Order to Show CauseAttorneys representing African-American Texaco employees successfully sought an order to show cause why Texaco should not be sanctioned for discovery abuse. Also included is an affidavit from one of plaintiffs' counsel describing audio tapes in which Texaco executives disparage minority employees and discuss shredding and purging certain documents, as well as excerpts from those tapes.
BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP
COHEN, MILSTEIN, HAUSFELD &
TOLL, P.L.L.C. Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
BARI-ELLEN ROBERTS, SIL CHAMBERS, Plaintiffs, -against- TEXACO INC., Defendant. 94 Civ. 2015 (CLB) (MDF) ORDER TO SHOW CAUSE Upon the affidavit of Cyrus Mehri, sworn to the 28th day of October, 1996, and upon the accompanying memorandum of law, it is ORDERED that the above named defendant show cause before Hon. Mark D. Fox, United States Magistrate Judge at the United States Court House, 300 Quarropas Street, White Plains, Room 421, New York, on Nov. 1, 1996, at 9:00 AM o'clock, or as soon thereafter as counsel may be heard, why an order should not be issued, pursuant to the Court's inherent powers to regulate litigation, imposing sanctions on defendant Texaco Inc. for abuse of the federal discovery rules; IT IS FURTHER ORDERED that plaintiffs shall serve this Order, the accompanying Affidavit of Cyrus Mehri and plaintiffs' memorandum of law, on defendant by hand before 4:00 PM on October 29, 1996. SO ORDERED
Dated: White Plains, New York
/s/ Charles L. Brieant
BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
BARI-ELLEN ROBERTS, SIL CHAMBERS, Plaintiffs, -against- TEXACO INC., Defendant. 94 Civ. 2015 (CLB) (MDF) AFFIDAVIT OF CYRUS MEHRI IN SUPPORT OF PLAINTIFFS' MOTION FOR CLASS CERTIFICATION AND ORDER TO SHOW CAUSE Cyrus Mehri, being duly sworn, states and avers as follows: 1. I am an associate in the law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C., one of the firms representing plaintiffs in this action. This affidavit is made in support of plaintiffs' Motion for Class Certification and plaintiffs, Order to Show Cause Why Sanctions Should Not Be Imposed On Defendant Texaco Inc. ("Texaco" or the "Company"). I have full knowledge of the acts set forth herein. 2. As set forte more fully below, the Order to Show Cause is necessary because plaintiffs have recently obtained evidence that senior officers at Texaco withheld and may have destroyed evidence expressly requested under plaintiffs' Fed.R.Civ.P. 34 document requests relating to class certification issues. The Order to Show Cause is based upon the Court's inherent power to regulate litigation and to sanction litigants for abusive practices. No previous application for similar relief has been made. Plaintiffs' Requests for Documents - Relating to Class Certification 3. Pursuant to an Order of the Court entered May 16, 1994, the parties were permitted first to conduct discovery concerning issues relating to potential certification of a class in this action merits discovery is to follow the Court's decision on Plaintiffs' Motion for Class Certification. Thus, as part of this class discovery, on August 5, 1994, plaintiffs took the deposition of Richard A. Lundwall, the senior coordinator of personnel services within Texaco's Finance Department. The Finance Department is located in Harrison, New York and is the department in which two of the named plaintiffs in this action, Bari-Ellen Roberts and Sil Chambers, work. The primary purpose of the deposition was to determine what documents Texaco and, in particular the Finance Department, prepared and maintained in the ordinary course of business that related to equal employment matters. During his deposition, Mr. Lundwall testified that his job responsibilities were "pretty much to free up management from routine everyday administration, making sure we are within parameters of company policies." Deposition of Richard A. Lundwall ("Dep.") at 15 (relevant pages annexed hereto as Exhibit A). 4. At his deposition, Mr. Lundwall testified that "at least" twice a year, the most senior officers in the Finance Department met to discuss the "development of women and minorities" within the Department and the Department's "track record to date" with respect to those developmental efforts. Id. at 91. As Mr. Lundwall explained, the subject matters that were discussed at these meetings were directly relevant to plaintiffs' claims: [the topic of these meetings is] what can we do to enhance Texaco's position in minority representation at higher position grades, managers and supervisory levels ... As regards women and minorities, where we have been and where we hope to be. Where we are now in the way of women and minorities in managerial and professional [positions], and where we hope to be. Id. at 91-92. Among the senior officers who attended these meetings were: Robert W. Ulrich, the Treasurer of Texaco and a senior corporate officer of the Company who was head of the Finance Department; J. David Keough, Texaco's Senior Assistant Treasurer, who reported directly to Ulrich; and the division heads within the Department, including Peter Meade, Brian Ashley, Pete Wissel and Steve Carlson. Id. 5. Mr. Lundwall testified that the Finance Department prepared a "Masterbook" for each of these meetings, which served as the agenda and which was distributed to each senior officer in advance. Id. The Masterbook contained, inter alia, minutes of previous meetings; any statistical "data" that was "going to be used at a meeting;" and documents relating to the Finance Department's "long-range planning" for the development of minority employees. Id. at 88-92; 100-03. Lundwall also testified that the Finance Department maintained records of applicants for job openings, including documents that would enable the Department to "answer why of any number of applicants, an applicant received a given position over another." Id. at 86. 6. Mr. Lundwall also testified that the senior officers in the Finance Department maintained documents relating to those employees considered by these senior officers to have the "potential for executive management positions" at the Company. Id. at 58-60. These documents contained information concerning the "kind of development a person might need to develop that [executive management] potential." Id. Lists of the names of these "high potential" employees within the Finance Department were provided to Texaco's Executive Human Resources Committee ("EHRC") for consideration during meetings of that highly select Committee. 7. All these documents obviously were highly germane to plaintiffs' claims of discrimination. They all were called for by plaintiffs, initial Rule 34 document requests, which were served on May 13, 1994, (approximately three months before Mr. Lundwall's deposition); yet, none were produced (a copy of Plaintiffs' First Set of Document Requests is annexed hereto as Exhibit 3; see request nos. 2, 3, 5 and 14.) Therefore, during Mr. Lundwall's deposition, I requested, on the record, that Texaco produce the documents that Mr. Lundwall identified. Dep. at 86. After defense counsel requested that plaintiffs make this request in writing, on August 9, 1994, I sent a letter to defense counsel requesting production of these documents. (see Exhibit C). On August 11, 1994, defense counsel responded in a letter which stated that the information plaintiffs had requested was "currently being reviewed and we will notify you when production is available." See Exhibit D. 8. Thereafter, on August 12, 1994, plaintiffs served a second Rule 34 document request, that specifically sought, inter alia: Request No. 23 All documents pertaining to the following matters referred to by Richard Lundwall in his deposition of August 5, 1994: (a) EEO Audit Reports; (b) the Finance Department Masterbook and all documents concerning or ever contained in such Masterbook; and (c) all agendas, minutes or notes of any meeting attended by Mr. Lundwall and any of the following individuals: Messrs. Ulrich, Keough, Faber, Wissel, Ashley, Carlson or Meade, where the performance, compensation, bonuses or merit raise, or promotability of any Finance Department employee was discussed, including but not limited to discussions concerning candidates for potential Executive Management. Exhibit E. 9. Although production of these documents was due within thirty days after service of plaintiffs' second request, that is; by September 12, 1994, Texaco did not produce any responsive documents by that time. On October 3, 1994, I again sent a letter to defense counsel requesting production of the aforementioned documents. See Exhibit F. 10. From October 1994 through December 1994, the parties engaged in a mediation under the auspices of the United States Department of Justice in an attempt to resolve their dispute. All discovery and other proceedings were stayed during this time. The mediation concluded unsuccessfully and litigation resumed in February 1995. On February 17, 1995, plaintiffs served yet another Rule 34 document request, which again requested "[a]ll documents pertaining to the matters referred to by Richard Lundwall in his deposition of August 5, 1994." Exhibit G; Request no. 19. It was not until March 1995 that any of the documents which Mr. Lundwall had testified about were actually produced. Admissions that Texaco Destroyed (or Withheld) Relevant Documents to Avoid Their Production to Plaintiffs 11. On August 1, 1996, I received an unsolicited telephone call from Mr. Lundwall. He stated that he had certain information- that he believed would be helpful to plaintiffs' case and that he wished to speak with plaintiffs' counsel about such information. Mr. Lundwall stated that his employment had been terminated by Texaco, effective as of August 31, 1996. Mr. Lundwall also stated that he was no longer working at Texaco, but as currently at home on vacation which would last until his official termination. On August 9, 1996, Mr. Lundwall telephoned me again and told me that, as part of his business duties, he often tape-recorded certain meetings of senior officials within Texaco's Finance Department, the purpose of which was to discuss the development and promotability of women and minorities within the Finance Department. 12. On August 12, 1996, I briefly met with Mr. Lundwall in Danbury, Connecticut. He told me that certain meetings that he tape recorded occurred after this litigation had commenced and involved senior Finance Department officials tampering with documents that were "at the crux of the case." I had no further discussions with Mr. Lundwall at that meeting and suggested that he consider obtaining counsel to represent him. 13. On August 28, 1996, I received a telephone call from a Peter Gass, who advised me that he was an attorney who had been retained by Mr. Lundwall to represent him. Mr. Gass stated that Mr. Lundwall had given him certain audio cassette tapes which Mr. Lundwall represented contained recordings that he had made at Texaco. 14. In early September 1996, I spoke with Mr. Gass again. He stated that he had listened to the cassette tapes and represented that, on the tapes, senior Texaco officers could be heard to discuss "purging" and "shredding" documents that had been requested by plaintiffs. Mr. Gass also told me that senior officers within the Finance Department could be heard on the tapes using racially offensive language. Mr. Gass stated that Mr. Lundwall was willing to give plaintiffs' counsel the tapes. Accordingly, at my request, Mr. Gass made copies of the tapes that Mr. Lundwall had provided him. On September 13, 1996, Steven B. Singer, an associate with the firm of Bernstein Litowitz Berger & Grossmann LLP, traveled to Mr. Gass's office in White Plains and received personally from Mr. Gass two micro cassette audio tapes. Mr. Gass represented that these were copies of the cassette tapes that Mr. Lundwall had given him. Mr. Gass also gave Mr. Singer a document that Mr. Gass represented was a transcript of certain excerpted portions of the audio tapes that had been prepared by Mr. Lundwall. 15. Thereafter, under Mr. Singer's direction, plaintiffs' counsel retained a firm to enhance the quality of the cassette tape recordings. After the sound quality was enhanced, plaintiffs' counsel prepared transcripts of the cassette tapes from the enhanced recordings. 16. On or around October 7, 1996, I contacted Mr. Gass and requested permission to meet with his client to authenticate the tapes, identify the voices on the tapes and to confirm the accuracy of the transcripts. After speaking with his client, Mr. Gass gave me permission to do so and, accordingly, I arranged for a meeting between plaintiffs' counsel and Mr. Lundwall. 17. On October 25, 1996, Mr. Lundwall met with me and other plaintiffs' counsel in Danbury, Connecticut. At this meeting, Mr. Lundwall stated that, while at Texaco, he often recorded meetings of the Finance Department Human Resources Committee. He said that he kept a micro cassette recorder in his office and would put it in his pocket and turn it on before going into these meetings. He said that taking minutes of these meetings was part of his responsibilities and he recorded the meetings to ensure accurate minutes. Mr. Lundwall stated that he did not inform the other participants at these meetings that he was recording and, as far as he knows, they were unaware of it. 18. Mr. Lundwall stated that once he tape-recorded the meetings, he maintained exclusive possession of the tapes and kept them either in his office or at home. Mr. Lundwall stated that in March 1996, he listened to the tape recordings and identified certain ones -- two micro cassettes -- that he believed contained recorded conversations relevant to this case. Mr. Lundwall stated that he gave these two original micro cassettes that he identified to his counsel, Mr. Gass. 19. Also at the meeting on October 25, 1996, we played Mr. Lundwall the portions of the audio tapes that are annexed hereto as Exhibit H. Mr. Lundwall confirmed that these were the recordings that he had made and were from the cassettes he had provided to his counsel. Then, Mr. Lundwall identified the voices on the tapes as those belonging to himself, Mr. Ulrich, Mr. Keough and Mr. Meade. Mr. Lundwall also confirmed that the meetings recorded on these tapes occurred shortly after his deposition and no later than the fall of 1994. One tape was labeled "August 14, 1994" and Mr. Lundwall stated that he believes that that tape was recorded on that day. Mr. Lundwall further stated that the purpose of the meetings recorded was to review the materials that plaintiffs had requested at his deposition, taken on August 5, 1994, before producing them to plaintiffs. Mr. Lundwall stated that one purpose of the meetings, as reflected in the conversations recorded, was to "hide" documents from plaintiffs. For example, Mr. Lundwall identified Mr. Ulrich, Texaco's former Treasurer and the head of the Finance Department, as being the employee who is heard on the tapes declaring that "we're gonna purge the shit out of these books, though. We're not going to have any damn thing that ... we don't need to be in them." Exhibit H at 4. 20. Mr. Lundwall explained that the allusions to "these books" on the tapes refers to the Finance Department Masterbooks. At the meeting, Mr. Lundwall further stated that (1) portions of the Masterbooks and other documents plaintiffs requested were "shredded"; (2) individuals who had copies of the Masterbook were told to say that they did not retain them; and (3) handwritten comments were deleted from documents. Mr. Lundwall also identified Mr. Ulrich as the voice on the tapes stating: "I don't want to be caught up in a cover-up. I don't want to be my own Watergate." Exhibit H at 4. 21. Mr. Lundwall also identified Mr. Ulrich as the speaker on the tapes who is heard describing African-Americans as "black jelly beans" and stating "I'm still having trouble with Hanukkah. Now we have Kwanzaa ... fucking niggers, they shifted all over us with this." Exhibit H at 8.
/s/ Sworn to this 28th day of October, 1996 Notary Public EXCERPTED PORTIONS OF TRANSCRIPTS OF TAPES * * * LUNDWALL: Well, lock, I'm inclined -- I'm not going to search any more for my books prior to, prior to '93. I've looked enough. If other managers have them, I'm not going to go bugging them for them. If the ... KEOUGH: You're not responsible for what the managers hold in their desks -- LUNDWALL: What they hold in their desk, right. So I'm just going to, I'm just going to respond that my files contain only these '92 and '93 and the one we had in '94, so far. Which we haven't gotten the minutes yet by the way, he's still sitting on them (inaudible) ... from about a month, two months, during whatever (inaudible) ... KEOUGH: (Inaud.) ... LUNDWALL: Well, we have to, because we got to respond to this. So in any event, so with that, I think that's the tack we'll take. If they want to fish more, fine, let them fish. Anyway, these are the two books for '93. KEOUGH: If you ask me, I'm over here, I only keep my latest books. If I kept everything that ever happened to me around here, I'd be drowning in paper. LUNDWALL: Well, there's no sense duplicating what we're doing over here. I've got two years worth. That should be sufficient. I don't really care what happened in 1991. KEOUGH: Yeah, well, right -- LUNDWALL: '92 I care. That's why I have '92s and is. Now, we had three meetings in '92 and we had two in '93. And I went through the -- these two books. And I just want to point out certain things. I mean, we do have a lot of names in here For example, here look at this chart. You know, I'm not really quite sure what it means. This chart is not mentioned in the agenda, so it's not important that we even have it in there. I don't know that we have to have -- they would never know it was here. The agenda is silent on this chart comparing KEOUGH: They'll find it when they look through it. LUNDWALL: Not if I take it out they won't. * * * KEOUGH: Is this women and minorities or is this the company? LUNDWALL: The company's women and minorities -- I don't know. But the fact that the minutes are silent on this -it was probably put in there at the last minute. They have them under Tab 4. I'm inclined to remove them ... Roster of women and minorities, change (inaudible) nines and ... title, target. Minority data and chart, that's something else. KEOUGH: Are you sure that's not the minority data chart? LUNDWALL: No, it's not. That's this thing here. Which is simply listing women and minorities. KEOUGH: If we can't explain this thing, I mean, it shouldn't be in there, you know. Maybe it's just the same chart? LUNDWALL: Basically the same chart. KEOUGH: Now we see the final...this is a draft...(Inaud.)... LUNDWALL: Yes; nor can I-- KEOUGH: --the company or us. If it was a favorable chart, you'd want to retain it- LUNDWALL: Yeah. KEOUGH: --but-- LUNDWALL: I don't know that it is. * * * LUNDWALL: The only other issue is do they know who was at these meetings? Generally, they are our seniors. Now we can say, "Yeah, all I have are my '93 forward." ULRICH: We're not responsible for our records. LUNDWALL: You know, but if you really had an attorney who had anything on the ball you'd say, "Well, okay, Richard, did each of these attendees have a briefing book?" Yes, they did. KEOUGH: If they had one but you don't know. LUNDWALL: Of course they did, I gave them to them. Now, okay, they directed them directly. I remember -- a million other possibilities -- ULRICH: You're not responsible for those individuals. LUNDWALL: And that's fine. The point is, we keep it here. If it goes that far, fine, we'll live with it. And we work with it then. But it is a possibility, that's only thing I ask. ULRICH: But I don't want to be caught up in a coverup. I don't want to be my own Watergate. LUNDWALL: Well, the point is -- ULRICH: If you go around ... how people ... LUNDWALL: We're not going to, that's it. If they have the brain power to -- ULRICH: They came to you and you don't have them. That's all you have. LUNDWALL: That's all I have. And I'm not going to go try to dig them up from other people. ULRICH: That's why we don't have them. Those are the people responsible ... keep shit going back to the dark ages. If they come after guys like that, we'll just tell them at this time we don't have them. LUNDWALL: If push comes to shove ... KEOUGH: Where we're going these days, where everyone is pushing as hard as they can in every area to get as much as they can in every area and they're going to have so much stuff that -- ULRICH: We're gonna purge the shit out of these books, though. We're not going to have any damn thing that ... we don't need to be in them ... * * * LUNDWALL: As a matter of fact, I just want to be reminded of what we discussed. You take your data and KEOUGH: You look and make sure it's consistent to what we've given them already for minutes. Two versions with the restricted and that's marked clearly on top. LUNDWALL: It's got the body counts, ins and outs, year to year. * * * KEOUGH: Why don't I just give them my book and we'll go through and make them the same ... LUNDWALL: Okay. * * * KEOUGH: It's strange, these restricted versions ... are there other restricted versions? ... they're gonna want to know. LUNDWALL: Oh no, they're not getting this. I mean, here's the one they get, this one here. My point is he's concerned about these things. I don't know it's valid to ... him. He could comment. * * * LUNDWALL: We've been doing pretty much two versions, too. This one here, this is strictly my book, your book, ... ULRICH: Boy, I'll tell you, that one, you would put that and you would have the only copy. Nobody else ought to have copies of that LUNDWALL: Okay? ULRICH: You have that someplace and it doesn't exist. LUNDWALL: Yeah, okay. ULRICH: I just don't want anybody to have a copy of that. LUNDWALL: Good. No problem. ULRICH: You know, there is no point in even keeping the restricted version any more. All it could do is get us in trouble. That's the way I feel. I would not keep anything. LUNDWALL: Let me shred this thing and any other restricted version like it -- ULRICH: Why do we have to keep the minutes of the meeting anymore? LUNDWALL: You don't, you don't. ULRICH: We don't? LUNDWALL: Because we don't, no we don't because it comes back to haunt us like right now. * * * ULRICH: I mean, the pendulum is swinging the other way, guys. LUNDWALL: They are perpetuating an us/them atmosphere. Last week or last Friday I told ... ULRICH : . . . (Inaud.) LUNDWALL: Yeah, that's what I said to you, you want to frag grenade? You know, duck, I'm going to throw one. Well, that's what I was alluding to. But the point is now that's not bad in itself but it does perpetuate us/them ... And if you're trying to get away and get to the we ... you can't do that kind of scuff. ULRICH: (Inaud.) ... I agree. This diversity thing. You know how black jelly beans agree ... LUNDWALL: That's funny. All the black jelly beans seem to be glued to the bottom of the bag. ULRICH: You can't have just we and them. You can't just have black jelly beans and other jelly beans. It doesn't work. LUNDWALL: Yeah. But they're perpetuating the black jelly beans. * * * LUNDWALL: All I know is during April, which is National Odin Month in Norway, I'm wearing my Viking hat and I don't want anybody to say anything like on my own horns, ... I'm celebrating my heritage. PETER MEADE: (Inaud.) ... I think Friday was National Clean Up Your Desk Day. I wish I knew that. I would have posted a sign on a couple of people to say ... LUNDWALL: ... When they came in with these African things. ULRICH: ... I refused to go to that one ... when last year, out of curiosity. I ... LUNDWALL: I walked out during, I'm sorry, when they did their version ... ULRICH: Of the National Anthem ... LUNDWALL: When they sat during "ours", listen to me, during "ours", as though they're not included, and stood for their modified one, I won't apologize to nobody for walking out of there. I really would not. Now we have two friggin national anthems. (Pause) ULRICH: I'm still having trouble with Hanukkah. Now, we have Kwanzaa.... (laughter by FIRST). Fucking niggers, they shifted all over us with this. (Cross talk.) MV: Well, it's not a Menorah. MV: It looks like a Menorah. LUNDWALL: There are seven candles, the Menorah has eight. There are three representing the three days coming in and then there's one black candle in the center. The three days represent what you've done ... ULRICH: And that one's bigger than the other candies LUNDWALL: The three days represent where we are and the red candles represent where we're going. The reason I know this is that my daughter who teaches, she was a little bit annoyed, she had to give a class where she was discussing with her fourth graders Kwanzaa. And she was telling me all this.
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