Commercial Litigation and Arbitration

Rule 11 & §1927 Sanctions Properly Imposed on Counsel for Violating Sham Affidavit Doctrine Despite Warnings in Prior Cases — Abuse of Discretion Doctrine “Is Not Appellant-Friendly” and Imposes a “Weighty Burden” (Good Quote)

Escribano-Reyes v. Prof’l HEPA Certificate Corp., 2016 U.S. App. LEXIS 5851 (1st Cir. Mar. 30, 2016):

Carlos Escribano-Reyes's ("Escribano") discrimination and retaliation suit against his employer, Professional HEPA Certificate Corp. ("HEPA"), ended in summary judgment for HEPA and a sanction order against Escribano's counsel for filing a "sham affidavit" after he received repeated warnings in earlier cases not to do so.

As to the summary judgment order, Escribano first argues that the district court erred in striking, under the sham affidavit doctrine, a post-discovery sworn statement that Escribano had submitted in his opposition to HEPA's motion for summary judgment. Second, he argues that the district court erred in granting summary judgment to HEPA on the basis that he did not meet his burden of showing that HEPA had enough employees to qualify as a covered employer [*2]  under either the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213, or the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634. Even though the nature of the evidence he provided -- a list of names of twenty-seven individuals who he believed were employees of HEPA -- was competent, we agree with the district court that it was insufficient to meet his burden on summary judgment, where the defendant had submitted official documents filed with the Puerto Rico Department of Labor showing that it did not employ enough people to trigger the ADA or the ADEA.

Finally, Escribano challenges the district court's imposition of $1000 in sanctions against Escribano's attorney, Aníbal Escanellas-Rivera, for submitting the stricken affidavit. Finding no error, we affirm.


On September 9, 2013, Escribano brought suit in the United States District Court in Puerto Rico against his employer, HEPA. His amended complaint alleged "illegal harassment, discrimination and retaliation, due to [his] disability, requests for a reasonable accommodation, age, and for his opposition against [HEPA's] unlawful employment practices," in violation of the ADA and the ADEA. He also alleged violations of Puerto Rico law.

On June 24, [*3]  2014, about one month after the conclusion of discovery -- on the last day of which Escribano's deposition had been taken -- HEPA filed a motion for summary judgment. HEPA argued that it did not employ the minimum number of employees necessary to qualify as an "employer" under either the ADA or the ADEA. See 42 U.S.C. § 12111(5)(A) ("employer" for purposes of ADA requires "15 or more employees"); 29 U.S.C. § 630(b) ("employer" for purposes of ADEA requires "twenty or more employees"). In support, HEPA submitted "Quarterly Report[s] of Wages Paid to Each Employee" for the years 2012 and 2013 that had been filed with the Puerto Rico Department of Labor and Human Resources, as well as "Informative Return Statements" for the years 2012 and 2013, to show that HEPA had fewer than fifteen employees between 2012 and 2013.

Escribano filed a memorandum in opposition to HEPA's motion for summary judgment on August 13, 2014. He argued that HEPA had twenty-seven employees during the years 2011, 2012, 2013, and 2014. To support his argument, Escribano submitted: (1) a handwritten list prepared by Escribano, which had been produced in discovery, that listed the names of twenty-seven people who Escribano believed were employees of HEPA, and (2) a [*4]  sworn statement dated August 12, 2014, in which he stated that "[he] [was] fully aware of the fact that the defendant had 27 employees during the years in which the adverse employment actions were taken against [him], since [he] worked on a daily basis, along with the employees that appear in the list."

HEPA filed a reply to Escribano's memorandum on September 3, 2014, arguing that Escribano's allegations with regard to the number of HEPA employees were insufficient to defeat a motion for summary judgment and requesting that the district court strike Escribano's sworn statement in its entirety. HEPA stated that Escribano's "sworn statement consists of several new allegations never before mentioned, testimony that contradicts [Escribano's] testimony during his deposition, that is based on hearsay and/or that constitute a conclusory allegation and/or a reinstatement of [Escribano's] allegations of the Amended Complaint unsupported by a single piece of evidence or reference to the record." In short, HEPA alleged that Escribano, "confronted with the fact that there is no evidence to support his allegations, prepared a custom-made, self-serving statement . . . to face the ambiguities and [*5]  gaps of his factual and legal theories."

The district court granted HEPA's motion for summary judgment and its motion to strike Escribano's sworn statement on January 23, 2015. Reyes v. Prof'l HEPA Certificate Corp., 74 F. Supp. 3d 489 (D.P.R. 2015). Invoking the sham affidavit doctrine and our opinion in Morales v. A.C. Orssleff's EFTF, 246 F.3d 32, 35 (1st Cir. 2001), the district court explained that unless a party can provide a "satisfactory explanation" for doing so, "[f]ollowing discovery, a party may not use a later affidavit to contradict facts previously provided to survive summary judgment." Reyes, 74 F. Supp. 3d at 491. The court then noted that Escribano's sworn statement -- signed after HEPA's motion for summary judgment and just one day before Escribano's opposition was filed -- "provides no explanation as to its tardiness, inconsistencies with previous facts and new factual contentions." Id. Lamenting that "this [was] not the first time this court face[d] a sham affidavit issue with [Escribano's] counsel," id. at 492, the district court struck Escribano's sworn statement, held that Escribano's pleadings supported by the stricken evidence would be deemed unsupported, and granted HEPA's motion for summary judgment with regard to Escribano's ADA and ADEA claims, id. at 493, 495-96. The court also declined to exercise supplemental jurisdiction over Escribano's state law claims [*6]  and dismissed them without prejudice. Id. at 496; see 28 U.S.C. § 1367(c)(3).

In a separate order dated January 23, 2015, the district court ordered the parties to "show cause as to why [Escribano] or his counsel should or should not be sanctioned pursuant to Fed. R. Civ. P. 11(b) and 28 U.S.C. § 1927." Both parties filed motions in compliance with the order on February 6, 2015. Escribano also filed a notice of appeal from the judgment that same day.

On February 18, 2015, the district court issued an opinion and order imposing on Escribano's counsel, Escanellas-Rivera, a $500 sanction for violation of Rule 11(b) of the Federal Rules of Civil Procedure and a $500 sanction for violations of 28 U.S.C. § 1927. Reyes v. Prof'l HEPA Certificate Corp., 86 F. Supp. 3d 79, 82-83 (D.P.R. 2015). In imposing the sanction for violations of 28 U.S.C. § 1927, the district court judge noted that "[c]ounsel's behavior is not an isolated event" and that he and other judges in the District of Puerto Rico had previously admonished Attorney Escanellas-Rivera for filing post-summary judgment affidavits.1 Id. at 83. Escribano filed an amended notice of appeal on February 24, 2015, to include an appeal of the district court's order on sanctions.

1   The district court cited the following cases as examples of Attorney Escanellas-Rivera's history of filing post-discovery affidavits: Levine-Diaz v. Humana Health Care, 990 F. Supp. 2d 133, 140 (D.P.R. 2014) (disregarding portions of affidavit where "it was either incongruent with [*7]  [the plaintiff's] deposition testimony or the matter in question was the subject of extensive questioning during deposition, yet she decided to elaborate further in her affidavit"); Rodriguez-Fonseca v. Baxter Healthcare Corp. of P.R., 899 F. Supp. 2d 141, 148 (D.P.R. 2012) ("Plaintiff's attorney is hereby admonished to never again file a sham affidavit before this Court."); Order at 2, Velazquez-Perez v. Developers Diversified Realty Corp., No. 10-1002 (D.P.R. June 12, 2012), ECF No. 131 (striking post-summary judgment affidavit under sham affidavit doctrine, and noting that "a practice of presenting post summary judgment affidavits . . . simply makes a mockery out of Rule 56"); Rivera v. Empresas Y-Nuina, Inc./Kikuet, No. 10-1574, 2011 U.S. Dist. LEXIS 87906, 2011 WL 3443086, at *3-4 & n.3 (D.P.R. Aug. 8, 2011) (noting the defendant's objection to the plaintiff's submission of a sworn statement, but declining to find that it was a sham affidavit); Melendez-Ortiz v. Wyeth Pharm. Co., 775 F. Supp. 2d 349, 359 (D.P.R. 2011) (adopting magistrate judge's recommendation to disregard portions of affidavit under sham affidavit doctrine); Mojica v. El Conquistador Resort & Golden Door Spa, 714 F. Supp. 2d 241, 252 (D.P.R. 2010) (noting submission of "self-serving affidavit," but declining to find that the affidavit was a sham affidavit); Rivot-Sanchez v. Warner Chilcott Co., 707 F. Supp. 2d 234, 239 & n.1 (D.P.R. 2010) (adopting magistrate judge's recommendation to strike portions of sworn statement under sham affidavit doctrine); Marquez v. Drugs Unlimited, Inc., No. 08-2387, 2010 U.S. Dist. LEXIS 26794, 2010 WL 1133808, at *4-6 (D.P.R. Mar. 22, 2010) (disregarding several statements in a sworn statement under sham affidavit doctrine); Order, Baerga-Castro [*8]  v. Wyeth Pharm., No. 08-1014 (D.P.R. July 15, 2009), ECF No. 78 (granting motion to strike affidavit); Franco v. GlaxoSmithKline, No. 06-1781, 2009 U.S. Dist. LEXIS 19835, 2009 WL 702221, at *7-8 (D.P.R. Mar. 11, 2009) (adopting magistrate judge's report and recommendation, which disregarded several statements in sworn affidavit under sham affidavit doctrine); Rivera-Rocca v. RG Mortg. Corp., 535 F. Supp. 2d 276, 285-86 n.5 (D.P.R. 2008) (disregarding "sham affidavit"). The district court also cited Sánchez-Medina v. Unicco Service, Co., No. 07-1880, 2010 U.S. Dist. LEXIS 105142, 2010 WL 3955792 (D.P.R. May 20, 2010); however, that case did not involve an affidavit submitted by Attorney Escanellas-Rivera, but rather a motion to strike portions of the plaintiff's (Escanellas-Rivera's client) deposition testimony because of inconsistencies, 2010 U.S. Dist. LEXIS 105142, [WL] at *1-2.


"We review a district court's grant of summary judgment de novo, and review the record in the light most favorable to the nonmoving party, drawing all reasonable inferences in the nonmoving party's favor." Del Valle-Santana v. Servicios Legales de P.R., Inc., 804 F.3d 127, 129 (1st Cir. 2015). "[W]e review the district court's decision as to 'the evidentiary materials it will consider in deciding a motion for summary judgment' only for 'a clear abuse of discretion.'" Lennon v. Rubin, 166 F.3d 6, 8 (1st Cir. 1999) (quoting EEOC v. Green, 76 F.3d 19, 24 (1st Cir. 1996)).

A. Escribano's Sworn Statement

Escribano first contends that the district court erred in striking his sworn statement. He argues that "there were no inconsistencies between the [sworn statement] and previous statements from Escribano," and that he provided an adequate [*9]  explanation for the late filing when he stated that he had to prepare the sworn statement in order to support facts that HEPA's counsel never asked about during Escribano's deposition, "but were raised by HEPA, along with new factual allegations never before raised in [HEPA's motion for summary judgment]."

The district court did not abuse its discretion in striking Escribano's statement. "[W]here a party has given 'clear answers to unambiguous questions' in discovery, that party cannot 'create a conflict and resist summary judgment with an affidavit that is clearly contradictory,' unless there is a 'satisfactory explanation of why the testimony [has] changed.'" Hernandez-Loring v. Universidad Metropolitana, 233 F.3d 49, 54 (1st Cir. 2000) (second alteration in original) (quoting Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir. 1994)); see also Torres v. E.I. DuPont de Nemours & Co., 219 F.3d 13, 20 (1st Cir. 2000).

There are a number of inconsistencies between Escribano's deposition testimony and his allegations in the sworn statement.2 For example, in his sworn statement, Escribano alleged that between March and April 2013, he was subjected to derogatory comments regarding his age from employees David Ayala, Alfredo García, Jeniffer Zayas, and Anabel Pérez. But earlier in his deposition, when defense counsel pressed him on "[w]ho specifically told [him] that [he was] old," he identified only Ayala [*10]  and García. Defense counsel then asked, "Who else?"; Escribano responded, "That's it." Additionally, in his sworn statement, Escribano claimed that in August 2013, Ayala, García, and Pérez "told [him] that they did not want [him] working with them, due to the discrimination charge file[d], and also because [he] was old and sick and was useless due to the requests for reasonable accommodation made." Though Escribano said that Ayala had made disparaging comments about his age, at no point during his deposition did he allege the particular discriminatory acts cited above; indeed, when asked at the end of his deposition if he could identify any other discriminatory acts against him by Ayala, García, or Pérez, he answered in the negative. Elsewhere in his sworn statement, Escribano alleged that adverse employment actions were taken against him in 2012. But in his deposition, Escribano described the alleged discrimination as beginning in 2013. Additionally, in his sworn statement, Escribano stated -- inconsistently -- that employee Alexander Velázquez was elevated to a position higher than Escribano's in either November 2012 or March 2013. In his deposition, though, Escribano stated -- also inconsistently [*11]  -- that Velázquez was promoted above him either in April 2013 or after Escribano filed a discrimination charge in June 2013.

2   The district court did not err in declining to enumerate each of the inconsistencies between the sworn statement and deposition. See Orta-Castro v. Merck, Sharp & Dohme Quimica P.R., Inc., 447 F.3d 105, 110 (1st Cir. 2006) ("[W]e can find no authority whatsoever for the proposition that a district court must specifically enumerate the contradictions that lead it to disregard a given piece of evidence.").

The timing of the sworn statement -- signed one day before Escribano's opposition to HEPA's motion for summary judgment was filed -- also supports the district court's conclusion that Escribano's sworn statement was an inappropriate attempt to manufacture issues of fact and should be stricken. See Orta-Castro v. Merck, Sharp & Dohme Quimica P.R., Inc., 447 F.3d 105, 110 & n.2 (1st Cir. 2006) ("[T]he Statement was executed only after [the defendant] had filed its motion for summary judgment, thus suggesting that the Statement was made solely to create an issue of fact for the purpose of surviving summary judgment," id. at 110.); Torres, 219 F.3d at 20-21 (affirming district court's decision to strike affidavits that were offered after defendants had filed motions for summary judgment); Colantuoni, 44 F.3d at 5 ("[W]e think it significant that the affidavit was offered only after defendants had filed motions for summary [*12]  judgment. In these circumstances, we are persuaded that plaintiff's affidavit should be disregarded in considering the propriety of summary judgment.").

Escribano presents no satisfactory explanation for the inconsistencies created by his eleventh-hour filing. And the explanation he does offer does not work. He argues that HEPA's counsel did not address certain factual allegations during Escribano's deposition and then raised them for the first time in HEPA's motion for summary judgment, which was itself supported by a different sworn statement, thereby entitling Escribano to "support his opposition to the dispositive motion with a [sworn statement] as for those factual allegations." But this argument, which the district court characterized as a "brother counsel did it first" argument, Reyes, 74 F. Supp. 3d at 493, falls flat because it does not explain why Escribano's testimony is inconsistent or why he failed to describe certain acts of alleged discrimination in his deposition even though he was given the opportunity. Escribano's insistence that evidence he needed to support his opposition to summary judgment was unavailable because defense counsel never asked about it during Escribano's deposition is meritless; [*13]  Escribano cannot blame opposing counsel for his failure to marshal the evidence he required.

Under these circumstances, the district court acted within its discretion in striking Escribano's sworn statement.


C. Sanctions

Finally, Escribano challenges the imposition of sanctions on his attorney based on the filing of the sworn statement. The district court imposed sanctions under Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927.7 In imposing these sanctions, the district court placed particular emphasis on Attorney Escanellas-Rivera's long track record of similar tactics, noting that in one case, he was "admonished to never again file a sham affidavit before this Court." Reyes, 86 F. Supp. 3d at 83 (quoting Rodriguez-Fonseca v. Baxter Healthcare Corp. of P.R., 899 F. Supp. 2d 141, 148 (D.P.R. 2012)).

7   Federal Rule of Civil Procedure 11(c)(1) authorizes the imposition of sanctions on an attorney who has violated Federal Rule of Civil Procedure 11(b), which governs attorneys' representations to the court.

28 U.S.C. § 1927 provides: "Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct."

"We review a district court's imposition of sanctions for abuse of discretion." Jensen v. Phillips Screw Co., 546 F.3d 59, 64 (1st Cir. 2008); see CQ Int'l Co. v. Rochem Int'l, Inc., USA, 659 F.3d 53, 59 (1st Cir. 2011). "This standard is not appellant-friendly, and 'a sanctioned litigant bears [*22]  a weighty burden in attempting to show that an abuse occurred.'" Jensen, 546 F.3d at 64 (quoting Young v. Gordon, 330 F.3d 76, 81 (1st Cir. 2003)). Escribano's entire argument opposing sanctions is predicated on his claim that the district court erred in concluding that many of his statements in the sworn statement were a sham. We already rejected that argument above, and Escribano marshals no other defenses. We find no abuse of discretion in the court's order of sanctions.

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