Sheppard v. River Valley Fitness One, L.P.

428 F.3d 1, 2005 WL 2708218
CourtCourt of Appeals for the First Circuit
DecidedOctober 21, 2005
DocketNos. 04-1831, 04-1861
StatusPublished
Cited by43 cases

This text of 428 F.3d 1 (Sheppard v. River Valley Fitness One, L.P.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheppard v. River Valley Fitness One, L.P., 428 F.3d 1, 2005 WL 2708218 (1st Cir. 2005).

Opinion

LIPEZ, Circuit Judge.

This is an appeal of a monetary sanction that was imposed by the magistrate judge on defendants’ lawyer, William E. Whit-tington IV, for discovery misconduct. The court required that Whittington personally compensate the opposing parties for the attorney’s fees and costs incurred in opposing a protective order that he had obtained. Citing the injury to his professional reputation, Whittington also, appeals certain findings of fact made by the magistrate judge in support of the monetary sanction. The district court affirmed the sanction and most of the findings. After a careful review of the record, we affirm the sanction but vacate a finding that the district court affirmed.

I.

To explain the genesis of the sanction and findings, we must review the history of the underlying case. River Valley was a health club located in Hanover, New Hampshire. In early 1999, Mary C. Sheppard, the principal' plaintiff in this case, brought a claim of sexual harassment against defendants (in essence, the club and its owners, Joseph- and Elizabeth Asch) for offensive incidents she- said she experienced while working at the club. The club’s manager, Robert Aubin, filed a lawsuit of his own, alleging that he was fired in retaliation for reporting Sheppard’s complaints about harassment.1 In both cases, defendants denied all of the allegations and filed counterclaims against Sheppard and Aubin, accusing them of conspiring to fabricate their lawsuits. In early 200.0, the two cases were consolidated for discovery.

In August 2000, defendants and Aubin discussed settling their dispute (and, shortly thereafter, did settle). The sanction in this case and the findings all derive from three instances in Which Whittington made claims about the settlement process in the Aubin case.

A. Whittington’s statements to the Au-bin court on August 21, 2000

On August 15, 2000, Whittington sent a letter to Aubin’s counsel to, as the letter put it, “summarize our settlement discussions.” The letter opened by stating that “[t]he parties will settle on the following terms (subject to details being worked out on the open items below).” The letter provided that “Aubin would agree to a stipulated judgment of $50,000” in River Valley’s favor, but that Aubin need pay only $100 of that amount for release and satisfaction. Also, because River Valley was keenly interested in getting information from Aubin to help with its dispute [4]*4with Sheppard, Aubin would provide details of his discussions with Sheppard about their claims. In addition, River Valley wanted corroborating information and documents from two other people, Barney Brannen and Jack Panzica, who River Valley believed were involved with the alleged conspiracy against it; to that end, River Valley had asked the court for subpoenas. The letter stated that the parties would not file the stipulated settlement with the court until after deposing those two witnesses. In the meantime, the parties “will jointly inform the Court we’re close to settlement ... and tell the Court that it would help the parties’ settlement negotiations to get a prompt ruling on the Bran-nen/Panzica motions, which Aubin will now join.” Whittington stressed the importance that River Valley placed on Aubin’s information by underlining. the following sentence: “The settlement is contingent upon defendants’ satisfaction that Aubin is assisting defendants in good faith to the best of his ability,” The letter closed by stating: “If the above is satisfactory, please indicate by signing below and returning a copy of this letter.” The next day, August 16, Aubin’s counsel signed her agreement and returned the letter.

On August 21, 2000, Whittington, as promised, told the Aubin court that the parties were close to settlement:

The parties advise-the Court that they have seriously discussed settlement, that they believe the prospects for settlement are excellent after resolution of the two pending motions [to get information from Brannen and Panzica], and that resolution of the motions will be helpful to the settlement process.

On October 3, 2000, having resolved the Brannen and Panzica issues2 and having obtained a satisfactory affidavit from Au-bin, Whittington authorized Aubin’s counsel to file the stipulated judgment with the court and release other settlement documents from escrow. On October 4, 2000, the district court entered judgment in the Aubin case.

B. Whittington’s letter to Sheppard’s counsel on October 6, 2000

Whittington then tried to put the settlement in Aubin to his clients’ advantage in Sheppard. On October 6, 2000, Whitting-ton wrote a letter to Sheppard’s counsel, informing her of the outcome in the Aubin case. Whittington’s letter did not say that River Valley had agreed to accept $100 as satisfaction of a much larger judgment; the letter referred simply to the “$50,000 judgment.” Whittington wrote that it was “clear” that, when presented with the “extensive evidence” marshaled by River Valley, “Aubin and his counsel saw that the litigation had only one possible outcome.” The letter explained that River Valley was now also privy to Aubin’s “inside perspective.” Referring to “the press’s continuing strong interest in the litigation,” the letter warned that Sheppard might be portrayed in an unflattering light “once all the facts came out.” Consequently, the letter advised, “[r]eaching a negotiated settlement promptly” would help to avoid that unpleasant outcome. The letter expressed River Valley’s willingness to settle for payment of $50,000 and an affidavit from Au-bin backing up River Valley’s version of thé disputed events.

C. Whittington’s motion for a protective order on March 29, 2001

Faced with Whittington’s letter and wanting to see the settlement agreement [5]*5for herself, Sheppard’s counsel filed a motion to compel its production. On March 29, 2001, Whittington responded by moving for a protective order, seeking to keep the terms of the agreement secret. Claiming that the settlement agreement in Au-bin had “no bearing on any of the issues in this case,” Whittington offered to let the court review the documents in camera to determine for itself whether they were relevant to the Sheppard case. If the court did order the 'agreement’s production, Whittington asked that access be limited to Sheppard’s counsel.

On March 30, 2001, the magistrate judge in the Sheppard case granted the protective order to the extent that it sought counsel’s-eyes-only review of the settlement agreement. On April 23, 2001, having now received and read the agreement, Sheppard’s counsel filed a motion for relief from the protective order, seeking full freedom to disclose the agreement, and for “sanctions pursuant to Rule 26(c),” which governs protective orders.

That motion led to the sanctions at issue in this case. On May 23, 2001, the magistrate judge ordered the settlement agreement to be unsealed. Referring to what it called a “lack of forthrightness” on Whit-tington’s part and “[h]alf-truths about the Aubin settlement,” the magistrate judge also scheduled a hearing on “appropriate sanctions, if any.” At the end of that hearing on June 13, 2001, the magistrate judge said: “There will be at least one sanction. Mr.

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428 F.3d 1, 2005 WL 2708218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheppard-v-river-valley-fitness-one-lp-ca1-2005.