STATE OF NEW YORK, et al., Plaintiffs, -v- UNITED STATES DEPARTMENT OF COMMERCE, et al., Defendants.
18-CV-2921 (JMF)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
May 21, 2020
JESSE M. FURMAN, United States District Judge
OPINION AND
JESSE M. FURMAN, United States District Judge:
In these consolidated cases, two groups of Plaintiffs — the first, a coalition of states and other government entities (the “Governmental Plaintiffs”); and the second, a coalition of non-governmental organizations (the “NGO Plaintiffs”) — challenged Secretary of Commerce Wilbur L. Ross, Jr.’s decision to add a question about citizenship status to the 2020 decennial census questionnaire. After more than a year of hard-fought litigation, which included an eight-day bench trial, Plaintiffs ultimately prevailed: This Court granted an injunction barring the question’s inclusion, see New York v. U.S. Dep‘t of Commerce, 351 F. Supp. 3d 502 (S.D.N.Y. 2019), and the Supreme Court affirmed on the ground that Secretary Ross’s stated rationale — that adding the citizenship question was necessary to help enforce the Voting Rights Act of 1965 — was “pretextual” and “contrived,” Dep‘t of Commerce v. New York, 139 S. Ct. 2551, 2573, 2575 (2019). Defendants then consented to entry of a permanent injunction barring any inclusion of a citizenship question on the 2020 census questionnaire.
Normally, that would be the end of the matter. But while the case was pending before the Supreme Court, Plaintiffs obtained new evidence that, they claim, suggests Secretary Ross’s true motive in adding a citizenship question to the census questionnaire was to facilitate redistricting strategies to benefit Republicans and non-Hispanic whites.
For the reasons stated below, the Court concludes that the NGO Plaintiffs’ motion should be granted in part and denied in part. First, the Court concludes that sanctions and further inquiry are not warranted with respect to the NGO Plaintiffs’ most serious allegations — that Defendants concealed evidence and that two witnesses providеd false testimony. To be clear, that conclusion is not based on a finding that Plaintiffs’ troubling allegations are wrong; the Court intimates no view on that question. Instead, the conclusion is based primarily on the fact that, even if Plaintiffs’ allegations are accurate, that would not have changed the outcome of this litigation. As Defendants themselves acknowledge, Plaintiffs prevailed at trial and in the Supreme Court on precisely the theory that the NGO Plaintiffs seek to
BACKGROUND
The Court presumes familiarity with the background and procedural history of these cases, which are set forth — at some length — in the Court’s prior Opinions. In short, Plaintiffs sought review of Secretary Ross’s decision principally under the Administrative Procedure Act (“APA”),
In the days after the Supreme Court’s decision, Defendants vacillated over whether to persist in their efforts to include a citizenship question on the 2020 census questionnaire — presumably on the basis of a new (or at least newly disclosed) rationale. See ECF Nos. 613, 627. The uncertainty came to an end on July 11, 2019, when the President announced in a Rose Garden address that, in lieu of a question on the census questionnaire, he was directing the Department of Commerce to use administrative records (such as databases maintained by the Department of Homeland Security and the Social Security Administration) to collect citizenship data on those living in the United States. See
In the meantime, while the case was pending before the Supreme Court, the NGO Plaintiffs acquired new evidence that, in their view, shed more light on the genesis of Secretary Ross’s decision and cast doubt on certain representations made, and testimony given, in this case. Most significantly, they obtained documents through an unrelated lawsuit suggesting that a redistricting specialist named Dr. Thomas Hofeller may have provided a paragraph to Mark Neuman, an outside advisor to Secretary Ross, for use in a draft letter that Neuman then provided to John Gore, then the Assistant Attоrney General for Civil Rights. Gore, in turn, drafted the letter (known as the “Gary Letter” after its signatory) that DOJ sent to the Department of Commerce purporting to request the addition of a citizenship question on the decennial census questionnaire. ECF No. 635 (“NGO Pls.’ Mem.”), at 4-5; see New York, 351 F. Supp. 3d at 530-32. The paragraph in question, like the final version of the Gary Letter that DOJ sent to the Department of Commerce, argued that adding a citizenship question to the decennial census questionnaire would help DOJ enforce the Voting Rights Act. Other evidence obtained by the NGO Plaintiffs, however, suggested that Dr. Hofeller’s true motive in promoting a census citizenship question was to facilitate redistricting strategies that would, in his words, be “advantageous to Republicans and non-Hispanic Whites.” NGO Pls.’ Mem. 4. The NGO Plaintiffs argued that this and other evidence revealed that two of Defendants’ witnesses, Neuman and Gore, “provided false testimony” in their depositions and concealed evidence in discovery. Id. at 7-11.
After the NGO Plaintiffs brought their concerns to the Court’s attention via letter motion, see ECF No. 595, the Court held a conference on June 5, 2019 and set a schedule for more formal motion practice, see ECF No. 605. Consistent with that schedule, the NGO Plaintiffs filed a motion in July 2019 — after the Supreme Court had resolved the merits of this case in their favor — seeking sanctions and other relief against Defendants, including additional discovery. Before the Court addressed that motion, however, the plot thickened twice, causing the Court to defer judgment: First, on November 14, 2019, the NGO Plaintiffs sought and obtained
Second, several days after filing that response, Defendants notified Plaintiffs and the Court that they had discovered a batch of documents that, in fact, should have been but were not produced to Plaintiffs in the course of discovery. See ECF No. 669. Defendants represented that these documents “were collected in the course of responding to discovery in this litigation, [and were] loaded into [a] document review platform for that purpose.” ECF No. 669-1, at 1. Nevertheless, Defendants claimed that they had “inadvertently” failed to produce them to Plaintiffs. Id. Defendants further represented that they were “still investigating the cause of the error” and “whether any other documents were similarly inadvertently omitted from production.” Id. at 2. In the exchange of letters that followed, the NGO Plaintiffs asked that the Court order a “full . . . accounting of Defendants’ search protocols,” including “production of all litigation hold notices and document collection certifications.” ECF No. 673, at 3-4. Defendants maintained that such relief was not warranted, and represented that although they had “attempted to ascertain why, having been collected,” the omitted documents “were not thereupon produced,” Defendants were “[r]egrettably[] . . . unable to discover the cause.” ECF No. 674 (“Defs.’ Dec. 12, 2019 Letter”), at 4. The Court stopped short of granting Plaintiffs’ full request, but ordered Defendants to provide a more complete update regarding their investigation into whether other documents might have been omitted from their earlier productions, see ECF No. 675, and on December 19, 2019, Defendants filed a letter advising that their investigation had revealed “480 potentially responsive emails . . . , which including attachments total[ed] 2,062 documents” that had not been produced to Plaintiffs in discovery. ECF No. 676, at 2. After another exchangе of letters, the Court ordered Defendants to review and produce any non-privileged materials from among these documents by February 21, 2020 — noting that if that deadline imposed a burden on Defendants, they had “no one but themselves to blame since the documents at issue should have been produced a year and a half” earlier. ECF No. 682, at 4.
Defendants have now completed their review and produced the non-privileged materials that were improperly withheld, ultimately totaling at least 900 previously unproduced documents. See ECF No. 693 (“Defs.’ Suppl. Reply”), at 2 n.1.2 Since then, the parties — including the Government Plaintiffs — have filed letters detailing their respective positions on what, if any, effect the newly produced materials should have on the NGO Plaintiffs’ underlying motion for sanctions. See ECF No. 690 (“NGO Pls.’ Suppl. Letter”); ECF No. 691; ECF No. 692 (“Defs.’ Suppl. Letter”); Defs.’ Suppl. Reply. The motion is, thus, finally ripe for decision.
The NGO Plaintiffs contend that sanctions are, or may be, warranted pursuant to two Federal Rules of Civil Procedure — Rule 26(g)(3) and Rule 37(b)(2) — and the Court’s “inherent authority.” NGO Pls.’ Mem. 19-21. Significantly, however, although they frame their motion as a motion for sanctions, it is really a motion for discovery first, and sanctions only second. That is, the NGO Plaintiffs first seek additional discovery in aid of their sanctions motion, after which they would “more specifically identify the sanctions sought” from among “three categories of likely appropriate sanctions,” including additional findings of fact, waivers of Defendants’ deliberative-process privilege against disclosure of certain materials, and monetary sanctions (including attorney’s fees and costs). Id. at 32-33. Arguably implicit in this ordering is a conсession that, on its own, the newly discovered evidence does not support the imposition of sanctions on any particular individual or party. Be that as it may, the Court will address each of the NGO Plaintiffs’ arguments in turn.
A. Rule 26(g)(3)
For that reason, the Court concludes that sanctions under
B. Inherent Authority
Whether to impose sanctions pursuant to the Court’s inherent powers is a closer call. The NGO Plaintiffs’ seek such sanctions for what they describe as a “fraud on the court,” and identify six instances of alleged “false or misleading testimony, statements, and conduct by Defendants and those acting on their behalf,” NGO Pls.’ Mem. 21 — most notably, Neuman and Gore — as a basis for sanctions under the Court’s inherent powers, id. at 19-22. It is well established that, “[e]ven in the absence of a discovery order, a court may impose sanctions on a party for misconduct in discovery under its inherent power to manage its own affairs.” Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 106-07 (2d Cir. 2002). But “[b]ecause of their very potency, inherent powers must be exercised with restraint and discretion.” Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). In the first place, “a finding of bad faith” is a prerequisite “for the imposition of sanctions” pursuant to a court’s inherent powers. DLC Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 136 (2d Cir. 1998). Because of that “bad faith” requirement, a court exercising its inherent powers will often have to overlook statements that are merely false, even suspiciously so. Instead, a court will impose sanctions pursuant to its inherent powers only where a person “has made a false statement to the court and has done so in bad faith.” SEC v. Smith, 710 F.3d 87, 97 (2d Cir. 2013) (emphasis added).
Notably, the Court’s inherent sanctioning authority is even more limited with respect to the alleged misconduct of a non-party witness. In particular, mere “[u]ntruthful testimony,” “perjury,” and “nondisclosure” by a non-party witness is insufficient to warrant sanctions under the Court’s inherent powers unless it is part of a larger scheme amounting to a fraud on the Court. Rybner v. Cannon Design, Inc., No. 95-CV-0279 (SS), 1996 WL 470668, at *3 (S.D.N.Y. Aug. 20, 1996) (Sotomayor, J.) (internal quotation marks omitted). “In short, neither perjury nor nondisclosure, by itself, amounts to anything more than fraud involving injury to a single litigant.” Gleason v. Jandrucko, 860 F.2d 556, 560 (2d Cir. 1988). Thus, “[u]ntruthful testimony by a witness, which has not been suborned by his lawyer, does not, standing alone, constitute fraud upon the court,” particularly where “the testimony is given during a pretrial deposition.” In re Grievance Comm. of U.S. Dist. Court, Dist. of Conn., 847 F.2d 57, 64 (2d Cir. 1988) (Van Graafeiland, J., concurring). “Only when a fraud seriously affects the integrity of the normal process of adjudication, does the conduct amount to a fraud upon the court,” as “where it can be demonstrated, clearly and convincingly, that 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.” Rybner, 1996 WL 470668, at *3 (citations and internal quotation marks omitted).
In light of these standards, the Court concludes that Neuman’s testimony, however troubling, could merit sanctions pursuant to the Court’s inherent powers only if it were part of a broader scheme orchestrated by Defendants or their attorneys
At the heart of this dispute is a semantic, if not philosophical, question. Neuman drafted a letter requesting the inclusion of a citizenship question on the decennial census and then gave that draft to Gore. Gore, in turn, drafted a letter making the same request, a letter that was then edited by others. The final version — the Gary Letter — was then transmitted to the Departmеnt of Commerce. On these facts, who authored the “initial” draft of the Gary Letter? To be sure, Neuman’s letter preceded Gore’s in time. But how similar would Neuman’s effort have to have been to Gore’s, or to the final document, for Neuman’s draft to be considered the “initial” version of the Gary letter? For present purposes, it suffices to say that there is no evidence in the record that Gore relied on Neuman’s draft at all in preparing his own draft of what became the Gary Letter. Nor are the Neuman drafts and any of Gore’s early drafts of the Gary Letter in the record so similar as to compel an inference that he did.1 Notably, the similarity upon which the NGO Plaintiffs’ hang their hat — and, admittedly, it is a striking one — is between Neuman’s draft and a paragraph discovered on Dr. Hofeller’s computer. Compare ECF No. 635-1, at 133-34, with id. аt 136. That similarity suggests a degree of coordination between Neuman and Dr. Hofeller that might undermine any claim that Neuman was the initial “author” of his own draft. But it does not suggest that Gore intentionally misled the Court when he testified that it was he who authored the “initial draft” of what became the Gary Letter. And it certainly does not amount to “clear and convincing” evidence of bad faith. Accordingly, the Court declines to exercise its inherent authority to sanction Gore.
The remaining instances of allegedly misleading statements or conduct concern the behavior of Defendants and their counsel
The Court accordingly declines to order further discovery in aid of the NGO Plaintiffs’ contention that sanctions are appropriate under the Court’s inherent authority, even though that means stopping short of a full accounting of the conduct of Neuman, Gore, and others in the evidence-gathering stages of this litigation (and even though stopping short also denies these people the possibility of exoneration that might have come from further discovery). Instead, the Court concludes that “restraint and discretion” counsel against the further expense of judicial resources in pursuit of these matters, at least in this case. Chambers, 501 U.S. at 44.
C. Rule 37
That leaves the NGO Plaintiffs’ requests for sanctions pursuant to
(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobеdient party; or
(vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.
The NGO Plaintiffs’ Rule 37 motion centers on what they describe as Defendants’ failure to provide a complete Administrative Record and their “delay” in producing documents in the course of the initial round of litigation (that is, before the present motion was filed). However meritorious these claims may be, the sanctions enumerated in
Plaintiffs’ efforts to obtain discovery in advance of trial — both in this Court and in opposing Defendants’ various “emergency” interlocutory appeals to higher authorities — were certainly burdensome. See New York v. U.S. Dep‘t of Commerce, No. 18-CV-2921 (JMF), 2018 WL 6060304, at *1 (S.D.N.Y. Nov. 20, 2018) (discussing Defendants’ multiple attempts “to halt the orderly progress of this litigation” with meritless stay requests and interlocutory appeals). But the NGO Plaintiffs were already compensated for those efforts — they settled their claims for fees and costs arising from the main phase of this case, see ECF No. 647 — and that moots most of the relief the Court might otherwise have granted pursuant to
Notably, Defendants
Instead, Defendants oppose the NGO Plaintiffs’ request for Rule 37 sanctions on a purely technical ground. In their view, although Rule 37 permits sanctions for a party’s “fail[ure] to obey an order to provide or permit discovery,” there was “no such order with which Defendants failed to comply” here. Defs.’ Opp’n 3 (internal quotation marks omitted). That is because, they continue, the order at issue was the Court’s July 5, 2018 Order directing Defendants to complete the Administrative Record and, “[a]s the Court recognized earlier in this litigation, [p]roperly understood . . . an order directing completion of an administrative record is not the same thing as ordering ‘discovery.’” Id. at 4 (quoting New York, 351 F. Supp. 3d at 633). To be sure, the lines dividing orders to “complete” an administrative record from orders to “supplement” an administrative record and orders for discovery “beyond” an administrative record can be blurry. See New York, 351 F. Supp. 3d at 631-35. That is particularly true here because the parties eventually stipulated that a large number of materials produced in extra-record discovery were actually part of the Administrative Record. See id. at 518 n.4, 630; ECF No. 523. As a result, it is hard (if not impossible) to tell in retrospect, simply on the basis of terminology, whether any given order should be classified as an order to “complete” the Administrative Record or to provide discovery “beyond” it. Compare ECF No. 676, at 2 (explaining that the production errors at issue occurred in the course of resolving Plaintiffs’ fifth motion to compel), with ECF No. 293, at 2 (Plaintiffs’ fifth motion to compel, seeking, among other relief, an order compelling Defendants “to undertake reasonable searches of all material custodians to cоmplete the Administrative Record”). Presumably for the same reasons, Defendants’ own terminology is not always consistent with their arguments. See Defs.’ Suppl. Letter 1 (explaining that “the newly produced documents include e-mails and attachments thereto that inadvertently were not produced during the discovery stage of this case” (emphasis added)).
In any event, the Court is unpersuaded by Defendants’ contention that an order to complete an administrative record — although “not the same thing as ordering discovery beyond the record,” New York, 351 F. Supp. 3d at 633 — is different from an “order to provide or permit discovery” within the meaning of Rule 37. By its terms,
At this level, then, the distinction between orders that carry the label “discovery” and those that order completion of the administrative record disappears. Sure enough, at least one Court of Appeals has held that a prior court order to produce or complete an administrative record can be the basis for Rule 37 sanctions — even, as in that case, where the obligation to produce the record arises in the first instance from a governing statute. See Diaz-Fonseca v. Puerto Rico, 451 F.3d 13, 26 (1st Cir. 2006). Indeed, absent a specialized statutory framework for production of an administrative record, see id. (discussing such a framework in the context of the Individuals with Disabilities Education Act,
Accordingly, the Court will — and arguably “must,”
CONCLUSION
At the end of the day, the NGO Plaintiffs’ allegations of misconduct merely reinforce their overall theory of this case: that Secretary Ross’s decision to add a citizenship question to the 2020 decennial census questionnaire was not made for the reasons he gave. With newly discovered evidence in hand, the NGO Plaintiffs now argue that Secretary Ross’s decision was even more pretextual than they had been able to show in the first instance. But even if these allegations are true, and even if Defendants’ misconduct would otherwise have been sanctionable, this is a case in which, for the most part, “the proper remedy is exactly what happened at trial.” Ideal Steel Supply Corp. v. Anza, No. 02-CV-4788 (RMB), 2013 WL 6912681, at *4 (S.D.N.Y. Dec. 23, 2013) (citation and internal quotation marks omitted). Plaintiffs tested the credibility of Defendants’ explanations, including the testimony of Defendants’ witnesses; persuaded the Court that Defendants’ official story concealed their true reasons for acting; and — on that basis — ultimately prevailed. See, e.g., New York, 351 F. Supp. 3d at 565 (finding the testimony of one witness “materially misleading”); id. at 556 (noting Gore’s admission that he did not believe adding the citizenship question was necessary to improve Voting Rights Act enforcement efforts, the stated rationale for doing so). Indeed, evidence that apportionment effects might have been a reason for Secretary Ross’s decision supported the Court’s conclusion that improving Voting Rights Act enforcement was not his actual reason. See id. at 568, ¶ 170. Thus, not only did the NGO Plaintiffs ultimately “obtain[] all the relief they sought when they brought this case,” but they did so in part for the same reasons they now seek further sanctions against Defendants. In the final analysis, although the NGO Plaintiffs’ allegations are troubling, so too were the facts that won them a victory at trial and in the Supreme Court. Plaintiffs’ theory of the case could hardly need more judicial vindication than that.
To be sure, this was not DOJ’s finest hour. At best, DOJ failed to produce more than ten percent of the documents that Defendants were required to produce as part of this litigation. But the Court cannot conclude from the record before it that further investigation into possible sanctionable conduct is warranted in the circumstances of this case. Accordingly, and as an exercise of the Court’s “wide discretion,” S. New England Tel. Co., 624 F.3d at 144 (internal quotation marks omitted), the Court will not impose sanctions on Defendants beyond the litigation defeat they have alrеady suffered, or the fee award in which they have acquiesced — except to order that Defendants pay the costs and fees associated with a portion of this motion and its embedded disputes. Nor will the Court invite further discovery in order to determine exactly who did what and when with respect to the decision to add a citizenship question to the decennial census. NGO Pls.’ Mem. 32-33. Litigation, despite its truth-seeking function, sometimes produces an incomplete or unsatisfying version of the facts. In this case, however, the facts that Plaintiffs were able to prove at trial won them complete relief in this Court and in the Supreme Court of the United States. If there is more to the story, principles of judicial restraint counsel
For the reasons given and to thе extent set forth above, the NGO Plaintiffs’ motion for discovery and sanctions is GRANTED in part and DENIED in part. In particular, pursuant to its authority under
The Clerk of Court is directed to terminate ECF No. 635.
SO ORDERED.
Dated: May 21, 2020
New York, New York
JESSE M. FURMAN
United States District Judge