Case: 16-50191 Document: 00513793765 Page: 1 Date Filed: 12/12/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-50191
Fifth Circuit
FILED
December 12, 2016
LISA VELASQUEZ OLIVAREZ, Lyle W. Cayce
Clerk
Plaintiff,
v.
GEO GROUP, INCORPORATED; ET AL,
Defendants,
SHAWN K. FITZPATRICK; TIMOTHY FLOCOS,
Appellants.
Appeal from the United States District Court
for the Western District of Texas
Before JOLLY, HIGGINBOTHAM, and PRADO, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
Attorneys Shawn K. Fitzpatrick and Timothy Flocos (collectively,
“Appellants”) were sanctioned by the district court for certifying that their
clients’ initial disclosures under Federal Rule of Civil Procedure 26(a)(1) were
complete and correct even though the disclosures failed to mention evidence
that Appellants later used during a deposition. Appellants now ask this Court
to reverse the district court’s decision and remit to them the monetary
sanctions collected by the district court. We AFFIRM.
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No. 16-50191
I. BACKGROUND
In 2012 and 2013, Plaintiff Lisa Velasquez Olivarez was allegedly
sexually assaulted on multiple occasions while incarcerated at the Maverick
County Detention Center (“MCDC”), a facility which was then operated by the
GEO Group, Inc. (“GEO”). Olivarez alleged that she was sexually assaulted by
Defendant Luis Armando Valladarez, who was a GEO employee at the time.
Around the time of the alleged assaults, Olivarez made a series of phone calls
to her mother and a friend named Juan using the MCDC’s phone system. Each
call began with a prerecorded message indicating that the call might be
monitored and recorded. GEO recorded at least three of Olivarez’s phone calls.
During these phone calls, Olivarez discussed her encounters with Valladarez
in ways that might be construed to suggest Olivarez consented to the sexual
conduct.
On November 26, 2014, Olivarez filed a complaint against GEO,
Valladarez, and other MCDC officials, raising various claims related to the
alleged sexual assaults, including a civil rights claim under 18 U.S.C. § 1983.
In response to these claims, Defendants argued, among other things, that
Olivarez had “initiated consensual sex” with Valladarez and that the
purportedly consensual sexual encounters did not deprive Olivarez of any civil
rights under § 1983. On May 19, 2015, Fitzpatrick, in his capacity as GEO’s
attorney, submitted GEO’s initial disclosures pursuant to Federal Rule of Civil
Procedure 26(a)(1)(A). Flocos, who was representing Valladarez, submitted
initial disclosures on behalf of his client the following day. Neither of these
initial disclosures mentioned the audio recordings of Olivarez’s conversations
with her mother and her friend Juan.
Appellants deposed Olivarez on May 29, 2015. During the deposition,
Fitzpatrick first questioned Olivarez about her phone conversations with her
mother and her friend Juan. Olivarez testified that she told her mother and
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Juan about the incidents with Valladarez, that her mother told her to be
careful, and that she told Juan that Valladarez had forced her to have sex.
Later in the deposition, Flocos played the recordings of Olivarez’s phone calls
and questioned her extensively about her conversations with her mother and
Juan. After the deposition ended, Fitzpatrick provided Olivarez’s counsel with
an online link to the recordings.
On July 31, 2015, Olivarez filed a motion requesting that the district
court impose sanctions on GEO and Valladarez under Federal Rules of Civil
Procedure 26 and 37 for failing to include the audio recordings in their clients’
initial disclosures. Under Rule 26(a)(1)(A):
a party must, without awaiting a discovery request, provide to the
other parties . . . a copy—or a description by category and
location—of all documents, electronically stored information, and
tangible things that the disclosing party has in its possession,
custody, or control and may use to support its claims or defenses,
unless the use would be solely for impeachment . . . .
In addition, Rule 26(g)(1) requires that “[e]very disclosure under Rule
26(a)(1) . . . be signed by at least one attorney of record.” By signing, an
attorney certifies that an initial disclosure is “complete and correct” under the
requirements of Rule 26(a)(1) “to the best of the [attorney’s] knowledge,
information, and belief formed after a reasonable inquiry.” Fed. R. Civ. P.
26(g)(1). “If a certification violates [Rule 26(g)] without substantial
justification, the court . . . must impose an appropriate sanction on the signer,
the party on whose behalf the signer was acting, or both.” Fed. R. Civ. P.
26(g)(3). Likewise, a party is subject to sanctions under Rule 37(c)(1) if the
“party fails to provide information or identify a witness as required by Rule
26(a) or (e), . . . unless the failure was substantially justified or is harmless.”
The parties settled their case while the motion for sanctions was under
consideration by the district court. However, on October 20, 2015, the district
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court issued an order holding that the “audio recordings [did] not solely contain
impeachment evidence, therefore Rule 26 required their disclosure.” Pursuant
to Rule 37 and the court’s inherent authority, the district court imposed
sanctions requiring each Appellant to pay a $1,000 fine. Appellants
subsequently filed motions for reconsideration. On January 27, 2016, the
district court issued an order denying the motions for reconsideration. The
district court explained that Appellants had certified that their clients’ initial
disclosures were “complete and correct” pursuant to Rule 26(g)(1), but the
“disclosures did not include recorded phone calls despite their being
encompassed by Rule 26(a)(1)(A)(ii).” After determining these omissions were
not substantially justified, the district court concluded that sanctions were
required under Rule 26(g)(3). On the same day, the district court dismissed
Olivarez’s cause of action with prejudice pursuant to Federal Rule of Civil
Procedure 41(a)(1)(A)(ii).
Appellants timely appealed. On appeal, Appellants argue that the
district court abused its discretion by (1) incorrectly applying Rule 26(a)(1)’s
disclosure requirement and (2) failing to properly consider whether Appellants’
purported violation of Rule 26 was substantially justified under Rule 26(g)(3).
II. JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction over this appeal under 28 U.S.C. § 1291 because the
district court’s dismissal of the underlying action with prejudice constituted a
final decision. Marshall v. Kansas City S. Ry. Co., 378 F.3d 495, 500 (5th Cir.
2004); Click v. Abilene Nat’l Bank, 822 F.2d 544, 545 (5th Cir. 1987). “The
district courts wield their various sanction powers at their broad discretion.”
Topalian v. Ehrman, 3 F.3d 931, 934 (5th Cir. 1993). Thus, we “may reverse a
district court’s award of sanctions only if we find that the court abused its
discretion in imposing them.” Id. “A district court abuses its discretion if it
awards sanctions based on an erroneous view of the law or on a clearly
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erroneous assessment of the evidence.” Procter & Gamble Co. v. Amway Corp.,
280 F.3d 519, 526 (5th Cir. 2002) (quoting Walker v. City of Bogalusa, 168 F.3d
237, 240 (5th Cir. 1999)).
III. DISCUSSION
A. Substantive Versus Impeachment Evidence
Appellants first argue that they used the recordings solely to impeach
Olivarez’s credibility; therefore, they were not required to disclose the
recordings under Rule 26(a)(1), which specifically states evidence need not be
disclosed if “the use would be solely for impeachment.” Appellants contend the
district court abused its discretion by announcing a novel standard under Rule
26(a)(1) and then sanctioning them for not complying with that novel standard.
But contrary to Appellants’ contentions, the district court’s decision was firmly
grounded in this Court’s precedent.
“Substantive evidence is that which is offered to establish the truth of a
matter to be determined by the trier of fact.” Chiasson v. Zapata Gulf Marine
Corp., 988 F.2d 513, 517 (5th Cir. 1993). “Impeachment evidence, on the other
hand, is that which is offered to ‘discredit a witness . . . to reduce the
effectiveness of [her] testimony by bringing forth evidence which explains why
the jury should not put faith in [her] or [her] testimony.’” Id. (quoting John P.
Frank, Pretrial Conferences and Discovery—Disclosure or Surprise?, 1965 Ins.
Law J. 661, 664).
This Court has made clear that some evidence serves both substantive
and impeachment functions and thus should not be treated as “solely”
impeachment evidence. Id.; see also Baker v. Canadian Nat’l/Ill. Cent. R.R.,
536 F.3d 357, 368–69 (5th Cir. 2008) (acknowledging that surveillance videos
contradicting testimony from plaintiff’s witnesses were of a substantive
nature, regardless of their impeachment value). Other courts have taken
similar approaches. See Searles v. Van Bebber, 251 F.3d 869, 877 (10th Cir.
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2001) (“If, as the judge saw it, the evidence was really more than mere
impeachment evidence, then the witnesses should have been disclosed.”);
Wilson v. AM Gen. Corp., 167 F.3d 1114, 1122 (7th Cir. 1999) (holding that
witnesses who provided impeachment testimony should have been disclosed
prior to trial because the testimony was part of defendant’s “primary line of
defense”); Klonoski v. Mahlab, 156 F.3d 255, 270 (1st Cir. 1998) (holding that
evidence was not introduced “solely for impeachment purposes” where the
evidence was “both impeaching and substantive”). Rule 26(a)(1)’s automatic
disclosure requirement “was adopted to end two evils that had threatened civil
litigation: expensive and time-consuming pretrial discovery techniques and
trial-by-ambush.” Standley v. Edmonds-Leach, 783 F.3d 1276, 1283 (D.C. Cir.
2015) (quoting Hayes v. Cha, 338 F. Supp. 2d 470, 503 (D.N.J. 2004)). “A too
expansive reading of the impeachment exception ‘could cause a resurgence of
these evils.’” Id. at 1283–84 (quoting Hayes, 338 F. Supp. 2d at 503).
In Chiasson, a local rule required “each party to list the exhibits to be
presented at trial,” but if a party had “good cause not to disclose exhibits to be
used solely for the purpose of impeachment,” the party was permitted
to request an ex parte conference with the court to explain why the exhibits
should not be disclosed prior to the trial. 988 F.2d at 515. 1 The district court
ruled that a video surveillance tape could be shown to the jury during trial,
even though it was not previously disclosed pursuant to the local rule. Id. at
513. In doing so, the district court implicitly found that the video, which
showed the plaintiff “sweeping [a] carport, working under a car, entering a
1Chiasson predated the current version of Rule 26(a). Prior to December 1, 1993, Rule
26 imposed no duty to disclose information to an opposing party in the absence of formal
discovery requests. See Fed. R. Civ. P. 26 advisory committee’s note to 1993 amendment.
Despite this historical difference in the rule, however, Chiasson still provides clear guidance
on how this Court interprets the phrase “solely for the purpose of impeachment” in the
context of pretrial disclosures.
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store, and buying food,” was being used at trial solely to challenge the
credibility of the plaintiff’s testimony that she was “unable to carry on daily
activities without pain.” Id. at 513, 515–17. On appeal, however, this Court
pointed out that the evidence tended to establish the truth of “key issues” to be
determined by the jury, namely “the severity of [the plaintiff’s] pain and the
extent to which she ha[d] lost the enjoyment of normal activity.” Id. at 517.
This Court held that “[b]ecause the tape is, at the very least[,] in part
substantive, it should have been disclosed prior to trial, regardless of its
impeachment value.” Id. at 517–18.
In the instant case, the recordings of Olivarez’s phone calls likely had
some impeachment value because they were at least arguably inconsistent
with Olivarez’s testimony during the deposition regarding her conversations
with her mother and her friend Juan. But the recordings also had substantive
value because they seemed to suggest that Olivarez may have consented to the
sexual encounters with Valladarez. The recordings tended to establish the
truth of a key issue Defendants raised as a defense in the case—that Olivarez
had “initiated consensual sex” with Valladarez. Accordingly, the recordings
were, at the very least, in part substantive, and the district court did not abuse
its discretion in concluding that Appellants were required to disclose the
recordings under Rule 26(a)(1).
B. Substantial Justification
Appellants also argue that the district court failed to properly consider
whether their decision to withhold the audio recordings from the initial
disclosures was substantially justified. “Substantial justification for the failure
to make a required disclosure has been regarded as justification to a degree
that could satisfy a reasonable person that parties could differ as to whether
the party was required to comply with the disclosure [obligation].” Grider v.
Keystone Health Plan Cent., Inc., 580 F.3d 119, 140 n.23 (3d Cir. 2009) (quoting
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Tolerico v. Home Depot, 205 F.R.D. 169, 175–76 (M.D. Pa. 2002)); see also Pierce
v. Underwood, 487 U.S. 552, 564–65 (1988) (holding, in another context, that
“substantially justified” means “justified to a degree that could satisfy a
reasonable person”); Sun River Energy, Inc. v. Nelson, 800 F.3d 1219, 1227–29
(10th Cir. 2015) (holding that “substantial justification” under Rule 37 means
“justified to a degree that could satisfy a reasonable person”); Sheppard v.
River Valley Fitness One, L.P., 428 F.3d 1, 12 (1st Cir. 2005) (same); Preuss v.
Kolmar Labs., Inc., 970 F. Supp. 2d 171, 175 (S.D.N.Y. 2013) (same). The
attorney’s decision to refrain from disclosing the information must have had a
“reasonable basis both in law and fact.” Underwood, 487 U.S. at 565.
Appellants cite several cases in support of their contention that they had
a reasonable basis for concluding that disclosure was not required. Some of
these cases suggest that evidence does not need to be disclosed under Rule
26(a)(1), even if the evidence has substantive value, so long as the evidence is
offered solely for impeachment. See DeBiasio v. Ill. Cent. R.R., 52 F.3d 678, 686
(7th Cir. 1995); Ruddell v. Weakley Cty. Sheriff’s Dep’t, No. 1:07-CV-01159,
2009 WL 7355081, at *1 (W.D. Tenn. May 22, 2009); Lomascolo v. Otto
Oldsmobile-Cadillac, Inc., 253 F. Supp. 2d 354, 359–60 (N.D.N.Y. 2003);
Halbasch v. Med-Data, Inc., 192 F.R.D. 641, 648–50 (D. Or. 2000). Appellants
also cite cases suggesting that evidence does not need to be disclosed under
Rule 26(a)(1) if a party’s subjective intent is to use the evidence solely for
impeachment. See Nehara v. California, No. 1:10-CV-00491, 2013 WL
1281618, at *3 (E.D. Cal. Mar. 26, 2013); Doyle v. N.J. Transit Rail Operations,
Inc., No. CIV.A.04-5209, 2008 WL 4755735, at *3 (D.N.J. Oct. 29, 2008).
However, all of the cases cited by Appellants were decided by courts
outside this Circuit. The only controlling authority on the issue is Chiasson. In
that case, we held that evidence should not be treated as “solely” impeachment
evidence if it tends to establish the truth of key issues to be determined by the
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jury. 988 F.2d at 517–18. Instead, the evidence must be treated as having at
least some substantive value and must be disclosed to the opposing party. Id.
Given that this Court had previously addressed the issue, it was unreasonable
for Appellants to rely on authorities outside this Circuit to support their own
litigation strategy. A reasonable person would have applied this Court’s
precedents to the facts and determined that the audio recordings needed to be
disclosed because they had substantive value. Accordingly, we hold that the
district court did not abuse its discretion in concluding that Appellants had no
substantial justification for violating Rule 26.
IV. CONCLUSION
For the foregoing reasons, the district court’s judgment is AFFIRMED.
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