Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-16-01753/USCOURTS-ca7-16-01753-0/pdf.json

Parties Involved:
Armando Ramirez
Appellant
T&H Lemont, Incorporated
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit

No. 16‐1753

ARMANDO RAMIREZ,

Plaintiff‐Appellant,

v.

T&H LEMONT, INCORPORATED,

Defendant‐Appellee.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:12‐CV‐01279 — James B. Zagel, Judge.

ARGUED NOVEMBER 1, 2016 — DECIDED DECEMBER 30, 2016

Before EASTERBROOK, ROVNER, and SYKES, Circuit Judges.

ROVNER, Circuit Judge.    Upon finding that plaintiff

Armando Ramirez had offered a witness money in exchange

for his favorable testimony, the district court dismissed

Ramirez’s suit with prejudice. Ramirez appeals, contending

that the district court erred in finding that he engaged in

Case: 16-1753 Document: 33 Filed: 12/30/2016 Pages: 19
2 No. 16‐1753

witness tampering and that it abused its discretion in

dismissing the case with prejudice as a sanction. We affirm.

I.

Ramirez’s amended complaint alleges that his former

employer, T&H Lemont, Inc., subjected him to discriminatory

working conditions and a hostile work environment based on

his national original (Ramirez is Hispanic and was born in

Mexico) and then fired him in retaliation for reporting the

harassment, in violation of Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000e–2(a) & –3(a). Nearly three years into the

litigation, with discovery essentially concluded Ramirez and

his counsel had not located any witnesses to corroborate his

allegations, which were vigorously denied by the defendant,

and his attorney was seeking leave to withdraw from the case.

But at the eleventh hour, Ramirez located three witnesses, all

former T&H Lemont employees who had worked with

Ramirez in the company’s machine shop, willing to give

testimony on his behalf. Ramirez’s counsel abandoned his

motion to withdraw, the district court ordered that the new

witnesses be deposed, and all three of those witnesses

—Francisco Hernandez, Miguel Velasquez, and Santiago

Villagrana—were serially deposed on the same day. Each

testified in substance that he had observed ways in which two

T&H Lemont managerial and supervisory employees had

purposely made life difficult for Ramirez at the firm; all three

testified that they had witnessed one of those supervisors refer

to Ramirez as a burro or donkey on one or more occasions.

Three months afterthese depositions took place, as defense

counsel was seeking to re‐depose Villagrana, Villagrana sent

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No. 16‐1753 3

a text to Ramirez’s counsel asking for a letter “saying what

percent I will receive when the case is settled.” R. 59–1 at 2.

Ramirez’s counsel reported the text to defense counsel. As it

turned out, on the same day that Villagrana texted Ramirez’s

lawyer, he also contacted a T&H Lemont employee informing

him that he and the other two witnesses were no longer

supporting Ramirez and that he (Villagrana) was willing to

testify for T&H Lemont if he could get his old job back.

At the defendant’s request, the district court convened an

evidentiary hearing in ordertodetermine whether any witness

had provided false deposition testimony in the case and, if so,

whether anyone else was involved in that false testimony.1

Two witnesses testified in person at that hearing: Oberlin Luis,

the T&H Lemont employee whom Villagrana had contacted to

report that he was willing to testify on the company’s behalf;

and Francisco Hernandez, one of the other witnesses who had

given deposition testimony supporting Ramirez. A third

witness, Villagrana, was subsequently deposed in California,

where he was then living. His deposition was videotaped, and

a transcript of his testimony was submitted to the court after

the hearing.2 Villagrana testifiedin substance thatRamirez had

offered him money in exchange for his favorable testimony;

that he accepted the offer because he was in urgent need of

1

   As part of the inquiry, the district court ordered Ramirez and all three of

his witnesses to submit their cell phones for forensic imaging. So far as the

record reveals, that examination produced no evidence relevant to the

alleged witness tampering.

2

   The record does not make clear whether the district court reviewed only

the written transcript of Villagrana’s testimony or also the video recording.

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money; that he had not observed the harassment of which

Ramirez was complaining; that all three of the belatedly‐

located witnesses had met with Ramirez before they were

deposed in May and discussed using the word “donkey”; and

that he had testified falsely at his deposition in exchange for

the money Ramirez had offered him. Hernandez denied that

anyone had offered him money in exchange for his deposition

testimony. He did acknowledge, however, that he and the

other two witnesses had met with Ramirez twice before they

were deposed. During the first meeting, Ramirez had asked

them whether they would be willing to testify on his behalf,

and during both meetings, they had discussed what their

testimony would be. There were certain inconsistencies in

Hernandez’s testimony on other points that would lead the

district court to observe that his credibility appeared

“questionable” at times. App. 102. Finally, Luis recounted the

offer he had received from Villagrana to testify on the

company’s behalf.

Based on this testimony, the district court, on T&H

Lemont’s motion, dismissed the case with prejudice. After

summarizing the testimonypresentedtohim,thedistrictjudge

observed:

Throughout the evidentiary hearing, counsel for

Plaintiff has been forthcoming and cooperative—I

am convinced that he played no role in Plaintiff’s

misconduct. Because I have found clear and

convincing evidence of witness tampering, I am

dismissing this case with prejudice to sanction

Plaintiff.

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No. 16‐1753 5

R. 80 at 2. The court later denied Ramirez’s request, pursuant

to Fed. R. Civ. P. 59(e), to reconsider the dismissal. R. 84.

II.

Ramirez contends on appeal that the record does not

support a finding by clear and convincing evidence that he

engaged in witness tampering and that the district court

abused its discretion in dismissing the case with prejudice as

a sanction for that misconduct. Villagrana’s testimony that

Ramirez had offered him money in exchange for his testimony

was not credible, Ramirez contends, in view of Luis’s

testimony that Villagrana had offered to testify for the

defendant if he could get his job back and the conflicts between

Villagrana’s testimony and Hernandez’s testimony. And

dismissing the suit with prejudice was an inappropriate

sanction, Ramirez argues, when it otherwise appears he may

have a meritorious claim of employment discrimination.

T&H Lemont asked the district court to dismiss the case

with prejudice pursuant to Federal Rule of Civil Procedure 37

and the court’s inherent authority to sanction misconduct.

When it granted that request and dismissed the case, the

district court did not specify which source of authority it was

relying upon. Either would appear to support the court’s

decision. Rule 37(b)(2)(A)(v) authorizes a range of sanctions,

including the dismissal of a suit, for a party’s failure to comply

with the court’s discovery orders3; and Rule 37(a)(4) treats an

3

   We have signaled a willingness to broadly construe what constitutes a

court orderfor purposes of imposing sanctions under Rule 37. See Brandt v.

(continued...)

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6 No. 16‐1753

evasive and incomplete answer in discovery as equivalent to

no answer, and thus a failure to comply with court‐ordered

discovery.We have construed the sanctioningpower conveyed

by Rule 37 to extend to instances of a party hiding evidence

and lying in his deposition.Negrete v.Nat’lR.R. PassengerCorp.,

547 F.3d 721, 723–24 (7th Cir. 2008). We can think of no reason

why the power would not also extend to a party soliciting a

witness to lie at his court‐ordered deposition. See, e.g., Quela v.

Payco‐Gen. Am. Credits, Inc., No. 99 C 1904, 2000 WL 656681

(N.D. Ill. May 18, 2000), j. aff’d on other grounds, Hakim v. Payco‐

Gen. Am. Credits, Inc., 272 F.3d 932 (7th Cir. 2001) . Apart from

the discovery rule, a court has the inherent authority to

manage judicial proceedings and to regulate the conduct of

those appearing before it, and pursuant to that authority may

impose appropriate sanctions to penalize and discourage

misconduct. See Chambers v. NASCO, Inc., 501 U.S. 32, 46–50,

111 S. Ct. 2123, 2134–36 (1991). Thus, as we noted in Secrease v.

Western & Southern Life Ins. Co., 800 F.3d 397, 401 (7th Cir.

2015), “[d]ismissal [pursuant to the court’s inherent authority]

can be appropriate when the plaintiff has abused the judicial

process by seeking relief basedon information thatthe plaintiff

knows is false.”

The exercise of either power requires the court to find that

the responsible party acted or failed to act with a degree of

culpability that exceeds simple inadvertence or mistake before

3

  (...continued)

Vulcan, Inc., 30 F.3d 752, 756 n. 7 (7th Cir. 1994) (collecting cases); Halas v.

Consumer Servs., Inc., 16 F.3d 161, 164 (7th Cir. 1994) (oral directive from

court to provide discovery sufficient).

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No. 16‐1753 7

it may choose dismissal as a sanction for discovery violations.

Any sanctions imposed pursuant to the court’s inherent

authority must be premised on a finding that the culpable

party willfully abused the judicial process or otherwise

conducted the litigation in bad faith. See Chambers, 501 U.S. at

50, 111 S. Ct. at 2135–36; Secrease, 800 F.3d at 401; Trade Well

Int’l v. United Cent. Bank, 778 F.3d 620, 626 (7th Cir. 2015)

(negligence is insufficient to support a finding of bad faith).

Rule 37 itself does not specify a requisite mental state, but in

Societe Internacionale pour Participations Industrielles et

Commerciales, S.A. v. Rogers, 357 U.S. 197, 212, 78 S. Ct. 1087,

1096 (1958), the Supreme Court concluded that Rule 37 should

not be construed to authorize dismissal of an action when a

plaintiff’s failure to comply with his discovery obligations was

due to his inability to comply rather than his “willfulness, bad

faith, or any fault.” See also Nat’l Hockey League v. Metro. Hockey

Club, Inc., 427 U.S. 639, 640, 96 S. Ct. 2778, 2779 (1976) (per

curiam) (reaffirming that holding). Fault, in contrast to

wilfulness or bad faith, does not require a showing of intent,

but presumes that the sanctioned party was guilty of

“extraordinarily poor judgment” or “gross negligence” rather

than mere “mistake or carelessness.” Marrocco v. Gen. Motors

Corp., 966 F.2d 220, 224 (7th Cir. 1992); Long v. Steepro, 213 F.3d

983, 987 (7th Cir. 2000) (“[f]ault in this context suggests

objectively unreasonable behavior”); see also e360 Insight, Inc.

v. Spamhaus Project, 658 F.3d 637, 642–43 (7th Cir. 2011)

(distinguishing degree of fault necessary to support dismissal

or default from that necessary to support lesser sanctions).

Our decision in Maynard v. Nygren, 332 F.3d 462, 468 (7th

Cir. 2003), held that clear and convincing evidence is required

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8 No. 16‐1753

in order to dismiss a case as a sanction for discovery‐related

misconduct pursuant to Rule 37. Citing a series of cases from

other circuits (most of which dealt with sanctions imposed for

conduct amounting to fraud on the court rather than abuse of

the discovery process) we reasoned that “considering the

severe and punitive nature of dismissal as a discovery

sanction, a court must have clear and convincing evidence of

willfulness, bad faith, or fault before dismissing a case.” Id. By

its own terms, that rationale presumably would apply to a

dismissal imposed pursuant to the court’s inherent authority,

as the severity of the sanction remains the same. See Ty Inc. v.

Softbelly’s, Inc., 517 F.3d 494, 498–99 (7th Cir. 2008).

But we have questioned Maynard’s holding on multiple

occasions. See Wade v. Soo Line R.R. Corp., 500 F.3d 559, 564 (7th

Cir. 2007) (“We doubt that ‘clear and convincing’ evidence is

required” to establish a wilful violation of Rule 37); Ridge

Chrysler Jeep, LLC v. DaimlerChrysler Fin. Servs. Americas LLC,

516 F.3d 623, 625–26 (7th Cir. 2008) (renewing Wade’s criticism

of Maynard); Ty, 517 F.3d at 498–99 (considering appropriate

standard for sanctions imposed for witness tampering

pursuant to court’s inherent authority and noting that

Maynard’s soundness as to standard for Rule 37 sanctions had

been questioned); see also Brown v. Columbia Sussex Corp., 664

F.3d 182, 191 n.8 (7th Cir. 2011) (noting “some discussion” as

to whether finding of wilfulness for purposes of Rule 37

dismissal must be based on clear and convincing evidence, but

finding it unnecessary to address it); Watkins v. Nielsen, 405 F.

App’x 42, 44 (7th Cir. 2010) (nonprecedential decision) (“We

have not resolved definitively whether a finding of wilfulness

must be premised on clear and convincing evidence or simply

Case: 16-1753 Document: 33 Filed: 12/30/2016 Pages: 19
No. 16‐1753 9

a preponderance.”); Negrete, 547 F.3d at 724 n.1 (“[t]here is no

need to resolve the standard here because the evidence was

clear and convincing”). We believe it is time to put an end to

the questions and make clear that a preponderance of the

evidence is sufficient.

Maynard failed to consider “the presumption that the

burden of proof in federal civil cases is proof by a

preponderance of the evidence,” Yi v. Sterling Collision Ctrs.,

Inc., 480 F.3d 505, 507 (7th Cir. 2007), a presumption reinforced

by the Supreme Court’s repeated rejection of more demanding

evidentiary burdens in the civil setting. See, e.g., Halo

Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 1934

(2016) (rejecting requirement that egregious patent

infringement behavior warranting enhanced damages under

35 U.S.C. § 284 be proved by clear and convincing evidence);

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct.

1749, 1758 (2014) (rejecting requirement that patent litigant

must establish by clear and convincing evidence that case is

sufficiently “exceptional” as to warrant fee shifting under 35

U.S.C. § 285); Grogan v. Garner, 498 U.S. 279, 286–87, 111 S. Ct.

654, 659 (1991) (rejecting clear‐and‐convincing standard for

non‐dischargeability of debts in bankruptcy pursuant to 11

U.S.C. § 523); Price Waterhouse v. Hopkins, 490 U.S. 228, 253–54,

109 S. Ct. 1775, 1792–93 (1989) (rejecting requirement in Title

VII case that employer with mixed motives prove by clear and

convincing evidence that it would have made same decision

absent discriminatory motive); Herman & MacLean v.

Huddleston, 459 U.S. 375, 387–90, 103 S. Ct. 683, 690–92 (1983)

(rejecting clear‐and‐convincing standard for civil claims

alleging securities fraud in violation of section 10(b) of the

Case: 16-1753 Document: 33 Filed: 12/30/2016 Pages: 19
10 No. 16‐1753

Securities Exchange Act of 1934, 15 U.S.C. §78j(b)). Our

decisions in Ridge Chrysler Jeep, 516 F.3d at 625–26, and Wade,

500 F.3d at 564, both noted that Maynard omitted any mention

of such precedents and of the Supreme Court’s rationale as to

heightened burdens of proof.

As Grogan and Huddleston make clear, unless the governing

statute (or in this case, the rule) specifies a higher burden, or

the Constitution demands a higher burden because of the

nature of the individual interests at stake, proof by a

preponderance ofthe evidence will suffice.Huddleston, 459U.S.

at 389, 103 S. Ct. at 691; Grogan, 498 U.S. at 296, 111 S. Ct. at 659.

Rule 37 is silent as to a standard for sanctions; and, of course,

the inherent authority to impose sanctions for litigation

misconduct is judicially derived and specifies no particular

standard of proof. Maynard implies that dismissal of a suit as

a sanction for discovery misconduct implicates rights that

warrant a more demanding standard than a preponderance of

evidence. But it makes no case for why that is so. Huddleston

explains that the standard of proof “serves to allocate the risk

of error between the litigants and to indicate the relative

importance attached to the ultimate decision.” 459 U.S. at 389,

103 S. Ct. at 691 (quoting Addington v. Texas, 441 U.S. 418, 423,

99 S. Ct. 1804, 1808 (1979)). Price Waterhouse adds that

“[e]xceptions to [the preponderance standardincivil cases] are

uncommon, and in fact are ordinarily recognized only when

the government seeks to take unusual coercive action—action

more dramatic than entering an award of money damages or

other conventional relief—against an individual.” 490 U.S. at

253, 109 S. Ct. at 1792. To illustrate that point, Price Waterhouse

and Huddleston collect cases involving the termination of

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parental rights, involuntary commitment, deportation, and

denaturalization as examples of proceedings in which

particularly important individual interests are at stake, such

that the Constitution warrants a higher burden of proof

(namely, clear and convincing evidence). Id., 109 S. Ct. at 1792;

Huddleston, 459 U.S. at 389, 103 S. Ct. at 691; see also Liquid Air

Corp. v. Rogers, 834 F.2d 1297, 1302–03 (7th Cir. 1987). “By

contrast,” Huddleston proceeds, the “imposition of even severe

civil sanctions that do not implicate such interests has been

permitted after proof by a preponderance of the evidence.” Id.

at 389–90, 103 S. Ct. at 691 (citing United States v. Regan, 232

U.S. 37, 48–49, 34 S. Ct. 213, 217 (1914) (proof by

preponderance of evidence suffices in civil suits that entail

proof of acts exposing a party to criminal prosecution)).

The interests implicated by the dismissal of a suit as a

sanction for misconduct occurring in civil litigation (including

discovery) are not so important as to demand that the facts

underlying the dismissal be established by clear and

convincing evidence. Certainly a dismissal of the suit with

prejudice constitutes a severe sanction; but as Huddleston

indicates,that alone does not warrant a standard of proof more

burdensome than a preponderance of the evidence. The

preponderance standard allocates the risk of error more orless

equally between Ramirez and T&H Lemont as parties to the

suit. See Huddleston, 459 U.S. at 390, 103 S. Ct. at 691 (citing

Addington, 441 U.S. at 423, 99 S. Ct. at 1808); Yi, 480 F.3d at 507.

As in most civil suits between private parties, what is at stake

in this suit is money (Ramirez did not ask for equitable relief),

and thus a factual error in the determination of the merits of

the case exposes both parties to the same type and magnitude

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of risk—the loss or gain of the damages that Ramirez seeks.

The same is true with respect to the imposition of sanctions.

Nothing about the nature of sanctions in a civil case places one

party or the other in a unique position: either party may be

sanctioned for its misconduct, and either might lose the right

to present its case if the court decides to enter an adverse

judgment as a sanction, as occurred here. (Rule 37(b)(2)(A) (v)

and (vi) authorizes both the dismissal of the action and the

entry of a default judgment against the offending plaintiff or

defendant; and the court’s inherent power to sanction

misconduct is likewise symmetrical, see Secrease, 800 F.3d at

401.) Even if the court decides to impose a lesser, issue‐related

sanction, such as excluding the testimony of a particular

witness (see Rule 37(b)(2)(A)(ii)), the sanction may so hobble

the sanctioned party that the result of the case is foreordained.

At all events, the sanctioned party does not stand to forfeit

more than he might have lost were the case resolved against

him on the merits. Ramirez has been deprived of the

opportunity to vindicate his rights under Title VII, and those

rights are highly important, we agree. But, important as they

are, the loss of the opportunity to vindicate those rights in a

civil suit against one’s employer is not of the same

constitutional magnitude as the liberty interests at stake in

proceedings involving the termination of parental rights or

involuntary commitment to an institution for psychiatric care,

for example. Cf. Addington, 441 U.S. at 427, 99 S. Ct. at 1810

(“The individual [named in a civil commitment petition]

should not be asked to share equally with society the risk of

error when the possible injury to the individual is significantly

greater than any possible harm to the state.”).

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The gravity of dismissing a suit with prejudice based on

litigation misconduct certainly warrants the careful exercise of

the court’s discretion. But that is a matter distinct from the

standard of proof by which the underlying facts must be

proven. See Ty, 517 F.3d at 499–500. Given that the facts bearing

on the merits of a Title VII suit need only be proven by a

preponderance of the evidence,see Price Waterhouse, 490 U.S. at

253, 109 S. Ct. at 1792, we see no reason why the facts bearing

on whether sanctionable misconduct has occurred during the

course of such a suit that warrants the entry of judgment must

be established by clear and convincing evidence. Huddleston

recognizes that any standardotherthan apreponderance ofthe

evidence “expresses a preference for one side’s interests.” 459

U.S. at 390, 103 S. Ct. at 691. Like any other civil litigant,

Ramirez is obliged under Rule 37 to comply with the court’s

discovery orders and, more broadly, to comport himself

appropriately before the court and refrain from attempts to

deceive his opponent and to perpetrate a fraud on the court.

His adversary, T&H Lemont, shares the same obligations and

faces the same penalties should it ignore them. The

preponderance standard appropriately reflects the mutuality

of the parties’ obligations; the clear‐and‐convincing standard,

by contrast, would reflect an unwarranted preference for one

party over the other.

We recognize that our decision places us into conflict with

the decisions of certain other circuits, a sampling of which we

cited and followed in Maynard. 332 F.3d at 468 (collecting

cases). The case forthe clear and convincing standard adopted

in those cases is best articulated by Shepherd v. Am. Broadcasting

Cos., 62 F.3d 1469, 1476–78 (D.C. Cir. 1995), which concluded

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that a preponderance of evidence was insufficient to support

a dismissal of the case pursuant to the court’s inherent

authority as a sanction for discovery‐related misconduct.

Focusing on the punitive aspect of inherent‐authority

sanctions,the courtlikened the sanction of dismissal or default

judgment to civil contempt, a sanction designed to coerce a

recalcitrant litigant into compliance with the court’s orders,

and reasoned that the two types of sanctions should be

governed by the same evidentiary standard. Id. at 1477. It is

true enough that there is “[a] large body of case law hold[ing]

that civil contempt must be proved by clear and convincing

evidence.” S.E.C. v. First Choice Mgmt. Servs., Inc., 678 F.3d 538,

544 (7th Cir. 2012) (collecting cases). But we have pointed out

that this very line of authority itself is “in tension with the

Supreme Court’s insistence on a presumption in favor of the

less onerous standard of preponderance of the evidence in

federal civil cases.” Id.

Shepherd added that a heightened standard is appropriate

forinherent‐power sanctions because thepredicatemisconduct

for such sanctions typically involves some type of fraudulent

or quasi‐criminal misconduct. 62 F.3d at 1477. Yet the Supreme

Court has dispelled the notion that a finding of fraud in civil

litigation invariably demands clear and convincing evidence:

Huddleston adopted the preponderance standard for civil

claims of securities fraud, 459 U.S. at 388–90, 103 S. Ct. at

690–92, and Grogan held that a creditor need only show by a

preponderance of evidence that a claim was incurred through

fraud in order to establish that the claim is not dischargeable

in bankruptcy, 498 U.S. at 286–87, 111 S. Ct. at 659. Both

decisions acknowledged the very tradition of requiring that

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fraud be proved by clear and convincing evidence that

Shepherd invoked, see Huddleston, 549 U.S. at 388–89, 103 S. Ct.

at 690–91; Grogan, 498 U.S. at 288, 111 S. Ct. at 660, and yet both

concluded that the particular interests implicated by a finding

of fraud in those cases were not sufficient to overcome the

presumptionthatthepreponderance standard will governcivil

litigation.4 See also Liquid Air, 834 F.2d at 1302‐03 (rejecting clear

and convincing standard for civil claims under Racketeer

Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962

& 1964, notwithstanding fact that certain predicate acts of

racketeering involve fraud).

What is patently clear from the Court’s decisions in

Huddleston and Grogan is thatlabels matterless than substance.

Simply because a sanction is premised on conduct that can be

described as fraudulent does not mean that the court must by

rote adopt an evidentiary standard historically associated with

fraud claims. The Supreme Court instead directs us to focus on

the pragmatic implications of the sanctions decision and to

consider whether they transform a civil case that is otherwise

about money into one that may implicate much more

substantial interests.In that vein, our decision in Ty recognized

the pragmatic differences between a civil merits judgment

deeming a party guilty of fraud and a sanction imposed by the

court for a fraud on the court committed in the course of the

4

   Huddleston noted that the clear and convincing standard was adopted at

common law for fraud claims in part out of a fear that such claims could be

easily concocted. 459 U.S. at 388 n.27, 103 S. Ct. at 690 n.27. That concern is

not present here, when a court is called upon to determine whether a party

has engaged in fraudulent conduct during the litigation over which the

court is presiding.

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16 No. 16‐1753

litigation. 517 F.3d at 499. We have, in this case, already

explained at some length why the interests at stake in the

court’s decision to dismiss the suit as a sanction for witness

tampering are not sufficient to overcome the presumption that

the relevantfacts will be determined by a preponderance ofthe

evidence. And as with use of the term “fraud,” affixing the

“quasi‐criminal” label to the sanctioned conduct does not alter

the calculus. See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491,

105 S. Ct. 3275, 3282 (1985) (“In a number of settings, conduct

that can be punished as criminal only upon proof beyond a

reasonable doubt will support civil sanctions under a

preponderance standard.”) (collecting cases); see also

Huddleston, 459 U.S. at 390, 103 S. Ct. at 691 (citing Regan, 232

U.S. at 48‐49, 34 S. Ct. at 217, for the proposition that, in civil

litigation, preponderance is sufficient as proof of acts that

expose a party to criminal prosecution); Liquid Air, 834 F.2d at

1302‐03 (civil RICO claims are subject to proof by

preponderance of evidencenotwithstanding thatpredicate acts

ofracketeering are criminal in nature: “A civilRICOdefendant

does not face imprisonment, nor does the defendant sufferthe

collateral consequences associated with conviction of a

criminal offense.”). Regardless of whether the litigation

misconduct at issue is characterized by fraud, bad faith, fault,

or quasi‐criminal misconduct, the case remains a civil suit

between private litigants, and what is at stake for Ramirez is

the loss of the opportunity to win money damages from his

former employer. See Kunkel v. Com’r of Internal Revenue, 821

F.3d 908, 910 (7th Cir. 2016) (Supreme Court’s jurisprudence

indicates that “in civil litigation over money, the appropriate

standardis the preponderance ofthe evidence”); Liquid Air, 834

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No. 16‐1753 17

F.2d at 1302 (clear and convincing standard “is used in civil

cases in which more is at stake than mere loss of money”).

Because our holding today conflicts with our decision in

Maynard and with like decisions of other circuits as to the

applicable evidentiary standard, this opinion was circulated to

all active judges pursuant to Circuit Rule 40(e). No judge in

active service wished to hearthis case en banc. Our decision in

Maynard is overruled in that respect. In civil cases, the facts

underlying a district court’s decision to dismiss the suit or

enter a default judgment as a sanction under Rule 37 or the

court’s inherent authority need only be established by a

preponderance of the evidence.

The evidence presented to the district court was sufficient

to support a finding by the preponderance of the evidence that

Ramirez engaged in witness tampering. Villagrana testified

that Ramirez offered him money in exchange for favorable

testimony, that he accepted the offer due to a variety of

financial hardships he faced, that he discussed with Ramirez

(and the other two witnesses) what his testimony would be,

that the testimony he gave in exchange for money Ramirez

offered was false, and that, in truth, he had never observed any

discrimination against Ramirez while in T&H Lemont’s

employ. The district court obviously credited Villagrana’s

testimony, and it is worth noting that no other witness

(including Ramirez, who chose not to testify) disputed his

account. It is true that Hernandez denied that he was bribed,

but that does not undercut the notion that Villagrana was.

And, of course, the district court indicated that portions of

Hernandez’s testimony were questionable. At the same time,

Hernandez did corroborate Villagrana’s testimony in part by

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18 No. 16‐1753

confirming that the three witnesses had met and discussed

their testimony with Ramirez in advance of their depositions.

It is also true that, according to Luis, Villagrana offered to

testify for T&H Lemont if he could get his job back. That

testimony raises the possibility that Villagrana was a

mercenary witness whose testimony was for sale to the highest

bidder (he himself acknowledged that he agreed to testify for

Ramirez because he was in dire straits financially), and it

permitted, but did not compel,the district courtto discredit his

testimony. But the court chose instead to credit Villagrana, and

we have no ground on which to second‐guess its credibility

determination.5 Having creditedVillagrana’s testimony that he

was offered money to testify (falsely) for Ramirez, the district

court was on solid ground in finding by a preponderance of

the evidence that Ramirez had engaged in witness tampering.

In light of that finding, the court certainly did not abuse its

discretion in dismissing the case with prejudice rather than

imposing a lesser sanction. The court considered the

possibility—indeed, it expressly assumed—that Ramirez may

have had a meritorious case of employment discrimination,

and that dismissal would foreclose Ramirez from pursuing

relief for that injury. See R. 73 at 12‐14. But witness tampering

is among the most grave abuses of the judicial process, and as

such it warrants a substantial sanction. See, e.g., Secrease, 800

F.3d at 402 (“falsifying evidence to secure a court victory

undermines the most basic foundations of our judicial

5

   No issue is presented as to the procedure the district court followed in

making its factual findings, including the manner in which Villagrana’s

testimony was presented to the court.

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No. 16‐1753 19

system”); Ty, 517 F.3d at 498 (“[t]rying to improperly influence

a witness is fraud on the court and on the opposing party”).

Crediting Villagrana’s account, Ramirez made a calculated

effort to bolster his floundering case by offering payment to a

witness to support his allegations of employment

discrimination when the witness had, in fact, observed no such

discrimination. Dismissing the case with prejudice is an

entirely reasonable response to such a deliberate attempt to

deceive the court.

III.

Finding no clear error in the district court’s finding that

Ramirez engaged in witness tampering and no abuse of

discretion in the court’s decision to dismiss the case with

prejudice as a sanction, we AFFIRM the judgment.

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