Opinion
Civil No. 07-1459 (GAG/BJM).
September 16, 2008
OPINION AND ORDER
Plaintiffs Bernardo Reyes Guadalupe and his wife, Julia Ines Ramos, bring this action against Casas Criolla, Inc., and Pedro Gómez García for damages arising under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., and related claims. Plaintiffs have moved for a default judgment against defendants as sanction for failure to comply with discovery requests and court orders. (Docket Nos. 24, 28, 37). Defendants oppose (Docket Nos. 25, 28), and move to dismiss the case under Federal Rule of Civil Procedure 12(b)(1). (Docket No. 34). Plaintiff opposes the motion to dismiss. (Docket No. 37). The parties have consented to proceed before me. (Docket No. 18).
BACKGROUND
On May 27, 2008, plaintiffs moved for a default judgment as a sanction for failure to comply with court-ordered discovery (the "First Default Motion"), and they have renewed their motion on two separate occasions since that time. (Docket Nos. 24, 28, 37). Specifically, in the First Default Motion plaintiffs asserted that defendants failed to comply with requests for interrogatories and production of documents in violation of the court's May 16, 2008 order compelling production by May 20, 2008 (Docket No. 23) (the "May 16 Order"). (Docket No. 24). Defendants' counsel responded that they were having "communication problems," and "apologize[d] for defendants' failure to comply" with the May 16 Order and informed the court that they were "considering the need to file a withdrawal from defendants' legal representation if the situation persists." (Docket No. 25). Defendants also raised a number of substantive arguments attempting to justify their failure to comply with the May 16 Order and requested a ten-day extension of their time to comply with the May 16 Order (Id.), which plaintiffs opposed. (Docket No. 27).
Plaintiffs supplemented their First Default Motion shortly thereafter when defendants' counsel informed plaintiffs that they could not produce defendants for depositions that had been scheduled for May 30, 2008, and had first been noticed on March 7, 2008. (Docket No. 28) (the "Second Default Motion"). The Friday, May 30, 2008 date was the last business day before the court-ordered close of discovery on Monday, June 2, 2008. (Id.) These depositions had been scheduled despite the fact that defendants, to that date, had failed to produce the written discovery required by the May 16 Order. (Id.) Defendants responded, requesting an extension until June 9, 2008 to comply with the Order, and requesting an extension of the discovery period until June 30, 2008. (Docket No. 29). Plaintiffs replied and opposed. (Docket No. 30).
On June 3, 2008, defendants' attorney moved to withdraw. (Docket No. 31). I ordered defendants' attorney to continue as counsel until July 3, 2008, or until new counsel appeared, whichever came first (the "June 3 Order"). (Docket No. 32). I set a deadline of July 3, 2008, for the appearance of new counsel. (Id.). Prior to withdrawal, defendants' counsel filed a motion to dismiss for lack of subject matter jurisdiction, arguing that this court lacked subject matter jurisdiction over the ADEA claim because plaintiff Reyes failed to exhaust administrative remedies, and arguing that plaintiff Ramos's Article 1802 claim was time-barred. (Docket No. 34). Plaintiffs opposed, and again renewed their request for a default judgment. (Docket No. 37). Specifically, plaintiffs argued that their renewed motion should be granted in light of defendants' failure to comply with the court's June 3 Order requiring the appearance of new counsel by July 3, 2008. (Id.) To date, no new counsel has appeared on defendants' behalf and defendants proceed pro se. Defendants also failed to participate in the preparation of the joint proposed pretrial order, which was required to be submitted by September 12, 2008, and plaintiffs alone submitted. (Docket Nos. 17, 43).
DISCUSSION
I. Subject Matter Jurisdiction
Before I can consider the motion for a default judgment, I must consider defendants' assertion that this court lacks jurisdiction over the subject matter of plaintiffs' claims.When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), a court must accept as true all well-pleaded factual claims, and indulge all reasonable inferences in the non-movant's favor. McCloskey v. Mueller, 446 F.3d 262, 266 (1st Cir. 2006), Deniz v. Municipality of Guaynabo, 285 F.3d 142, 144 (1st Cir. 2002). On a motion to dismiss for lack of subject matter jurisdiction, the court can look beyond the pleadings to affidavits and depositions in order to determine jurisdiction.González v. United States, 284 F.3d 281, 288 (1st Cir. 2002). Rule 12(b)(1) may be used to attack two different types of defects: first, it may attack the facial sufficiency of the jurisdictional allegations of the complaint; second, it may challenge the factual basis for the court's subject matter jurisdiction even despite the formal sufficiency of the jurisdictional allegations of the complaint. See Wright Miller, Federal Practice Procedure, Civil 3d § 1350 (2006). Under Rule 12(b)(1), "dismissal would be proper if the facts alleged reveal a jurisdictional defect not otherwise remediable." Dennehy v. Frambes, 385 F.Supp.2d 121, 123 (D.P.R. 2005).
A Rule 12(b)(1) motion may be based on the plaintiff's failure to exhaust administrative remedies that are a prerequisite to the suit. United States v. Lahey Clinic Hosp., Inc., 399 F.3d 1, 8 fn. 6 (1st Cir. 2005). Under the ADEA, a plaintiff must file a timely charge with the EEOC before a federal court may entertain a suit that seeks recovery for an alleged ADEA violation.Gonzalez Figueroa v. J.C. Penney P.R., Inc., 247 F.R.D. 274, 278 (D.P.R. 2007). However, defendants here do not dispute that plaintiffs filed a timely charge with the EEOC. In particular, it is undisputed that Mr. Reyes filed a claim at the EEOC on August 2, 2006, and was issued a right-to-sue letter on March 30, 2007. (Docket Nos. 1, ¶ 6; 9, ¶ 6).
Instead, defendants argue that Mr. Reyes failed to exhaust administrative remedies because a motion for reconsideration is still pending before the Anti-Discrimination Unit of the Department of Labor and Human Resources of Puerto Rico (the "state commission"). (Docket No. 34). This argument misconstrues the ADEA requirements. While Section 14(b) of the ADEA requires a plaintiff to "commence" proceedings in an appropriate state agency, where one exists, prior to filing in federal court, "Section 14(b) does not stipulate an exhaustion requirement."Oscar Mayer Co. v. Evans, 441 U.S. 750, 761 (1979). According to the Supreme Court, Section 14(b) is satisfied when a plaintiff mails a complaint to the appropriate commission. Oscar Mayer Co., 441 U.S. at 764. A plaintiff must then wait sixty days from the commencement of the state agency proceeding, unless the state proceedings were earlier terminated, before commencing a federal suit. 29 U.S.C. § 633(b). Here, plaintiffs far surpassed this requirement because not only did they properly commence a state agency proceeding, but the state commission issued plaintiffs permission to sue in a February 23, 2007 letter, over three months prior to the commencement of this action on May 30, 2007. (Docket No. 34-2).
Because plaintiffs satisfied the ADEA exhaustion of remedies requirement by bringing a claim before the EEOC, and also satisfied the additional (albeit non-jurisdictional) ADEA requirement of commencing a state action sixty days before commencing a federal action, defendants' argument that this court lacks subject matter jurisdiction on a failure to exhaust theory is without merit. Therefore, I conclude that this court properly has subject matter jurisdiction over the ADEA claim, and defendants' motion to dismiss for lack of subject matter jurisdiction is denied.
Because defendants' argument that Ms. Ramos failed to bring her Article 1802 claim within the applicable statute of limitations is properly brought under Rule 12(b)(6) and does not call into question the court's subject matter jurisdiction, I do not need to decide this issue prior to considering the motions for default judgment. Trans-Spec Truck Serv. v. Caterpillar Inc., 524 F.3d 315, 320 (1st Cir. 2008) ("[a]ffirmative defenses, such as the statute of limitations, may be raised in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)"); LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 509 (1st Cir. 1998) (upholding grant of motion to dismiss under Rule 12(b)(6) based on statute of limitations defense).
II. Motion for Default Judgment
Having determined that the court has subject matter jurisdiction over this action, I turn to plaintiffs' motion for a default judgment under Rules 37(b) and 37(d).
Rule 37(b) provides that a district court may order sanctions for failure to comply with a discovery order, and Rule 37(d) makes sanctions available for a party's failure to attend its own deposition, serve answers to interrogatories, or respond to a request for inspection. Fed.R.Civ.P. 37. Plaintiffs move for a default judgment (1) pursuant to Rule 37(b) based on defendants' failure to comply with the May 16 Order requiring defendants's responses to plaintiffs' interrogatories and discovery requests, and (2) pursuant to Rule 37(d) due to defendants' failure to attend their deposition.
The First Circuit has set forth the factors a district court should consider when imposing sanctions under Rule 37.Velázquez-Rivera v. Sea-Land Service, Inc., 920 F.2d 1072, 1076-78 (1st Cir. 1990). A court should consider (1) whether the conduct was willful; (2) whether the procedural history indicates "protracted inaction or deliberate delay"; (3) whether the party "received and ignored earlier warnings of the consequences of the misconduct in question"; (4) prejudice to the opposing party; and (5) whether the sanction would serve to deter violations by other litigants. Id. In some cases, the extreme remedy of a default judgment may be appropriate. See, e.g., Díaz Fonseca v. Puerto Rico, 451 F.3d 13, 26 (1st Cir. 2006) (upholding default judgment where defendants violated discovery orders by missing clearly established deadlines and by misrepresenting their compliance to the court); Baldi v. Broderick, 04-cv-466-01-PB, 2006 U.S. Dist. Lexis 91417 (D.N.H. Dec. 18, 2006) (granting motion for default judgment because plaintiffs were "severely prejudiced" by defendant's failure to respond to interrogatories, file a pretrial statement, and attend pretrial conference).
The conduct in question here is: (1) defendants' failure, to this date, to respond to plaintiffs' March 7, 2008 interrogatories and requests for documents (2) in violation of this court's June 16 Order requiring a response by May 20, 2008; (3) defendants' failure to appear for (or reschedule) depositions which had been scheduled for the second-to-last day of the discovery period; (4) defendants' failure, to this date, to obtain new counsel in violation of this court's order that they do so by July 3, 2008; and (5) defendants' failure to participate in preparing the court-ordered joint proposed pretrial order. (Docket Nos. 24, 28, 37, 43). Defendants responded to the First Default Motion by stating that they were having difficulty gathering the discovery requested by plaintiffs, and responded to the Supplemental Default Motion without providing a single explanation for their failure to appear for deposition and adhere to the discovery deadlines in the case. (Docket Nos. 25, 29). Instead, defendants requested additional extensions of the discovery period and urged the court not to impose the severe sanction of default judgment. (Docket No. 29).
In considering the first factor in the First Circuit's Rule 37 analysis, there is ample evidence in the record that defendants have willfully failed to comply with discovery requests, court-ordered discovery, and the litigation process generally. First, defendants' response to the First Default Motion suggests that defendants failed to communicate with their counsel and diligently work with counsel to respond to discovery requests. In that response, defendants' counsel noted their "communication problems" with their clients and concern that they may need to withdraw if such problems continued. (Docket No. 25) ("the undersigned attorneys do not know the reasons that are causing the above mentioned communication problems . . . and inform that [they] are considering the need to file a withdrawal from defendants' legal representation if the situation persists"). Likewise, supporting documents offered by plaintiffs suggest that defendants' failure to appear was due to counsel's inability to communicate with their clients. (Docket No. 28-2) (raising concern about attendance for scheduled deposition because "we have not been able to contact our clients lately"). Moreover, defendants' attorney withdrew from representation in this case on the grounds that due to "communication problems" with their clients, they were "not . . . able to fully discharge their professional duty to responsibly comply with the Honorable Court's order regarding the pending discovery." (Docket No. 31). Whereas other courts considering Rule 37 sanctions have been in the position of considering whether parties should be punished for their counsel's errors, the record here suggests that the fault for defendants' failures lies with defendants themselves. Therefore, the record demonstrates that defendants' failure to comply with the litigation process is willful.
Second, the record indicates that defendants' failure to comply with court orders and discovery requests has been "protracted" and "deliberate". Velázquez-Rivera, 920 F.2d at 1077. Discovery requests were first served on March 7, 2008, and the June 16 Order required discovery responses by May 20, 2008. Seven months have now passed from the date discovery was first propounded and there is nothing in the record to suggest that defendants have yet complied with any of the outstanding discovery requests. Defendants also failed to comply with the court's order that they obtain new counsel, and most recently, failed to participate in drafting the joint proposed pretrial order due on September 12, 2008.
Third, defendants have received prior warnings concerning their compliance with discovery. In the May 16 Order, the court required defendants to comply with discovery requests. While the court did not spell out explicitly the range of possible consequences of failure to comply, defendants' former counsel stated that they had informed their clients "of all possible consequences of the incompliance [sic] with this Court's orders." (Docket No. 31.) Although this factor presents a closer question than the others, the record tips in favor of a default judgment. Defendants' misconduct has previously been the subject of the court's reproach; defendants' counsel apprised them of the possible consequences of failure to comply; and importantly, the motions for default judgment have been pending for four months, putting defendants on clear notice of the possible consequences of their continued failure to comply with discovery requests and court orders.
Moreover, the First Circuit has noted that this factor "may not be controlling", citing the Supreme Court's statement in a review of a dismissal for failure to prosecute, "when circumstances make such action appropriate, a District Court may dismiss a complaint . . . even without affording notice of its intention to do so or providing an adversary hearing before acting."Velazquez-Rivera, 920 F.2d at 1078, n. 9, citing Link v. Wabash R. Co., 370 U.S. 626, 633 (1962).
It is clear that plaintiffs have been prejudiced by defendants' conduct. A week after a joint pretrial order was due (which was submitted by plaintiffs alone), and just weeks before trial is scheduled to begin, plaintiffs have not yet received requested discovery and have not been able to depose defendants. (Docket No. 17). Defendants' neglect of their duties as litigants greatly prejudices plaintiffs' ability to effectively prepare their case for trial. Finally, imposing a default judgment here serves as a deterrent to other litigants who attempt to delay, forestall, and simply ignore both the federal court's discovery rules and court orders enforcing their compliance with those rules.
For the foregoing reasons, I find that a default judgment is appropriate here and plaintiffs' motion for a default judgment is GRANTED. A hearing to determine damages will be scheduled.
IT IS SO ORDERED.