United States Court of Appeals

For the First Circuit

No. 02-2590

K. ANDREW HULL; PATRICIA RIVERA-HULL; and

RIVERA-HULL CONJUGAL PARTNERSHIP,

Plaintiffs, Appellants,

v.

MUNICIPALITY OF SAN JUAN; ACE INSURANCE COMPANY; 

and TARGET ENGINEERING, S.E.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Gilberto Gierbolini-Ortiz, Senior U.S. District Judge]

Before

 Boudin, Chief Judge,

Lynch and Howard, Circuit Judges.

Andrew R. Schulman with whom Getman, Stacey, Tamposi,

Schulthess & Steere, P.A. was on brief for appellants.

Luis G. Martínez-Lloréns with whom Colón, Colón & Martínez,

P.S.C. was on brief for appellees Target Engineering, S.E., and Ace

Insurance Company.

Harold D. Vicente-González for appellee Municipality of San

Juan.

January 20, 2004
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BOUDIN, Chief Judge. This appeal arises from the

district court's dismissal of a personal injury lawsuit. The basis

for the dismissal was the district court's finding of fraud in the

conduct of the litigation. Because the finding of fraud as well as

the remedy adopted by the district court are contested on appeal,

we begin with a bare-bones summary of what happened, reserving some

of the details until discussion of the issues raised on appeal.

On November 8, 1999, Andrew K. Hull of California was

visiting San Juan, Puerto Rico, on a business trip. While walking

through a city sidewalk site that was under repair, Andrew

allegedly caught his foot on a raised piece of wire mesh and fell

heavily, hitting his face and left arm. He proceeded to dinner

but, still feeling pain in his left elbow, visited a local hospital

thereafter where x-rays revealed a fracture of the elbow and lesser

injury to the nose. Andrew attended business meetings over the

next three days and then returned to California.

After his return, Andrew allegedly experienced a range of

symptoms, consulted a number of doctors, and underwent several

surgeries. One was to repair a nasal obstruction and deviated

septum; others were spinal operations to relieve spinal cord

compression and repair an extruded disc and related conditions.

Carpal-Tunnel syndrome was diagnosed in both wrists, and surgery as

to both to relieve this condition ensued. 
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Andrew also complained of mental and emotional problems,

including poor memory, sleeplessness, depression, fatigue,

headaches and sexual dysfunction. After testing, a neurologist

found that Andrew suffered from post-concussion syndrome. Although

Andrew had not lost consciousness at the time of the fall, the

neurologist opined that the syndrome could nevertheless have

resulted from the fall and the doctor prescribed treatments.

In due course, Andrew and Patricia, his wife, filed this

diversity action in the federal district court in Puerto Rico,

against the municipality, the contractor working on the sidewalk,

and the contractor's insurer. The complaint, charging negligence,

attributed to the accident the physical and mental impairments

already described as well as a few other symptoms (e.g., rotator

cuff injury, aphasia) and loss of income. On his own behalf,

Andrew sought $2 million in damages.

Patricia claimed separately for loss of income (due to

the need to care for Andrew) and mental anguish. Her claim was for

$300,000. An additional $561,000 was sought by the "conjugal

partnership," a community property concept recognized under the law

of Puerto Rico, e.g., Fernandez-Cerra v. Commercial Ins. Co. of

Newark, 344 F. Supp. 314, 316 (D.P.R. 1972); but no separate

argument has been offered on appeal as to its claim, and we

therefore disregard it.
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Extensive discovery was conducted by the defendants over

many months. Andrew did not reveal, in response to questions

fairly seeking this information, facts about his prior injuries and

treatment--until the defense uncovered this information on its own.

These included a rear-end automobile collision in 1982 in which

Andrew suffered back injuries; a neck injury in 1995 leading to a

diagnosis of nerve injury (neuropathy); and a 1996 slip and fall

incident in an Orlando, Florida, hotel, resulting among other

things in a diagnosis of Carpal-Tunnel syndrome.

The information was patently material. Various symptoms

and conditions associated with Andrew's earlier injuries overlapped

with those that he claimed had resulted from the more recent fall

in Puerto Rico. This is obvious with respect to the Carpal-Tunnel

syndrome but, in addition, the rear-end collision in 1982 was a

possible source of some of the spinal damage, and nerve injury and

sleep problems had been claimed as a result of one or both of the

other two earlier accidents.

When taxed about these omissions, Andrew's position was

that in the heat of his deposition he had not remembered any of

these incidents or claims. As to their absence from interrogatory

answers, Andrew said that defendants had not asked the right

questions. The defendants moved for dismissal of the case on the

ground that the litigation was being perpetrated through fraud.
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In October 2002, the district court granted the motion

and dismissed the case in a 23-page opinion and order, analyzing in

detail Andrew's answers to interrogatories, deposition questions

and in affidavit statements. The district judge concluded "by

clear and convincing evidence" that Andrew had committed fraud,

said that the proper remedy was a matter of discretion, and

concluded that "weighing all of the circumstances in this case,"

dismissal was the proper sanction "commensurate with Mr. Hull's

conduct" and to deter future misconduct.

On this appeal, the plaintiffs make three different

claims of error: that the fraud finding was not supported by clear

and convincing evidence; that dismissal was not an appropriate

sanction; and that--independent of these arguments--dismissal of

Patricia's claims for her own mental anguish and economic expense

was not supported by any independent finding of fraud on her part.

We reject the first two claims but conclude that a remand is

required to determine whether Patricia's claims should be

dismissed.

The first question is whether Andrew engaged in a pattern

of deliberate deception in the course of discovery. It is common

ground that clear and convincing evidence is required, Aoude v.

Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989). On the other

hand, the district court's findings as to whether Andrew

dishonestly withheld information are reviewed only for "clear
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error." Cavallaro v. United States, 284 F.3d 236, 245 (1st Cir.

2002). (The phrase "abuse of discretion" is sometimes used, e.g.,

Aoude, 892 F.2d at 1117-18, but the phrasing makes little

difference.)

It is clear that Andrew failed to disclose the prior

injuries when specifically asked for such information during his

deposition and that the omissions were material. The harder issue,

usually the sticking point in perjury and fraud cases, is Andrew's

state of mind which–-absent a confession–-must be inferred from

circumstances. Here, several circumstances combine to reinforce

the district court's finding of scienter.

First, the information was squarely sought. In his

deposition, Andrew was asked directly about his prior medical

history and failed to reveal any of the three prior incidents. All

three of the prior incidents were serious and sufficiently related

to the current claim of injuries, so that it is unlikely that even

one would have been forgotten. That all three would have been

forgotten through happenstance or distraction strains belief. And,

given Andrew's obvious self-interest to enlarge his potential

damages, the inference of deliberate deceit is hard to escape.

Second, there is a broader pattern of deceit. For

example, when the Orlando incident was unearthed by the defense,

Andrew gave answers as to his medical treatment omitting the

diagnosis of Carpal-Tunnel syndrome; and he withheld such
1The defense relies upon Andrew's negative answers to two

interrogatory questions dealing with medical history; but one

(strangely) arguably excluded "personal injury" and the other

related to post-claim accident injuries or illnesses. Yet in

response to the latter, Andrew incautiously added that "all" his

present injuries were due to the San Juan accident.

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information from his own doctor in this case, reducing the

likelihood that it would be discovered. Andrew also appears to

have lied when he answered an interrogatory by saying that all of

his present claimed injuries were the result of the fall in San

Juan, although this might be a closer question.1

Third, Andrew was not a neophyte. He was the president

of a firm named "Settlement Associates" which sells insurance and

structured settlements to law firms and other companies. His wife

was a claims manager for State Farm Insurance Company. Further,

his prior injuries had resulted in a range of doctor and hospital

visits over a substantial period, and he could not have avoided

learning a good deal about the causes and nature of his prior

injuries.

We find no clear error in the district court's finding

that Andrew's fraud was proved by clear and convincing evidence.

It is easy enough to forget details of one's past; and possibly

Andrew did suffer some impairment in the fall affecting his memory.

But the information withheld was too patent and too convenient, and

the pattern of deceit and grudging concessions too marked, to

excuse the misstatements and omissions as merely careless.
2The "fraud on the court" phrase is also sometimes used in

drawing distinctions in the quite different context of reopening

final judgments--especially in distinguishing between fraud that

must be presented within one year of the judgment and fraud that

can be invoked later under the savings clause of Fed. R. Civ. P.

60(b). Compare 11 Wright & Miller, Federal Practice and Procedure,

§ 2860 (2d ed. 1995) (discussing Fed. R. Civ. P. 60(b)(3) ("fraud,

. . . misrepresentation or other misconduct") with id. § 2870

(discussing "fraud on the court" under the savings clause).

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The next question is whether a district court has power

to dismiss a complaint because the plaintiff lies substantially and

materially in the course of discovery. In our own circuit, fraud--

at least of a kind sometimes called "fraud on the court"2--is a

potential basis for dismissing a claim on the facts where 

a party has sentiently set in motion some

unconscionable scheme calculated to interfere

with the judicial system's ability impartially

to adjudicate a matter by improperly

influencing the trier or unfairly hampering

the presentation of the opposing party's claim

or defense.

Aoude, 892 F.2d at 1118-19. There is similar case law in other

circuits. Shepherd v. Am. Broad. Cos., 62 F.3d 1469, 1476-78 (D.C.

Cir. 1995); Wyle v. R.J. Reynolds Indus., 709 F.2d 585, 589 (9th

Cir. 1983). 

Although not so terrible as attempted bribery of a judge,

Andrew's conduct fits within the Aoude category. It was

deliberate, broad enough to constitute a scheme, unconscionable,

and calculated to enhance damages, thus unfairly hampering the

defense. The unfairness was two-fold: the scope of the injuries
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attributable to Andrew's fall in Puerto Rico was likely to be the

main issue in the case, and, in the nature of things, past medical

information is peculiarly within the privileged control of the

plaintiff. The same conduct might not necessarily be enough to

reopen a final judgment after one year, Geo. P. Reintjes Co., Inc.

v. Riley Stoker Corp., 71 F.3d 44, 47-49 (1st Cir. 1995), but

finality of long-standing judgments is a different matter than

dismissal of a current complaint.

That a remedy is in principle available does not mean

that its use is reasonable in all circumstances. Here, plaintiffs

make both a substantive and a procedural objection. The first is

that it was unreasonable to use so extreme a remedy as dismissal,

especially where the defense ultimately gained the information and

lesser remedies were available. The second is that the district

court erred by not specifically considering the pros and cons of

alternative lesser remedies. Both are uphill arguments, given the

trial judge's special competence in judging the extent of the

misbehavior and its effects. Young v. Gordon, 330 F.3d 76, 81 (1st

Cir. 2003).

Starting with substance, the sanction was obviously

severe and lesser sanctions were available. For example, the court

could have debarred Andrew from presenting certain claims of

injury, underscored the jury's ability to draw negative inferences

from his deceits, or both. And while the deceits imposed extra
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expenses on the defense, an award of attorney's fees and costs

could have been treated as sufficiently offsetting this damage.

On the other hand, dismissing only the affected claims of

injury would have wiped out most of the main damage claims anyway,

while inference drawing would be available without a sanction and

could be pretty mild in effect if Andrew were nimble on crossexamination. His deceits were substantial, deliberate, and went to

the heart of the case. And since not everyone will be caught, the

penalty needs to be severe enough to deter. In the choice of

remedy, there was no abuse of discretion--the proper test as to

remedy. Aoude, 892 F.2d at 1117; Fernandez v. Leonard, 963 F.2d

459, 462 (1st Cir. 1992).

As for procedure, plaintiffs draw our attention to cases

in other circuits saying that the trial judge must expressly

consider lesser alternatives before adopting the extreme remedy of

dismissal; and they urge us to adopt such a rule. Shepherd, 62

F.3d at 1479; Halaco Eng'g Co. v. Costle, 843 F.2d 376, 381-82 (9th

Cir. 1988). We agree that lesser remedies ought to be considered,

where reasonably available, whenever a judge imposes the harshest

sanction. But in our view, how much consideration, and in what

form depend upon the circumstances.

In this instance, the district judge did not grasp

thoughtlessly for dismissal. The choice of remedy followed a

careful study over many pages of the precise deceits and Andrew's
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culpability; the court recognized that it had discretion as to

remedy; and it said that dismissal was "commensurate" with Andrew's

conduct and the need to deter "this type of behavior from

recurring"–-behavior that the court said went well beyond injury to

an opposing litigant and threatened "the integrity of this court."

Requiring a district judge to list and address

alternatives may sometimes make sense, for example where the judge

has ignored a seemingly superior remedy. Occasionally it may be

a polite way to say that the remedy chosen is disproportionate to

the offense–-also not the case here. How much explanation is

required of the remedy chosen, and how much discounting of

alternatives may be warranted, depend on the facts, and to us a

mindlessly mechanical rule makes no sense. Here, the district

court did enough to assure reasoned consideration of the remedy. 

Patricia's claims are a different matter. The subject of

claims by one who is secondarily injured is complicated, but Puerto

Rico law allows one spouse to recover in some cases at least for

emotional distress suffered through the injury of the other spouse,

Santini Rivera v. Serv Air, Inc., 137 P.R. Dec. 1, 10 (1994). Nor

do defendants suggest that such a claim is barred because the

directly injured spouse is debarred from recovery by his own

misconduct in court.

Instead, defendants argue that Patricia joined actively

in the fraud. They say that she joined in the complaint asserting
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that her own damages were due in part to Andrew's Carpal-Tunnel

syndrome and back injuries allegedly due to the San Juan accident;

that she joined by cross reference her husband's false

interrogatory answer ("All the injuries and treatment I had were as

a result of the 11-9-99 incident which is the subject of the

complaint"); and that when the plaintiffs were ordered by the court

to disclose all of Andrew's medical history, she joined in the

response which failed to disclose the full history of prior

accidents and treatment.

Defendants then argue that Patricia must have known of

the three prior incidents of greatest importance (1982, 1995, 1996)

and, given the filings made on her behalf, is equally responsible

for the deceits. They also note that Patricia worked for many

years as a claims manager at State Farm Insurance Company and dealt

with personal injury claims, so had to understand the importance of

the omissions. Quite possibly the district court did believe that

she was complicit in the fraud, and the evidence may well support

such conclusion.

Still, nowhere does the district court's decision

separately muster evidence of Patricia's culpability or make an

express finding that she personally engaged in or knowingly abetted

the fraud. The single strongest evidence of fraud against Andrew

is his deposition answers and we know nothing about what, if

anything, Patricia said in any deposition of her own. The proper
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solution is a remand to allow the district judge to make his own

determination and supporting findings as to Patricia's

responsibility for the fraud--assuming that she thinks it advisable

to proceed with her claims which are now much weakened by Andrew's

lack of credibility.

The plaintiffs have asked that any remand that may be

necessary should be conducted before a different judge. The ground

given is that the district court's findings of fraud are so couched

as to "suggest[] some antipathy to [the] litigant"; plaintiffs'

counsel says that while the "judge [who presided in the district

court] would, no doubt, remain an impartial and professional jurist

on remand," a new judge approaching the case "on a fresh page"

would be better. The defendants oppose the request.

The statute providing for remands confers on the circuit

courts authority to make such orders "as may be just under the

circumstances," 28 U.S.C. § 2106 (2000); and remand orders by the

circuit court to a different judge have been held permissible by

the Supreme Court, Liteky v. United States, 510 U.S. 540, 554

(1994). But views formed by a judge in considering a case are

normally not a sound basis either for required recusal or for

directing that a different judge be assigned on remand. Liteky,

510 U.S. at 555-56. In this instance, nothing in the district

judge's decision warrants the remedy sought by plaintiffs.
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The judgment of dismissal is affirmed as to the claims of

Andrew Hull and the conjugal partnership. As to the individual

claims of Patricia Hull, the judgment is vacated and the matter

remanded for further proceedings consistent with this decision.

It is so ordered.