Smith v. Chicago School Reform Bd. of Trustees

• Citation: 165 F.3d 1142
• Decision Date: 16 February 1999
• Docket Number: 97-2871,Nos. 97-2824,98-1616 and 98-1658,s. 97-2824
• Parties: 79 Fair Empl.Prac.Cas. (BNA) 288, 132 Ed. Law Rep. 52 Carrie-Merle SMITH, Plaintiff-Appellee, Cross-Appellant, v. CHICAGO SCHOOL REFORM BOARD OF TRUSTEES, Defendant-Appellant, Cross-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1142

165 F.3d 1142

79 Fair Empl.Prac.Cas. (BNA) 288, 132 Ed. Law Rep. 52

Carrie-Merle SMITH, Plaintiff-Appellee, Cross-Appellant, v. CHICAGO SCHOOL REFORM BOARD OF TRUSTEES Defendant-Appellant, Cross-Appellee.

Nos. 97-2824, 97-2871, 98-1616 and 98-1658.

United States Court of Appeals Seventh Circuit.

Argued Nov. 6, 1998.

Decided Jan. 21, 1999.

Rehearing and Rehearing En Banc Denied Feb. 16, 1999.

William J. Raleigh (argued), Raleigh & Cahill, Chicago, IL, for Plaintiff-Appellee in Nos. 97-2824 and 98-1616.

William J. Raleigh (argued), Raleigh & Cahill, Chicago, IL, for Plaintiff-Appellant in Nos. 97-2871 and 98-1658.

Jerold S. Solovy, Norman M. Hirsch (argued), Rodney D. Joslin, Kenneth A. Kroot, Jenner & Block, Chicago, Illinois, for Defendant-Appellee, Cross-Appellee.

Before CUMMINGS, EASTERBROOK, and EVANS, Circuit Judges.

EASTERBROOK, Circuit Judge.

According to the final pretrial order that governed the trial of this case, the parties agreed that Carrie-Merle Smith, a teacher at Collins High School in Chicago, was the victim of racial discrimination. Smith is white; most of the students, faculty, and administrators at the school are black. After she reported an assault and battery by faculty member Elbert Teague, who called Smith a "goddamn white bitch [who] don't belong here" and threatened to kill her--conduct for which Teague was prosecuted and convicted--the faculty and administration of the school made her life miserable on account of her race. The jury was told that the parties agreed that "[a] racially hostile atmosphere existed at Collins H.S." and that "the intimidation and racial harassment at Collins H.S. was unbearable" to Smith. A psychiatrist testified that as a result of this harassment Smith suffered a mental and physical breakdown. Emphasizing the extent to which the school system accepts Smith's version of events, her lawyer hammered away during closing argument on the fact that the school system had called no witnesses of its own and barely questioned the testimony of hers. Predictably Smith prevailed, and the judgment in her favor, including attorneys' fees, exceeds $2 million.

What the jury heard was a sham. Although the school district concedes that Teague abused Smith, it denies that she was the victim of racial harassment at the hands of other teachers and administrators; the persons Smith accused of vexing her denied the allegations under oath in depositions; and there were substantial problems with the damages evidence as well (for example, the psychiatrist first saw Smith two years after she was transferred away from Collins High School, and four years after Teague's criminal assault). Most of the events that were narrated occurred well outside the statute of limitations. But the jury knew none of this--in part because the district judge held the school system to a pretrial order that Smith's lawyer drafted, and in part because the judge informed the school system that it could call witnesses only with the plaintiff's consent. Needless to say, consent was withheld. The result was a kangaroo court, different only in the trappings from a default judgment. Appellate review of sanctions is deferential, see National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976), but we are confident that the district judge abused his discretion and committed a legal error to boot.

The legal error is subtle but important. The district judge permitted plaintiff's counsel to file her dream version of a pretrial order after concluding that defendant failed to meet a deadline for submitting its own version. Civil Rule 16(f) provides that if a party fails to comply with a scheduling order, the court "may make such orders with regard thereto as are just, and among others any of the orders provided in Rule 37(b)(2)(B), (C), (D)". This list of appropriate sanctions implies that the sanction provided in Rule 37(b)(2)(A) is not "just" for this kind of infraction; using the "among others" language to authorize use of a Rule 37(b)(2)(A) sanction would nullify its omission from Rule 16(f)'s enumeration. See J.F. Edwards Construction Co. v. Anderson Safeway Guard Rail Corp., 542 F.2d 1318, 1322 (7th Cir.1976). Cf. G. Heileman Brewing Co. v. Joseph Oat Corp., 871 F.2d 648, 653 n. 8 (7th Cir.1989) (en banc) (Rule 16 does not authorize a judge to compel a party to stipulate to facts). Here is the list in Rule 37(b)(2):

(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;

(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence;

(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;

(D) In lieu of any of the foregoing orders or in addition thereto, an order treating as a contempt of court the failure to obey any orders except an order to submit to a physical or mental examination;

(E) Where a party has failed to comply with an order under Rule 35(a) requiring that party to produce another for examination, such orders as are listed in paragraphs (A), (B), and (C) of this subdivision, unless the party failing to comply shows that that party is unable to produce such person for examination.

The judge's order barring the school system from presenting witnesses is the sort of sanction contemplated by Rule 37(b)(2)(B); permitting Smith to file a final pretrial order informing the jury that disputed factual issues actually were agreed between the parties, or otherwise "established", is the sort of sanction contemplated by Rule 37(b)(2)(A). The (b)(2)(A) sanction is more powerful than the (b)(2)(B) sanction because it disables the party from doing anything to contest the allegation, and this must account for its omission from the list in Rule 16(f). A litigant precluded under Rule 37(b)(2)(B) from presenting its own witnesses still can contest the other side's evidence, by cross-examination or by argument demonstrating its shortcomings. But an order deeming facts "established" or "uncontested" removes that resource. Defendant in this case could do nothing but grit its teeth while Smith's lawyer presented her story and told the jury that her opponent agreed with every word.

Use of the Rule 37(b)(2)(A) sanction would be harmless error if the transgression were serious enough to justify a default judgment--for this is what Rule 37(b)(2)(A) effectively authorizes. Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 705, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). Many times we have held that failure to participate in the pretrial process, whether by abandoning the litigation or by obstructing some vital step, permits a court to award summary victory to the other side. E.g., Newman v. Metropolitan Pier & Exposition Authority, 962 F.2d 589 (7th Cir.1992); In re State Exchange Finance Co., 896 F.2d 1104 (7th Cir.1990). Events here did not justify that step, however. Smith filed suit in November 1994, and for more than two and a half years the parties engaged in motions practice, discovery, and other steps to prepare the case for trial. The judge set a trial date of June 16, 1997, and directed the parties to exchange drafts of pretrial orders and confer with a view to producing an agreed order by May 20. A scheduling order called for defendant to furnish Smith with a list of witnesses and exhibits 40 days before trial--although the same order also called for the witness and exhibit lists to be furnished 30 days before trial. Defendant furnished its lists 31 days before trial and learned to its sorrow that the judge deemed this a fatal misstep. Defendant's lists also were not very helpful; instead of informing plaintiff and the court of the witnesses counsel reasonably expected to call, they included 122 names, almost everyone mentioned in discovery materials. (To avoid damage to reputation, we note that the lawyers who pulled this stunt were not associated with the firm that now represents the school system.) Worse still in the judge's eyes, defendant asked for a two-day extension (until May 22) to finish up the pretrial order. This might not seem long--defendant offered the plausible explanation that Smith's lawyers had been a week late in furnishing their own (incomplete) draft--but it was to the judge a grievous offense, aggravated by the fact that the extension was granted.

What happened is this. Under Local Rule 5.00 pp 2(i), (6), and note 10, the plaintiff is principally responsible for preparing the pretrial order and must submit a draft, together with a trial brief identifying the theory and elements of liability, to the defendant at least 11 days before the pretrial order is due. Thus Smith's counsel should have produced their draft by May 9. Smith's lawyers provided a partial draft pretrial order on the afternoon of Friday, May 16, a week late and only two business days before the May 20 deadline. Some material ordinarily included with pretrial orders was missing, and the draft put plaintiff's principal contentions in the category of "agreed" facts, which did not help the parties find common ground. Late on the evening of May 19 defense counsel faxed plaintiff's lawyers their draft, which moved plaintiff's "uncontested" facts to the "contested" section. Defendant's draft was incomplete; like Smith's it lacked a trial brief, and proposed voir dire questions and jury instructions also were missing. Each side asserts that it offered to meet on May 20 to negotiate a final, agreed pretrial order, but that the other side refused. At noon on May 20 Smith's...