                               NOT FOR PUBLICATION                       FILED
                         UNITED STATES COURT OF APPEALS                  NOV 13 2015
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                                FOR THE NINTH CIRCUIT


 ENVIRONMENTAL WORLD WATCH,                      No. 13-56534
 INC.,
                                                 D.C. No. 2:09-cv-04045-DMG-
            Plaintiff,                           PLA

 and
                                                 MEMORANDUM*
 DENNIS BECVAR,

            Plaintiff - Appellant,

   v.

 THE WALT DISNEY COMPANY; et al.,

            Defendants - Appellees.




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
 ENVIRONMENTAL WORLD WATCH,                           No. 13-56565
 INC.,
                                                      D.C. No. 2:09-cv-04045-DMG-
             Plaintiff,                               PLA

   and

 WILLIAM P. DUNLAP,

             Movant - Appellant,

   v.

 THE WALT DISNEY COMPANY; et al.,

             Defendants - Appellees.

                          Appeal from the United States District Court
                             for the Central District of California
                            Dolly M. Gee, District Judge, Presiding

                                Submitted November 5, 2015**
                                    Pasadena, California

Before: FARRIS and FRIEDLAND, Circuit Judges, and CHHABRIA,*** District
Judge.

        These appeals arise from litigation filed in 2009 by Environmental World

Watch (“EWW”) and individuals against The Walt Disney Company, Disney




        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Vince G. Chhabria, District Judge for the U.S. District
Court for the Northern District of California, sitting by designation.

                                              2
Enterprises, Inc., and Disney Worldwide Services, Inc. (collectively, “Disney”)

alleging violations of the Clean Water Act. During the course of that litigation,

Disney filed a motion for sanctions against nonparties William Dunlap and Dennis

Becvar, who, at various times, were officers of EWW.

      In support of its motion for sanctions, Disney alleged that Dunlap had

falsified documents and concealed this misconduct during discovery, and that

Becvar had destroyed potentially discoverable emails while an officer of EWW.

Disney further argued Dunlap and Becvar were alter egos of EWW, and, as such,

were jointly and severally liable for any sanctions imposed against EWW.

      The district court referred the sanctions motion to a magistrate judge, who

issued a report and recommendation (“R & R”) recommending that the district

court impose a $10,000 sanction against Becvar and a $20,000 sanction against

Dunlap. The district court issued an order adopting the R & R with minor

revisions, and granted partial summary judgment for Disney, holding that Dunlap

and Becvar were alter egos of EWW, and vice versa.

      Dunlap and Becvar timely filed these appeals of the district judge’s order,

but the underlying litigation continued. Dunlap challenges both the district court’s

alter ego determination and its imposition of monetary sanctions on him. Becvar

challenges only the district court’s imposition of monetary sanctions on him.

      The district court later dismissed EWW’s claims for lack of Article III


                                         3
standing. The district court subsequently entered a final order dismissing the

remaining plaintiffs’ claims pursuant to a settlement with Disney.1

   I.       Alter Ego.

        We are guided by three factors when deciding whether an individual is an

alter ego of an entity: “the amount of respect given to the separate identity of the

corporation by its shareholders, the degree of injustice visited on the litigants by

recognition of the corporate entity, and the fraudulent intent of the incorporators.”

Bd. of Trs. v. Valley Cabinet & Mfg. Co., 877 F.2d 769, 772 (9th Cir. 1989)

(quoting Seymour v. Hull & Moreland Eng’g, 605 F.2d 1105, 1111 (9th Cir.

1979)). In addition to the formation of a corporation with fraudulent intent, “post

incorporation misuse of the corporate form . . . can satisfy the fraudulent intent

element.” Id. at 774. A party seeking to pierce the corporate veil “must prevail on



        1
         We have jurisdiction over these appeals despite the fact that they were filed
before entry of a final judgment, and despite the district court’s later dismissal for
lack of standing. Because the order appealed here was a sanctions order against
non-parties (or, as to the alter ego ruling, directly related to that order), it was a
collateral order that Dunlap and Becvar were entitled to immediately appeal
without waiting for a final judgment. Riverhead Sav. Bank v. Nat’l Mortg. Equity
Corp., 893 F.2d 1109, 1113 (9th Cir. 1990). Because the district court’s order was
issued for the purpose of “maint[aining] orderly procedure,” and “[did] not signify
[the] district court’s assessment of the legal merits of the complaint,” the order was
unaffected by the district court’s subsequent dismissal of EWW’s claims for lack
of standing. Willy v. Coastal Corp., 503 U.S. 131, 137, 138 (1992) (quoting
Cooter & Gell v. Hartmarz Corp., 496 U.S. 384, 396 (1990)); see also In re Exxon
Valdez, 102 F.3d 429, 431 (9th Cir. 1996).


                                          4
the first threshold factor and on one of the other two.” UA Local 343 v. Nor–Cal

Plumbing, Inc., 48 F.3d 1465, 1475 (9th Cir. 1995).

         In its order granting partial summary judgment for Disney, the district court

found that there was little, if any, evidence that EWW had maintained corporate

formalities, and further found that Dunlap and Becvar had misrepresented their

status with respect to EWW to avoid discovery responsibilities. These findings are

well-supported by the record.

         Dunlap’s briefing fails to identify any evidence in the record tending to

contradict the district court’s findings, and instead provides argument relevant only

to the entirely separate issue of whether EWW had Article III standing to maintain

its claims. We therefore affirm the district court’s grant of partial summary

judgment for Disney.

   II.      Sanctions Issues.

         A district court may sanction a party who has despoiled evidence under: (1)

the power granted by Federal Rule of Civil Procedure 37(b)(2) to sanction “a party

or a party’s officer, director, or managing agent” who “fails to obey an order to

provide or permit discovery”; or (2) the inherent power of federal courts to levy

sanctions in response to abusive litigation practices. Leon v. IDX Sys. Corp., 464
F.3d 951, 958 (9th Cir. 2006). “Before awarding sanctions pursuant to its inherent

power, ‘the court must make an express finding that the sanctioned party’s


                                           5
behavior constituted or was tantamount to bad faith.’” Haeger v. Goodyear Tire &

Rubber Co., 793 F.3d 1122, 1132 (9th Cir. 2015) (quoting Leon, 464 F.3d at 961)

(some internal quotation marks omitted).

      Here, the magistrate judge’s R & R—which was adopted by the district

court—discussed both sources of sanctioning authority, and it explicitly

recommended sanctioning Dunlap pursuant to the district court’s inherent powers,

after making the necessary finding of bad faith. Dunlap has not shown that the

district court abused its discretion in imposing this sanction, or that any of the

factual findings in support of the sanction were clearly erroneous. We thus affirm

the district court’s order imposing sanctions upon Dunlap.

      Neither the district court nor the magistrate judge expressly found that

Becvar’s conduct had violated an existing court order, and it appears from the

record that Becvar’s deletion of emails may have preceded any such order.

Therefore, we cannot affirm Becvar’s sanction as a valid exercise of the district

court’s authority under Rule 37(b)(2). We also cannot affirm Becvar’s sanction as

a valid exercise of the district court’s inherent powers, because the magistrate

judge and the district court made no explicit finding that Becvar’s actions

constituted or were tantamount to bad faith. We therefore vacate the sanction on

Becvar and remand to the district court, which may re-impose its sanction upon

Becvar if it finds that Becvar’s conduct either violated a court order or reflected


                                          6
bad faith.

   III.       Conclusion.

          For the reasons discussed above, we (1) AFFIRM the district court’s grant

of partial summary judgment determining Becvar and Dunlap to be EWW’s alter

egos; (2) AFFIRM the district court’s order sanctioning Dunlap; and (3)

VACATE the district court’s order sanctioning Becvar, and REMAND with

instructions to the district court to make factual findings, before re-imposing any

sanction, as to whether Becvar’s conduct violated a court order or amounted to bad

faith.2

          Dunlap shall bear his own costs and half of Disney’s costs. Disney shall

bear the other half of its own costs, as well as Becvar’s costs.




          2
       Because our disposition does not rely on any materials that Disney has
moved to strike, we DENY Disney’s motion to strike as moot.

                                           7

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