ED McMULLEN v. Bay Ship Management

PRECEDENTIAL
Filed June 20, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-3157
ED McMULLEN,
Appellant
v.
BAY SHIP MANAGEMENT,
Appellee
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
(D.C. Civ. No. 99-CV-00164)
Magistrate Judge: Honorable Raymond J. Durkin
Argued April 22, 2003
Before: SCIRICA, Chief Judge,* AMBRO and
WEIS, Circuit Judges.
Filed: June 20, 2003
Vincent S. Cimini, Esquire
(ARGUED)
Foley, Cognetti, Comerford & Cimini
507 Linden Street, Suite 700
Scranton, Pennsylvania 18503
Attorney for Appellant
* Judge Scirica began his term as Chief Judge on May 4, 2003.

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Thomas R. Daniels, Esquire
(ARGUED)
Lehahan & Dempsey, P.C.
Kane Building, Suite 400
116 N. Washington Avenue
P.O. Box 234
Scranton, Pennsylvania 18503
Attorneys for Appellee
OPINION OF THE COURT
WEIS, Circuit Judge.
In this diversity case, we conclude that the plaintiff ’s
proper invocation of the Fifth Amendment privilege against
self-incrimination did not warrant dismissal of the
litigation. Because other less drastic measures were
available to cope with the failure to comply with the
defendant’s discovery requests, we will reverse and remand
for further proceedings.
Plaintiff filed a civil action on January 29, 1999 asserting
claims for breach of contract and unjust enrichment based
on painting services he had performed on military vessels
at defendant’s instance. With the consent of the parties, the
matter was assigned to a magistrate judge for trial.
On August 15, 1999, while this civil suit was still
pending, an Information was filed in the Middle District of
Florida charging one of the defendant’s employees with
irregularities in carrying out a contract with the United
States to service and maintain military vessels. Plaintiff was
a named, but uncharged, co-conspirator in that
Information.
One month later, on September 17, 1999, the defendant
served on plaintiff interrogatories and request for
production of documents. In a letter dated November 11,
1999, counsel for the plaintiff advised defendant that:
With respect to the Information handed down by the
Federal Grand Jury, Mr. McMullen will obviously be
asserting his Fifth Amendment privilege at the time of
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his deposition. Moreover, so that there can be no
question as to Mr. McMullen’s waiver of his Fifth
Amendment privilege, he must also assert said privilege
in response to the outstanding discovery requests.
In response, defendant filed a motion to compel answers
to the interrogatories and a request for production. The
parties filed briefs and discussed the issue as well as
possible settlement with the magistrate judge at a pretrial
conference in December 1999.
Upon receiving notification in the following month that
settlement efforts had been unavailing, the Court ruled on
defendant’s motion to compel. The Court recognized that
generally an order to compel compliance with discovery is
a prerequisite to the imposition of sanctions. However, the
magistrate judge concluded that in view of the plaintiff ’s
unequivocal assertion that he would invoke his Fifth
Amendment privilege, the issuance of an order compelling
discovery would be a futile act.
Relying on Serafino v. Hasbro, 82 F.3d 515 (1st Cir.
1996), the Court directed that the case be dismissed with
prejudice, noting that an examination of the plaintiff ’s
records might be helpful, but would be a poor proxy for his
testimony. Although both parties had suggested the
alternative of staying the case, the Court did not indicate
why that procedure would not be a satisfactory solution for
the problem.
After the appeal was taken, the parties participated in an
extended period of negotiations in accordance with this
Court’s Appellate Mediation Program. The criminal matter
was concluded in June 2002, and on July 9, 2002, the
plaintiff advised that he was now available for an oral
deposition. Defendant declined the offer on the ground that
too much time had elapsed. The case was then placed on
the regular docket for submission to this Court.
I.
Federal Rule of Civil Procedure 37 provides the means to
be used in sanctioning obstructive conduct in discovery
matters. Generally, the Rule requires the issuance of an
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order to compel and only after failure to comply with that
rule should a penalty be imposed. Daval Steel Prods. v. M/V
Fakredine, 951 F.2d 1357, 1363-64 (2d Cir. 1991) (judicial
intervention between a discovery request and the
imposition of sanctions demonstrates the seriousness of the
dereliction, and permits judicial scrutiny of the discovery
request); see also Keefer v. Provident Life & Acc. Ins. Co.,
238 F.3d 937, 940 (8th Cir. 2000); Lillie v. United States, 40
F.3d 1105, 1109 (10th Cir. 1994); 8A Charles Alan Wright
& Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE
§ 2282 (2d ed. Supp. 2003).
Although the prerequisite of an order to compel is the
usual rule, we agree with the District Court that following
that procedure in this case would have been a meaningless
formality. The plaintiff had clearly stated his position and
the issue had been briefed and argued before the
magistrate judge at a pretrial conference. The reasons
underlying the Rule — active judicial review of the
discovery dispute and recognition of the gravity of the issue
— had already been satisfied. Thus, issuance of an order in
this situation, indeed, would have been an exercise in
futility. See Serafino, 82 F.3d at 519.
II.
We come, therefore, to the sanction imposed. This Court
has emphasized that control of discovery is committed to
the discretion of the trial court and we will seldom
intervene. However, the District Court’s power is not
without limit. In re Orthopedic “Bone Screw” Products Liab.
Litig., 132 F.3d 152, 156 (3d Cir. 1997). We have
emphasized this Court’s policy of favoring litigation on the
merits, rather than imposing dismissals with prejudice or a
default judgment. In Hewlett v. Davis, 844 F.2d 109, 113
(3d Cir. 1988), we stated that “[t]hese must be sanctions of
last, not first, resort.” See also Poulis v. State Farm Fire &
Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984) (setting out
checklist applicable for sanction of dismissal).
In Serafino, the Court of Appeals considered that in the
circumstances of that case, the trial court did not abuse its
discretion in dismissing the case with prejudice. Serafino,
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82 F.3d at 519. The appellate court emphasized the
necessity of balancing the competing interests of the parties
and cited, among others, our opinion in SEC v. Graystone
Nash, Inc., 25 F.3d 187 (3d Cir. 1994). Id. at 518.
Curiously, despite its obvious pertinency, counsel for
neither party cited Graystone to the District Court in this
case.
In Graystone, the defendants invoked the Fifth
Amendment privilege, refusing to answer questions during
discovery depositions. 25 F.3d at 188-89. As a sanction, the
District Court precluded defendants from presenting
evidence in opposition to the plaintiff ’s summary judgment
motion and granted judgment for the plaintiffs. Id.
We recognized that the civil litigant had the right to the
protection of the Fifth Amendment, but that invoking that
privilege had a prejudicial effect on the adversary’s right. Id.
at 190. Sanctions, therefore, had to be tailored to provide
equitable treatment to the adversary, as well as
accommodating the Fifth Amendment rights of the party
invoking the privilege. Id. at 192. “[T]he detriment to the
party asserting [the privilege] should be no more than is
necessary to prevent unfair and unnecessary prejudice to
the other side.” Id.
Here, the factual situation differs from Graystone in that
the party availing himself of the Fifth Amendment privilege
is a plaintiff who chose to bring the suit, rather than a
defendant who had been summoned into court. Some
commentators have suggested that having selected the
litigation process, a plaintiff may not use the privilege to
advance his cause — to use it as a sword, rather than a
shield. That approach, however, has not carried the day.
Wehling v. Columbia Broadcasting Sys., 608 F.2d 1084,
1086 (5th Cir. 1979), held that “the Fifth Amendment
would serve as a shield to any party who feared that
complying with discovery would expose him to a risk of self-
incrimination.” The Court stated that “[i]n most cases, a
party ‘voluntarily’ becomes a plaintiff only because there is
no other means of protecting legal rights.” Wehling, 608
F.2d at 1089 n.10. The Court reversed the District Court’s
dismissal and suggested instead a protective order staying
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discovery until the statute of limitations on the criminal
matter had expired. Id. at 1089.
A leading commentator has dismissed arguments against
extending the Fifth Amendment privilege to a plaintiff. “It is
inconceivable that by exercising the constitutional right to
bring or defend an action a person waives his or her
constitutional right not to be a witness against himself or
herself, and no case has so held.” 8 Charles Alan Wright &
Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE
§ 2018 (2d ed. 1994). See also Mitchell v. Roma, 265 F.2d
633, 637 (3d Cir. 1959) (explaining that by instituting a
suit, plaintiff does not automatically waive any privilege).
This case does not differ in any major respect from
Graystone, and we therefore apply it to the controversy
presently before us. The general approach in both cases
should be the same. Although the privilege is available,
prejudice to the other party must be minimized and an
equitable resolution adopted. Here, that task has been
greatly simplified by the conduct of the parties.
In his brief to the District Court, the plaintiff suggested
as alternatives to dismissal a stay of the matter or allowing
an adverse inference because of his failure to testify. The
defendant moved for dismissal, but also suggested as an
alternative that the case be placed on the inactive list until
plaintiff “is no longer under the cloud of criminal
prosecution.”
Although a stay had been suggested as a satisfactory
solution by both parties, the District Court simply
dismissed the case without commenting on the parties’
alternative suggestions for a disposition. Placing the case
on the inactive list would have been in harmony with the
balancing test set out in Graystone, which, rather than
Serafino, is the governing precedent within this circuit.
The only virtue in dismissing the case here was clearing
the court’s docket. Although promptness in judicial
administration is highly desirable, delay may sometimes be
necessary to the mission of doing justice. We are all too
often reminded that “justice delayed is justice denied.” But,
it is equally true that in some situations “justice rushed is
justice crushed.”
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As the Supreme Court has reminded us, “a myopic
insistence upon expeditiousness in the face of a justifiable
request for delay can render the right to defend with
counsel an empty formality.” Ungar v. Sarafite, 376 U.S.
575, 589 (1964). In a similar vein, we have said, “we are
not unmindful of the need for judicial eagerness to expedite
cases, to fully utilize the court’s time, to reduce
overcrowded calenders and to establish finality of
judgments. However, these commendable aspirations
should never be used to thwart the objectives of the blind
goddess.” Boughner v. Sec. of Hlth., Educ. & Welfare, 572
F.2d 976, 978-79 (3d Cir. 1978).
In the circumstances here, dismissal of the case was not
consistent with a sound exercise of judicial discretion.
Accordingly, the order of the District Court will be
reversed, and the case remanded for further proceedings
consistent with this Opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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