USCA1 Opinion
United States Court of Appeals
For the First Circuit
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No. 95-1931
GEORGE J. SERAFINO AND ANITA M. SERAFINO,
Plaintiffs, Appellants,
v.
HASBRO, INC., ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Coffin, Senior Circuit Judge,
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and Cyr, Circuit Judge.
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Morris M. Goldings with whom Ellen S. Shapiro was on brief for
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appellants.
Arthur G. Telegen with whom Amy B.G. Katz, Charles S. Cohen, and
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David G. Cohen were on brief for appellees.
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April 23, 1996
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COFFIN, Senior Circuit Judge. Plaintiff-appellant George
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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
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1 Since this appeal is from an order granting a motion to
dismiss, we derive the facts from the pleadings. PHC, Inc. v.
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Pioneer Healthcare, Inc., 75 F.3d 75, 77 (1st Cir. 1996).
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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
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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."
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Mass. Gen. L. Ann. ch. 151B3, quantum meruit, and intentional
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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
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3 Chapter 151B protects people against unlawful
discrimination. Wheelock College v. Massachusetts Comm'n Against
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Discrimination, 371 Mass. 130, 137, 355 N.E.2d 309 (1976).
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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."
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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
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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.
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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
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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
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silence." Spevack v. Klein, 385 U.S. 511, 514 (1967) (quoting
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Malloy v. Hogan, 378 U.S. 1, 8 (1964)) (emphasis added). The
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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
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(1965)).
Unconstitutional penalties for the invocation of the
privilege have included disbarment of a lawyer, see Spevack, 385
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U.S. at 516; forfeiture of jobs by public employees, see Gardner
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v. Broderick, 392 U.S. 273, 278 (1968) and Uniformed Sanitation
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Men Ass'n v. Commissioner of Sanitation, 392 U.S. 280, 284-85
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(1968); and imposition of substantial economic sanctions, see
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Lefkowitz v. Turley, 414 U.S. 70, 82-83 (1973). While automatic
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dismissal of a civil action could fall neatly within this
category, see Wehling v. Columbia Broadcasting Sys., 608 F.2d
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1084, 1087-88 (5th Cir. 1979), we cannot agree that dismissal is
always impermissible. See id. at 1087 n.6 ("[T]he district court
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is not precluded from using dismissal as a remedy to prevent
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unfairness to the defendant.").
The Supreme Court has indicated that the assertion of the
privilege may sometimes disadvantage a party. See Baxter v.
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Palmigiano, 425 U.S. 308, 318 (1976) (allowing adverse inferences
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to be drawn from a civil party's assertion of the privilege);
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Flint v. Mullen, 499 F.2d 100, 104 (1st Cir. 1974) ("[N]ot every
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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,
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903 F.2d 36, 44 (1st Cir. 1990), it also must ensure that the
opposing party is not unduly disadvantaged. See Gutierrez-
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Rodriguez v. Cartagena, 882 F.2d 553, 577 (1st Cir. 1989)
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(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
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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.
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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
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Nash, Inc., 25 F.3d at 187, 192 (3d Cir. 1994); Wehling, 608 F.2d
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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.
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Cir. 1981), vacated mem., 458 U.S. 1118 (1982) (enunciating
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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,
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903 F.2d at 44.
B. The Court's Balancing Test
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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
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See, e.g., Wehling v. Columbia Broadcasting Sys., 608 F.2d 1084,
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1087 n.6 (5th Cir. 1979); Lyons v. Johnson, 415 F.2d 540, 542
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(9th Cir. 1969); Mt. Vernon Sav. & Loan v. Partridge Assocs., 679
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F. Supp. 522, 529 (D. Md. 1987); Stop & Shop Cos. v. Interstate
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Cigar Co., 110 F.R.D. 105, 108 (D. Mass. 1986); Jones v. B. C.
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Christopher & Co., 466 F. Supp. 213, 227 (D. Kan. 1979); Penn
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Communications Specialties, Inc. v. Hess, 65 F.R.D. 510, 512
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(E.D. Pa. 1975); Wansong v. Wansong, 395 Mass. 154, 157-58, 478
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N.E.2d 1270 (1985).
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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.
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1. Importance of the Information
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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),
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which generally guides claims under Mass. Gen. L. Ann. ch. 151B,
Woods v. Friction Materials, Inc., 30 F.3d 255, 263 (1st Cir.
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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
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Mental Health, 419 Mass. 356, 362-63, 645 N.E.2d 1159 (1995). In
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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
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v. Nashville Banner Pub. Co., 115 S. Ct. 879, 886 (1995) (holding
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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
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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.
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investigate a matter that goes to the heart of the damages
sought, defendants would be substantially prejudiced.
2. Alternative Means
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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
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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
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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.
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Though he never requested one, Serafino contends that the
court could have issued a stay and cites Wehling in support. In
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Wehling, the Fifth Circuit reversed the denial of plaintiff's
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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
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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.
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