Opinion ID: 515444
Heading Depth: 1
Heading Rank: 3

Heading: the undisclosed evidence and the ensuing appeal

Text: 52 We now reach the second of the plaintiffs' two appeals, No. 88-1070. During the pendency of the original appeal, certain previously undisclosed evidence surfaced. Plaintiffs learned serendipitously that Riley had commissioned Yankee Environmental Engineering and Research Services, Inc. (Yankee) to make a hydrogeologic investigation of the tannery property in 1983. Yankee was to determine (1) the direction of groundwater flow at the tannery; (2) whether groundwater contamination was present there; and (3) whether the tannery contributed to contamination found at Rileyco's two production wells. The resulting report (Report), 8 based on field research conducted during mid-1983, was never produced in pretrial discovery. 53 Spurred by their newfound knowledge, plaintiffs moved to set aside the judgment. The district court heard argument on three separate days and denied the motion. Anderson v. Beatrice Foods Co., No. 82-1672-S, slip op. (D.Mass. Jan. 22, 1988) (Anderson V ). The court made four salient findings: (1) the Report was relevant and within the ambit of plaintiffs' pretrial discovery request; (2) defense counsel had defaulted in their obligation to furnish the Report during discovery; (3) the nondisclosure resulted from a lapse of judgment rather than fraud or deliberate misrepresentation, id. at 20; and (4) plaintiffs had not been prevented from fully and fairly presenting their case. 54
55 We start with basics. Plaintiffs' motion to upset the judgment was brought under Fed.R.Civ.P. 60(b) and was therefore addressed to the district court's sound discretion. When Rule 60(b) is in play, we ordinarily defer to the trial judge's more intimate knowledge of the case. For us to act, there must be an abuse of discretion. United States v. Ayer, 857 F.2d 881, 886 (1st Cir.1988); Rivera v. M/T Fossarina, 840 F.2d 152, 156 (1st Cir.1988); Pagan v. American Airlines, Inc., 534 F.2d 990, 993 (1st Cir.1976). Under this standard, we reverse only if it plainly appears that the court below committed a meaningful error in judgment. See, e.g., In re San Juan Dupont Plaza Hotel Fire Litigation, 859 F.2d 1007, 1019 (1st Cir.1988) (delineating standard). In relevant part, Rule 60 states: 56 On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order, or proceeding for the following reasons: ... (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party.... 57 Fed.R.Civ.P. 60(b)(3). 9 Failure to disclose or produce materials requested in discovery can constitute misconduct within the purview of this subsection. See Rozier v. Ford Motor Co., 573 F.2d 1332, 1339 (5th Cir.1978). Misconduct does not demand proof of nefarious intent or purpose as a prerequisite to redress. For the term to have meaning in the Rule 60(b)(3) context, it must differ from both fraud and misrepresentation. Definition of this difference requires us to take an expansive view of misconduct. The term can cover even accidental omissions--elsewise it would be pleonastic, because fraud and misrepresentation would likely subsume it. Cf. United States v. One Douglas A-26B Aircraft, 662 F.2d 1372, 1374-75 n. 6 (11th Cir.1981) (to avoid redundancy, misrepresentation in Rule 60(b)(3) must encompass more than false statements made with intent to deceive). We think such a construction not overly harsh; it takes scant imagination to conjure up discovery responses which, though made in good faith, are so ineptly researched or lackadaisical that they deny the opposing party a fair trial. Accidents--at least avoidable ones--should not be immune from the reach of the rule. Thus, we find ourselves in agreement with the Fifth Circuit that, depending upon the circumstances, relief on the ground of misconduct may be justified whether there was evil, innocent or careless, purpose. Bros. Inc. v. W.E. Grace Manufacturing Co., 351 F.2d 208, 211 (5th Cir.1965), cert. denied, 383 U.S. 936, 86 S.Ct. 1065, 15 L.Ed.2d 852 (1966). 58 Once we leave the starting gate, the borders of the course blur. The concept of misconduct seems mutable: not every instance of nondisclosure merits the same judicial response. The text of Rule 60(b)(3) gives precious little guidance as to how a court should ascertain the existence of misconduct, weigh its effect, and ultimately determine when to set aside a verdict. Our sister circuits have set some guideposts along the track: the moving party must demonstrate misconduct--like fraud or misrepresentation--by clear and convincing evidence, and must then show that the misconduct foreclosed full and fair preparation or presentation of its case. See, e.g., In re M/V Peacock, 809 F.2d 1403, 1404-05 (9th Cir.1987) (Kennedy, J.); Harre v. A.H. Robins Co., 750 F.2d 1501, 1503 (11th Cir.1985); Stridiron v. Stridiron, 698 F.2d 204, 207 (3d Cir.1983); Square Construction Co. v. Washington Metropolitan Area Transit Authority, 657 F.2d 68, 71 (4th Cir.1981); Rozier, 573 F.2d at 1339. Another well-sculpted marker points out that misconduct need not be result-altering in order to merit Rule 60(b)(3) redress. See Wilson v. Thompson, 638 F.2d 801, 804 (5th Cir.1981); Rozier, 573 F.2d at 1339; Seaboldt v. Pennsylvania Railroad Company, 290 F.2d 296, 299 (3d Cir.1961); see also Bunch v. United States, 680 F.2d 1271, 1283 (9th Cir.1982) (when information withheld in discovery, aggrieved party need not establish that outcome would have been different). 10 59 We are in general concert with these authorities, but find it necessary to place our own gloss upon the subject. Verdicts ought not lightly to be disturbed, so it makes very good sense to require complainants to demonstrate convincingly that they have been victimized by an adversary's misconduct. And as with other defects in the course of litigation, the error, to warrant relief, must have been harmful--it must have affect[ed] the substantial rights of the movant. Fed.R.Civ.P. 61. 11 Moreover, since parties ought not to benefit from their own mis-, mal-, or nonfeasance, uncertainties attending the application of hindsight in this area should redound to the movant's benefit. See generally Minneapolis, St. Paul, & Sault Ste. Marie Ry. Co. v. Moquin, 283 U.S. 520, 521-22, 51 S.Ct. 501, 502, 75 L.Ed. 1243 (1931) (litigant who engages in misconduct will not be permitted the benefit of calculation, which can be little better than speculation, as to the extent of the wrong inflicted upon his opponent). 60 Our chief refinement of the conventional full and fair preparation and presentation standard is to delineate more exactly how the value of the suppressed evidence should be weighed. By definition, lack of access to any discoverable material forecloses full preparation for trial since the material in question will be missing. Yet concealed evidence may turn out to be cumulative, insignificant, or of marginal relevance. If that be the case, retrial would needlessly squander judicial resources. The solution, we believe, is that before retrial is mandated under Rule 60(b)(3) in consequence of discovery misconduct, the challenged behavior must substantially have interfered with the aggrieved party's ability fully and fairly to prepare for and proceed at trial. Accord Carson v. Polley, 689 F.2d 562, 586 (5th Cir.1982); cf. Wilson v. Volkswagen of America, Inc., 561 F.2d 494, 504 (4th Cir.1977) (imposition of default judgment as sanction under Fed.R.Civ.P. 37 should be confined to flagrant cases where failure to produce materially affect[s] the substantial rights of the adverse party and is prejudicial to the presentation of his case), cert. denied, 434 U.S. 1020, 98 S.Ct. 744, 54 L.Ed.2d 768 (1978); Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107, 132 (S.D.Fla.1987) (similar). 61 Under a substantial interference rule as we envision it, a party still need not prove that the concealed material would likely have turned the tide at trial. Substantial impairment may exist, for example, if a party shows that the concealment precluded inquiry into a plausible theory of liability, denied it access to evidence that could well have been probative on an important issue, or closed off a potentially fruitful avenue of direct or cross examination. See, e.g., Seaboldt v. Pennsylvania Railroad Company, 290 F.2d at 299 (new trial justified where sequestered information would have made a difference in ... counsel's approach to the testimony of several witnesses). Substantial interference may also be established by presumption or inference. That possibility, however, brings to the fore the utility of some further embellishments. 62 Although we agree that the existence of misconduct in the Rule 60(b)(3) sense does not depend upon a demonstration of nefarious intent or purpose, see supra, the actor's intent is not immaterial. Nondisclosure comes in different shapes and sizes: it may be accidental or inadvertent, or considerably more blameworthy (though still short of fraud or outright misrepresentation). In the case of intentional misconduct, as where concealment was knowing and purposeful, it seems fair to presume that the suppressed evidence would have damaged the nondisclosing party. See Nation-Wide Check Corp. v. Forest Hills Distributors, Inc. 692 F.2d 214, 217-19 (1st Cir.1982) (deliberate nonproduction or destruction of relevant document is evidence that the party which has prevented production did so out of the well-founded fear that the contents would harm him); accord Marquis Theatre Corp., 846 F.2d at 89-90; Knightsbridge Marketing v. Promociones y Proyectos, 728 F.2d 572, 575 (1st Cir.1984); Commercial Ins. Co. v. Gonzalez, 512 F.2d 1307, 1314 (1st Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 65, 46 L.Ed.2d 57 (1975). It seems equally logical that where discovery material is deliberately suppressed, its absence can be presumed to have inhibited the unearthing of further admissible evidence adverse to the withholder, that is, to have substantially interfered with the aggrieved party's trial preparation. See Alexander v. National Farmers Organization, 687 F.2d 1173, 1205-06 (8th Cir.1982) (where documents deliberately destroyed, court should draw factual inferences adverse to party responsible); Telectron, Inc., 116 F.R.D. at 134 (where destruction motivated by flagrant bad faith, conduct warrant[ed] the inference that the destroyed documents would have been harmful to [destroyer]; resultant unavailability must therefore be seen as prejudicial to [innocent party's] interest in pursuing the full and fair litigation of its claims); National Association of Radiation Survivors v. Turnage, 115 F.R.D. 543, 557 (N.D.Cal.1987) (Where one party wrongfully denies another the evidence necessary to establish a fact in dispute, the court must draw the strongest allowable inferences in favor of the aggrieved party.). 63 The presumption, if it arises, should be a rebuttable one. It may be refuted by clear and convincing evidence demonstrating that the withheld material was in fact inconsequential. We are keenly aware of the stringency of this standard, yet we believe it to be an appropriate antidote for deliberate misconduct. A party who is guilty of, say, intentionally shredding documents in order to stymie the opposition, should not easily be able to excuse the misconduct by claiming that the vanished documents were of minimal import. Without the imposition of a heavy burden such as the clear and convincing standard, spoliators would almost certainly benefit from having destroyed the documents, since the opposing party could probably muster little evidence concerning the value of papers it never saw. As between guilty and innocent parties, the difficulties created by the absence of evidence should fall squarely upon the former. 64 Where the documents have been intentionally withheld but not destroyed, the threshold becomes easier to climb. In such situations, the documents themselves may constitute clear and convincing proof that no prejudice inured. Cf. Eaton Corp. v. Appliance Valves Corp., 790 F.2d 874, 878 (Fed.Cir.1986) (where destroyed documents had earlier been produced in discovery and plaintiff unable to show that they bore significantly on liability issue, destruction was harmless). Of course, the actual documents are not the only proof of harmlessness which could be clear and convincing. Even when documents have been destroyed, it is possible to present evidence of their general nature and contents, and to decide whether they would likely have been irrelevant or cumulative. See, e.g., Allen Pen Co. v. Springfield Photo Mount, 653 F.2d 17, 24 (1st Cir.1981). 65 Conversely, where the nondisclosure was accidental--as opposed to knowing or purposeful--there seems less reason for an adverse presumption. See Coates v. Johnson & Johnson, 756 F.2d 524, 551 (7th Cir.1985) (where documents were destroyed routinely, not in bad faith, loss would not support inference that defendant's agents were conscious of weak case); Soria v. Ozinga Bros., Inc., 704 F.2d 990, 996 n. 7 (7th Cir.1983) (where incomplete recording due to the admittedly informal nature of the company's policy rather than willful destruction of existing records, it would be unfair to create an evidentiary presumption against the company); Vick v. Texas Employment Comm'n, 514 F.2d 734, 737 (5th Cir.1975) (mere negligence leading to destruction of records does not sustain inference that party believed its case lacked merit); Ina Aviation Corp. v. United States, 468 F.Supp. 695, 700 (E.D.N.Y.) (no illation that missing evidence unfavorable where the destruction of evidence is unintentional or where failure to produce evidence is satisfactorily explained), aff'd, 610 F.2d 806 (2d Cir.1979); cf. United States v. Mora, 821 F.2d 860, 869 (1st Cir.1987) (in assessing explanation for delay in presenting tapes for sealing, court should consider whether delay was caused deliberately or inadvertently). 66 While parties who are substantially prejudiced by their opponents' misconduct may make a case for a new trial even absent malicious intent, the burden of showing substantial interference in that circumstance should rightfully rest with the movant. Yet the movant, we suggest, need only carry that devoir of persuasion by a preponderance of the evidence, since the considerations which lead us to impose a heightened burden of proof on one who deliberately destroys or withholds discovery materials are lacking when the default is unintentional and the burden of proof is, therefore, to be hefted by the withholdee. 67 To summarize, in motions for a new trial under the misconduct prong of Rule 60(b)(3), the movant must show the opponent's misconduct by clear and convincing evidence. Next, the moving party must show that the misconduct substantially interfered with its ability fully and fairly to prepare for, and proceed at, trial. This burden may be shouldered either by establishing the material's likely worth as trial evidence or by elucidating its value as a tool for obtaining meaningful discovery. The burden can also be met by presumption or inference, if the movant can successfully demonstrate that the misconduct was knowing or deliberate. Once a presumption of substantial interference arises, it can alone carry the day, unless defeated by a clear and convincing demonstration that the consequences of the misconduct were nugacious. Alternatively, if unaided by a presumption--that is, if the movant is unable to prove that the misconduct was knowing or deliberate--it may still prevail as long as it proves by a preponderance of the evidence that the nondisclosure worked some substantial interference with the full and fair preparation or presentation of the case. 68 In our view, this methodology strikes an acceptable balance between the need to preserve the finality of judgments and the need to enforce discovery rules against those who would seek unfair advantage by withholding information. It does not handcuff the nisi prius court; rather than requiring mechanistic decisionmaking, the protocol which we have delineated envisions that the trial judge will make a series of record-rooted judgment calls in exercising his informed discretion under Rule 60(b)(3)--judgment calls of the sort district courts are uniquely equipped to essay. And because weighing the relevant factors remains primarily a task for the district court, we will ordinarily defer to its assessment of the situation, absent error of law or manifest abuse of discretion. 69
70 Although our approach to Rule 60(b)(3) differs somewhat from that employed by the district court, remand is not automatic. See, e.g., United States v. Mora, 821 F.2d at 869-70 (though district court used wrong standard, factual findings were sufficiently explicit to allow court of appeals to discern result). It is important, therefore, to peruse the lower court's findings carefully before charting our future course. 71 1. Misconduct. Though the circumstances giving rise to belated discovery of the Report need not be discussed, the circumstances surrounding its nondisclosure are of great concern. The district court required plaintiffs to establish Beatrice's misconduct by clear and convincing evidence. Anderson V, slip op. at 10. It correctly imputed counsel's knowledge and behavior to the client, found that Beatrice had suppressed the Report, and characterized this suppression as a lapse in judgment. Id. at 20. It made no explicit finding as to whether the default was tantamount to Rule 60(b)(3) misconduct. This last omission, however, appears to be of little moment; the record contains clear and convincing evidence--overwhelming evidence, to call a spade a spade--that appellee engaged in what must be called misconduct under the applicable legal standard. 72 As early as October 1982, plaintiffs asked Beatrice to indicate the dates and describe the results of any tests of water quality conducted on the water from the Riley land.... Interrogatory No. 30, Set 1. Beatrice filed its response before the Report was compiled, and therefore did not mention it. Subsequently, Beatrice failed to supplement its reply to reveal the Report's existence. 12 There is no need for us to determine how many angels danced on the head of that particular pin, however, for what transpired thereafter was unarguably in dereliction of appellee's duty. In their second set of interrogatories, plaintiffs asked Beatrice if there had been any evidence of contamination from the surface of the ground entering the well [on the tannery property], Interrogatory No. 75; to [i]ndicate the dates and chemical concentrations found of all additional monitoring efforts that indicated water contamination of the Riley Tannery well, No. 80; and what documents were in the possession of any officer or employee of the Riley Company ... [relating] to the past or present storage treatment and/or disposal of wastes or any related activities at the Riley Tannery.... No. 92. Appellee objected to these interrogatories. Plaintiffs moved to compel answers and Beatrice cross-moved for a protective order, arguing--unsuccessfully--that the case had focused on the 15 acres, and therefore the operations of the tannery itself have been and remain irrelevant to the litigation. The district court thought otherwise, denying the motion (April 23, 1985) on the ground that plaintiffs' complaint was without limitation to the 15-acre tract. It ordered appellee to answer the challenged interrogatories fully. 73 Beatrice complied on May 30, 1985--more than a year after the Report had been issued. It eschewed any mention of the document, answering no to Interrogatory No. 75 and stating in reply to No. 80 that [t]he only tests performed on the well of which Beatrice is aware were conducted ... on behalf of the EPA. (It had earlier responded to No. 92 that no such documents exist.) Appellee neither amended nor supplemented these representations at any time. This was an outright breach. See Fed.R.Civ.P. 26(e)(2)(A) (A party is under a duty seasonably to amend a prior response if the party obtains information upon the basis of which (A) the party knows that the response was incorrect when made....). It was not the only one. 74 Plaintiffs also filed a Rule 34 production request on December 31, 1984. Among other things, they demanded that Beatrice cough up: 75 [s]tudies, reports ... and other documents relating or referring to any contamination of water supplies in the City of Woburn.... 76