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

NANCY ANN KUTSCHENREUTER, Complainant A

EVE SCHOBER SCHOENLEBER, Complainant B

ROBERTS TRUCKING INC., Respondent

FAIR EMPLOYMENT DECISION
ERD Case Nos. 200501465, 2005014,
EEOC Case Nos. 26G-2005-01767C, 26G-2005-01768C


An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge (copy attached) is affirmed.

Dated and Mailed April 21, 2011

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

MEMORANDUM OPINION

Introduction -- The complainants, Nancy Ann Kutschenreuter and Eve Schober Schoenleber  (1),  each separately filed complaints in the spring of 2005 which alleged that they were sexually harassed by a co-worker at the company where they both worked, that the employer violated the Wisconsin Fair Employment Act by permitting the sexual harassment to occur, and that they were constructively discharged by this violation of the WFEA. After an investigation resulting in initial determinations of probable cause issued in June and July 2006, and a three day hearing which was completed in June 2007, an administrative law judge (ALJ) for the Equal Rights Division issued a decision on June 6, 2008 which found that the complainants had not established a violation of the Act.  (2)   The ALJ found that the complainants failed to establish their claims of work-related sexual harassment, and that what comments and conduct of a sexual nature did occur were consensual. The complainants petitioned for commission review. They challenge both the ALJ's decision on the merits, and rulings by the ALJ concerning their requests for sanctions against the respondent.
 

The merits - The ALJ's decision on the merits was based on her assessment, which she expressly stated and explained in her decision, that the complainants were not credible. Insofar as the merits are concerned, the complainants' challenge to the ALJ's decision focuses entirely on the argument that the ALJ erred in assessing credibility. Witness credibility is clearly the crucial issue in this case.

At the hearing in this matter, testimony was offered by the two complainants, as well as by Sandra Roberts, the owner of the respondent, and a number of other employees or former employees of the respondent.  (3)   The record contains a detailed summary of the testimony of all of these witnesses, which the commission has relied on in conducting its review, pursuant to its administrative rules.  (4)   In addition, testimony from the employee alleged to have harassed the complainants was received into the record in the form of an evidentiary deposition. The commission has considered all of this evidence, as well as the extensive documentary record in this case, closely and at length, and it has carefully considered the arguments of counsel regarding that evidence. Based on such review, the commission finds itself in complete agreement with the assessment of the ALJ regarding the credibility of the witnesses, and with the findings and conclusions made by the ALJ.

Without intending to indicate that these are the only considerations which affected its assessment of credibility in this matter, the commission would note the following for illustrative purposes.

The commission agreed with the ALJ that Kutschenreuter's testimony about Liebenow's visit to her home in early March 2005, was implausible, in a number of respects. This included but was not limited to her testimony about how Liebenow ended up alone with her in the house, and how her cell phone ended up in Liebenow's hand.

The commission was doubtful about the allegation by Schoenleber that Liebenow physically assaulted her in the office in November 2004, not least because of inconsistencies between her claims as to when she told Buckland and Kutschenreuter about it, and the testimony of Buckland about when he was told of alleged incidents of harassment by Schoenleber and Kutschenreuter.

The commission found itself in doubt about the accuracy of the testimony offered by Buckland as to the timing and sequence of occasions on which the complainants allegedly told him about incidents of harassment. One reason for this doubt had to do with Buckland's testimony as to exactly when it was that Kutschenreuter told him about Liebenow's visit to her home referred to above. It is undisputed that this visit by Liebenow to Kutschenreuter's home occurred in the first week of March, 2005. Buckland testified that the complainants told him in April 2005 that Liebenow had gone over to Kutschenreuter's and put his hands on her, that he (Buckland) then told Roberts about this the very next day, that on the day after that Roberts talked to Liebenow about it, and that this was probably April 23 or 24. However, Kutschenreuter testified that Liebenow's visit to her home was in the first week of March 2005, and that she told Buckland about it the very next day. As just described, Buckland's testimony places that conversation weeks later.

The testimony of Liebenow about the times he went out drinking with Schoenleber and or Kutschenreuter was very specific, and the commission felt that the nature of the detail provided in that testimony was characteristic of real recollection.

The commission also found the testimony of Jennifer McGee regarding the interactions between the complainants and Liebenow to be credible and persuasive as to the nature of the relationship between them. (5) 

The commission would again emphasize that the points noted above are only illustrative of the types of considerations that factored into its overall weighing of the credibility of the various witness. The commission also independently arrived at much the same view on the particulars bearing on credibility as described in the ALJ's Memorandum Opinion, see, ALJ's Decision, pp. 8-11. For that reason, it agrees with and adopts the ALJ's findings, conclusions, and Memorandum Opinion as its own.
 

Complainants' arguments for sanctions relating to discovery issues and alleged frivolous claims -- The complainants also raise several arguments that are separate from their position on the merits. In these they in effect assert that, whatever outcome is arrived at on the merits, they are entitled to an award of attorneys fees and costs in connection with certain procedural- and proof-related matters that occurred in the run-up to the hearing and at the hearing.

Some of these have to do with the pre-hearing discovery that occurred in this case. Thus, the complainants argue that the ALJ erred prior to hearing while the discovery was going on, in rulings she made (or did not make) regarding the respondent's alleged failure to respond to discovery requests under Wis. Stat. § 804.12(1) of the discovery code. They also argue that the ALJ erred during the hearing by not finding that the respondent violated Wis. Stat. § 804.12(4) by not supplementing the discovery responses it had made when those responses were allegedly called into question by the evidence. They also argue that the ALJ erred after the close of the hearing by not agreeing with the complainant's contention that the respondent had failed to admit matters which were ultimately proved at hearing, under § 804.12(3). They also raise an argument that the ALJ erred in refusing to order sanctions under Wis. Stat. § 227.483, "Costs upon frivolous claims".

The complainants' brief does not fully or accurately describe the discovery which took place and the rulings of the ALJ regarding it. In order to evaluate the claim that the ALJ either failed to rule, or ruled incorrectly, on discovery issues before her, it is necessary to consider the specifics of the discovery process in this case.

On July 26, 2006, complainants' counsel served Requests to Admit, Interrogatories, and Requests for Production of Documents in the Kutschenreuter matter. On September 20, 2006, complainant's counsel served Requests To Admit, Interrogatories, and Requests for Production of Documents in the Schoenleber matter.

On September 29, 2006, complainants' counsel filed a Motion to Compel and for Sanctions, alleging that the respondent had not responded to the discovery request in the Kutschenreuter matter. After some correspondence between the parties and the ALJ (more complaints from complainant's counsel, a response to the motion from the respondent, and the service of a discovery response from the respondent), the ALJ informed the parties in an October 20, 2006 letter that while she was "troubled" by the delay in the respondent's response to the discovery request, she had "decided not to take any action with respect to the [Complainants'] discovery motion at this time." In effect, the ALJ was informing the parties that she had decided that she would not grant the September 29, 2006 Motion to Compel and for Sanctions.

Just a few days later, the complainant's counsel wrote the ALJ complaining of more problems with discovery, and then on October 24, 2006 complainant's counsel filed a Second Motion To Compel And Request For Sanctions, specifically asking in her cover letter that the ALJ rule on the motion. It should be noted that this motion, like the first one, related to the discovery which had been requested on July 26, 2006 in the Kutschenreuter matter. The ALJ's initial response was to request the parties try to resolve the matter themselves and to set a date for the respondent to file a response to the "Second Motion."

On October 31, 2006, the complainant's counsel sent the ALJ a letter regarding the Schoenleber matter which stated, "this is both a motion to compel and award sanctions and a response to your 10/20 letter" and which closed, "[p]lease compel respondent to provide the interrogatory answers and award the appropriate sanctions." Unlike the other motions which counsel had filed, there were no formal motion papers (i.e., motion, supporting brief, etc.) enclosed, but only a copy of September 20, 2006 Requests To Admit, Interrogatories, and Requests for Production of Documents in the Schoenleber matter.

After some further exchanges of correspondence, the ALJ issued a letter ruling on November 29, 2006 which addressed the pending discovery-related issues in the Kutschenreuter matter.

With regard to the discovery issues regarding the Schoenleber matter, the ALJ stated in her letter that "[w]hile Ms. Radtke attempted to roll her objections concerning the Respondent's delay in answering Complainant Schober's discovery requests into this motion, I consider any motion concerning Ms. Schober's discovery requests to be premature and not before me." She advised the parties to make efforts to attempt to settle that issue and stated that "if the parties, after sincere efforts, are not able to resolve the discovery requests involving Ms. Schober, then the Complainant may make a motion concerning those efforts and the need to file such a motion with respect to Ms. Schober".

With regard to the discovery issues in the Kutschenreuter matter which were before her, the ALJ granted the motion in some respects (issuing corresponding orders to the respondent to comply with certain discovery requests), and denied it in other respects. She also held that sanctions against respondent under § 804.(1)(c), in the form of expenses of both the first and second discovery motion, were appropriate, and she set a schedule for the complainants' counsel to provide an itemized request for attorney's fees and costs and for the respondent to file a response.

On December 20, 2006, the ALJ ruled on the issue of costs and fees for the two discovery motions filed regarding the Kutschenreuter matter, ordering the respondent to pay $2,585.32 by January 11, 2007. No contention is being made that this order was not complied with.

There were two other matters touching to some extent on discovery which were put before the ALJ, but they were both ruled on. The respondent indicated that it proposed to take an evidentiary deposition of an individual to use at hearing, pursuant to 804.07(1)(c)1., complainants' counsel objected to this, and the ALJ ruled on January 4, 2007 that it would be allowed. Also, on December 13, 2006, the complainants' counsel filed a motion for an order pursuant to 804.12(2), relating to sanctions for failing to comply with discovery orders, barring the respondent from making a particular argument or in the alternative to bar it from calling a particular witness,  (6)   and on December 20, 2006, the ALJ issued a letter ruling which effectively denied that motion.

The hearing commenced on January 30, 2007. In March, 2007, in the context of a letter to the parties concerning the dates for continued hearing, the ALJ confirmed that no further discovery was being allowed.

Based on the above, the commission is satisfied that prior to the first day of hearing on January 30, 2007, the ALJ had ruled on all of the pre-hearing discovery matters which had been placed before her. According to the Summary of Proceedings, there was no contention made by counsel for the complainants at the commencement of the hearing on that day, that there were any outstanding discovery issues which had not been addressed. Furthermore, while her brief reflects her dissatisfaction with how the pre-hearing discovery went in this case, complainants' counsel has not clearly articulated any assertion that any ruling regarding discovery made by the ALJ prior to hearing was erroneous and prejudicial to her clients' opportunity for a fair hearing. The commission therefore considers that there are no objections to pre-hearing discovery rulings of the ALJ which have been preserved, and it is not necessary for it to further address the pre-hearing discovery process.

In any event, having reviewed the arguments made by the parties to the ALJ prior to the hearing and the ALJ's explanations of her ruling, the commission concludes that the reasoning of the ALJ was reasonable and that she was well within the range of her discretion in how she handled the very contentious discovery process in this case.

With regard to discovery and related issues that came up at hearing, the specifics are as follows.

On January 30, 2007, the first day of the hearing, and after the beginning of testimony from the second witness to testify (Sandra Roberts, the owner of the respondent), the complainant's counsel made a motion for sanctions regarding discovery problems. This had to do with the respondent's production at the hearing that day of a document which its witness testified should have been a part of the personnel file of the alleged harasser Liebenow, but which was not included in the documents produced in discovery by the respondent in response to the July 26, 2006 Request for Production of Documents which contained a request for production of that personnel file.

The respondent's counsel asked for time to respond to the objection, explaining that he had not been the attorney for respondent at the time the July 2006 discovery request was made and responded to. The ALJ indicated that she would reserve judgment on the issue. The parties apparently did not return to this issue on that day.

On the next day of hearing, June 12, 2007, the issue came up again. The day started with the respondent's production of some documents (time records of an employee of respondent, Jennifer McGee), which had apparently been the subject of a subpoena duces tecum served on respondent. In the course of examining Sandra Roberts, the complainants' counsel elicited from her the testimony that since the first day of hearing in the matter she had not made an effort to supplement or correct any of her answers to the complainants' written discovery requests. Counsel for the complainants then made a motion under sec. 227.483 regarding costs on frivolous claims. She also reminded the ALJ that the respondent had previously been sanctioned for failure to abide by discovery rules, and stated that nearly 5 months later the respondent had not made an effort to make sure everything was up-to-date and accurate, and asked the ALJ to sanction the respondent and its counsel. After an exchange between complainants' counsel and the ALJ, the ALJ essentially declined to rule on the motion, and the testimony continued.

The only other occasion on which the matter of an alleged failure to supplement discovery responses was even arguably raised at the hearing, was at the very end of the hearing on its third and final day, June 14, 2007, when complainants' counsel stated on the record her request to "renew her motion for sanctions." At this time, however, she did not specifically identify any alleged failure to supplement a discovery response; she was apparently simply referring to her previous arguments on this issue.

There are two distinct legal issues implicated by the foregoing. One has to do with the alleged failure by the respondent to meet the requirements of Wis. Stat. § 804.01(5) regarding supplementation of discovery responses. The other involves Wis. Stat. § 227.483, "Costs upon frivolous claims". These issues need to be addressed separately.

With regard to supplementation of discovery requests, Wis. Stat. § 804.01(5) provides:

§ 804.01 (5) Supplementation of responses. A party who has responded to a request for discovery with a response that was complete when made is under no duty to supplement the response to include information thereafter acquired, except as follows:

(a) A party is under a duty seasonably to supplement the party's response with respect to any question directly addressed to all of the following:

1. The identity and location of persons having knowledge of discoverable matters.

2. The identity of each person expected to be called as an expert witness at trial.

(b) A party is under a duty seasonably to amend a prior response if the party obtains information upon the basis of which 1. the party knows that the response was incorrect when made, or 2. the party knows that the response though correct when made is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment.

(c) A duty to supplement responses may be imposed by order of the court, agreement of the parties, or at any time prior to trial through new requests for supplementation of prior responses.

As discussed above, at hearing, the complainants' counsel raised specific allegations of failure by respondent to supplement a discovery response pursuant to § 804.01(5), in only two contexts. One concerned the omission of an August 15, 2001 disciplinary letter to the alleged harasser Liebenow, from the documents which were provided to complainants during discovery in response to their request for a complete copy of Liebenow's personnel file. At hearing, Roberts testified that the letter should have been part of Liebenow's personnel file and that she did not know why it was not produced in response to the complainants' discovery request. The other came up when Roberts was testifying about the time records of another employee of the respondent and indicated, in answer to a question from complainants' counsel, that she had not made any efforts to supplement or correct any of her answers. It is not clear from this exchange if the time records in question were (like the disciplinary letter to Liebenow) something which should have been provided in an earlier discovery response but were not.

In her brief to LIRC, the only alleged failure of the respondent to supplement discovery responses directly alleged by complainants' counsel involved the disciplinary letter to Liebenow. However, she also cited to another document (argumentatively entitled "Lies, Lies and More Lies") which she had submitted to the ALJ after the hearing, and which she asserted set out numerous examples of failures by respondent to supplement discovery responses.

The relief which may be available for a party's failure to supplement discovery responses is described in Wis. Stat. § 804.12(4), which provides:

(4) FAILURE OF PARTY TO ... SUPPLEMENT RESPONSES. If a party or an officer, director, or managing agent of a party ... fails ... (d) seasonably to supplement or amend a response when obligated to do so under s. 804.01 (5), the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others, it may take any action authorized under sub. (2) (a) 1., 2. and 3. In lieu of any order or in addition thereto, the court shall require the party failing to act or the attorney advising the party or both to pay the reasonable expenses, including attorney fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

The "action[s] authorized under sub. (2)(a)1., 2. and 3." referred to here are orders that things be taken as proved, or prohibiting certain evidence or claims or defenses, or striking pleadings or parts thereof.

It should be noted that this provision allows a judge to impose such actions "on motion." The complainant's counsel made an oral motion for sanctions under this section regarding the respondent's failure to supplement its production of the personnel file of Liebenow with the disciplinary memo to him which it produced at hearing. She also asked that the ALJ sanction the respondent for not making sure discovery responses were up to date and accurate, at a later point in the hearing, although here it is not clear if this had to do with any specific piece of information which the complainants assert should have been presented as a supplement to an earlier discovery response sooner than it was. The ALJ did not directly rule on these motions at the time. She did, however, discuss them generally in her decision. After noting that she had ruled in the complainants' favor in regard to some discovery issues which arose before the hearing, the ALJ said:

During the hearing, the Complainant alleged other violations of the discovery statutes by the Respondent. However, the Complainant has not provided sufficient information either during the hearing or after the hearing for the Administrative Law Judge to make any further determination as to whether the respondent violated the discovery statutes in view of the evidence presented at the hearing. In view of the lack of information provided, the Administrative Law Judge determines that there is no basis for providing the Complainant with attorneys' fees and costs based on alleged violation of the discovery statutes by the Respondent. (ALJ's Decision, p. 13).

It is well established that a trial court's decision on whether to impose discovery sanctions is committed to that court's discretion, and that an appellate court's review of such a decision by a trial court is not a de novo decision on whether sanctions should be imposed, but a review to determine whether the trial court reasonably exercised its discretion. Milwaukee Constructors v. Milwaukee Metro. Sewer Dist., 177 Wis. 2d 523, 530, 502 N.W.2d 881, 883 (Ct. App. 1993).  A discretionary decision will be sustained if the trial court has examined the relevant facts, applied a proper standard of law using a rational process, and reached a reasonable conclusion. Paytes v. Kost, 167 Wis. 2d 387, 393, 482 N.W.2d 130, 132 (Ct. App. 1992).

This same standard of review is applicable here. Although as a general matter LIRC conducts a de novo review and acts as an original fact finder and reviewer of an ALJ's decision, it has recognized a specific exception where what is concerned is review of an ALJ's exercise of discretion in ruling on discovery matters. The standard applied is not whether LIRC believes that a particular position had been substantially justified and whether attorneys fees and costs ought to have been awarded, but whether it finds the ALJ's decision on the issue to have been an abuse of discretion. See, Wells v. Roadway Express (LIRC, 05/13/02).

The commission believes that the ALJ acted reasonably and within the scope of her discretion in initially declining to rule on the motions made orally by complainants' counsel during hearing about alleged failure to supplement discovery responses, and also in her discussion of this issue in her post-hearing decision. Basically, what the ALJ was saying was that she did not believe that the complainants presented an adequately developed and supported motion. The commission agrees.

One thing which was lacking in the motions presented by the complainants was a statement of specifically what sanctions were being sought in connection with any specific alleged failure to supplement discovery, and why those particular kinds of sanctions would be appropriate. Under Wis. Stat. § 804.12(4), the sanctions which may be imposed for failure of a party to supplement discovery responses include orders that matters be taken as established as a matter of fact, that claims or defenses be prohibited, that certain evidence be excluded, that matters in pleadings be stricken, that default judgment be granted, and in addition, that attorneys' fees and costs be granted. Making a determination as to whether any of these sanctions might be appropriate requires, among other things, determining whether a failure to comply with the rules of discovery (including timely supplementation) prejudiced the other party. See, e.g., Fredrickson v. Louisville Ladder Co., 52 Wis. 2d 776, 784, 191 N.W.2d 193, 196 (1971). Whether and how a failure to supplement discovery has surprised the other party is an important consideration in determining what sanction might be reasonable. Without specific development of argument on how an alleged failure to supplement discovery has affected the other party, it is not possible to evaluate a general request for undescribed sanctions, such as complainants made here.

According to the Summary of Proceedings, when complainants' counsel raised complaints about alleged failure to supplement discovery responses at hearing, she simply requested "sanctions." Even in her brief to LIRC, complainants' counsel does not specifically indicate what sanctions she believes should have been granted on those occasions during the hearing. Complainants' Brief, pp. 28-30. Indeed, she does not specifically indicate what relief she believes should be granted on this account now, apart from repeating a generic request for "sanctions".

The ALJ in this case was faced with an extreme level of rancor and conflict between counsel. She had to balance the interests of both sides in keeping the case moving forward while also preserving opportunities for useful discovery. In retrospect, it is clear that the process was by no means ideal. However, the commission is satisfied that the ALJ considered the issues which were put before her and exercised her discretion based on reasoned evaluation of the overall circumstances. Her decision not to make any orders for sanctions at the points during the hearing when complainants' counsel requested them based on alleged failure to supplement discovery responses, is understandable given the failure by complainants counsel to clearly indicate what sanctions she asserted were appropriate given the specific failure to supplement a discovery response alleged, and why those sanctions would be the appropriate ones. Overall, under the limited review of discretion standard which is applicable to the ALJ's decisions regarding the claims of failure to supplement discovery responses, and given the manner and the extent to which theses issues were put before the ALJ, the ALJ's actions in this respect provide no reason to consider setting aside her decision.

With regard to alleged failure to admit matters eventually proved at hearing, Wis. Stat. § 804.12(3) provides:

(3) Expenses on failure to admit. If a party fails to admit the genuineness of any document or the truth of any matter as requested under s. 804.11, and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, the requesting party may apply to the court for an order requiring the other party to pay the requesting party the reasonable expenses incurred in the making of that proof, including reasonable attorney fees. The court shall make the order unless it finds that (a) the request was held objectionable pursuant to sub. (1), or (b) the admission sought was of no substantial importance, or (c) the party failing to admit had reasonable ground to believe that he or she might prevail on the matter, or (d) there was other good reason for the failure to admit.

The argument made in the complainants' brief regarding alleged failures to admit matters later proved at hearing, is merged with that brief's argument on alleged violation of the duty to seasonably supplement discovery responses. However, these are distinct issues. The provision concerning "expenses on failure to admit" relates exclusively to answers to requests for admissions under § 804.11. It does not provide any remedy for allegations that answers to written interrogatories were not accurate.

The complainants' brief to LIRC does not identify any specific requested admission which the respondent declined to admit and which the complainants then allegedly proved at hearing to have been true. It merely references the "Lies, Lies and More Lies" document which was filed with the ALJ after the close of the hearing and asserts that it lays out "numerous examples" of failing to admit. The commission believes, though, that out of the 23 numbered items in the "Lies, Lies and More Lies" document, there are few which even involve requests to admit, and fewer still that involve a claim that a matter which the respondent refused to admit was later proved to be true at hearing.

Item Number 4 describes testimony by Roberts which is alleged to be contrary to something she had admitted in an answer to a Request to Admit. Even assuming this is correct, testifying inconsistently with an Admission is not a failure to admit within the scope of § 804.12(3). This item does not even arguably constitute an allegation of a failure to admit a fact subsequently proved.

Item Number 9 indicates that Roberts testified that she did not give Liebenow any formal discipline, and then complains that Roberts had denied Requests to Admit 4 & 5, which asked her to admit that Liebenow received no formal discipline. Even assuming this correctly identifies an inconsistency between a response to a Request to Admit and subsequent hearing testimony, § 804.12(3) does not generically cover inconsistencies. It is very specifically about one type of situation: a refusal to admit a fact which is later proved at hearing to be true. The question is, therefore, whether the content of the complainants' Requests to Admit 4 & 5 were denied by Roberts and were later proved to be true.

Complainants' Request to Admit 4 requested the respondent to admit that "Steven Liebenow received no formal discipline for sexually harassing Nancy Kutschenreuter." Respondent answered, "Deny. Affirmally (sic) allege that Mr. Liebenow's work hours were modified as a result of the allegations pending the investigation into the matter. As no corroboration has ever been set forth by any witness other than Ms. Kutschenreuter or Ms. Schoenleber, Mr. Liebenow has received no further discipline." Complainants' Request to Admit 5 requested the respondent to admit that "Steven Liebenow received no formal discipline for sexually harassing Eve Schoenleber." Respondent answered, "Respondent objects to this response on the grounds that it is irrelevant to the above-captioned action and no response shall be forthcoming. Subject to said objection, deny."

Item Number 10 indicates that Roberts denied Complainant's Request to Admit 6, yet testified at hearing that she did not believe she put anything in Liebenow's personnel file. Again, though, the question under § 804.12(3) is simply whether the content of the complainants' Request to Admit 6 was denied by Roberts and was later proved to be true. Complainant's Request to Admit 6 requested the respondent to admit that "Steve Liebenow received no documentation of any kind in his personnel file for inappropriate behaviors towards Eve Schoenleber or Nancy Kutschenreuter." This was denied (subject to an objection similar to the one noted above in regard to Request to Admit 5).

[Evaluating the argument now being made about these requests to admit is problematic in that they in effect assumed, or could be read as assuming, that Liebenow had in fact "sexually harass[ed]" and engaged in "inappropriate behaviors towards" Kutschenreuter and Schoenleber What was proved at hearing was that in a particular time period (2003-2005), Liebenow received no formal discipline and no "documentation," but it was not proved that he engaged in sexual harassment. This has implications for the resolution of the discovery sanctions question, as discussed below.]

Item Number 11 indicates, among other things, that Roberts denied Complainants' Request to Admit 17, and it seems to take the position that she provided testimony at hearing which was inconsistent with that. Again, though, the question under § 804.12(3) is simply whether content of the complainants' Request to Admit 17 was denied by Roberts and was later proved to be true. Complainant's Request to Admit 17 referred to here requested the respondent to admit that "Mr. Liebenow was not required to take any days off as a result of Ms. Schoenleber's April 22, 2005 complaints about him." The Respondent denied this, but also referenced its response to the preceding request (Number 16), in which it had admitted in part and denied in part, alleging in connection therewith that "Mr. Liebenow's pay was not technically docked, however, Respondent asked Mr. Liebenow to take a few days off work to see if the issues alleged by the Complainant and her co-worker could be straightened out."

Item Number 15 asserts that

[i]n Amended Answers to Requests to Admit, the Respondent asserted Kutschenreuter left employment and refused to respond to Respondent's investigation into the allegations of sexual harassment thereby obstructing Respondent's investigation

but that at hearing Roberts testified that she could "not recall" when Ms. Kutschenreuter did that and admitted that she never contacted her and indicated they needed information. Again, though, the question under § 804.12(3) is simply whether the content of a Request to Admit was denied by Roberts and was later proved to be true. This relates to Request to Admit 3. Significantly, Complainants do not directly assert here, that Respondent denied this Request, and review of their response shows that they basically admitted the request, but added other allegations by way of expansion. The point the complainants are making here, is that some of the additional matters alleged by Respondent in response to this request, were inconsistent with testimony by Roberts at hearing. However, this simply does not establish a refusal to admit a matter subsequently proved, within § 804.12(3). This item too does not even arguably constitute an allegation of a failure to admit a fact subsequently proved.

Item Number 16 asserts that Respondent answered Admission Request No. 12 admitting that Ms. Schoenleber had alleged that Steven Liebenow tried to pinch her in the butt in the workplace and "den[ying] all other allegations contained therein inconsistent therewith," but that Roberts testified at hearing that she did not know what that meant and that there was nothing about Admission Request No. 12 that she denied. The commission agrees with Roberts; it does not know what this response meant. The problem is that there are no other allegations contained in the request to admit that are "inconsistent with" the allegations that are admitted. The real problem here is that this response to the request to admit is so worded that it is not entirely clear.

The ultimate question is whether these circumstances relating to responses to requests for admission justified relief (in the form of an order of expenses incurred in making the proof) under § 804.12(3). As noted above, that provision states that court shall order such relief

unless it finds that (a) the request was held objectionable pursuant to sub. (1), or (b) the admission sought was of no substantial importance, or (c) the party failing to admit had reasonable ground to believe that he or she might prevail on the matter, or (d) there was other good reason for the failure to admit

The commission believes that considering all of the circumstances here -- which includes the eventual resolution of the case on the merits against the complainants, based largely on resolution of credibility disputes against the position taken by the complainants - the appropriate conclusion is that the admissions sought "were of no substantial importance" within the meaning of this provision. Thus, it seems to the commission to be fundamentally unimportant that Liebenow was not disciplined by the respondent, given the ALJ's definitive finding that it was not credibly established that he engaged in conduct warranting discipline. It also seems fundamentally unimportant that Schoenleber made the allegation about the attempt to pinch her butt, given the ALJ's rejection of Schoenleber's allegations about supposed sexual harassment.

For these reasons, the commission does not agree with the complainant's arguments regarding expenses for alleged failure to admit under § 804.12(3). 
 

Allegation of frivolous claim under § 227.483 - Wis. Stat. § 227.483 provides:

227.483 Costs upon frivolous claims. (1) If a hearing examiner finds, at any time during the proceeding, that an administrative hearing commenced or continued by a petitioner or a claim or defense used by a party is frivolous, the hearing examiner shall award the successful party the costs and reasonable attorney fees that are directly attributable to responding to the frivolous petition, claim, or defense. (2) If the costs and fees awarded under sub. (1) are awarded against the party other than a public agency, those costs may be assessed fully against either the party or the attorney representing the party or may be assessed so that the party and the attorney each pay a portion of the costs and fees.

(3) To find a petition for a hearing or a claim or defense to be frivolous under sub. (1), the hearing examiner must find at least one of the following:

(a) That the petition, claim, or defense was commenced, used, or continued in bad faith, solely for purposes of harassing or maliciously injuring another.

(b) That the party or the party's attorney knew, or should have known, that the petition, claim, or defense was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification, or reversal of existing law.

This statute, adopted in 2003 and as yet uninterpreted by any appellate court decisions, applies to "an administrative hearing commenced or continued by a petitioner" or "a claim or defense used by a party." It is self-evident that the first of these phrases cannot be stretched to cover a respondent in a discrimination case, but a respondent could be considered to have used a "claim" or a "defense." The real question is, what exactly a "claim" or a "defense" is in this context

Another question presented by § 227.483 has to do with the extent to which LIRC itself (as opposed to the ALJ) can take up and resolve arguments that there were frivolous claims within the meaning of the statute. This question arises because the statute is so specific in indicating that a "hearing examiner" can make findings and awards under the statute. LIRC took this question up in Henderson v. Department of Corrections (LIRC, Mar. 19, 2009), and it resolved it by indicating that any request for an award under this statute had to be made to the ALJ, and that LIRC could then review the ALJ's ruling on such a request. Thus, the scope of the issues arising under this statute in any particular case will be defined by the scope of the argument the party made to the ALJ when presenting the request to them. While LIRC can review the ALJ's ruling on any such request, it cannot act on any new request made for the first time before LIRC. What this means is that the commission must start by identifying specifically what the complainants argued to the ALJ were the claims or defenses that were supposedly made frivolously. LIRC can review the ALJ's rulings on those arguments.

The complainants' argument to the ALJ on the § 227.483 issue was submitted in the form of a "Brief In Support Of Motion For Costs Under § 227.483" separate from their brief on the merits. This brief was an attack on virtually everything the respondent and its counsel did and said in the case. Although long on vitriol, the brief was short on specific references to particular "claims" and "defenses" which are alleged to have been frivolously made. This makes it difficult to analyze how the standards in § 227.483 should be applied. The ALJ, however, did tease out a number of specific respects in which she apparently understood the complainants to be claiming that the respondent used a "claim" or "defense" that was frivolous. These are discussed at pp. 12-13 of the ALJ's decision. Thus, the ALJ indicated that she understood the complainants to be arguing that Roberts gave testimony not consistent with prior testimony or discovery answers. She also indicated that she understood the complainants to be arguing that the manner in which the deposition of Liebenow was handled somehow gave rise to a viable claim under § 227.483. She also indicated that she understood the complainants to be arguing that the manner in which the respondent and its counsel handled discovery matters also somehow gave rise to a viable claim under § 227.483. However, the ALJ rejected all of these arguments. She summarized her views on the question of § 227.483 sanctions this way:

The Administrative Law Judge finds the Complainant's motion for attorney's fees and costs under sec. 227.483, Stats., is without merit. There is simply no basis for the Complainant to allege that the Respondent made any claim or defense that was frivolous. While it is true that the Complainant may allege that some of the testimony was not accurate and that there were problems with the credibility of witnesses, this is not the same as determining that a claim or defense is frivolous. If it were, then an award of attorney's fees and costs under sec. 227.483, Stats., could be awarded against both parties in any hearing held before the Equal Rights Division. The Administrative Law Judge determines that there is no basis for awarding attorney's fees and costs against the Respondent under sec. 227.482, Stats., and denies the Complainant's motion.

In contrast to the global nature of the argument it submitted to the ALJ on the subject of sanctions under § 227.483, the complainants' brief to LIRC is very focused: it is limited to raising three specific arguments as to allegedly frivolous claims or defenses by the respondent. The first is a contention that respondent made a claim that it had either disciplined Liebenow or docked his pay or given him mandatory unpaid time off. The second is a contention that the respondent relied upon a defense that it either had no knowledge of the harassment or did an appropriate investigation into it. The third is a contention that the respondent made a claim or defense when it allegedly denied that Liebenow made a particular comment about the anatomy of one of the complainants.

As to the first two of these, it is clear the respondent asserted for quite some time that after the complainants made their allegations known to the respondent it had disciplined Liebenow or docked his pay or work time in some fashion. The respondent also clearly did take the position that its owner, Roberts, had no knowledge until near the very end of the complainants' employment that they were alleging this sexual harassment There is a basis in the law for saying that promptly taking disciplinary action against a sexual harasser could be considered a "defense" to a claim of a violation of the WFEA arising from sexual harassment. A respondent is liable for the harassing acts of a complainant's co-worker only if it knew or should have known about the harassment but failed to take adequate measures to prevent or eradicate it, Guerrero v. UW Hospital & Clinics (LIRC, 06/04/10), so an assertion by a respondent that it did not know and could not have been expected to know of harassment, or that it took adequate measures to prevent or eradicate it, certainly seems like a "defense." The complainants' position is effectively that the respondents used this defense frivolously, not because it would have been legally insufficient if proved true, but because (complainant argues) there was no factual basis for the respondent to assert the defense since it had not in fact taken any measures to prevent or eradicate the alleged sexual harassment. However, the problem the commission has with the complainant's position on this, is that the outcome of the case also establishes that there was in fact no sexual harassment. There was thus no sexual harassment for the respondent to know about, or to attempt to prevent or eradicate.

As to the third contention, involving the very specific matter of a denial that Liebenow made comments about someone's butt, the commission agrees with the ALJ's comments in her Memorandum Opinion. The commission does not believe that this is a matter of a "claim" or a "defense" within the meaning of the statute, but rather of one specific evidentiary point. The most one could say, would be that it might be relevant to a question of whether a particular claim or defense was established. Considering this one specific factual question to be a "claim" or "defense" in itself under § 227.483, would as the ALJ noted open up the possibility that every disputed factual point in a hearing could, upon its final resolution one way or the other by the ALJ, give rise to a "frivolous claim or defense" issue.

For these reasons, the commission concludes that the ALJ reasonably declined to grant the complainants' request for sanctions under § 227.483.

cc:
Sandra G. Radtke, Attorney for Complainants
Timothy C. Kamin, Attorney for Respondents


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Footnotes:

(1)( Back ) This complainant's name was changed by marriage during her employment. Thus, there are references to her in the file and in the evidence, using both her maiden name "Schober" and her married name "Schoenleber." The commission will use the latter in this decision.

(2)( Back ) The commission's review in this case was delayed by the fact that it took over two years for the Equal Rights Division to prepare the Summary of Proceedings which was necessary for the commission to be able to conduct its review. The commission finally received the file at the end of July, 2010. Briefing to the commission was then completed, and the matter was finally ready for it to begin its review, by mid-October, 2010.

(3)( Back ) Testimony was also elicited from a psychiatrist, Dr. Basil Jackson, who had treated the two complainants. Although allowing some testimony to be taken from Dr. Jackson, the ALJ ultimately ruled that it would be discounted as not relevant. See, ALJ's Decision, note 3, p. 10. However, apart from a passing assertion that the ALJ was, in counsel's words, "not interested in the testimony of [Dr. Jackson]", the complainants' brief does not otherwise mention, much less directly challenge, the ALJ's ruling regarding Dr. Jackson's testimony. The commission therefore considers this issue to have been abandoned by the complainants.

(4)( Back ) See, Wis. Adm. Code LIRC 1.04(2). No contention has been made that the summary of the testimony is not complete and accurate or does not fairly reflect the relevant and material testimony and other evidence taken.

(5)( Back ) At hearing, the complainants objected to McGee being allowed to testify, based on the unavailability of certain notes which they asserted they could use to impeach her testimony. However, the complainants' brief does not argue this objection to McGee's testimony. The commission therefore considers this issue to have been abandoned by the complainants.

(6)( Back ) This involved a potential argument by the respondent that it conducted an investigation into the allegations of harassment, and the testimony of Jennifer McGee regarding any such investigation.

 


uploaded 2011/05/17