Gonzalez v. Trinity Marine Group, Inc.

United States Court of Appeals,

Fifth Circuit.

No. 96-30980.

Jose GONZALEZ, Plaintiff-Appellant,

v.

TRINITY MARINE GROUP, INC., Defendant-Appellee.

July 28, 1997.

Appeal from the United States District Court for the Eastern
District of Louisiana.

Before POLITZ, Chief Judge, DeMOSS, Circuit Judge and DOHERTY,1
District Judge.

DOHERTY, District Judge:

Appellant, Jose Gonzalez ("Gonzalez"), appeals the district

court's judgment dismissing Gonzalez's suit at his cost and the

granting of reasonable attorney's fees and expenses in connection

with the district court's grant of Trinity Marine Group, Inc.'s

("Trinity") Motion to Strike Plaintiff's Pleadings for Dismissal

and Sanctions. Plaintiff also appeals the district court's use of

an evidentiary hearing in conjunction with Trinity's Motion to

Strike Pleadings for Dismissal and Sanctions and the denial by the

district court of Plaintiff's Motion for Partial Summary Judgment

on the issue of whether Plaintiff, as a matter of law, was an

"employee" within the meaning of La.Rev.Stat. § 23:1006 and

La.Rev.Stat. § 51:2231, the Louisiana race, sex, and age

discrimination in employment statutes. For the following reasons,

1
District Judge of the Western District of Louisiana, sitting
by designation.

1
we AFFIRM IN PART, REVERSE IN PART and REMAND IN PART.

Background

In August of 1994, Jose Gonzalez filed suit against Trinity

Marine Group, Inc. asserting several claims which included a claim

pursuant to the Louisiana employment discrimination statutes,

La.Rev.Stat. § 23:1006 and § 51:2231 et seq., claims pursuant to

La. Civ.Code art. 2315 for intentional and negligent infliction of

emotional distress, and a claim for breach of contract and

detrimental reliance also pursuant to Louisiana law.2

Gonzalez was hired on April 13, 1992, and employed as a

draftsman for over two years at Trinity's Gretna, Louisiana

shipyard. Trinity alleges Gonzalez was a "job shopper" or

independent contractor; Gonzalez alleges he was an employee.

Gonzalez's position was eliminated when the amount of drafting work

done at Trinity declined, and required a reduction in work force

and contract labor. Gonzalez was the last remaining job shopper

when his position was eliminated. Prior to his dismissal from

Trinity, in a letter dated August 17 1994, Gonzalez complained to

Trinity of discrimination based on his national origin, wherein he

stated his classification as an independent contractor was due to

his being of Hispanic national origin. The following week, on

2
However, the district court subsequently dismissed Gonzalez's
claims for intentional and negligent infliction of emotional
distress. Ruling on Motions, January 19, 1995. It is not
necessary for the purposes of this motion to reiterate the entire
procedural history of this matter, other than to state plaintiff's
claims are pursuant to La.Rev.Stat. § 51:2231 and La.Rev.Stat. §
23:1006. Plaintiff has not asserted a claim pursuant to 42 U.S.C.
§ 2000e, Title VII.

2
August 26, 1994, Trinity officials met with Gonzalez to discuss his

claim of discrimination. Unbeknownst to the Trinity officials,

Gonzalez secretly recorded the meeting. Gonzalez was terminated

from Trinity the following week and subsequently filed his

complaint on August 30, 1994 against Trinity alleging race

discrimination and retaliatory discharge.

Within discovery, Gonzalez did not disclose that a recording

of the meeting existed. A hearing was held on October 11, 1995, on

a Motion to Compel Certain Discovery, which would have included the

tape at issue, wherein the district court ordered Gonzalez to

produce a privilege log. Trinity's receipt of that log on October

24, 1995 granted Trinity its first notice of the existence of a

taped recording of the August 26, 1994 meeting.

Upon request to produce the tape, Gonzalez refused and Trinity

filed a second motion to compel. After the motion was filed by

Trinity, Gonzalez agreed to produce the tape and on November 7,

1995, Gonzalez's attorney, Gregory T. Juge, produced what is now

called the "original tape." The sound quality of the copied tape

was poor and Trinity engaged a local expert, Keith Falgout, to

amplify the sound quality. During this process concern arose that

the "original tape" had been altered.

Trinity subsequently hired an expert, Dr. George Papcun, of

Los Alamos National Laboratories, to perform certain tests on the

tape. To do so, he needed the actual "original" recording and the

tape recorder which Gonzalez had used to record the meeting with

Trinity officials. Trinity's attempts to obtain the actual

3
"original" recording and the tape recorder from plaintiff's counsel

were unsuccessful.

Trinity was forced to file a third motion to compel for the

production of the actual "original" recording and tape recorder.

The district court granted defendant's third motion to compel on

December 21, 1995, ordering Gonzalez to produce the actual

"original" tape and the recorder. Thereafter, Gonzales produced

the actual "original" tape recording and the tape recorder used in

recording the conversation between Gonzalez and the Trinity

officers on August 26, 1994. The "original" recording was

digitally recorded by Trinity's experts onto another tape and onto

a computer for later analysis. Both the "original" tape and the

digital copies were tested and analyzed by Trinity's experts.

Plaintiff's counsel was in attendance at all times during the

copying and testing of the "original" tape, and upon completion of

the testing, said tape was returned to his possession. Exact

duplicate copies of all tapes created and/or analyzed by

defendant's experts were provided to the Plaintiff.

After receiving a report from Dr. Papcun, Trinity filed a

Motion to Strike Pleadings, for Dismissal and Sanctions. In

conjunction with said motion, Trinity requested an evidentiary

hearing which the district court held on August 8, 1996.

After testimony was presented during the evidentiary hearing,

which included Plaintiff's testimony, defendant's experts, and

Trinity employees who had been present at the August 26, 1994

meeting, the district court ruled:

4
 The Court having heard that which was presented on the motion
of Defendant to strike Plaintiff's pleadings for dismissal and
for sanctions will grant the motion for sanctions and will
discuss what they should be. I will reserve ruling on the
motion to strike pleadings and will reserve ruling on the
motion for dismissal.

It would be appreciated if Counsel could suggest to the Court
either orally now or in a brief what sanctions should be,
bearing in mind, and this is not a ruling on the motion for
dismissal, that I consider a dismissal rather extreme,
especially when there are other aspects of the case. But I
don't rule out dismissal, and striking pleadings in effect is
the same thing as dismissal, so whatever you care to address
is fine.

Sanctions, which should they be? I could pronounce to the
jury at the time of the trial of this case that it is an
established fact that Mr. Gonzalez knew at the time he had
this conversation that work was slowing down. I could tell
the jury that when I had a hearing on a pre-trial motion, I
considered that Mr. Gonzalez's testimony was untruthful and I
could tell the jury that Mr. Gonzalez made a tape recording of
a conversation unknown to other participants in the
conversation and that while in his possession the tape
recording was altered in the manner in which it was altered.

These are merely suggestions, but I do think the preponderance
of the evidence I've heard, the expert testimony, every—the
tape was altered. The only material place that I think we're
talking about is the "I don't know," instead of, "yes, I know
the work was slowing down."

And it would be my intention to make sure the jury knows that
my appreciation of the fact was that Mr. Gonzalez was
untruthful and that the tape while in his possession was
altered in that respect....

With all this in mind, I don't see that it's necessary for me
at this time to report this to the Criminal Division of the
United States Attorney's Office, but it might be that it
should be done. I'm stating now that evidence in the case was
altered. I'm stating that I think perhaps Mr. Gonzalez
committed perjury. Maybe you should address whether I should
address this to the Criminal Division of the United States
Attorney's Office.

I throw the ball in your court, gentlemen and consider the
matter submitted.

Transcript of Evidentiary Hearing, August 8, 1996, at 131-33.

5
Counsel for Gonzalez and Trinity both submitted post-trial

memoranda as requested by the court.

The district court thereafter on August 29, 1996, issued

ruling on defendant's Motion to Strike Pleadings for Dismissal and

Sanctions. In said ruling, the district court found based on

"material filed in support of defendant's motion, from independent

expert laboratory analysis and from the testimony and evidence

addressed at the evidentiary hearing that the tape was deliberately

altered and fabricated in two ways: (1) certain admissions by

plaintiff were erased, and (2) certain admissions by plaintiff were

"over dubbed" with statements neutralizing the effect of these same

admissions."3

The Court further noted, "[t]he experts' opinions and findings

are that the "original' tape that was produced by plaintiff: (l )

is not a recording of the conversation it purports to represent,

(2) is not the recording made between plaintiff and defendant

officials, (3) is a false recording of those purported events, and

(4) has been edited and deliberately altered in an attempt to

fabricate a single, continuous recording between the parties. The

court agrees with these opinions and findings and also determines

that plaintiff gave untruthful testimony at the hearing to the

effect that he did not stop-start the recording device on his

person at the aforesaid conference with defendants, and to the

effect that the tape was not altered."4 The district court then

3
Memorandum Ruling of August 29, 1997 at 2.
4
Id. at 4.

6
granted Trinity's motion to dismiss Gonzalez's claim and awarded

attorney's fees and expenses in connection with its motions.

Gonzalez appeals the court's order imposing sanctions and

dismissing his case complaining that the district court abused its

discretion by holding an evidentiary hearing in conjunction with

defendant's Motion to Strike Plaintiff's Pleadings for Dismissal

and Sanctions, thereby denying Plaintiff his right to a jury trial;

and failing to use the least severe sanction available by

dismissing Plaintiff's entire claim pursuant to its inherent powers

and Fed. R. Civ. Pro. 37(b)(2). Additionally, Gonzalez appeals the

district court's denial of his Motion for Partial Summary Judgment.

Discussion

We review the district court's imposition of sanctions and

dismissal of Plaintiff's case for abuse of discretion. Chambers v.

NASCO, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 2138, 115 L.Ed.2d 27,

reh'g denied, 501 U.S. 1269, 112 S.Ct. 12, 115 L.Ed.2d 1097 (1991);

Natural Gas Pipeline Co. of America v. Energy Gathering, Inc., 2

F.3d 1397, 1410 (5th Cir.1993) cert. denied, Fox v. Natural Gas

Pipeline Co. of America, 510 U.S. 1073, 114 S.Ct. 882, 127 L.Ed.2d

77 (1994). In dismissing Plaintiff's claim, the district court

appears to have relied on Fed. R. Civ. Pro. 37(b)(2)(C) and the

Fifth Circuit opinion of Woodson v. Surgitek, Inc., 57 F.3d 1406,

1417 (5th Cir.1995), in which a plaintiff's claim was dismissed

pursuant to the district court's inherent powers under Article III.

Federal Rule of Civil Procedure 37(b) addresses the issue of

sanctions and provides in relevant part:

7
 (2) Sanctions by a court in which action is pending. If a
party ... fails to obey an order to provide or permit
discovery, including an order made under subdivision (a) of
this rule ..., the court in which the action is pending may
make such orders in regard to the failure as are just, and
among others the following:

(C) An order striking out pleadings or parts thereof, or
staying further proceedings until the order is obeyed, or
dismissing the action or proceeding or any part thereof,
or rendering a judgment by default against the
disobedient party;

In Woodson, this court also upheld dismissal of a plaintiff's

claim based on the inherent power of a district court. In Woodson

we stated:

The federal courts are vested with the inherent power "to
manage their own affairs so as to achieve the orderly and
expeditious disposition of cases." [Link v. Wabash R. Co.,
370 U.S. 626, 630, 82 S.Ct. 1386, 1388, 1389, 8 L.Ed.2d 734
(1962).] This power is necessarily incident to the judicial
power granted under Article III of the Constitution. [Natural
Gas Pipeline, 2 F.3d at 1406.] This includes the power of the
court to control its docket by dismissing a case as a sanction
for a party's failure to obey court orders. [In re United
Markets Int'l, Inc., 24 F.3d 650, 654 (5th Cir.) cert.
denied,513 U.S. 946, 115 S.Ct. 356, 130 L.Ed.2d 310 (1994).]
However, when these inherent powers are invoked, they must be
exercised with "restraint and discretion." [Chambers, 501
U.S. at 44, 111 S.Ct. at 2132.] Dismissing a case with
prejudice is a harsh sanction, but we will uphold an
involuntary dismissal unless the district court has abused its
discretion. [Id. at 54-56, 111 S.Ct. at 2138.] This Court
has held that such sanctions should be confined to instances
of "bad faith or willful abuse of the judicial process."
[United Markets, 24 F.3d at 654 (quoting Pressey v. Patterson,
898 F.2d 1018, 1021 (5th Cir.1990)).]

Woodson, 57 F.3d at 1417 (some citations omitted).

Further, "a court must, of course, exercise caution in

invoking its inherent power, and it must comply with the mandates

of due process, both in determining that the requisite bad faith

8
exists and in assessing fees."5

This Court notes that dismissal with prejudice is an "extreme

sanction that deprives the litigant of the opportunity to pursue

his claim." Woodson, 57 F.3d at 1418 (quoting Callip v. Harris

County Child Welfare Dept., 757 F.2d 1513, 1519 (5th Cir.1985)).

Additionally, the district court is bound to impose the least

severe sanction available. Carroll v. Jaques Admiralty Law Firm,

110 F.3d 290 (5th Cir.1997).

First, this Court finds no abuse of discretion in the court's

actions as to its grant of expenses and attorney's fees and thus

AFFIRMS the district court's grant of reasonable expenses including

attorney's fees as sanctions for Plaintiff's conduct.

Second, this Court AFFIRMS the district court's use of an

evidentiary hearing in conjunction with defendant's Motion to

Strike Plaintiff's Pleadings for Dismissal and Sanctions. An

evidentiary hearing in order to determine the validity of a claim

of willful and bad faith fabrication of evidence and an abuse of

the judicial process, is wholly within the discretion of the

district court and does not deprive Plaintiff of his right to a

jury trial on his claims. Said evidentiary hearing would be in the

nature of a hearing required pursuant to Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d

469 (1993), which requires the district court to exercise a "gate

keeping" role prior to trial to determine whether the testimony

5
Chambers, 501 U.S. at 50, 111 S.Ct. at 2136. There is no
issue of due process that need be addressed, nor that was raised by
Gonzalez.

9
offered by an expert is sufficiently reliable to be presented to

the jury. Such is the case with the "altered" tape recording at

issue. Allegations made by defendant require the exercise of the

district court's inherent power to "manage their own affairs so as

to achieve an orderly and expeditious disposition of cases." Link,

370 U.S. at 630-31, 82 S.Ct. at 1389.

Third, this Court must now address the most difficult issue

presented, the dismissal of Plaintiff's entire case with prejudice

as a sanction. As noted, Rule 37(b) specifically provides for

dismissal of an action for direct failure of a party to obey an

order of the court. Also, as previously noted, this Court has

affirmed dismissal as a sanction under the inherent powers of the

court. Woodson, supra. However, in recognizing those powers this

Court also has required the least onerous sanction which will

address the offensive conduct be used. In this matter, as the

district court itself noted it had available a wide selection of

sanctions. Many of the available possible sanctions would have had

same or similar practical effect as to plaintiff's egregious

actions and result as the dismissal. As this is the case, this

court REVERSES the district court, only in its selection of

dismissal of the entire case, and REMANDS this case to the district

court for selection of an appropriate sanction which fully

addresses Plaintiff's egregious behavior, but falls short of the

ultimate sanction of dismissal of Plaintiff's entire claim with

prejudice.

Denial of Partial Summary Judgment

10
 As previously stated, the crux of Plaintiff's discrimination

claim against Trinity is plaintiff's nationality, Hispanic, and his

allegations that he was not receiving the same benefits as other

employees at Trinity while he was working at the Trinity Gretna

shipyard. Trinity alleges that Plaintiff was hired as an

independent contractor and a "job shopper" and therefore, Plaintiff

must establish he was in fact an employee and Trinity was his

employer, in order for Gonzalez to maintain his claims under the

Louisiana discrimination statutes.6

Accordingly, Gonzalez, on June 4, 1996, filed a Motion for

Partial Summary Judgment seeking a ruling from the district court

that Plaintiff was an "employee" within the meaning of Title VII

and that Trinity was liable for discriminating against Plaintiff in

the terms and conditions of his employment, prior to his discharge.

The Motion for Summary Judgment was heard on briefs and

subsequently denied by the district court in an order and reasons

dated July 17, 1996. The district court essentially ruled, that in

applying the "hybrid test" for a determination of employee status,

cited in Deal v. State Farm Mutual Ins. Co. of Texas, 5 F.3d 117,

118-19 (5th Cir.1993), that the determination of whether Gonzalez

was an "employee" or "independent contractor" "requires a factual

analysis of often conflicting allegations" and as such, the

district court found that the "issue is not amenable to summary

6
Both parties agree that the analysis of plaintiff's claims
under La.Rev.Stat. § 51:2231 and La.Rev.Stat. § 23:1006 utilize the
same analysis as a claim for discrimination brought under Title
VII.

11
judgment at this time."7

The district court's denial of Plaintiff's Motion for Partial

Summary Judgment is not a final decision as to which this Court has

appellate jurisdiction. See Enplanar, Inc. v. Marsh, 11 F.3d 1284,

1291 n. 7 (5th Cir.1994) (citing 10 Wright & Miller, FEDERAL

PRACTICE AND PROCEDURE § 2715 p. 636). Consequently, Plaintiff's

appeal as to this action by the district court is DISMISSED.

Conclusion

This Court finds Gonzalez's behavior as reprehensible as did

the district court and recognizes with approval the district

court's exercise of its right to protect the integrity of the

judicial process. However, as recognized by the district court in

its reasons, dismissal of the entire claim is extreme and the

district court had available several other options which would have

addressed the offensive behavior with equally deterrent effect.

Accordingly, the dismissal of Plaintiff's claim with prejudice is

REVERSED. This Court, however, AFFIRMS the awarding of reasonable

costs and attorney's fees in connection with the motions and

holding of an evidentiary hearing by the district court in order to

determine the validity of the "original" tape in question.

Although Gonzalez also raises on appeal the district court's denial

of his Motion for Partial Summary Judgment, Plaintiff's appeal of

the denial of the Motion for Partial Summary Judgment is DISMISSED

for lack of appellate jurisdiction.

7
Order and Reasons of July 17, 1996.

12