Horaist v. Doctor's Hospital of Opelousas

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _______________ m 99-31121 _______________ DEBORAH M. HORAIST, Plaintiff-Appellant, VERSUS DOCTOR’S HOSPITAL OF OPELOUSAS; COLUMBIA/HCA HEALTHCARE CORPORATION OF CENTRAL LOUISIANA, INC.; NOTAMI OPELOUSAS, INC.; NOTAMI HOSPITAL OF LOUISIANA, INC.; COLUMBIA/HCA HEALTHCARE CORPORATION; JAMES BIENVENUE; GREG GIBSON; MEL LAGARDE; DARYL DOISE; RICK THOMASON; SELDON DESHOTEL, JR., M.D.; CONTINENTAL INSURANCE COMPANIES; CONTINENTAL CASUALTY COMPANY; RELIANCE INSURANCE COMPANY OF ILLINOIS; CNA INSURANCE COMPANY; CLARENDON LLOYDS; HEALTHCARE INDEMNITY, INC.; AND LLOYDS OF LONDON, Defendants-Appellees. ******************************* _______________ m 99-31138 _______________ SEALED APPELLEE, Plaintiff-Appellee, VERSUS SEALED APPELLANT 1; SEALED APPELLANT 2; SEALED APPELLANT 3; SEALED APPELLANT 4; SEALED APPELLANT 5; SEALED APPELLANT 6; SEALED APPELLANT 7; SEALED APPELLANT 8; SEALED APPELLANT 9, Defendants-Appellants. _________________________ Appeals from the United States District Court for the Western District of Louisiana _________________________ July 11, 2001 Before REYNALDO G. GARZA, certified its ruling for interlocutory appeal HIGGINBOTHAM, and SMITH, under 28 U.S.C. § 1292(b). The court also Circuit Judges. dismissed most of Horiast’s claims but certi- fied its dismissal of her conspiracy claims and JERRY E. SMITH, Circuit Judge: her state law claims for appeal under FED. R. CIV. P. 54(b). Deborah Horaist was fired by Doctor’s Hospital of Opelousas, allegedly in retaliation Horaist appeals, contending that she for reporting unwelcome sexual advances from properly raised claims under § 1985(3) and her supervisors. She sued the alleged harass- that her state law claims are not time-barred. ers, the hospital, and several of its officers We affirm and remand for further proceedings. (collectively “defendants”) under title VII, 42 U.S.C. § 1985(3), and state law. Defendants I. moved to disqualify Horaist’s counsel on the Horaist was Director of Business Health ground that he had an intimate relationship Services for Doctor’s Hospital from July 1995 with her. to December 1996, during which time she was dating André Toce, her lawyer in this case. In The district court denied the motion but November 1995, Toce sponsored a breast aug- 2 mentation surgery for her. law claims of battery and intentional infliction of emotional distress. The defendants moved Horaist asserts that throughout her to disqualify Toce and his law firm on the employment, she received unwelcome sexual ground that his intimate relationship with Hor- advances and verbal harassment, including aist caused a conflict of interest and interfered comments about her breasts, from Sheldon with his ability to render independent Deshotels, a physician on staff. Horaist professional judgment. Moreover, they reported Deshotels’s behavior to Gibson and claimed Toce was a necessary witness on the to the Chief Operations Officer and Chief issues of liability and damages for emotional Financial Officer. Gibson advised her to file a distress, because Horaist had discussed written complaint with him rather than with problems in her relationship with Toce with Human Resources. Horaist did not tell Toce her therapist. Further, they argued that these about the sexual harassment at the time, nor conflicts should be imputed to Toce’s firm. did Toce notice anything while attending social functions at the hospital with her. The court dismissed the § 1985(3) conspiracy claims against all defendants, the Horiast further claims that Gibson made re- state law claims against the corporate peated and unwelcome sexual advances defendants, state law claims against Deshotels, toward her, including calling her residence, and state law claims against Gibson for failure fondling her in a sexual manner, commenting to state a claim on which relief could be explicitly about her body and the thoughts he granted. See FED. R. CIV. P. 12(b)(6). Only had in connection therewith, and attempting to the breach of contract claim against Gibson kiss her. She reported this behavior to the and the contract and title VII claims against COO and CFO, who advised her to file a the corporate defendants remained. The court formal complaint. certified these claims for immediate appeal1 and later dismissed all title VII claims against After reporting Gibson, Horaist asserts that the individual defendants. Horaist now he made unrealistic demands on her schedule presents the issues certified for appeal by the and that her duties changed from those of an district court, and the parties do not contest executive manager to those of an errand girl. the propriety of that certification.2 Further, Gibson purportedly suggested that she should have sexual relations with him if 1 she wanted to keep her job. Horaist was fired See FED. R. CIV. P. 54(b) (allowing a district in December 1996, allegedly in retaliation for court to “direct the entry of a final judgment as to reporting the harassment. After her one or more but fewer than all claims or parties termination, she earned money through a gift- only upon an express determination that there is no basket business and interior decorating. just reason for delay and upon an express direction for the entry of judgment”). Horaist sued the corporate defendants and 2 After Horaist filed her appeal, she reasserted certain of their officers, Deshotels, and Gibson all of her claims in a third amended complaint. She for retaliatory discharge, breach of contract, refused to withdraw the previously dismissed conspiracy to permit the sexual harassment or claims, and the district court struck them again. to force Horaist out of her position, and state See FED. R. CIV. P. 12(f) (stating that the court (continued...) 3 II. cifically adopt the Rules of Professional Con- The district court refused to disqualify Toce duct of the Supreme Court of Louisiana. See and his firm from representing Horaist, and it LA. UNIFORM R. U.S. DIST. CT. LR83.2.4W. certified the ruling for an interlocutory appeal These rules are identical to the ABA’s Model under 28 U.S.C. § 1292(b). On appeal, we Rules of Professional Conduct in all relevant consider whether (1) Toce was a necessary aspects. See LA. REV. STAT. tit. 37, ch. 4, witness; (2) he had an impermissible conflict of art. XVI. interest; and (3) any disqualification should be imputed to his firm. We review the findings of We interpret these rules as we would any fact for clear error and the application of the other source of law. In re Dresser Indus., 972 rules of ethical conduct de novo. FDIC v. F.2d 540, 543 (5th Cir. 1992). In considering United States Fire Ins. Co., 50 F.3d 1304, a disqualification motion, we view the rules in 1311 (5th Cir. 1995). light of the litigant’s rights and the public in- terest, considering “whether a conflict has “[D]isqualification cases are governed by (1) the appearance of impropriety in general, state and national ethical standards adopted by or (2) a possibility that a specific impropriety the court.” Id. at 1312 (quoting In re Am. will occur, and (3) the likelihood of public sus- Airlines, Inc., 972 F.2d 605, 605 (5th Cir. picion from the impropriety outweighs any so- 1992)). Ethical canons relevant to the district cial interests which will be served by the court’s order include (1) the local rules for the lawyer’s continued participation in the case.” Western District of Louisiana; (2) the Id. at 544. American Bar Association’s (“ABA’s”) Model Rules of Professional Conduct; (3) the ABA’s A. Model Code of Professional Responsibility; Defendants contend that Toce is a and (4) the state rules of conduct. See id. The necessary witness and thus should be Rules of the Western District of Louisiana spe- disqualified. MODEL RULES OF PROF’L CONDUCT 3.7(a); LA. RULES OF PROF’L CONDUCT 3.7(a) (2000).3 They believe he 2 (...continued) may strike “from any pleading any insufficient de- 3 fense or any redundant, immaterial, impertinent, or The rule states: scandalous matter”). Defendants contend that the subsequent dismissal estops Horaist from seeking (a) A lawyer shall not act as an advocate at our review of the issues certified under rule 54(b). a trial in which the lawyer is likely to be a necessary witness except where: We disagree. The presence of similar claims, either arising out of the same transaction or sharing (1) the testimony relates to an uncontested factual elements, pending before the district court, issue; does not strip us of jurisdiction to hear the certified issue on appeal. See H & W Indus., Inc. v. Formo- (2) the testimony relates to the nature and sa Plastics Corp., 860 F.2d 172, 175 (5th Cir. value of legal services rendered in the case; 1988). If a factually identical claim may proceed or in the district court during the pendency of the ap- peal, its disposition, by extension, cannot preclude (3) disqualification of the lawyer would the effect of our decision. (continued...) 4 must testify that Horaist did not tell him about Loan Ass’n, 474 F. Supp. 742, 749-50 (E.D. the harassment at the time it occurred and that La. 1979) (internal quotation marks omitted). this fact is adverse to her. They also want Toce to testify to Horaist’s emotional state Each item of information that Toce could and to her earnings in her gift-basket business provide is already available from another and interior decorating. source, and defendants have failed to articulate how Toce’s corroboration would prejudice If a lawyer must testify adversely to a Horaist. Horaist may testify to the nature of client’s interest, the client cannot waive the her relationship with Toce and to the fact that conflict. See United States Fire Ins. Co., 50 she did not reveal her harassment to him at the F.3d at 1317. But, if a lawyer discovers dur- time. Other co-workers may shed light on ing litigation that he “may be called as a wit- Horaist’s behavior with her alleged harassers. ness other than on behalf of his client, he may She may produce business records or testify continue the representation until it is apparent to her earnings. Her psychologist, family, that his testimony would prejudice his client.” friends, and former co-workers can testify to MODEL RULES OF PROF’L CONDUCT 3.7(c); LA. her emotional state.4 R ULES OF P ROF ’ L C ONDUCT 3.7( c ). “Testimony is considered prejudicial under this Because his testimony is cumulative, Toce Rule if it is so adverse to the client’s side that is not a necessary witness. His testimony cor- the bar or the client might have an interest in roborates Horaist’s, so she has no interest in discrediting the testimony,” and the movant discrediting it. The defendants have not met has the burden of establishing prejudice with their burden of demonstrating prejudice. See specificity. Smith v. New Orleans Fed. Sav. & id. at 750. 5 In addition, when the attorney’s participation as both lawyer and witness stands to prejudice only his own client, the opposing 3 (...continued) attorney should have no say in the matter. work a substantial hardship on the United States Fire Ins. Co., 50 F.3d at 1315. client. B. (b) A lawyer may act as an advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless 4 Defendants also want Toce to testify that he precluded from doing so by Rule 1.7 or 1.9. paid for Horaist’s breast augmentation surgery. Although that is irrelevant to the sexual harassment (c) If, after undertaking employment in con- suit, Horaist can testify to it herself. templated or pending litigation, a lawyer 5 learns, or it is obvious that he or a lawyer in Because Toce is not a necessary witness, we his firm may be called as a witness other need not reach the question whether the substantial than on behalf of his client, he may continue hardship to Horaist outweighs the appearance of the representation until it is apparent that his impropriety and other policy considerations. Cf., testimony is or may be prejudicial to his e.g., MODEL RULE 3.7(a); United States Fire Ins. client. Co., 50 F.3d at 1316 (noting that the necessary witness rule balances the likelihood of public MODEL RULES OF P ROF’L CONDUCT 3.7(a); LA. suspicion against a party’s right to counsel of RULES OF PROF’L CONDUCT 3.7(a) (2000). choice). 5 Defendants argue that Toce’s waiving the conflict of interest. Even if the representation of Horaist creates a conflict of relationship lasted longer than they admit, all interest. “A lawyer shall not represent a client parties agree that Horaist and Toce are not if the representation of that client may be now intimately involved. Prior sexual materially limited by . . . the lawyer’s own relationships do not give rise to the type of interests, unless: (1) the lawyer reasonably ethical violation requiring disqualification believes the representation will not be under the rules.7 adversely affected; and (2) the client consents after consultation.” MODEL RULES OF PROF’L C. CONDUCT 1.7(b); LA. RULES OF PROF’L Defendants argue that Toce’s conflict of in- CONDUCT 1.7(b). terest should be imputed to the firm. “While lawyers are associated in a firm, none of them Defendants also claim that Toce cannot shall knowingly represent a client when any exercise independent professional judgment one of them practicing alone would be because of his past relationship. “In prohibited from doing so by Rules 1.7, 1.8(c), representing a client, a lawyer shall exercise 1.9, or 2.2.” MODEL RULES OF PROF’L independent professional judgment and render CONDUCT 1.10(a); LA. RULES OF PROF’L candid advice.” MODEL RULES OF PROF’L CONDUCT 1.10(a). Rule 1.10 concerns only CONDUCT 2.1; LA. RULES OF PROF’L CONDUCT Toce’s alleged conflict of interest, not his 2.1. A sexual relationship with a client that potential status as a witness or his ability to arises during the course of the representation render a candid opinion. As discussed above, may create a conflict between the professional Horaist has waived any conflict that may arise and personal interests of the lawyer and under rule 1.7 by her consent to the interfere with the lawyer’s professional representation after full disclosure. judgment.6 Louisiana courts have held that if an Horaist and Toce assert, however, that their attorney is disqualified under rule 3.7, his relationship ended before the litigation began. presence as a witness may create a conflict of Moreover, Horaist consented to the interest that may be imputed to the firm.8 We representation after full disclosure, thereby 7 Cf. generally Ralph H. Brock, Sex, Clients, 6 See, e.g., In re Gore, 752 So. 2d 853, 855 and Legal Ethics, 64 TEX. BAR J. 234 (2001) (La. 2000) (affirming the suspension of an attorney (lauding the emergence of specific disciplinary who had an affair with a client he represented in a rules prohibiting a lawyer from having a sexual divorce); In re Touchet, 753 So. 2d 820, 823 (La. relationship with a client during the course of 2000) (disbarring attorney for unwanted sexual ad- representation). vances to clients, including solicitation of sexual 8 favors in lieu of fees); In re Schambach, 726 So. See Bellino v. Simon, 1999 WL 1277535 2d 892, 895-96 (La. 1999) (involving an attorney (E.D. La. 1999) (disqualifying counsel and his firm who had an extra-marital affair with a client after because counsel was a necessary witness, his tes- he began representing her, borrowed money from timony would contradict his client’s assertions, and her, and refused to repay it); In re Ashy, 721 So. his actions were in question). See also Lange v. 2d 859, 867-68 (La. 1998) (suspending a lawyer Orleans Levee Dist., 1997 WL 668216 at *5 (E.D. for two years for unwanted sexual advances). (continued...) 6 concluded above that Toce is not a necessary EEOC review.9 The relevant portion of the witness, and his potential testimony is hardly amended statute reads: adverse in the sense that the Model Rules contemplate. Therefore, Toce and his firm Any cause of action provided in this may continue to represent Horaist. Chapter shall be subject to a prescriptive period of one year. However, this one- III. year period shall be suspended during Horaist contends the court improperly dis- the pendency of any administrative missed, as time-barred, her claims of review or investigation of the claim con- intentional interference with contract, ducted by the federal Equal Employment intentional infliction of emotional distress, Opportunity Commission or the Lou- battery, discrimination, and retaliation. Under isiana Commission on Human Rights. Louisiana law, each of these delictual actions No suspension authorized pursuant to has a limitations period of one year. See LA. this Subsection of this one-year CIV. CODE ANN. art. 3492 (West 2001). prescriptive period shall last longer than six Horaist was fired on December 5, 1996. months. She filed her claim with the EEOC on Janu- ary 2, 1997. She received her right-to-sue LA. REV. STAT. ANN. § 23:303(D) (West letter on May 8, 1998, and sued the same day. 2001). If this statute applies to Horaist’s She admits that the statute of limitations ran claims, they are timely, because she filed suit before she filed her claim, but she believed that within seventeen months. because her state law claims were supplemental to her title VII claims, the EEOC Louisiana law instructs that if, as here, the administrative proceeding would toll the stat- legislature has not expressed an intent, the ute of limitations on the state claim. court should determine whether the statute is Moreover, Louisiana law requires that “[a] procedural, substantive, or interpretive. See party shall assert all causes of action arising King v. Phelps Dunbar, L.L.P., 743 So. 2d out of the transaction or occurrence that is the 181, 185 (La. 1999). Article 6 of the Louis- subject matter of the litigation.” LA. CODE iana Civil Code Annotated provides that, in the CIV. PROC. ANN. art. 425 (West 2001). absence of legislative expression to the contrary, changes in the law during the course In 1997, the legislature revised the of a suit that are procedural and interpretive employment discrimination statute, LA. REV. apply both prospectively and retroactively, but STAT. ANN. § 23:1006, to toll the prescriptive those that are substantive apply only period for state causes of action pending prospectively. Id. at 185. Louisiana courts have suggested that prescriptive statutes are 8 9 (...continued) The old § 23:1006 did not have a prescriptive La. 1997) (disqualifying plaintiff’s lawyers and the period, but the courts drew on tort analogies to as- rest of their firm because the lawyers were likely to sign a one-year prescriptive period. See Winbush be called as witnesses to testify adversely to the v. Normal Life, Inc., 599 So. 2d 489, 491 (La. client). App.—3d Cir. 1992). 7 procedural. See, e.g., Dozier v. Ingram Barge statute of limitations for delictual actions still Co., 706 So. 2d 1064, 1066 (La. App.—4th applies.10 Cir. 1998). If, however, the retroactive application of a IV. procedural statute “has the effect of making a Horaist appeals the dismissal of her con- change in the substantive law”or creates a new spiracy claims brought under § 1985(3).11 The liability, it will apply only prospectively. See Thomassie v. Savoie, 581 So. 2d 1031, 1034 10 (La. App.—1st Cir.), writ denied, 589 So. 2d See Roth v. N.J. Malin & Assocs., 1998 WL 898367, at *2 (E.D. La. 1998) (holding that the 493 (La. 1991). An otherwise procedural prescriptive period of § 23:333(C), now codified at statute may not apply retroactively if it is § 23:303(D), applies only to causes of action “inextricably intertwined” with a statute that arising under Chapter 3-A of Title 23, which does creates a new substantive obligation. Id. not include intentional infliction of emotional distress, or retaliatory discharge). The statute In King, 743 So. 2d at 185, the court similarly does not provide a cause of action for determined that chapter 3-A of title 23, which tortious interference with contract, so the codified the 1997 Louisiana discrimination prescriptive period would not be tolled for this statute, “create[d] and define[d] the rights and claim, either. duties of employers and employees relative to 11 discrimination in the workplace.” “[T]he en- The statute reads: actment of these provisions . . . is substantive and cannot be retroactively applied.” Id. If two or more persons in any State or Ter- ritory conspire or go in disguise on the high- way or on the premises of another, for the Although King does not hold specifically purpose of depriving, either directly or in- that the substantive provisions of the statute directly, any person or class of persons of are inextricably intertwined with the the equal protection of the laws, or of equal procedural ones, it explains that the legislature privileges and immunities under the laws; or intended an overall revision of the law. See id. for the purpose of preventing or hindering Thomassie instructs that where a procedural the constituted authorities of any State or provision is a part of an overall revision of the Territory from giving or securing to all per- law, that provision is “inextricably sons within such State or Territory the equal intertwined” with the substantive provision. protection of the laws; or if two or more Thomassie, 581 So. 2d at 1034. Accordingly, persons conspire to prevent by force, § 23:303(D) cannot apply retroactively, and intimidation, or threat, any citizen who is Horaist’s state law employment discrimination lawfully entitled to vote, from giving his claim is time-barred. support or advocacy in a legal manner, to- ward or in favor of the election of any lawfully qualified person as an elector for Horaist urges that this tolling provision also President or Vice President, or as a Member applies to her claims of battery, retaliation, of Congress of the United States; or to intentional infliction of emotional distress, and injure any citizen in person or property on tortious interference with contract. Even had account of such support or advocacy; in any we found § 23:303(D) applicable retroactively, case of conspiracy set forth in this section, Louisiana courts have held that the one-year if one or more persons engaged therein do, (continued...) 8 district court properly dismisses a claim under Horaist’s conspiracy claim seems to rule 12(b)(6) if “it appears beyond doubt that reference title VII violations exclusively: the plaintiff may prove no set of facts which “Defendants conspired with one another to would entitle him to relief.” Collins v. create a pretext for DEBBIE’s termination and Morgan Stanley Dean Witter, 224 F.3d 496, conspired with each other to cover up the 498 (5th Cir. 2000). To state a cognizable retaliatory discharge.” To the extent the claim under § 1985(3), Horaist must allege claims stem from title VII, she may not use that (1) a racial or class-based discriminatory § 1985(3) as a remedy.13 animus lay behind the conspiracy and (2) the conspiracy aimed to violate rights protected B. against private infringement.12 Bray v. Horaist attempts to evade Novotny’s bar by Alexandria Women’s Health Clinic, 506 U.S. explaining that her § 1985(3) claim includes 263, 267-68 (1993) (citing Griffin v. her state law claims for breach of contract, tor- Breckenridge, 403 U.S. 88, 102 (1971)); tious interference with contract, intentional in- United Bhd. of Carpenters v. Scott, 463 U.S. fliction of emotional distress, discrimination, 825, 833 (1983). retaliation, and battery. Although, as we have said, the latter five claims are time-barred, the A. breach of contract claim remains before the district court. 11 (...continued) We need not consider whether § 1985(3) or cause to be done, any act in furtherance of the protects against interference with state con- object of such conspiracy, whereby another is tractual rights, because Horiast’s conspiracy injured in his person or property, or deprived of claim so plainly lacks the necessary element of having and exercising any right or privilege of a invidious discrimination. “In this circuit, we citizen of the United States, the party so injured or require an allegation of a race-based con- deprived may have an action for the recovery of spiracy” to present a claim under § 1985(3). damages occasioned by such injury or deprivation, Bryan v. City of Madison, 213 F.3d 267, 276 against any one or more of the conspirators. (5th Cir. 2000), cert. denied, 121 S. Ct. 1081 42 U.S.C. § 1985(3). (2001).14 Horaist has alleged no racial ani 12 In this circuit, a § 1985(3) claim must allege that “(1) the defendants conspired (2) for the pur- 13 See Great Am. Fed. Sav. & Loan Ass’n v. poses of depriving, either directly or indirectly, any Novotny, 442 U.S. 366, 378 (1979) (holding that person or class of persons of the equal protection “§ 1985(3) may not be invoked to redress of the laws, or of equal privileges and immunities violations of Title VII”). under the laws, and (3) one or more of the 14 conspirators committed some act in furtherance of See also Newberry v. E. Tex. State Univ., the conspiracy; whereby (4) another person is 161 F.3d 276, 281 n.2 (5th Cir. 1998) (noting that injured in his person or property or deprived of the Supreme Court has never held that non-racial having and exercising any right or privilege of a animus is sufficient); Deubert v. Gulf Fed. Sav. citizen of the United States; and (5) the action of Bank, 820 F.2d 754 (5th Cir. 1987). The Eleventh the conspirators is motivated by a racial animus.” Circuit’s holding that § 1985(3) applies to Wong v. Stripling, 881 F.2d 200, 202-03 (5th Cir. conspiracies grounded in sex-based animus 1989). (continued...) 9 mus, so her claim fails; the district court cor- rectly dismissed it under FED. R. CIV. P. 12(b)(6). The judgments and orders appealed from are AFFIRMED, and this matter is REMANDED for further proceedings. 14 (...continued) perpetrated under color of state law may seem in tension with Fifth Circuit precedent. See Lyes v. City of Riviera Beach, 166 F.3d 1332, 1336-40 (11th Cir. 1999). In fact, however, it does not squarely contradict our prior holdings. The Lyes court declared sex-based animus ac- tionable where plaintiffs had raised a charge of conspiracy to violate the Equal Protection Clause. Id. at 1336. We r ecognized in Wong that a plaintiff could raise such a claim under § 1985(3). See Wong, 881 F.2d at 203 (dismissing the claim for failure to allege state action). We also noted that § 1985(3) does not confer substantive rights. Id. Thus, in Lyes, the Eleventh Circuit needed to account for the special question presented by the interaction of the Equal Protection Clause with § 1985(3). Lyes’s statement that “class-based” dis- crimination for purposes of § 1985(3) is coterminous with the suspect classes of equal protection analysis (at least with regard to sex) may have been appropriate where the underlying right was equal protection itself. Cf. Lyes, 166 F.3d at 1338. We have never been presented with this precise question, and we express no view on it now. 10