Opinion
No. 99-3134 G
July 9, 2002
ORDER DENYING DEFENDANT'S POST-TRIAL MOTION FOR SANCTIONS
A jury trial was held in this Title VII case from March 4, 2002, until March 13, 2002. The jury found that plaintiffs Candice Coleman, Kimberly Coleman, and Nisa Hawkins were subjected to racial and sexual harassment while they were employed at the Frayser Boulevard Captain D's in Memphis, Tennessee. The jury also determined, however, that defendant Shoney's Inc. ("Shoney's") established the elements of its affirmative defense, and, as a result, no damages were awarded to plaintiffs. Judgement was entered on March 27, 2002. Currently before the court is a post-trial motion for sanctions filed by Shoney's on April 8, 2002.
This motion questions deposition testimony given by plaintiffs concerning whether they or Gloria Anderson, the mother of Candice and Kimberly Coleman, called a toll free internal complaint hotline in order to report the alleged harassing behavior to which plaintiffs were being subjected at the Frayser Boulevard Captain D's. Shoney's argues that plaintiffs should bear reasonable attorney's fees and costs in the amount of $4,579.50 as sanctions for their bad faith conduct in this litigation. According to Shoney's, plaintiffs gave false testimony under oath in their depositions which caused unnecessary delay and needlessly increased the cost of litigation. Specifically, Shoney's alleges that all three plaintiffs gave false and misleading deposition testimony by stating that Gloria Anderson called the toll free internal complaint number when she did not. According to Shoney's, plaintiffs ultimately had to admit that neither they nor Anderson called the toll free number to report any harassing conduct after Anderson gave conflicting testimony in her deposition that she did not call the toll free number but, instead, testified that she dialed the number for her daughters and that one or both of them left a recorded message. Shoney's asserts that plaintiffs' false testimony made it necessary for it to take the out of town deposition of Juanita Presley, former EEO manager for Shoney's, to prove at trial that neither plaintiffs nor Anderson called the hotline. Shoney's seeks costs and attorney's fees to reimburse it for the expenses and attorney hours devoted to taking Presley's deposition and preparing her for trial.
Plaintiffs aver that they made no intentionally false statements in their depositions and that sanctions are not warranted in this instance. Rather, according to plaintiffs, their deposition testimony reveals simply that they incorrectly assumed Anderson called the internal complaint hotline number when she did not. Additionally, plaintiffs assert that Shoney's took the position at trial that it needed to play Presley's videotaped deposition to the jury for reasons other than establishing that plaintiffs did not call the internal complaint hotline. Thus, plaintiffs argue, it is inconsistent for Shoney's to now contend that it should be awarded attorney's fees because Presley's deposition was taken solely to establish that plaintiffs did not call the hotline.
The Supreme Court stated in Chambers v. NASCO, Inc., 501 U.S. 32, 33 (1991), that federal courts have an inherent power to manage their own proceedings and to control the conduct of those who appear before them. To punish abusive conduct, a court may use its inherent power to fashion an appropriate sanction, including dismissing a lawsuit or assessing attorney's fees. Id. This power is within the equity discretion of a district court, Lichtenstein v. Lichtenstein, 481 F.2d 682, 684 (3d Cir. 1973) Although the American Rule states that a prevailing party may not ordinarily recover attorney fees in the absence of a statute or enforceable contract providing for a fee award, Shimman v. Int'l Union of Operating Eng'rs, 744 F.2d 1226, 1229 (6th Cir. 1984), an exception to the American Rule allows federal courts to employ their inherent power "to access such fees as a sanction when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons, . . . as when the party practices a fraud upon the court, . . . or delays or disrupts the litigation or hampers a court order's enforcement." Chambers, 501 U.S. at 33 (internal citations omitted).
The purpose for the American Rule has been stated as follows:
The American Rule's failure to fully compensate an injured party is justified by the rationale that "since litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents' counsel.
Shimman, 744 F.2d at 1229 (citing Fleishmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967)).
In its motion, Shoney's argues that plaintiffs committed a fraud on the court and that they acted in bad faith, vexatiously, wantonly or for oppressive reasons when they gave false deposition testimony about calling the hotline number. The court first considers Shoney's allegations that plaintiffs' conduct constituted a fraud on the court. As a general rule, a litigant is deemed to have perpetrated a fraud on the court when:
It can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system's ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense.
Aoude v. Mobile Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989). Generally speaking, only the most egregious misconduct, such as bribing a judge or members of the jury or fabricating evidence with the collusion of an attorney, will constitute a fraud on the court. Fierro v. Johnson, 197 F.3d 147, 154 (5th Cir. 1999). Less egregious behavior, such as failing to disclose allegedly pertinent facts to the court, usually will not rise to the level of fraud on the court. Id. A witness's perjured testimony alone, absent collaboration with an attorney, normally does not constitute a fraud upon the court. Quality Tech. Co. v. Stone Webster Eng'g Co., Inc., Nos. 92-5434, 92-5628, 1993 WL 375803, at *3 (6th Cir. Sept. 23, 1993); see also Fierro, 197 F.3d 147, 154-157 (5th Cir. 1999) (holding that the false testimony of a witness alone would be insufficient to constitute a fraud on the court); Cleveland Demolition Co. v. Azcon Scrap Corp., 827 F.2d 984, 986 (4th Cir. 1987) (holding that fraud on the court may exist where witness and attorney conspire to present perjured testimony); Rozier v. Ford Motor Co., 573 F.2d 1332, 1338 (5th Cir. 1978) (holding that fraud on the court may exist where party, with counsel's collusion, fabricates evidence).
In this case, Shoney's does not assert that plaintiffs colluded with their attorneys for the purpose of conspiring to commit a fraud upon the court. Moreover, it was established before trial that neither plaintiffs nor Anderson called the internal hotline. No misleading evidence was presented to the jury on this issue, and, as a result, the jury found in Shoney's favor that it had established the elements of its affirmative defense. Thus, having found no collusion among plaintiffs and their attorneys and no improper influence of the trier of fact, the court concludes that the allegations against plaintiffs, even if true, are insufficient to constitute a fraud on the court.
Next, the court considers Shoney's contention that it should be awarded attorney's fees since plaintiffs acted in bad faith, vexatiously, wantonly or for oppressive reasons. An action is brought in bad faith when the claim is entirely without color and has been asserted wantonly, for purposes of harassment or delay, or for other improper reasons. Big Yank Corp., v. Liberty Mutual Fire Ins. Co., 125 F.3d 308, 313-314 (6th Cir. 1997). "A claim is entirely `without color' when it lacks any legal or factual basis." Sierra Club v. United States Army Corps or Eng'r, 776 F.2d 383, 390 (2d Cir. 1985) (citing Nemeroff v. Abelson, 620 F.2d 339, 348 (2d Cir. 1980). In contrast, "`[a] claim is colorable, for the purpose of the bad faith exception, when it has some legal and factual support, considered in the light of the reasonable beliefs of the individual making the claim.'" First Bank of Marietta v. Hartford Underwriters Ins. Co., 115 F. Supp.2d 898, 905 (S.D. Ohio 2000) (citing Nemeroff, 620 F.2d at 348). In an action that is not itself brought in bad faith, however, a court still may award attorney's fees limited to any expenses reasonably incurred to counteract the other party's groundless, bad faith conduct during litigation. Browning Debenture Holders' Comm. v. Dasa Corp., 560 F.2d 1078, 1089 (2d Cir. 1977).
It is indisputable in the instant case that plaintiffs had a colorable claim since the jury, after hearing all the proof at trial, found that plaintiffs were subjected to racial and sexual harassment while they were employed at the Frayser Boulevard Captain D's. Since plaintiffs' action itself was not brought in bad faith, the court will consider only whether to award attorney's fees limited to the expenses Shoney's reasonably incurred in its attempt to refute plaintiffs' alleged bad faith conduct during litigation. The court looks to the relevant deposition testimony to make this determination.
Candice Coleman testified in her deposition that she did not call the toll free hotline number. (C. Coleman Dep. at 35-36.) According to Candice, she was present when her mother was dialing the hotline number, but she "left out" before she heard whether her mother spoke to anyone. Id. In response to the question "Did she [Anderson] ever tell you what happened after she called the number?", Candice first responded "No," then said "I believe she said that she left some messages." Id. Kimberly Coleman stated in her deposition that her mother told her that she called the hotline number and left some messages, but Kimberly never testified to being present during any of those calls. (K. Coleman Dep. at 154-155.) Nisa Hawkins testified that she thought Gloria Anderson called the hotline because Candice Coleman told her that Anderson had called. (Hawkins Dep. at 174.) Gloria Anderson stated in her deposition that she dialed the hotline number and that one or both of her daughters then left a message. (Anderson Dep. at 88-89.) Anderson stated that she did not recall leaving a message herself. Id. Although there are certainly some inconsistencies in the deposition testimony of all three plaintiffs and Anderson, is uncertain whether plaintiffs actually, in bad faith, gave false testimony or whether they were mistaken or confused in their assumption that Anderson had called the hotline number on their behalf. After reviewing the relevant deposition testimony in this case, the court is unconvinced that plaintiffs acted in bad faith, vexatiously, wantonly or for oppressive reasons, and, accordingly, defendant's motion for post-trial sanctions is denied.
IT IS SO ORDERED.