under this chapter shall have within the district in which sessions are held by the court that appointed the magistrate judge, at other places where that court may function, and elsewhere as authorized by law— (1) all powers and duties conferred or imposed upon United States commissioners by law or by the Rules of Criminal Procedure for the United States District Courts; (2) the power to administer oaths and affirmations, issue orders pursuant to section 3142 of title 18 concerning release or detention of persons pending trial, and take acknowledgements, affidavits, and depositions; (3) the power to conduct trials under section 3401, title 18, United States Code, in conformity with and subject to the limitations of that section; (4) the power to enter a sentence for a petty offense; and (5) the power to enter a sentence for a class A misdemeanor in a case in which the parties have consented. (b) (1) Notwithstanding any provision of law to the contrary— (A) a judge may designate a magistrate judge to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant, to suppress evidence in a criminal case, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge’s order is clearly erroneous or contrary to law. (B) a judge may also designate a magistrate judge to conduct hearings, including evidentiary hearings, and to submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court, of any motion excepted in subparagraph (A), of applications for post trial [1] relief made by individuals convicted of criminal offenses and of prisoner petitions challenging conditions of confinement. -A-

Case: 07-17369

06/02/2009

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(C) the magistrate judge shall file his proposed findings and recommendations under subparagraph (B) with the court and a copy shall forthwith be mailed to all parties. Within ten days after being served with a copy, any party may serve and file written objections to such proposed findings and recommendations as provided by rules of court. A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge may also receive further evidence or recommit the matter to the magistrate judge with instructions. 10111314.2

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