The opinion of the court was delivered by: LECHNER
This is an action brought by plaintiff Elizabeth G. Miller ("Miller") against defendants Beneficial Management Corporation, Beneficial Management Corporation of America and Beneficial Corporation (collectively, "Beneficial") for claims relating to sex and age discrimination in employment in violation of Federal and state law. Jurisdiction is alleged pursuant to the Equal Pay Act, as amended, 29 U.S.C. § 216 et seq. ("EPA"), the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 626, et seq. ("ADEA"), the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2002, et seq. ("Title VII") and 28 U.S.C. §§ 1331 and 1367.
Currently before the court is the appeal by Beneficial of the order of Magistrate Judge Dennis M. Cavanaugh ("Judge Cavanaugh"), dated 20 July 1993 (the "20 July 1993 Order"), denying Beneficial's motion to amend its answer.
Miller cross-appeals Judge Cavanaugh's denial of sanctions against Beneficial under Fed. R. Civ. P. 11 ("Rule 11") and 28 U.S.C. § 1927. For the reasons set forth below, the decision of Judge Cavanaugh is reversed with respect to Beneficial's motion, and affirmed with respect to Miller's motion for sanctions.
Miller's claims of age and sex discrimination relate to her transfer from Beneficial's Legal Department to its Government Relations Department. Complaint and Jury Demand ("Complaint"), P 7. In early 1984, Beneficial vice president David Ward ("Ward") informed Miller that Charles Walsh, vice president and counsel for government relations ("Walsh"), and Ken Raatz, an employee in the Government Relations Department ("Raatz"), were to be terminated from their posts and he invited her to replace them. Id., PP 7-8. Miller contends she formally began working in the Government Relations Department on 1 July 1984 and took over for both Walsh and Raatz. Id. According to Miller, despite assuming greater responsibilities than those handled by either Walsh or Raatz, her base salary was less than either of their salaries. Id., PP 9-12.
The Complaint, filed by Miller on 20 July 1989, alleged discrimination under the EPA, ADEA, New Jersey Law Against Discrimination ("NJLAD"), N.J. Stat. Ann., 10:5-1 et seq., and the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. 34:19-1 et seq.3 Miller first modified the Complaint on 21 November 1989, when she filed an amendment to the Complaint adding a claim of discrimination under Title VII (the "Amended Complaint"). Miller's request for leave to file a second amended complaint was granted by Magistrate Judge Dennis M. Cavanaugh, but Miller did not file an amendment within the time provided.
Beneficial filed its answer to the Amended Complaint on 29 September 1989 (the "Answer"). In the Answer, Beneficial asserted six separate affirmative defenses.
By notice of appeal, filed 15 November 1991, Miller appealed to the Third Circuit the grant of summary judgment. On 19 November 1992, the circuit reversed the grant of summary judgment and remanded, holding that genuine issues of material fact existed. See Miller v. Beneficial Management Corp., 977 F.2d 834 (3d Cir. 1992).
On 3 March 1993, a Substitution of Attorney was entered on Beneficial's behalf. As a result thereof, current counsel for Beneficial, Michael K. Furey ("Furey"), replaced former counsel S. Joseph Fortunato.
By order, dated 21 April 1993, Judge Cavanaugh reopened discovery and directed the manner in which it should be carried out. Judge Cavanaugh also ordered that all discovery should be completed on or before 30 July 1993.
By order, dated 6 May 1993, Judge Cavanaugh denied Miller's third motion to amend the Amended Complaint and her motion to compel answers to interrogatories. By letter-opinion, dated 14 June 1993, the court affirmed Judge Cavanaugh's order of 6 May because of Miller's failure to timely appeal. See Miller v. Beneficial Management Corp., 1993 U.S. Dist. LEXIS 19332, No. 89-3089, slip op. (D.N.J. 14 June 1993).
On 9 July 1993, Beneficial moved before Judge Cavanaugh for leave to amend the Answer pursuant to Fed. R. Civ. P. 15. Beneficial sought to amend the Answer to include two additional affirmative defenses they assert they acquired during the Miller Deposition. Plaintiffs cross-moved for sanctions, for "having to oppose such a hopelessly flawed application." 20 July 1993 Order at 5.
By the 20 July 1993 Order, Judge Cavanaugh denied Beneficial's motion to amend the Answer. Judge Cavanaugh held:
It is within this Court's discretion to deny Defendant's motion. I find that Defendants' delay is insufficiently and inconsistently explained; the factual bases for the amendment were known to Defendants well over four years before Plaintiff's deposition. In reality, the so called new evidence is not new at all. . . . The Court finds that the undue delay that would be caused by Defendants' actions would unfairly prejudice Plaintiff. Therefore, based upon the foregoing, Defendants' motion to amend their Answer is DENIED.
20 July 1993 Order at 4-5. In explaining the prejudice which would be caused to Miller by a grant of leave to amend the Answer, Judge Cavanaugh stated:
This case has been assigned a trial date of September 27, 1993. Pretrial submissions are due September 10, 1993. Discovery is to close July 31, 1993 and at this time most pretrial discovery has been completed. If Defendants' motion is granted at this late stage of the case Plaintiff would be required to redepose numerous witnesses who were never specifically questioned about the issues Defendants now seek to bring into the action. This is due to the fact that while the parties both had knowledge of the issues, Plaintiff had no reason to address them previously.
Judge Cavanaugh also denied Miller's request for sanctions under Rule 11 and 28 U.S.C. § 1927. In so doing, Judge Cavanaugh relied on his interpretation of Rule 11 and 28 U.S.C. § 1927 as both requiring a showing of bad faith on the part of the party or attorney against whom sanctions are sought. See 20 July 1993 Order at 5. Because Judge Cavanaugh found that Beneficial did not act in bad faith, he denied Miller's motion for sanctions. Id.
By notice of appeal filed 2 August 1993, Beneficial appealed the 20 July Order's denial of leave to amend the Answer. In her Opposition Brief, Miller appealed the 20 July 1993 Order's denial of sanctions against Beneficial, although she did not file an appeal on this portion of the 20 July 1993 Order.
Trial was originally set for 27 September 1993. 20 July 1993 Order at 4. By order, dated 12 August 1993, Miller's request for adjournment was granted, and trial was set to commence on 4 October 1993.
Beneficial contends that because of newly-acquired evidence, two defenses are now available to it which were not available at the time the Answer was filed. To this end, Beneficial asserts certain statements made by Miller at the Miller Deposition have provided them for the first time with the two factual bases for an absolute defense. Moving Brief at 11-12. First, Beneficial points to statements made by Miller which Beneficial argues amount to admissions that she had misrepresented her age in job application materials. Moving Brief at 4. The relevant part of the Miller Deposition reads as follows:
Q [by Beneficial's counsel]: Mrs. Miller, when were you born?
A [by Miller]: February 20th, 1928.
Q: When you applied for a job at Beneficial, did you give a different date of birth?
A: I don't believe that question was on the application.
Q: At some point in time while you were employed at Beneficial, did you give someone, an employee, a date of birth different than February 20th, 1928?
[Objection of Miller's counsel on ground of relevance]
A: I don't even remember.
Q: Did you submit a resume which had a different date of birth than February 20th, 1928?
[Objection of Miller's counsel]
A: I gave a resume to someone I worked with at Allied who may have submitted that.
Q: Did it contain a false birth date?
A: I don't know. It may have.
Q: Why did you put a false birth date on your resume?
[Objection by Miller's counsel on grounds that Miller had not yet acknowledged falsification of birth date]
Q: If you gave a false date, why did you do that?
A: . . . . I did sometimes give another birth date because I had ...