Wis.LIRC ER Decision: Smith, Arline - September 30, 1999 - Voluntary dismissal - with prejudice or without prejudice; Attorneys fees, availability of in favor of respondents

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

ARLINE SMITH, Complainant

RACINE UNIFIED SCHOOL DISTRICT, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 199702274, EEOC Case No. 26G971494

This case is before the commission for reconsideration of its May 20, 1999 decision in this matter which affirmed the administrative law judge's (ALJ's) order that "The ERD complaint in this matter is dismissed without prejudice to any rights the complainant may have to pursue this matter in another forum." On motion by counsel for the respondent, the commission set aside its earlier decision on June 15, 1999, pending further consideration. A briefing schedule was then requested by counsel for the complainant. The last brief was filed with the commission on July 15, 1999.

For reasons set forth in the memorandum opinion portion of this decision, the Labor and Industry Review Commission hereby issues the following:

ORDER

The administrative law judge's decision granting the complainant's request for a withdrawal of her complaint without prejudice is reversed and this matter is remanded to the administrative law judge for a ruling on the respondent's motion to dismiss the complainant's complaint on the merits, with prejudice. The respondent's request for costs and attorney's fees is denied.

Dated and mailed September 30, 1999
smithar2.rpr : 125 : 5

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

James A. Rutkowski, Commissioner

MEMORANDUM OPINION

At issue in this case is whether the complainant's complaint should be dismissed with or without prejudice, (1 ) and whether or not the respondent is entitled to an award for attorney's fees and costs for a claimed abuse of the Equal Rights Division's hearing process on the part of the complainant's counsel. These issues arise in connection with a hearing held on December 1, 1998, on the merits of complainant Arline Smith's claims that she had been discriminated against by the respondent on the basis of race with respect to her terms and conditions of employment, and retaliated against for opposing a discriminatory practice under the Fair Employment Act. At that hearing counsel for the complainant called several of the respondent's employes and one former employe to testify, and presented testimony herself on her claims of discrimination. After completion of the complainant's testimony, counsel for the complainant apparently announced off the record that the complainant wished to voluntarily withdraw her complaint filed with the division without prejudice and to pursue her complaint in federal court. Counsel for the respondent did not agree to the complainant's voluntary dismissal motion and instead moved for a dismissal of the complaint on the merits, with prejudice. (2 )

Section DWD 218.03(7) of the Wisconsin Administrative Code provides as follows:

(7) WITHDRAWAL OF COMPLAINT. A complaint may be withdrawn at any time. A request for withdrawal shall be in writing and shall be signed by the complainant or by the complainant's duly authorized representative. Upon the filing of a request for withdrawal, the department shall dismiss the complaint by written order. Such dismissal shall be with prejudice unless otherwise expressly stated in the order.

The last sentence of this provision indicates that there is a degree of discretionary authority on the part of the division as to whether an order of dismissal following a request for withdrawal of a complaint shall be with or without prejudice. This administrative provision does not indicate what factor or factors the division should consider in the exercise of this discretion, however. Nor can it be ascertained from reading the ALJ's dismissal order what he considered as reason for granting a dismissal of Arline Smith's complaint "without prejudice to any right the complainant may have to pursue this matter in another forum."

While complaints before the division are not governed by the procedures for civil actions in courts, the Wisconsin Statutes and case law governing voluntary dismissals of civil actions provides some helpful guidance with respect to administering the division's administrative rule regarding requests for withdrawal of complaints without prejudice. Section 805.04, Stats., governs voluntary dismissal of civil actions in court. Under sec. 805.04(2), (3 ) a trial court may grant a plaintiff's motion for voluntary dismissal upon such terms and conditions as the court deems proper. In Clark v. Mudge, Case No. 99-0082 (Ct. App. 1999)(Recommended for Publication), the court stated that the basic purpose of sec. 805.04(2) is to freely permit the plaintiff, with court approval, to voluntarily dismiss an action so long as no other party will be prejudiced. The rule allows the plaintiff to withdraw his or her action from the court without prejudice to future litigation. The court, noting that the decision to grant or deny a motion for voluntary dismissal under sec. 805.04(2), Stats., is committed to the trial court's discretion, listed the following factors as being included for consideration when reviewing a motion for voluntary dismissal: (l) the plaintiff's diligence in bringing the motion; (2) any undue vexatiousness on the plaintiff's part; (3) the extent to which the suit has progressed, including the defendant's efforts and expenses in preparation for trial; (4) the duplicative expense of relitigation; and (5) the adequacy of plaintiff's explanation for a need to dismiss.

The respondent's bases for taking exception to the ALJ's granting of the complainant's request for a withdrawal without prejudice seems to focus on the third and fifth factors listed above. The respondent has asserted that it relied on complainant's counsel's stated intent that the complainant would pursue the matter through the hearing before the division, and therefore expended considerable time, money and resources in preparing for the hearing. The respondent has further asserted that the complainant had finished submitting evidence in her case because in an off-the-record discussion counsel for the complainant represented to the respondent and the ALJ that he had no further witnesses to call. Also, the respondent has asserted that in the discussion off the record, counsel for the complainant stated that he had not intended to complete the Equal Rights Division hearing, but had used the hearing process for discovery purposes related to the complainant's potential federal claims, and that this was an abuse of process that should not be rewarded otherwise this tactic could become standard process for complainants who use the hearing for discovery purposes and/or unsuccessfully attempt to fully prove their own cases and calculate that they are about to face dismissals with prejudice.

As noted above, it cannot be ascertained from reading the ALJ's dismissal order what he based his decision on to grant the complainant a voluntary dismissal of her complaint without prejudice. Further, what are supposedly the original cassette tapes of the hearing that was furnished to the commission by the division, reveals that there is no hearing record of the complainant's request to withdraw her complaint. The tape recording of the hearing ends at the point where the two counsel and the ALJ go off the record for a discussion. There is nothing more on the tape after this point. The parties apparently did go back on the record to discuss the complainant's request to withdraw her complaint, however, since the synopsis prepared by the division's legal assistant summarizes the respondent as stating that it was not agreeing to stipulate to the complainant's voluntary dismissal of the case, and was moving to dismiss the case on the merits, with prejudice. This is the extent of the summary. This summarization of what occurred is shown in the synopsis as taking place on Tape 5, side 1. A review of the hearing tapes marked number 4 and number 5, however, reveals that these tapes contain the exact same testimony and end with the ALJ going off the record for a discussion with both counsel.

An affidavit by one of the counsel for the respondent provides the following account of what transpired when the ALJ went back on the record:

"15. Once on the record, counsel for Complainant stated that he wished to move for a voluntary dismissal of the matter without prejudice. I stated that (I) did not agree to Complainant's motion for a voluntary dismissal, and instead moved for a dismissal with prejudice, based on the fact that Complainant had finished calling all her witnesses but had failed to demonstrate a prima facie case of race discrimination. Judge Grandberry stated that, with great reluctance, he was denying the District's motion for dismissal on the merits and granting the Complainant's motion for voluntary dismissal, on the basis that the Complainant had not yet formally yet (sic) rested her case."

(Emphasis added)

In a footnote on page 2 of complainant's counsel's brief submitted in opposition to the respondent's petition for reconsideration, counsel for the complainant asserts that "It must be noted that the Plaintiff never rested her case." Interestingly, however, the brief by counsel for the complainant does not address the assertion by respondent's counsel that when asked during the off-the-record discussion if he had any other witnesses to call, counsel for the complainant stated that he did not. Counsel for the complainant also has not addressed the respondent's assertion that during the discussion off the record counsel for the complainant stated that he had not intended to complete the ERD hearing, but had used the hearing process for discovery purposes related to the complainant's potential federal claims.

The first issue that must be resolved is whether or not the complainant was properly granted a withdrawal of her complaint without prejudice. While not all of the discussion regarding the complainant's request to withdraw her complaint appears on the record, the fact that the complainant's complaint before the ERD had proceeded to the hearing on the merits with the complainant examining several witnesses, and the fact that the respondent has incurred substantial expenses while undertaking extensive efforts to prepare for the hearing, weighs heavily in favor of the respondent's position that allowing the complainant to withdraw her complaint without prejudice causes unfair prejudice to the respondent. Further, the brief by the complainant does not contest the respondent's claim that counsel for the complainant stated that he had not intended to complete the ERD hearing, but had used the hearing process for discovery purposes related to the complainant's potential federal claims. If true, this raises a question as to the validity of the complainant's explanation for a need for dismissal of her complaint. This is not an adequate basis for requesting a voluntary withdrawal of the complaint without prejudice. As noted by the respondent, prehearing discovery procedures were available to the complainant, and her failure to exercise those discovery options cannot support or justify the use of the hearing on the merits as a substitute discovery tool.

Under these circumstances, the commission finds that it was error to grant the complainant's request for a withdrawal of her complaint without prejudice.

The question that arises next, however, is, what should happen with the case at this point? In its original petition in this matter the respondent requested that the commission dismiss the complainant's complaint on the merits. (4 ) At the hearing, counsel for the respondent had moved for a dismissal of the complaint by the ALJ on the merits, with prejudice. The respondent's grounds for a dismissal of the complaint on the merits appears to rely partly on its assertion that the complainant had represented to it and the ALJ during an off-the-record discussion that he had no further witnesses to call, and thus had fully exercised her right to present evidence at the hearing, and partly based on its claim that the hearing revealed that the complainant produced no evidence that she was subjected to any race discrimination by the district.

The commission has chosen not to rule on the respondent's motion for dismissal of the complaint on the merits, with prejudice. There are several reasons. Part of the reason has to do with the inadequacy of the record before the commission. There are several instances where hearing testimony was lost due to what was apparently a malfunctioning of the hearing tape recorder. All totaled, there is over 16 minutes of testimony, given by three witnesses, that was lost due to what was apparently a malfunctioning of the tape recorder. The witnesses' testimony lost included seven consecutive minutes of testimony by Mary Beth Wynn, the principal at Schulte School at the relevant time in question, and the primary "target" of the complainant's claim of race discrimination, several instances of lost testimony by the complainant, ranging from about one minute to nearly three minutes, and several instances of lost testimony by Jetha Lawson Pinkson, Human Resources Assistant Manager for the respondent school district, which totaled well over four minutes. (5 ) Additionally, while the parties had evidently agreed off the record what exhibits would be considered at the hearing, the record does not disclose what exhibits were actually received into evidence, and many of the exhibits referenced at the hearing could only be located by examining various documents in the case file in an effort to determine if those documents were the actual exhibits being referenced at the hearing. Moreover, there were at least three exhibits that were discussed at the hearing (Exhibit 12, apparently Complainant's Exhibit, and Respondent's Exhibits 32 and 35) that could not be located in the file.

Second, according to the affidavit submitted by one of respondent's counsel, the ALJ's stated basis on the record for the denial of the respondent's motion to dismiss on the merits was that the complainant had not yet formally rested her case. (Counsel for the complainant has also asserted that the complainant "never rested her case" in his brief to the commission.) The hearing record of the ALJ's ruling has been lost, and his reason for this ruling is not known. Because respondent's counsel's affidavit statement of the ALJ's stated basis on the record for denial of the motion to dismiss appears to be inconsistent with the respondent's further affidavit claim that during an off-the-record discussion counsel for the complainant stated he had no further witnesses to call, this is a matter that the ALJ should resolve, not the commission.

Third, even assuming that the complainant had ended the presentation of her case, there are credibility issues that need to be resolved in order to decide the respondent's motion to dismiss the case on the merits. For instance, the complainant, who began her assignment at Schulte School during the fall of 1996, and was the only black teacher at Schulte that school year, maintained that twice Ms. Wynn had stated to her that "You were not chosen to work here." The complainant included this claim in a November 1996, written letter to Ms. Wynn protesting alleged discrimination against her. The complainant testified that these were Ms. Wynn's exact words, and she characterized Ms. Wynn's demeanor as "evil" when making this comment. Ms. Wynn, however, denied having made such statements. The complainant's claim of discrimination is, in part, that she was discriminated against with respect to her terms and conditions of employment. Clearly the alleged statements about the complainant not being chosen to work at Schulte, if believed, raise a question as to her welcomeness at that school and the possibility that a bias existed against her. Indeed, one of the claims made by the complainant at the hearing, although apparently little detail was provided, was that she was not contacted regarding computer time or regarding materials that she could use for math class. No explanation appears of record regarding these claims by the complainant.

Also, the complainant spent a large portion of her hearing testimony on her claim that she was not allowed to exercise her professional expertise in the process of grading students' performance and recording those grades on the students' report cards. (The complainant alleged in her complaint that "grades (were) forged on documents in an effort to further humiliate and demoralize (my) character whereas White teachers grades were not subject to scrutiny and readily accepted.") Specifically, the complainant asserted at the hearing that two meetings were called by Ms. Wynn where her method of grading was objected to, and, further that, although she had submitted a document representing what were to be her third quarter grades for her students, Ms. Wynn gave her some documents highlighting changes made in the grades for her students. Ms. Wynn apparently maintained that the complainant had entered different grades on students' report cards than were reported on her initial document listing of students' grades, causing a discrepancy as to what grades some students should receive, and that what she (Ms. Wynn) did was to highlight those discrepancies in documents given to the complainant. The complainant, however, maintains there were only a few report cards where she had actually recorded students grades because in a number of instances grades had already been recorded on the report cards for her students, and that she therefore could not enter grades on the students' report cards. The complainant also denied having caused any change in her student's grades.

While the commission may itself decide issues of credibility, in the absence of a complete record before the commission, the commission is not in a proper position to resolve issues of credibility. Perhaps the ALJ has written notes that he took at the hearing that the parties would be willing to stipulate using for the missing portions of the record, and that the exhibits referenced at the hearing but not contained in the file may be in the possession of the ALJ or one of the parties.

Considering the above-stated reasons collectively, the commission decided that the best course of action was to remand the matter to the ALJ for a ruling on the respondent's motion for dismissal of the complainant's complaint on the merits, with prejudice.

Finally, in its earlier decision the commission denied the respondent's request for an award of costs and attorney's fees as a sanction for the claimed abuse of the department hearing process on the part of the complainant's counsel. In part, the commission's decision noted that in the case cited by the respondent in support of its claim for awarding costs and fees as a sanction for an abuse of process, Dobbs v. Super 8 Motel, (LIRC, 10/15/96), an award of attorney's fees had been ordered in that case on the basis of Dobbs' failure twice to appear at a deposition under the express authority of Wisconsin Administrative Code, sec. DWD 218.14(4), which provides the division the same authority as a court under ch. 804 to impose sanctions for failure to comply with discovery requests.

Continuing its claim that it should be awarded sanctions in the form of costs and attorney's fees, the respondent argues in its reply brief submitted in support of its petition for reconsideration that the complainant's counsel's conduct constitutes a blatant failure to comply with a discovery order. The respondent argues that counsel failed to comply with a discovery order because around September 17, 1998, the ALJ had "ordered" that discovery be completed no later than November 16, 1998, yet after that date counsel subpoenaed several witnesses to the hearing, calling several to testify, and then requesting for a withdrawal of the case, stating that he had not intended to complete the hearing but used the hearing process for discovery purposes related to the complainant's potential federal claims. The respondent's request for costs and attorney's fees fails. Under Chapter 804 an award may be made for expenses, including attorney's fees, incurred in obtaining an order for compelling discovery, caused by a party's failure to obey an order to provide or permit discovery, that were incurred in the making of proof regarding a failure to permit, or that were caused by the failure of a party to attend his or her own deposition, to serve answers to interrogatories, to respond to a request for inspection, or to seasonably supplement or amend a prior discovery response. See Wis. Stats., secs. 804.12(1)(c), (2)(b), (3) and (4). Assuming for purposes of argument that the ALJ had "ordered" that discovery be completed by November 16, 1998, neither ch. 804 nor DWD sec. 218.14(4) of the administrative code provides authority for awarding costs and attorney's fees sought here as a sanction for the claimed abuse of process by the complainant.

Moreover, to the extent that the respondent seeks costs and attorney's fees as compensation for its expenses in preparation for and participation in the hearing, the commission does not consider it appropriate to award the respondent costs and attorney's fees associated with its preparation for and participation in the hearing where the commission has determined that it was error to grant the complainant's request for a withdrawal of her complainant without prejudice and the matter is being remanded for the ALJ to rule on the respondent's motion to dismiss the complainant's complaint on the merits, with prejudice.

cc:
Willie J. Nunnery
Robin Van Harpen

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Footnotes:

(1)( Back ) Black's Law Dictionary defines "without prejudice" as follows: "Where an offer or admission is made `without prejudice,' or a motion is denied or a suit dismissed `without prejudice,' it is meant as a declaration that no rights or privileges of the parties concerned are to be considered as thereby waived or lost except insofar as may be expressly conceded or decided.A dismissal `without prejudice' allows a new suit to be brought on the same cause of action."

(2)( Back ) The commission's original decision, relying on University of Tennessee v. Elliot, 478 U.S. 788, 41 FEP Cases 1771 (1986)(A plaintiff who pursues a Title VII action in federal court following an unreviewed state administrative determination is entitled to a trial de novo), simply concluded that even had the complainant proceeded with her case before the ALJ to its conclusion and received an adverse decision, as long as there was no state court review of her claims she would still be entitled to pursue her claims in federal court since Congress did not intend unreviewed state administrative determinations to have preclusive effect on a plaintiff's Title VII claims. However, this was error in that this decision fails to specifically address the department's administrative rule regarding withdrawal of complaints, and it presumed that the only claim the complainant would pursue in federal court would be a claim under Title VII.

(3)( Back ) This statute provides in part as follows: ".an action shall not be dismissed at the plaintiff's instance save upon order of court and upon such terms and conditions as the court deems proper. Unless otherwise specified in the order, a dismissal under this subsection is not on the merits."

(4)( Back ) In its reply brief submitted in support of reconsideration of the commission's decision the respondent requests that the ALJ be ordered to issue findings of fact and a dismissal on the merits.

(5)( Back ) There was also a loss of a portion of the record near the beginning of the hearing during a preliminary argument over the relevance of allowing the testimony of two former Schulte black teachers, as well as the discussion that occurred at the end of the hearing following an off-the-record discussion.