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DEL CANTO v. ITT SHERATON CORP.

October 21, 1994

RICARDO DEL CANTO, Plaintiff,
v.
ITT SHERATON CORPORATION, et al., Defendant.



The opinion of the court was delivered by: FRIEDMAN

 This matter is before the Court on the Motion of the Defendants Hotel and Restaurant Employee Union Local 25 and its Executive Secretary-Treasurer, Ronald Richardson, for sanctions under Rule 11 of the Federal Rules of Civil Procedure. Defendants argue that counsel for Plaintiff Ricardo del Canto violated Rule 11 in that he "failed to conduct an adequate pre-filing inquiry" before filing his complaint. Plaintiff responds that the 1993 amendments to Rule 11 apply in these circumstances and that Defendants failed to comply with the provisions of the rules as amended. Plaintiff also contends that he did conduct an adequate pre-filing inquiry before filing the complaint and that he had a sufficient basis to proceed at least through the discovery phase. Finally, invoking the Court's discretion under amended Rule 11, Plaintiff suggests "voluntary remediation" as a deterrent rather than the imposition of sanctions.

 The Court has granted Defendants' Motion for Summary Judgment, denied Plaintiff's Motion for Summary Judgment and entered judgment on all counts in favor of Defendants. Specifically, the Court concluded that Plaintiff had no cause of action under the Employee Polygraph Protection Act of 1988, 29 U.S.C. §§ 2001-2009, because the Union and Mr. Richardson were not "employers" or persons "acting directly or indirectly in the interests of an employer in relation to an employee or prospective employee," 29 U.S.C. § 2001(2). The Court also concluded that there was no evidence in the record whatsoever to support the second cause of action, for defamation, and, indeed, that Plaintiff's own deposition testimony wholly undermined that claim. Del Canto Deposition at 65-66. Finally, the Court concluded that if Plaintiff had no cause of action under the Employee Polygraph Protection Act or for common law defamation he could have no cause of action for conspiracy because conspiracy is not a separate tort in the District of Columbia. Halberstam v. Welch, 227 U.S. App. D.C. 167, 705 F.2d 472, 479 (D.C. Cir. 1983).

 At the hearing on the cross-motions for summary judgment, the Court advised counsel that although it was granting summary judgment for Defendants, it would not impose Rule 11 sanctions for the filing of the statutory claim, but reserved ruling on the sanctions question with respect to the other claims. Plaintiff's counsel argued, and the Court agreed, that Rule 11 can have a chilling effect and "that lawyers are between Scylla and Charybdis" in not knowing whether to "push the envelope" when there is a newly enacted statute or a burgeoning legal theory that presents itself. As Plaintiff's counsel pointed out, the Employee Polygraph Protection Act had been in force for only a few years when he filed the complaint in this case. While there had been only one decision interpreting the statute when counsel filed the complaint, he represented that he was unaware of that decision at the time. *fn1"

 When he filed the complaint, counsel said that he was aware only of a state court decision, Moniodis v. Cook, 64 Md. App. 1, 494 A.2d 212 (Md. Ct. Spec. App.), cert. denied, 304 Md. 631, 500 A.2d 649 (Md. 1985), holding that compensatory and sometimes punitive damages are available for violating an employee's rights under the Maryland state polygraph statute. On the basis of that decision and the then relatively new federal statute, it was not unreasonable for Plaintiff's counsel to conclude that there might be some basis for a lawsuit here, even though neither the Union nor Mr. Richardson was an "employer" within the meaning of the Act. *fn2"

 The same cannot be said of the defamation claim. That claim is based on the allegation that Defendant Richardson had communicated with third parties about Plaintiff's suspension from his job and that those communications conveyed Mr. Richardson's belief that Plaintiff was a liar and, at least by implication, suggested that Plaintiff had stolen liquor from the hotel. Plaintiff has put forth only two pieces of evidence with respect to that claim. The first is a January 10, 1992, letter from Albert Hunt and the second is a two-line excerpt from Mr. Richardson's deposition. Neither the Hunt letter nor the lines referred to in the Richardson deposition, however, provide any basis for the allegation that Mr. Richardson conveyed his disbelief about Plaintiff's veracity and, by implication, his theft of liquor.

 The Hunt letter was not a statement by Mr. Richardson, nor did it even refer to a statement made by Mr. Richardson. Rather it was a letter written to Mr. Richardson by Mr. Hunt wherein Mr. Hunt offered his assistance in the arbitration proceedings against Mr. del Canto because, Hunt said, he had known Mr. del Canto as a waiter at the Sheraton Cariton Hotel for almost ten years and had a high regard for him. Mr. Hunt wrote that he had learned about the incident from Mr. del Canto himself. The Hunt letter in no way, either by its language or by implication, provides a basis for the assertion that Mr. Richardson communicated to Mr. Hunt any suggestion that Mr. Richardson disbelieved Mr. del Canto or thought he was guilty of theft. Indeed, it does not even suggest that Mr. Hunt spoke with Mr. Richardson before writing the letter.

 As for Mr. Richardson's deposition testimony, when one looks at the cited portion, lines 11 and 12 on page 58 of the deposition, one finds absolutely nothing on those lines or on that page to support the assertion that Mr. Richardson disbelieved Mr. del Canto or thought him guilty of theft. When one turns to Plaintiff's own deposition in this case, however, on pages 65 and 66, one finds the following:

 
QUESTION: Did Ron (Richardson) or anybody else from the Union ever tell you that they didn't believe your story about the events of December 17th, about what happened on the night of December 17th?
 
ANSWER: No.
 
QUESTION: Did Ron or any other Union representative tell you they thought you took property from the Sheraton Carlton on December 17th?
 
ANSWER: Now that you ask me, I remember reading the report of security at the front office on one of the occasions that I was --
 
QUESTION: The report of hotel security?
 
ANSWER: Hotel security. On Ron's desk. He gave it to me and so I read it and he said what do you think and I said, Ron, it is a whole bunch of lies and he said, well, Ricardo, why would they lie, and I said I don't know. He said they are ...

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