Opinion
6:21-cv-01842-TMC-JDA
09-21-2022
Denise Ernul, Plaintiff, v. Appalachian Council of Governments, Defendant.
REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE
JACQUELYN D. AUSTIN, UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on a motion to dismiss by Defendant. [Doc. 21.] Plaintiff, represented by counsel, brings this action alleging race and color discrimination pursuant to Title VII of the Civil Rights Act of 1964, as amended (“Title VII”), and race discrimination pursuant to 42 U.S.C. § 1981. [Doc. 1-1 ¶¶ 14-24.] Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and Local Civil Rule 73.02(B)(2)(g), D.S.C., all pretrial matters in this employment discrimination action are referred to the undersigned United States Magistrate Judge for consideration.
Plaintiff filed this action in the Greenville County Court of Common Pleas, and Defendants removed it to this Court on June 17, 2021, on the basis of federal-question jurisdiction. [Docs. 1; 1-1.] On May 2, 2022, Defendant filed a motion to dismiss for failure to prosecute based on Plaintiff's failure to respond to discovery. [Doc. 21.] On June 9, 2022, Plaintiff filed a response opposing the motion to dismiss, and on June 16, 2022, Defendant filed a reply. [Docs. 33; 34.] The motion is now ripe for review.
On June 6, 2022, this Court issued an Order granting a motion by Defendant to stay all deadlines in this case, pending the Court's ruling on Defendant's motion to dismiss. [Doc. 32; see Doc. 31.]
BACKGROUND
Plaintiff alleges that she is an African-American/Asian female who was originally employed by Defendant in June 2018 as an office manager until she was terminated in August 2020. [Doc. 1-1 ¶ 4.] Plaintiff claims she performed an insurance sales business after hours and on weekends but that Defendant mistakenly accused her of performing her insurance business during work hours. [Id. ¶ 10.] Plaintiff alleges that Defendant terminated her employment “for the pre-textural reason that [Defendant] had lost confidence in her ability to perform her job, citing her supplemental employment in insurance sales.” [Id. ¶ 13.]
As noted, Plaintiff's Complaint alleges a cause of action for race and color discrimination under Title VII [id. ¶¶ 14-19] and a cause of action for violation of 42 U.S.C. § 1981 [id. ¶¶ 20-24]. As relief, Plaintiff requests money damages, including punitive damages, and court costs and attorneys' fees. [Id. at 6.]
DISCUSSION
Defendant argues that, due to Plaintiff's failure to comply with this Court's Order compelling her participation in discovery, Defendant is entitled under Rule 37(b)(2)(A) for an order dismissing this action for failure to prosecute. [Docs. 21; 34.] The Court agrees.
Facts Relating to the Sanctions Motion
Discovery was served on Plaintiff on October 21, 2021. [Doc. 19-1.] Although responses to the interrogatories and requests for production were originally due November 20, 2021, Plaintiff was allowed several extensions and ultimately agreed to respond to discovery on March 4, 2022. [Doc. 19.] However, Plaintiff did not produce any answers or documents by that date, and thus Defendant filed a motion to compel on March 10, 2022. [Id.] Plaintiff also filed no response to Defendant's motion, and on March 30, 2022, this Court issued a Text Order granting the motion to compel and ordering Plaintiff to “fully respond” to Defendant's discovery by April 20, 2022. [Doc. 20.] Despite the Court-ordered deadline, Plaintiff again provided no discovery response by that date. [Doc. 21.]
On May 2, 2022, with Plaintiff still having not responded, Defendant filed a motion to dismiss Plaintiff's action based on Plaintiff's failure to provide discovery. [Id.] Defendant represented that Plaintiff's deposition was then currently scheduled for May 5, 2022, which was the day before the close of the discovery in the case, and Defendant argued it had been prejudiced by Plaintiff's continued failure to provide timely discovery responses. [Id. at 2.] Defendant requested that Plaintiff's action be dismissed with prejudice or in the alternative that Plaintiff be ordered to respond to Defendant's discovery in full and without objection no later than May 13, 2022, and that the discovery deadline be extended to May 31, 2022, so that Plaintiff would have time to review Plaintiff's discovery responses before deposing Plaintiff. [Id.]
That same day, Plaintiff produced nine pages of documents, including her resume, her 2019 W-2 for her work with Defendant, a Form 1099G for her unemployment compensation, and two Form 1099s from Occidental Life Insurance for her business. [Doc. 34 at 1-2.]
Given the outstanding discovery problems, the Court held a telephone conference on May 3, 2022, took Plaintiff's motion to dismiss under advisement, and ordered “Plaintiff to respond to [Defendant's] discovery in full and without objection by May 13, 2022.” [Doc. 23.] In light of the delay caused by Plaintiff's failure to respond adequately to discovery, the Court also ordered the parties to submit a proposed amended scheduling order for the Court's consideration by May 9, 2022. [Id.]
More than two weeks later, on May 18, 2022, the Court issued a Text Order directing the parties to provide the Court with a status update regarding the production of discovery that Plaintiff had provided on or before the May 13, 2022, deadline and whether Defendant would be withdrawing its motion to dismiss. [Doc. 27.] Defendant sent the Clerk's Office an email that same day advising that Plaintiff had not provided any further response and requesting a ruling on its motion to dismiss. [Doc. 28 ¶ 5.] Plaintiff's counsel responded to that email, also on the same day, stating, “[Plaintiff] and I are gathering what she has and would respectfully ask for five more business days.” [Id. ¶ 6.] On May 19, 2022, Plaintiff's counsel then forwarded to Defendant an email from Plaintiff stating: “‘Here[] you go. I included my company S.C. Certificate of Existence for my Company PMII Enterprises LLC, complete tax returns for year 2019 and 2020, I can't find my 2018 tax returns. As to the attorney's questions about where was the discrimination, see below.'” [Id. ¶ 7.] In the forwarded email, Plaintiff outlined what she maintained were facts supporting her allegation that she was treated differently based on her race and color, including naming white co-workers that solicited secondary income or fundraisers and ways that she claims she was treated differently. [Id.] She also stated regarding PMII Enterprises that “[a]nyone can check the State's Business Entity lookup website Entity Profile - Business Entities Online - S.C. Secretary of State (sc.gov).” [Id.]
Six days later, on May 25, 2022, Defendant filed its status report informing the Court that, despite the Court's Order of May 3, 2002, Plaintiff had not produced any additional discovery response or other communication by the May 13, 2022, deadline. [Id. ¶ 3.] Defendant provided the following assessment of Plaintiff's discovery response through the date of the status report:
8. To date, [the 2019] and 2020 tax returns referenced in Plaintiff's email have not been produced, nor have any other tax returns from 2011 forward and sought in requests for production. She has also failed to produce, despite it also being requested in discovery:
a. any document relating to her charge of discrimination;
b. any documents relating to loans referenced in her initial discovery responses;
c. the income and expense records, financial statements, payroll or wage records, and benefits documents for her business, all of which relate to both . . . her termination and subsequent damages;
d. any information pertaining to her employment history beyond a resume; and e. any information itemizing her damages.
9. What she did provide in the form of a narrative is not responsive to any discovery request. The information that she states can be obtained from the Secretary of State is unresponsive to any of the items in 8, subparts b, c and e above, as the Secretary of State would not have those items.
10. Plaintiff's deposition is scheduled for May 26, 2022. It will again have to be rescheduled.[Id. ¶¶ 8-10.]
On May 27, 2022, Plaintiff finally provided, via email, her 2019 and 2020 tax returns. [Doc. 34 at 2.] On June 7, 2022, after discovery had closed, Plaintiff also produced a few additional documents, those being: three state retirement system statements; a state Blue Cross enrollment welcome letter; a 2021 tax return reflecting more than $45,000 in purportedly passive income from Plaintiff's business; account statements for a medical expense loan, a Lending Club loan, a Prosper Loan home improvement loan, and a Freedom Plus loan; a note showing that Plaintiff's business obtained a Paycheck Protection Program (‘PPP') loan of $85,130 in 2020; and two South Carolina Department of Employment and Workforce Form 1099s. [Id. at 3-4.]
On June 9, 2022, Plaintiff filed a response in opposition to Defendant's motion to dismiss. [Doc. 33.] In the response, Plaintiff asserts that she has “thus far completely responded to [Defendant's] discovery requests,” “supplemented her responses with the remaining tax returns, loan documents, and an itemization of her damages, among other things,” and “provided all the information she is able to.” [Id. at 1.] She also asserts that “Defendant has not been prejudiced by [Plaintiff's] supplementation of discovery as requested” and that Defendant “now possesses everything necessary to conduct a thorough deposition” of Plaintiff. [Id.] Plaintiff adds that “the Court has indicated it is willing to allow Defendant to conduct discovery as needed as a result of [Defendant's] need for additional information to conduct said deposition.” [Id. at 1-2.] Plaintiff emphasizes that she “is a cancer survivor who struggled after her high-dose chemotherapy and radiation treatment and subsequent wrongful termination by Defendant,” she has not been sanctioned by the Court previously, and Defendant has not been prejudiced by any delay in Plaintiff providing her discovery responses. [Id. at 2-3.] Plaintiff therefore argued that Defendant's motion to dismiss should be denied and her action should not be dismissed. [Id. at 3.]
Defendant filed a reply on June 16, 2022. [Doc. 34.] In the reply, Defendant vehemently challenges Plaintiff's characterization that she had completely responded to Defendant's discovery requests. [Id.] Although Defendant notes that Plaintiff eventually provided further response via email, including her 2019, 2020, and 2021 tax returns, Defendant emphasizes that Defendant's request for production sought returns from 2011 forward, along with “‘all supporting schedules and documents such as W2 forms, 1099s, and the like, whether filed or not, as well as tax returns for any business in which Plaintiff had an interest.'” [Id. at 2.] Regarding these supporting schedules and documents, Defendant asserts that Plaintiff well understands that she is required to produce those, as shown by the fact that she produced her Occidental Life 1099's and her W-2 for her work for Defendant. [Id.] Defendant contends that Plaintiff has left Defendant with a significant information gap insofar as her 2019 tax return shows gross income from her personal business exceeding $145,000 but the only supporting document she has produced is the 2019 Occidental 1099 showing less than $3,000 in payments to her. [Id.] Similarly, Defendant points out that Plaintiff's 2020 tax return reflects more than $99,000 in gross income from her business but she has produced only a 2020 Occidental 1099 showing less than $1,000 in payments, and her returns also show that she deducted business expenses exceeding $118,000 in 2019 and $84,000 in 2020, but she has not produced any documentation supporting the deductions. [Id. at 2-3.] Defendant argues that, given that “Plaintiff's Complaint makes it clear that a crucial issue in this case is the allegation that she was terminated, in large measure, for running a business on [Defendant's] time,” the information she has now produced shows the size of that business and shows why Defendant's “interest in seeing the underlying data for the business in question is not a passing one.” [Id. at 3.]
Defendant also notes that Plaintiff seeks damages for more than $95,000 in personal and business loans and almost $24,000 in medical expenses but has not produced the documentation supporting her loan applications. [Id.] Defendant notes that it requested “‘[c]opies of any loan or grant applications made on behalf of any business in which Plaintiff has an ownership interest including supporting documentation of any kind, as well as any correspondence or other communications or documents pertaining to said applications.'” [Id. (emphasis omitted).] Separately, Defendant points out that despite Defendant's specific request for the documents, “Plaintiff has not produced a single document regarding her charge of discrimination filed with the EEOC” and she has failed to respond to an interrogatory seeking specific information about her employment history. [Id. at 5.]
On September 9, 2022, the Court directed Defendant to forward to the Court, for in camera review, “all of the discovery that Plaintiff has produced.” [Doc. 37.] Plaintiff forwarded that discovery the same day. [Doc. 38.]
Applicable Law
“Federal courts have the inherent power to order sanctions to preserve the integrity of the judicial process and to punish bad-faith conduct intended to delay or disrupt the course of litigation or to impede enforcement of a court order.” Life Techs. Corp. v. Govindaraj, 931 F.3d 259, 267 (4th Cir. 2019) (internal quotation marks omitted). Rule 37 of the Federal Rules of Civil Procedure defines the sanctions a court may levy on a party who refuses to cooperate in discovery and/or fails to comply with a court order. Under Rule 37(b), a district court may impose sanctions, including dismissing the action or holding a party in contempt of court, for a party's failure to comply with the court's discovery orders. Fed.R.Civ.P. 37(b)(2)(A); see also Fed.R.Civ.P. 16(f)(1)(c) (providing that the district “court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails to obey a . . . pretrial order”). “In determining the appropriate sanctions to impose under Rule 37, [courts] consider (1) whether the noncomplying party acted in bad faith, (2) the amount of prejudice that noncompliance caused the adversary, (3) the need for deterrence of the particular sort of non-compliance, and (4) whether less drastic sanctions would [be] effective.” Beach Mart, Inc. v. L&L Wings, Inc., 784 Fed.Appx. 118, 124 (4th Cir. 2019).
With the sanction of dismissal, “the range of discretion is more narrow than when a court imposes less severe sanctions.” Hathcock v. Navistar Int'l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995) (internal quotation marks omitted). “Dismissal of a party's case for failure to comply with a court order or a discovery request is a severe sanction that must be exercised cautiously and with restraint.” Whatley v. S.C. Dep't of Pub. Safety, No. 3:05-0042-JFA, 2007 WL 120848, at *12 (D.S.C. Jan. 10, 2007). To warrant dismissal, the offending party's conduct in the litigation must demonstrate “a pattern of indifference and disrespect to the authority of the court.” Mut. Fed. Sav. & Loan Ass'n v. Richards & Assocs., Inc., 872 F.2d 88, 93 (4th Cir. 1992).
In addition, the Fourth Circuit has emphasized the significance of providing a party with a warning regarding the possibility of dismissal before entering such a sanction. Hathcock, 53 F.3d at 40. While a district court may dismiss a party's case for noncompliance with the court's discovery order where the party's action constitutes “‘flagrant bad faith'” and “‘callous disregard'” of her responsibilities, Nat'l Hockey League v. Metro. Hockey Club, 427 U.S. 639, 643 (1976), the Fourth Circuit has held the dismissal power should be exercised only when the record clearly reflects “delay or contumacious conduct by the plaintiff,” Dove v. CODESCO, 569 F.2d 807, 810 (4th Cir. 1978) (internal quotation marks omitted).
The standard for dismissal under Rule 41 is “virtually the same” as that for dismissal under Rule 37. Carter v. Univ. of W.Va. Sys., Bd. of Trs., 23 F.3d 400, at *2 (4th Cir. 1994) (unpublished table decision). A court is authorized under Rule 41 to involuntarily dismiss a party's case for failure of the plaintiff “to prosecute or to comply with these rules or a court order.” Fed.R.Civ.P. 41(b). In determining whether dismissal is warranted under that rule, a court considers: (1) the degree of personal responsibility on the part of the plaintiff; (2) the amount of prejudice to the defendant caused by the delay; (3) the presence or absence of a drawn out history of deliberately proceeding in a dilatory fashion; and (4) the effectiveness of sanctions less drastic than dismissal. Davis v. Williams, 588 F.2d 69, 70 (4th Cir. 1978).
Although Rule 41(b) does not explicitly provide for dismissal sua sponte, a court has the inherent power to dismiss a case sua sponte for lack of prosecution or violation of a court order. See Link v. Wabash R.R. Co., 370 U.S. 626, 630-33 (1962).
Discussion
The undersigned concludes that the Court should dismiss Plaintiff's action under Rules 37 and 41.
Initially, the Court finds that Plaintiff has not participated in discovery in good faith. After receiving more than three months of extensions, she failed to respond to discovery by the date she agreed to, requiring Defendant to file a motion to compel. [Doc. 19.] When Plaintiff did not file a response to that motion, the Court granted it and set another deadline for Plaintiff to respond fully to the discovery requests. [Doc. 20.] Plaintiff flatly ignored this court-established deadline as well, necessitating Defendant to file of a motion to dismiss and requiring the undersigned to hold a telephone conference with counsel. [Docs. 21; 23.] Following this conference, the Court took Plaintiff's motion to dismiss under advisement, ordered “Plaintiff to respond to [Defendant's] discovery in full and without objection by May 13, 2022” and informed the parties that the Court would rule on Defendant's motion to dismiss after Plaintiff produced her discovery responses. [Doc. 23.] Plaintiff flatly ignored this court-established deadline as well. [Doc. 28 ¶ 5.]
Since the time that Defendant informed the Court that Plaintiff had again ignored a court-established deadline, Plaintiff has provided some discovery responses. Several days after the deadline, Plaintiff produced some documents [Id. ¶ 7] and indicated that those represented all that she could produce [Doc. 33 at 1]. Then she produced a few more documents on May 27, and a few more still on June 7, after discovery had closed. [Doc. 34 at 2-4.] As Defendant properly asserts, Plaintiff's responses have “been a slow drip, and even then, untimely and insufficient.” [Id. at 6.]
Defendant has explained several ways in which Plaintiff's responses were insufficient. The most significant omissions concern Plaintiff's business. Her damage spreadsheet indicates that she seeks damages for more than $95,000 in personal and business loans, but she has failed to produce the documentation supporting her loan applications despite Defendant's request for “[c]opies of any loan or grant applications made on behalf of any business in which Plaintiff has an ownership interest including supporting documentation of any kind, as well as any correspondence or other communications or documents pertaining to said applications.” [Doc. 19-1 at 8.] Additionally, Defendant specifically requested “[a]ll income and expense records, financial statements and agreements of any partnership, joint venture, proprietorship or other business entity in which [Plaintiff] has or had any interest whatsoever from 2011 to the present.” [Id. at 6.] Plaintiff produced tax returns showing gross income from her personal business exceeding $145,000 for 2019 and $99,000 for 2020, and deductible expenses of $118,000 in 2019 and more than $84,000 in 2020. [Doc. 34 at 2-3.] Yet she has not produced the documentation supporting the deductible expenses. [Id.] Plaintiff also has not yet produced any documents in response to Defendant's request for documents concerning Plaintiff's charge of discrimination filed with the EEOC, nor has she fully responded to Plaintiff's interrogatory requesting particular information regarding her current and past employment. [Id. at 5; Doc. 19-1 at 3-4.]
The Court notes that Plaintiff has never objected to producing any of the requested information, nor did Plaintiff oppose Defendant's motion to compel discovery responses, and now the time for any objection has passed.
In response to these descriptions of areas of deficiency, Plaintiff has not explained with any specificity why she has not provided the documents and information sought, referencing only the fact that she is “a cancer survivor who struggled after her high-dose chemotherapy and radiation treatment and subsequent wrongful termination by Defendant.” [Doc. 33 at 2-3.] In the absence of a more specific explanation, and given her consistent pattern of ignoring this Court's Orders and deadlines, the undersigned can only conclude that Plaintiff has not made a good faith effort to respond fully to Defendant's discovery requests. See Cooper v. Spartanburg Sch. Dist., No. 7:15-cv-03072-JMC-JDA, 2017 WL 92895401, at *4-5 (D.S.C. Feb. 24, 2017) (explaining that the plaintiff's failure to comply with multiple court orders was evidence of bad faith).
The Court notes that in her spreadsheet outlining her medical expenses, her most recent radiology and oncology appointments were April 10, 2022.
The Court further concludes that the amount of prejudice to Defendant caused by Plaintiff's failure to provide the relevant discovery has been substantial. As a result of Plaintiff's continued failure to fully respond to discovery, “Plaintiff's deposition has been noticed, prepared for and postponed three times . . ., to the point where the discovery deadline, amended twice before, has now passed and [Defendant] still lacks the requested documents.” [Doc. 34 at 6.] Defendants have suffered harm from Plaintiff's failure to comply with the Court's Order because, by refusing to provide the needed discovery-after a request from opposing counsel and an order of the Court compelling compliance-Plaintiff has impaired Defendant's ability to obtain material information it needs to defend against Plaintiff's claim. See Cooper, 2017 WL 92895401, at *5. For example, Plaintiff seeks damages for more than $85,000 in a loan for her business but Defendant has not been provided specific information regarding the income and expenses of the business or information supporting the loan application. [Doc. 34 at 2-5.] Of course, Plaintiff's recalcitrance has also required Defendants to spend time and effort attempting to obtain the discovery to which the Court found they were entitled.
The Court notes that even after Defendant filed a motion to compel, filed a motion to dismiss, participated in a telephone conference, and filed its status report informing the Court of Plaintiff's latest missed deadline, and even as the Court has stayed applicable deadlines and warned Plaintiff that the Court would be ruling on Defendant's motion to dismiss, Plaintiff still has not provided many of the documents the Court ordered her to provide and has not answered the interrogatories the Court ordered her to answer. The Court concludes that Plaintiff has demonstrated a pattern of indifference and disrespect to this Court's orders that cannot be countenanced and that such noncompliance must be deterred. See Gilbert v. City of Spartanburg, No. 7:16-cv-03088-MGL-JDA, 2017 WL 1040725, at *3 (D.S.C. Feb. 24, 2017) (noting the need for deterrence of similar noncompliance), Report and Recommendation adopted by 2017 WL 1020981 (D.S.C. Mar. 16, 2017). Additionally, because Plaintiff has already ignored multiple deadlines and Court Orders, the Court concludes that sanctions less drastic than dismissal would not be effective. Indeed, any sanction other than dismissal would fail to cure Plaintiff's determined obdurateness and impede the administration of justice.
The Court notes that in lieu of offering any specific explanation of why she has not provided the requested information, Plaintiff argues that dismissal is not warranted because the Court has not sanctioned her up to this point in this case. [Doc. 33 at 3.] However, Plaintiff has long had clear notice that her case was subject to dismissal if she continued to fail to produce the required responses. Cf. Rangarajan v. Johns Hopkins Univ., 917 F.3d 218, 225 (4th Cir. 2019) (explaining that although “notice is an important aspect of fairness in procedure that might relate to the ultimate fairness of imposing any sanction,” a prior warning is not a necessary element for a Rule 37 sanction). It was more than four months ago that the Court took Defendant's motion to dismiss under advisement, ordered Plaintiff “to respond to Defendant['s] discovery in full and without objection by May 13, 2022, and warned Plaintiff that the Court would “rule on Defendant's request for sanctions and/or dismissal after Plaintiff produces discovery responses” [Doc. 23]. At this point, no purpose would be served by the Court continuing to attempt to persuade Plaintiff to prosecute her own case.
In Rangarajan, the Fourth Circuit affirmed the dismissal of the plaintiff's case based on her failure to participate in discovery. In rejecting the plaintiff's argument that the plaintiff was not adequately warned of the possibility of dismissal, the Fourth Circuit noted that the defendant moved for dismissal of the action, the district court, “in response to [the defendant's] motion for sanctions, alerted [the plaintiff] that the motion ‘raised some serious issues' regarding her failure to comply with rules relating to discovery and summary judgment.” Rangarajan, 917 F.3d at 225. The court emphasized that the defendant had requested dismissal of two of the causes of action as a sanction and that “the gravity of the issues was also conveyed to [the plaintiff] by the district court's order staying proceedings” in the case. Id. Additionally, the plaintiff was aware that dismissal was a possibility as shown by the fact that she argued against the court imposing dismissal as a sanction. [Id.] Similarly, in the present case, the Court specifically instructed Plaintiff that the Court would rule on Defendant's motion to dismiss after Plaintiff responded to discovery [Doc. 23], the Court stayed the applicable deadlines during the pendency of the motion to dismiss [Doc. 31], and Plaintiff specifically argued against dismissal as a sanction in its response opposing Defendant's motion [Doc. 33].
Regarding Rule 41, the Court has already discussed prejudice and the effectiveness of sanctions less effective than dismissal. All indications, including her forwarded email to her counsel [Doc. 28 ¶ 7], are that she is aware of the discovery that Defendant has requested, including the records relating to her business, and she has failed to produce them, repeatedly continuing to delay the progress of this case.
For all the aforementioned reasons, the Court recommends that Plaintiff's case be dismissed under Rules 37 and 41. See Gilbert, 2017 WL 1040725, at *4 (dismissing action under Rules 37 and 41 for failure to comply with discovery requests and this Court's Orders compelling discovery).
RECOMMENDATION
Wherefore, based upon the foregoing, the undersigned recommends that Defendant's motion to dismiss [Doc. 21] be GRANTED.
IT IS SO RECOMMENDED.