Case: 09-31038 Document: 00511291419 Page: 1 Date Filed: 11/11/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 11, 2010
No. 09-31038
Lyle W. Cayce
Clerk
IN RE: FEMA TRAILER FORMALDEHYDE PRODUCTS LIABILITY
PLAINTIFF'S LIAISON COUNSEL; ET AL
Plaintiffs
v.
DEFENDANT'S LIAISON COUNSEL; ET AL
Defendants
MARY C. DEVANY,
Movant - Appellant
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CHARLIE AGE; ET AL
Plaintiffs
v.
GULF STREAM COACH, INC; ET AL
Defendants
MARY C. DEVANY
Movant - Appellant
Case: 09-31038 Document: 00511291419 Page: 2 Date Filed: 11/11/2010
No. 09-31038
Appeal from the United States District Court for the
Eastern District of Louisiana
No. 2:07-MD-1873
Before KING, GARWOOD and DAVIS, Circuit Judges.
PER CURIAM:*
Mary C. DeVany was an expert witness in a multi-district products
liability litigation before the United States District Court for the Eastern
District of Louisiana. The district court imposed sanctions on DeVany relating
to her testimony in an unrelated Washington State administrative court
proceeding. DeVany appeals from the sanctions order. We vacate the order of
the district court.
I. BACKGROUND
This appeal comes to us from an order of the district court in Age, et al v.
Gulf Stream Coach, Inc., et al, No. 2:09-CV-02892, a bellwether suit within the
multi-district litigation In Re: FEMA Trailer Formaldehyde Products Liability
Litigation, No. 2:07-MD-1873 (“FEMA Trailer”). Plaintiffs are individuals who
resided in emergency housing units, or FEMA trailers, provided by the Federal
Emergency Management Agency (“FEMA”) after Hurricanes Katrina and Rita.
Plaintiffs in the instant action brought suit against Gulf Stream Coach, Inc.
(“Gulf Stream”), Fluor Enterprises, Inc., and the United States, seeking damages
for injuries resulting from exposure to dangerous levels of formaldehyde or
formaldehyde vapors allegedly released from the FEMA trailers.
The FEMA Trailer Plaintiffs’ Steering Committee retained appellant Mary
C. DeVany (“DeVany”) as an expert witness in the field of industrial hygiene.
She was designated as a fact and expert witness for the class certification
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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hearing and, after class certification was denied, as one of many expert
witnesses for the plaintiffs in the bellwether trial.
Gulf Stream filed a motion in limine to exclude DeVany’s expert opinions
from the trial. In support of its motion, Gulf Stream notified the district court
that DeVany had inflated her educational credentials and exaggerated her role
in the FEMA Trailer litigation in an unrelated matter before the Board of
Industrial Insurance Appeals (“BIIA”) in the State of Washington (the “Vaughn
proceedings”).1 In her testimony before the BIIA, DeVany averred that she was
chosen, at the district court’s request, to be “the one” expert witness “to help [the
district court] evaluate the science behind formaldehyde . . . and explain the
chemistry, physiology and toxicology of formaldehyde.”
The district court denied Gulf Stream’s motion in limine in part,
permitting DeVany to offer opinions relating to her expertise in industrial
hygiene. However, the district court also urged plaintiffs’ counsel to reconsider
calling DeVany as a witness at trial. The district court expressed great concerns
about DeVany’s “completely false representation” to the BIIA that DeVany was
chosen to assist the district court, at its request, in evaluating the science behind
the plaintiffs’ claims. The district court ordered Gulf Stream to produce the
transcript of DeVany’s testimony in the Vaughn proceedings, stating that if Gulf
Stream’s characterization of her testimony was accurate, “[c]ounsel will be
allowed to voir dire DeVany and bring out such prior testimony at trial, which
will, without a doubt, warrant the Court’s correction of such testimony before the
jury, and admonishment of this witness for making such self-aggrandizing
statements.” 2
1
In Re: Steven R. Vaughn, Docket No. 07-13382, Claim No. Y-965493.
2
In her testimony in the Vaughn proceedings, which Gulf Stream provided for the
district court, DeVany stated the following:
A. I’m currently involved in, umm, a large federal case—series of federal
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At trial on September 15, 2009, before plaintiffs’ counsel called DeVany to
testify, the district court informed counsel during a bench conference that it had
read DeVany’s testimony in the Vaughn proceedings and intended to admonish
her in front of the jury. Consequently, plaintiffs chose not to call DeVany as a
witness. On September 17, 2009, DeVany met with the district court in
chambers, where she “apologized for what she considered an error and pledged
her cooperation to rectify the situation.” On September 24, 2009, the jury
entered a verdict for the defendants, and that same day, the district court issued
cases—actually, approximately thirty thousand federal cases, involving,
umm, individual exposures to people that were given FEMA trailers and
portable housing units in response to Katrina—hurricanes Katrina and
Rita. And I’m the expert witness coordinating all the expert work for all
the litigation in the entire gulf coast for the plaintiffs.
...
Q. So, in terms of the multi-party litigation you just mentioned, did all the
attorneys for the parties involved in that litigation have to agree upon
you as an expert, did the Judge appoint you, how did that work?
A. Judge [Engelhardt] had—he’s the Federal Judge, umm, in that whole
jurisdiction, umm—I don’t want to say complained severely, but
what—it was actually, he complained to all the—the, uhh, parties
involved saying since it wasn’t a—it’s not a class action, all these
different lawsuits are clogging up his Federal court system. There are
truly an excess of thirty thousand of them.
And—and so, he told these—all these law firms along the whole
gulf coast to get together and to form one central committee, and to
present to him, since the cases are so similar—present to him one
Complaint, one Request for Interrogatories and Discoveries, you know,
one Motion every time something comes up. And, to agree upon one
expert witness that he could work with to help him evaluate the science
behind formaldehyde, how formaldehyde’s measured, its toxic effect, how
it got into the trailers in the first place, and someone he could rely upon
to produce Affidavits to, umm, evidentiary hearings before him and
explain the chemistry, physiology and toxicology of formaldehyde.
And these law firms along the gulf coast got together and decided
I should be the one.
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an Order and Rule to Show Cause reprimanding DeVany for her statements in
the Vaughn proceedings. That order is the subject of this appeal.
In the order, the district court found that
DeVany’s statements in the Vaughn matter served to grossly
overstate her importance in this litigation, and to incorrectly
portray herself as the single expert exclusively advising this Court,
and upon whom this Court would rely. Without a doubt, DeVany
knew that she had not been granted such status, and that she did
not work with the undersigned in any way regarding the science
behind formaldehyde, etc. Moreover . . . it is clear that DeVany
sought to exaggerate the role of the undersigned, and then attach
herself to that exaggerated position. . . . In order to facilitate this
image, DeVany created the fiction of an overwhelming court docket
in order to further support a motivation for the Court to crown her
as that handpicked expert in this case. She wrongly presented
herself to have the imprimatur of this Court in asserting her
credentials.
It concluded that DeVany was a sophisticated and experienced expert witness
with extensive qualifications, “all of which discount the notion that her
testimony was an unintentional departure from the reality of her role in this
litigation.”
The district court ordered DeVany to send a copy of the order, along with
a written statement setting forth accurate facts, to the judge and attorneys
involved in the Vaughn proceedings within fifteen days, and to provide to the
district court sworn certification that she had complied. If she did not comply
with the order, the district court would order her to show cause in writing,
within fifteen days, why she should not be sanctioned in the amount of $5,000.
DeVany filed a notice of appeal on October 2, 2009.
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II. DISCUSSION
A. Jurisdiction
As a threshold matter, we must determine our jurisdiction over this
appeal.3 We have jurisdiction over “appeals from all final decisions of the district
courts.” 28 U.S.C. § 1291. “[A] decision is not final, ordinarily, unless it ‘ends
the litigation on the merits and leaves nothing for the court to do but execute the
judgment.’” Cunningham v. Hamilton Cnty., 527 U.S. 198, 204 (1999) (quoting
Van Cauwenberghe v. Biard, 486 U.S. 517, 521–22 (1988)).
DeVany argues that the district court’s order amounted to a criminal
contempt order, and is therefore immediately appealable as a final order under
§ 1291. Lamar Fin. Corp. v. Adams, 918 F.2d 564, 566 (5th Cir. 1990) (noting
that criminal contempt orders are appealable final orders). This order is not
immediately appealable under this theory because, for the reasons discussed in
the following section, we find that the district court’s order is not a criminal
contempt order.
In the alternative, DeVany contends that we have jurisdiction over this
appeal pursuant to the collateral order doctrine. See Cohen v. Beneficial Indus.
Loan Corp., 337 U.S. 541, 546 (1949). Under the collateral order doctrine, we
have jurisdiction under § 1291 over a “small category of decisions that . . . do not
end the litigation,” which “includes only decisions that are conclusive, that
resolve important questions separate from the merits, and that are effectively
unreviewable on appeal from the final judgment in the underlying action.”
3
We note at the outset that the district court’s order presents a reviewable appellate
issue. In Walker v. City of Mesquite, 129 F.3d 831, 832 (5th Cir. 1997), we recognized that a
district court’s finding of blatant misconduct by an attorney resulted in injury to the lawyer’s
reputation that was reviewable on appeal, “being persuaded beyond peradventure that one’s
professional reputation is a lawyer’s most important and valuable asset.” The district court’s
finding of misconduct in this case results in a similar harm to DeVany’s professional
reputation as an expert witness, and would likewise be appealable even if not accompanied
by a monetary penalty. Id. at 832–33.
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Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995) (quoting Cohen, 337
U.S. at 546). “The collateral order doctrine is best understood not as an
exception to the ‘final decision’ rule laid down by Congress in § 1291, but as a
‘practical construction’ of it.” Digital Equip. Corp. v. Desktop Direct, Inc., 511
U.S. 863, 867 (1994) (quoting Cohen, 337 U.S. at 546)).
Typically, sanctions orders are not themselves final orders and do not meet
the criteria of the collateral order doctrine. See Click v. Abilene Nat’l Bank, 822
F.2d 544, 545 (5th Cir. 1987). A district court’s finding of sanctionable conduct
in the course of litigation will frequently be “inextricably intertwined with the
merits of the action,” Cunningham, 527 U.S. at 205, and therefore “can be and
routinely [will be] appealed when merged in the district court’s final judgment.”
Click, 822 F.2d at 545. Permitting an immediate appeal from such sanctions
orders would undermine the district court’s discretion in managing litigation
before it, “forestall resolution of the case as each new sanction would give rise
to a new appeal,” and lead to “the very sorts of piecemeal appeals and
concomitant delays that the final judgment rule was designed to prevent.”
Cunningham, 527 U.S. at 209.4
These concerns are not implicated here. First, although the district court’s
order is not final in the sense that it ends litigation on the merits, the order is
4
Cunningham concerned a sanction for discovery violations imposed on an attorney
under Federal Rule of Civil Procedure 37(a). We have since applied Cunningham to preclude
collateral order review of other sanctions orders assessed against attorneys for conduct during
the course of litigation. See, e.g., Conerly v. Ordeneaux, 143 F.App’x 575, 576–77 (5th Cir.
2005) (per curiam) (order imposing sanctions on an attorney under Rule 16(f) or the court’s
inherent power was not an appealable collateral order); Williams v. Midwest Emp’rs Cas. Co.,
243 F.3d 208, 210 (5th Cir. 2001) (per curiam) (Rule 11 sanction imposed on party’s attorney
was neither a final order nor an appealable collateral order). These cases are distinguishable
because here the order concerns a sanction imposed on a witness, rather than an attorney, for
conduct unrelated to the underlying litigation. Cf. Cunningham, 527 U.S. at 207 (in dicta,
noting that unlike attorneys, “witnesses[’] . . . interests may differ substantially from the
parties’,” and that “[t]he effective congruence of interests between clients and attorneys
counsels against treating attorneys like other nonparties for purposes of appeal”).
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final as to DeVany, because the district court conclusively determined that she
“wrongfully presented herself to have the imprimatur of [the district court] in
asserting her credentials” in the Vaughn proceedings. Furthermore, the
sanctions order has no bearing on the merits of the FEMA Trailer litigation, like
a Rule 11 or discovery sanction would; rather, it addresses only DeVany’s
testimony in the Vaughn proceedings before the BIIA. Therefore, review of the
appeal would not impede, and indeed has not impeded, final resolution of the
underlying proceedings. Finally, because the sanctions order is unrelated to the
underlying suit, DeVany has an interest in challenging the sanctions order that
is not shared by the parties; as a non-party, it is unclear that she would be able
to obtain review of the order from the final judgment.5 Given these unique
circumstances, we find that the order at issue fits within the collateral order
doctrine, and accordingly, that we have jurisdiction over this appeal.
B. The District Court’s Authority to Sanction DeVany
We review the district court’s imposition of sanctions for abuse of
discretion. Chambers v. NASCO, Inc., 501 U.S. 32, 55 (1991); Natural Gas
Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d 1397, 1410 (5th Cir. 1993).
DeVany contends that because the district court’s sanctions were punitive,
the order is best characterized as a criminal contempt order. However, nothing
in the record or the district court’s order suggests that the district court intended
to punish DeVany for contempt. “A party commits contempt when he violates
a definite and specific order of the court requiring him to perform or refrain from
performing a particular act or acts with knowledge of the court’s order.” SEC
v. First Fin. Grp. of Tex., 659 F.2d 660, 669 (5th Cir. Oct. 1981). We can find no
5
For this reason, the sanctions order at issue here is analogous to a civil contempt
order imposed upon a non-party, which we likewise consider to be “final” for purposes of
appeal under § 1291. See Southern Ry. Co. v. Lanham, 403 F.2d 119, 124 (5th Cir. 1968) (“an
adjudication of civil contempt is final and appealable as to a non-party who would be unable
to appeal from the final decision on the merits”).
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order of the district court that DeVany may have defied, and the district court
references none. As DeVany herself points out, a sanction for contempt does not
fit the conduct punished here. See 18 U.S.C. § 401(1)–(3).6 Consequently, we
find no reason to construe the district court’s sanction as an exercise of its
contempt powers.
In its order, the district court did not identify the Federal Rule of Civil
Procedure or statutory authority upon which it relied in imposing sanctions on
DeVany. As no rule or statute appears to apply to DeVany’s conduct, we assume
that the district court relied on its inherent power in reprimanding DeVany.7
“When a party’s deplorable conduct is not effectively sanctionable
pursuant to an existing rule or statute, it is appropriate for a district court to
rely on its inherent power to impose sanctions.” Carroll v. The Jaques Admiralty
Law Firm, P.C., 110 F.3d 290, 292 (5th Cir. 1997) (citing Chambers, 501 U.S. at
50). The inherent sanctioning power is “based on the need to control court
proceeding[s] and [the] necessity of protecting the exercise of judicial authority
in connection with those proceedings.” Citizens Bank & trust Co. v. Case (In re
Case), 937 F.2d 1014, 1023 (5th Cir. 1991) (citation omitted). Therefore, the
district court’s inherent power “is not a broad reservoir of power, ready at an
imperial hand, but a limited source; an implied power squeezed from the need
6
18 U.S.C. § 401 states:
A court of the United States shall have power to punish by fine or
imprisonment, or both, at its discretion, such contempt of its authority, and
none other, as--
(1) Misbehavior of any person in its presence or so near thereto as to
obstruct the administration of justice;
(2) Misbehavior of any of its officers in their official transactions;
(3) Disobedience or resistence to its lawful writ, process, order, rule,
decree or command.
7
DeVany points to one possible contender, Rule 11. However, as Rule 11 sanctions may
only be imposed upon an “attorney, law firm, or party” that violates the Rule, it does not apply
to allow a district court to sanction a witness for testimony in an unrelated proceeding before
another court. See FED . R. CIV . P. 11(c)(1).
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to make the court function.” NASCO, Inc. v. Calcasieu Television & Radio, Inc.,
894 F.2d 696, 702 (5th Cir. 1990), aff’d sub nom Chambers v. NASCO, Inc., 501
U.S. 32 (1991). The district court’s inherent power “must be exercised with
restraint and discretion,” Chambers, 501 U.S. at 44, and “may be exercised only
if essential to preserve the authority of the court.” Natural Gas Pipeline Co. of
Am. v. Energy Gathering, Inc. 86 F.3d 464, 467 (5th Cir. 1996).
“Inherent power must arise from the litigation before [the sanctioning]
court,” and a district court abuses its discretion for sanctioning conduct that
cannot be construed as part of the proceedings before it. Case, 937 F.2d at 1024.
In Case, we held that a bankruptcy court’s inherent sanctioning power did not
extend to a debtor’s improper conduct in a state court proceeding that was
“completely collateral to the proceedings in the bankruptcy court.” Id. at 1023.
Although the debtor employed the same bad-faith litigation tactics against the
same creditor in the state court action as in the bankruptcy court, we found that
the “conduct of the parties in the state action cannot be said to affect the exercise
of the judicial authority of the bankruptcy court or limit the bankruptcy court’s
power to control the behavior of parties and attorneys in the litigation before it.”
We therefore held that the bankruptcy court abused its discretion in sanctioning
conduct that occurred outside the litigation before it by awarding attorneys’ fees
incurred in the state court action. Id. at 1023–24.
We affirmed the limited reach of the district court’s inherent sanctioning
power in FDIC v. Maxxam, Inc., 523 F.3d 566, 593 (5th Cir. 2008). Vacating the
district court’s sanctions assessed against a party for its conduct relating to a
collateral administrative court proceeding, we held that a court’s “inherent
power to police itself” does not “grant a district court the power to police the
administrative courts . . . when those courts do not threaten the court’s own
judicial authority or proceedings.” Id. (internal quotation omitted); see also
Positive Software Solutions, Inc. v. New Century Mortg. Corp., –F.3d–, 2010 WL
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3530013, at *5 (5th Cir. Sept 13, 2010) (holding that a district court lacked
inherent authority to sanction an attorney for misconduct that took place during
a related arbitration proceeding, because the misconduct was neither before the
district court nor in direct defiance of its orders).
In accordance with this caselaw, it is clear that the district court abused
its discretion in sanctioning DeVany for her testimony before the Washington
State BIIA. Her testimony in the Vaughn proceedings was not a part of the
proceedings before the sanctioning court. We have even less reason to affirm
DeVany’s sanctions than in Case, Maxxam, and Positive Software Solutions
because, unlike the collateral proceedings in those cases, the Vaughn
proceedings were wholly unrelated to the underlying litigation in the FEMA
Trailer litigation. While the district court may consider conduct in collateral
proceedings in determining whether the conduct before it was taken in bad faith
or undertaken with an improper motive, see Travelers Ins. Co. v. St. Jude Hosp.
of Kenner, La., Inc., 38 F.3d 1414, 1417–18 (5th Cir. 1994), the district court did
not do so here. Rather, it reprimanded DeVany solely for testimony in the
Vaughn proceedings and made no findings that she acted improperly in the
instant action. DeVany’s testimony in the Vaughn proceedings concerning her
role in the FEMA Trailer litigation neither interfered with the FEMA Trailer
proceedings nor threatened the district court’s authority to manage those
proceedings. Therefore, it cannot be said that the exercise of the district court’s
sanctioning power in the instant case was “essential to preserve the authority
of the court.” Natural Gas Pipeline, 86 F.3d at 467.
The district court was understandably troubled by the substance of
DeVany’s testimony in the Vaughn proceedings. Our vacation of the district
court’s sanctions order should not be construed as endorsing DeVany’s
testimony. We merely hold, as our caselaw compels, that the district court’s
inherent power to sanction bad-faith litigation conduct did not reach DeVany’s
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testimony before the BIIA.8 Because we hold that the district court abused its
discretion in sanctioning DeVany for her testimony in the Vaughn proceedings,
we do not reach her argument that the district court failed to provide her due
process prior to entering its sanctions order.
III. CONCLUSION
For the foregoing reasons, we VACATE the order of the district court.
8
We do not address whether it would have been proper for the district court to
admonish DeVany during trial if opposing counsel brought out her prior testimony during
examination; as plaintiffs’ counsel chose not to call her as a trial witness, the issue is not
before us.
12