Salmeron v. Enterprise Recovery Systems, Inc.

579 F.3d 787, 2009 U.S. App. LEXIS 19316, 2009 WL 2616036
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 27, 2009
Docket08-3375
StatusPublished
Cited by135 cases

This text of 579 F.3d 787 (Salmeron v. Enterprise Recovery Systems, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salmeron v. Enterprise Recovery Systems, Inc., 579 F.3d 787, 2009 U.S. App. LEXIS 19316, 2009 WL 2616036 (7th Cir. 2009).

Opinion

MANION, Circuit Judge.

After her employer Enterprise Recovery Systems (“ERS”) fired her, Rhonda Salmerón brought this qui tam action on behalf of the United States against ERS alleging that it committed fraud in its student loan debt collection practices. Salmerón subsequently amended her complaint three times to add USA Funds, Inc.; USA Group Guarantee Services, Inc.; USA Servicing Corp.; Sallie Mae, Inc.; Sallie Mae Servicing, L.P.; and Scott Nicholson as defendants. During the lawsuit’s three-year sojourn in the district court, Salmeron’s attorney, Jorge Sanchez, engaged in what the judge described as a “virtually unbroken pattern of dilatory and irresponsible conduct,” consistently missing filing deadlines and failing to appear at status conferences. Fed up with Sanchez’s repeated flouting of the court’s rules, the district court dismissed the suit sua sponte. Though ultimately persuaded to reinstate the action, the district court issued a “final warning” to Sanchez that future misconduct would not be tolerated. Only a short time later, however, Sanchez breached an oral agreement he had with opposing counsel and leaked a document obtained through discovery to three separate sources. Upon finding the document posted on an Internet website, the defendants moved to dismiss the suit as a sanction for the unauthorized disclosure. The district court granted the motion, finding the leak “willful” and “inexcusable.” Salmerón appeals, arguing that the punishment does not fit the offending conduct. We affirm.

*790 I.

In its opinion and order dismissing the suit, the district court extensively chronicled the transgressions of Salmeron’s counsel, Jorge Sanchez, during the course of this litigation. The day after the deadline to respond to ERS’s motion to dismiss, Sanchez, citing his workload and personal issues as the reasons for the delay, filed a motion for permission to file the response late, which the district court granted. A few months later, Sanchez missed the deadline to file a response to USA Funds’s motion to dismiss. He again cited workload and family obligations and asked the court to excuse the late filing, which it did. A few months after that late filing, Sanchez failed to timely respond to USA Funds’s request for production of documents and interrogatories; the responses to the interrogatories were not submitted until more than two and a half months after they were due. Sanchez also failed to appear at a scheduled status conference. Next, when responses to ERS’s interrogatories and requests for production were already several weeks overdue, Sanchez reneged on a promise that he would provide the information. The court had to order Sanchez to comply.

Sanchez’s dilatory conduct continued past the lawsuit’s second anniversary. Nine days after Salmeron’s response to ERS’s motion to dismiss the second amended complaint'was due, rather than belatedly attempting to respond, Sanchez instead filed a motion for leave to file a third amended complaint. The court applied ERS’s motion to the third amended complaint and set a new deadline for Sanchez’s response. True to form, Sanchez missed that deadline. Again citing his workload, Sanchez moved for leave to file a response a week after the deadline had passed. The court and opposing counsel had been apprised of the motion only minutes before a scheduled status hearing. Nevertheless, the court granted that motion and set a deadline for Sanchez to file Salmeron’s third amended complaint, which had yet to be filed.

Sanchez could not meet that deadline and asked for an extension, which the district court granted. But the extended deadline passed without Sanchez filing anything. Although the court’s clerk called Sanchez to inquire about the status of the filing and was told it was forthcoming, Sanchez neither attended the status hearing scheduled shortly after the deadline nor filed the third amended complaint. Only after the court ordered Sanchez to file the third amended complaint or face dismissal did Sanchez finally file that document.

Despite these admonitions, Sanchez’s foot-dragging continued. On March 7, 2008, in response to the defendants’ motions to dismiss and for summary judgment, the court entered a scheduling order requiring Salmerón to respond by April 11. Predictably, Sanchez filed a motion for an extension on April 9, citing yet again his workload as a reason for delay. The court granted an extension until April 18, but that date passed without Sanchez filing a response to any of the motions. On May 1, Sanchez filed a motion to extend the filing date for the responses until May 6. The court granted that extension, but Sanchez failed to meet that extended deadline as well. On May 8, Sanchez contacted the court and requested a continuance of the status hearing scheduled for the next day, telling the court that the continuance was necessary so that he could file the delinquent responses before the hearing. Sanchez promised to have the responses filed by the afternoon of the next day, so the district court agreed to postpone the hearing until May 16. When, five days later, Sanchez still had not filed his responses, the district court finally got his attention: *791 it entered an order dismissing the action for want of prosecution.

Sanchez moved to reopen the case, arguing that his failures as counsel should not be held against Salmerón. At a hearing on the motion, the district court reinstated the suit while, at the same time, giving Sanchez a stern warning about the consequences of future misconduct:

Well, I guess the short answer is that with considerable diffidence, I’m going to grant the Rule 59[ (e) ] motion and permit the case to get back into a live posture, but I want to tell you now you have really had what amounts to the final warning, and we’re not going to have any repetition of any of this, or it’s going to result in a conclusion that you certainly won’t desire and that ... is really occasioned by this extended pattern of noncompliance.

Despite the second chance, Sanchez raised his misconduct to a more egregious level. On June 24, defendants USA Funds, Sallie Mae, and ERS learned that a scanned copy of the confidential document containing the Guarantee Services Agreement between Sallie Mae and USA Funds had been posted on a website known as Wikileaks.org (‘Wikileaks’’). 1 Also posted was a summary of the document and 13 inflammatory questions about the possible “criminality” of the arrangement. Two days later, the Chronicle of Higher Education published an online article about the leaked document captioned “Contract Raises New Concern over Sallie Mae’s Ties to Guarantor.” The Chronicle claimed it had obtained the document several days before it appeared on Wikileaks and denied providing it to Wikileaks. Both the copy of the Guarantee Services Agreement leaked to Wikileaks and the copy provided to the Chronicle bore Bates stamps conclusively demonstrating that they originated from USA Funds’s document production during this lawsuit.

USA Funds then moved to dismiss the suit as a sanction for the disclosure of the Guarantee Services Agreement. 2

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Cite This Page — Counsel Stack

Bluebook (online)
579 F.3d 787, 2009 U.S. App. LEXIS 19316, 2009 WL 2616036, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salmeron-v-enterprise-recovery-systems-inc-ca7-2009.