Lucy Rorrer v. Cleveland Steel Container

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 12-1427
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LUCY RORRER; LOUIS RORRER
v.
CLEVELAND STEEL CONTAINER; RICHARD GILBERT
LUCY RORRER**; LOUIS RORRER**;
MARTHA SPERLING, ESQ.,*
Appellants
(* Pursuant to Fed. R. App. P. 12(a))
(** Dismissed per Clerk order of 12/26/12)
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Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2-08-cv-00671)
District Judge: Honorable Mitchell S. Goldberg
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Submitted Under Third Circuit LAR 34.1(a)
March 6, 2014
Before: AMBRO, JORDAN, and ROTH, Circuit Judges
(Opinion filed: April 29, 2014)
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OPINION
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AMBRO, Circuit Judge
During a Title VII action, the District Court imposed a monetary sanction against
Plaintiffs’ counsel, Martha Sperling, under Rule 16(f) of the Federal Rules of Civil
Procedure for failure to obey the Court’s scheduling order. Ms. Sperling appeals, arguing
that the District Court abused its discretion in imposing that sanction. For the reasons
that follow, we affirm.
I. BACKGROUND
The underlying Title VII action has a lengthy factual and procedural history, much
of which is irrelevant to this appeal. The pertinent facts, however, concern an eleventh-
hour psychiatric evaluation of Ms. Sperling’s client, Lucy Rorrer, performed by Dr.
Robert Toborowsky, her expert forensic psychiatrist. The District Court’s final
scheduling order directed the parties to complete expert discovery by September 25,
2009. In advance of this deadline, Ms. Sperling produced three of Dr. Toborowsky’s
reports concerning her client’s mental condition.
On June 11, 2010, nearly ten months after the closing of expert discovery, Ms.
Sperling informed defense counsel that Dr. Toborowsky wished to meet with and re-
examine her client sometime prior to his scheduled testimony. With discovery long-
closed and trial testimony due to begin only days later, defense counsel objected to the
proposed reexamination. Suspicious that Ms. Sperling might permit the reexamination
2
notwithstanding the objection, defense counsel reiterated to Ms. Sperling clear and
unequivocal opposition to any further examination or consultation by the doctor. 1
Despite these objections, Ms. Sperling’s client was indeed reexamined by Dr.
Toborowsky on June 11, 2010—the very same day she had initially broached the subject
of reexamination with defense counsel. This information was first brought to light during
Dr. Toborowsky’s cross-examination, as Ms. Sperling elected neither to supplement the
doctor’s previous report nor to provide notice of any kind. When asked whether the
reexamination influenced his testimony in any way, Dr. Toborowsy explained that it
merely “tended to reinforce opinions that [he] had independently arrived at before.” J.A.
at 25, 170. 2
At sidebar during cross-examination and later in the Judge’s chambers, the District
Judge discussed the reexamination with counsel. During this two-part colloquy, Ms.
Sperling acknowledged her decision to ignore the objections of defense counsel and
permit Dr. Toborowsky to meet with her client. Id. at 26. Shortly thereafter, defense
counsel moved to strike the doctor’s testimony.
1
The day before trial testimony was scheduled to begin, Ms. Sperling informed defense
counsel that, in light of a conflicting doctor’s appointment, her client would not be the
first witness to testify as previously indicated. Suspicious that this previously
undisclosed appointment might be the reexamination at issue, defense counsel forwarded
correspondence to Ms. Sperling stating that, “out of an abundance of caution, we simply
want to reiterate our objections to Plaintiff seeing or consulting with Dr. Toborowsky
before his trial testimony.” At no time, however, did Ms. Sperling acknowledge, let alone
respond, to this communication. Id. at 25.
2
When asked whether he was able to produce a record of the reexamination as mandated
by a subpoena requiring him to preserve and bring his entire file to court, Dr.
Toborowsky testified that the notes had been destroyed, adding that they were merely
“scribbles.” Id. at 25.
3
Though denying the motion to strike, the District Court elected to sanction Ms.
Sperling pursuant to Rule 16(f) of the Federal Rules of Civil Procedure on the ground
that she had committed a “flagrant and bad will violation of the discovery rules” and had
acted unfairly. J.A. at 27. Specifically, the Court explained that “Ms. Sperling
deliberately withheld information about the pending re-examination without any regard
for discovery deadlines, . . . concern for Defense counsel’s right to know this
information, or . . . Defendant’s right to bring this dispute to the Court’s attention.” Id.
The sanction, totaling $2,700, was meant to reflect the total amount of attorney’s fees
incurred by the defendant because of Ms. Sperling’s expert discovery violation. In the
alternative, the District Court held that, even if no discovery violation occurred, it “would
have nonetheless sanctioned Ms. Sperling under [its] inherent authority to manage cases
before [it].” Id. at 31. It thereafter denied Ms. Sperling’s motion to vacate the monetary
sanction. D.E. No. 267. Ms. Sperling has timely appealed.
II. JURISDICTION AND STANDARD OF REVIEW
The District Court had subject matter jurisdiction over the Title VII action
pursuant to 28 U.S.C. § 1331. We have jurisdiction over the appeal under 28 U.S.C.
§ 1291, as we conclude that the District Court’s order denying plaintiff’s motion for new
trial disposed of all claims of the parties and is properly considered “final” for purposes
of § 1291. See Johnson v. Trueblood, 629 F.2d 302, 303 (3d Cir. 1980). Moreover,
although technically not a party of record, Ms. Sperling is considered a party for purposes
of appealing the District Court’s disciplinary order. See id.4
We review a district court’s decision to impose sanctions for abuse of discretion
and may reverse only if the award is based on an “erroneous view of the law or clearly
erroneous assessment of the evidence.” Bowers v. Nat’l Collegiate Athletic Ass’n, 475
F.3d 524, 538 (3d Cir. 2007).
III. DISCUSSION
On appeal, Ms. Sperling alleges that the District Court abused its discretion in
assessing a Rule 16(f) sanction against her. Rules 16(a) through (e) of the Federal Rules
of Civil Procedure set out standards governing pretrial conferences, scheduling orders,
and general case management, while Rule 16(f) authorizes sanctions for violations of
those standards. In relevant part Rule 16(f) provides that “[o]n motion or on its own, the
court may issue any just orders . . . if a party or its attorney . . . fails to obey a scheduling
or other pretrial order.” Fed. R. Civ. P. 16(f)(1)(C). Moreover, “[i]nstead of or in
addition to any other sanction, the court must order the party, or its attorney, or both to
pay the reasonable expenses—including attorney’s fees—incurred because of any
noncompliance with this rule.” Id. 16(f)(2) (emphasis added). Absent a showing that the
noncompliance was either “substantially justified” or circumstantially “unjust,” Rule
16(f) requires the imposition of monetary sanctions. Id. Substantial justification exists
where there is a “genuine dispute concerning compliance.” Tracienda Corp. v.
DaimlerChrysler AG, 502 F.3d 212, 241 (3d Cir. 2007) (quoting Fitz, Inc. v. Ralph
Wilson Plastics Co., 174 F.R.D. 587, 591 (D.N.J. 1997)). Whether a sanction is “unjust”
requires a “consideration of the degree of the sanction in light of the severity of the
5
transgression which brought about the failure to produce.” Id. (noting “‘unjust’ can be
variously defined as ‘unfair,’ ‘unreasonable,’ ‘inequitable,’ or ‘harsh’”).
Beyond their express ability to impose sanctions against parties and attorneys
under Rule 16(f), federal courts “retain the inherent power ‘to sanction errant attorneys
financially both for contempt and for conduct not rising to the level of contempt.’” In re
Cendent Corp., 260 F.3d 183, 199 (3d Cir. 2001) (quoting Eash v. Riggins Trucking, Inc.,
757 F.2d 557, 567 (3d. Cir. 1985)). This power, the Supreme Court has noted, is
“governed not by rule or statute but by the control necessarily vested in courts to manage
their own affairs so as to achieve the orderly and expeditious disposition of cases.” Link
v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962).
The District Court concluded that the imposition of a monetary sanction against
Ms. Sperling was warranted under Rule 16(f) in light of her “blatant violation” of the
expert discovery deadline. J.A. at 29. It pointed out that not only was Ms. Sperling
obligated to disclose the reexamination to defense counsel, but that her failure to do so
precluded her opponents from performing any form of discovery to which they were
rightly entitled. Id. It also noted that Ms. Sperling was neither “substantially justified” in
her noncompliance with the Court’s scheduling order nor unjustly sanctioned. Id. at 30.
As to the former, the Court explained that, given the significant amount of time elapsed
between the Court’s scheduling order and the reexamination in question, there was no
“genuine dispute” concerning compliance. Id. Moreover, Ms. Sperling permitted her
client to attend the reexamination notwithstanding defense counsel’s objection.
Concerning the latter, the Court determined that, considering the extent to which Ms.
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Sperling’s behavior “illustrated a blatant disrespect for the judicial process and common
courtesy to her opposing counsel,” a fine equivalent to defense counsel’s resulting
attorney’s fees was far from unjust. Id. On these facts, we cannot say that the District
Court abused its discretion in sanctioning Ms. Sperling.
She argues nonetheless that her actions were not a discovery violation because, at
the time of the reexamination, the relevant scheduling order was no longer in effect.
Appellant’s Opening Br. 28. In support of this assertion, Ms. Sperling makes reference to
an order, filed on October 13, 2009, that suspended all deadlines contained in the Court’s
April 27, 2009, scheduling order pending the outcome of settlement discussions
scheduled for November 6, 2009. Id.; J.A. at 09. Insofar as the docket does not
explicitly reflect the Court’s reinstatement of the April 27, 2009 scheduling order
(including the September 25, 2009 discovery deadline), Ms. Sperling argues that no
scheduling order was in place. Appellant’s Opening Br. 28.
This argument is not persuasive. Although the docket does not explicitly reflect
reinstatement of the deadlines in the scheduling order, that minor omission does not
invite Ms. Sperling to conclude that the discovery deadline was never restored. The
Court’s October 13, 2009 order suspending discovery deadlines pending the outcome of
settlement discussions was filed over three weeks after the expert discovery deadline had
passed. If nothing else, that order implicitly suggests that, once the settlement
discussions were concluded, the existing discovery deadlines were reinstated. Any
assumption to the contrary would permit ongoing discovery up to and including the
beginning of trial.
7
The District Court buttressed its decision to impose a monetary sanction against
Ms. Sperling by citing its inherent authority to govern its own affairs. J.A. at 31 (“[E]ven
if there was no rule discovery violation, we would have nonetheless sanctioned Ms.
Sperling under our inherent authority to manage cases before us.”) Thus, even in the
absence of a discovery violation, the Court was well within its discretion under its
inherent power to “impose reasonable sanctions for conduct by lawyers that falls short of
contempt of court.” In re Cendant Corp, 260 F.3d at 199. By ignoring the objections of
defense counsel and failing to provide any notice that the reexamination had taken place,
Ms. Sperling conducted herself in a manner deserving censure. Insofar as the Court
found Ms. Sperling’s actions to be abusive of the judicial process (and this it no doubt
did), its inherent powers permitted the imposition of a monetary sanction.
Ms. Sperling raises additional points of contention in her appeal, none of which
materially affect our assessment of the District Court’s decision. First, she argues that, in
light of the express language of Rule 26(e), she was under no duty to supplement the
record following the reexamination by Dr. Toborowsky. Under Rule 26(e)(1)(A), a party
who has either made a disclosure or responded to an interrogatory, request for
production, or request for admission is required to provide supplementation “if the party
learns that in some material respect the disclosure or response is incomplete or incorrect,
and if the additional or corrective information has not otherwise been made known to the
other parties during the discovery process or in writing.” Fed. R. Civ. P. 26(e)(1)(A)
(emphasis added).
8
Here, Ms. Sperling’s argument is predicated on the belief that, insofar as Dr.
Toborowsky’s reexamination “tended to reinforce opinions that [he] had independently
arrived at before,” J.A. at 25, it did not produce any “material” change in his diagnosis
that would call for supplementation or notice of any kind, Appellant’s Opening Br. 34-35.
Whether Ms. Sperling was under a duty to supplement the record, however, is not the key
to this appeal, as the District Court’s decision to impose a sanction was premised not on
her failure to provide Rule 26 supplementation but on her “blatant violation of the
Court’s April 27, 2009 Scheduling Order.” J.A. at 29. Whereas Rule 37(c) permits a
court to levy sanctions against a party for failure to supplement, sanctions imposed
pursuant to Rule 16(f) address a party’s failure to obey scheduling or other pretrial
orders. See Fed. R. Civ. P. 16(f), 37(c). Accordingly, the sanction imposed here by the
District Court, whether pursuant to Rule 16(f) or its inherent authority to manage its
affairs, is unaffected by Ms. Sperling’s decision to forgo Rule 26 supplementation.
Ms. Sperling also claims that the Court’s decision to sanction her was improperly
influenced by the District Judge’s “personal animus” against her. Appellant’s Opening
Br. 28. While the record reflects that Ms. Sperling may have tested the Judge’s patience
during the course of the trial, no evidence supports any inference of judicial impropriety.
Beyond acting pursuant to its well-established statutory and inherent authority, the Court
articulated a clear basis to set the sanction it imposed. J.A. at 27 (noting that Ms.
Sperling was sanctioned for “flagrant and bad faith willful violation of the discovery
rules, and general [un]fairness—in the way [she] conducted [herself] in this matter”).
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Accordingly, we have no reason to conclude that the sanctioning of Ms. Sperling was the
result of personal ill will.
Finally, Ms. Sperling contends that the Court erred in imposing a sanction because
defense counsel had unclean hands. Appellant’s Opening Br. 28. In support of this
assertion, she cites several instances of allegedly improper conduct by the defense
attorney. 3 Ms. Sperling’s reliance on this doctrine, however, is misplaced, as “[t]he
equitable doctrine of unclean hands applies when a party seeking relief has committed an
unconscionable act immediately related to the equity the party seeks in respect to the
litigation.” Highmark, Inc. v. UPMC Health Plan, Inc., 276 F.3d 160, 174 (3d Cir. 2001)
(citing Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245 (1933))
(emphasis added). In our case, defense counsel did not seek the fine levied against Ms.
Sperling. Instead, the Court, acting pursuant to its statutory and inherent authority,
independently elected to impose its sanction. J.A. at 27. As the doctrine of unclean
hands covers only the “party seeking relief,” it has no application here.
In this context, we hold that the District Court did not abuse its discretion in
assessing $2,700 monetary sanction against Ms. Sperling. We thus affirm.
3
Most notably, Ms. Sperling alleges that defense counsel’s own expert psychiatrist, Dr.
Annie Steinberg, improperly reviewed certain medical records after issuing her initial
report and failed to file supplementation. Appellant’s Opening Br. 46.
10