Opinion
Case No. 99-2526-JAR
December 18, 2002.
MEMORANDUM ORDER AND OPINION
This comes before the Court on Plaintiff's Motion for Sanctions for Defendant's Spoilation of Evidence (Doc. 126) filed on October 15, 2002, during the jury trial that resulted in a verdict in favor of Defendant Midwest Woodworking, Inc. Plaintiff's Motion for Sanctions sought relief for Defendant's violations of the Court's orders and rulings, in addition to sanctions for spoilation of evidence. There has been no response filed by Defendant. Being duly advised and for good cause shown, the Court grants this motion for sanctions, not on the basis of spoilation of evidence, but on the basis of Defendant's failure to respond to discovery requests, failure to comply with the Court's order to compel, and defense counsel's flagrant and repeated violations of the Court's rulings on motions in limine.
Although Plaintiff filed a Notice of Appeal on November 15, 2002, appealing from the verdict and judgment, the Court retains jurisdiction to rule on this collateral motion for sanctions, which the Court took under advisement on October 15, 2002. See Lancaster v. Indep. Sch. Dist. No. 5, ( 149 F.3d 1228, 1237 (10th Cir. 1998) ("[a]lthough filing notice of appeal generally divests the district court of jurisdiction over the issues on appeal, the district court retains jurisdiction over `collateral matters not involved in the appeal.'") (quoting Garcia v. Burlington Northern R. Co., 818 F.2d 713, 721 (10th Cir. 1987).
Background
Plaintiff filed this case on November 23, 1999. Roger Phillips entered his appearance on behalf of Defendant on December 20, 1999. Denise Anderson entered her appearance on behalf of Defendant on November 9, 2000. Neither Anderson nor Phillips withdrew, and both appeared as trial counsel in October 2002.
In his Request for Production, served on Denise Anderson and Roger Phillips on February 4, 2002, Plaintiff requested:
23. All documents that you contend support any affirmative defense asserted in your Answer to Plaintiff's First Amended Complaint.
. . . .
25. All non-privileged calendars, diaries, day timers, notes, logs or similar records maintained by you or on your behalf, to the extent such documents relate or refer to the plaintiff, or the claims he asserts in his First Amended Complaint, or your defenses to the claims he asserts in his First Amended Complaint.
. . . .
27. All documents relating to plaintiff's complaints of sexual harassment.
28. All documents relating to any investigation you made into plaintiff's complaints of sexual harassment.
29. All documents relating to your response to plaintiff's complaints of sexual harassment.
. . . .
40. Any non-privileged statements or documents in your possession, custody or control the subject matter of which is (1) the plaintiff; or (2) this lawsuit.
In this Request for Production, Plaintiff defined "document" to include notes, among other forms of writings. Further, Plaintiff directed that with respect to any requested document for which Defendant asserts a privilege, Defendant should: specify the ground and precise nature of the claimed privilege; identify the date, authors, recipients, subject matter and number of pages of the document; and identify the name and job title of each person who has seen the document or who has knowledge of the subject matter and contents of the document.
Defense counsel Denise Anderson responded to Plaintiff's Request for Production on February 11, 2002, generally asserting the attorney client and work product privileges where applicable, and objected to Plaintiff's definition of the term "document" as overly broad and burdensome. Defendant then specifically responded to each of Plaintiff's 41 requests by objecting that the documents were not relevant, the request was overly broad and burdensome, and that the documents were protected by the attorney-client privilege and/or the work product doctrine.
After Anderson did not respond to repeated communications about Defendant's incomplete and unresponsive submission, on May 15, 2002, Plaintiff filed a motion to compel discovery, which this Court granted in an oral ruling on August 30, 2002. The Court ordered Defendant, through counsel Denise Anderson, to produce the documents and a privilege log by September 9, 2002, with respect to any documents for which Defendant claimed a privilege. On September 19, 2002, Defendant filed a notice that it had supplemented its response to the request for production. But Defendant did not produce, and has never produced a privilege log.
Plaintiff, in a letter dated September 30, 2002, again requested a privilege log, and referenced a conversation between Denise Anderson and Plaintiff's counsel, in which Anderson represented that the documents that Defendant had claimed privileged were previously produced to the EEOC. Plaintiff warned that such disclosure effected a waiver of the privilege and that Plaintiff would be filing a motion for costs. Anderson responded in a letter dated October 2, 2002, in which she referred to the issues raised by Plaintiff as "[n]it picky."
Anderson further asserted that the "transcript" of the Court's oral ruling on August 30, revealed that although the Court had ordered production of a privilege log, this was limited to documents for which an attorney client privilege was claimed; the Court did not order a log for documents claimed covered by the work product doctrine. The transcript of the August 30 hearing demonstrates that the Court and Denise Anderson discussed Defendant producing a log for documents claimed to be protected by the work product doctrine or attorney client privilege.
THE COURT: All right. Now the defendant says that some of these documents are protected by attorney-client privilege or work product. Have you filed a log, or are you preparing a log, Ms. Anderson?
MS. ANDERSON: I would prepare a log. . . . . yes, we'll prepare a log."
. . . .
THE COURT: . . . . . I will have the defendant prepare and file a log by September 9th.
. . . .
MS. ANDERSON: So in essence, Judge, then you're ruling that all documents that plaintiff is seeking would be produced except for those that we plan to privilege or work product?
Anderson further asserted that the only privilege they were claiming was work product, for documents generated while Roger Phillips was representing Defendant during the course of the EEOC investigation. Anderson further stated in her letter of October 2, 2002, that ". . . Roger confirmed to me the documents involved in his investigation were no longer in existence and that all information deemed privileged as a result of the investigation was contained in the statements sent to the EEOC. As such, there were no documents to identify on a `log.'" Seven days after Anderson's letter, the jury trial commenced, on October 9, 2002. Neither party brought to the Court's attention at the commencement of the trial, that there was still an issue concerning Defendant's compliance with the Court's August 30, 2002 bench ruling.
On October 15, 2002, during Defendant's case, its personnel director Jackie Nieder, testified that she conducted an internal investigation of Plaintiff's complaint during the EEOC process, interviewed employees and made notes of these interviews. Nieder further testified that she kept these interview notes on her desk, fully incorporated them into the written summary report Defendant transmitted to the EEOC investigator, and that she thereafter shredded or destroyed the notes. Nieder did not retain copies of these notes in the employees' files, nor in any other file maintained by Defendant.
For the first time, during Nieder's testimony, Plaintiff learned that there were interview notes of Defendants' employees and that the notes had been destroyed. Out of the jury's hearing, the Court heard Plaintiff's motion for sanctions for spoilation of evidence and denied Plaintiff's request for judgment as a matter of law on Defendant's affirmative defense. The Court gave a curative instruction to the jury and took under advisement Plaintiff's request for attorney's fees, costs and other relief. The trial concluded on October 16, 2002, with a jury verdict for Defendant.
Discussion
From February 11, 2002, through October 16, 2002, Defendant caused Plaintiff to expend time and money seeking discovery of a number of documents that Defendant refused to produce, claiming a blanket attorney client and/or work product privilege. Although counsel dispute the substance of their conversations, it is clear from the substance of Plaintiff's counsels' letters to Denise Anderson that Defendant would not identify the nature of the documents, nor commit to specifying the exact privilege claimed for each document. And, despite Plaintiff's request for specific information about the purported privileged documents, Defendant did not produce a privilege log for any of the documents. The Court ordered Defendant to either produce the document or a privilege log on the document. Defendant flagrantly ignored this order, parsing the Court's words in an offensive and contemptuous manner. The Court did not limit the privilege log to any type of privilege. Indeed, at the August 30, 2002 hearing, Defendant was still asserting a blanket privilege and still not identifying the document and the exact privilege claimed. Thus, the Court gave Defendant until September 9, 2002, to produce the documents or the privilege log. Defendant did not do so by September 9, 2002. Having ignored several letters from Plaintiff's counsel requesting and then demanding compliance, on October 2, just seven days before trial, Anderson responded that any documents were work product and not subject to the Court's order.
Notably, in her October 2 letter, Anderson states ". . . Roger confirmed to me the documents involved in his investigation were no longer in existence and that all information deemed privileged as a result of the investigation was contained in the statements sent to the EEOC. As such, there are no documents to identify on a `log.'" Yet, Anderson still avoided identifying the nature of the documents generated. She never disclosed that there were notes of interviews of employees, including those Plaintiff and Defendant had listed as trial witnesses. It was during the trial testimony of Jackie Nieder, Defendant's personnel director, that Plaintiff finally learned about the existence and destruction of interview notes.
The Court denied Plaintiff's request that the jury be instructed that defendant's affirmative defense was deemed disproved. Nieder testified that she had fully incorporated the information in the notes in the EEOC submission. Nieder testified that no one interviewed had witnessed any sexual harassment of Plaintiff or a sexually hostile work environment. Although Plaintiff should have discovered the notes (assuming they were not privileged), if Nieder were inclined to sanitize the report submitted to the EEOC, by excluding any information adverse to Defendant's interests, it was just as likely that she would sanitize her notes of her interviews with employees.
But, the Court found no evidence that Nieder or Defendant acted in bad faith. Nieder testified that neither she nor the principals of Defendant had ever been involved in an EEOC matter at that point; and that she did not know that she should retain her handwritten notes. A finding of bad faith is essential to sanctioning the destruction of evidence. The Tenth Circuit recognized the doctrine of spoilation of evidence in its Aramburu decision, describing that:
Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997)[citing, Coates v. Johnson Johnson, 756 F.2d 524, 551 (7th Cir. 1985); Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107 (S.D.Fla. 1987); Vick v. Texas Employment Com'n, 514 F.2d 734, 737 (5th Cir. 1975); and Anderson v. Cryovac, Inc., 862 F.2d 910, 926 (1st Cir. 1988)]. Cf. Hicks v. Gates Rubber Co.,833 F.2d 1406, 1419 (10th Cir. 1987)[plaintiff entitled to presumption that destroyed documents would have been unfavorable, where defendant destroyed personnel records in violation of EEOC regulation, even though defendant did not act in bad faith but out of misinterpretation of what constitutes a personnel record].
[T]he general rule is that bad faith destruction of a document relevant to proof of an issue at trial gives rise to an inference that production of the document would have been unfavorable to the party responsible for its destruction. . . . The adverse inference must be predicated on the bad faith of the party destroying the records . . . Mere negligence in losing or destroying records is not enough because it does not support an inference of consciousness of a weak case.
Moreover, aside from no showing of bad faith, the Court found no actual prejudice to Plaintiff. Despite the surprise of Nieder's testimony, Plaintiff's counsel effectively cross-examined Nieder, attempting to impeach her testimony by establishing that Nieder handled the investigation of Plaintiff's complaint of sexual harassment very differently than her investigation of less serious complaints. Nieder admitted that nothing regarding Plaintiff's complaint or her investigation was documented in the personnel file of Plaintiff nor anyone else allegedly involved. Yet, Defendant was careful to document its employees' personnel files with a myriad of other minor complaints and instances of misconduct. For example, when an employee parked his car in the "wrong direction" in the parking lot, his file was documented.
Yet, Defendant's abusive and bad faith strategy in this case, before and after being ordered to produce documents or an appropriate privilege log, is not conduct that this Court will countenance. The rules of discovery exist precisely to stop the "trial by ambush" tactics of the defense counsel in this case. Denise Anderson justifies her inconsistent and noncompliant responses to Plaintiff's requests on the basis that Roger Phillips, not she, was Defendant's counsel during the EEOC process. Anderson argued that she was unaware of what documents were arguably privileged, either attorney client or work product, because at the time any documents would have been generated, she was not representing Defendant; Roger Phillips was. Roger Phillips offered not even that much in excuse or justification. Yet, Roger Phillips continued to represent Defendant, in some capacity, for he sat at counsel table with Anderson throughout the trial.
Neither counsel was justified in his or her defiance of the rules of discovery and the Court's order. They knew individually, or collectively that employees were interviewed during the EEOC process. Plaintiff made specific requests for documents, including notes, pertaining to Defendant's internal investigation. Yet, defense counsel would have the Court believe that neither of them bothered to inquire of Jackie Nieder or anyone else, whether there were notes underlying the summary of the internal investigation that was submitted to the EEOC.
Although Nieder testified that she was unaware of any obligation to retain the notes, it must be noted that Roger Phillips consulted with Nieder and/or Defendant's principals during the EEOC investigation. In fact, it was Phillip's participation that formed the basis of Defendant's claim that the documents were privileged, as attorney client communications or work product. The Court finds it implausible that Phillips was not aware that the basis for Nieder's written report was oral interviews of employees. During a hearing on this motion, Anderson argued that she assumed such documentation existed. However, since Denise Anderson entered her appearance in this case in November 2000, she cannot blame Phillips, or rest on assumptions. She, too had the responsibility to determine what investigative documents were generated by Defendant, that might fall within the scope of Plaintiff's requests. Instead, Anderson asserted blanket privilege, and apparently took no steps to ascertain the existence, nature and substance of documents within the scope of the discovery request.
Anderson and Phillips disregarded their professional duty to investigate and consult with their client, such that they could accurately and appropriately respond to Plaintiff's discovery requests. Their conduct was highly inappropriate and prejudiced Plaintiff, at least to the extent of the costs incurred in pursuing discovery. It is incumbent on counsel to communicate with their client and sufficiently investigate, so as to accurately, specifically and fully respond to discovery requests, whether the response be production of the document, or a specific claim of privilege. As counsel are charged to know, Rule 26(b)(5) of the Federal Rules of Civil Procedure requires that:
When a party withholds information otherwise discoverable under these rules by claiming that it is . . . subject to protection as trial preparation material, the party shall . . . describe the nature of the documents, communications, or things not disclosed that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection.
Thus, "[p]arties objecting to discovery on the basis of the attorney-client privilege bear the burden of establishing that it applies." "To carry the burden, they must describe in detail the documents or information to be protected and provide precise reasons for the objection to discovery." "A `blanket claim' as to the applicability of a privilege does not satisfy the burden of proof."
ERA Franchise Systems, Inc. v. Northern Ins. Co.of New York, 183 F.R.D. 276, 278 (D.Kan. 1998) (citing Boyer v. Board of County Com'rs of County of Johnson, 162 F.R.D. 687, 688 (D.Kan. 1995)).
Id. at 278-79 (citing National Union Fire Ins. Co. of Pittsburgh v. Midland Bancor, Inc., 159 F.R.D. 562, 567 (D.Kan. 1994)).
Id. (citing Kelling v. Bridgestone/Firestone, Inc., 157 F.R.D. 496, 497 (D.Kan. 1994)).
The gamesmanship of defense counsel continued throughout the trial. Denise Anderson repeatedly violated or came close to violating the Court's numerous rulings on motions in limine. Even after the Court warned her to refrain from this conduct, she persisted in asking questions to elicit information that the Court had excluded in limine. Although Anderson's flagrant violations of the Court's limine rulings are not the subject of this motion for sanctions, her behavior at trial demonstrates that she had no respect or regard for the Court's rulings and even when admonished, persisted in attempting to present evidence already excluded by the Court. This behavior persisted after the close of the evidence. Incredibly, during her closing argument, the Court having rejected Defendant's proposed instruction defining objective and subjective perspective, Anderson proceeded to publish to the jury a copy of an opinion from another court, defining these terms as she saw fit, until the Court abruptly ordered her to stop. Given Anderson's flagrant violation of this and other court rulings during the trial, the Court simply does not believe her excuse of ignorance or misinterpretation offered to explain her failure to comply with the discovery requests and the order to compel.
Anderson and Phillips's conduct caused Plaintiff's counsel to incur substantial time and expense on their wild goose chase to discover documents pertaining to Defendant's affirmative defense to vicarious liability for sexual harassment by an employee. This fruitless chase began on February 11, 2002, when Defendant commenced its campaign of misrepresentation and omission; believing that there was nothing to be discovered, Plaintiff was ambushed literally in the middle of Jackie Nieder's testimony, causing Plaintiff to file this motion and memorandum brief for sanctions during trial.
The Federal Rules of Civil Procedure give the court "ample tools to deal with a recalcitrant litigant." Whether or not to impose sanctions is within the discretion of the court. Rule 37(b)(2) provides a variety of sanctions against a party who fails to cooperate in discovery, including default judgment. "In determining the appropriate sanction to be imposed, the court must consider the purposes to be served by the imposition of sanctions." Such purposes include "(1) deterring future litigation abuse, (2) punishing present litigation abuse, (3) compensating victims of litigation abuse, and (4) streamlining court dockets and facilitating case management." "Sanctions under Rule 37 are intended to ensure that a party does not benefit from its failure to comply, and to deter those who might be tempted to such conduct in the absence of such a deterrent." The court should diligently apply sanctions under Rule 37 both to penalize those who have engaged in sanctionable misconduct and to deter those who might be tempted to such conduct in the absence of such a deterrent. The sanction to be imposed should be the least severe of those available, which appears adequate to deter and punish the wrongdoer. "The court's discretion is limited in that Fed.R.Civ.P. 37 requires that any sanction be `just' and that the sanction be specifically related to the particular `claim' which was at issue in the order to provide discovery."
Jones v. Thompson, 996 F.2d 261, 264 (10th Cir. 1993).
See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976).
Resolution Trust Corp. v. Williams, 162 F.R.D. 654, 660 (D.Kan. 1995).
Id.
Starbrite Waterproofing Co., Inc. v. AIM Const. Contracting Corp., 164 F.R.D. 378, 381 (S.D.N.Y. 1996) [citations and internal quotations omitted].
Olcott v. Delaware Flood Co., 76 F.3d 1538, 1555 (10th Cir. 1996).
See White v. General Motors Corp., Inc., 908 F.2d 675, 685 (10th Cir. 1990), cert. denied 498 U.S. 1069, 111 S.Ct. 788, 112 L.Ed.2d 850 (1991).
Myers v. Colgate-Palmolive Co., 102 F. Supp.2d 1208, 1222 (D.Kan. 2000).
Although the Court found insufficient grounds to direct the jury to deem certain facts as true or to disregard the affirmative defense, the Court will not allow such unacceptable, dishonorable conduct to go unsanctioned. Plaintiff has submitted a bill of costs for attorneys fees and expenses for the time period of March 25, 2002 through September 27, 2002. This period commences with Plaintiff's counsel's letter to Denise Anderson requesting supplemental discovery responses, and concludes with Plaintiff's drafting of a Motion to Show Cause for sanctions and attorney's fees. All of the items on the bill pertain directly to this discovery dispute. None pertain to additional time and costs expended during the trial, after the surprise testimony of Jackie Nieder. Having reviewed the bill of costs, the Court finds that the expenses are reasonable, the time claimed for work is minimal, and that the fees and costs requested, $5,268.00, are reasonable.
Because Plaintiff's counsel were appointed by the Court to represent Plaintiff, an indigent party in a civil action, they are entitled, pursuant to D. Kan. Rule 83.5.3, to seek reimbursement of their actual out of pocket expenditures from the bar registration and disciplinary fund. However, the rule allows reimbursement only for those expenditures ". . . not otherwise recoverable in the action." Because the Court is ordering defense counsel, Denise Anderson and Roger Phillips to forthwith remit to Plaintiff's counsel, the sum of $5,268.00, which is itemized in their bill of costs, Plaintiff's counsel are not entitled to collect from the bar and registration fund, the fees and expenses that are itemized in their bill of costs, totaling $5,268.00. Those fees and expenses are recoverable from Denise Anderson and Roger Phillips, who have joint and several liability to remit this total amount, $5268.00 to Plaintiff's counsel, forthwith, and in no event later than January 6, 2003. Plaintiff's counsel may submit vouchers for all other fees and expenses, in accordance with D. Kan. Rule 83.5.3 and the practices and procedures established by this Court.
IT IS THEREFORE ORDERED that Plaintiff's Motion for Sanctions for Defendant's Spoilation of Evidence. (Doc. 126) is GRANTED.