United States Court of Appeals,
Fifth Circuit.
No. 93-3110.
Shelby REED, Plaintiff,
Richard H. Barker, IV, Movant-Appellant Cross-Appellee,
v.
IOWA MARINE AND REPAIR CORP., Defendant-Appellee Cross-Appellant.
March 14, 1994.
Appeal from the United States District Court for the Eastern
District of Louisiana.
Before POLITZ, Chief Judge, KING and GARWOOD, Circuit Judges.
POLITZ, Chief Judge:
Richard H. Barker IV, Esq. appeals the district court's
inherent power assessment of personal sanctions totaling $38,770.94
for the tardy filing of supplemental answers to interrogatories,
143 F.R.O. 648. Finding an abuse of discretion, we reverse.
Background
The instant dispute arises out of a personal injury lawsuit
filed by Barker for the plaintiff Shelby Reed. The case was
referred to Barker by Ron Menville, an out-of-town attorney. Reed
filed the complaint and routinely handled interrogatories
propounded by the defendant. Menville engaged John Gibson, an
attorney in Reed's hometown of Monticello, Arkansas, to assist Reed
in understanding and answering the interrogatories. Contrary to
the factual scenario Reed told Barker, as reflected in the initial
answers to interrogatories, Reed actually had been treated by over
100 doctors for job-related injuries and he had sued at least ten
1
former employers, collecting over $150,000 in settlements.
The truth emerged at a deposition of Reed taken by Iowa
Marine's counsel. That deposition was scheduled after defense
counsel amassed critical information, aided by Barker who routinely
had secured and furnished Reed's written consent for defense
counsel to get material records. The information thus secured by
defense counsel was supplemented by data about prior claims
otherwise available to the defendant and its insurer. During the
course of the deposition in April 1991, when confronted with
specifics, Reed admitted to a significant number of undisclosed
prior injuries and lawsuits that the defendant had uncovered. At
the conclusion of the deposition, counsel for Iowa Marine requested
"that the answers to defendant's Interrogatories be updated and be
more accurate please." Barker immediately responded "Certainly."
After the deposition, Barker asked Reed why he previously had
not revealed the prior injury/claim information, and he asked about
any other omissions. Reed responded that Menville had told him
that previous injuries would not preclude recovery in this case, a
statement he understood as advising that such injuries were
irrelevant. Reed assured Barker, however, that during the
deposition he had been forthright about all of his earlier
omissions. Barker promptly telephoned Menville who confirmed the
substance of Reed's explanation. Thereafter, believing Reed had no
additional relevant information beyond that admitted at the
deposition, of which the defendant obviously was aware, Barker did
not file supplemental answers until August 1991 when he did so in
2
response to Iowa Marine's Motion to Compel. The responses then
made were based on data developed during the deposition and taken
from defendant's motion for summary judgment. All of this
information was in the defendant's possession before filing the
motion to compel. The case routinely proceeded to trial.1
At conclusion of the trial, during which Reed's credibility
obviously was a major issue, the jury found for the defendants.
Iowa Marine then sought sanctions totaling over $60,000,
complaining of Barker's bad faith and dilatory response to its
request for supplemental answers to the interrogatories. After two
hearings the district court found no Fed.R.Civ.P. 11 violation and
no 28 U.S.C. § 1927 violation of the prohibition against vexatious
litigation. Exercising its inherent power, however, it levied
sanctions in the amount of $38,770.64 against Barker personally for
ostensible bad faith violations of Fed.R.Civ.P. 26(e)(2) & (3).2
Both parties timely appeal, Barker seeking relief from judgment,
Iowa Marine seeking the entire amount of its sanctions claim.
Analysis
We review the imposition of sanctions for an abuse of
discretion.3 In this analysis we are mindful that a "district
1
Iowa Marine sought summary judgment on all issues. The
court granted summary judgment on the maintenance and cure claims
but denied it as to the rest of Reed's claims, referring those to
trial.
2
The applicable version of Rule 26(e) is the text as amended
in 1987. The most recent amendments to Rule 26 were not in
effect for the relevant period herein.
3
National Hockey League v. Metropolitan Hockey Club, 427
U.S. 639, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976); Batson v. Neal
3
court necessarily would abuse its discretion if it imposed
sanctions based upon an erroneous view of the law or a clearly
erroneous assessment of the evidence."4 We are mindful that the
threshold for the use of inherent power sanctions is high. Indeed,
the Supreme Court has cautioned that "[b]ecause of their very
potency, inherent powers must be exercised with restraint and
discretion."5 We find the mandated restraint lacking herein.
In a nutshell, the district court found that "Barker acted in
bad faith in his failure to supplement his responses to
interrogatories for three and one-half months after agreeing to do
so, and after having learned of the facts that activated his duty
to do so." Barker insists that he did not violate Rule 26(e) or
act in bad faith.
Rule 26(e) Violations
Fed.R.Civ.P. 26(e)(2) requires counsel to supplement
seasonably any discovery response "if the party obtains information
upon the basis of which (A) the party knows that the response was
incorrect when made, or (B) the party knows that the response
though correct when made is no longer true and the circumstances
are such that a failure to amend the response is in substance a
knowing concealment." Rule 26(e)(3) states that "[a] duty to
supplement responses may be imposed by ... agreement of the
Spice Assoc., 805 F.2d 546 (5th Cir.1986).
4
Smith v. Our Lady of the Lake Hosp., Inc., 960 F.2d 439,
444 (5th Cir.1992).
5
Chambers v. Nasco, Inc., 501 U.S. 32, ---- - ----, 111
S.Ct. 2123, 2132-33, 115 L.Ed.2d 27 (1991).
4
parties." Barker earnestly maintains that he did not violate
either provision of this Rule.
Neither subpart of Rule 26(e)(2) requires a party to amend
unless one obtains information reflecting that a prior response is
incorrect. The 1993 recasting of Rule 26(e) makes clear that a
party has a duty to supplement discovery responses only if the
additional information has not otherwise been made known to the
other parties during the discovery process.6 There is nothing in
the language or history of the controlling version of Rule 26(e)
which militates in favor of a contrary conclusion.7 Therefore, to
establish that Barker violated Rule 26(e) and that the sanctions
were warranted and within the district court's sound discretion,
Iowa Marine had to show: (1) Barker actually was aware that his
client's discovery responses were incorrect, and (2) he did not
seasonably inform, (3) an unknowing Iowa Marine. No such showing
was made. The reason is apparent; none could be made herein.8
6
While the term "party" includes both client and attorney,
the duty to amend only binds individuals who become aware of
errors in previous discovery responses. Here, although Reed knew
of the facts in question and concealed them, Barker did not. See
Chambers, 501 U.S. at ----, 111 S.Ct. at 2133 ("if a court finds
"that fraud has been practiced upon it, or that the very temple
of justice has been defiled,' it may assess attorney's fees
against the responsible party ") (emphasis added). We do not
address the appropriateness of sanctions against Reed or Reed's
out-of-state attorneys. We merely find same inappropriate as to
Barker.
7
See Fed.R.Civ.P. 26(e)(2) (1993). Cf. Wright & Miller §
2049 at 324 ("not under a duty to amend his responses ... [if]
the change in conditions that has made his answer no longer
accurate is known to his opponent").
8
Indeed supplemental responses herein, in light of Reed's
deposition admissions, might largely be viewed as a duplicative,
5
The record contains no support for any suggestion that Barker
became aware of Reed's "inaccuracies" prior to Reed's admissions
during his deposition. Thereafter Barker obviously knew that the
original interrogatories were inaccurate, but so did defense
counsel who actually knew that before, at least in major part. As
to Barker's knowledge after the deposition, Reed offered an
explanation for his previous omissions which were confirmed by
forwarding counsel, and Reed assured Barker that he had now
provided Iowa Marine with complete and correct information. Barker
attests that he believed these representations until he received
Iowa Marine's summary judgment motion and its further disclosing of
Reed's dishonesty. Thus, for the period prior to Iowa Marine's
July 1991 summary judgment motion, there is no evidence whatever
that Barker withheld anything he knew in violation of Rule
26(e)(2). Neither is there any suggestion that at any point after
the filing of the summary judgment motion Barker became aware of
further omissions which he would have been obliged to reveal to
Iowa Marine. In sum, the district court's sanctions order was
based on an erroneous view of the law and, under the correct
construction of Rule 26(e)(2), there is insufficient evidence to
support that order. Accordingly, the district court's imposition
of sanctions was an abuse of the court's discretion.
Iowa Marine points to Barker's post-deposition 26(e)(3)
agreement to supplement his initial interrogatory responses.
Neither Barker's immediate response of "certainly" to defense
wasteful exercise.
6
counsel's request for supplementation, nor the permissive terms of
Rule 26(e)(3) support Iowa Marine's suggestion that Barker agreed
to reveal more than he learned from the deposition and his
post-deposition discussion with Reed and referring Arkansas
counsel.
Our reading of Rule 26(e)(2) and (3) is consistent with the
Rule's basic purpose of preventing prejudice and surprise,9 neither
of which occurred in the case at bar. There is no evidence that at
any point in these proceedings Barker was aware of any information
which Iowa Marine did not already possess. By the time of Reed's
deposition, Iowa Marine knew most of the information in question.
Defense counsel knew far more than Barker did. The remainder of
the information for which Barker was sanctioned for delaying was in
Iowa Marine's hands by the time of its July 1991 summary judgment
motion and motion to compel, months before trial. On these facts,
the defendant could not have been caught unprepared due to any
delay by Barker. There manifestly was no prejudice or surprise.
The purposes of Rule 26(e) were not frustrated by Barker's conduct.
One final note: at direction of referring counsel Menville,
John Gibson, an Arkansas attorney, assisted Reed in writing the
answers to the interrogatories and forwarded them to Barker for
typing in proper form and filing. Barker merely sent a copy of the
interrogatories to Reed through Gibson, asking that they make
certain that the interrogatories were fully answered. He then
9
Halpern v. John Menville Sales Corp., 737 F.2d 462 (5th
Cir.1984) (standard under Rule 26(e) is whether the party was
"prejudicially surprised").
7
typed and distributed the responses. The preparation of the
substance of the answers to the interrogatories was entrusted by
the original forwarding attorney, who actually tried the case, to
an attorney other than Barker. Barker did not act unreasonably in
relying on Menville and Gibson and their investigation of Reed's
claims. We previously have held that "an attorney receiving a case
from another attorney is entitled to place some reliance upon that
[referring] attorney's investigation."10 That proposition holds
doubly true in the instant case.
Finally, the district court's order implies that Barker had
a further duty to investigate Reed once he was put on notice that
his client had been less than forthcoming. There is, of course, a
Rule 11 duty to investigate, which attaches on signature of a
pleading. The district court rightly recognized that this duty is
limited to pleadings and explicitly rejected Rule 11 as the basis
for sanctioning Barker. Neither the district court nor Iowa Marine
cites any authority for the proposition that Rule 26(e) creates a
new and greater duty to investigate. We are aware of none.
Capsulating, Reed gave an untruthful version of his medical
and litigation history both to Barker and to Iowa Marine. At
deposition, Reed admitted to untruths in his interrogatory answers
but gave Barker an explanation for same which was confirmed by
forwarding counsel. While we obviously would encourage Barker to
do more next time in instances such as here presented, including
withdrawing from the case, we are not prepared to create out of
10
Our Lady of the Lake, 960 F.2d at 446.
8
whole cloth an expansive Rule 26 duty to investigate and, ex post
facto, sanction Barker thereunder. We therefore conclude that
under the relevant and controlling rubrics, Barker's conduct did
not warrant the imposition of sanctions.
The judgment of the district court is REVERSED.
9