Batson v. Neal Spelce Associates, Inc.

• Decision Date: 18 July 1985
• Docket Number: No. 84-1841,84-1841
• Parties: 38 Fair Empl.Prac.Cas. 867, 38 Empl. Prac. Dec. P 35,563, 2 Fed.R.Serv.3d 828 Rose v. BATSON, Plaintiff-Appellant, v. NEAL SPELCE ASSOCIATES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 511

765 F.2d 511

38 Fair Empl.Prac.Cas. 867,

38 Empl. Prac. Dec. P 35,563, 2 Fed.R.Serv.3d 828

Rose v. BATSON, Plaintiff-Appellant, v. NEAL SPELCE ASSOCIATES, INC., Defendant-Appellee.

No. 84-1841.

United States Court of Appeals Fifth Circuit.

July 18, 1985.

Bunton, Nolan, Ode & Cooper, Connie Ode, Austin, Tex., for plaintiff-appellant.

McGinnis, Lochridge & Kilgore, Brook Bennett Brown, Rick Harrison, Austin, Tex., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before GOLDBERG, TATE and JOLLY, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

In this appeal we consider whether the district court abused its discretion in dismissing a civil rights plaintiff's complaint with prejudice and assessing over $30,000 in attorney's fees and costs for failure to comply with a discovery order. We hold that sanctions were appropriate but that the district court abused its discretion in this instance by the severity of those imposed. Accordingly, we remand for a reconsideration and reassessment of sanctions in the light of this opinion.

I

Rose V. Batson (Batson), the appellant, filed suit on March 8, 1983, in district court against her former employer, Neal Spelce Associates, Inc. (Spelce), alleging that her dismissal from employment was based upon sex discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e, et seq. Batson sought recovery of lost wages in the amount of $32,500 per year plus bonuses, benefits and attorney's fees. Spelce denied any unlawful discrimination and counterclaimed alleging that the suit was frivolous and had been brought solely for harassment purposes.

In preparation for trial, Spelce sought to depose Batson on April 12, 1983. Included in Spelce's deposition notice was a request, accompanied by a subpoena duces tecum, for the production of documents, most of which were intended to reveal Batson's income and financial activities in the years after her dismissal. Although Batson attended the deposition she did not produce all of the requested documents nor did she move for a protective order prior to the deposition. She assured Spelce, however, that the documents would be forthcoming. After the deposition, Spelce repeatedly made informal demands to Batson, most in the form of letters, seeking the financial records. In response to these demands Batson produced some of the documents and assured Spelce that others would be forthcoming in the near future.

All the documents were not produced, however, and Spelce, on February 27, 1984, noticed its intent to resume Batson's deposition on March 30. On March 9, Spelce served on Batson an amended notice of deposition; both the February 27 and March 9 notices were accompanied by subpoenaes requesting production of the same financial documents that had been requested in Batson's initial deposition, but had yet not been produced after some ten months.

Batson attended the deposition on March 30 as scheduled; but still she did not produce all of the requested financial documents and, for the first time, claimed that they were privileged. At the close of the deposition, Spelce noticed its intent to resume discovery on April 7, and again requested Batson's financial records. Batson then filed a motion to quash the document request, but the district court failed to rule on the motion prior to April 7. Batson attended the deposition but refused to produce the documents, hanging onto her claim of privilege.

On April 9, the district court overruled Batson's motion to quash and ordered her to produce all documents not yet produced. The court's order, however, did not specify a compliance date nor did it recite that sanctions would be imposed for failure to comply. Upon Batson's failure to comply upon request, Spelce, on April 12, filed a motion for sanctions. The same day Batson partially, but only partially, complied with the court's order. The trial was to begin April 18; but on April 18, before the trial commenced, the district court conducted a hearing on Spelce's motion for sanctions and did the court ever "sanctify" Ms. Batson: it dismissed her complaint with prejudice, and awarded Spelce $30,950.93 in attorney's fees and costs.

The court found that Batson's failure to produce was not because of her inability to produce. Furthermore, it found that the nonproduction severely prejudiced Spelce's ability to prepare its case. The court held that the dismissal of Batson's claim was authorized by Fed.R.Civ.P. 37(b) and (d) because of Batson's recalcitrance or gross neglect in complying with proper discovery requests, including a violation of the court's April 9 order and its previous order that discovery be completed by December 1, 1983. The court awarded the attorney's fees, deposition costs and witness fees in connection with the following items of the litigation: the second and third depositions of Batson; the deposition of Batson's husband; the defense of Batson's motion to quash the deposition of Batson's psychiatrist; the April 7 deposition of Batson; and the preparation and argument of Spelce's motion for sanctions. The award of attorney's fees and costs was based on Fed.R.Civ.P. 37 and 26, 28 U.S.C. Sec. 1927 and decisions of the United States Supreme Court. ¹ Batson timely appeals.

II

The sole issue on appeal is whether the district court abused its discretion in sanctioning Batson by dismissing her complaint and awarding Spelce attorney's fees and costs. In resolving this issue, we first consider whether the sanction of dismissal was appropriate.

III

A.

It is firmly established that a district court is authorized under Fed.R.Civ.P. 37(b)(2)(C) to dismiss a complaint with prejudice when a party refuses to obey a valid discovery order. National Hockey League v. Metro Hockey Club, Inc., 427 U.S. 639, 640, 96 S.Ct. 2778, 2779, 49 L.Ed.2d 747 (1976); Jones v. Louisiana State Bar Association, 602 F.2d 94, 96 (5th Cir.1979) (per curiam). In reviewing a dismissal by the district court, our duty is to decide not whether we would have dismissed the action as an original matter, but whether the district court abused its discretion in so doing. National Hockey League, 427 U.S. at 642, 96 S.Ct. at 2780; Jones, 602 F.2d at 96.

In determining whether a district court abused its discretion, our precedent has addressed a number of considerations. First, dismissal is authorized only when the failure to comply with the court's order results from wilfulness or bad faith, and not from the inability to comply. National Hockey League, 427 U.S. at 640, 96 S.Ct. at 2779; see also Marshall v. Segona, 621 F.2d 763, 767 n. 8 (5th Cir.1980). Next, dismissal is proper only in situations where the deterrent value of Rule 37 cannot be substantially achieved by the use of less drastic sanctions. Marshall, 621 F.2d at 768. Another consideration is whether the other party's preparation for trial was substantially prejudiced. Finally, dismissal may be inappropriate when neglect is plainly attributable to an attorney rather than a blameless client, or when a party's simple negligence is grounded in confusion or sincere misunderstanding of the court's orders. Marshall, 621 F.2d at 768; Silas v. Sears, Roebuck & Co., 586 F.2d 382, 385 (5th Cir.1978).

Here, the district court expressly found that Batson's failure to produce was not the result of inability, and that Spelce's preparation for trial was substantially prejudiced. Because there is substantial evidence in the record to support these findings, we hold that they are not clearly erroneous. Batson, however, argues that she should be excused for failing to comply because the court's order was confusing. She specifically notes that the order did not contain a compliance date and did not recite that sanctions would be imposed for failure to comply. Batson's contention is unconvincing. Since the court's order was issued approximately one week before trial, Batson should have been aware that compliance was required before the April 18 trial date. Similarly, although the court's order did not recite that sanctions would follow a refusal to comply, it is universally understood that a court's orders are not to be wilfully ignored, and, certainly, attorneys are presumed to know that refusal to comply will subject them and their clients to sanctions. In conclusion, we are free from doubt that sanctions were appropriate in this case.

A more difficult question, however, is whether the district court abused its discretion in choosing the sanction of dismissal with prejudice. Although the district court's discretion under Rule 37 is broad, we have repeatedly emphasized that it is not unlimited, and we have often characterized a dismissal with prejudice as a "draconian" remedy, or a "remedy of last resort" only to be applied in extreme circumstances. See, e.g., Marshall, 621 F.2d at 767; Jones, 602 F.2d at 96; Bonaventure v. Butler, 593 F.2d 625, 626 (5th Cir.1979) (per curiam). Nevertheless, we are mindful of the Supreme Court's admonition regarding the natural tendency of reviewing courts, employing hindsight, to be heavily influenced by the severity of outright dismissal of an action as a discovery sanction. National Hockey League, 427 U.S. at 642, 96 S.Ct. at 2780.

In National Hockey League, the plaintiff failed to timely answer written interrogatories even after the district court had entered an order compelling discovery. The court of appeals reversed the district court's dismissal of the action holding that there was insufficient evidence to support a finding of bad faith. In reaching its decision, the court of appeals relied upon several "extenuating factors," including the following: (1) none of the parties had really pressed discovery until approximately one year after the commencement of the action; (2) the plaintiff's counsel took over the litigation after a consent decree was entered and had difficulty in obtaining some of...