In re: Ahmad J. Tukhi, CC-16-1318-KuFL

Debtor Ahmad J. Tukhi filed chapter 7; creditor Abdul Habib Olomi timely filed an adversary alleging nondischargeability under § 523(a)(6) for an intentional automobile strike.
The bankruptcy court set a pretrial conference and required a jointly prepared, served and filed pretrial stipulation under Local Rule 7016-1(b)–(c); the court repeatedly warned noncompliance could lead to dismissal.
On the day of the pretrial conference Olomi’s counsel had not filed/served the joint pretrial stipulation, having mistakenly filed a joint status report; counsel explained his error as inexperience/misreading the rules.
The bankruptcy court dismissed Olomi’s adversary at the pretrial conference, citing Local Rule 7016-1(f)(4); the court later, when denying reconsideration, also analyzed dismissal under Civil Rule 41(b)/Rule 7041 for failure to prosecute.
On appeal the BAP found the dismissal was an abuse of discretion: the court failed to apply the heightened culpability/proportionality standards for local-rule based terminating sanctions and the record did not support dismissal for failure to prosecute.
The BAP vacated the dismissal and remanded for completion of pretrial proceedings and trial scheduling.

Issue	Plaintiff's Argument (Olomi)	Defendant's Argument (Tukhi)	Held
Whether dismissal as sanction for Local Rule 7016-1 violation was appropriate	Olomi argued the failure was inadvertent excusable neglect by counsel; dismissal disproportionate	Tukhi argued strict enforcement and terminating sanction justified given repeated warnings	Dismissal improper: court failed to apply Zambrano standard requiring willfulness/recklessness/gross negligence (mere fault insufficient) and proportionality analysis
Whether dismissal for failure to prosecute under Civil Rule 41(b) was appropriate	Olomi relied on excusable neglect (Pioneer) and minimal delay; alternative lesser sanctions available	Tukhi argued delay and docket-management needs justified dismissal	Vacated: applying Henderson factors the BAP found only docket-management and public-interest factors favored dismissal; prejudice and merit-disposition weighed against dismissal; lesser sanctions were available

Pioneer Inv. Servs. v. Brunswick Assocs., 507 U.S. 380 (U.S. 1993) (standard for excusable neglect in postjudgment relief)
Zambrano v. City of Tustin, 885 F.2d 1473 (9th Cir. 1989) (local-rule dismissal requires heightened culpability and proportionality)
Henderson v. Duncan, 779 F.2d 1421 (9th Cir. 1986) (five-factor test for dismissal for failure to prosecute)
United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (abuse-of-discretion review: correct legal standard de novo; factual findings for clear error)
Yourish v. Cal. Amplifier, 191 F.3d 983 (9th Cir. 1999) (deference to district court on docket-management factor)
Pagtalunan v. Galaza, 291 F.3d 639 (9th Cir. 2002) (warnings may substitute for considering lesser sanctions when given for prior noncompliance)
Malone v. United States Postal Serv., 833 F.2d 128 (9th Cir. 1987) (delay can constitute prejudice to opposing party)
In re Eisen, 31 F.3d 1447 (9th Cir. 1994) (standards for dismissal for failure to prosecute in bankruptcy adversary proceedings)