Gerald Hester v. Vision Airlines, Inc.
687 F.3d 1162
| 9th Cir. | 2012Background
- Vision subcontracted with Capital Aviation to provide Baghdad/Kabul flights; hazard pay was contractually allocated to pilots/crew with pass-through to subcontractors.
- Capital Aviation paid Vision $27,000 per round trip in hazard pay and Vision allegedly distributed none to crew; Vision terminated or replaced employees aware of hazard pay.
- Hester filed a class action alleging Vision retained >$21 million in hazard pay; theories included unjust enrichment, money had and received, and conversion.
- Discovery disputes led to sanctions: Vision withheld documents, redacted files, and misrepresented production; court ordered production and warned of sanctions.
- Court struck Vision’s Answer and entered default, then held a damages trial; punitive damages claim dismissed at trial but the Class cross-appealed due to punitive damages availability.
- Nevada punitive damages claim allowed on remand; ethical concerns raised about Vision’s attorney.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court properly sanctioned Vision by striking its Answer | Hester argues sanctions warranted for deliberate discovery violations | Vision asserts the district court failed to consider lesser sanctions | Yes; five-factor test satisfied; no abuse of discretion |
| Whether the complaint supports a default judgment on the pleaded claims | Complaint sufficiently states unjust enrichment, money had and received, and conversion | Vision contends claims are conclusory or legally deficient | Yes; claims sufficiently pleaded and binding on defaulting party |
| Whether the class certification was proper under Rule 23 | Class representative adequately represents; no evidence of contract distinction absent | Hester lacked typicality due to alleged employment contract differences | Yes; district court did not abuse discretion in certifying the Class |
| Whether punitive damages were properly dismissed and remanded for trial on the merits | Complaint could support oppression, fraud, or malice; punitive damages appropriate | Punitive damages not properly supported by clear and convincing evidence at that stage | Remanded for jury trial on punitive damages under Nevada law |
Key Cases Cited
- Dreith v. Nu Image, Inc., 648 F.3d 779 (9th Cir. 2011) (abuse-of-discretion standard for sanctions; five-factor test)
- Jorgensen v. Cassiday, 320 F.3d 906 (9th Cir. 2003) (willful/bad-faith discovery violations justify sanctions)
- Computer Task Group, Inc. v. Brotby, 364 F.3d 1112 (9th Cir. 2004) (lesser sanctions analysis; three-factor test)
- Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337 (9th Cir. 1995) (relevance to sanctions and willful misconduct)
- Wickliffe v. Fletcher Jones of Las Vegas, Inc., 661 P.2d 1295 (Nev. 1983) (punitive damages framework under Nevada law; oppression, fraud, or malice)
- Knievel v. ESPN, Inc., 393 F.3d 1068 (9th Cir. 2005) (de novo review of sufficiency of pleadings and punitive damages in diversity cases)
- Alan Neuman Prod., Inc. v. Albright, 862 F.2d 1388 (9th Cir. 1988) (binding effect of default-pleaded facts; focus on legal sufficiency)