In re: GTI CAPITAL HOLDINGS, LLC, an Arizona limited liability company, DBA Rockland… v. Comerica Bank;

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
The panel unanimously concludes that this case is suitable for**
decision without oral argument. See Fed. R. App. P. 34(a)(2).
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: GTI CAPITAL HOLDINGS, LLC,
an Arizona limited liability company,
DBA Rockland Materials,
Debtor,
TRIAD COMMERCIAL CAPTIVE CO.;
et al.,
Appellants,
v.
COMERICA BANK; et al.,
Appellees.
No. 09-60039
BAP No. AZ-09-1053-JuMkD
MEMORANDUM*
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Markell, Dunn, and Jury, Bankruptcy Judges, Presiding
Submitted October 6, 2010**
San Francisco, California
FILED
OCT 08 2010
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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Before: THOMPSON, FERNANDEZ and SILVERMAN, Circuit Judges.
Appellants challenge the bankruptcy court’s imposition of sanctions,
pursuant to Fed. R. Civ. P. 37(a)(5)(B), following the denial of their Rule 37
motion to compel depositions. We have jurisdiction pursuant to 28 U.S.C. §§
158(d)(1) and 1291. We affirm.
First, the bankruptcy court had jurisdiction to impose the sanctions, despite
previously granting Appellants’ request to voluntarily withdraw their complaints.
“It is well established that a federal court may consider collateral issues after an
action is no longer pending.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395
(1990). Rule 37(a)(5)(B) sanctions are collateral because they aim to deter abuse
of the judicial process and have no bearing, and therefore no res judicata effect, on
the case’s underlying merits. Id. at 396; see also Willy v. Coastal Corp., 503 U.S.
131, 139 (1992).
Second, the bankruptcy court did not abuse its discretion in imposing
sanctions under Rule 37(a)(5)(B). Appellants have failed at all levels to
demonstrate that their motion to compel was “substantially justified,” i.e., that
“reasonable people could differ as to whether the party requested must comply”
with their motion to compel. See Reygo Pac. Corp. v. Johnston Pump Co., 680
F.2d 647, 649 (9th Cir. 1982).

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AFFIRMED.

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