Johnson v. Verisign, Inc.

Full title: MICHAEL ANDREW JOHNSON, Plaintiff, v. VERISIGN, INC., et al., Defendants

Court: United States District Court, E.D. Virginia, Alexandria Division

Date published: Jul 17, 2002

Civil Action No. 01-765-A (E.D. Va. Jul. 17, 2002)

Opinion

Civil Action No. 01-765-A

July 17, 2002

MEMORANDUM OPINION AND ORDER

GERALD BRUCE LEE, United States District Judge.

THIS MATTER is before the Court on Plaintiff Michael Andrew Johnson's Amended Motion for New Trial, Motion to Alter or Amend the Court's Ruling on Defendants' Motion for Summary Judgment, and Motion for Relief from Judgment of the Verdict. The instant Opinion is about alleged misrepresentations made by Defendants and their counsel in their motion for summary judgment and by Defendants' in their testimony introduced at trial. The Court granted partial summary judgment in favor of Defendants on December 18, 2001, dismissing the Plaintiff's race discrimination and Employment Retirement Income Security Act, 29 U.S.C. § 1001, et seq. ("ERISA") claims. The Court denied summary judgment, however, on Plaintiff's unlawful retaliation claim. On January 9, 2002, a jury returned a verdict in favor of Defendants on Plaintiff's remaining retaliatory discharge claim. Although the Plaintiff raises a litany of issues regarding alleged material misrepresentations made before this Court on summary judgment and the jury, the case boils down to two basic questions (1) whether Defendants falsely testified as to the existence of a written, tangible layoff list; and (2) if so, what is the effect of that false testimony on the December 18th Order and the January 9th jury verdict.

As elaborated below, the Court finds that Defendants did in fact submit false testimony at trial regarding the existence of a written, tangible layoff list. Because this false testimony seriously undermines Defendants' non-pretextual rationale for Plaintiff's termination, the Court finds that a new trial is warranted under Rule 59 of the Federal Rules of Civil Procedure ("FRCP").¹ Accordingly, Plaintiff's motion for a new trial on his retaliatory discharge claim is granted.

1 The Court's ruling on January 8, 2002, dismissing Defendant Benjamin Turner for lack of evidence of his involvement in the termination of the Plaintiff was unaffected by the Court's January 23, 2002, Order temporarily vacating the December 18th Order and January 9th verdict. To be clear, there remains no evidence that Turner was involved in the layoff of the Plaintiff and therefore Turner is not a Defendant in this case.

However, the Court will not disturb the December 18th Order granting Defendants' summary judgment motion on Plaintiff's race discrimination and ERISA claims. Plaintiff essentially seeks to set aside the summary judgment Order, as well as the jury verdict for that matter, under FRCP 60(b) for fraud on the court. Plaintiff's motion to vacate the rulings in favor of Defendants based on allegations of fraud on the court are unfounded. Fraud on the court is a serious allegation that demands proof that counsel were active participants with Defendants in a deliberate scheme to obtain a judgment by proffering false testimony. Plaintiff has failed to provide any evidence of such a conspiracy to warrant a finding of fraud on the court. Similarly, the Court declines to amend the December 18th Order dismissing Plaintiff's race discrimination and ERISA claims under FRCP 59(e) notwithstanding the misrepresentations by Defendants, the fact remains that Plaintiff cannot establish a prima facie race discrimination or ERISA claim.

I. BACKGROUND

The procedural posture of this case is not ordinary. This matter may have began as an employment discrimination case, but it has evolved into one of candor by Defendants and their counsel before this Court. The facts set forth below begin with a review of the December 18, 2001, Order granting summary judgment in Defendants favor on Plaintiff's racial discrimination and ERISA claims, but denying summary judgment with respect to his retaliatory discharge claim. The Court then discusses the three day jury trial from January 7-9, 2001, and verdict in this case concerning the Plaintiff's retaliatory discharge claim. The following section addresses the Court's January 23, 2002, Order temporarily vacating the judgments in this case until Defendants provided certain documents to assuage the Court's concerns regarding possible misrepresentations by Defendants before the Court on summary judgment and at trial. Finally, the Court reviews Defendants' submissions pursuant to the Court's (document request and the March 8, 2002, hearing where the parties argued Plaintiff's amended motion for new trial, motion to amend the Court's December 18th Order, and motion to vacate the judgments rendered in favor of Defendants.

A. The December 18th Summary Judgment Order.

In March 2001, Plaintiff Michael Johnson filed a Complaint in this Court against Defendants VeriSign, Inc., Network Solutions, Inc., Douglas L. Wolford, Benjamin R. Turner, Jeffrey W. Johnson, and Robert Smith, alleging, inter ails, racial discrimination and retaliatory termination in violation of 42 U.S.C. § 1981 and a violation of the Employment Retirement Income Security Act, 29 U.S.C. § 1001, et seq. ("ERISA")² Plaintiff's allegations involved the termination of his employment with VeriSign. Plaintiff, an African-American male, alleged that Defendants fired him because of his race and in retaliation for protected activity he engaged in opposing alleged racially discriminatory practices by VeriSign management against other employees. Plaintiff also alleged that he was due benefits denied to his daughters under his medical plan by Defendants in violation of ERISA.

2 In July 2001, with leave from the Court, Plaintiff filed a seven count Amended Complaint. On October 2, 2001, the Court dismissed five of the seven counts leaving the § 1981 and ERISA claims.

Defendants moved for summary judgment on Plaintiff's claims on November 29, 2001. In their memorandum in support of their summary judgment motion, Defendants asserted that Plaintiff's position was eliminated on February 9, 2001, as part of a company wide layoff. (Defs.' Mem. in Supp. of Summ. J. at 2, 12-13, 19-20) ("Defs.'s Summ. J. Mem.") Defendants presented sworn declarations from current and former VeriSign employees Doug Wolford, Jeff Johnson, Robert Smith and Heather Serice, to substantiate this claim. (Defs.' Summ. J. Mem. Ex. 5, Decl. of Doug Wolford ("Wolford Decl."); Defs.' Summ. J. Mem. Ex. 6, Decl. of Jeff Johnson ("Johnson Decl."); Defs.' Summ. J. Mem Ex. 7, Decl. of Robert Smith ("Smith Decl."); Defs.' Summ. J. Mem. Ex. 8 Decl. of Heather Serice ("Serice Decl.")). The sworn declarations of these individuals attached to the motion made numerous references to a list of affected individuals by the layoff.³

3 Wolford stated that "I was presented with lists of affected individuals by each staff member, and I approved the lists." (Wolford Decl. ¶ 18.) Similarly, Jeff Johnson related that "I came up with a list of people . . . [Rob Smith and I] spoke with Doug Wolford . . . about the list of candidates for layoff. Both Ms. Serice and Mr. Wolford approved the decision to include Mr. Johnson in this list of people." (Johnson Decl. ¶ 16-18.) Robert Smith stated "We came up with a list of people based upon performance and job duties." (Smith Decl. ¶ 19.) Smith also said that "some of [Plaintiff']s deficiencies . . . occurred while the layoff list was being generated." (Id. ¶ 20.) And that "[b]oth Ms. Serice and Mr. Wolford approved of the decision to include Mr. Johnson in this list of people." (Id. ¶ 21.)

Based on these affidavits, Defendants represented that "Ms. Serice . . . approved the list of people selected for layoff." (Id. at 13.) In sum, Defendants argued that

in the month of February 2001, the same month that plaintiff was laid off, 12 individuals were laid off within the group in which the plaintiff was employed. Plaintiff was the only African-American laid off. Eleven of the people laid off were white, and one was Asian. Seven of the twelve individuals selected for layoff, including the plaintiff, were selected by . . . Jeff Johnson and Mr. Smith, and the selection of each of these seven individuals was expressly approved by Mr. Wolford.

(Defs.' Summ. J. Mem. at 14) (internal citations omitted). Defendants represented that the Plaintiff was selected for layoff because of redundancy and job performance problems, including recent failings in January 2001 and complaints against the Plaintiff lodged by fellow employee April Griggs. (Id.)

Relying on Defendants' proffers, the Court granted Defendants' motion for summary judgment on Plaintiff's racial discrimination claim. The Court found that "it is an undisputed fact that VeriSign laid off 12 employees in February 2001. Ten of the employees laid off were White, one Asian and one African American. Seven of the employees selected were from Plaintiff's department and were chosen by the same decision makers who selected the Plaintiff." (December 18th Order at 26.) The Court held that Plaintiff could not satisfy the fourth element of a prima facie case for racial discrimination because there was no evidence that employees outside his protected class were treated more favorably than Plaintiff. (Id.) The Court also granted summary judgment on Plaintiff's claim under ERISA because Plaintiff failed to submit any evidence of any viable injury in the form of unpaid medical bills. (Id. at 27.)

However, the Court denied Defendants' motion for summary judgment on Plaintiff's retaliatory discharge claim under 42 U.S.C. § 1981. The Court found that a material issue of fact existed as to whether Defendants eliminated Plaintiff's position because of his alleged history of protected activity, the last incident involving one of the decision-makers in the elimination of Plaintiff's position occurring less than a few weeks before Plaintiff's termination. Further, Plaintiff successfully rebutted Defendants' non-pretext rationale for the elimination of his position. One of Defendants' proffered non-discriminatory rationales for dismissing Plaintiff was the assertion that Ms. Griggs complained of Plaintiff's unwelcome behavior toward her. Plaintiff provided a sworn declaration from Ms. Griggs indicating that Plaintiff did not make her feel uncomfortable and that Defendants' counsel allegedly attempted to persuade her to sign a false affidavit concerning Plaintiff.

B. The Trial.

The Court held a jury trial on Plaintiff's retaliation claim from January 7 to January 9, 2002. At the trial the jury was presented with the following evidence:

In October 1999, Network Solutions hired Plaintiff as the Director of the Business Affairs Office ("BAO"). Network Solutions was later acquired by Defendant VeriSign in June 2000. Plaintiff was interviewed by two of Defendants, Doug Wolford and Ben Turner. Wolford, Turner, and Jim Rutt collectively made the decision to hire Plaintiff.

In the fall of 2000, VeriSign began to reorganize the company into three groups — Corporate, Enterprise, and Mass. Markets. Around this time, the BAD, a department in the Mass. Markets group, was reorganized and eventually dissolved. Several changes with respect to Plaintiff's employment with VeriSign resulted from reorganization of the BAO, including Plaintiff's job title, supervisory role and duties. During the transition, Plaintiff reported to Defendant Robert Smith, Assistant General Manager of the VeriSign Global Identity Group ("VGI"), a department within the Mass. Markets group. Smith, in turn, reported to Defendant Jeff Johnson, Vice President of VGI, who in turn reported to Wolford, Group General Manager of the Web Presence Services Group. VGI included employees in IdNames, Great Domains (a unit within VGI based in California formed after acquisition of a company called Great Domains by VeriSign in 2000), and the BAO. (Trial Tr. Vol. III at 173-75.) Great Domains employees also fell under the supervision of Defendants Johnson, Smith and Wolford. (Id.) Two-thirds of VGI employees were located outside of Virginia. (Id. at 73, 92-94.)

1. Plaintiff's work product and the situation with Ms. Griggs.

In January 2001, two concomitant and contested series of events transpired. First, Defendants claim that Plaintiff failed in several respects to perform his job adequately. At trial, Smith and Jeff Johnson testified extensively regarding Plaintiff's inability to operate basic computer programs, as well as his failure to: (1) create a minority marketing business project, (2) draft a memo concerning his ICANN duties, and (3) coordinate and reorganize the training curriculum for new employee's in Jeff Johnson's group. (Trial Tr. Vol. II at 124-138; Vol. III at 54-84.) Jeff Johnson and Smith testified that the training curriculum was particularly problematic because they had to relieve Plaintiff of the assignment and perform the task themselves to meet the deadline. Defendants also presented an email where Smith questioned Plaintiff's knowledge of basic marketing concepts concerning VeriSign. Defendants did not present any formal poor performance appraisals of Plaintiff's work nor memoranda admonishing Plaintiff's substandard performance prior to his termination. Plaintiff testified that Defendants did not alert him of their disapproval with his work product.

Second, Human Resources Manager Heather Serice, Smith and Johnson, testified that in January 2001 they were approached by Ms. April Griggs, a former secretary of the Plaintiff from February 2000 to November 2000. (Trial Tr. Vol. II. at 139-146 273-276; Vol. III at 85-90.) They testified that Ms. Griggs expressed concern and discomfort working with Plaintiff. Elysa Darling, another VGI employee, also testified that Ms. Griggs had approached her stating that she was uncomfortable working with Plaintiff. Ms. Darling wrote an email to Smith and other VGI management discussing her conversation with Ms. Griggs. (Defs.' Tr. Ex. 32.) In a December 8, 2000, memorandum, Plaintiff expressed to Ms. Griggs that he desired to address the "uncomfortable" situation between the two. VeriSign management held two meetings with the Plaintiff to discuss his relationship with Ms. Griggs on January 31, 2001, and February 1, 2001. In a memorandum discussing the February 1, 2001, meeting, Plaintiff acknowledged that Ms. Griggs had accused him of making her uncomfortable at work," and stated that "April is lying about me and damaging my reputation." (Pl.'s Tr. Ex. 53.) Plaintiff expressed that "this matter is getting out of hand and II am concerned about being fired from my job." (Id.) Defendants did not present any formal documentation reprimanding or counseling Plaintiff regarding the alleged harassment.

Ms. Griggs testified, however, that Plaintiff never said anything inappropriate, improper or offensive to her. (Trial Tr. Vol. III. at 195-197.) Ms. Griggs testified that her discomfort involving Plaintiff after her transfer in November 2000 stemmed from management's instructions not to perform secretarial work for the Plaintiff. She denied ever telling anyone that Plaintiff had harassed her or otherwise treated her improperly by making any unwelcome advances. Plaintiff also emphatically denied any harassment of Ms. Griggs at trial.

2. The layoff.

Plaintiff's position was eliminated on February 9, 2001. Plaintiff, Ms. Griggs, and Henry Howell, testified that management stated that Plaintiff's position was eliminated because of redundancy. Plaintiff's termination letter does not mention poor performance nor allegations of harassment, it simply states that Plaintiff was laid off because of job elimination. (Pl.'s Trial Tr. Ex. 7.) Defendants Johnson and Smith testified that the laid off employees were selected based on redundancy and job performance. Defendants Johnson and Smith attested that Plaintiff was selected in particular because of the redundancy of his position, his inadequate job performance, and Ms. Griggs' complaints.

Defendants repeatedly referred to a "list" of employees selected for layoff compiled by Johnson and Smith and submitted to Wolford and Ms. Serice for review and approval. Specifically, Wolford referred on several occasions to a list of people selected for layoff, his review of this list and his final approval of the list of affected employees. (Trial Tr. Vol. III at 184-87.) Jeff Johnson and Robert Smith provided similar testimony concerning the finalization and approval of a layoff list. (Trial Tr. Vol. II at 148-153; Vol. III at 90-91.) Ms. Serice likewise testified on several occasions to reviewing a list of proposed laid off employees provided by Smith and Jeff Johnson. (Trial Tr. Vol. II at 277, 288; Vol. III at 16, 21.) Twelve VeriSign employees in the Mass. Markets group were laid off in February 2001, ten of whom were White and one Asian. Seven of the employees were from Plaintiff's department — VGI and selected by Smith and Johnson. Ms. Serice testified that Plaintiff was the only VGI employee laid off in the Herndon, Virginia office. (Trial Tr. Vol. III at 12-15.)⁴ Ms. Serice believed that the six other employees laid off in the Plaintiff's group were not from the Herndon, Virginia office, but could not identify what offices the other employees had worked in. (Id. at 12-13.) In general, Ms. Serice could not provide much detail concerning the February 2001 layoff, including the names of the other employees laid off. (See Id. at 10-18.) Plaintiff's counsel did not cross-examine Ms. Serice regarding her use of the word "list."

4 Defendant Smith later confirmed Ms. Serice's testimony stating that Plaintiff was the only VGI employee laid off in the Herndon office and the remaining six of the seven employees were terminated from the VGI's California office. (Trial Tr. Vol. III at 93.)

Ms. Serice's testimony raised concerns to the Court, which it voiced to the parties in a side bar conference during Ms. Serice's testimony. (See Id. at 32-37.) The Court explained that it was bothered by the fact that Defendants' memorandum in support of their summary judgment motion implied that the other employees laid off in Plaintiff's group worked in the Plaintiff's office. (Id. at 35-37.) Defendants' brief did not present that employees from other offices had been laid off; indeed, Ms. Serice's testimony was "completely different from what [the Court] inferred from reading [Defendants'] brief." (Id. at 36.) The Court stressed that it was concerned that Ms. Serice could provide little detail regarding the lay off. The fact that Ms. Serice could provide little detail concerning the February 2001 layoffs was especially disconcerting since the circumstances of the layoff of the Plaintiff and other VeriSign employees were central to Defendants' defense in this case. (Id. at 34-36.) The Court invited Defendants to address the Court's concern by providing some documentation of the other VeriSign employees laid off in February 2001. (Id. at 34-36.) No documentation was forthcoming.

3. Plaintiff's alleged protected activity and retaliation.

The jury was also presented with testimony regarding Plaintiff's alleged protected activity. Between May 2000 and August 2000, Plaintiff testified that he made several reports concerning discrimination and disparate treatment by VeriSign supervisor Lori Davis toward Yolanda Hernandez. Plaintiff testified that he alerted Serice, Turner, and Charlotte Norris, Acting Vice President of the Human Resources Department of the discrimination. Serice and Turner denied that Plaintiff ever approached them with concerns of racial discrimination against Ms. Hernandez. Ms. Hernandez testified that she had complained to the Plaintiff about management over-working her. However, she did nor testify that she had been the victim of racial discrimination or ever complained to the Plaintiff or others about it.

Plaintiff testified that in October 2000 he complained to Norris, Serice, Wolford, Turner and Jeff Johnson that Henry Howell, an African-American employee, was being discriminated against. Plaintiff's concerns were twofold. Plaintiff and Howell testified that they believed Howell was not being paid the equivalent of White managers and this disparity was racial discrimination. Plaintiff claimed that Jeff Johnson retaliated against him by harshly admonishing Plaintiff for interfering with Defendant Johnson's plans to "cancel" Howell. Plaintiff testified that he continued to complain about treatment of Howell through November and December. Jeff Johnson eventually agreed to transfer Howell and promoted him to manager but Johnson did not agree to meet Howell's salary request. Jeff Johnson, Serice, Smith, Turner, and Wolford, all denied that Plaintiff or Howell had complained of racial discrimination. On cross-examination, Defendants' counsel confronted Howell with his previous deposition testimony stating that he had never complained about racial discrimination to anyone.

Finally, Plaintiff testified to engaging in protected activity involving his former secretary Ms. April Griggs, an African-American woman. During the month of January 2001, Plaintiff testified that he became aware that Johnson was considering taking adverse action against Ms. Griggs by placing her on performance review. Under a performance review, the employee is given a time-frame to improve her performance or the employee will be terminated. Plaintiff opposed placing Ms. Griggs on performance review. On January 19, 2001, Plaintiff testified that he met with Jeff Johnson to discuss, inter alia, Ms. Griggs' placement on performance review. According to Plaintiff, at the January 19th meeting Defendant Johnson attempted to coerce Plaintiff into cooperating with him to fire Ms. Griggs, including falsely accusing Ms. Griggs of having an affair with the Plaintiff. Jeff Johnson denied Plaintiff's allegations.

At closing arguments, Plaintiff argued that he was the victim of a "layoff of one" prompted by his protected activity on behalf of Ms. Hernandez, Mr. Howell, and Ms. Griggs. Plaintiff explicitly argued that Defendants' testimony was not credible because of the paucity of independent documentary evidence supporting their claims regarding the layoff and Plaintiff's termination. (Trial Tr. Vol. III. at 265.) On January 9, 2002, the jury returned a verdict in favor of Defendants.

C. The Court's Sua Sponte January 23, 2002, Order.

On January 22, 2002, Plaintiff filed a motion for a new trial, motion to alter or amend judgment and motion for relief from judgment of the verdict. Plaintiff moved for a new trial based on alleged misrepresentations made on summary judgment and at trial by Defendants and defense counsel in connection to the layoff of the Plaintiff and other VeriSign employees in February 2001.

On January 23, 2002, this Court issued a sua sponte Order addressing its concerns with the same representations made by defense counsel on summary judgment and Defendants at trial identified by Plaintiff in his motion for new trial. Although close in time, the Court's Order had no connection to Plaintiff's motion. The January 23rd Order was spurred by testimony concerning the circumstances surrounding the layoff of VeriSign employees in February 2001. As discussed above, Ms. Serice' s testimony raised doubts involving Defendants' previous representations concerning the February 2001 layoff.

The January 23rd Order expressed the Court's concern that despite its admonition Defendants did not produce any documents substantiating the layoff. The Court noted that notwithstanding Defendants repeated references to a "list" of seven employees selected for layoff compiled by Johnson and Smith, and submitted to Wolford and Ms. Serice, Defendants failed to provide any list. In fact, Defendants did not provide a single document identifying any of the VeriSign employees who were laid off in February 2001. The lack of documentation, combined with Ms. Serice's testimony, raised serious concerns about Defendants' representations involving the February 2001 layoff. The Court also reiterated its concern that Ms. Serice's testimony revealed for the first time that the six other VGI employees laid off were not from Plaintiff's office in Herndon, Virginia, but were laid off from offices in California.

To allay its concerns, the Court ordered Defendants to submit to the Court, on or before February 4, 2002, any and all documents concerning VeriSign employees laid off in February 2001.⁵ Defendants were directed to submit copies of the documents to the Plaintiff. The Court also vacated the December 18th Order entering summary judgment in favor of Defendants on Plaintiff's racial discrimination and ERISA claims, as well as the January 9, 2002, judgment entered in favor of Defendants on Plaintiff's unlawful retaliation claim. The Court indicated that it would reinstate the judgments after Defendants had complied with the document request and the matter was adequately resolved. The Court also directed Plaintiff to file an amended motion for new trial.

5 The January 23rd Order further directed that "[a]t minimum, these documents should include original documents of the following materials:

(1) VeriSign records listing the names of the employees laid off in February 2001;

(2) memoranda or emails explaining the selection of such employees for layoff;

(3) the originals of management memoranda ordering a layoff in Plaintiff's group and any memoranda sent to management discussing the layoff in Plaintiff's group;

(4) the complete personnel files of the twelve VeriSign employees terminated in the layoff referred to in Defendants' memorandum in support of summary judgment; and

(5) letters of discharge sent from VeriSign to each employee laid off in February 2001." (Jan. 23rd Order at 7.)

D. Defendants' Submissions and the March 8, 2002, Hearing.

Pursuant to the Court's Order, Defendants filed various materials with this Court on February 4, 2002. Along with the documents, Defendants submitted an explanatory memorandum. Defendants filed additional materials responsive to the Court's January 23rd Order on February 14, 2002.

In general, Defendants substantially complied with the Court's Order. In particular, Defendants provided voluminous emails, memoranda, slide presentations, "headcount" projections, etc . . ., that addressed the layoff of what appears to be hundreds of employees beginning in January 2001. There are also charts, emails, memoranda, and the like, discussing about 100 layoffs in the Mass. Markets group, the division wherein VGI is located. Defendants also provided the complete original personnel files of the twelve Mass. Markets group employees laid off in February 2001.

However, review of the hundreds of documents revealed several significant facts. First, there is no contemporaneous list of employees selected for layoff in February 2001 concerning Plaintiff Michael Johnson. In fact, Defendants did not submit a single document, email, or memorandum that mentioned Plaintiff within The context of a layoff.⁶ Second, the documents submitted confirmed that six of the seven employees laid off in VGI were in the Global Domains branch of VGI in California.

6 Defendants provided a post-termination list of all employees laid off in the year 2001 numbered exhibit 42. The list indicates that fourteen VeriSign employees were laid in February 2001. Although Defendants did not identify any other "list" as such, in the hundreds of ancillary documents there are several "lists" that are somewhat revealing submitted as exhibit 41. For instance, there is the February 15, 2001, email exchange listing various employees in Affiliate Operations, Partner Relations, and Sales, who will be "effected" by "headcount reductions." There is a also an apparent copy of an undated looseleaf notepad discussing "layoffs" — "40 February all at same time." The notes go on to list various employees under supervisor's names. These employees are on the January 8, 2001, to February 2, 2001, payroll and were laid off on February 2, 2001. Some of the employees laid off in February 2001 are on the list. Some are not, including Plaintiff. There are additional notes discussing "12 underperformers" to be laid off. There is a note from January 19, 2001, implying that several employees discussed at the meeting will be laid off. Plaintiff is not mentioned. Finally, there is a note from January 24, 2001, again implicitly listing employees to be laid off, separated into "high" — apparently defined as "within 1 week end of 2/9/01" — and low. The list apparently refers to employees to be laid off from Great Domains. Some of the employees terminated in February are on this list. Some are not, including Plaintiff.

The Court held a hearing on Plaintiff's amended motions and Defendants' submissions provided pursuant to the January 23rd Order on March 8, 2002. The Court structured the oral argument around several questions provided to the parties in written form at the hearing. (See March 8th Hr'g Tr. at 1.)⁷ The first group of questions involved the use of the term "list" by Defendants and their counsel on summary judgment and during trial. On the that issue, the Court and Defendants' counsel exchanged the following colloquy:

7 The questions raised in the memorandum were "[1] What does the word "list" mean to you? [2] How should the Court have construed the word? [3] In footnote 17 of Defendants' opposition, Defendants refer to lists submitted in response to the Court's January 23rd Order. Precisely, what lists are Defendants referring to? [4] Does the Judge have an independent duty to ensure the integrity of a judicial proceeding when it appears that a party has made a misrepresentation to the Court and the jury? [5] Does an officer of the court violate Rule 11(b) by representing the existence of a list of employees selected for layoff when in fact such a list never existed? [6] Assuming that there was misrepresentation or fraud on the Court, yet it appears upon review of the evidence that Plaintiff still fails to state a prima facie claim of Race Discrimination, what should the Court do? [7] Defendants have provided substantial evidence that there was in fact a reduction in force, the question is whether the Plaintiff was terminated as part of that layoff or for some impermissible reason. Is this a question of law for the Court or one of fact for the jury? [8] If it is a question of fact for the jury, should the jury be appraised of prior misrepresentations made by Defendants or defense counsel concerning that reduction in force as it relates to the Plaintiff? [9] Apparently, Plaintiff failed to seek discovery on the circumstances of the "layoff" and the existence of a "layoff list." If true, how should this effect the Court's decision?"
The memorandum also posed a hypothetical concerning representations made by GM counsel on summary judgment representing to the court that the legitimate non-pretextual rationale for Plaintiff's dismissal in a discrimination lawsuit was a "layoff." GM represents that twenty other employees were laid off in Plaintiff's department in the same month as the Plaintiff. The questions posed to counsel were: "[1] If the twenty other employees actually worked for a Saturn plant in North Carolina and the plaintiff worked for a Chrysler plant in Detroit, is GM's failure to appraise the Court of these facts an affirmative misrepresentation? What if the plaintiff was a senior level manager at the plant in Detroit, and the employees in North Carolina work on the assembly line? [2] With respect to this case, what is the relationship between Great Domains and VeriSign, and Great Domains and VGI? What evidence is there to substantiate the proposition that Great Domains is part of VGI other than Doug Wolford's testimony at trial?"

The Court: Let me be absolutely clear. I'm asking you as a member of the court, when you put in a pleading "list" and you're giving it to a United States District judge, what do you mean by that?

MR. SEEGULL: I do not mean a written list. I mean a verbal list . . . I think the term "list" obviously has different meanings to different people. And I do not think the term "list" by definition means a written list . . . For one instance, I can list for you right now bread, milk, cheese and juice.

THE COURT: So, when Heather Serice, the HR director says I reviewed the list, I should take that to mean that she reviewed some mental list that was in Mr. Johnson's mind?

* * * *

THE COURT: [W]hen the judge is presented testimony about a list, when a jury is presented with testimony about a list, I think that has distinct me[aning]. So I want to be real clear that you're telling me that "list" means a mental list. Now whose mind are you talking about?

MR. SEEGULL: Let me be clear your honor. I don't think the testimony was that she guessed the names on the list. I think the testimony was she discussed the names on the list.

THE COURT: You said there was no list. You said there was no document to review.

MR. SEEGULL: That doesn't mean there is no list . . . Rob Smith and Jeff Johnson may have called Heather Serice and said here are the people we'd like to layoff. And then they list the names. That then becomes the list. It's a verbal list.

* * * *

THE COURT: I'm trying to make sure that I understand that when you, Mr. Seegull, tell a judge that there was a list and that judge is considering your submission, whether it's from you personally or whether it's from your management employees, what that means. And so, I want to be clear. I want you to tell me on the record, when you tell a judge that there was a list of employees laid off, what do you, Mr. Seegull, mean?

MR. SEEGULL: I mean there was a list of names. There were people that were laid off, group of people that were laid off.

(See March 8th Hr'g Tr. at 17-22.)

Later in the hearing, the Court noted that despite the Court's directive to produce some documentation about a layoff list, Defendants had failed to do so. (Id. at 28-29.) In response, counsel stated that there is no list existing today but chat did not necessarily rule out the existence of a list in February 2001. (Id. at 29.) The Court questioned counsel concerning the six employees in the VGI group being laid off in a separate office and geographical location. The thrust of the Court's inquiry was whether Defendants had an obligation to inform the Court that six of the seven employees in Plaintiff's group — VGI — were actually part of a subgroup of VGI called Great Domains located in California. (Id. at 37-39.) Defendants' counsel maintained that: (1) Great Domains had been integrated into VeriSign; and (2) any questions concerning the geographic disparity between the Great Domain employees and the Plaintiff, should have been, and were raised by Plaintiff's counsel at trial.

Following the hearing, Defendants submitted affidavits from Ms. Serice, Jeff Johnson and Robert Smith. The substance of these affidavits attested that Ms. Serice and Defendants Johnson and Smith apologized for any misunderstanding the Court may have had regarding a tangible layoff list. The affidavits also confirmed that although Ms. Serice and Defendants may have used temporary lists of employees selected for layoff, e.g., listing names on a chalkboard or notes, they never compiled a formal tangible list of employees to be laid off, reviewed and submitted for approval.

II. DISCUSSION

Plaintiff seeks various forms of relief based on Defendants' alleged misrepresentations. Plaintiff first requests that the Court use its inherent power to enter a verdict in favor of the Plaintiff. Plaintiff does not present any valid grounds for this extraordinary relief and the request is summarily denied. In the alternative, Plaintiff moves the Court to set aside the jury verdict and order a new trial. Plaintiff also moves that should the Court grant a new trial, the Court should vacate or alter its December 18th Order and reinstate Plaintiff's discrimination claim.⁸

8 Plaintiff further moves for additional discovery. In light of the developments in this matter demonstrating the absence of a layoff "list" selecting the Plaintiff for termination and the fact that six of the seven VGI employees were actually laid off from VeriSign's California office, the Court finds that Plaintiff has set forth a valid basis for re-opening discovery in this case. Accordingly, the request for additional discovery is granted.

This case basically boils down to whether Defendants proffered false testimony and if so what the Court should do about it. As set forth below, part A briefly addresses the Court's obligation to effectively investigate the possibility of fraud in this case. Part B then discusses the grounds for granting a new trial under Rule 59 based on false evidence. Part C addresses the allegations of fraud on the court and part D discusses the grounds for amending the December 18th Order under Rule 59(e). Finally, the Court briefly attends to the issue of Rule 11 sanctions in part E.

A. The Court's Duty to Investigate Allegations of Fraud.

In their various submissions since the January 23rd Order, Defendants have questioned the Court's decision to investigate the possibility that the trial and summary judgment order were tainted by fraud. The Court pauses here to briefly address that contention.

Our courts of justice are an institution with certain inherent powers that naturally flow from the responsibility of being arbiters of the law. See Chambers v. Nasco, Inc., 501 U.S. 32, 43 (1991) ("Certain implied powers must necessarily result to our Courts of justice from the nature of their institution . . . because they are necessary to the exercise of all others.") (citations and internal quotations omitted). One of the hallmarks of the judicial institution is the inherent power to ensure that a trial has proceeded fairly and within the law.

"Of particular relevance here, the inherent power also allows a federal court to vacate its own judgment upon proof that a fraud has been perpetrated upon the court." Id. (citing Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944); Universal Oil Prods. Co. v. Root Ref. Co., 328 U.S. 575, 580 (1946)). The power to vacate a judgment premised on fraud necessarily encompasses the power, and the responsibility, to conduct an independent investigation to determine whether the court itself has been the victim of fraud. See Universal Oil, 328 U.S. at 580 (citing Hazel-Atlas Co., 322 U.S. 238) ("The inherent power of a federal court to investigate whether a judgment was obtained by fraud, is beyond question."); Alberta Gas Chains., Ltd. v. Celanese Corp., 650 F.2d 9, 12-13 (2d Cir. 1981).

The circumstances in this case called for, at a minimum, an inquiry into the representations of Defendants and their counsel concerning the layoff of VeriSign employees in February 2001. The crux of Defendants' non-pretextual rationale for termination of the Plaintiff's position was that the decision had been undertaken as part of a company wide layoff. During the course of trial, the Court heard testimony that undermined Defendants' earlier representations involving the layoff of VeriSign employees in February 2001. Specifically, testimony from VeriSign Human Resources Manager Heather Serice raised serious doubts involving Defendants' previous representations. At trial, Ms. Serice's testimony revealed for the first time that Plaintiff was the only VGI employee laid off in the Herndon, Virginia office in February 2001. (Trial Tr. Vol. III at 12-14, 33.) Ms. Serice believed that the six other employees laid off in the Plaintiff's group were not from the Herndon, Virginia office, but could not identify what offices the other employees had worked in. (Id. at 12-13.) In general, Ms. Serice could not provide much detail concerning the February 2001 layoff, including the names of the other employees laid off.

Ms. Serice's testimony raised concerns to the Court, which it voiced to the parties in a side bar conference during Ms. Serice's testimony. (See id. at 32-37.) The Court explained that it was bothered by the fact that Defendants' memorandum in support of their summary judgment motion implied that the other employees laid off in Plaintiff's group worked in the Plaintiff's office. (Id. at 32-33.) Defendants' brief did not present that "12 people all over the world" had been laid off. (Id. at 33.)⁹ In fact, Ms. Serice's testimony was "completely different from what [the Court] inferred from reading [Defendants'1 brief." (Id. at 36.) The Court stressed that it was concerned that the "HR manager [did not] know the names of who else was laid off and [did not] seem to have a lot of detail." (Id. at 36.) The fact that Ms. Serice could provide little detail concerning the February 2001 layoffs was especially disconcerting since the circumstances of the layoffs of the Plaintiff and other VeriSign employees were central to Defendants' defense in this case. (Id. at 34-37.)

9 The Court is disturbed by counsel's contention that the omission of the location of the six other VGI employees was an insignificant fact. Although in the Court's opinion counsel's conduct was not sanctionable, it certainly reflects on his candor before this Court. When some attorneys stand at the podium and represent to the Court that the sky is blue, the judge can accept it as fact and move on. There are other lawyers that represent to the court that the sky is blue, and the judge must step down from the bench, walk to the window, and lower the blinds himself. This is a case where the judge needed to look.

The Court asked counsel if there existed a list of the employees selected by management for the layoff. (Id. at 33.) Counsel replied that he did not know. The Court stated that "[t]here ought to be some list that was prepared that everybody signed off, all the executives signed off on that says seven people were laid off." (Id. at 34.) The Court invited Defendants to address the Court's concern by providing some documentation of the VeriSign employees laid off in February 2001. (Id. at 34.)

Despite the Court's admonition and request, Defendants did not initially produce any documents substantiating the layoff. For instance, notwithstanding that Defendants repeatedly referred to a "list" of employees selected for layoff compiled by Defendants Johnson and Smith and submitted to Wolford and Ms. Serice, Defendants failed to provide a tangible, written list. In fact, Defendants did not provide a single document identifying any of the VeriSign employees who were laid off in February 2001. Defendants did not provide any memoranda or emails from Johnson or Smith to Wolford or Serice identifying the other employees selected for layoff. Neither did Defendants produce a discharge letter sent to any of the other employees who were laid off in February 2001.¹⁰

10 As discussed in detail above, Defendants eventually provided the Court with documentation substantiating the layoff pursuant to the January 23rd Order. Some of these documents appeared to list various employees in VGI selected for layoff. See supra note 6 and accompanying text. None of the documents listed Plaintiff. Id.

Upon discovery that the underlying factual predicate of Defendants' non-pretextual justification was suspect, that not one, but four witnesses had possibly conspired to introduce false testimony regarding a material issue in the case, it was incumbent upon the Court to inquire into the facts. "The power to unearth . . . fraud is the power to unearth it effectively." Universal Oil, 328 U.S. at 580. Relying on its "historic power of equity to set aside fraudulently begotten judgments," Chambers, 501 U.S. at 44 (quoting Hazel-Atlas, 322 U.S. at 245), the Court determined that temporarily vacating the judgments in favor of Defendants until they provided bona fide documentation addressing the Court's concerns was appropriate to prevent a possible miscarriage of justice.

B. Motion for New Trial under Rule 59.

The Court first turns to the Plaintiff's central argument — requesting the Court to set aside the jury verdict and grant a new trial because of Defendants' alleged misrepresentations. Plaintiff's original motion for new trial was timely filed pursuant to Rule 59 of the Federal Rules of Civil Procedure. At the Court's direction, Plaintiff filed an amended motion for new trial after reviewing and incorporating the submissions of Defendants pursuant to the January 23rd Order. The amended motion for new trial relies more heavily on the Court's power under Rule 60(b) to set aside the verdict and grant a new trial for "fraud on the court," rather than Rule 59.¹¹

11 The gravamen of Plaintiff's legal argument in his amended motion for new trial centers on the Court's authority to set aside a verdict based on "fraud on the court." Pl.'s Am. Mot. at 19-20. Plaintiff also cites Rule 60 as the authority under which the Court can grant such relief. Id. at 2. However, Plaintiff's amended motion also cites to Gill v. Rollins, 773 F.2d 592 (4th Cir. 1986), a Rule 59 case, for the proposition that Defendants' proffer of false testimony warrants a new trial. (See Pl.'s Am. Not. at 6.) Further, the fraud on the court argument under Rule 60(b) is framed as additional grounds for relief. (Id. at 18) ("Asserting Statements Known to be False to the Court also Constitutes a "Fraud on the Court.'") (emphasis added). Defendants addressed the issue of a new trial under both Rule 59 and Rule 60 in their Opposition to Plaintiff's Amended Motion. Plaintiff also explicitly cites to Rule 59 in his Reply to Defendants Opposition. (See Pl.'s Reply at 14.) Based on the foregoing, the Court addresses Plaintiff's grounds for new trial under both Rules 59 and 60.

The Court will review Plaintiff's motion for a new trial under both Rules 59 and 60(b). Plaintiff's principal contention under either rule is that the Court should grant a new trial because Defendants' proffered false testimony. The difference is that under Rule 60(b), Plaintiff must demonstrate more than false testimony to warrant vacating the verdict for "fraud on the court." Further, Plaintiff's contention of "fraud on the court" extends to the Court's December 18th Order. The Court first turns to whether the Court should grant a new trial under Rule 59 because the jury verdict was based on false testimony, and addresses the thornier question as to whether the conduct in this case rises to the level of fraud on the court in part C.

1. Standard of review.

Rule 59 states that "[a] new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States . . . ." FED. R. Civ. P. 59(a). In considering a motion for a new trial under Rule 59 in this circuit "a trial judge may weigh the evidence and consider the credibility of the witnesses, and if he finds the verdict is against the clear weight of the evidence, is based on false evidence or will result in a miscarriage of justice, he must set aside the verdict, even if supported by substantial evidence, and grant a new trial." Poynter by Poynter v. Ratcliff, 874 F.2d 219, 223 (4th Cir. 1989); Conner v. Schrader-Bridgeport Int'l, Inc., 227 F.3d 179, 200 (4th Cir. 2000); Mattison v. Dallas Carrier Corp., 947 F.2d 95, 108 (4th Cir. 1991); Aetna Cas. Sur. Co. v. Yeatts, 122 F.2d 350, 352-353 (4th Cir. 1941).

The first two prongs of this standard requires the district court to determine "purely factual questions," whether (1) the verdict is "against the weight of the evidence" or (2) "based upon evidence which is false." Atlas Food Sys. and Servs., Inc., v. Crane Nat'l Vendors Inc., 99 F.3d 587, 594 (4th Cir. 1996) (discussing new trial standard within context of jury damages) If the court is of the opinion that the verdict is based on any of these enumerated grounds, the court has a duty to remove the case from the jury and recommit it to a new one. See Mattison, 947 F.2d at 108. The trial court's exercise of its power to grant a new trial "is not in derogation of the right of trial by jury but is one of the historic safeguards of that right." Id. (quoting Aetna Cas., 122 F.2d at 352-53)

The decision to grant or deny a motion for a new trial lies at the heart of the district court's sound discretion and "will not be disturbed absent a clear showing of abuse of discretion." Wilhelm v. Blue Bell, Inc., 773 F.2d 1429, 1433 (4th Cir. 1985), cert. denied, 475 U.S. 1016 (1986). Where a new trial is granted on the grounds that "some undesirable or pernicious influence has intruded into the trial," the trial court's discretion is broader than if the new trial "is granted on the ground that the verdict is against the weight of the evidence." A.I. Massey, et al., v. Gulf Oil Corp., 508 F.2d 92, 94 (5th Cir. 1975) (contrasting appellate standard of review of trial court's decision to deny a motion for new trial with the decision to grant the motion). The burden of demonstrating harmful error warranting a new trial falls on the party seeking the relief. See Equal Employment Opportunity Comm'n v. Marion Motel Asss., 763 F. Supp. 1338, 1341 (W.D. N.C. 1991) (quoting 11 CHARLES ALAN WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2803 (1973) (citing and collecting cases)

2. Motion for new trial based on false evidence.

Plaintiff moves for a new trial on the basis that Defendants proffered false testimony at trial involving a material issue.¹² A verdict based on perjury is one example of the injustice to be avoided through the grant of a new trial, if necessary. See, e.g., Isley v. Motown Record Corp., 69 F.R.D. 12, 16-17 (S.D.N.Y. 1975). Although the Fourth Circuit has not precisely addressed the standard for granting a new trial based on the contention that the jury verdict was based on false testimony, the Sixth Circuit applies a three prong test which the Court adopts herein.

12 Defendants attempt to frame the question as whether Defendants' allegedly false testimony constitutes newly discovered evidence warranting a new trial. The Court finds the Plaintiff's formulation of the issue more on point. What we have here is a case where three defendants and one material witness are accused of falsely testifying to material issues in their defense — the layoff of the Plaintiff. The proper question then is whether the jury verdict was "based on false evidence" as understood under Rule 59, not whether the evidence of false testimony is newly discovered.

The standard for granting a new trial based on false testimony is set forth in Davis v. Jellico Comty. Hosp., Inc., 912 F.2d 129, 133 (6th Cir. 1990).

[A] new trial should be granted where the court is reasonably well satisfied that the testimony given by a material witness is false; that without it, a jury might have reached a different conclusion; that the party seeking a new trial was taken by surprise when the false testimony was given and was unable to meet it or did not know of its falsity until after trial.

Id. at 133; Williams v. United Dairy Farmers, et al., 188 F.R.D. 266 (S.D. Oh. 1999) (applying Davis standard to motion for new trial based on false testimony under Rule 59 in employment discrimination case). See also Antevski v. Voklswagenwerk Aktiengesellschaft, 4 F.3d 537, 540 (7th Cir. 1993) (citing Davis for proposition that if the verdict is based on false testimony, district judge has the discretion to grant the injured party a new trial under Rule 59). Applying this three-pronged standard, the Court finds that a new trial is warranted.

a. Defendants proffered false testimony.

Ostensibly, the threshold question is whether Defendants proffered false testimony. See Sanden v. Mayo Clinic, 495 F.2d 221, 225 (8th Cir. 1974). The Court finds that in testifying to the facts surrounding the critical event of the layoff, Defendants represented to the Court on summary judgment and to the jury at trial, the existence of a tangible layoff "list."¹³ Having observed the demeanor of Defendants and witnesses and assessed their credibility, combined with the fact that Defendants failed to provide a written list after two requests from the Court, the Court finds reasonable cause to believe that testimony introduced at trial regarding the existence of a layoff list including the Plaintiff was false. The reference to a "list" is particularly central to Defendants' defense that Plaintiff was removed from employment because VeriSign had a legitimate business reason — a company wide reduction in payroll by elimination of positions. The credibility issue of the defense is whether the employer here represents truthful information about a company decision to include a particular employee in a layoff. Layoff lists are certainly not required to substantiate a lawful reduction in force. However, the facts in this case involve a technology company that transmits data and management information electronically, orally and written; it is an odd occurrence not to find a single email, memorandum, list or note of any sort that mentions Plaintiff in the context of a layoff.

13 Plaintiff also contends that Defendants submitted false testimony regarding the fact that the other six VGI employees laid off with the Plaintiff in February 2001 were actually employees of Great Domains in California. However, Defendants and Ms. Serice never testified that the six other VGI employees laid off were not from California. At most, the fact that the six VGI employees worked in the Great Domains department was an omission by Defendants, not false testimony. The Court addresses this omission within the context of Plaintiff's motion to amend the December 18th Order below.

Defendants' misrepresentations regarding the existence of a layoff list began on summary judgment. In his declaration submitted on summary judgment, Defendant Wolford represented that "I was presented with lists of affected individuals by each staff member, and I approved the lists." (Wolford Decl. ¶ 18) (emphasis added). Similarly, Jeff Johnson related that "[b]efore making the final decision about who should be included in the list of people being laid off, Rob Smith and I spoke with Heather Serice . . . about the candidates we proposed for layoff. We also spoke with Doug Wolford, my supervisor about the list of candidates for layoff. Both Ms. Serice and Mr. Wolford approved the decision to include Mr. Johnson in this list of people, as well as the other individuals we had selected." (Johnson Decl. ¶ 18) (emphasis added).

Defendant Robert Smith stated "[w]e came up with a list of people based upon performance and job duties." (Smith Decl. ¶ 19) (emphasis added). Smith also said that "some of [Plaintiff']s deficiencies . . . occurred while the layoff list was being generated." (Id. ¶ 20) (emphasis added). He added that "[b]oth Ms. Serice and Mr. Wolford approved of the decision to include Mr. Johnson in this list of people." (Id. ¶ 21) (emphasis added) Based on these affidavits, Defendants represented in the summary judgment motion that "Ms. Serice . . . approved the list of people selected for layoff." (Defs.' Summ. J. Mot. at 13.)

Defendants' testimony at trial continued to refer to a list of individuals selected for layoff. Defendant Wolford testified that his direct reports "came back to me [in] late January or early February, with lists of people that they had selected for layoff. And I got lists from at least three different departments within my division." (Trial Tr. Vol. III at 184) (emphasis added). Wolford elaborated: "the leadership of the group would sit with me and have a list, and I would lock at the list and I would say, you know, "Are these your underperformers?' . . . then I would approve the list." (Id. at 185.) Wolford testified that he was "sad . . . to see [Plaintiff's] name there [on the list], but I wasn't suprised." (Id. at 187.)

Defendants Johnson and Smith also made several references to a layoff list. Defendant Johnson testified that in early February 2001, "we were finalizing a list, hav[ing] been in the process of communicating with several managers across VeriSign, to identify people who were going to be [laid off]." (Trial Tr. Vol. II at 148.) He further explained that "[u]ltimately, Human Resources and my boss approves the list . . . then I have to present that list to my boss, Doug Wolford . . . ." (Id. at 151) (emphasis added). Smith stated that "I had been reviewing the lists of names with Jeff Johnson . . . and had been putting together a list of names of people that would be part of a reduction in force." (Trial Tr. Vol. III at 90) (emphasis added) He further testified that neither Wolford nor Serice changed the list after Smith and Johnson presented them with the list of selected employees. (Id. at 96.)

Finally, Ms. Serice made numerous references to a layoff list in her testimony. Ms. Serice began by testifying that "Rob Smith and Jeff Johnson showed me the list that they had selected, and I reviewed the list, ultimately said it was okay and approved it." (Trial Tr. Vol. II at 277) (emphasis added). Ms. Serice then outlined the process for selecting employees for the layoff. First, she testified that "Jeff Johnson and Rob Smith actually put together the list and selected individuals for layoff. And they also ran the list by me and I approved it." (Id. at 279) (emphasis added). Ms. Serice further testified that "I reviewed the list to make sure that there was not anybody on the list that I had additional information that I needed to alert the manager to prior to them making the final call that this person was going to be on the layoff." Id. (emphasis added). On cross-examination, Ms Serice testified that she could not recall the date when she received the list identifying the Plaintiff for layoff. (Trial Tr. Vol. III at 19.)

In sum, the Court finds that Defendants represented to the Court and the jury that they (1) engaged in a reasoned, deliberate analysis of who should be included in a layoff list, (2) reviewed names of selected individuals on a layoff list, (3) approved the individuals appearing on a layoff list, (4) included the Plaintiff on a layoff list, and (5) approved the layoff list selecting the Plaintiff for termination.

The problem is that there is no layoff list identifying the Plaintiff for layoff. Defendants have several responses to this apparent misrepresentation. First, they argue that "defendants have never suggested that they had any formal written list that identified the individuals selected for layoff from within VGI in February 2001 and why they were selected, which was signed off on by all of the relevant decision makers." (Defs.'s Opp'n at 12.) This is patently false. As summarized above, the record demonstrates that Defendants testified to a list of individuals selected, reviewed and approved by Defendants for layoff. To argue that the above record does not even so much as suggest the existence of a formal written list is disingenuous at best.

Defendants second contention fares no better. Defendants argue that "the testimony in which the term "list' is used is different for each witness, and could be interpreted to refer to a verbal or written list." (Id.) This argument is also meritless. The common definition of the term "list" is a "series of names or other items written or printed together in a meaningful grouping or sequence so as to constitute a record." RANDOM HOUSE DICTIONARY OF THE ENGLISH LANGUAGE 1121 (2ed. 1987). In certain contexts, a list can refer to a verbal list of names.

However, it is clear that in this case Defendants were referring to a tangible list of names of individuals selected, reviewed and approved for layoff; one that was "written or printed" so as to "constitute a record." Much of Defendants' representations on summary judgment unambiguously use the term list in the tangible sense. (See, e.g., Wolford Decl. ¶ 18 ("I was presented with lists of affected individuals. . . ."); Smith Decl. ¶ 20 (Plaintiff's deficiencies occurred "while the layoff list was being generated.")). The testimony at trial was even more explicit. (Trial Tr. Vol. III at 184 ("my direct reports . . . came back to me with lists of people. . . ."); Id. at 185 ("I would look at the list. . ."); Trial Tr. Vol. II at 151 ("I have to present that list . . ."); Trial Tr. Vol. III at 90 ("[I] had been putting together a list of names . . ."); Trial Tr. Vol. II at 277 ("Rob Smith and Jeff Johnson showed me the list that they had selected and I reviewed the list . . .

Faced with these facts, Defendants switch gears and contend that even if there is no list the absence is immaterial. (See Defs.' Opp'n at 14.) Defendants essentially resort to the argument that this Court has no role in second-guessing business decisions and Defendants' decision to layoff their employees without the benefit of a list falls within that sphere of corporate independence. Defendants simply miss the point. The Court has no interest in participating in personnel matters of the company. Federal law proscribes unlawful discrimination in the workplace and Defendants are answerable under the law to produce accurate evidence in court supporting their legitimate non-discriminatory reason for Plaintiff's termination. Defendants are being sued for retaliatory discrimination for the termination of Plaintiff's employment in violation of federal law. The facts surrounding whether Plaintiff was terminated as part of a legitimate layoff of employees or for an unlawful purpose are integral to the critical question in this case. Indeed, these facts are essential to the defense of the nonpretextual rationale for termination. The issue is whether Defendants lied to the jury by stating the Plaintiff was included in a layoff or whether termination of the Plaintiff was because of protected activity.

The Court finds that Defendants presented false testimony to this Court and the jury concerning the existence of a tangible layoff list of VeriSign employees selected for termination that purportedly included Plaintiff. Review of the record indicates that Defendants provided clear, unambiguous testimony that Defendants assembled a tangible list of employees selected for layoff and that Plaintiff was on that list. There is, of course, no written list or evidence that there ever was a list. Simply put, Defendants lied.

b. The jury might have reached a different conclusion.

Having found that the testimony given by several material witnesses was false, the next question is whether the jury might have reached a different conclusion without the false testimony. Williams, 188 F.R.D. at 275. The Court holds that the jury may have reached a different verdict if they were presented with all the relevant facts, and combined with the appearance of impropriety, a new trial is warranted.

This case turned on questions of credibility, quintessential questions for a jury. See Williams, 188 F.R.D. at 276 (finding that possibility that jury verdict might have been tainted by false testimony in employment discrimination case was sufficient to warrant new trial where issues at trial "turned on accusations and denials."). The jury was presented with two starkly different stories. Plaintiff and his witnesses presented a case where his superiors had conspired against him to have him terminated under the guise of a layoff because of his complaints about management's treatment of fellow employees. Defendants portrayed a Plaintiff with performance and personnel problems who was selected for inclusion in a layoff based on these deficiencies. Since there was very little documentation by either side, the case boiled down to whose story the jury believed.

Defendants' consistent testimony about a written, tangible layoff list including the Plaintiff unquestionably bolstered the credibility of Defendants in a case where credibility was key. Defendants' non-pretextual rationale for the Plaintiff's termination was that he was selected to be laid off because of his recent deficiencies. Defendants did not produce any documentary evidence that Plaintiff was subject to any disciplinary action or formal poor performance appraisals. Defendants largely proffered testimony indicating that the decision to eliminate Plaintiff's position was undertaken in a deliberate and equitable fashion. The most salient support for this proposition was Plaintiff's inclusion in a layoff list generated by Defendants Johnson and Smith and then reviewed and approved by Defendant Wolford and Ms. Serice.

Excising the testimony referring to the layoff list from Defendants' case paints a wholly different picture of the layoff and how Plaintiff was included in that layoff. Without lengthy testimony concerning a reasoned, deliberate inclusion of Plaintiff's name on a tangible list, Defendants' non-pretextual rationale does not appear as credible. The lack of a tangible layoff list identifying Plaintiff for termination, the fact that Defendants misrepresented the existence of such a list, and the paucity of documentation of Plaintiff's poor performance, reasonably suggest an illicit motive for termination. Under these circumstances, "the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose . . . the factfinder is entitled to consider a party's dishonesty about a material fact as affirmative evidence of guilt." Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133, 147 (2000) (citations and internal quotations omitted)

The lack of a written, tangible layoff list with Plaintiff's name on other documents showing a layoff in his group, also lends support to the claim that Defendants' shifting non-pretextual rationale indicates that Plaintiff was terminated for reasons other than the ones cited by Defendants. At first, Defendants stated that the Plaintiff's position was eliminated because of the redundancy of his position. At his termination meeting and in his termination letter, Plaintiff was informed that he was being laid off as part of a company wide reduction in force. (Trial Tr. Vol. III at 98-99; Pl.'s Tr. Ex. 7). Plaintiff was not told he was being fired for poor performance or for engaging in sexual harassment. It was only later, at summary judgment, that Defendants first asserted that Plaintiff was selected for layoff because of performance and potential harassment problems.

Defendants proffer of additional reasons over time for the elimination of Plaintiff's position, although not inconsistent, is an additional ground for a trier of fact to infer that Defendants' explanations may be pretext. Equal Employment Opportunity Comm'n v. Sears Roebuck Co., 243 F.3d 846, 852-53 (4th Cir. 2001); Perfetti v. First Nat'l Bank of Chicago, 950 F.2d 449, 456 (7th Cir. 1991) ("If at the time of the adverse employment decision the decision-maker gave one reason, but at the time of the trial gave a different reason which was; unsupported by the documentary evidence, the jury could reasonably conclude that the new reason was a pretextual after-the-fact justification."). Evidence that there is no tangible list identifying Plaintiff for layoff and that Defendants falsely testified to one, combined with the absence of any memoranda, email or written notes indicating that Plaintiff was selected for layoff, may lead a jury to question Defendants' changing nonpretextual rationale and return a verdict in favor of Plaintiff.

Finally, courts should not countenance verdicts that even appear to be based on false testimony. "[T]here is a class of cases where some irregularity so taints the trial that the appearance of impropriety compels a new trial as a prophylactic rather than remedial measure. As was stated long ago, the fountains of justice must be kept pure and free from suspicion, or the citizen will lose all respect for the laws, and the rights of persons, and property will become insecure." Budoff v. Holiday Inns, Inc., 732 F.2d 1523, 1526 (6th Cir. 1984) (internal quotes and citations omitted) (holding that district court had abused its discretion in denying motion for new trial on basis of improper communication between counsel and juror). Defendants' evidence regarding the layoff is so thoroughly undermined by their false testimony involving a layoff list that failing to grant a new trial would be tantamount to approving the use of false evidence to garner a favorable jury verdict.

c. Plaintiff was unaware of the falsity of Defendants' testimony.

The final question is whether the party seeking the new trial was taken by surprise of the false testimony or was unaware of the false testimony until after trial. The falsity of Defendants' testimony regarding the absence of a layoff list was not even implicated until the testimony of Ms. Serice. Ms. Serice was the fifth witness in Defendants' case. By the time the jury heard the testimony of Ms. Serice, it had already listened to at least one other Defendant discuss the existence of a layoff list. Further, the extent of Defendants' false evidence was not fully revealed until after Defendants complied with the January 23rd Order. It was not until after a review of the documents regarding the layoff that it became clear that a layoff list including the Plaintiff does not exist.

Under these circumstances, the Court finds that Plaintiff was unable to meet the false testimony presented at trial, and was unaware of the extent of the falsehood until after trial. Defendants argue that the Court should fault Plaintiff for failing to depose any witnesses and the failure to unearth the absence of a written list is a burden borne by the Plaintiff. To be sure, failure to depose any witnesses suggests that Plaintiff's counsel was not as diligent in its trial preparation as they could have been. However, Defendants could have just as easily have falsely testified to the existence of a layoff list during deposition and again at trial. Each of Defendants and the material witness had no hesitation signing affidavits asserting the existence of a list or testifying in court to that effect. The fact that there was no tangible list was not revealed by Defendants until trial. And the fact that Defendants falsely testified to conceal that fact is unaffected by Plaintiff's failure to depose them.

In sum, the Court holds that a new trial is warranted in this case on Plaintiff's retaliatory discrimination claim under Rule 59 because (1) the testimony given by several material witnesses regarding an essential element of the case was false; (2) without this testimony, the jury may have reached a different conclusion; and (3) Plaintiff was unaware of the falsity of the testimony until after trial. The Court now turns to the motion for new trial based on fraud on the court under Rule 60(b)

C. Fraud on the Court.

Plaintiff also moves to vacate the jury verdict and the December 18th summary judgment Order and grant a new trial on the retaliation, race discrimination claim, and ERISA claims under Rule 60(b) of the Federal Rules of Civil Procedure. Specifically, Plaintiff contends that the verdict and the summary judgment Order should be vacated because Defendants conspired with counsel to proffer false, misleading, and perjurious testimony amounting to "fraud on the court." As discussed below, notwithstanding that the Court finds that Defendants submitted false testimony at trial, these misrepresentations do not rise to the level of "fraud on the court."

1. Fraud on the court under Rule 60(b).

Under Rule 60(b), a district court has "the power in certain restricted circumstances to "vacate judgments whenever such action is appropriate to accomplish justice.'" Compton v. Alton Steamship Co., Inc., 608 F.2d 96, 101-102 (4th Cir. 1979) (citations omitted). This is an "extraordinary [remedy] and is only to be invoked upon a showing of exceptional circumstances." Id. (citations omitted). In considering whether to vacate a judgment under 60(b), "courts must engage in the delicate balancing of "the sanctity of final judgments, expressed in the doctrine of res judicata, and the incessant command of the court's conscience that justice be done in light of all the facts.'" Id.¹⁴

14 Rule 60(b), entitled "Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, Etc." provides in pertinent part:

On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as provided in Title 28, U.S.C. § 1655, or to set aside a judgment for fraud upon the court. Writs of coram nobis, coram vobis, audita querela, and bills of review and bills in the nature of a bill of review, are abolished, and the procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action.

Rule 60(b) provides various grounds for relief from a judgment. Rule 60(b) specifically provides for relief based upon (1) "newly discovered evidence which by the due diligence of the parties could not have been discovered in time to move for a new trial under Rule 59(b)," FED. R. CIV. P. 60(b)(2), and (2) "fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party." Id. 60(b)(3). A motion to vacate based on newly discovered evidence or fraud must be made within one year of the judgment. Id. 60(b). Rule 60(b) also provides that a court may vacate a judgment when it determines that a party has perpetrated a "fraud upon the court." Id. Unlike a motion under Rule 60(b)(2) or (3), a motion to vacate under Rule 60(b) for fraud on the court does not have any time limit.

Fraud on the court under Rule 60(b) is materially different from the fraud or misconduct referred to in Rule 60(b)(3). See Kupferman v. Consol. Research and Mfg. Corp., 459 F.2d 1072, 1078 (2d Cir. 1972). As the Fourth Circuit has explained, "[n]ot all `fraud is fraud on the court.'" Great Coastal Express v. Int'l Bhd. of Teamsters, 675 F.2d 1349, 1356 (4th Cir. 1982) (citing 11 CHARLES ALAN WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2870 at 253 (1973)). Courts have construed the concept of fraud on the court very narrowly to prevent it from being "overwhelm[ed] [by] the specific provision of 60(b)(3) and its time limitations and thereby subvert the balance of equities contained in the Rule." Id.

Mildly stated, a party "must clear a high hurdle in order to set aside the verdict based" on fraud on the court. Perez-Perez v. Popular Leasing Rental, Inc., et al., 993 F.2d 281, 285 (1st Cir. 1993). Fraud on the court is a "serious allegation involving corruption of the judicial process itself." Cleveland Demolition Co. v. Azcon Scraps Corp., 827 F.2d 984, 986 (4th Cir. 1987) (citation and internal quotes omitted). As Professor Moore's often cited formulation explains:

Fraud upon the court should, we believe, embrace only that species of fraud which does or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery can not perform in the usual manner its impartial task of adjudging cases that are presented for adjudication. Fraud inter partes without more should not be a fraud upon the court, but redress should be left to a motion under Rule 60(b)(3) or to the independent action.

7 MOORE'S FEDERAL PRACTICE § 60.33 at 515 (1971) (cited in Great Coastal Express, 675 F.2d at 1356). See also Demjanjuk v. Petrovsky, 10 F.3d 338, 352 (5th Cir. 1994) (following Moore); Kupferman, 459 F.2d at 1078 (same)

Applying such a rigorous standard, courts have ordinarily limited the term "to the most egregious cases, such as bribery of a judge or juror, or improper influence exerted on the court by an attorney, in which the integrity of the court and its ability to function impartially is directly impinged." Great Coastal Express, 675 F.2d at 1356. See also Lockwood v. Bowles, 46 F.R.D. 625, 631-32 (D.D.C. 1969) (listing examples of conduct rising to level of fraud on the court). In contrast, courts have held that "perjury or fabricated evidence are not grounds for relief as "fraud on the court.'" Great Coastal Express, 675 F.2d at 1357 (finding that fabricated testimony did not constitute fraud on the court) (citations omitted); Lockwood, 46 F.R.D. at 630 (same). False testimony, standing alone, does not qualify as fraud on the court because it is an "evil that can and should be exposed at trial, and the legal system encourages and expects litigants to root them out as early as possible." Great Coastal Express, 675 F.2d at 1357.

However, notwithstanding that perjury is insufficient, "the involvement of an attorney, as an officer of the court, in a scheme to suborn perjury should certainly be considered fraud on the court." Cleveland Demolition, 827 F.2d at 986; Great Coastal Express, 675 F.2d at 1357. Attorneys are held to the highest standards of integrity and have an obligation as officers of the court to be candid before the Court in conducting litigation. Indeed, "[c]ases dealing with fraud on the court often turn on whether the improper actions are those of parties alone, or if the attorneys in the case are involved." Demjanjuk, 10 F.3d at 352; Hazel-Atlas Glass Co., 322 U.S. at 245-46 (finding that attorney's role in submitting false article constituted a "deliberately planned and carefully executed scheme" to defraud the court)

2. Plaintiff's allegations of fraud on the court.

Turning to the facts of the case at bar, Plaintiff contends that Defendants committed perjury by testifying to the existence of a tangible layoff list regarding Plaintiff's termination when in fact no such list existed. Plaintiff maintains that Defendants' counsel had a role in the perjury because, in his view, "it is inconceivable that defendants' lawyers were not aware of their clients' deceit." (Pl.'s Am. Mot. at 20.) Plaintiff relies on the fact that Defendants made similar representations concerning the existence of a tangible list in sworn, written declarations prepared by counsel and submitted to the Court on summary judgment.

As discussed above, the Court finds that Defendants' proffered false testimony warranting a new trial on Plaintiff's retaliatory discharge claim under Rule 59. However, Defendants' false testimony at trial, as well as on summary judgment, does not constitute fraud on the court under Rule 60(b) because perjury alone does not constitute fraud on the court. Plaintiff argues that counsel was an active participant in the presentation of Defendants' false testimony and therefore the conduct constitutes fraud on the court. However, Plaintiff offers nothing more than speculation to base such a serious charge. Unfortunately, clients may present half-truths and whole lies to their attorneys as well as the court. To a certain extent, attorneys are entitled to rely on their clients' representations when drafting declarations and placing a client on the stand. But a client's false testimony, by itself, cannot constitute fraud on the court by simply alleging that their attorney should have or had to have known about the falsity of the testimony.¹⁵

15 Plaintiff's reliance on Demanjanjuk, 10 F.3d at 338, is misplaced. In that case, the Sixth Circuit found that the record demonstrated that government attorneys had engaged in prosecutorial misconduct by failing to disclose to the court or detainee exculpatory information in their possession. Demjanjuk is factually inapposite from the case at bar because it addresses the fundamental question of the government's duty to disclose exculpatory evidence under Brady v. Maryland, 373 U.S. 83 (1963).

The Fourth Circuit rejected a similar argument in Cleveland Demolition, Co., 827 F.2d at 986. In that case, the court rejected the defendant's Rule 60(b) motion to set aside the jury verdict in favor of the plaintiff on the basis that the plaintiff's counsel conspired with a witness to present perjured testimony. The court denied the defendant's motion to set aside the verdict based on allegations of fraud on the court because, inter alia, the defendant did not produce any evidence of a conspiracy to present false testimony between the counsel and the witness. Id. at 986-87.

In this case, Plaintiff would have the Court adopt the "automatic rule that, whenever a witness lies on the stand his attorney must have known about and actively participated in the perjury." Cleveland Demolition, Co., 827 F.2d at 987. Plaintiff seeks the Court to do precisely what Cleveland Demolition, Co., instructs not to — presume that Defendants' counsel knowingly participated in presenting false testimony. Therefore, because Plaintiff has not presented any evidence that Defendants' counsel conspired with Defendants to present false testimony regarding the layoff, Plaintiff has failed to demonstrate fraud on the court.

D. Motion to Amend or Set Aside the December 18th Order.

Having found that the December 18th summary judgment Order cannot be vacated under Rule 60(b), the Court turns to whether it should amend the order under Rule 59(e). The Court finds that Plaintiff has not met his burden demonstrating that the Court should reconsider the December 18th Order to reinstate the Plaintiff's racial discrimination and ERISA claims.

1. Rule 59(e).

The Fourth Circuit recognizes Rule 59(e) as inherently providing "three grounds for amending an earlier judgment: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice. Pacific Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (citations omitted). Rule 59(e) "permits a district court to correct its own errors, "sparing the parties and the appellate courts the burden of unnecessary appellate proceedings.'" Id. (citations omitted).

"Rule 59(e) motions may not be used . . . to raise arguments which could have been raised prior to the issuance of the judgment, nor may they be used to argue a case under a novel legal theory that the party had the ability to address in the first instance." Id. (citations omitted). In the event that "a party relies on newly discovered evidence in its Rule 59(e) motion, the party "must produce a "legitimate justification for not presenting' the evidence during the earlier proceeding.'" Id. (citations omitted). As a general proposition "reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly." Id.

2. Amending the December 18th Order is unwarranted.

The December 18th Order granted Defendants' partial summary judgment and dismissed Plaintiff's race discrimination and ERISA claims. In contrast to the earlier motions, the motion to amend the December 18th Order involves another possible misrepresentation by Defendants. In addition, to the false testimony regarding a layoff list, there is also the issue regarding Defendants' representations as to the other employees laid off from VGI in February 2001. At trial, it was revealed for the first time that the Plaintiff was the only employee in the VGI group to be laid off in Virginia. After Defendants complied with the January 23rd Order, it became clear that the six other VGI employees laid off in February 2001 were part of Great Domains, another department of VGI located entirely in California. Plaintiff contends that since the Court's summary judgment Order dismissing Plaintiff's race discrimination claim was premised on the existence of a layoff list and the inference that the six other employees were part of VGI's Virginia office, the Court should amend the December 18th Order to reinstate the race discrimination claim.

Admittedly, Defendants misrepresented the existence of a layoff list in their affidavits submitted on summary judgment. Also, Defendants presented the facts of the layoff in such a way that it was entirely reasonable for this Court to conclude that the other employees laid off in February 2001 were actually Plaintiff's co-workers in the Herndon, Virginia office. The fact that the six employees were actually employed by Great Domains in California did not become apparent until long after summary judgment was entered. The fact that the six other employees were not part of the Virginia office and were in fact located on the other side of the country is a significant detail in the Plaintiff's termination. After all, the six other employees were the similarly situated employees the Court looked to in determining whether there was any discriminatory animus in the decision to terminate Plaintiff. The Court finds that Defendants' failure to mention that the six other employees laid off by VeriSign in February 2001 were employees of Great Domains in California was a material omission. The issue of whether counsel's failure to alert the Court to this fact is sanctionable under Rule 11 is addressed below. See discussion infra Part II. E.

Nonetheless, the Court declines to amend the December 18th Order and reinstate the race discrimination and ERISA claims. plaintiff cannot overcome the fatal fact that what was true at the summary judgment stage remains true now: the Plaintiff does not have any evidence that similarly situated employees outside his protected class were treated differently than Plaintiff. The following facts are undisputed: (1) VeriSign went through a series of layoffs in 2001; (2) the VGI department experienced layoffs in February 2001; (3) Defendants Johnson and Smith selected Plaintiff for termination in February 2001; (5) Defendants Johnson and Smith selected six other employees from VGI, albeit a VGI group named Great Domains located in California, for layoff in February 2001; (6) twelve total employees in the Mass. Markets group (VGI's parent group) were laid off in February 2001; and (7) Plaintiff was the only African-American terminated in February 2001.¹⁶ The lack of a layoff list or the fact that the six other VGI employees were located in California does not change the reality that the Plaintiff still fails to make a prima facie claim of racial discrimination. (See December 18th Order at 26); see also Brown v. Runyon, No. 96-2230, 1998 WL 85414, *2 (4th Cir. Feb. 27, 1998) (unpublished); Reese v. Dobson, Civ. Action No. 3:O1cv181, 2001 U.S. Dist. LEXIS 12853, at *10 (E.D. Va. 2001).¹⁷ Similarly, Plaintiff provides no grounds for amending the summary judgment Order with respect to his ERISA claim. Plaintiff has still failed to provide any evidence that he actually suffered any damages in the form of unpaid medical bills triggering a cause of action under ERISA.

16 The Court has reviewed Plaintiff's new racial discrimination claim based on the allegation that Bruce Beckwith was his replacement and finds that it is wholly unsupported by the record.

17 Plaintiff's failure to state a prima face race discrimination claims stands in contrast to his retaliation claim where, as explained in the December 18th Order, Plaintiff met his prima facie case for retaliation and raised an issue of fact regarding Defendants' rationale for the elimination of his position.

E. Sanctions under Rule 11.

Finally, the misrepresentations by Defendants in their affidavits presented on summary judgment raise the issue of whether Rule 11 sanctions should be imposed against Defendants' counsel.¹⁸ The issue is limited to counsel's representations on summary judgment because Rule 11 only applies to pleadings and written motions that have been presented to the court. See Adduono v. World Hockey Ass'n, 824 F.2d 617 (8th Cir. 1987).

18 Plaintiff did not follow proper procedure under Rule 11 and file his motion for sanctions separately from his motion for new trial. Nonetheless, the Court retains the power to impose sanctions sue sponte under Rule 11 if it first enters an order describing the specific conduct violative of Rule 11 and directing the alleged offender to show cause as to why the conduct did not violate Rule 11. FED. R. CIV. P. 11.

Rule 11 imposes an obligation on all officers of the court to ensure that the allegations and other factual contentions in their written submissions have evidentiary support. See FED. R. CIV. P. 11(b)(3). Several obligations flow from this basic rule. First, reasonable inquiry must precede the presentation of any pleading, written motion or other paper. See Cabel v. Petty, 810 F.2d 463, 466 (4th Cir. 1987). Second, a deliberate misstatement may not be presented as a statement of fact. See Frazier v. Cast, 771 F.2d 259, 265 (7th Cir. 1985). Third, an omission may be equally misleading as an affirmative false statement. See In Re Ronco, 838 F.2d 212, 218 (7th Cir. 1988)

Here, there is no evidence demonstrating reasonable cause to believe that counsel of record for Defendants actively or passively participated in a fraud on the court. The evidence indicates highly motivated executives extending the English language far beyond truthful grasp. The Court declines to engage in a probe of counsel's conduct in the absence of some reasonable cause that counsel failed to conduct a reasonable inquiry into the existence of layoff list or the location of the six other VGI employees.

III. CONCLUSION

For the foregoing reasons, it is hereby

ORDERED that Plaintiff's Amended Motion For New Trial on his retaliatory discharge claim is GRANTED, and it is

ORDERED that Plaintiff's Motion for Additional Discovery on the retaliation claim is GRANTED. It is further

ORDERED that Plaintiff's Motions to Vacate, or in the alternative Amend the December 18, 2001, summary judgment Order are DENIED, and finally it is

ORDERED that the December 18, 2001, summary judgment Order in favor of Defendants dismissing Plaintiff's race discrimination and ERISA claims is REINSTATED.

The Court will issue a forthcoming Order setting a status conference date to schedule a new trial date on Plaintiff's unlawful retaliation claim under § 1981.

The Clerk is directed to forward a copy of this Order to counsel.