Ramirez v. T&H Lemont, Inc.

• Citation: 845 F.3d 772
• Decision Date: 30 December 2016
• Docket Number: No. 16-1753,16-1753
• Parties: Armando RAMIREZ, Plaintiff–Appellant, v. T&H LEMONT, INCORPORATED, Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

845 F.3d 772

Armando RAMIREZ, Plaintiff–Appellant,

v.T&H LEMONT, INCORPORATED, Defendant–Appellee.

No. 16-1753

United States Court of Appeals, Seventh Circuit.

Argued November 1, 2016

Decided December 30, 2016

James Joseph Macchitelli, Attorney, Schaumburg, IL, for Plaintiff–Appellant.

Cinthia G. Motley, Esq., Attorney, Sedgwick LLP, Chicago, IL, for Defendant–Appellee.

Before Easterbrook, Rovne r, and Sykes, Circuit Judges.

Rovner, Circuit Judge.

Upon finding that plaintiff Armando Ramirez had offered a witness money in exchange for his favorable testimony, the district court dismissed Ramirez's suit with prejudice. Ramirez appeals, contending that the district court erred in finding that he engaged in witness tampering and that it abused its discretion in dismissing the case with prejudice as a sanction. We affirm.

I.

Ramirez's amended complaint alleges that his former employer, T&H Lemont, Inc., subjected him to discriminatory working conditions and a hostile work environment based on his national original (Ramirez is Hispanic and was born in Mexico) and then fired him in retaliation for reporting the harassment, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e–2(a) & –3(a). Nearly three years into the litigation, with discovery essentially concluded, Ramirez and his counsel had not located any witnesses to corroborate his allegations, which were vigorously denied by the defendant, and his attorney was seeking leave to withdraw from the case. But at the eleventh hour, Ramirez located three witnesses, all former T&H Lemont employees who had worked with Ramirez in the company's machine shop, willing to give testimony on his behalf. Ramirez's counsel abandoned his motion to withdraw, the district court ordered that the new witnesses be deposed, and all three of those witnesses—Francisco Hernandez, Miguel Velasquez, and Santiago Villagrana—were serially deposed on the same day. Each testified in substance that he had observed ways in which two T&H Lemont managerial and supervisory employees had purposely made life difficult for Ramirez at the firm; all three testified that they had witnessed one of those supervisors refer to Ramirez as a burro or donkey on one or more occasions.

Three months after these depositions took place, as defense counsel was seeking to re-depose Villagrana, Villagrana sent a text to Ramirez's counsel asking for a letter "saying what percent I will receive when the case is settled." R. 59–1 at 2. Ramirez's counsel reported the text to defense counsel. As it turned out, on the same day that Villagrana texted Ramirez's lawyer, he also contacted a T&H Lemont employee informing him that he and the other two witnesses were no longer supporting Ramirez and that he (Villagrana) was willing to testify for T&H Lemont if he could get his old job back.

At the defendant's request, the district court convened an evidentiary hearing in order to determine whether any witness had provided false deposition testimony in the case and, if so, whether anyone else was involved in that false testimony.¹ Two witnesses testified in person at that hearing: Oberlin Luis, the T&H Lemont employee whom Villagrana had contacted to report that he was willing to testify on the company's behalf; and Francisco Hernandez, one of the other witnesses who had given deposition testimony supporting Ramirez. A third witness, Villagrana, was subsequently deposed in California, where he was then living. His deposition was videotaped, and a transcript of his testimony was submitted to the court after the hearing.² Villagrana testified in substance that Ramirez had offered him money in exchange for his favorable testimony; that he accepted the offer because he was in urgent need of money; that he had not observed the harassment of which Ramirez was complaining; that all three of the belatedly-located witnesses had met with Ramirez before they were deposed in May and discussed using the word "donkey"; and that he had testified falsely at his deposition in exchange for the money Ramirez had offered him. Hernandez denied that anyone had offered him money in exchange for his deposition testimony. He did acknowledge, however, that he and the other two witnesses had met with Ramirez twice before they were deposed. During the first meeting, Ramirez had asked them whether they would be willing to testify on his behalf, and during both meetings, they had discussed what their testimony would be. There were certain inconsistencies in Hernandez's testimony on other points that would lead the district court to observe that his credibility appeared "questionable" at times. App. 102. Finally, Luis recounted the offer he had received from Villagrana to testify on the company's behalf.

Based on this testimony, the district court, on T&H Lemont's motion, dismissed the case with prejudice. After summarizing the testimony presented to him, the district judge observed:

Throughout the evidentiary hearing, counsel for Plaintiff has been forthcoming and cooperative—I am convinced that he played no role in Plaintiff's misconduct. Because I have found clear and convincing evidence of witness tampering, I am dismissing this case with prejudice to sanction Plaintiff.

R. 80 at 2. The court later denied Ramirez's request, pursuant to Fed. R. Civ. P. 59(e), to reconsider the dismissal. R. 84.

II.

Ramirez contends on appeal that the record does not support a finding by clear and convincing evidence that he engaged in witness tampering and that the district court abused its discretion in dismissing the case with prejudice as a sanction for that misconduct. Villagrana's testimony that Ramirez had offered him money in exchange for his testimony was not credible, Ramirez contends, in view of Luis's testimony that Villagrana had offered to testify for the defendant if he could get his job back and the conflicts between Villagrana's testimony and Hernandez's testimony. And dismissing the suit with prejudice was an inappropriate sanction, Ramirez argues, when it otherwise appears he may have a meritorious claim of employment discrimination.

T&H Lemont asked the district court to dismiss the case with prejudice pursuant to Federal Rule of Civil Procedure 37 and the court's inherent authority to sanction misconduct. When it granted that request and dismissed the case, the district court did not specify which source of authority it was relying upon. Either would appear to support the court's decision. Rule 37(b)(2)(A)(v) authorizes a range of sanctions, including the dismissal of a suit, for a party's failure to comply with the court's discovery orders³ ; and Rule 37(a)(4) treats an evasive and incomplete answer in discovery as equivalent to no answer, and thus a failure to comply with court-ordered discovery. We have construed the sanctioning power conveyed by Rule 37 to extend to instances of a party hiding evidence and lying in his deposition. Negrete v. Nat'l R.R. Passenger Corp. , 547 F.3d 721, 723–24 (7th Cir. 2008). We can think of no reason why the power would not also extend to a party soliciting a witness to lie at his court-ordered deposition. See , e.g. , Quela v. Payco–Gen. Am. Credits, Inc. , No. 99 C 1904, 2000 WL 656681 (N.D. Ill. May 18, 2000), j. aff'd on other grounds , Hakim v. Payco–Gen. Am. Credits, Inc. , 272 F.3d 932 (7th Cir. 2001). Apart from the discovery rule, a court has the inherent authority to manage judicial proceedings and to regulate the conduct of those appearing before it, and pursuant to that authority may impose appropriate sanctions to penalize and discourage misconduct. See Chambers v. NASCO, Inc. , 501 U.S. 32, 46–50, 111 S.Ct. 2123, 2134–36, 115 L.Ed.2d 27 (1991). Thus, as we noted in Secrease v. Western & Southern Life Ins. Co. , 800 F.3d 397, 401 (7th Cir. 2015), "[d]ismissal [pursuant to the court's inherent authority] can be appropriate when the plaintiff has abused the judicial process by seeking relief based on information that the plaintiff knows is false."

The exercise of either power requires the court to find that the responsible party acted or failed to act with a degree of culpability that exceeds simple inadvertence or mistake before it may choose dismissal as a sanction for discovery violations. Any sanctions imposed pursuant to the court's inherent authority must be premised on a finding that the culpable party willfully abused the judicial process or otherwise conducted the litigation in bad faith. See Chambers , 501 U.S. at 50, 111 S.Ct. at 2135–36 ; Secrease , 800 F.3d at 401 ; Trade Well Int'l v. United Cent. Bank , 778 F.3d 620, 626 (7th Cir. 2015) (negligence is insufficient to support a finding of bad faith). Rule 37 itself does not specify a requisite mental state, but in Societe Interna t ionale pour Participations Industrielles et Commerciales, S.A. v. Rogers , 357 U.S. 197, 212, 78 S.Ct. 1087, 1096, 2 L.Ed.2d 1255 (1958), the Supreme Court concluded that Rule 37 should not be construed to authorize dismissal of an action when a plaintiff's failure to comply with his discovery obligations was due to his inability to comply rather than his "willfulness, bad faith, or any fault." See also Nat'l Hockey League v. Metro. Hockey Club, Inc. , 427 U.S. 639, 640, 96 S.Ct. 2778, 2779, 49 L.Ed.2d 747 (1976) (per curiam) (reaffirming that holding). Fault, in contrast to wilfulness or bad faith, does not require a showing of intent, but presumes that the sanctioned party was guilty of "extraordinarily poor judgment" or "gross negligence" rather than mere "mistake or carelessness." Marrocco v. Gen. Motors Corp. , 966 F.2d 220, 224 (7th Cir. 1992) ; Long v. Steepro , 213 F.3d 983, 987 (7th Cir. 2000) ("[f]ault in this context suggests objectively unreasonable behavior"); see also e360 Insight, Inc. v. Spamhaus Project , 658 F.3d 637, 642–43 (7th Cir. 2011) (distinguishing degree of fault necessary to support dismissal or default from that necessary to support lesser sanctions).

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