Opinion
7:21-CV-00061
07-01-2022
Tonya Barber, Plaintiff, v. Coastal Horizons Center, Inc., Defendant.
MEMORANDUM & RECOMMENDATION
Robert T. Numbers, II United States Magistrate Judge
Coastal Horizons Center, Inc. claims that Tonya Barber has fabricated a key piece of evidence. And it claims that the appropriate sanction for this misconduct is dismissal of her claims and entry of a default judgment against her on its counterclaims. Barber rejects Coastal's allegations of wrongdoing.
After considering the record, the undersigned concludes that Coastal has shown by clear and convincing evidence that Barber fabricated evidence. Along with a lack of any trace of the email on Coastal's email servers, the email contains a corporate logo that was not released to employees until several months after the email was allegedly sent. Barber has not refuted Coastal's evidence on this point or presented evidence of her own establishing the email's authenticity.
The undersigned also concludes that the only appropriate sanction to address Barber's misconduct is to resolve all pending claims against her. By engaging in willful misconduct that prejudices the opposing party, the judicial process, and the administration of justice, Barber has created a situation that demands a severe response from the court. Given the centrality of the falsified evidence to Coastal's counterclaims, entry of a default judgment against Barber is the only viable sanction. And because of the need to punish Barber for her actions and strongly deter similar conduct by other litigants, it is also appropriate to dismiss Barber's claims.
I. Background
Coastal is a nonprofit that provides services related to mental health, substance abuse, crisis counseling, and housing. Counterclaim ¶ 7, D.E. 16. Barber worked for Coastal as a case manager in its Housing and Urban Development Program from 2016 until January 19, 2021. Id. ¶¶ 8, 9. This case stems from Barber's allegations that Coastal retaliated against her for being a whistleblower and failing to pay her appropriately. Am. Compl. passim, D.E. 15.
About six weeks after Barber's termination, Coastal learned that “thousands of dollars” of Target gift cards “entrusted to Barber” were missing. Counterclaim ¶ 12. As part of its efforts to locate the gift cards, Kenny House, Coastal's Vice President of Clinical Services, reached out to Barber in early March 2021. Id. ¶ 13; Email from House to Barber (Mar. 5, 2021 9:22 a.m.), D.E. 34-4 at 3-4. He told Barber he needed her help “to locate and account for the Target gift cards that were in [her] possession. . .in February and March of 2020.” House Email, D.E. 34-4 at 3. And he asked her if she still had the gift cards or knew where the lockbox used to store them and the spreadsheet used to track their usage were. Id. at 4.
Barber denied having “the lockbox, the keys, or any other HUD Horizons Housing program” materials. Email from Barber to House (Mar. 5, 2021 4:25 p.m.), D.E. 34-4 at 3. But she told House that the lockbox should be in a filing cabinet in her old office. Id. And she told House where he could find the lockbox's key. Id.
Barber also sent House a memorandum of understanding between Coastal and the University of North Carolina at Wilmington's Office of Student Leadership and Engagement's Volunteer Outreach. Counterclaim ¶¶ 14-15. According to Barber, the MOU explained how the gift cards were used. Email from Barber to House (Mar. 5, 2021), D.E. 34-4 at 3. It stated that, among other things, kits would be created to help the homeless. Counterclaim Ex. 1 at 1. Two non-profits, Nourish NC and Diaper Bank of NC-Lower Cape Fear would distribute these kits. Id. The MOU also included language stating that gift cards would be given to low-income individuals or used to purchase items for them. Id. at 2. Barber signed the MOU for Coastal and it bore the digital signatures of Kelsey Sanders and Calisha Ford for UNCW. Id. at 3.
In some of Coastal's submissions this person is called Kelsey Taylor, but the MOU is signed by Kelsey Sanders.
Coastal's investigation turned up several problems with Barber's claims. For example, neither the lockbox nor the key was found where Barber said they should be. Case Supplemental Report (May 18, 2021), D.E. 34-2 at 23.
There were also several problems with the MOU. To begin with, according to Coastal, since Barber was a part-time employee, she lacked the authority to enter into such a document. Counterclaim ¶ 17. And although the MOU was apparently entered into with UNCW's Office of Student Leadership and Engagement's Volunteer Outreach, the University says it has no such office. Id. ¶ 16. The two individuals who purportedly signed the agreement for the University had no connection to it. Id. ¶¶ 19, 21. Similarly, the non-profits who were to distribute the kits knew nothing about the MOU, were unaware of the MOU's plan for distribution of infectious disease kits, and had no relationship with the office described in the MOU or the women who signed it for UNCW. Id. ¶¶ 24-34
Coastal presented these allegations to local law enforcement who began to investigate Barber and the missing gift cards. Reporting Officer Narrative (Sept. 2, 2021), D.E. 34-2 at 6. The investigation discovered that Barber's Target loyalty card had been used in connection with the purchase of 837 items between late February 2020 and mid October 2020. Id. Barber used nearly 150 different gift cards to purchase items, including ninety-four gift cards used before the MOU was signed. Reporting Officer Narrative (Sept. 2, 20211), D.E. 34-2 at 6; Case Supplemental Report (Oct 13, 2021), D.E. 34-2 at 26. The purchased items included dog food, cat litter, “a wide variety of women's clothing,. . .a Roku[,] and an Apple watch.” Case Supplemental Report (Oct 13, 2021), D.E. 34-2 at 26.
After reviewing the list of purchased items, Coastal told law enforcement that Barber was not authorized to make the purchases. Id. at 27. It also shared that “Barber was vegan and that vegan food was purchased, clothes were of her size, and other items she was known to purchase were purchased as well.” Id.
As part of the investigation, law enforcement spoke with Calisha Ford, who allegedly signed the MOU for UNCW. Case Supplemental Report (May 18, 2021), D.E. 34-2 at 23. Ford denied knowing Barber or the MOU's other signatory. Id. And when law enforcement showed her the MOU, she did not recognize it. Id. Attempts to contact Sanders or to connect her to the number listed for her in the MOU failed. Id. at 27.
Then, in early September 2021, a state magistrate judge issued warrants charging Barber with two felonies: embezzlement and obtaining properties by false pretenses. Id. ¶¶ 37, 44; Decl. of Cpl. Matt Ake ¶ 3, D.E. 29-1. These charges remain outstanding. Ake Decl. ¶ 4.
A month later, Costal answered Barber's complaint. Its pleading and brought three counterclaims against her due to her alleged misuse of the gift cards. It brought a state-law claim for conversion, a North Carolina statutory claim for civil damages, and a claim for punitive damages.
About two weeks after Costal filed its counterclaims, Barber's attorney, Michelle Gessner, sent a letter to Coastal's counsel alleging that the counterclaims violated Rule 11. The letter said that the counterclaims “lack evidentiary support and appear to have only been made for an improper purpose.” Letter from Gessner to Toups & Mincey (Oct. 27, 2021), D.E. 23-4 (emphasis in original).
To back up this claim, Barber's attorney pointed to a March 27, 2020 email from Barber's former boss, Eline Ricci. Id. at 5 In the email, Ricci discussed using Target gift cards to purchase items for clients. Id. According to the email, Ricci told Barber to “keep a running log of what purchases match which households[.]” Id. Gessner claimed that this email showed that Coastal “instructed Ms. Barber to make purchases with the gift cards for the benefit of program clients and had full knowledge of her doing so[.]” Id.
Gessner's letter also objected to Coastal's allegation that Barber lacked authority to enter into the MOU. Id. It claimed that the Ricci email refutes that allegation and, instead, shows that Ricci encouraged Barber to pursue an MOU. Id.
The letter concluded by demanding that Coastal withdraw its counterclaims and have the criminal charges dismissed within two days. Id. at 5-6. Gessner threatened that if Coastal did not accede to this demand, she would move for sanctions and amend the complaint to add claims of malicious prosecution, abuse of process, and intentional infliction of emotional distress against Coastal, its attorney, and its attorney's law firm. Id. at 6. Coastal neither withdrew its counterclaims nor sought to have the criminal charges dismissed.
Then, in early December 2021, Gessner sent another letter to Coastal's counsel about its response to Barber's request for production of documents. Letter from Barber to Toups and Mincey (Decl. 6, 2021), D.E. 23-5. The letter noted that although Coastal had produced over 46,000 pages of documents, the Ricci email was not among them. Id. at 4-5. Gessner demanded that Coastal explained why it had “selectively omit[ed]” that email. Id. Gessner threatened that if Costal did not accede to this demand, she would move for sanctions. Id.
Later that month Barber responded to Coastal's request for production of documents. Mot. for Sanctions ¶ 15, D.E. 23. Among the documents she produced was the Ricci email. Id.
At the same time, Barber moved to amend her complaint. D.E. 19 The Proposed Second Amended Complaint sought to bring claims of malicious prosecution, abuse of process, and intentional infliction of emotional distress against Costal (but not the attorney or law firm that represented it) for bringing allegedly baseless criminal charges against her. Proposed Second Am. Compl. passim, D.E. 19-1. According to the Proposed Second Amended Complaint, the Ricci email establishes that Barber's use of the gift cards “were known, endorsed, and at all times authorized by” Coastal. Id. ¶ 67.
Less than 10 days after Barber moved to amend, Coastal asked the court to sanction Barber for relying on the Ricci email, which it called “a fake, fabricated document.” Mot. for Sanctions ¶ 17. It presented several declarations in support of its claim.
To begin with, Coastal submitted a declaration from Ricci herself. D.E. 23-7. In her declaration, Ricci says that she did not write or send the March 27, 2020 email, nor did she authorize anyone to do so on her behalf. Ricci Decl. ¶¶ 5-7. She says that the email “is a fabrication.” Id. ¶ 11.
It also submitted declarations from an in-house IT support analyst and an outside consultant. These individuals searched Coastal's email servers for the Ricci email, but could not find it. Daniel Decl. ¶ 5; Gilmore Decl. ¶¶ 8-9.
Then the company pointed out an issue with a logo in the email's signature block. Coastal noted that the Ricci email contained a logo recognizing Coastal's 50th anniversary. Yet while the Ricci email was supposedly sent in March 2020, Coastal's 50th anniversary did not occur until early August 2020. Weller-Stargell Decl. ¶ 3. According to Coastal, the logo did not exist on the date the Ricci email was supposedly sent. Id. ¶ 6. And the company did not provide its employees with the 50th anniversary logo until August 10, 2020. Id. ¶ 5.
What's more, Coastal provided the court with an email that Ricci actually sent on March 27, 2020 and it does not contain the 50th anniversary logo. Daniel Decl. ¶¶ 6-7. Ricci's emails, however, did begin using the logo around the time of the company's 50th anniversary. Gilmore Decl. ¶ 9.
In response, Barber says that she did not fabricate the Ricci email or misuse the gift cards. Barber Decl. ¶¶ 4, 14. Instead, she says that it was one of hundreds of documents she retained related to her work with Coastal. Id. ¶ 13. She retained these documents in various ways including printing documents, emailing documents to herself, taking screenshots of documents, and using document retention software. Id. She notes that the file on her computer containing the Ricci email, which appears to be an image file, was created on June 3, 2021. Id. ¶ 14. Barber claims she had no idea at that time that Coastal suspected her of misusing the gift cards. Id.
She also denies fabricating the MOU. Id. ¶ 10. She claims to have located a copy of the MOU on her personal device. Id. ¶ 11. She notes that “the copy was created June 25, 2020, one day after the document was signed[.]” Id. She also included copies of text messages she claims to have exchanged with Kelsey Sanders in May and June 2020. Id. ¶ 12; D.E. 34-20 at 2.
After briefing, the court held a hearing to discuss how to proceed on the sanctions motion and several motions the parties filed. Barber's counsel insisted that discovery was necessary before she could adequately respond to the sanctions motion. Feb. 1, 2022 Hrg. Tr. at 16:6-12. So the court allowed what was supposed to be a brief period of limited discovery followed by an evidentiary hearing. Feb. 15, 2022 Order, D.E. 42.
But there were many issues with the discovery process, so the court convened another hearing. At that hearing the court lamented the delays that had occurred and suggested that it would have been better to have simply ruled on the papers in the first place. Apr. 21, 2021 Hrg. Tr. at 38:6-9. Barber's attorney, who had proposed discovery in the first place, urged the court to rule on the papers and declined the opportunity to do further discovery. Id. at 41:1-2 (“So if the Court wants to rule on the pleadings, I would ask the court to do that.”).
Gessner has, at times, suggested that due process requires complete discovery before the court can enter a dispositive sanction. While her latest statement effectively abandoned that position, it is incorrect as a legal matter. Parties are entitled to due process before a court imposes a sanction. Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991). But due process only requires a party receive notice of the potential for sanctions and an opportunity to be heard before imposition of any sanctions. See Rangarajan v. Johns Hopkins Univ., 917 F.3d 218, 226 (4th Cir. 2019) (finding no due process concerns when a party had an opportunity to respond before the court imposed sanctions); Martin v. Brown, 63 F.3d 1252, 1262 (3d Cir. 1995) (“The Due Process Clause of the Fifth Amendment requires a federal court to provide notice and an opportunity to be heard before sanctions are imposed on a litigant or attorney.”). Those requirements have been satisfied here through the briefing process. See In re Kunstler, 914 F.2d 505, 521 (4th Cir. 1990) (“Due process does not require an evidentiary hearing before sanctions are imposed[.]”).
II. Analysis
Coastal's motion requires the court to answer two questions. First, it must determine whether the company has shown that Barber fabricated the Ricci email. And, if it concludes she has, the court must determine what the appropriate sanction is for that transgression.
A. The presence of the 50th Anniversary Logo on the Ricci email shows, by clear and convincing evidence, that the email is a fake.
The initial question is whether Coastal has shown that Barber fabricated the Ricci email and, if so, how strong their evidence is on that point. While the Fourth Circuit has not addressed the standard Coastal must meet to obtain the relief it seeks, courts within this circuit have coalesced around the idea that dispositive sanctions are appropriate only when there is clear and convincing evidence of wrongdoing; a preponderance of the evidence suffices for all other sanctions. See DeWitt v. Ritz, Case No. DKC 18-3202, 2021 WL 915146, at *4 (D. Md. Mar. 10, 2021); Salgam v. Advance Software Sys., Inc., No. 1:18-CV-00029, 2020 WL 6322857, at *4 (E.D. Va. July 2, 2020); Balcar v. Bell & Assoc., LLC, 295 F.Supp.2d 635, 640 (N.D. W.Va. 2003).
To meet the clear and convincing evidence standard, Coastal must provide enough evidence to “place in the ultimate factfinder an abiding conviction that the truth of [the party's] factual contentions are ‘highly probable.'” Colorado v. New Mexico, 467 U.S. 310, 316 (1984). On the other hand, the preponderance of the evidence standard “simply requires the trier of fact to believe that the existence of a fact is more probable than its nonexistence.” Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 622 (1993) (internal quotation marks omitted).
The evidence shows, clearly and convincingly, that Barber fabricated the Ricci email. To begin with, Ricci says that she never wrote or sent it. And her assertion is bolstered by Coastal's examination of its own servers which showed no trace of the Ricci email.
More compelling than Ricci's statement, however, is the presence of the 50th Anniversary logo in the Ricci email. The logo did not exist in March 2020 and the company did not distribute it to employees until August 2020. Weller-Stargell Decl. ¶¶ 5-6. And it does not appear in any other email from the relevant period. See Email from Ricci to Barber & Rosenberg (June 25, 2020 12:05 p.m.), D.E. 34-10 at 3; Email from Ricci to Barber & Rosenberg (June 25, 2020 12:01 p.m.), D.E. 34-10 at 4; Email from Ricci to Barber & Rosenberg (June 25, 2020 11:05 a.m.), D.E. 34-10 at 5-6; Email from Ricci to Barber & Rosenberg (June 25, 2020 9:44 a.m.), D.E. 34-10 at 7; Email from Ricci to Burns (June 23, 2020 5:37 p.m.), D.E. 34-10 at 8; Email from Ricci to Barber & Rosenberg (June 23, 2020 1:43 p.m.), D.E. 34-10 at 8-9; Email from Ricci to Rosenberg & Barber (Mar. 27, 2020 2:52 p.m.), D.E. 34-17 at 2; Email from House to various employees (Mar. 27, 2020 10:57 a.m.), D.E. 34-17 at 2; Email from House to various employees (Mar. 27, 2020 8:32 a.m.), D.E. 37-17 at 3. And despite Barber's claim that she retained hundreds or thousands of emails from her time at Coastal, she has not provided the court with even a single document from the relevant period containing the logo.
Given that Coastal's employees had no access to the logo until August 2020, it is impossible for it to be present in an email sent in March 2020. So the presence of the 50th Anniversary email clearly and convincingly establishes that Barber fabricated this email. See Vargas v. Peltz, 901 F.Supp. 1572 (S.D. Fla. 1995) (concluding that plaintiff fabricated evidence when item of clothing plaintiff used as evidence were not sold until after events at issue).
While Barber denies that she fabricated the email, her claim is unconvincing. To support her position, she notes that after Coastal challenged the email's authenticity, she “located a copy of the email [she] retained on [her] personal device[.]” Barber Decl. ¶ 14, D.E. 34-22. The email was supposedly one of “hundreds (if not thousands) of documents” she retained from her time at Coastal. Id. She notes that the file's metadata establishes the file was created on June 3, 2021. Id. That date is supposedly important because Barber claims that at that time she was “completely unaware of the allegations Coastal would make regarding [her] misuse of gift cards months later.” Barber Decl. ¶ 14. So, the argument goes, Barber would have no incentive to fabricate an email about the gift cards since she did not believe she was suspected of misusing them.
Upon inspection, neither of her arguments are persuasive. The email metadata does little to refute the claim that she fabricated the Ricci email. To begin with, the file she relies on is not the email itself, it is a screenshot of the email. D.E. 34-16 at 4 (including file information stating the image is a screenshot). So the file information only suggests that she took a screenshot of the email in June 2021. It provides no support for the claim that the email was created in March 2020.
But what about Barber's claim that she had no reason to fabricate the email because she did not know that Coastal suspected her of misappropriating gift cards? That claim too falters under inspection. The March 2021 email from Kenny House asking Barber what happened to the gift cards put her on notice that Coastal was aware the gift cards were missing. While House's email does not explicitly accuse Barber of misusing the gift cards, the email no doubt put Barber on notice that Coastal knew the gift cards were missing and was trying to figure out what happened to them.
Barber's exchange with House also raises another inconsistency. She told House that since her termination she no longer had access to her Coastal email account so she could not “go back and look for emails, documents, and such to help” House with his search. While she may not have had access to her Coastal account, she has admitted that she retained hundreds and perhaps thousands of documents and emails from her time at Coastal. So her statement to House is, at best, a half-truth, which undermines her credibility.
Coastal has established by clear and convincing evidence that Barber fabricated the Ricci email. The email's author claims she did not send it, Coastal's email servers do not contain it, and a genuine email could not contain the 50th Anniversary Logo. Barber has not refuted Coastal's evidence on these issues, nor has she presented compelling evidence of her own of the email's authenticity. The court also finds that she knowingly and willfully made a false statement about a material fact in her declaration. Thus, it is appropriate to consider whether Barber's claims should be dismissed and a default judgment entered against her on Coastal's counterclaims.
B. The Shaffer factors support sanctioning Barber by dismissing her claims and entering a default judgment against her on Coastal's counterclaims.
Coastal says that the court should exercise its inherent authority to sanction Barber by dismissing her complaint and entering a default judgment against her on its counterclaims. Six factors play into whether Coastal's preferred sanction is appropriate. United States v. Shaffer Equip. Co., 11 F.3d 450, 462-63 (4th Cir. 1993). First, the court must consider the degree of the wrongdoer's culpability. Id. at 462. Second, the court looks to the extent of the client's blameworthiness. Id. The third relevant issue is the prejudice to the judicial process and the administration of justice. Id. Fourth, the court takes into account the prejudice to the victim. Id. The fifth consideration is the availability of other sanctions to rectify the wrong by punishing culpable persons, compensating harmed persons, and deterring similar conduct in the future. Id. at 462-63. And the sixth consideration is the public interest. Id.
The first and second factors favor imposing a strong sanction. Barber fabricated the email, so she bears a high degree of culpability. And given that there is no indication anyone else was part of the fabrication, she must shoulder all the blame for her conduct.
Three factors focus on the prejudice caused by Barber's conduct. The court must consider the prejudice to Coastal, the prejudice to the judicial process, and the prejudice to the administration ofjustice. Each of these factors supports a severe sanction.
Barber's conduct has severely prejudiced the judicial process and the administration of justice. By relying on fabricated evidence and submitting a false statement, she has corrupted the vital truth-seeking function performed by courts. See, e.g., United States v. Cargill, 17 Fed.Appx. 214, 227-28 (4th Cir. 2001) (“[T]he government's knowing use of false testimony. . .'involves ‘a corruption of the truth-seeking function of the trial process,[.]'”). Her conduct “undermines the most basic foundations of our judicial system.” Secrease v. W. & S. Life Ins. Co., 800 F.3d 397, 402 (7th Cir. 2015). If this conduct is not addressed decisively, it could lead to unjust outcomes in individual cases and a loss of confidence by the public in the judicial system as a whole. See Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 246 (1944) (explaining that fraud on the court “is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society.”).
The court also agrees with Coastal's claim that it has been seriously prejudiced by Barber's conduct. By fabricating evidence on her counterclaims, Barber has cast doubt on the validity of any documents she relies on to support her claims. And given that she falsely claimed in a declaration that she did not fabricate the evidence, she has cast doubt on the truthfulness of any sworn statements she makes in this case. This conduct now requires Coastal to confirm the existence and accuracy of each document Barber produces. And the court will likely be asked to resolve disputes over the authenticity of those documents. Confirming the authenticity of the documents Barber relies on places a substantial burden on everyone involved here other than Barber even though this is an issue of her making. See Slate v. Am. Broad. Cos, 941 F.Supp.2d 27, 48-49 (D.D.C. 2013); Walker v. Spina, Case No. CIV 17-0991, 2018 WL 6050630, at *11 (D.N.M. Nov. 19, 2018) (citing cases). Thus this factor also supports Coastal's preferred sanction.
Other documents submitted in connection with this motion bear out these concerns. Take the MOU for example. Barber says it is authentic, but there are several reasons to believe that the document is fabricated. For example, the entity that supposedly entered into the MOU with Coastal does not exist. And the people who signed the MOU for that entity have no affiliation with it. One of the signers knew nothing of the document and the other one cannot be found. On top of that, the entities that were supposed to help deliver the kits created under the MOU deny any knowledge of the MOU or their obligations under it. So Coastal will need to run down all these items and the court will need to resolve the dispute over the document's authenticity.
Even the texts Barber claims she had with one of the MOU's signers are suspect. According to the exhibit that Barber submitted, she exchanged several texts with Kelsey Sanders in May and June 2020. But the text messages lack the name and phone number of the participants, which are typical feature of text messages. And at the bottom of the document is a notation that she did not extract these text until November 2021, after she was accused of fabricating the MOU. Plus in the database containing the messages was modified in January 2021, which was after the messages were sent. So, again, there is a serious question about the authenticity of a document Barber relies on. Given the document-intensive nature of this case, these questions will persist throughout the litigation and resolving those questions will impose a substantial burden on Coastal and the court. So her conduct has severely prejudiced Coastal, the judicial process, and the administration of justice.
Barber apparently used a program called iMazing to export the text messages. The app's website notes that the export data in the footer provide identifying information for the device, “the current date[,] and the last modified date of the iOS messages database.” Transfer iPhone Messages (SMS), MMS, and iMessages to your Computer, https://imazing.com/guides/how-to-save-iphone-text-messages-sms-and-imessages-to-your-computer (last visited June 30, 2022).
The court must also consider whether sanctions short of dismissal or entry of default would sufficiently address Barber's conduct. In doing so, the court must be “[m]indful of the strong policy that cases be decided on the merits[.]” Shaffer Equip. Co., 11 F.3d at 462. There are different considerations at play with respect to Coastal's request for an entry of default judgment and its request to dismiss Barber's complaint, so the court will address them separately.
As for Coastal's counterclaims, entry of a default judgment is the only sanction sufficient to address Barber's misconduct. As shown by the proposed second amended complaint and the parties' correspondence, the Ricci email is central to Barber's defense of those counterclaims. Barber relies on this document to show her use of the gift cards was “known, endorsed, and at all times authorized by” Coastal. Proposed Second Am. Compl. ¶ 67. So Barber has fabricated key evidence related to Coastal's claims. In similar circumstances, courts regularly impose dispositive sanctions because of the wrongdoer's corruption of the judicial process. See Pope v. Fed. Express Corp., 138 F.R.D. 675 (W.D. Mo. 1990), aff'd in relevant part, 974 F.2d 982 (8th Cir. 1992) (dismissing action because plaintiff manufactured alleged note containing improper remarks from supervisor); Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989) (dismissing claim where plaintiff attached a bogus agreement to the complaint); Plastech Holding Corp. v. WM Greentech Auto. Corp., 257 F.Supp.3d 867 (E.D. Mich. 2018) (dismissing claims after party fabricated key agreement); DeWitt v. Ritz, No. DKC 18-3202, 2021 WL 915146 (D. Md. Mar. 10, 2021).
Plus, given the importance of the Ricci email to Barber's defense, there is little difference between prohibiting her from using the document and resolving the claims against her at this point. And allowing Barber to proceed with her defense of these claims after attempting to use fabricated evidence would provide an insufficient deterrent effect to others who may be tempted to engage in similar conduct. So no lesser sanction than entry of a default judgment would be sufficient.
A different analysis applies to Coastal's request to dismiss Barber's claims. The Ricci email and Barber's statements about it do not appear to have any direct relevance to the substance of her claims. So her wrongdoing does not taint those claims in the same way as it taints her defense of Coastal's counterclaims.
But despite that fact, the need to deter similar conduct weighs heavily in favor of dismissing her claims. Coastal's counterclaims seek a few thousand dollars to recover for the misspent gift cards. Barber's claims, on the other hand seeks damages for front pay, twice any back pay she is owed, salary and pay increases, bonuses, insurance, benefits, training, promotions, special damages, damages for emotional distress and loss of standing in the community, liquidated damages, treble damages, and punitive damages. If Barber were to prevail on her claims, her recovery will likely dwarf the amount she must pay Coastal in connection with its counterclaims. So her recovery would nullify the sanction the court imposed for her fabrication of evidence.
While a victorious Barber may find herself with a few thousand dollars less than she would have otherwise received, that may be a trade that she and future litigants may be willing to make in the hopes of avoiding liability altogether through the use of fabricated evidence. So no other sanction would be sufficient to punish the person culpable for this violation and deter similar conduct in the future. See Shaffer, 11 F.3d at 462-63.
Of course, this sanction has the effect of resolving the case without a formal adjudication on the merits. But although there is “strong policy that cases be decided on the merits,” id. at 462, there is also a vital “need to preserve the integrity of the judicial process in order to retain confidence that the process works to uncover the truth.” Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001). Given the circumstances of this case, the need to punish Barber for her actions and the need to deter similar conduct in the future outweighs any claims Barber may have about the validity of her claims.
Finally, given the nature of Barber's transgression, the public interest demands “a most extreme sanction[.]” Shaffer Equip. Co., 11 F.3d at 462. Parties must understand that courts have no tolerance for false statements or attempts to pass off false evidence. And the public must be able to have confidence that judicial decisions are based on truthful evidence. The sanctions Coastal requested will vindicate those interests.
Each Shaffer factor favors dismissing Barber's claims and entering a default judgment against her on Coastal's counterclaims. The undersigned recommends the district court grant Coastal's motion for sanctions and award it the relief it seeks.
III. Conclusion
Coastal has shown by clear and convincing evidence that Barber fabricated the Ricci email because the email contains a logo that was not provided to employees until several months after the email was allegedly sent. Because the evidence shows the email was fabricated, it also shows that Barber willfully made a false statement in her declaration attesting to the email authenticity.
Barber has engaged in egregious misconduct and thus is subject to a severe sanction. After considering the Shaffer factors, the undersigned recommends that the court grant Coastal's motion; dismiss Barber's claims; and enter a default judgment against Barber on Coastal's counterclaims.
The Clerk of Court must serve a copy of this Memorandum and Recommendation (“M&R”) on each party who has appeared in this action. Any party may file a written objection to the M&R within 14 days from the date the Clerk serves it on them. The objection must specifically note the portion of the M&R that the party objects to and the reasons for their objection. Any other party may respond to the objection within 14 days from the date the objecting party serves it on them. The district judge will review the objection and make their own determination about the matter that is the subject of the objection. If a party does not file a timely written objection, the party will have forfeited their ability to have the M&R (or a later decision based on the M&R) reviewed by the Court of Appeals.