Court Opinion

ID: 2964070
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:20:00.498836+00
Date Added: 2024-06-11T11:42:49.964075
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 95-1931

                      GEORGE J. SERAFINO AND ANITA M. SERAFINO,

                               Plaintiffs, Appellants,

                                          v.

                                HASBRO, INC., ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Michael A. Ponsor, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                Torruella, Chief Judge,
                                           ___________
                            Coffin, Senior Circuit Judge,
                                    ____________________
                               and Cyr, Circuit Judge.
                                        _____________

                                 ____________________

            Morris M.  Goldings with  whom Ellen S.  Shapiro was on  brief for
            ___________________            _________________
        appellants.
            Arthur G. Telegen with whom Amy  B.G. Katz, Charles S.  Cohen, and
            _________________           ______________  _________________
        David G. Cohen were on brief for appellees.
        ______________

                                 ____________________

                                    April 23, 1996
                                 ____________________

               COFFIN,  Senior Circuit  Judge.   Plaintiff-appellant George
                        _____________________

          Serafino brought  a lawsuit  against Hasbro, Inc.  ("Hasbro") and

          its CEO, George R. Ditomassi, Jr., claiming that  they unlawfully

          terminated certain business arrangements and then  his employment

          because his daughter filed  a discrimination action against them.

          During discovery, Serafino refused to answer questions pertaining

          to alleged improprieties  surrounding the business  arrangements,

          invoking   his   Fifth   Amendment   privilege    against   self-

          incrimination.  Upon determining that Serafino's silence on these

          matters unfairly hampered defendants' ability to mount a defense,

          the district court dismissed Serafino's claims with prejudice.  

               In  this   appeal,  we  must   determine  whether  dismissal

          constitutes   an   impermissible   infringement   on   Serafino's

          constitutional  right  against  self-incrimination.    After  due

          consideration, we  conclude that the district  court acted within

          its  power and  discretion in  dismissing Serafino's  claims, and

          affirm.

                                     BACKGROUND1

               From 1972  until his termination in  December 1994, Serafino

          worked as a mechanic and then group leader for the Milton Bradley

          Company  ("Milton Bradley"),  a  division of  Hasbro since  1985,

          located  in  Springfield,  Massachusetts.   In  addition  to  his

          regular  employment,   Serafino   had  three   unusual   business

          arrangements  with Milton  Bradley.   In  1976, Serafino  created
                              
          ____________________

               1  Since  this appeal is from an order  granting a motion to
          dismiss,  we derive the facts  from the pleadings.   PHC, Inc. v.
                                                               _________
          Pioneer Healthcare, Inc., 75 F.3d 75, 77 (1st Cir. 1996).
          ________________________

                                         -2-

          Hampden Battery Service, Inc. ("Hampden Battery"), which serviced

          and  reconditioned batteries  used  in  Milton Bradley  vehicles.

          Then,  in 1984, he formed ABC  Janitorial Services ("ABC"), which

          performed  nightly cleaning service  at Milton Bradley buildings.

          Finally,  in  1985,  he  assumed  responsibility  for supervising

          ground maintenance  at the company's facilities, for which he was

          guaranteed 20 hours a week of overtime.  

               Anita Serafino,2 George Serafino's  daughter, also worked at

          Milton Bradley.  In January 1992, she filed a complaint  with the

          Massachusetts Commission Against  Discrimination alleging that  a

          co-worker  had  sexually  harassed  her.    In  July  1993,  both

          Serafinos  filed a  complaint in  Hampden Superior  Court against

          Hasbro and Ditomassi alleging sex discrimination and retaliation.

          In  particular,  George Serafino  alleged  that  Ditomassi, as  a

          retaliatory   measure,   instructed   two  high-ranking   company

          employees, Joseph  Gulluni and  Arthur Peckham, to  terminate the

          three   extracurricular   business   ventures.      The  overtime

          arrangement  was discontinued  on January  1, 1993,  the business

          relationship  with  Hampden Battery  in  April of  1993,  and the

          relationship  with  ABC in  mid-1994.    Based on  these  events,

          Serafino  advanced three  theories  of liability:   violation  of

                              
          ____________________

               2    To  avoid  confusion,  Anita  Serafino  will always  be
          referred  to by her full name; George Serafino, at times, will be
          referred to only as "Serafino."

                                         -3-

          Mass.  Gen. L.  Ann. ch. 151B3,  quantum meruit,  and intentional
                                           _______ ______

          interference with advantageous relationship.  

               Serafino was  deposed  in  the  fall of  1994.    Defendants

          pursued   a  line   of   questioning   concerning   improprieties

          surrounding  Hampden  Battery,  ABC  and  the  overtime benefits,

          focusing,  in particular,  on how  Serafino, Gulluni  and Peckham

          might have  illegally benefitted from these  ventures.  Serafino,

          invoking his rights under  the Fifth Amendment and Article  12 of

          the Massachusetts  Declaration of Rights, refused  to answer most

          questions relating to these matters.  Such questions included:

               Did you give money to other people  as a condition for doing
               business with Milton Bradley?

               [Did] Mr. Peckham ever get any financial benefit from  
               ABC Cleaning Services?

               Why did [Mr. Gulluni] have you report to his office    
               every day?

               Do you have any financial relations with Mr. Peckham?

               Were you involved in criminal activity together?

               Isn't it true that Mr. Peckham got financial benefit   
               from your companies that was illegal?

               George  Serafino  was  discharged  from  Milton  Bradley  in

          December 1994.   Shortly thereafter, the  Serafinos amended their

          complaint  to  include  this  termination  as  a  further act  of

                              
          ____________________

               3     Chapter   151B   protects   people  against   unlawful
          discrimination.  Wheelock College v. Massachusetts Comm'n Against
                           ________________    ____________________________
          Discrimination,  371  Mass.  130,  137, 355  N.E.2d  309  (1976).
          ______________
          Serafino accused  defendants of violating chapter  151B,   4(4A),
          which makes it  unlawful for any  person "to coerce,  intimidate,
          threaten  or interfere with such other person for having aided or
          encouraged any other person  in the exercise or enjoyment  of any
          such right granted or protected by this chapter."

                                         -4-

          retaliation.  In response, defendants removed the case to federal

          court, on  the ground that  consideration of the  discharge would

          require the court to interpret a collective bargaining agreement,

          bringing  Serafino's  claim  within  Section  301  of  the  Labor

          Management Relations Act, 29 U.S.C.   185.  

               On  March  31,  1995,4  defendants  submitted  a  motion  to

          dismiss  Serafino's  claims.   They claimed  that by  refusing to

          respond  to their  questions,  Serafino had  prevented them  from

          discovering important information about the very benefits that he

          sued  to  recover.     Defendants  asserted  that  the  questions

          surrounding the benefits were central to the case:

               If .  .  .  Serafino  paid criminal  bribes  to  Milton
               Bradley  employees to maintain  his unusually favorable
               overtime  arrangement,  battery  business and  cleaning
               services,  then he  is  in no  position  to claim  that
               defendants somehow wrongfully took these  benefits away
               . . . [or that] his termination was [not] proper.

               In  rebuttal,   Serafino  disputed  the   relevance  of  the

          questions,  suggesting that defendants were instead attempting to

          garner information for their  RICO complaint.  On July  28, 1995,

          the  district  court  dismissed  all of  Serafino's  claims  with

          prejudice  and  remanded Anita  Serafino's  claims  to the  state

          court.

                                      DISCUSSION

               Serafino  attacks  the  district  court's  decision  on  two

          fronts:  first, he argues that, as a matter of law, the court did
                              
          ____________________

               4  A few days  earlier, Hasbro filed a civil RICO  complaint
          against  Serafino,  Gulluni  and  Peckham alleging  a  course  of
          conduct  involving  kickbacks,  overcharging  and  other  illegal
          activity.

                                         -5-

          not have the  power to  dismiss his claims;  second, he  contends

          that  the court  abused  its discretion  in  concluding that  his

          constitutional interest was  outweighed by possible prejudice  to

          defendants.  We address these issues in turn.

          A.   The District Court's Power to Dismiss 
               _____________________________________

               Serafino argues that the  legitimate exercise of one's Fifth

          Amendment privilege can never justify dismissal  of a civil claim

          -- a contention not without force.   The Supreme Court has stated

          that the Fifth Amendment "guarantees .  . . the right of a person

          to remain silent  unless he  chooses to speak  in the  unfettered

          exercise of his own will, and to suffer no penalty . . . for such
                                                     _______

          silence."   Spevack v. Klein,  385 U.S. 511,  514 (1967) (quoting
                      _______    _____

          Malloy v. Hogan,  378 U.S.  1, 8 (1964))  (emphasis added).   The
          ______    _____

          concept  of "penalty"  includes "the  imposition of  any sanction

          which makes assertion of the Fifth Amendment privilege 'costly.'"

          Id.  at 515  (quoting Griffin  v. California,  380 U.S.  609, 614
          ___                   _______     __________

          (1965)).  

               Unconstitutional  penalties   for  the  invocation   of  the

          privilege have included disbarment of a lawyer, see Spevack,  385
                                                          ___ _______

          U.S.  at 516; forfeiture of jobs by public employees, see Gardner
                                                                ___ _______

          v.  Broderick, 392 U.S. 273, 278  (1968) and Uniformed Sanitation
              _________                                ____________________

          Men Ass'n  v. Commissioner  of Sanitation,  392 U.S. 280,  284-85
          _________     ___________________________

          (1968);  and imposition  of substantial  economic sanctions,  see
                                                                        ___

          Lefkowitz  v. Turley, 414 U.S. 70, 82-83 (1973).  While automatic
          _________     ______

          dismissal  of  a  civil  action  could fall  neatly  within  this

          category,  see Wehling  v. Columbia  Broadcasting Sys.,  608 F.2d
                     ___ _______     ___________________________

                                         -6-

          1084,  1087-88 (5th Cir. 1979), we cannot agree that dismissal is

          always impermissible.  See id. at 1087 n.6 ("[T]he district court
                                 ___ ___

          is  not precluded  from using  dismissal as  a remedy  to prevent
                                                         ______

          unfairness to the defendant.").

               The  Supreme Court has  indicated that the  assertion of the

          privilege may  sometimes disadvantage  a party.    See Baxter  v.
                                                             ___ ______

          Palmigiano, 425 U.S. 308, 318 (1976) (allowing adverse inferences
          __________

          to be drawn  from a  civil party's assertion  of the  privilege);
                               _____

          Flint v. Mullen, 499 F.2d 100, 104 (1st Cir. 1974)  ("[N]ot every
          _____    ______

          undesirable consequence which may follow from the exercise of the

          privilege  against self-incrimination can  be characterized  as a

          penalty.").    We  think  that  in  the  civil   context,  where,

          systemically, the parties  are on a  somewhat equal footing,  one

          party's  assertion  of  his   constitutional  right  should   not

          obliterate  another party's right to a fair proceeding.  In other

          words, while a trial court should strive to accommodate a party's

          Fifth  Amendment interests, see United States v. Parcels of Land,
                                      ___ _____________    _______________

          903 F.2d  36, 44 (1st  Cir. 1990), it  also must ensure  that the

          opposing  party  is not  unduly  disadvantaged.   See  Gutierrez-
                                                            ___  __________

          Rodriguez  v.  Cartagena,  882  F.2d 553,  577  (1st  Cir.  1989)
          _________      _________

          (affirming district court's refusal to allow defendant to testify

          at  trial  when  he  asserted Fifth  Amendment  privilege  during

          discovery).  After balancing the conflicting interests, dismissal

          may be the only viable alternative.5
                              
          ____________________

               5  Though dismissal  has rarely been imposed or  affirmed, a
          number of courts  have acknowledged the court's power  to dismiss
          even in the  face of a party's proper assertion of the privilege.

                                         -7-

               We reiterate that the balance must be weighted to  safeguard

          the Fifth Amendment privilege:  the burden on the party asserting

          it  should be no  more than  is necessary  to prevent  unfair and

          unnecessary prejudice to the other side.  See S.E.C. v. Graystone
                                                    ___ ______    _________

          Nash, Inc., 25 F.3d at 187, 192 (3d Cir. 1994); Wehling, 608 F.2d
          __________                                      _______

          at  1088.  As correctly delineated  by the district court in this

          case,  "the Fifth  Amendment  privilege should  be upheld  unless

          defendants have  substantial need for particular  information and

          there is  no other less  burdensome effective means  of obtaining

          it."  See Black Panther Party v. Smith, 661 F.2d 1243, 1272 (D.C.
                ___ ___________________    _____

          Cir.  1981),  vacated mem.,  458  U.S.  1118 (1982)  (enunciating
                        ____________

          similar balancing approach).  Having determined that the district

          court  could, within its discretion,  dismiss this case, and that

          it  utilized  the  proper  balancing test,  we  now  evaluate the

          balancing itself for abuse  of discretion.  See Parcels  of Land,
                                                      ___ ________________

          903 F.2d at 44.  

          B.   The Court's Balancing Test
               __________________________

               The   district  court   dismissed  Serafino's   claims  upon

          concluding  that 1)  the alleged  illegal conduct  underlying the

          outside benefits was central to defendants' defense; 2) there was

          no effective substitute for Serafino's answers; and 3)  there was
                              
          ____________________

          See, e.g., Wehling v. Columbia  Broadcasting Sys., 608 F.2d 1084,
          ___  ____  _______    ___________________________
          1087  n.6 (5th Cir.  1979); Lyons v.  Johnson, 415 F.2d  540, 542
                                      _____     _______
          (9th Cir. 1969); Mt. Vernon Sav. & Loan v. Partridge Assocs., 679
                           ______________________    _________________
          F. Supp. 522,  529 (D. Md. 1987); Stop &  Shop Cos. v. Interstate
                                            _________________    __________
          Cigar Co.,  110 F.R.D. 105, 108  (D. Mass. 1986); Jones  v. B. C.
          _________                                         _____     _____
          Christopher  & Co., 466  F. Supp. 213,  227 (D.  Kan. 1979); Penn
          __________________                                           ____
          Communications  Specialties, Inc.  v.  Hess, 65  F.R.D. 510,  512
          _________________________________      ____
          (E.D. Pa. 1975); Wansong  v. Wansong, 395 Mass. 154,  157-58, 478
                           _______     _______
          N.E.2d 1270 (1985). 

                                         -8-

          no  adequate alternative  remedy to  dismissal.   Though Serafino

          hotly disputes  each premise, our more  detailed analysis compels

          us to agree with the court's conclusions.

                                         -9-

               1.   Importance of the Information
                    _____________________________

               Serafino's alleged illegal conduct  is relevant in two ways.

          First, defendants  justify their  discharge of Serafino  on their

          belief  that he conspired to defraud Hasbro.  Under the framework

          of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973),
             _______________________    _____

          which  generally guides claims under Mass. Gen. L. Ann. ch. 151B,

          Woods v. Friction  Materials, Inc.,  30 F.3d 255,  263 (1st  Cir.
          _____    _________________________

          1994),  if defendants  propose  a nonretaliatory  reason for  the

          termination and present facts in support, Serafino cannot prevail

          unless he proves that the reason is pretext, see Tate v. Dep't of
                                                       ___ ____    ________

          Mental Health, 419 Mass. 356, 362-63, 645 N.E.2d 1159 (1995).  In
          _____________

          this context, the significance  of information that goes directly

          to the nonretaliatory justification is self-evident.

               Second,  if in  fact the  benefits were  illegally obtained,

          then  defendants could  effectively  argue that  Serafino is  not

          entitled to  compensation based on them.   Though we do  not, and

          need  not,  determine   whether  his  alleged  misconduct   would

          foreclose all possible  relief,6 we easily conclude  that, at the

          very least, it would greatly diminish his recovery.  Cf. McKennon
                                                               ___ ________

          v. Nashville Banner Pub. Co., 115 S. Ct. 879, 886 (1995) (holding
             _________________________

          that after-acquired evidence of an employee's misconduct does not

          bar  all relief under the ADEA but  must be taken into account in

          determining  an  appropriate remedy).    Without  the ability  to

                              
          ____________________

               6      In  addition   to   seeking   compensation  for   the
          discontinuation  of  the  three business  arrangements,  Serafino
          seeks  emotional  and  exemplary  damages,  attorneys'  fees  and
          injunctive relief against further retaliation.

                                         -10-

          investigate  a matter  that  goes to  the  heart of  the  damages

          sought, defendants would be substantially prejudiced.

               2.   Alternative Means
                    _________________

               The district court  found that "there are no company records

          or  other Hasbro  employees  whose information  could effectively

          substitute  for  responses from  George  Serafino  himself."   We

          agree. Even if a  paper trail might show some  irregularities, it

          is  a  poor  proxy  for  Serafino's  testimony.    As  for  other

          employees,  such as Peckham and Gulluni, if they were involved in

          illegal conduct,  they would almost certainly  assert their Fifth

          Amendment  privilege.    If,  instead,  they denied  involvement,

          defendants  would be  back  at square  one, handicapped  in their

          defense by Serafino's silence.  

               3.   Alternative Remedies
                    ____________________

               We  are left to consider whether a less drastic remedy would

          have  sufficed.   At  oral argument  on  the motion  to  dismiss,

          counsel for Serafino listed  several possibilities -- staying the

          matter, allowing an  adverse inference to be  drawn, and striking

          testimony --  but did not recommend one,  suggesting instead that

          the court's  first alternative should be a  motion to compel.  We

          doubt that  the  court  could  have ordered  Serafino  to  answer

          questions to which the privilege attached.  See Wehling, 608 F.2d
                                                      ___ _______

          at 1087.  In any  event, since counsel did not even  suggest that

          Serafino would waive his  privilege, a motion to compel was not a

          reasonable alternative.  

                                         -11-

               Though he  never requested  one, Serafino contends  that the

          court could  have issued a stay and cites Wehling in support.  In
                                                    _______

          Wehling,  the Fifth  Circuit reversed  the denial  of plaintiff's
          _______

          motion for a  protective order and  stayed the civil  proceedings

          for three years, until the expiration of the criminal limitations

          period.  608  F.2d at  1089.  Here,  upon considering  Serafino's

          failure  to  file a  motion, and  the  hardship that  delay would

          impose  on defendants, the  district court refused  to sua sponte
                                                                 ___ ______

          impose  a  stay.   We  cannot say  this  constitutes an  abuse of

          discretion.  

                                      CONCLUSION

               Information   regarding   potential   illegal   conduct   in

          connection  with  the  three  business ventures  was  crucial  to

          defendants'  ability  to  mount  an effective  defense,  and  was

          uniquely  within  plaintiff's control.    While  Serafino had  an

          absolute  constitutional  right  not to  reveal  any  potentially

          incriminating  material,  his invocation  of  that  privilege, in

          these   circumstances,  placed   defendants   at  a   significant

          disadvantage.    Because the  district  court did  not  abuse its

          discretion in  balancing the  interests at  stake, we  affirm its

          decision to dismiss Serafino's claims.

               Affirmed.
               ________

                                         -12-