United States Court of Appeals,
Fifth Circuit
No. 93-8031
Fred STARLING and Bonnie Starling,
Plaintiffs-Appellants, Cross-Appellees, Appellees,
v.
Charles FULLER, et al.,
Defendants-Appellees,
and
Jim Boutwell and Williamson County, Texas,
Defendants-Appellees, Cross-Appellants,
James Ludlum,
Appellant.
Appeal from the United States District Court for the Western District of Texas.
April 5, 1995
Before GARWOOD and EMILIO M. GARZA, Circuit Judges, and HEAD*, District Judge.**
HAYDEN W. HEAD, Jr., District Judge:
Fred and Bonnie Starling appeal from a jury verdict finding in
favor of the defendants. Specifically, they challenge the
following of the district court's orders: (1) an order denying
* District Judge of the Southern District of Texas, sitting by designation. ** Pursuant to Local Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in Local Rule 47.5.4. leave to file a sixth amended complaint; (2) an order striking the
parties' second joint pretrial order, filed in 1992; (3) an order
denying leave to file a trial amendment of the joint pretrial
order; (4) an order excluding the testimony of Jerry Shorten, one
of plaintiffs' witnesses; (5) an order allowing Paul Womack, an
unlisted defense witness, to testify; and (6) the court's jury
instructions. Sheriff Boutwell and Williamson County cross-appeal,
challenging the district court's award of sanctions against them
and their attorney, James Ludlum. Ludlum also challenges that
award in his own appeal. We affirm the district court's orders
except as to the fee awarded to lift the bankruptcy stay.
I. THE STARLINGS' APPEAL ON THE MERITS
A. Facts and Proceedings Below
Charles Elkins, Fred Starling's landlord, obtained a civil
judgment against Starling in the amount of $1,436.50. Elkins
requested a writ of execution, which was issued on February 3,
1988. In order to execute that writ, Williamson County Constable
Charles Fuller went to a pawnshop owned by Starling. When Fuller
attempted to serve the writ on Starling, Starling became quite
angry. Though there is some dispute as to the exact words used by
Starling, Fuller testified that Starling threatened to shoot him if
he attempted to take anything from the store in execution of the
writ. Starling claims that Fuller became angry when he saw that
Starling was supporting Fuller's opponent in an upcoming election.
Fuller reported the substance of the encounter to Sergeant Ruby Johnson, the civil warrants officer at the Williamson County
Sheriff's Department. Because Sergeant Johnson believed Starling's
threat violated the criminal laws, she summoned the officer in
charge of criminal matters, Sergeant Dennis Jaroszewski. Sergeant
Jaroszewski took Fuller's statement and ordered Deputy David
Proctor to prepare a criminal complaint against Starling. Fuller
brought the complaint to a Justice of the Peace, who issued a
warrant for Starling's arrest for aggravated assault on a law
enforcement officer and set bond in the amount of $25,000.00.
Upon learning of the warrant for his arrest, Starling
surrendered and was placed in jail for six days. Starling
testified that during the time he was in jail, both Sergeant
Johnson and Constable Fuller visited him in jail, urging him to pay
off the civil judgment. After his bond was reduced to personal
recognizance and his wife paid off the civil judgment, Starling was
released. At the suggestion of Fuller, the charges against
Starling were dropped several months later.
In February 1989, the Starlings filed suit against Fuller,
Proctor, Johnson, Jaroszewski, and Gene Hutchinson, another
employee of the Williamson County Sheriff's Department. In their
complaint, the Starlings alleged violations of 42 U.S.C. § 1983 and
Texas state law, claiming that Starling was falsely arrested and
imprisoned, maliciously prosecuted, and otherwise wrongfully
treated by the defendants. Plaintiffs claimed defendants acted in
retaliation for Starling's support of Fuller's political opponent and for Starling's earlier complaints about Jaroszewski and
Hutchinson in connection with their handling of a family dispute.
In May 1991, plaintiffs added Sheriff Jim Boutwell and Williamson
County as defendants. After a trial in October 1992, a jury found
in favor of the defendants on all claims.
B. Discussion
1. The Sixth Amended Complaint
On May 1, 1992, the Starlings filed a motion for leave to file
their sixth amended complaint. The Starlings wished to add a claim
alleging the defendants retaliated against them after arresting
Fred Starling in violation of their First Amendment rights. The
court denied their motion to amend on May 19, 1992. The Starlings
challenge that denial, contending it was an abuse of the trial
court's discretion.
Federal Rule of Civil Procedure 15(a) provides that leave to
amend complaints "shall be freely given when justice so requires."
The decision as to whether to grant leave is "entrusted to the
sound discretion of the district court, and that court's ruling is
reversible only for an abuse of discretion." Wimm v. Jack Eckerd
Corp., 3 F.3d 137, 139 (5th Cir.1993) (citations omitted). Though
leave need not be automatically granted, the district court's
discretion is not unbounded. Id. (citations omitted). " "[I]f the
district court lacks a "substantial reason" to deny leave, its
discretion is not broad enough to permit denial.' " Id. (quoting
Jamieson v. Shaw, 772 F.2d 1205, 1208 (5th Cir.1985)). The district court may consider such factors as undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue prejudice
to the opposing party, and futility of amendment. Id. (citations
omitted).
In Wimm, plaintiffs sought leave to amend their complaint
after defendants filed a motion for summary judgment. The record
showed that the plaintiffs sought leave to add claims based on
facts of which they were aware before they initiated their action.
This Court held that awareness supported a finding of bad faith and
dilatory motive. Wimm, 3 F.3d at 141. Here, the record also
supports such a finding. The defendants' actions forming the basis
for plaintiffs' claims of retaliation occurred in 1987 and 1988,
well before plaintiffs filed their original complaint in this
action.1 Though the Starlings argue they only learned of a pattern
of retaliation in discovery during March and April of 1992, the
actual conduct upon which plaintiffs based the claim occurred much
earlier. Further, the plaintiffs knew of the conduct at the time
it occurred. The pattern discovered in 1992 would only add support
to their claim; it was not the conduct upon which plaintiffs
sought to base their claim. Because plaintiff waited so long to
attempt to add the claim, the district court could have found
1 The Starlings argue defendants should have had notice of a First Amendment retaliation claim as early as the filing of their fourth amended complaint in May, 1991. Accordingly, plaintiffs as much as admit they had a basis for their retaliation claim at least a year before they sought to add the claim. plaintiffs' made their motion for leave to amend in bad faith.
Accordingly, the district court's denial of the motion was not an
abuse of discretion.
2. The 1992 Pretrial Order
On May 15, 1991, the parties filed a joint pretrial order.
On May 1, 1992, the parties submitted a second joint pretrial
order. The second order included plaintiffs' purported retaliation
claim. The order did not contain the parties' signatures, as
required by the Local Rules for the Western District of Texas.
Because of that deficiency, the court struck the pretrial order on
May 19, 1992. On appeal, the Starlings claim the district court
erred because they were given no opportunity to cure any problem
with the pretrial order.
The Starlings' argument that they were given no opportunity to
cure the deficiencies of the 1992 pretrial order does not comport
with the facts. The order striking the pretrial order clearly
stated the pretrial order did not comply with the Local Rules.
Neither party attempted to resubmit the order at any time between
May 19, 1992, when it was struck, and October 12, 1992, when trial
began. Clearly, the parties had sufficient opportunity to cure any
deficiencies in the pretrial order by resubmitting it.
Accordingly, plaintiffs' argument lacks merit.
3. The Supplemental, or Trial, Amendment to Pretrial Order
On the second day of trial, the Starlings filed a motion for
leave to file a trial amendment to the 1991 pretrial order. Apparently, the motion was the Starlings' final attempt to plead a
claim of post-arrest retaliation in violation of their First
Amendment rights such that they could pursue it at trial. The
court denied their motion to supplement. The Starlings challenge
that denial.
The joint pretrial order "shall be modified only to prevent
manifest injustice." Fed.R.Civ.P. 16(e). We review the district
court's decision not to allow the modification of an existing
pretrial order for an abuse of discretion. Masinter v. Tenneco Oil
Co., 929 F.2d 191, 194 (5th Cir.1991), reh. granted, opinion
confirmed and reinstated, 938 F.2d 536 (5th Cir.1991) (citations
omitted). No manifest injustice resulted from the district court's
denial of the motion to amend the pretrial order. The Starlings
knew of the facts underlying their post-arrest retaliation claim
well before they filed their first pretrial order. They did not
include that claim in the first pretrial order, nor did they begin
to attempt to place the claim before the court until over a year
after filing the 1991 pretrial order. Based on those facts, the
Starlings cannot claim manifest injustice occurred when they were
not permitted to amend the pretrial order at trial. See Canal Ins.
Co. v. First General Ins. Co., 889 F.2d 604, 609 (5th Cir.1989),
mandate recalled and reformed, 901 F.2d 45 (5th Cir.1990).
4. The Court's Exclusion of Jerry Shorten's Testimony
The Starlings attempted to call Jerry Shorten as a witness at
trial to support their post-arrest retaliation claim. The court excluded his testimony, and the Starlings contend that exclusion
was error. We review the district court's exclusion of testimony
for an abuse of discretion. United States v. Pace, 10 F.3d 1106,
1115 (5th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2180,
128 L.Ed.2d 899 (1994). Plaintiffs sought to introduce Shorten's
testimony as proof of their retaliation claim. That claim was not
before the district court at the time of trial. Though the
plaintiffs argue they asserted the retaliation claim in their
fourth amended complaint, we disagree with that view of the
complaint. That complaint addressed only plaintiffs' claims that
Fred Starling was arrested solely to force him to pay a civil
judgment—it contains no allegations supporting their claim of
post-arrest retaliation. Further, we have held already that the
district court properly struck the 1992 pretrial order.
Consequently, the 1991 pretrial order governed the trial, and that
pretrial order does not include plaintiff's post-arrest retaliation
claim. Finally, plaintiffs, in their brief, admit the description
of Shorten's testimony in the 1991 pretrial order gave no
indication that he would testify as to matters relevant to a
post-arrest retaliation claim. Because we conclude that claim was
not before the district court, the testimony was not relevant to
any issue, and the court did not abuse its discretion in excluding
it.
Plaintiffs argue we should apply the four factors set forth
in Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir.1990), to determine whether the district court's exclusion of Shorten's
testimony is an abuse of discretion. Those factors are used "to
review [a] court's exercise of discretion to exclude evidence that
was not properly designated." Id. In Geiserman, the court struck
plaintiff's untimely expert witness designation and precluded any
expert witness testimony in order to enforce both the court's
scheduling order and local rules. Id. at 790. Here we have held
the district court's exclusion of the evidence to be proper because
the evidence is irrelevant, not because the evidence was not
properly designated. Consequently, the Geiserman factors do not
apply.
5. Allowing Paul Womack to Testify
Defendants named District Attorney Ken Anderson as a witness
in their witness list. Anderson, however, was unavailable to
testify at trial because he was trying a capital murder case. The
defendants therefore called Assistant District Attorney Paul Womack
as a substitute witness. Though the Starlings objected to him
testifying, Womack was allowed to testify over their objection.
The Starlings contend the court erred in allowing Womack's
testimony because (1) he was a surprise witness who testified well
beyond the scope of Anderson's planned testimony as described in
the pretrial order; (2) the court allowed him to testify to legal
opinions; and (3) the court allowed the defendants to introduce a
new theory of defense at trial, largely through the testimony of
Paul Womack. a. Surprise Witness
We review the trial court's decision to allow a witness not
listed in the pretrial order to testify for an abuse of discretion.
Geiserman, 893 F.2d at 791 (citations omitted). The trial court's
discretion is to be guided by considering the following four
factors: (1) the importance of the witness's testimony; (2) the
prejudice to the opposing party of allowing the witness to testify;
(3) the possibility of curing such prejudice by granting a
continuance; and (4) the explanation, if any, for the party's
failure to identify the witness. Id.
Womack's testimony clearly was important to the defendants'
case. Plaintiffs claimed Fred Starling was arrested to coerce him
to pay a civil judgment he was contesting. As evidence of that
claim, they sought to show there was no probable cause to arrest
Starling for any crime under Texas law, thus demonstrating
defendants' bad motive in arresting him. At least one of
plaintiffs' witnesses, former assistant district attorney Randy
Dale, testified that, in his opinion, the facts alleged in the
criminal complaint against Starling did not constitute a crime.
R18:762-63. Accordingly, plaintiffs opened the door to the issue
of whether the complaint contained sufficient facts to establish
probable cause that Starling committed a crime. Womack testified
to the requirements for a valid arrest under Texas law, and he
testified that if the facts stated by Constable Fuller were true,
those facts would establish probable cause to believe Starling committed the crime of retaliation. R19:1078-79. Womack's
testimony covered the same subject as Dale's, and served as a
direct rebuttal of Dale's testimony.
Despite the importance to defendant's case, the Starlings
claim they were prejudiced by the district court allowing Womack to
testify. Plaintiffs claim that before Womack testified, they had
no idea defendants intended to claim there was probable cause to
believe Starling had committed any crime other than aggravated
assault. Accordingly, they were not prepared to rebut the claim
that probable cause existed to believe Starling committed
retaliation. The record belies plaintiffs' contention. As early
as October 13, 1992, which was three days before Womack testified,
the defense elicited an admission on cross-examination that the
facts alleged in the criminal complaint against Fred Starling
amounted to the crime of retaliation. See testimony of Jim
Stinnett, a former employee of the Williamson County Sheriff's
Department at R17:323-27, 338. Further, the defense elicited the
same admission from Randy Dale on October 14, 1992. R18:785-86.
Even if that claim of prejudice is true, such harm clearly
could have been cured by seeking a continuance. Plaintiffs claim
they could not seek a continuance because the district judge had
been consistently emphatic that the trial would be completed on the
day Womack testified. However, the record does not show that
plaintiffs even asked for a continuance when it became clear that
the court was going to allow Womack to testify. Consequently, they speculate when they now claim it was useless to do so because the
court would have denied it.
Finally, defendants' reason for failing to identify Womack
before trial does not suggest anything other than good faith.
Defendants failed to list Womack simply because they intended to
call the District Attorney, Ken Anderson, and listed Anderson in
the 1991 pretrial order. However, Anderson was prosecuting a
capital murder trial when this case finally came to trial.
Defendants called Womack, who is an assistant district attorney, as
a replacement witness.
Based on consideration of those factors, we cannot hold the
trial court abused its discretion in allowing Womack to testify.
Further, we cannot hold his testimony exceeded its permissible
scope because it simply rebutted evidence presented by plaintiffs
that Williamson County lacked probable cause to arrest Fred
Starling. As defendants point out, plaintiffs' description of
Dale's testimony in the 1991 pretrial order did not indicate
clearly that Dale would address whether the facts alleged in the
criminal complaint would state a crime. R2:208. Plaintiffs were
allowed to raise that issue at trial, and defendants are entitled
to address issues raised by plaintiffs.
b. Legal Opinion Testimony
Plaintiffs claim the district court erred in allowing Womack
to testify on matters of substantive law such as: the general role
of the magistrate in setting bail; whether evidentiary documents stated probable cause; the legal effect of a technical mistake in
a complaint; whether an arrest warrant was required; and that
probable cause for the offense of criminal retaliation existed. As
an assistant district attorney, Womack knows of the procedures
followed to obtain an arrest warrant and to set bail, and what
happens when there is a technical defect in the application for the
warrant. Accordingly, he is qualified to testify to those matters,
like any other expert. See Marx & Co., Inc. v. Diners' Club, Inc.,
550 F.2d 505, 508-09 (2d Cir.), cert. denied, 434 U.S. 861, 98
S.Ct. 188, 54 L.Ed.2d 134 (1977). As to the remainder of the
testimony, plaintiffs' witnesses had been allowed to testify to the
lack of probable cause. Clearly, the defendants had the right to
meet that testimony with testimony of their own demonstrating
probable cause did exist. "In general, when a party opens up a
subject, there can be no objection if the opposing party introduces
evidence on the same subject." Francis v. Clark Equip. Co., 993
F.2d 545, 550 (6th Cir.1993) (citation omitted). We find no abuse
of discretion.
c. New Defense
Plaintiffs argue the district court erred in allowing
defendants to introduce a new theory of defense through Womack's
testimony. They cite no authority for the proposition that the
court's actions were improper. As we already stated, plaintiffs
raised the issue of the lack of probable cause, and now seek to
preclude defendants from defending on that claim. Further, notwithstanding their assertions to the contrary, plaintiffs had
notice of this defense at least as early as three days before
Womack testified, through the cross-examination of one of their own
witnesses. Any testimony by Womack was merely cumulative of the
earlier testimony.
6. Failure to Instruct the Jury
Plaintiffs complain that the district court failed to give
several requested instructions, and that failure denied plaintiffs
a fair trial. Specifically, plaintiffs sought the following
instructions: (1) an instruction based on City of Houston v. Hill,
482 U.S. 451, 107 S.Ct. 2502, 96 L.Ed.2d 398 (1987), to the effect
that verbal criticism of law enforcement officers is
constitutionally protected and that a peace officer must exercise
a degree of restraint in the face of verbal criticism or challenge;
(2) instructions on procedural and substantive due process issues
affecting the validity of the arrest of Fred Starling, such as the
requirement that the criminal complaint be made under oath, the
four corners doctrine for reading the complaint, and law as to the
result of the complaint containing conclusory allegations; and (3)
an instruction on post-arrest retaliation based on the First
Amendment.
a. Hill Instruction
Plaintiffs are entitled to have the court instruct the jury
on their theory of the case if the instruction is legally correct,
the theory is supported by the evidence, and the desired instruction is brought to the court's attention in a timely manner.
Pierce v. Ramsey Winch Co., 753 F.2d 416, 425 n. 10 (5th Cir.1985)
(citing Corey v. Jones, 650 F.2d 803, 806 (5th Cir.1981)).
Plaintiffs, however, are not entitled to have the jury instructed
in the precise language or form they requested. Id. at 425
(citations omitted). In reviewing a claim that the district court
erroneously instructed the jury, we "view the charge as a whole, in
the context of the case, and we ignore technical imperfections."
Id. The court "may refuse proposed instructions ... if the charge
that is given covers the theory in substance; the judge, not the
parties, has control over the language and form of jury
instructions." Id. at 425 n. 10 (citing Corey v. Jones, 650 F.2d
803, 806 (5th Cir.1981)).
Plaintiffs sought an instruction to the effect that verbal
criticism of law enforcement officers is constitutionally protected
and that a peace officer must exercise a degree of restraint in the
face of verbal criticism or challenge. See R11:2020. The court
instructed the jury as follows:
The second constitutional violation which plaintiffs allege is that Defendants violated Fred Starling's First Amendment Rights. The First Amendment of the Constitution of the United States gives every citizen the right to freedom of speech, which includes the right to complain about the conduct of a law enforcement officer and the right to support or criticize any political candidate or public official one chooses.
Arresting a person in retaliation for his or her speech activities is a violation of his or her First Amendment rights if it is shown that the person's speech activities were a substantial or motivating factor in the defendant's decision to arrest him or her. If you find that plaintiffs have met this burden of proof, you must then determine whether the defendants have shown by a preponderance of the evidence that Fred Starling would have been arrested even if his political opinions or speech activities had not been considered, i.e., because there existed probable cause. If the defendants show, by a preponderance of the evidence, that Fred Starling would have been arrested in any event, then you should find for the defendants with regard to plaintiffs' First Amendment claim.
R11:2139. The substance of the court's instruction covers
plaintiffs' theory. Consequently, it was not error for the
district court to refuse to give plaintiff's proposed instruction.
b. Due Process Issues
All of the challenged due process instructions relate to the
issue of whether the warrant authorizing the arrest of Starling was
valid, the determination of which is essential to the plaintiffs'
claim of false arrest. We will not reverse based on a challenged
instruction " "if we find, based upon the record, that the
challenged instruction could not have affected the outcome of the
case.' " Pierce, 753 F.2d at 425 (quoting Bass v. USDA, 737 F.2d
1408, 1414 (5th Cir.1984).
As the defendants point out, the jury's finding that Fred
Starling threatened to shoot Constable Fuller if Fuller carried out
his lawful duties moots plaintiffs' arguments. That behavior
constitutes a felony under Texas law. See Tex.Penal Code § 36.06.
Even if the requested due process instructions were given and the
jury found the arrest warrant was procedurally deficient,
defendants argue, the jury could not have found in favor of
plaintiffs on the false arrest claim because the commission of a felony in the presence of a peace officer negates the need for an
arrest warrant. Bolden v. State, 634 S.W.2d 710, 713
(Tex.Crim.App.1982); Caro v. State, 771 S.W.2d 610, 616
(Tex.App.—Dallas 1989, no pet.). Accordingly, they argue, the fact
that the arrest warrant was procedurally deficient would not
invalidate the arrest. We agree. The district court's failure to
give the requested due process instructions was not erroneous
because they would not have changed the result of the trial.
c. Post-Arrest Retaliation
We review the district court's refusal of a requested
instruction for an abuse of discretion. Jackson v. Taylor, 912
F.2d 795, 798 (5th Cir.1990) (citing Bryan v. Cargill, Inc., 723
F.2d 1202 (5th Cir.1984)). The refusal is an abuse of discretion
only if there are pleadings and sufficient evidence to support the
instruction. Id. (citing Syrie v. Knoll Int'l, 748 F.2d 304 (5th
Cir.1984)). We have determined already that plaintiffs did not
raise a claim of post-arrest retaliation based on the First
Amendment in any of the pleadings before the court. Because the
post-arrest retaliation claim was not before the court, the court
did not err in refusing the requested instruction.
II. APPEAL OF THE AWARD OF SANCTIONS
During 1990, 1991, and the early part of 1992, the parties
were involved in a number of discovery disputes. On April 29,
1992, the Starlings filed a motion for sanctions against Boutwell and the County, as well as against James Ludlum, their attorney.
On May 19, 1992, the district court assigned the motion to United
States Magistrate Judge Stephen H. Cappelle, and Judge Cappelle
conducted an evidentiary hearing on the motion on June 2, 1992. On
August 25, 1992, the magistrate judge submitted his 104-page report
and recommendation to the district court. The magistrate judge
recommended that sanctions be awarded against Boutwell, Ludlum, and
the County. The district court announced it would postpone
consideration of the magistrate judge's recommendations until after
a trial on the merits.
The jury rendered its verdict in favor of the defendants on
all claims in October 1992. On November 6, 1992, the district
court conducted its hearing on the motion for sanctions. At the
beginning of the hearing, the district court announced its adoption
of the majority of the magistrate judge's findings of fact2 and its
intent to impose sanctions based on those findings. Accordingly,
the district court announced that it would only consider the issue
of the amount of sanctions at the hearing. After the hearing, the
district court assessed sanctions against Boutwell, Ludlum, and the
County in the amount of $44,177.40, ordering that the liability for
2 The district court adopted all of the magistrate judge's findings with the exception of the findings contained in paragraphs 51, 62, 63, 74, 95, 96, 101, 117, 121, and 122. The excluded findings included determinations that defendants had retaliated against plaintiffs and their witnesses, that plaintiffs had been highly prejudiced by defendants' discovery abuse and that defendants had delayed to take advantage of Fred Starling's heart condition. The district court did not indicate why it did not adopt those findings except to note that Ludlum's dilatory tactics had not prejudiced Plaintiffs. the sanction was joint and several among the three. The district
court incorporated the sanctions award into its final judgment,
which the court entered on November 23, 1992. Ludlum, Boutwell and
the County have each appealed the sanctions award.
In its order awarding sanctions against Boutwell, Ludlum, and
the County, the district court noted that, while the same sanctions
could be awarded under Federal Rule of Civil Procedure 11 or under
its inherent authority, it was imposing the sanctions under Federal
Rule of Civil Procedure 37. We review the imposition of Rule 37
sanctions under an abuse of discretion standard. Coane v. Ferrara
Pan Candy Co., 898 F.2d 1030, 1031 (5th Cir.1990).
1. Inadequate Notice
The cross-appellants Ludlum, Boutwell and the County
(cross-appellants) assert that the imposition of sanctions against
them violated their due process rights. While a district court has
broad discretion in the awarding of sanctions, that discretion is
limited by due process concerns. Frame v. S-H, Inc., 967 F.2d 194,
204 (5th Cir.1992). Due process requires adequate notice and an
opportunity to be heard. American Airlines, Inc. v. Allied Pilots
Ass'n, 968 F.2d 523, 530 (5th Cir.1992). The level of formality of
the notice and proceedings correspond to the level of sanctions
imposed. American Airlines, Inc., 968 F.2d at 530. In American
Airlines, Inc., this Court found that the notice issued by Judge
McBryde was adequate where the notice sufficiently described that nature of the sanctioned party's conduct that the court wanted to
address. Id. After it gives notice, a district court must also
give the sanctioned party an opportunity to respond to the possible
sanctions. See Spiller v. Ella Smithers Geriatric Center, 919 F.2d
339, 347 (5th Cir.1990) (Rule 11 sanctions).
Cross-appellants view of the magistrate judge's report and
recommendation, as well as the district court's order adopting a
substantial majority of the magistrate judge's findings, argues
that the district court imposed sanctions in a manner which did not
meet the requirements of due process. The motion for sanctions
that the plaintiffs' filed against Ludlum, Boutwell and the County
alleges that they had been dilatory with regard to the production
of documents requested to prepare for the deposition of Boutwell.
With regard to the relief requested in the motion, plaintiffs
sought all costs for the deposition of Boutwell as well as all
attorney's fees that plaintiffs' incurred due to the problems
associated with the production of documents related to Boutwell's
deposition. Plaintiffs' also sought attorney's fees related to the
bringing of the motion for sanctions. The district court's order
assigning the motion to the magistrate judge directed the
magistrate judge to conduct "a full hearing and a recommendation
regarding factual findings on the conduct of the attorneys and
recommendations on what discovery, if any, should be accomplished
prior to the next trial setting."
Pursuant to the district court's order, the magistrate judge conducted an evidentiary hearing. While the transcript suggests
that the hearing was very lengthy, lasting almost a full day, the
testimony given and the evidence admitted at the hearing were
directed to whether defendants' had failed to produce requested
documents for Boutwell's deposition and whether Ludlum and Boutwell
were guilty of bad faith in failing to produce the requested
documents.
Despite the narrow focus of the motion for sanctions, the
order of reference and the evidence admitted at the hearing, the
magistrate judge's report and recommendation and the district
court's order adopting a substantial majority of the magistrate
judge's findings of fact address issues well beyond the scope of
the motion and hearing. The report and recommendation includes a
twenty page review of the procedural history of this case. Much of
that procedural history is devoted to dilatory tactics that the
magistrate judge found Ludlum to have committed both before and
after Boutwell and the County were joined as parties.
Boutwell and the County note also that there was substantial
consideration given in the report and recommendation to discovery
abuses that happened before they were joined as parties in the
lawsuit in May of 1991. The failure to produce certain Texas Crime
Information Center/National Crime Information Center log data,
Ludlum's failure to respond to the magistrate judge's order to
either produce the log or swear that it did not exist and discovery
delays that prompted plaintiffs to file a motion for contempt on May 1, 1991, were all included in the magistrate judge's report and
recommendation.
The magistrate judge also included an extensive review of
Ludlum's past conduct that went beyond Ludlum's representation of
Boutwell and the County in this lawsuit. The report and
recommendation included a separate section entitled, "PAST PATTERN
OF CONDUCT OF ATTORNEY JAMES LUDLUM, JR." The section, which is
sixteen pages long, includes a detailed description of Ludlum's
conduct in two other cases in the United States District Court for
the Western District of Texas. The report and recommendation also
includes, as exhibits, docket sheets, district court orders and
attorney correspondence related to those two cases. In this
section, the magistrate judge describes numerous continuances and
instances of delay attributable to Ludlum. While the district
court indicated in its order adopting the report that it was not
familiar with Ludlum's past conduct, it did concur in the
magistrate judge's assessment and warned Ludlum that similar legal
representation by him in the future would result in his inability
to practice in the United States District Court for the Western
District of Texas.
While the notice for the sanctions hearing did not indicate
that the magistrate judge would address issues regarding dilatory
tactics and discovery abuses before Boutwell and the County were
joined in the litigation and regarding Ludlum's overall conduct in
the Western District, it is not evident on the face of the record that the district court imposed sanctions because of Ludlum's or
this litigation's history. The magistrate judge found and the
district court adopted findings that both Ludlum and Boutwell
engaged in sanctionable delays with respect to Boutwell's
deposition and discovery related to that deposition in this
litigation. Sanctions were calculated on the basis of plaintiffs'
counsel's hours found expended in the deposition dispute in this
litigation multiplied by her hourly rate.3 Any inadequate notice
therefore constitutes harmless error that does not require
reversal.
2. Failure to Consider Evidence
On August 25, 1992, the magistrate judge issued his report
and recommendation. On September 4, 1992, Ludlum, Boutwell and the
County filed a motion to reopen and reconsider, requesting that the
magistrate judge reconsider his report and recommendation and that
he reopen the evidence relating to the report and recommendation.
On the same day, they filed their objections and notice of appeal
from the magistrate judge's report and recommendation in accordance
with 28 U.S.C. § 636(b)(1)(C). In an order entered on September
11, 1992, the district court denied their motion to reopen and
reconsider. In the same order, the district court concluded that
the magistrate judge's "determination [would] stand on the record
3 Even though the district court awarded less than the amount plaintiffs' sought, it is difficult to see how this dispute could have reasonably generated almost 250 hours of plaintiffs' attorney time, which constitutes more than one full month of work. Because that amount is unchallenged, the Court does not address it other than to take notice of it. developed before him prior to the rendering of his opinion when all
parties and their lawyers and the witnesses had full opportunity to
present their evidence on the issues." A review of the record
indicates that this conclusion is not entirely accurate.
In their supplemental offer of evidence filed on June 23,
1992, two months before the magistrate's decision, plaintiffs
included the affidavit of Jim Stinnett, who plaintiffs alleged was
a witness discovered after the sanctions hearing. Stinnett is a
former employee to the Williamson County Sheriff's Department. In
his affidavit, Stinnett describes a list of personnel records that
are maintained by that department. He also indicates that he
received a memorandum from Boutwell requesting that department
employees not have any dealings or associations with Fred Starling
or his business. Stinnett was required to sign the memorandum and
return it to his supervisor. In his report and recommendation at
paragraphs 38, 52 and 55, the magistrate judge referred to
Stinnett's affidavit and concluded that personnel files of the
County existed that had not been produced for discovery to the
plaintiffs. These findings were among those findings of fact
relied on by the district court to determine that sanctions were
appropriate. In their objections to the report and recommendation,
Ludlum, Boutwell and the County sought to show that Stinnett was a
disgruntled former employee who was terminated in 1991. Boutwell
and the County further alleged that Stinnett subsequently filed a
"whistleblower" lawsuit against the Williamson County Sheriff's Department that was dismissed with prejudice on July 9, 1992. The
district court does not refer to these circumstances in its order
adopting the report and recommendation. Cross-appellants do not
offer an explanation as to why they did not promptly challenge
Stinnett's affidavit.
A more serious issue concerns the affidavit of Beverly
Blevins. On April 29, Plaintiffs filed their motion for sanctions
against the cross-appellants. As part of their motion for
sanctions, plaintiffs included the affidavit of Beverly Blevins.
In her affidavit, Blevins indicates that she worked in the
Williamson County Sheriff's Department but was terminated on April
4, 1992. Also in her affidavit, she describes an office memorandum
similar to the one described by Stinnett. She also indicates that
the memorandum was from Boutwell, who instructed all employees of
the Sheriff's Department not to have any business dealings with
Fred Starling or Rick Perkins. While Blevins does not indicate it
in her affidavit, Perkins was the investigator for plaintiffs'
counsel. Blevins further indicates that she attempted to save her
copy of the memorandum in her personal lockbox, which she
apparently kept at the office, but that the memorandum was
confiscated. When she was terminated, Blevins described how her
supervisor referred to the memorandum when she was terminated.
Finally, Blevins described how phone lines to and from the
Williamson County Sheriff's Department were monitored by Williamson
County personnel. She recalled hearing clicks on the telephone during a conversation that she had with either Fred Starling or
Rick Perkins.
In his report and recommendation at paragraphs 37 and 66, the
magistrate judge referred to the Blevins affidavit to support his
conclusion that Boutwell had failed to produce an internal
memorandum which instructed employees of the Williamson County
Sheriff's Department to avoid associating with and doing business
with Fred Starling or Rick Perkins. The paragraphs which referred
to the Blevins affidavit were also among the findings of fact that
the district court adopted to impose sanctions.
In both their motion to reconsider and reopen and their
objections to and appeal from the report and recommendation,
cross-appellants attempted to submit affidavits from three
employees of the County to show that Blevins was not an employee of
the Williamson County Sheriff's Department and that the memorandum
at issue did not exist. In order to explain their delay in
submitting the affidavits, Bountwell and the County asserted that
these affidavits constituted newly discovered evidence. In the
context of a motion for new trial, newly discovered evidence
warranting a new trial is such evidence that (1) would probably
have changed the outcome of the trial; (2) could not have been
discovered earlier with due diligence; and (3) is not merely
cumulative or impeaching. Diaz v. Methodist Hospital, 46 F.3d 492
(5th Cir.1995). As all three of the affidavits are from employees
of the County, they cannot argue that they could not have obtained the affidavits earlier with due diligence. Moreover, these
affidavits could have been filed as late as August 14, 1992, when
plaintiffs filed their last supplemental offer of evidence and when
Boutwell and the County filed their motion for leave to supplement
evidence but before the magistrate judge had issued his report and
recommendation. The motion for leave to file supplemental evidence
did not refer to any affidavits, however, and was made up of
Ludlum's now frequent assertions that he had been too busy to file
supplemental evidence earlier. The affidavits therefore do not
constitute newly discovered evidence as a matter of law.
The first of the three affidavits was from Paul Caldwell, who
was the jail supervisor for the County. According to his
affidavit, Blevins was an inmate in the Williamson County jail on
April 3, 1992 but was released from jail on that same day on a bond
from Ace Bail Bonding. Caldwell indicates in his affidavit that
Ace Bail Bonding is owned by Rick Perkins. Caldwell further
indicated that he had never seen a memorandum from Boutwell
concerning Fred Starling's businesses.
The second affidavit was from Jill Bone, who was Boutwell's
secretary. Bone indicated in her affidavit that her review of
payroll records indicated that Blevins was never an employee of the
Sheriff's Department. She also indicated in her affidavit that she
had neither prepared nor seen a memorandum from Boutwell regarding
Fred Starling's pawn shop.
The third affidavit was from Geniva Simpson, who was the communications supervisor for the Sheriff's Department. In her
affidavit, Simpson also indicated that Blevins had not worked in
the Sheriff's Department and that she had never seen a memorandum
regarding Fred Starling's pawn shop or his businesses. Simpson
also indicated in her affidavit that she recalled that Blevins had
visited the Sheriff's Department on one occasion and had said then
that she was working for Fred Starling. With no adequate
explanation for lateness given, the district court clearly did not
abuse its discretion in denying the motion to reopen and
reconsider.
Following the district court's hearing on the sanctions issue,
counsel for Boutwell and the County filed a letter on November 17,
1992, directed to the issue of the amount of attorney's fees that
should be imposed as the sanction on Boutwell, the County and
Ludlum. Counsel attached to the letter a second affidavit from
Blevins which had been prepared and signed on September 17, 1992.
In the second affidavit, Blevins indicates that almost all of the
statements on her first affidavit were false. She further
indicates that the only portion of her first affidavit that was
true was that, in late March or early April of 1992, while she was
turning herself in on an outstanding warrant for theft by check,
she saw a memorandum addressed to all County employees but did not
recall who prepared it. She further remembered that the memorandum
referred to Ace Bail Bonds, Gold N Pond and Gold N Pawn. These are
businesses owned by either Rick Perkins or Fred Starling. Blevins further recalled that the memorandum advised people to be careful
with those businesses. She further indicated that Fred Starling
and Rick Perkins knew that she had never worked for the County
because their company held the bond on her pending charge of theft
by check. Blevins also described how Perkins had prepared the
first affidavit and she had signed it without reading it. Since
that time, she read the affidavit and realized that it was not what
she had told Perkins. Finally, Blevins indicated in the second
affidavit that she told plaintiffs' counsel, Rick Perkins and Fred
Starling that the first affidavit was false. According to Blevins,
they suggested that she not contact counsel for Boutwell and the
County about the matter. In its order adopting the magistrate
judge's report and recommendation and imposing sanctions on
Boutwell, the County and Ludlum, which was issued on November 23,
1992, the district court did not refer to the second affidavit.
In her second affidavit, Blevins also indicates that she was
not contacted by counsel for Boutwell and the County until
September 10, 1992. No reason is given for waiting so long to
contact Blevins. As potentially significant as the second Blevins
affidavit is, the district court was never presented with an
adequate reason for the delay in presenting this affidavit. This
Court concludes that the district court did not abuse its
discretion in refusing to consider the affidavits.
3. Fee Awarded to Lift Bankruptcy Stay
In his appeal of the sanctions award, Ludlum contests the award of fees to the bankruptcy attorney, John Alvis, and to
plaintiffs' counsel for their efforts to lift the automatic stay
against Defendant David Proctor, who had filed for personal
bankruptcy during the course of the litigation. Even though it was
not in his charge to hear nor the subject of any motion for
sanctions, the magistrate judge found in his report and
recommendation that Proctor has filed his bankruptcy on May 4, 1992
but that Ludlum delayed filing a notice of bankruptcy until June
18, 1992. The magistrate judge concluded that the late notice of
bankruptcy was calculated to interfere with the merits of the case.
Concurring with the magistrate judge's determination, the district
court awarded sanctions of $4,762 for the time spent by the
bankruptcy attorney and $2,700 for the time spent by plaintiff's
counsel that was related to Proctor's bankruptcy.
An examination of the docket sheet for this case indicates
that in the district court's order of May 19, 1992, assigning the
sanctions motion to the magistrate judge, the district court also
vacated the trial setting of May 26, 1992 and did not order another
trial setting. On September 1, 1992, the district court set the
case for jury trial on September 28, 1992. On the date that Ludlum
filed the notice of bankruptcy, there was not a trial setting in
the case. It is therefore difficult to understand how the late
notice was calculated to interfere with the trial of the case.
Moreover, the plaintiffs would have incurred the expenses
associated with lifting of the automatic stay regardless of the timing of the notice of bankruptcy in order to proceed with their
claims against Proctor. There was never a finding by either the
district court or the bankruptcy court that the Proctor's filing
was made in bad faith. This bankruptcy matter was also beyond the
notice and stated purpose of the hearing. The district court
therefore abused its discretion with regard to the award to
Plaintiffs for the fees and expenses associated with obtaining the
lift of the stay in Defendant David Proctor's bankruptcy case.
III. CONCLUSION
We AFFIRM the district court's judgment with respect to the
trial on the merits. We REVERSE and RENDER the district court's
judgment with respect to the award of fees for the lifting of the
bankruptcy stay. We AFFIRM the district court's judgment with
respect to the remaining imposition of sanctions and REMAND for
issuance of an order for payment of sanctions consistent with this
opinion.