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MCMUNN v. MEMORIAL SLOAN-KETTERING CANCER CENTER

March 27, 2002

HOLLY MCMUNN, PLAINTIFF,
V.
MEMORIAL SLOAN-KETTERING CANCER CENTER, DEFENDANT.



The opinion of the court was delivered by: Buchwald, District Judge.

MEMORANDUM AND ORDER

Plaintiff Holly McMunn brings this action against defendant Memorial Sloan-Kettering Cancer Center ("Memorial") alleging disability discrimination in violation of, inter alia, the Americans with Disabilities Act ("ADA"). We have previously denied a motion by Memorial for summary judgment. See McMunn v. Memorial Sloan-Kettering Cancer Ctr., 2000 WL 1341398, at *4 (S.D.N.Y. Sept. 15, 2000) (whether Ms. McMunn is perceived to be disabled within meaning of ADA must be determined by a jury). Memorial now moves to dismiss the Complaint and for an award of monetary sanctions for alleged misconduct by Ms. McMunn. For the reasons that follow, we dismiss this action with prejudice and award a $20,000 monetary sanction against Ms. McMunn.

BACKGROUND*fn1

Ms. McMunn brought this employment discrimination suit in August of 1997 alleging that she was terminated by her superior, Dr. Thomas Fahey, Senior Vice President for Clinical Program Development, and a breast cancer specialist. She claims that, during the six months that she worked for Dr. Fahey, she was an "exemplary" employee and that Dr. Fahey had "frequently praised [her] work performance," but that, when Dr. Fahey read her medical chart on September 9, 1994, thereby learning that she had breast cancer, he abruptly fired her. Compl. ¶¶ 1516. Ms. McMunn alleges that Dr. Fahey fired her "because she had breast cancer, had a record of breast cancer, and because of [his] presumptions and fears about her disability and perceived disability." Id. ¶ 28. Memorial defends her termination on the ground that she was fired for a legitimate, non-discriminatory reason, namely, that she had been absent from work an unreasonable number of days in the few months during which she worked for Dr. Fahey.

DISCUSSION

Memorial moves for dismissal of Ms. McMunn's lawsuit and monetary sanctions pursuant to Federal Rule of Civil Procedure 37 and the inherent power of this Court to "fashion an appropriate sanction for conduct which abuses the judicial process." Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991). Rule 37, however, only applies to instances where a party (or certain other actors) "fails to obey an order to provide or permit discovery." Fed.R.Civ.P. 37(b)(2). While some of Ms. McMunn's misconduct would clearly qualify for sanctions under this Rule, much of it would not, as her behavior goes well beyond distinct violations of our discovery orders.*fn2 Accordingly, we consider Memorial's motion in the context of our broader inherent power, because such power "extends to a full range of litigation abuses," including fraud upon the court. Chambers, 501 U.S. at 46, 111 S.Ct. 2123; see also Skywark v. Isaacson, 1999 WL 1489038, at *14 n. 27 (S.D.N.Y. Oct. 14, 1999), aff'd 2000 WL 145465 (S.D.N.Y. Feb. 9, 2000).

We proceed herein as follows: We will discuss the concept of "fraud upon the court," then our conclusion that the behavior at issue here rises to that level. Next, after setting forth the various sanctions available, we will explain our determination that both dismissal and a monetary sanction are appropriate in this case. Initially, however, we set out the due process safeguards we afforded Ms. McMunn.*fn3

I. Due Process

Dismissal with prejudice is "a particularly severe sanction," Chambers, 501 U.S. at 45, 111 S.Ct. 2123, even for a fraud upon the court, and a decision to impose such a sanction must be "made with restraint and discretion." Schlaifer Nance & Co., Inc. v. Estate of Warhol 194 F.3d 323, 334 (2d Cir. 1999). Accordingly, once Memorial requested permission to make the instant motion, see Letter from Edward A. Brill dated July 10, 2001 ("7/10/01 Ltr."),*fn4 we made every effort to ensure that Ms. McMunn would receive the process she was due. See Chambers, 501 U.S. at 50, 111 S.Ct. 2123 (in exercising its inherent powers, a court must "comply with the mandates of due process"). Due process, in the context of sanctioning an attorney or a party, required that Ms. McMunn be granted notice and an opportunity to be heard. Schlaifer Nance, 194 F.3d at 335.

At a conference held on July 12, 2001, counsel for Memorial sought "leave to move to dismiss this case based on the improper conduct of the plaintiff." Transcript of Conference held July 12, 2001, at 2. This request was granted. Id. at 14. Memorial served its motion to dismiss and for monetary sanctions on August 3 and, on August 7, Gary Ireland, then counsel for Ms. McMunn,*fn5 requested the opportunity to hire an expert to assist in responding to Memorial's motion, as well as an extension of time in which to submit opposition papers. See 8/7/01 Ltr. A phone conference was subsequently held on August 9 during which Mr. Ireland was granted permission to hire an expert as well as an extension to submit an opposition brief until September 21, 2001. In a letter dated August 14, 2001, Mr. Ireland stated the following:

After discussions with Plaintiff, it is mutually agreed that we can longer proceed in this action working together. Both Plaintiff and I respectfully request an order relieving me as counsel. In addition, Plaintiff requests an order suspending all discovery and motion practice for a reasonable amount of time to afford her the opportunity to retain counsel.

8/14/01 Ltr. Memorial consented to this request on the condition that Ms. McMunn timely meet certain outstanding discovery obligations. 8/15/01 Ltr.

At a conference held on August 22, we granted Mr. Ireland and Ms. McMunn's joint request. Approximately one month later, Ms. McMunn wrote to the Court, "I am writing to propose that a fair settlement of this case could include reasonable remuneration with both parties dropping all actual and alleged charges. If this is not acceptable, I would have no choice but to represent myself pro se." 9/17/01 Ltr. (emphasis in original).*fn6 We commenced yet another conference on October 4, 2001, in order to discuss settlement.

At this conference, Ms. McMunn acknowledged that she was not sure what settlement terms she was willing to offer Memorial. Thus, we ordered her to send Memorial and the Court a letter with a concrete settlement proposal within a week or so. In a letter dated October 10, 2002,*fn7 Ms. McMunn made a settlement offer, but Memorial declined to settle on Ms. McMunn's proposed terms.*fn8

In a letter dated January 4, 2002, Ms. McMunn wrote to the Court:

I am writing to request a hearing or a conference so that I can show you that Memorial Sloan-Kettering submitted a falsified document to you in its Reply. I would like to present this to you and show that Memorial's Motion to Dismiss my case should be dismissed on this basis. I would like to request that you place sanctions on Memorial. I would like to request that Memorial be punished to the fullest extent in this matter.

Then, in a letter dated January 5, 2002, Ms. McMunn requested an oral argument on Memorial's motion to dismiss, and in a letter dated January 7, 2002, she requested permission to "submit a Cross Motion to Dismiss Memorial's Motion to Dismiss my case." We sent a letter to the parties on January 9, denying Ms. McMunn's request for leave to file a cross-motion on the ground that she had already submitted a significant amount of briefing on the issues she indicated would be the subject of her motion. However, in a letter dated January 11, 2002, the Court granted Ms. McMunn's request for oral argument, which was scheduled for February 4, 2002.*fn10

Ms. McMunn apparently believed that the deposition transcript of Trisha Hodges, an employee of Memorial, would support her contention that Memorial had provided the Court with a forged document. As Ms. McMunn represented to the Court that she did not have a copy of Ms. Hodges's deposition transcript in her possession, at a phone conference on January 29, we facilitated her review thereof at the offices of Memorial's counsel.*fn11 Finally, the Court held a two-hour oral argument on the present motion on February 4, 2002.

In light of the foregoing, we believe that Ms. McMunn was granted adequate notice of the possibility that the Court would dismiss her suit for misconduct without reaching the merits, and that she was given every opportunity to be heard in opposition thereto. In all, Ms. McMunn submitted no fewer than 70 pages of briefing and 125 exhibits in opposition to Memorial's motion. Further, she had opportunities to be heard at oral argument, as well as during conferences held in court and by telephone since Memorial served its motion.*fn12

Finally, also in an effort to protect Ms. McMunn's procedural rights, we have applied a "clear and convincing" standard to any findings of fact we have made. See Shepherd v. American Broadcasting Cos., Inc., 62 F.3d 1469, 1477 (D.C.Cir. 1995) (to dismiss a suit for abusive behavior under inherent power, district court must find by "clear and convincing evidence" that abusive behavior occurred); cf. Weinberger v. Kendrick, 698 F.2d 61, 80 (2d Cir. 1982), cert. denied, 464 U.S. 818, 104 S.Ct. 77, 78 L.Ed.2d 89 (1983) (requiring "clear evidence" to support attorneys' fees awarded on the basis of bad faith); Rybner v. Cannon Design, Inc., 1996 WL 470668, at *4 (S.D.N.Y. Aug. 20, 1996) (sanctioning plaintiff where "defendants have proven by clear and convincing evidence that [he] acted intentionally, wilfully and in bad faith") (emphasis supplied).

II. Fraud Upon the Court

Fraud upon the court is "fraud which seriously affects the integrity of the normal process of adjudication." Gleason v. Jandrucko, 860 F.2d 556, 559 (2d Cir. 1988). It is well-settled, however, that an isolated instance of perjury, standing alone, will not constitute a fraud upon the court. Id. at 560; Doe v. Federal Grievance Comm. (In re Grievance Comm. of the United States Dist. Ct., Dist. of Conn.), 847 F.2d 57, 64 (2d Cir. 1988) (Graafeiland, J., concurring). Rather, fraud upon the court "occurs where a party has acted knowingly in an attempt to hinder the fact finder's fair adjudication of the case and his adversary's defense of the action." Skywark, 1999 WL 1489038, at *14. In other words, a fraud upon the court

occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system's ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense.

Aoude, 892 F.2d at 1118.

Our judicial system generally relies on litigants to tell the truth and participate in discovery in good faith. Cf. United States v. Turns, 198 F.3d 584, 587-88 (6th Cir. 2000) ("Our system of justice relies, in large part, on the theory that when a person takes the witness stand and swears to tell the truth, that he or she will in fact do so."); United States v. Leon-Reyes, 177 F.3d 816, 823 (9th Cir. 1999) ("our [criminal] justice system relies on witnesses telling the truth"); Doe, 847 F.2d at 63 (attorney has an ethical duty to disclose a fraud upon the court of which he knows); Solar Turbines, Inc. v. United States, 14 Cl.Ct. 551, 553 (1988) ("our system of justice generally relies upon the basic honesty of most individuals, harsh sanctions for perjury, and a panoply of rights concerning discovery and cross-examination"). Thus, when a party lies to the court and his adversary intentionally, repeatedly, and about issues that are central to the truth-finding process, it can fairly be said that he has forfeited his right to have his claim decided on the merits. This is the essence of a fraud upon the court.

III. Facts*fn13

As the following discussion will demonstrate, Ms. McMunn has perpetrated a fraud upon this Court. In analyzing Ms. McMunn's various abuses, we follow other courts in our Circuit by considering the following factors: (1) whether the misconduct was the product of intentional bad faith; (2) whether and to what extent the misconduct prejudiced the other party; (3) whether there is a pattern of misbehavior, rather than an isolated instance; (4) whether and when the misconduct was corrected; and (5) whether further misconduct is likely to continue in the future. See Skywark, 1999 WL 1489038, at *15 (collecting cases). As the objects of Ms. McMunn's various misconduct can be organized into categories, we examine each with these enumerated factors in mind.

A. The Visa Credit Card

As we noted above, Memorial's primary defense to Ms. McMunn's lawsuit is that she was terminated due to repeated unexcused absences from work in the summer of 1994. See Transcript of Deposition of Thomas Fahey ("Fahey Dep.") at 94-95, 101-103. Memorial suspected that Ms. McMunn spent some or all of her absences at her house in West Virginia. See, e.g., Transcript of Deposition of Holly McMunn ("McMunn Dep.") at 185:17-18; 5/21/01 Ltr. Accordingly, Memorial sought to discover Ms. McMunn's credit card statements from the summer of 1994 with the expectation that they would show billing activity in West Virginia. Thus, on January 16, 1998, during its first deposition of Ms. McMunn, Memorial questioned her as follows:

Q. Do you have any credit cards that you use for your personal use?

A. I have an American Express card.

Q. Any other cards?

A. No.

McMunn Dep. at 188:17-21

Subsequently, on January 28, 1998, Memorial served a discovery request asking Ms. McMunn to "[i]dentify any other credit or charge cards [other than American Express] held and/or used by plaintiff for the period March 1, 1994 to October 1, 1994 and for each, identify the corresponding account number(s)." See Def.'s Reply at 9; 5/15/01 Ltr. Ms. McMunn objected to this request "as not reasonably calculated to lead to the discovery of admissible evidence; interposed for the improper purposes of harassing and invading the privacy of plaintiff; and unreasonable." Id. On May 14, 2001, however, McMunn served an interrogatory requesting the same type of credit card information from Dr. Fahey. Memorial objected on the ground that there was no factual dispute as to Dr. Fahey's whereabouts on the dates he alleged Ms. McMunn was absent from work. See 5/21/01 Ltr. (Memorial admitting that Dr. Fahey was out of the office on the relevant dates). A phone conference was held on May 30, 2001, in order to resolve these discovery disputes, at which time we ordered Ms. McMunn to respond to Memorial's interrogatory request and disclose any and all credit cards she held or used in the summer of 1994. We also granted Memorial's motion to quash Ms. McMunn's interrogatory request for Dr. Fahey's credit card records because they had no bearing on Ms. McMunn's whereabouts that summer. See Order dated May 31, 2001 (granting motion to quash).

Memorial nevertheless believed that she may have used another credit card at the time she worked for Dr. Fahey and, accordingly, issued subpoenas to, inter alia, First USA Bank, N.A., who produced records for a Visa Gold Credit card (the "Visa Card") issued to Ms. McMunn. These business records clearly establish the following: Ms. McMunn had applied for the Visa Card in October of 1989; statements were mailed to her apartment at 100 West 89th Street in New York*fn14 from at least May 1996 to October 1998; Ms. McMunn's monthly statements, which showed frequent usage, were paid for by personal checks written and signed by her throughout 1997 and 1998; and the account was "charged off" (closed) in December 1999. See Brill Aff. Ex. 19; Brill Supp. Aff. Ex. 19. In fact, these records indicate that the Visa Card had been used (in West Virginia) on January 6, 1998, ...


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