1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-16-1994

Spain v. Gallegos

Precedential or Non-Precedential:

Docket 93-3467

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Recommended Citation

"Spain v. Gallegos" (1994). 1994 Decisions. Paper 50.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 93-3467 

 

ELLEN V. SPAIN, 

 Appellant 

v. 

TONY E. GALLEGOS, CHAIRMAN, 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION; 

UNITED STATES OF AMERICA 

 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

(D.C. Civil No. 92-1403) 

 

Argued May 2, 1994 

BEFORE: GREENBERG and GARTH, Circuit Judges, 

and ROBRENO, District Judge* 

(Filed: June 16, 1994) 

 

 Stanford A. Segal (argued) 

 Gatz, Cohen, Segal & Koerner 

 400 Law & Finance Building 

 Pittsburgh, PA 15219 

 Attorneys for Appellant

 

 James R. Neely, Jr. 

 Deputy General Counsel 

 Gwendolyn Young Reams 

 Associate General Counsel 

 Lorraine C. Davis 

 Assistant General Counsel 
2 

 

*Honorable Eduardo C. Robreno, United States District Judge for 

the Eastern District of Pennsylvania, sitting by designation. 
3 

 John F. Suhre (argued) 

 Attorney 

 Equal Employment Opportunity 

 Commission 

 1801 L Street, N.W. 

 Washington, D.C. 20507 

 Attorneys for Appellee

 

OPINION OF THE COURT 

 

GREENBERG, Circuit Judge. 

 A female employee of the Equal Employment Opportunity 

Commission brings this appeal from orders of the district court 

dismissing her action against the EEOC alleging sexual and racial 

discrimination, sexual harassment and unlawful retaliation, all 

in violation of Title VII of the Civil Rights Act of 1964. 

Immediately before the trial, the district court excluded certain 

evidence from the appellant's sexual discrimination and 

harassment claims and barred her from proceeding with those 

claims on the evidence she had intended to offer. Four days 

later, after an intervening weekend, the appellant elected not to 

proceed with the balance of her case, as she reasoned that the 

district court's ruling precluded her from establishing her 

remaining claims. In accordance with warnings the district court 

had given the appellant, the court then dismissed her case with 

prejudice for failure to prosecute, and it assessed her with jury 

costs. 

 The appellant appeals from the district court's 

exclusion of the evidence she intended to offer to prove sexual 
4 

discrimination and harassment, from the court's judgment against 

her on those claims on the basis of her proposed evidence, from 

the court's dismissal of the balance of her case predicated on 

her decision not to go forward, and from the court's imposition 

of jury costs against her. We conclude that in the unusual 

circumstances presented in her allegations, the appellant has 

alleged a prima facie case of sexual discrimination and 

harassment and that material issues of fact remain on these 

claims for consideration by a jury. We also conclude that the 

court abused its discretion in excluding her evidence. 

Consequently, we hold that the district court erred in barring 

her from proceeding with her sexual discrimination and harassment 

claims. 

 We also hold that the court did not abuse its 

discretion in dismissing the balance of her case after she 

decided not to go forward with her remaining claims, as it warned 

her that it would dismiss these claims if she did not proceed. 

However, in light of the significant impact of the court's 

initial rulings on the appellant's case and the short interval 

between these rulings and the start of trial on the remaining 

issues, we hold that the court abused its discretion in assessing 

the jury costs against her. Thus, we will reverse the order of 

the district court dismissing the appellant's sexual 

discrimination and harassment claims and assessing the jury costs 

against her, but we will affirm the order of the district court 

dismissing the balance of the case. 
5 

I. BACKGROUND 

 The appellant, Ellen V. Spain, is an investigator in 

the Pittsburgh Area Office of the EEOC.0 Although she was hired 

in 1974 by that office, the EEOC promoted her to the position of 

director of the Dayton Area Office in 1979, and she held that 

position until approximately 1980 or 1981. She then worked 

briefly for the Department of Housing and Urban Development 

before returning to the EEOC's Pittsburgh office as an 

investigator. App. at 75. Spain currently holds a position with 

a GS 1810-12, Step 10 Grade.0

 In addition to suing the EEOC, Spain originally named 

Eugene Nelson and Johnny Butler as defendants, but they have been 

dismissed from the action. Nelson and Butler are the director of 

the EEOC's Pittsburgh Area Office and the director of the EEOC's 

 

0The EEOC points out that much of Spain's brief "is devoted to 

discussion of matter which was not before the district court." 

Appellee's br. at 3 n.1. Thus, Spain has included depositions in 

the appendix not presented to the district court. We recognize 

that ordinarily this procedure could present a problem, as Spain 

would be expanding the record on appeal. But in the 

circumstances of this case, we will consider the affidavits and 

depositions in the appendix because the district court entered 

judgment for the EEOC on the sexual discrimination and harassment 

claims in a proceeding equivalent to a hearing on a motion for 

summary judgment. However, the court did so without advance 

notice to Spain of the proposed hearing. Thus, Spain had no 

opportunity to respond to a formal motion by filing answering 

papers attaching germane portions of affidavits and depositions. 

Accordingly, fairness requires that we treat the disposition of 

the sexual discrimination and harassment claims as the functional 

equivalent of the granting of a motion for summary judgment for 

the EEOC, and furthermore that we consider all the materials 

which Spain could have produced in opposition to that motion if 

given the opportunity. 

0Id. at 2. In the course of this opinion, we refer both to GS 

and GM level positions in accordance with the parties' briefs. 
6 

Philadelphia District Office, respectively. Therefore, Butler is 

Nelson's superior, and Nelson is Spain's superior. Spain does 

not challenge the dismissal of the action as to Nelson and 

Butler. 

 Spain, a white female, alleges that Nelson and Butler, 

male African-Americans, have a history of passing over her for 

promotions to GM-13 and GM-14 level positions in favor of 

allegedly lesser qualified male African-American applicants. Id. 

at 2-3. It is undisputed that in 1985, while Spain held a GS-11 

position, she unsuccessfully applied for an open GS-12 position, 

a rejection that led her to file an internal EEOC complaint 

alleging sexual and racial discrimination. Id. at 75-76. Spain 

asserts that the events which underlie the present action began 

shortly after she filed that complaint. 

 Spain alleges that Nelson, her superior, induced her 

not to proceed with the EEOC complaint by promising that she 

would receive the next available promotion, so long as she agreed 

to lend him money periodically.0 Spain asserts that because 

Nelson intimidated her she agreed to his requests, and she did 

obtain the next promotion in early 1986. Id. Spain charges that 

Nelson began demanding loans at that time and that he repeated 

these demands every four to eight weeks over the next few years. 

Id. at 76, 241; appellant's br. at 5. Significantly, EEOC 

regulations preclude a superior EEOC official from soliciting and 

 

0App. at 3-4, 76-77, 238-39; appellant's br. at 5. 
7 

accepting loans from a subordinate employee. See 29 C.F.R. 

§1600.735-203. 

 The crux of Spain's sexual discrimination and 

harassment claims is that over the years rumors developed in the 

Pittsburgh office that Spain and Nelson were having an affair, 

because his frequent demands for loans led other employees often 

to see them together privately in his office, the cafeteria, or 

leaving the office.0 Spain charges that because it was improper 

for Nelson to solicit the loans, he needed to meet her privately 

to ask for loans, to receive the funds, and to pay them back. Id. 

at 77. Spain claims that she learned of the rumors during casual 

conversations in the office. She alleges that she complained 

about the rumors to Nelson approximately four times per year 

between 1986 and 1988 and once in 1989 and requested him to put 

them to an end. Id. at 230. However, she alleges that the 

private meetings and loan requests continued, thereby 

perpetuating the rumors. According to Spain, the rumors and 

Nelson's continuation of his conduct in the face of the rumors 

embarrassed Spain, app. at 231, and caused her co-workers to 

ostracize her, thereby straining her relationship with them and 

with her supervisors and making her feel miserable and unable to 

"deal with the situation." Id. at 77. Spain claims that in late 

 

0App. at 228-31. Spain's co-worker, Ronald Dean, testified in 

his deposition that he had heard rumors for some time that Spain 

and Nelson had a relationship, and he stated that when people 

would see them together the rumors would escalate. Id. at 167-

70. He also stated that he was told by a co-worker, "Be careful, 

you don't want to rub Ellen Spain the wrong way, because if you 

do, then you're going to have problems with the Director" because 

there was a relationship between the two of them. Id. at 168. 
8 

1989 or early 1990 she told Nelson that she would no longer lend 

him any money. Id. at 78. Spain alleges that this refusal led 

Nelson to escalate his harassment, ultimately resulting in her 

being denied a promotion as a result of the rumors. 

 In 1990, Spain unsuccessfully sought a promotion to GM13 Supervisory Investigator. Spain contends that in part Nelson 

based his decision not to promote her on evaluations by her 

supervisors in the office. Appellant's br. at 7. As evidence of 

the impact of the false rumors upon her work environment, Spain 

points to an affidavit of one of these evaluating supervisors, 

Bruce Bagin, stating that he graded Spain low on the "integrity" 

category of the evaluation due to his perception of her conduct 

with Nelson based on the rumors and his observations. Bagin also 

stated that Spain had complained to him about the false rumors 

but that he refused to discuss them because his perception of her 

conduct seriously had affected his view of her. App. at 80. The 

EEOC contests Spain's assertion regarding the basis for its 

decision not to promote her and responds that Nelson considered 

much evidence assessing her qualifications, including the 

negative opinion of her supervisor in the Dayton Area Office. 

Appellee's br. at 4-5. 

 However, Spain offers as evidence a memorandum from 

Nelson to his superior, Butler, which discusses the 

qualifications of the candidate selected for the promotion, as 

well as the reasons why other candidates were not selected. App. 

at 374-76. In the memorandum, Nelson states that although Spain 

had "outstanding skills in administrative matters" and was 
9 

"proficient in the technical aspects" of the position, she ranked 

dead last among the candidates due to her consistent "inability 

to relate effectively with the supervisor, co-workers and 

others." App. at 376. The memorandum further explains that 

while all of the candidates had "sufficient technical skills to 

perform the supervisory job only Ms. Spain is rated so low in 

interpersonal relations to cause her to be ranked so low." Id. 

(emphasis added). In contrast to Spain's evidence, the EEOC does 

not precisely indicate what role the written evaluations of 

Spain's Pittsburgh supervisors played in Nelson's decision not to 

promote her. 

 In June 1990, Spain filed a second complaint with the 

EEOC, and it is this complaint which directly led to this action 

and thus to this appeal. Spain asserts that the retaliatory 

conduct began in earnest after she filed this complaint. App. at 

253. Moreover, she alleges that Nelson began coming to her house 

when she was working at home, and he continued to pressure her to 

make loans to him and to drop the new complaint. Id. at 274-80. 

On May 6, 1992, the EEOC issued a proposed disposition finding 

that there had not been discrimination against Spain. Id. at 12-

14. 

 On June 8, 1992, Spain filed her complaint in the 

district court against the EEOC, Nelson, and Butler. Count I of 

the complaint alleges sexual and racial discrimination, sexual 

harassment and unlawful retaliation, all in violation of Title 

VII of the Civil Rights Act of 1964, and Counts II and III allege 

the state law claim of intentional infliction of emotional 
10 

distress by Nelson and Butler. Id. at 1-10. In her complaint, 

Spain claims that she has been subject to retaliation for having 

filed prior grievances and that Nelson had stopped speaking to 

her and removed certain supervisory functions from her. Id. at 

3. Moreover, Spain charges that she has been subject to sexual 

discrimination and harassment stemming from "false rumors being 

circulated that she was involved in an intimate relationship with 

defendant Nelson." Id. Spain also alleges that even though 

Nelson knew the rumors were false, he perpetuated them by 

continuing his improper loan solicitation and by not taking steps 

to prevent the rumors. Instead, according to Spain, he and 

Butler, who also knew about the false rumors, used them to deny 

her advancement. Id. at 3-4. 

 In essence, Spain's claims of sexual discrimination and 

harassment are traceable to Nelson's alleged conduct, which both 

caused and perpetuated the rumors that, in turn, resulted in the 

treatment she received from both her co-workers and supervisors. 

Spain also claims that there was retaliation against her for 

refusing to continue to lend Nelson money, a practice which she 

asserts had been instituted because of her sex and race. Id. at 

4. In addition to alleging that she was bypassed improperly for 

a promotion, Spain claims that Nelson had begun downgrading her 

evaluations, and that Butler had rescinded an award due her. Id. 

 After depositions were taken, Spain's complaint against 

Butler was dismissed on November 10, 1992, with her consent. The 

United States then filed a Certificate of Substitution of itself 

for Nelson as a defendant under 28 U.S.C. § 2679, and the 
11 

district court permitted the substitution on March 3, 1993. 

Thereafter, on April 6, 1993, Spain filed a motion in limine

seeking to exclude evidence that her supervisors in the Dayton 

office evaluated her negatively and evidence that she had not 

been forthcoming about her education on her employment 

application. On April 9, 1993, the EEOC filed a motion in limine

pursuant to Fed. R. Evid. 401-03 to prevent Spain and her 

attorney from referring to or offering as evidence any testimony 

regarding the alleged loans by Spain to Nelson. On April 12, 

1993, Spain agreed to dismiss the United States as a defendant. 

Thus, as Nelson and Butler were no longer parties, the case went 

forward solely against the EEOC. 

 On Thursday, July 15, 1993, the day set for jury 

selection, the district court ruled sua sponte that it would not 

permit Spain to proceed with her claims of discrimination based 

on a sexually hostile working environment. In reaching this 

conclusion the court held that Spain could not base her claims on 

Nelson's failure to stop the false rumors in the workplace that 

he and Spain were having an affair. The court reached this 

decision despite Spain's allegations that the rumors caused her 

to be shunned by her co-workers and to be evaluated poorly for 

promotion purposes by her supervisors with respect to her 

integrity and ability to work with others. App. at 29-40. When 

the court asked Spain's attorney what type of evidence she 

intended to present to establish the sexual harassment claim, he 

replied that he would point to "the failure of the superior[s] to 
12 

put an end [to] the rumors when they knew about them." Id. at 

30. The district court then responded: 

I don't think that's recognizable under Title 

VII. I don't know that an individual who has 

had no relationship with someone has to 

embarrass himself by going forward and 

denying such a relationship just because some 

other person wants him to do that . . . . And 

I am not going to let you proceed on that, if 

that is the basis of that claim. 

Id. at 31. Spain's attorney then remarked that "[i]t is clearly 

the basis of the claim" and that he could not "present the case 

without the testimony of the rumors." Id. 

 Spain then attempted to argue orally that the case 

should be viewed as similar to Jew v. University of Iowa, 749 F. 

Supp. 946 (S.D. Iowa 1990). App. at 34-39. The court in Jew

found that there was a sexually hostile work environment where 

there were rumors that a female professor and her male superior 

were having an affair, and other faculty members in the position 

of evaluating her for promotion purposes spread the rumors and 

conducted a campaign of open slander and innuendo of a sexual 

nature against her. 

 However, the district court, agreeing with the EEOC's 

attorney, distinguished Jew on several grounds. The court first 

stated that in Jew, unlike in this case, the supervisor was 

spreading the rumors.0 The court then asked Spain's attorney how 

 

0Actually nothing in Jew indicates that the supervisor was 

spreading the rumors. On the other hand, Spain argues that 

Nelson created the conditions in which the rumors developed and 

then did nothing to stop them after being informed of them, and 

even continued the conduct which resulted in the rumors being 

perpetuated. 
13 

the rumors could have been corrected without Nelson telling 

people that he was not having an affair with Spain. Id. at 34-

35. The attorney responded that Title VII requires a supervisor 

on notice of sexual harassment to take corrective action promptly 

and that Nelson or Butler could have told the concerned employees 

that the rumors were false. Id. In response, the EEOC's 

attorney argued that the obligation to correct a hostile work 

environment presupposes that the employer has notice of the 

environment, and that there was no evidence that Spain complained 

to Butler about the rumors or evidence that Butler was otherwise 

on notice of the situation.0 

 The court then asked Spain what evidence she had that 

the comments made to her created a hostile environment. Id. at 

36. Spain responded that she was treated as an outcast by other 

employees, and she proffered testimony that a co-worker had 

warned another employee to stay away from Spain because she was 

the "boss' lover." Id.; see note 4, supra. The attorney for the 

EEOC responded that the testimony was that Spain had "got the 

boss' ear and [would] get you into trouble, which is not the same 

thing." Id. However, Spain disputed the EEOC's recollection of 

the co-worker's testimony. 

 The district court then distinguished Jew on the ground 

that the rumors in that case were that the professor was having 

an affair with her supervisor and was using the sexual 

relationship to gain favor, influence and power with her 

 

0App. at 35-36. Butler has admitted being asked about the rumors 

by the employees. App. at 340. 
14 

superior. The court asked Spain whether she had similar 

evidence. Id. at 36-37. Spain's attorney replied that the EEOC 

also denied Spain the promotion because she had poor 

interpersonal relationships with her co-employees. Id. at 37. 

The EEOC then argued, and the court agreed, that in Jew there was 

additional evidence of open harassment on the basis of sex in the 

form of cartoons and in other ways. Spain responded that her 

supervisors evaluated her negatively with respect to integrity 

because of the rumors about the affair. Id. at 38. 

 At first, the district court stated that it would allow 

evidence supporting these allegations inasmuch as a failure to 

promote due to the rumors had "a sexual connection." Id. at 39. 

However, on reconsideration, the court concluded that the poor 

ratings related to sexual activity and not gender. Consequently, 

the court ruled that the evidence could not be admitted unless 

there was evidence that males who did the same thing were treated 

differently. Id. at 44. 

 The court thus held that Title VII does not require 

that a supervisor deny rumors that he is having an affair with a 

subordinate. Therefore, the district court barred Spain from 

proceeding on her sexual discrimination and harassment claims 

based on the evidence she intended to offer. This ruling 

effectively granted summary judgment to the EEOC on these claims, 

and accordingly we review the case as if the court formally 

granted summary judgment.0

 

0See note 1, supra. 
15 

 The district court also ruled on the motions in limine. 

It denied Spain's motion but granted the EEOC's motion to exclude 

any evidence regarding whether Nelson solicited and accepted 

loans from Spain. Id. at 40-43. In opposition to the motion, 

Spain argued that the private meetings at which Nelson obtained 

the loans were the source of the false rumors that they were 

having a relationship and that Nelson could have stopped the 

rumors by ceasing to meet with Spain to borrow money. Id. at 42-

43. However, the court found no evidentiary value in the fact 

that "other people interpreted meetings . . . in the wrong way." 

Id. 

 As the district court prepared to adjourn, Spain's 

attorney asked whether taking a voluntary non-suit based on the 

court's ruling would eliminate her appeals. The court responded 

in the affirmative with respect to the issues on which Spain 

still was able to proceed. Id. at 45. The court stated that 

reversal of its ruling regarding the rumor-based sexual 

discrimination and harassment claims would permit Spain to try 

those claims, but reversal would not revive her remaining claims. 

Id. at 45-46. Moreover, the court and Spain's attorney discussed 

the fact that the evidentiary rulings regarding the sexual 

discrimination and harassment claims had no bearing on the 

remaining claims of racial discrimination and retaliation.0 

 Four days later, on Monday, July 19, 1993, as the 

 

0Id. at 46-47. While district courts are entitled to their 

opinions as to what is and is not appealable, and what are the 

likely consequences of an appellate decision, these views do not 

bind a court of appeals. 
16 

parties were about to start the trial on the remaining claims, 

Spain's attorney again suggested that Spain might not continue 

with the litigation. The court then warned him that if Spain did 

not proceed on her remaining claims, it would dismiss her case 

with prejudice for failure to prosecute. App. at 51. Noting the 

court's intentions, Spain then declared her decision not to 

proceed with the remaining allegations regarding failure to 

promote on the basis of race, failure to promote in retaliation 

for filing prior EEOC charges, and retaliation for filing this 

suit. App. at 52. The district court then followed through with 

its warnings and dismissed Spain's case. Furthermore, the court 

found that Spain could have advised the court of her decision not 

to proceed during the previous three days. Accordingly, it taxed 

the $375 costs of the jury against Spain. App. at 52-54. 

 Spain then appealed. The district court had 

jurisdiction under 28 U.S.C. §§ 1331, 1343, and we have 

jurisdiction under 28 U.S.C. § 1291.0

 

0In our review of the record, we noted that there is some 

question as to whether we have jurisdiction. The problem derives 

from the fact that the district court's orders in effect granting 

summary judgment to the EEOC on Spain's sexual harassment and 

discrimination claims, excluding evidence from her case, 

dismissing her case for failure to prosecute, and assessing the 

jury costs against her were issued orally from the bench and not 

reduced to writing. This omission raises the question whether 

the district court has entered a final order for the purposes of 

28 U.S.C. § 1291, inasmuch as it did not enter an order in a 

separate document pursuant to Fed. R. Civ. P. 58. See Bankers 

Trust Co. v. Mallis, 435 U.S. 381, 387-88, 98 S.Ct. 1117, 1121 

(1978); Temple Univ. v. White, 941 F.2d 201, 216 (3d Cir. 1991), 

cert. denied, 112 S.Ct. 873 (1992). 

 Yet, as in Bankers Trust, the district court clearly 

intended that its dismissal of the case would be its final 

decision, as the court designated the transcript as the order of 
17 

II. DISCUSSION 

A. Sex-Based Title VII Claims

 We first address the district court's grant of summary 

judgment against Spain on her Title VII claims, including the 

rejection of her promotion application, arising from a sexually 

hostile working environment. Inasmuch as the court in effect 

granted summary judgment against her, our standard of review is 

plenary. Thus, 

[we] review the district court's summary 

judgment determination de novo, applying the 

same standard as the district court . . . . 

[I]n all cases summary judgment should be 

granted if, after drawing all reasonable 

inferences from the underlying facts in the 

light most favorable to the non-moving party, 

the court concludes that there is no genuine 

issue of material fact to be resolved at 

trial and the moving party is entitled to 

judgment as a matter of law. Where the 

movant has produced evidence in support of 

its motion for summary judgment, the 

nonmovant cannot rest on the allegations of 

pleadings and must do more than create some 

metaphysical doubt. 

Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 

F.2d 1224, 1230 (3d Cir.), cert. denied, 114 S.Ct. 554 (1993). 

 

the court, and the judgment of dismissal was recorded on the 

clerk's docket. App. at XII, 55. The transcript of the 

proceeding in which the court entered summary judgment on Spain's 

claim also was entered on the docket, although we believe that a 

typographical error was made regarding the date of the 

proceeding, as it records that the session took place on Sunday 

rather than on Thursday. App. at XI. In light of Bankers Trust, 

we thus conclude that we have jurisdiction over the appeal 

pursuant to 28 U.S.C. § 1291, as no objection was made to the 

taking of the appeal, and the parties, therefore, are deemed to 

have waived the separate-judgment requirement of Rule 58. 435 

U.S. at 387-88, 98 S.Ct. at 1121. 
18 

Spain argues that the district court erred in preventing her from 

proceeding with her claims because she proffered evidence to 

support a case of sexual discrimination and harassment under 

Title VII. Comparing her situation to that of the plaintiff in 

Jew, and arguing that the district court erred in distinguishing 

that case, Spain argues that she belongs to a protected group, 

she was harassed and discriminated against because of her sex, 

the harassment affected a term or condition of employment, and 

the EEOC knew about the harassment but failed to take appropriate 

corrective action. Appellant's br. at 18-19. 

 Title VII of the Civil Rights Act of 1964 makes it "an 

unlawful employment practice for an employer . . . to 

discriminate against any individual with respect to his 

compensation, terms, conditions or privileges of employment 

because of such individual's race, color, religion, sex or 

national origin." 42 U.S.C. § 2000e-2(a)(1). Recently, the 

Supreme Court in Harris v. Forklift Sys., Inc., 114 S.Ct. 367 

(1993), discussed the foundation of a sexually hostile work 

environment claim: 

As we made clear in Meritor Savings Bank v. 

Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 

L.Ed.2d 49 (1986), this language 'is not 

limited to "economic" or "tangible" 

discrimination. The phrase "terms, 

conditions, or privileges of employment" 

evinces a congressional intent "to strike at 

the entire spectrum of disparate treatment of 

men and women" in employment,' which includes 

requiring people to work in a 

discriminatorily hostile or abusive 

environment. Id., at 64, 106 S.Ct., at 2404, 

quoting Los Angeles Dept. of Water and Power 

v. Manhart, 435 U.S. 702, 707, n. 13, 98 
19 

S.Ct. 1370, 1374, 55 L.Ed.2d 657 (1978) (some 

internal quotation marks omitted). When the 

workplace is permeated with 'discriminatory 

intimidation, ridicule, and insult,' 477 

U.S., at 65, 106 S.Ct., at 2405, that is 

'sufficiently severe or pervasive to alter 

the conditions of the victim's employment and 

create an abusive working environment,' id., 

at 67, 106 S.Ct., at 2405 (internal brackets 

and quotation marks omitted), Title VII is 

violated. 

Harris, 114 S.Ct. at 370. Furthermore, the Court stated that to 

determine whether an environment is "hostile" or "abusive" a 

court must look at "all the circumstances." Id. at 371. 

 In Andrews v. Philadelphia, 895 F.2d 1469 (3d Cir. 

1990), we discussed the requirements for establishing a claim 

predicated on a sexually hostile work environment: 

[F]ive constituents must converge to bring a 

successful claim for a sexually hostile work 

environment under Title VII: (1) the 

employees suffered intentional discrimination 

because of their sex, (2) the discrimination 

was pervasive and regular, (3) the 

discrimination detrimentally affected the 

plaintiff, (4) the discrimination would 

detrimentally affect a reasonable person of 

the same sex in that position; and (5) the 

existence of respondeat superior liability. 

895 F.2d at 1482 (footnote and citations omitted). As we noted, 

"these factors include both a subjective standard (No. 3) and an 

objective standard (No. 4)."0 Since our decision in Andrews, the 

Supreme Court in Harris has affirmed that a hostile work 

 

0Id. at 1483. We further explained: "The subjective factor is 

crucial because it demonstrates that the alleged conduct injured 

this particular plaintiff giving her a claim for judicial relief. 

The objective factor, however, is the more critical for it is 

here that the finder of fact must actually determine whether the 

work environment is sexually hostile." Id. 
20 

environment claim must involve both subjective and objective harm 

to the employee.0

 In this case, Spain asserts that the harassment she 

suffered led to her work environment being sexually hostile and 

to the denial of a promotion. Quite clearly, she presents an 

atypical sexually hostile work environment claim in that the 

alleged wrongful conduct does not include the type of blatantly 

sexist behavior that is frequently the hallmark of such claims. 

For example, this case differs from Meritor Sav. Bank v. Vinson, 

477 U.S. 57, 60, 106 S.Ct. 2399, 2402 (1986), in which an 

employee testified that her employer "fondled her in front of 

other employees, followed her into the women's restroom when she 

went there alone, exposed himself to her, and even forcibly raped 

her on several occasions." See also King v. Hillen, No. 92-3601, 

1994 U.S. App. LEXIS 7124, at *3 (2d Cir. Apr. 13, 1994). But an 

employee can demonstrate that there is a sexually hostile work 

environment without proving blatant sexual misconduct. Indeed, 

in commenting on the Andrews elements, we noted that the intent 

 

0In Harris, 114 S.Ct. at 370, the Court explained: 

 

Conduct that is not severe or 

pervasive enough to create an 

objectively hostile or abusive work 

environment -- an environment that 

a reasonable person would find 

hostile or abusive -- is beyond 

Title VII's purview. Likewise, if 

the victim does not subjectively 

perceive the environment to be 

abusive, the conduct has not 

actually altered the conditions of 

the victim's employment, and there 

is no Title VII violation. 
21 

to discriminate on the basis of sex could be demonstrated through 

actions which "are not sexual by their very nature," although we 

stated that a more fact intensive analysis would be necessary in 

such a case. Andrews, 895 F.2d at 1482 n.3. 

 Consequently, we recount Spain's allegations and 

evidence thereof and then consider them in light of the elements 

of a sexually hostile work environment claim under Andrews.

0 As 

we discuss above, Spain charges that she was the subject of false 

rumors that she was having a sexual relationship with Nelson and 

had gained influence over him as a result of their relationship. 

These rumors developed among her co-workers because they often 

saw her and Nelson in private meetings. However, these meetings 

allegedly resulted from Nelson's improper solicitation of loans, 

a practice which lasted for several years after Nelson initiated 

it. 

 Spain charges that as a result her work environment was 

affected in essentially five ways. First, she was subjected to 

the spreading of false rumors about her sexual affairs that 

impugned the integrity of her job performance. The very 

existence of the rumors caused Spain embarrassment. Second, due 

to the rumored sexual relationship, Spain's co-workers allegedly 

treated her like an outcast, leading to poor interpersonal 

relationships between herself and them, and causing Spain to feel 

miserable. Third, the rumors and the resulting poor 

 

0We note that while we evaluate Spain's allegations under the 

Andrews standards, the district court seems to have based its 

ruling primarily on its interpretation of Jew. 
22 

interpersonal relationships at work led supervisory personnel to 

evaluate Spain negatively for advancement purposes. Spain 

proffered testimony from a co-worker and a supervisor regarding 

the rumors and these effects on her and on her environment. 

Fourth, Spain alleges that Nelson knowingly exacerbated the 

situation. After creating the conditions in which the rumors 

developed, Nelson perpetuated the rumors by continuing to demand 

loans from Spain and to meet with her privately for this purpose, 

even after Spain informed him of the rumors and asked him to stop 

them. Finally, Spain contends that Nelson denied her a promotion 

in 1990 based on the rumors and the resulting effects they had 

upon her interpersonal relationships at work and her evaluations 

by her supervisors. She offered evidence as well to support this 

contention. 

 The first element of a hostile work environment claim 

under Andrews is that the employee have suffered intentional 

discrimination because of her sex. 895 F.2d at 1482. Spain's 

charge that she suffered such discrimination can withstand a 

motion for summary judgment as to this element. We have just 

recounted Spain's contentions and the evidence she offered to 

prove them concerning the rumors and their multiple effects upon 

her environment and advancement. We find that the first Andrews

element is satisfied because the crux of the rumors and their 

impact upon Spain is that Spain, a female, subordinate employee, 

had a sexual relationship with her male superior. Unfortunately, 

traditional negative stereotypes regarding the relationship 

between the advancement of women in the workplace and their 
23 

sexual behavior stubbornly persist in our society. Because we 

are cognizant that these stereotypes may cause superiors and coworkers to treat women in the workplace differently from men, we 

find that a reasonable jury could conclude that Spain suffered 

the effects she alleges because she was a woman. Consequently, 

Spain has made "out a case under Title VII" by showing "that 

gender [was] a substantial factor in the discrimination, and that 

if [Spain] had been a man she would not have been treated in the 

same manner." Andrews, 895 F.2d at 1485 (internal quotation 

marks omitted). 

 We note that there is no suggestion in the record that 

males who worked with Nelson were harassed similarly. However, 

the district court erred in requiring Spain to produce evidence 

that males in a similar position were treated differently. A 

jury reasonably could conclude that if Spain had been a male, 

rumors would not have started that she had gained influence with 

Nelson through physically using her sex, particularly the ability 

to create problems for a fellow employee who "rubbed her the 

wrong way."0 Our discussion above leads us to believe that even 

if a male had a relationship bringing him into repeated close 

contact with Nelson, it would have been less likely for coworkers to have believed that the relationship had a sexual 

basis. Thus, the resulting poor interpersonal relationships, 

negative evaluations, and denial of advancement might not have 

occurred for a male as they allegedly did for Spain, inasmuch as 

 

0Spain's co-worker, Ronald Dean, testified that he had been 

warned not to rub Spain the wrong way. See app. at 168. 
24 

the situation which caused them simply would not have been 

created. Furthermore, while it is true that the rumors also 

implicated Nelson, the rumors did not suggest that his 

involvement in the alleged relationship had brought him 

additional power in the workplace over his fellow employees, and 

the employees had no reason for resenting him in the way they did 

Spain. Accordingly, he did not have to endure a hostile working 

environment brought about due to his sex. 

 In addition, Spain's allegations that Nelson's improper 

conduct first created the conditions under which the rumors 

developed and then perpetuated them distinguishes Spain's claims 

from claims in other scenarios which might not support a sexually 

hostile work environment cause of action. See King v. Hillen, 

1994 U.S. App. LEXIS 7124 at *35. Thus, this is not a case in 

which the rumors concerned the behavior of a co-worker outside of 

the workplace, or in which rumors developed as the result of 

other employees' misperception of a supervisor's and an 

employee's frequent but necessary, job-related interaction. 

Rather, here there are factual questions for trial of whether the 

rumors developed and persisted as a result of Nelson's improper 

behavior. As in Jew, the situation here was "not merely one of 

idle gossip about an alleged office romance." 749 F. Supp. at 

959. Consequently, Spain properly has alleged, and supported 

with materials developed in discovery, that the rumors directed 

at her and her resulting ostracization and adverse evaluation for 

advancement purposes were both sex-based and intentional. 
25 

 In reaching our conclusion on this point we have paid 

particular attention to the distinction we drew in Andrews

between sexual misconduct in which the intent to discriminate "is 

implicit, and thus should be recognized as a matter of course" 

and "actions [which] are not sexual by their very nature." 895 

F.2d at 1482 n.3. Thus, an employer by its conduct might create 

conditions which all its employees, without regard for sex, 

reasonably consider as harassing and yet the employer would not 

discriminate on the basis of sex. Accordingly, where an employee 

claims sex discrimination predicated on sexually neutral conduct 

it may be necessary for the employee to establish that the 

employer's motives for its actions were sexual. If the 

discrimination of which Spain complained was predicated merely on 

the demands for loans, her case might be of that nature. 

 However, Spain's allegations are not predicated on 

sexually neutral conduct. Rather, she alleges that the 

harassment resulted from the rumors that she was having an affair 

with Nelson. Thus, the harassment directed against her as a 

woman had a sexual orientation by its very nature. Overall, we 

are satisfied that Spain has offered evidence that she suffered 

intentional discrimination because of sex. 

 The second requirement for demonstrating a sexually 

hostile work environment is that the discrimination must have 

been pervasive and regular. Andrews, 895 F.2d at 1482. In 

determining that Spain's claim can withstand a motion for summary 

judgment as to this Andrews element, we note that she has alleged 

that the rumors developed over a period of several years between 
26 

1986 and 1990 and manifested themselves through her continuous 

interaction with her colleagues and supervisors. Moreover, 

Nelson's loan solicitations and the private meetings allegedly 

occurred throughout this time, continuing in particular after 

Spain had asked him to put an end to the rumors. Therefore, 

there is a fact question for trial as to the pervasiveness and 

regularity of Nelson's conduct and the impact of the rumors on 

Spain.0

 Third, the discrimination must have affected Spain 

detrimentally, the subjective requirement of Andrews, as later 

recognized in Harris. As we discuss above, Spain has contended 

that she perceived herself to be subject to an abusive 

environment as manifested through her co-workers' and 

supervisors' interaction with her. Thus, determination of the 

particular effect of the rumors on Spain is another question of 

fact for the jury. 

 Under Andrews, the fourth requirement to demonstrate a 

sexually hostile work environment is that the discrimination must 

be such that it would have detrimentally affected a reasonable 

person of the same sex in Spain's position. The Supreme Court 

explained this requirement in Harris: "Conduct that is not 

severe or pervasive enough to create an objectively hostile or 

 

0We recognized in Bouton v. BMW of N.Am., Inc., No. 93-5296, slip 

op. at 5 n.2 (3d Cir. June 10, 1994), that the Andrews

requirement that the discrimination be "pervasive and regular" 

differs slightly in form from the Supreme Court's statement in 

Meritor Sav. Bank, 477 U.S. at 67, 106 S.Ct. at 2405, that the 

discrimination be "severe or pervasive." Regardless of whether 

the two formulations substantively differ, both have been met 

here for summary judgment purposes. 
27 

abusive work environment -- an environment that a reasonable 

person would find hostile or abusive -- is beyond Title VII's 

purview." 114 S.Ct. at 370. In Harris, the Court held that 

under Title VII conduct can be actionable as harassment creating 

a sexually hostile work environment, even though it does not 

affect seriously an employee's well-being or lead the employee to 

suffer injury. Id. at 370-71. Spain has alleged that she faced 

an environment in which her co-workers treated her as an outcast 

and in which her supervisors evaluated her negatively for 

advancement. Thus, the alleged workplace hostility manifested 

itself both in the immediate interaction between Spain and her 

colleagues and in connection with her consideration for a 

promotion in 1990. 

 We recognize, of course, that, as the EEOC points out, 

Title VII does not require fellow workers to socialize with an 

employee they dislike. Appellee's br. at 11 n.6. However, we 

must accept Spain's allegations and draw inferences from them in 

her favor, and Spain has alleged more than that her co-workers 

disliked her. She has presented proof of injury directly flowing 

from the sexually hostile work environment. Consequently, we 

find that there is a factual question of whether a reasonable 

person in Spain's position would have been affected detrimentally 

by the environment she faced. 

 In Andrews, the final factor for determining whether 

there was a sexually hostile work environment is the existence of 

respondeat superior liability: 
28 

'[L]iability exists where the defendant knew 

or should have known of the harassment and 

failed to take prompt remedial action.' 

Steele v. Offshore Shipbuilding, Inc., 867 

F.2d 1311, 1316 (11th Cir. 1989); see Hicks 

v. Gates Rubber [Co., 833 F.2d 1406, 1418 

(10th Cir. 1987)]. Thus, if a plaintiff 

proves that management-level employees had 

actual or constructive knowledge about the 

existence of a sexually hostile environment 

and failed to take prompt and adequate 

remedial action, the employer will be liable. 

Katz v. Dole, 709 F.2d [251, 255 (4th Cir. 

1983)]. 

895 F.2d at 1486. See also Bouton v. BMW of N. Am., No. 93-5296, 

slip. op at 4-13 (3d Cir. June 10, 1994). Spain contends that 

the EEOC took no action to stop the harassment even though 

managers at three levels recognized the situation she faced: 

Butler, app. at 340, Nelson, app. at 120, 125, and Spain's 

immediate supervisor, Bruce Bagin, app. at 80. In particular, 

she charges that she informed Nelson of the rumors and asked him 

to put an end to them, app. at 77, 230, but that he did nothing. 

App. at 121. Therefore, Spain's allegations and evidence of her 

superiors' knowledge of the environment and their indifference to 

it are sufficient to withstand a motion for summary judgment as 

to this element of her claim. 

 In its ruling, the district court stated that Title VII 

does not require a supervisor who is the object of a rumored 

affair between himself and a subordinate to "embarrass himself" 

by denying the rumors. App. at 31. Yet, without further 

qualification or explanation, this statement is too broad. As we 

already have indicated, if the employer knows of the harassment, 

it is obligated to take prompt remedial action. We do not 
29 

suggest that Title VII required that Nelson personally deny the 

rumors. However, assuming that Spain's allegations regarding the 

rumors are true, the law did require management personnel to take 

remedial action. Accordingly, we hold that the district court 

erred in granting summary judgment to the EEOC predicated on the 

court's interpretation of the EEOC's obligation under Title VII. 

Overall, we think that it is clear that Spain has established the 

requirements for a claim of a sexually hostile work environment 

under Andrews, and that material issues of fact remain for trial. 

Thus, the district court erred in barring Spain from going 

forward based on the evidence she intended to offer to prove 

these claims. 

 While we have predicated our result on Andrews and 

Harris, we nevertheless will discuss Jew, as it seems to be the 

only reported case dealing with circumstances similar to those 

here. The district court first distinguished Jew on the grounds 

that the supervisor in this case, Nelson, was not involved in 

spreading the rumors and was, in fact, an object of them. App. 

at 34. However, as Spain points out, Jew does not suggest that 

the supervisor in that case was involved in spreading the rumors, 

nor did Jew rely on such a consideration. Furthermore, on the 

record, it could be concluded that Nelson personally was involved 

in spreading the rumors due to his alleged involvement in 

creating the conditions under which they developed and were 

perpetuated, and due also to his refusal to take steps to end 

them. Thus, with respect to this aspect of the district court's 

ruling, it appears that the court seized upon a nonexistent 
30 

distinction between this case and Jew and then applied it 

improperly to Spain's allegations. 

 The district court also pointed out that in Jew the 

rumors suggested that the plaintiff had used a sexual 

relationship to gain favor, influence and power with an 

administrative superior. Accordingly, the court asked Spain what 

evidence there was of that type of situation here.0 Yet, in so 

asking, the court ignored Spain's offer of testimony by a coworker that another employee warned him to stay away from Spain 

because she could get him in trouble with Nelson due to her 

relationship with him. Id. at 35-36 (court proceeding of July 

15, 1993); id. at 168 (deposition testimony). Thus, there was 

evidence that the rumors alleged that Spain had attained 

influence with Nelson through the use of a sexual relationship. 

 As we recount above, however, the attorney for the EEOC 

argued that this testimony regarding Spain's alleged influence 

was based upon her having the "boss' ears," as opposed to their 

having a sexual relationship. Id. at 36. Yet, the record 

indicates that the EEOC's recollection of the co-worker's 

testimony was incomplete, in that the co-worker testified to the 

relationship between Spain and Nelson as the reason for Spain's 

potential influence over other employees before further 

explaining that Spain had Nelson's "ears." Id. at 168. 

Therefore, the district court erred to the extent that it may 

 

0App. at 36-37. It was on this ground that the district court in 

Jew found that the plaintiff was subject to sex-based harassment 

even though the male superior was also the object of the rumors. 
31 

have accepted the EEOC's account of the co-worker's testimony in 

determining that Spain did not allege that the rumors involved 

her use of a sexual relationship to attain influence. 

Furthermore, Spain offered evidence that a supervisor rated her 

poorly for advancement purposes on account of the rumors and her 

resulting poor interpersonal relationships. Thus, there was an 

additional reason for the court not to have distinguished Jew on 

the grounds that the plaintiff in that case used a sexual 

relationship to her advantage.0 

 Finally, while the district court correctly pointed out 

that this case does not involve allegations of overt sexual 

harassment, such as the posting of cartoons and the other 

activities described in Jew, we have noted that "[i]ntimidation 

and hostility toward women because they are women can obviously 

result from conduct other than explicit sexual advances." 

Andrews, 895 F.2d at 1485 (quoting Hall v. Gus Constr. Co., 842 

F.2d 1010, 1014 (8th Cir. 1988)). It would have been erroneous, 

therefore, for the district court to have barred Spain from going 

forward on the grounds that she had not alleged overt instances 

of harassment equivalent to those in Jew. 

 

0App. at 37-40. Although the district court initially determined 

that it would allow such evidence, it later changed its decision 

on the ground that the poor ratings had to do with sexual 

activity and not gender. Id. at 39, 44. The EEOC argues that 

the court's exclusion of this evidence was proper because Spain 

claims that she was denied the promotion on account of her race 

but not due to her sex. Appellee's br. at 14 n.8. However, 

Spain's complaint and her argument before the district court 

clearly were that she was subject to a sexually hostile work 

environment and denied a promotion on account of her sex. See

id. at 1-6 (complaint), app. at 37-40 (trial transcript). 
32 

 In sum, our analysis of the requirements of Title VII 

leads us to hold that the district court erred in barring Spain 

from proceeding with her sexual discrimination and harassment 

claims. Spain has presented evidence that she was subjected to a 

sexually hostile work environment in the form of rumors among her 

colleagues that she was involved in a sexual relationship with 

her superior. These rumors allegedly developed and continued due 

to the superior's conduct. Moreover, they allegedly led her 

fellow employees to shun her and her supervisors to evaluate her 

poorly for advancement purposes. Furthermore, the management 

personnel did not take remedial action to eliminate the rumors. 

We are satisfied that considering all the circumstances, and 

given Spain's unique allegations, she should be allowed the 

opportunity to prove her claims regarding the sexually hostile 

work environment she allegedly faced. 

B. Evidentiary Rulings

 We now turn to the district court's exclusion of 

Spain's evidence in support of her sexual discrimination and 

harassment claims, a ruling made in conjunction with the court's 

decision to prohibit Spain from proceeding with her claims. While 

we ordinarily would review an evidentiary ruling before making a 

substantive decision depending on whether evidence was admitted, 

we have reversed that order because our discussion of the 

substance of the sexual discrimination and harassment claims has 

cast light on the evidentiary question. We review the district 

court's admissibility ruling under an abuse of discretion 
33 

standard, as we are concerned with an issue of the application of 

rather than the interpretation of the Federal Rules of Evidence. 

United States v. Console, 13 F.3d 641, 656 (3d Cir. 1993), cert. 

denied, 128 L.Ed.2d 377, 62 U.S.L.W. 3722 (1994); Petruzzi's IGA 

Supermarkets, 998 F.2d at 1237. 

 The EEOC's motion in limine sought to exclude evidence 

concerning Nelson's alleged solicitation and acceptance of loans 

from Spain on the grounds: (1) that such evidence was not 

relevant to Spain's Title VII action under Rule 401, and 

therefore was inadmissible under Rule 402; and (2) that under 

Rule 403 the probative value of the evidence was outweighed 

substantially by the danger it might lead to unfair prejudice, 

confusion of the issues, and delay. App. at 56-62. The district 

court granted the EEOC's motion, stating simply: "So what? If 

other people interpreted meetings that he had for some other 

reason in the wrong way, so what?" Id. at 42-43. Although it 

would thus appear that the district court excluded the evidence 

on relevancy grounds pursuant to Rule 402, the district court's 

ruling is ambiguous, and the parties base their arguments on both 

Rule 402 and Rule 403. Consequently, we will consider the 

admissibility standards of Rules 401 and 402, as well as the 

prejudice standards of Rule 403, as we believe that under either 

of these standards, the district court abused its discretion in 

excluding the evidence in question. 

 1. Relevance 
34 

 We recently discussed Rule 401 and the standards for 

excluding evidence on relevancy grounds: 

 Under Fed. R. Evid. 401, evidence is 

relevant if it has 'any tendency to make the 

existence of any fact that is of consequence 

to the determination of the action more 

probable or less probable than it would be 

without the evidence.' As noted in the 

Advisory Committee's Note to Rule 401, 

'[r]elevancy is not an inherent 

characteristic of any item of evidence but 

exists only as a relation between an item of 

evidence and a matter properly provable in 

the case.' Because the rule makes evidence 

relevant 'if it has any tendency to prove a 

consequential fact, it follows that evidence 

is irrelevant only when it has no tendency to 

prove the fact.' 22 Charles A. Wright & 

Kenneth W. Graham, Jr., Federal Practice and 

Procedure: Evidence § 5166, at 74 n. 47 

(1978) (emphasis added). Thus the rule, 

while giving judges great freedom to admit 

evidence, diminishes substantially their 

authority to exclude evidence as irrelevant. 

Id. § 5166, at 74. 

Blancha v. Raymark Indus., 972 F.2d 507, 514 (3d Cir. 1992). 

 The EEOC argues that the district court correctly 

excluded the evidence as irrelevant, inasmuch as evidence 

concerning the reason for the meetings between Spain and Nelson 

and the resulting rumors does not tend to prove or disprove 

Spain's allegations regarding the rumors and that she was 

subjected to sexual harassment as a result. Appellee's br. at 

15-16. The EEOC contends that even under Spain's view of the 

case, the occurrence of the meetings with Nelson, but not the 

reasons for the meetings, is significant. Id. at 16. 

 Yet, it is clear that evidence concerning the reasons 

for the private meetings between Nelson and Spain had a tendency 
35 

to prove certain elements of Spain's claims, for the evidence 

demonstrated why Nelson would have wanted private meetings, as 

the EEOC regulations prohibited him from borrowing money from 

subordinates. Furthermore, the reasons for the meetings tend to 

demonstrate why they were so frequent. More importantly, if a 

jury knew the reason for the meetings, it would gain insight into 

the credibility of Spain's contention that Nelson did not take 

any steps to stop the rumors or initiate any other remedial 

actions after learning about the rumors, for remedial action 

might have required him to explain his conduct. Consequently, 

the evidence is relevant to prove that Nelson was at least 

partially responsible for the development and perpetuation of the 

false rumors. Inasmuch as under Harris all the germane 

circumstances should be considered in an evaluation of Spain's 

sexually hostile work environment claim, we believe that the 

district court abused its discretion in ruling that the evidence 

was inadmissible under Rules 401 and 402. 

 2. Unfair Prejudice 

 In Blancha, we also discussed Rule 403 and the 

standards for excluding evidence that substantially is more 

prejudicial than probative: 

 Fed. R. Evid. 403 states that evidence, 

even if relevant, may be excluded 'if its 

probative value is substantially outweighed 

by the danger of unfair prejudice, confusion 

of the issues, or misleading the jury.' Thus 

evidence may be excluded when its admission 

would lead to litigation of collateral 

issues, thereby creating a side issue which 

might distract the jury from the main issues. 
36 

United States v. Dennis, 625 F.2d 782, 797 

(8th Cir. 1980). . . . Evidence should be 

excluded under Rule 403 only sparingly since 

the evidence excluded is concededly 

probative. United States v. Terzado-Madruga, 

897 F.2d 1099, 1117 (11th Cir. 1990). The 

balance under the rule should be struck in 

favor of admissibility. Id.; Dennis, 625 

F.2d at 797 (8th Cir. 1980). Finally, we 

note that in determining the probative value 

of evidence under Rule 403, 'we must consider 

not only the extent to which it tends to 

demonstrate the proposition which it has been 

admitted to prove, but also the extent to 

which that proposition was directly at issue 

in the case.' United States v. Herman, 589 

F.2d 1191, 1198 (3d Cir. 1978), cert. denied, 

441 U.S. 913, 99 S.Ct. 2014, 60 L.Ed.2d 386 

(1979). 

Blancha, 972 F.2d at 516. The EEOC argues that the district 

court properly excluded evidence of the loans under Rule 403 

because evidence of Nelson's questionable conduct would be highly 

likely to distract the jury from focusing on the claim of sexual 

harassment and would cause the factfinder to be inclined to find 

a Title VII violation out of a desire to punish the supervisor 

for his unethical conduct. Appellee's br. at 16-17. 

 We conclude, however, that the probative value of this 

evidence is not "substantially outweighed by the danger of unfair 

prejudice." We already have discussed the relevance of the 

evidence to an understanding of why Spain's co-workers continued 

to see her privately with Nelson even after she and Nelson knew 

of the rumors and to an understanding of why Nelson did not take 

steps to stop the rumors. Indeed, Nelson admits that loans were 

made on the dates for which Spain has canceled checks, although 

he denies that he solicited them and offers an alternative 
37 

explanation. Appellee's app. at 4-7. Thus, the dispute concerns 

not whether they were loans, but rather the motivation for them 

and their frequency. 

 The EEOC contends, in essence, that the evidence would 

make the jury more likely to turn a breach of ethics into a 

finding of sexual harassment. "Yet, '[v]igorous crossexamination, presentation of contrary evidence, and careful 

instruction on the burden of proof are the traditional and 

appropriate means of attacking shaky but admissible evidence." 

Petruzzi's IGA Supermarkets, 998 F.2d at 1241 (quoting Daubert v. 

Merrell Dow Pharmaceuticals, Inc., 113 S.Ct. 2786, 2798 (1993)). 

Given our cautious approach to Rule 403 exclusions at the 

pretrial stage, see Petruzzi's IGA Supermarkets, 998 F.2d at 

1240; In Re Paoli R.R. Yard PCB Litig., 916 F.2d 829, 859-60 (3d 

Cir. 1990), cert. denied, 499 U.S. 961, 111 S.Ct. 1584 (1991), we 

hold that the district court abused its discretion in excluding 

the evidence under Rule 403. 

C. Dismissal For Failure to Prosecute

 Spain argues that the district court improperly 

dismissed the balance of her case for failure to prosecute after 

she determined not to go forward with her racial discrimination 

and retaliation claims following the dismissal of the sexual 
38 

discrimination and harassment claims. We hold that the district 

court did not abuse its discretion in this order.0

 As we have noted already, after the district court 

issued its ruling with respect to the sexual discrimination and 

harassment claims and excluded the evidence of the loans, Spain 

asked the court whether taking a voluntary non-suit on the 

remaining claims would eliminate her right to appeal on them. The 

court quite clearly explained that this would be the result with 

respect to the issues on which the court determined that Spain 

could proceed. App. at 45-46. Moreover, the court and Spain 

discussed the fact that the evidence with respect to the sexual 

discrimination claim had no bearing on the remaining claims of 

racial discrimination and retaliation, and Spain agreed that it 

did not. Id. at 46-47. When the case resumed after the weekend, 

Spain again raised the possibility of not going forward and the 

court again warned her of the consequences if she did not. Id. 

at 51. As a result, when Spain decided not to proceed, the 

district court dismissed the remaining claims for failure to 

prosecute. Id. at 52. 

 Spain argues that "because of the court's clear error 

in denying the evidence as to the sexual harassment, justice 

requires reinstatement of the entire Complaint." Appellant's br. 

at 25. She contends that her remaining claims of failure to 

promote based on race and retaliation are connected closely to 

 

0We review a dismissal of an action for failure to prosecute 

under an abuse of discretion standard. Dunbar v. Triangle Lumber 

and Supply Co., 816 F.2d 126, 128 (3d Cir. 1987). 
39 

the evidence she was not permitted to introduce. Id. Yet as the 

EEOC points out, and as we have reviewed above, Spain agreed 

before the district court that the evidence concerning the loans 

and the failure to correct the rumors was irrelevant to whether 

she was not promoted on account of her race or whether there was 

retaliation against her for filing the previous or present 

complaint. App. at 46-47. 

 While Spain now takes a position contrary to that which 

she took before the district court, she provides no detailed 

argument for why the excluded evidence relates to the racial 

discrimination and retaliation claims. Rather, Spain simply 

states that proof of her other claims depends upon the jury 

having knowledge of all of the events. Appellant's br. at 25. 

However, the excluded evidence regarding the loans would not tend 

to prove the remaining claims. Furthermore, even if the EEOC had 

intended to introduce Spain's poor relationship with her 

colleagues allegedly resulting from the loans and rumors as part 

of its defense to her claims, the EEOC correctly notes that such 

alleged sex-based evidence would be irrelevant to her racial 

discrimination and retaliation claims. In any event, even if the 

excluded evidence was important to the racial discrimination and 

retaliation claims, Spain was obliged to proceed with the trial 

notwithstanding the exclusion of the evidence. A party 

disappointed with a court's ruling may not refuse to proceed and 

then expect to obtain relief on appeal from an order of dismissal 

or default. See Marshall v. Sielaff, 492 F.2d 917 (3d Cir. 

1974). 
40 

 We recognize that dismissal is a harsh remedy to which 

a court should resort only in extreme cases, as "the policy of 

the law is to favor the hearing of a litigant's claim on the 

merits." Id. at 918 (citation omitted). Nevertheless the 

courts may dismiss cases with prejudice for want of prosecution 

under Fed. R. Civ. P. 41(b) or under their inherent power so that 

they can "manage their own affairs so as to achieve the orderly 

and expeditious disposition of cases." Id. (quoting Link v. 

Wabash R.R. Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 1389 

(1962)); see also Eash v. Riggins Trucking Inc., 757 F.2d 557, 

561, 564 (3d Cir. 1985) (in banc). Ordinarily, when a court is 

determining sua sponte or upon motion of a defendant whether to 

dismiss because of a plaintiff's failure to prosecute, and the 

plaintiff is opposing the motion, the court must consider several 

factors in reaching its decision: (1) the extent of the party's 

personal responsibility; (2) the prejudice to the opponent; (3) 

any history of dilatoriness; (4) whether the conduct of the party 

or the attorney was willful or in bad faith; (5) whether 

effective alternative sanctions are available; and (6) the 

meritoriousness of the claim or the defense. See Poulis v. State 

Farm Fire and Casualty Co., 747 F.2d 863, 868 (3d Cir. 1984). 

 However, in contrast to situations in which a court 

must balance factors because the plaintiff does not desire to 

abandon her case but has encountered problems in going forward, 

Spain willfully refused to prosecute her remaining claims after 

receiving an adverse ruling by the district court on the sexual 

discrimination and harassment claims. In these circumstances, we 
41 

cannot fault the district court for dismissing the suit. See

Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990). Indeed, 

it is difficult to conceive of what other course the court could 

have followed. Continuing the matter would not have helped 

Spain, as she was not confronted with a situation in which she 

faced an obstacle to prosecution of her case that could have been 

overcome at a later date. Furthermore, the court's sua sponte

action was appropriate; no motion from the EEOC was required.0

Accordingly, we will affirm the order of the court dismissing 

Spain's racial discrimination and retaliation claims. 

D. The Jury Costs

 Finally, Spain appeals from the district court's 

assessment of jury costs of $375 against her following the 

court's dismissal of her case. We apply an abuse of discretion 

standard of review to a court's imposition of sanctions under its 

 

0Link, 370 U.S. at 630-31; 82 S.Ct. at 1388-89. Spain's reliance 

on Coursen v. A.H. Robbins Co., 764 F.2d 1329 (9th Cir.), as 

amended, 773 F.2d 1049 (9th Cir. 1985), is misplaced. In Coursen, 

which involved a claim of injury from a birth control device, the 

district court denied the plaintiffs' motion to preclude the 

defendant from introducing evidence regarding their sexual 

history. 764 F.2d at 1341. Plaintiffs' actions were dismissed 

with prejudice when they then refused to proceed to trial. Id. 

at 1342. The Court of Appeals for the Ninth Circuit vacated the 

dismissal and remanded the case to the district court "with 

instructions that plaintiffs be directed to proceed to trial or 

have their cases dismissed." Id. at 1343. Coursen is quite 

unlike the present case, however, in that the court of appeals 

remanded the case to the district court to give the plaintiffs 

the option to continue with the litigation due to the confusion 

surrounding the entry of the dismissal order and the resulting 

availability of appellate review. Here, there is no doubt that 

Spain had a complete understanding of the implications of 

deciding not to proceed prior to making that decision. 
42 

inherent power. Chambers v. Nasco, Inc., 501 U.S. 32, __, 111 

S.Ct. 2123, 2138 (1991) (citing Link, 370 U.S. at 633, 82 S.Ct. 

at 1390). 

 While federal courts possess the inherent power to 

punish conduct which abuses the judicial process, they must 

exercise the power "with restraint and discretion." Chambers, 

501 U.S. at , 111 S.Ct. at 2132 (citing Roadway Express, Inc. 

v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463 (1980)). "A 

primary aspect of that discretion is the ability to fashion an 

appropriate sanction" for abusive conduct. Chambers, 501 U.S. at 

, 111 S.Ct. at 2132-33. Because we believe that there are no 

grounds for finding that Spain abused the judicial process with 

respect to when she notified the court she would not proceed with 

the trial, we hold that the district court abused its discretion 

in assessing the jury costs against her. 

 As we describe above, the district court precluded 

Spain from proceeding with her sexual discrimination and 

harassment and discrimination claims and issued its evidentiary 

exclusion decision on Thursday, July 15, 1993, the day that the 

jury was picked. The testimonial portion of the trial was to 

begin on Monday, July 19, 1993. However, on that morning, Spain 

informed the court she would not proceed with her remaining 

claims. The district court then dismissed her case with 

prejudice and assessed the jury costs against her. 

 Perhaps Spain could have reached her decision not to 

prosecute her remaining claims and informed the court of her 

decision on the day that the court issued its first rulings and 
43 

the jury was picked, or even on the next day, Friday, July 16, 

1993. Yet, even though the trial was set to begin only the 

following Monday, and the court was aware that Spain was 

contemplating abandoning her remaining claims, it set no time 

limit for her decision. See Boettcher v. Hartford Ins. Group, 

927 F.2d 23 (1st Cir. 1991) (assessment of jury costs by district 

court reversed when case settled on day of trial). Thus, we 

find no basis in the record to support a conclusion that Spain 

and her attorney acted in bad faith or otherwise abused the 

judicial process in taking the weekend before reaching a final 

decision not to proceed.0 Moreover, as the district court 

imposed the sanction without affording Spain prior notice and an 

opportunity to be heard, its action raises due process concerns. 

See Eash, 757 F.2d at 570-71. While we could, of course, cure 

the due process problem by remanding the matter for 

reconsideration of the imposition of the sanction, we think that 

in view of the modest $375 assessment, it would be prudent to 

consider the matter on the record as it exists. Overall, we are 

convinced that the district court abused its discretion in 

assessing the costs of the jury against Spain. 

III. 

CONCLUSION 

 

0There is no support in the record to conclude that Spain reached 

her decision before the weekend or even before Monday. In fact, 

Spain's attorney told the court that he and Spain spent the 

weekend talking about what to do. 
44 

 Based on the aforesaid analysis, we will reverse the 

orders of the district court entering summary judgment against 

Spain on the portions of count I of her complaint alleging the 

sexual discrimination and harassment claims, excluding the 

evidence she offered to prove those claims, and assessing the 

costs of the jury against her. We will affirm the court's 

dismissal of the remainder of Spain's case for failure to 

prosecute. We will remand the case to the district court for 

further proceedings on the reinstated claims. The parties will 

bear their own costs on this appeal.