Rogers v. Medline Industries, Inc. et al

Filing 93

Memorandum Opinion and ORDER Denying Plaintiff's Motion 53 for Default Judgment, [or] Alternatively, for Sanctions, and denying Plaintiff's Motion 62 to Strike Second Declaration of Katie Halberg. Signed by District Judge Halil S. Ozerden on December 19, 2018. (SSC)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
RICHARD K. ROGERS

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v.
MEDLINE INDUSTRIES, INC., AND
JOHN DOES 1-5

PLAINTIFF
Civil No. 1:17cv118-HSO-JCG

DEFENDANTS

MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF’S MOTION
[53] FOR DEFAULT JUDGMENT, [OR] ALTERNATIVELY, FOR
SANCTIONS, AND DENYING PLAINTIFF’S MOTION [62] TO STRIKE
SECOND DECLARATION OF KATIE HALBERG

BEFORE THE COURT are Plaintiff’s Motion [53] for Default Judgment, [or]
Alternatively, for Sanctions, and Plaintiff’s Motion [62] to Strike Second Declaration
of Katie Halberg. For the reasons that follow, the Court finds that both Motions
should be denied.
I. BACKGROUND
This is an employment discrimination case arising out of Plaintiff Richard K.
Rogers’ (“Rogers” or “Plaintiff”) employment with Medline Industries, Inc.
(“Medline” or “Defendant”). Medline employed Rogers as a salesperson from 2002
until he was terminated in 2016. Compl. [1] at 2. On or about January 28, 2017,
Plaintiff filed a Charge of Discrimination [1-1] with the Equal Employment
Opportunity Commission (“EEOC”) alleging that Medline discriminated against
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him on the basis of his age when it terminated him. On January 30, 2018, the
EEOC provided Rogers with a Notice of Right to Sue [1-2], and Rogers timely filed
suit against Medline and John Does 1-10. Compl. [1] at 1. The Complaint [1]
alleges that Medline unlawfully terminated Plaintiff because of his age in violation
of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 623. Id. at 4.
During discovery, Plaintiff deposed Mark Gallarelli, Medline’s Senior Vice
President for Sales for the Southeast Region, and on July 15, 2018, Plaintiff filed
the present Motion [52] for Default Judgment, [or] Alternatively, for Sanctions.
Pl.’s Mot. [52]. Plaintiff claims that Gallarelli committed perjury during his
deposition, and that Plaintiff is entitled to sanctions as a result. Pl.’s Mem. [54] at
2-3.
Specifically, Plaintiff claims that Gallarelli “denied that he had ever been
involved in” an incident which Plaintiff contends occurred in 2015. Id. Gallarelli
was asked at his deposition whether he had used a Medline product, a saline
syringe, “in an inappropriate and sexually suggestive manner towards a female
sales representative” at a meeting in 2015, in violation of Medline’s code of conduct.
Id. at 3-4.

Gallarelli denied being involved in such an incident because he could

not recall it occurring. Ex. “B” [53-2] at 30 (“I would say no. I don’t recall that.”).
Rogers asserts that the deposition testimony of J. Hunter Russum, a current
Medline employee who works under Gallarelli’s supervision, directly contradicts
Gallarelli’s denials, id. at 5, as Russum stated during his deposition that he did
recall the alleged incident, Ex. “D” [53-4] at 15-16. Plaintiff argues that because

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Gallarelli’s testimony during his deposition was perjurious, the Court should
sanction Medline under Federal Rule of Civil Procedure 37 or under its inherent
authority by entering a default judgment against Medline.1 Pl.’s Mem. [54] at 6-7.
On July 30, 2018, Medline filed a Response [60] in Opposition to Plaintiff’s
Motion. Defendant contends that Gallarelli’s statements were not perjurious
because Gallarelli stated that he could not recall the incident, Def.’s Resp. [60] at 34, and that the deposition during which Rogers claims Gallarelli perjured himself
was taken in his individual capacity as a fact witness,2 id. at 5.
Defendant also claims that even if the 2015 incident occurred, it is not
relevant or material to the issues in Plaintiff’s case, and that Plaintiff’s Motion [53]
is untimely under the Local Rules. Id. at 6. Further, Medline contends that
because Rule 37(b) only applies when a party “fails to obey an order to provide or
permit discovery,” and no order was violated, Rule 37 is inapplicable. Id. at 8-9.
Finally, Medline asserts that the Court should not exercise its inherent power to
impose sanctions because the requisite bad faith, judged by necessarily stringent
standards, is not present. Id. at 10-12.
In his Reply [63] [64],3 Rogers maintains that he has established the falsity
of Gallarelli’s testimony through the deposition testimony of another Medline

1 Rogers

maintains that because Gallarelli was deposed as a corporate designee, as a Rule 30(b)(6)
designee, and as a senior manager, sanctions are appropriate against Medline under Rule 37. Pl.’s
Mem. [54] at 6-7. Alternatively, Rogers asks the Court to sanction Medline under its inherent
power. Id. at 7.
2 Defendant argues that it only designated Gallarelli as a corporate representative to testify to sales
goals, incentive quotas, and commissions. Def.’s Resp. [60] at 5 (citing Ex. “C” [53-3] at 5-6; Notice to
take Dep. [31]).
3 Rogers filed two identical replies, one filed as a Rebuttal [63] and a second filed as a Reply [64].

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employee and that Gallarelli’s testimony is relevant to Rogers’ claim. Pl.’s Reply
[64] at 4-5.
Plaintiff has also filed a Motion [62] to Strike [the] Second Declaration of
Katie Halberg, which was attached as an exhibit to Medline’s Response [60]. Mot.
[62] to Strike. Rogers argues that portions of Halberg’s “hearsay-filled Declaration
should be stricken.” Id. at 3. Medline has responded that the statements at issue
in this Declaration are not hearsay because they reflect actions taken by Halberg in
an investigation she conducted and they are not submitted for the truth of the
matters asserted. Def.’s Resp. [71] at 5-7.
II. DISCUSSION
A.

Plaintiff’s Motion [53] for Default Judgment, [or] Alternatively, for Sanctions
1.

The Court’s power to sanction a party

A court may impose sanctions, including dismissing claims or rendering a
default judgment, against a party who fails to obey discovery orders. Fed. R. Civ. P.
37(b)(2)(A). Federal Rule of Civil Procedure 37 provides that:
If a party or a party’s officer, director, or managing agent—or a witness
designated under Rule 30(b)(6) or 31(a)(4)—fails to obey an order to
provide or permit discovery . . . the court where the action is pending
may issue further just orders.
Fed. R. Civ. P. 37. Rule 37 also provides for a court to order the payment of
reasonable attorney fees, unless the failure to obey orders was substantially
justified or the imposition of fees would be unjust. Id.
“When parties or their attorneys engage in bad faith conduct, a court should
ordinarily rely on the Federal Rules as the basis for sanctions.” Natural Gas
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Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d 1397, 1410 (5th Cir. 1993).
However, the Court also has the inherent authority to impose reasonable and
appropriate sanctions for bad faith conduct or willful abuse of the judicial process
where the Rules do not provide an adequate remedy. Chambers v. NASCO, Inc.,
501 U.S. 32, 50 (1991); Flaksa v. Little River Marine Constr. Co., 389 F.2d 885, 888
n.10 (5th Cir. 1968).
“Bad faith and willful abuse have been found when a party or its counsel
maintains patently unreasonable litigation positions or engages in contumacious
behavior that deliberately subverts a court’s administration of a case.” United
States Dist. Court S. Dist. of Texas Victoria Div. Sarco Creek Ranch v. Greeson, 167
F. Supp. 3d 835, 845 (S.D. Tex. 2016) (citing Brown v. Oil States Skagit Smatco, 664
F.3d 71, 76-80 (5th Cir. 2011)). The Court’s power to impose sanctions under its
inherent power is “even more limited” than under Rule 37, and bad faith is judged
by necessarily stringent standards. Pressey v. Patterson, 898 F.2d 1018, 1921 (5th
Cir. 1990). Under either standard, the Fifth Circuit requires the imposition of “the
least onerous sanction which will address the offensive conduct.” Gonzalez v.
Trinity Marine Grp., Inc., 177 F.3d 894, 899 (5th Cir. 1997); see Brown, 664 F.3d at
77.
2.

Analysis

The conduct at issue in this case does not clearly fall within the ambit of Rule
37, or of any other Rule. To the extent the Court could impose any sanction under
its inherent power, a showing of bad faith or willful misconduct would be required.

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The Fifth Circuit has held that perjury is a “serious offense that constitutes a
severe affront to the courts and thwarts the administration of justice.” Brown, 664
F.3d at 80. However, for the Court to impose sanctions, it must first find that
Gallarelli committed perjury. Perjury is defined as the “willful intent to provide
false testimony, rather than as a result of confusion, mistake, or faulty memory.”
United States v. Dunnigan, 507 U.S. 87, 94 (1993). “Perjury is not established by
mere contradictory testimony from witnesses or inconsistencies in a witness’s
testimony.” Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 648
(S.D. Tex. 2010) (citing Koch v. Puckett, 907 F.2d 524, 531 (5th Cir. 1990)
(“[C]ontradictory trial testimony, however, merely establishes a credibility question
for the jury.”)).
Rogers relies heavily upon the Fifth Circuit’s decision in Brown v. Oil States
Skaget Smatco, which affirmed the district court’s imposition of the sanction of
dismissal. See Pl.’s Mem. [54] at 7-9. In Brown, the district court dismissed the
plaintiff’s suit where he provided definitively conflicting testimony under oath in
two pending court matters. 664 F.3d at 77-78. Unlike the plaintiff in Brown, there
is no evidence Gallarelli testified elsewhere under oath that the 2015 incident did in
fact occur, or that he otherwise recalled the incident but willfully provided false
testimony. Gallarelli’s conduct does not rise to the level of perjury or of
contumacious conduct and instead raises a credibility question for the jury’s
consideration. Further, unlike the plaintiff in Brown, Medline would be prejudiced
if default judgment were entered against it. Id. at 77.

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To the extent Gallarelli’s statements under oath contradict those of another
employee at Medline, Hunter Russum, this creates a question of fact appropriate for
resolution by the fact finder at trial.4 It is not the function of the Court in
circumstances such as this to determine the credibility of witnesses. Nor has
Rogers produced or pointed to any evidence that Gallarelli did in fact recall the
incident.
Plaintiff has not met his burden of establishing that Defendant acted in bad
faith. Thus, the Court declines to resolve this dispute by imposing the drastic
sanction of a default judgment, or any other lesser sanction, either under Rule 37 or
under its own inherent authority. Rogers’ Motion [53] for Default Judgment, [or]
Alternatively, for Sanctions, should be denied.
B.

Plaintiff’s Motion [62] to Strike Second Declaration of Katie Halberg
The Court resolved Plaintiff’s Motion [53] for Default Judgment without

consideration of Katie Halberg’s Second Declaration [60-1]. As such, Plaintiff’s
Motion [62] to Strike is moot and should be denied.
III. CONCLUSION
IT IS, THEREFORE, ORDERED AND ADJUDGED that, Plaintiff’s
Motion [53] for Default Judgment, [or] Alternatively, for Sanctions is DENIED.
IT IS, FURTHER, ORDERED AND ADJUDGED that, Plaintiff’s Motion
[62] to Strike Second Declaration of Katie Halberg is DENIED as moot.

4 The

Court does not decide at this time whether the evidence of the 2015 incident would be
admissible at the summary judgment stage or at trial.

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SO ORDERED AND ADJUDGED, this the 19th day of December, 2018.

s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE

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