Harrison Ex Rel. Harrison v. Board of Regents

I attest to the accuracy and

integrity of this document

New Mexico Compilation

Commission, Santa Fe, NM

'00'05- 14:45:05 2013.11.07

Certiorari Granted, October 18, 2013, No. 34,349

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2013-NMCA-105

Filing Date: September 5, 2013

Docket No. 32,215

TRACI and KENNETH HARRISON,

Individually and as Parents and Next

Friends of BRILEY HARRISON,

Plaintiffs-Appellees,

v.

BOARD OF REGENTS OF THE UNIVERSITY

OF NEW MEXICO,

Defendants-Appellants,

and

LOVELACE HEALTH SYSTEM, INC.,

a New Mexico Corporation, and ABQ

HEALTH PARTNERS, LLC,

Defendants.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY

Alan M. Malott, District Judge

Shapiro Bettinger & Chase LLP

Andrew D. Scholl

Carl J. Bettinger

Gregory W. Chase

Albuquerque, NM

for Appellee

Sutin, Thayer & Browne

Kerry Kiernan

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Timothy J. Atler

Albuquerque, NM

Office of University Counsel

K. Lee Peifer

Kimberly N. Bell

Albuquerque, NM

for Appellants

OPINION

VANZI, Judge.

{1} The formal opinion filed in this case on August 28, 2013, is hereby withdrawn, and

this opinion is substituted in its place.

{2} District courts have the inherent authority to “impose a variety of sanctions on both

litigants and attorneys in order to regulate their docket, promote judicial efficiency, and deter

frivolous filings.” State ex rel. N.M. State Highway & Transp. Dep’t v. Baca, 1995-NMSC-

033, ¶ 11, 120 N.M. 1, 896 P.2d 1148 (internal quotation marks and citation omitted). The

question raised in this appeal is whether a district court’s inherent power to impose sanctions

includes the authority to issue a non-compensatory monetary sanction against a public entity.

We answer this question in the affirmative and therefore affirm the district court’s imposition

of a $100,000 sanction against Defendant-Appellant, the Board of Regents of the University

of New Mexico (the Regents), for willful and improper interference with a disclosed witness

in a matter pending before the district court.

BACKGROUND

{3} The facts underlying the imposition of sanctions in this case are not disputed by the

Regents on appeal. We therefore rely extensively below on the factual background that was

set forth in the district court’s letter decision imposing sanctions.

{4} In August 2009, Plaintiffs filed suit in district court against the Regents, along with

other parties, alleging medical malpractice in connection with a cesarean section/tubal

ligation surgery performed by physicians employed by the University of New Mexico

(UNM) Health Sciences Center. Plaintiffs subsequently retained Dr. Ian Paul to serve as an

expert witness in their case. At the time, Dr. Paul was a pathologist employed by the New

Mexico Office of the Medical Examiner (OMI) and was also a clinical assistant professor

in the Department of Pathology at the UNM Health Sciences Center. The conduct that led

the district court to impose sanctions against the Regents in this case occurred upon

Plaintiffs’ formal designation of Dr. Paul as one of their expert witnesses.

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{5} Scot Sauder, an attorney employed as in-house counsel by UNM, learned of Dr.

Paul’s designation as one of Plaintiffs’ medical expert witnesses. Sauder concluded that Dr.

Paul’s participation in the case was not in the best interests of the UNM Health Sciences

Center and, by extension, the Regents. At the time, Sauder was the head of the health law

section of the University Counsel’s office and was also serving as the manager of litigation

involving UNM Health Sciences Center, which included oversight of Plaintiffs’ case.

Sauder initially communicated his concerns regarding Dr. Paul’s expert testimony in the case

with Dr. Paul Roth, the chancellor of UNM Health Sciences Center, and he received

unquestioned approval from Dr. Roth to contact Dr. Paul’s supervisors regarding the matter.

Sauder then contacted Dr. Ross Zumwalt, who was Dr. Paul’s immediate supervisor at OMI,

to inform him of Dr. Paul’s plan to testify against another UNM physician and to end Dr.

Paul’s participation in the case. Dr. Zumwalt responded that he was familiar with Plaintiffs’

case as Dr. Paul had already informed him of his plan to testify as an expert witness for

Plaintiffs in the case. Dr. Zumwalt further stated, “I am sure the Regents desire that this case

be evaluated by competent, qualified, and unbiased experts. The Regents are fortunate that

Dr. Paul fits those criteria.”

{6} Sauder also spoke with Dr. Paul’s supervisor, Dr. Thomas Williams, the head of the

UNM Department of Pathology; however, nothing further happened until the case neared the

mediation deadline set by the district court approximately three months later. At that time,

Sauder contacted both of Dr. Paul’s supervisors, again suggesting that Dr. Paul’s

involvement in the case as Plaintiffs’ expert created a conflict of interest with the UNM

Health Sciences Center. He also informed them that Dr. Roth agreed with him and that he

believed Dr. Paul should withdraw from the engagement. The next day, Sauder reached to

outside counsel hired by the Regents to represent UNM in the litigation and informed her

that Dr. Paul would not be testifying in the case. Sauder later testified that by the time he

contacted outside counsel, he had already been assured by Dr. Williams that Dr. Paul would

be withdrawing from the case. However, Dr. Williams testified that he offered no such

assurance to Sauder. In fact, both of Dr. Paul’s supervisors later testified that they did not

believe it was appropriate or necessary for Dr. Paul to withdraw from the case.

{7} Within days of Sauder’s communications with Dr. Paul’s supervisors, Dr. Paul

withdrew from the case. In an email to Plaintiffs’ trial counsel informing him of his

decision, Dr. Paul stated that he had been under “a lot of pressure from the higher ups at

UNM” to withdraw. The district court noted that at the time these events unfolded, Dr. Paul

was under consideration for a significant job promotion. Dr. Paul later testified that he felt

intimidated and feared that his career was in jeopardy. He stated that he would not have

withdrawn from the case but for Sauder’s actions.

{8} Upon Dr. Paul’s withdrawal from the case, Plaintiffs filed a motion in district court

seeking sanctions against the Regents and their attorney, Sauder. Plaintiffs argued that the

manner in which Sauder caused Dr. Paul to withdraw from the case amounted to improper

witness interference and tampering and was a violation of a number of the Rules of

Professional Conduct governing attorneys. It also established that Sauder acted with the full

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support and encouragement of Dr. Roth. The district court held two hearings on Plaintiffs’

motion for sanctions. However, by the time the second hearing was held on Plaintiffs’

motion, the parties had already reached a settlement for the claims in the underlying case.

{9} Following the hearings, the district court issued a letter decision imposing sanctions

against the Regents and Sauder. The court stated in the decision that it was not persuaded

by Sauder’s position at the sanctions hearings that Dr. Paul’s involvement in the case

constituted an impermissible conflict of interest. The court found that there were no

applicable policies in effect at UNM under which Dr. Paul’s decision to testify as an expert

for Plaintiffs created an impermissible conflict of interest with the UNM Health Sciences

Center. The court stated “[t]hat any public entity, let alone the flagship University of this

State, believes it has such power to stifle comment is both terrifying and in violation of

public policy[.]” In addition, the court pointed out that Sauder could have, but failed to, file

a motion in open court in an attempt to prevent Dr. Paul from testifying, which would have

allowed both parties to develop their arguments and would have provided the district court

with an opportunity to determine whether Dr. Paul’s testimony would have been unduly

prejudicial to UNM or otherwise improper. The court found that Sauder instead acted

“internally, quietly . . . willfully and improperly interfered with a disclosed witness in

pending litigation before [the c]ourt” and that “[s]uch conduct was prejudicial to the interests

of the witness, the other litigants, and the administration of justice itself.” The court also

pointed out that Sauder’s “ ‘behind the scenes’ interference with a witness is just the kind

of conduct that fosters distrust and disdain for our profession and the [c]ourt system.”

{10} In determining that it could exercise “its inherent powers to control its docket and,

by extension, the behavior of litigants” to sanction Sauder and the Regents for their wrongful

conduct, the court noted that monetary sanctions were appropriate in the matter since the

underlying dispute between the parties had been settled. It further stated that the amount of

monetary sanctions had to be “sufficiently significant in light of the misconduct at issue and

the relative size and resources of the wrongdoers.” Accordingly, the district court ordered

the Regents to pay $32,000 to Plaintiffs for the attorney fees they had incurred in bringing

the motion for sanctions, the costs associated with locating a replacement for Dr. Paul, and

the fees that Plaintiffs incurred for Dr. Paul’s services prior to his withdrawal. Sauder was

personally sanctioned in the amount of $1500 to be paid to the Roadrunner Food Bank.

Lastly, the court sanctioned the Regents in the amount of $100,000 to be paid to four

charitable organizations.

{11} The Regents moved for reconsideration of the district court’s order, challenging only

the imposition of the $100,000 monetary sanction in their motion for reconsideration. The

Regents argued that the district court lacked the authority under its inherent power to impose

the $100,000 sanction because it was a punitive sanction in nature with no compensatory

aspect. They based their argument that such a sanction is not permitted against a public

entity such as the Regents under New Mexico law because such sanctions are punitive and

governmental entities are immune from punitive damages in civil actions for tort and

contract. The district court denied the Regents’ motion, concluding that the Regents’

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argument that the court’s inherent power does not include the authority to issue a non-

compensatory monetary sanction against a public entity was without merit. Noting that few

actions pose as dire a threat to the integrity of the courts as a litigant’s interference with

witnesses, the district court’s order further stated that the Regents’ conduct struck “at the

very core of the integrity of the judicial system and warrants the imposition of sanctions that

do more than merely compensate the other party for their fees and expenses incurred in

bringing the misconduct to the court’s attention. [The Regents’] conduct is an affront to the

court and every citizen of this state. Such an affront warrants imposition of sanctions severe

enough to put a stop to the practice.” (Internal quotation marks and citation omitted.) This

appeal followed.

DISCUSSION

{12} The dispositive issue raised in this appeal is whether a district court’s inherent power

to impose sanctions for a party’s misconduct during litigation includes the authority to issue

a non-compensatory monetary sanction against a public entity. On appeal, the Regents

contend that the district court lacked the authority under its inherent power to impose the

$100,000 non-compensatory monetary sanction against them because the sanction is purely

punitive in nature and therefore is not permitted against a public entity, such as the Regents,

under existing New Mexico case law and public policy grounds.

{13} Before we turn to address the Regents’ specific arguments, we first explain the very

limited nature of our appellate review in this case. The Regents’ arguments in this

appeal—as they were before the district court—are purely legal in nature; that is, the

Regents do not challenge the underlying facts that led the district court to impose sanctions

against the Regents as an exercise of the court’s inherent power. Specifically, the Regents

do not address whether the underlying facts of this case supported the imposition of the non-

compensatory monetary sanction, whether the circumstances were sufficiently egregious to

support the amount of the sanction, or the fact that the sanction was to be paid to four

charitable organizations. The Regents also raise no argument as to the propriety of the other

sanctions imposed by the district court. We therefore do not address those aspects of the

district court’s decision, and our appellate review is limited to the issue of addressing

whether, assuming the Regents’ conduct was sanctionable, the district court had the authority

at all to impose a monetary sanction outside of a compensatory award for costs and attorney

fees. See In re Doe, 1982-NMSC-099, ¶ 3, 98 N.M. 540, 650 P.2d 824 (stating that appellate

courts should not reach issues that the parties have failed to raise in their briefs).

A. Standard of Review

{14} We generally review a district court’s imposition of sanctions under its inherent

power for an abuse of discretion. Restaurant Mgmt. Co. v. Kidde-Fenwal, Inc., 1999-

NMCA-101, ¶ 8, 127 N.M. 708, 986 P.2d 504; see Gonzales v. Surgidev Corp., 1995-

NMSC-047, ¶¶ 31, 33, 120 N.M. 151, 899 P.2d 594. However, “even when we review for

an abuse of discretion, our review of the application of the law to the facts is conducted de

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novo.” N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986

P.2d 450 (internal quotation marks and citation omitted). “Accordingly, we may

characterize as an abuse of discretion a discretionary decision that is premised on a

misapprehension of the law.” Id. (alteration, internal quotation marks, and citation omitted).

In this case, the dispositive issue on appeal is a legal question, to which we apply de novo

review. If we conclude that the district court erred as a matter of law, then it necessarily

follows that the district court abused its discretion in imposing the $100,000 sanction against

the Regents because the decision was based on a misapprehension of the law.

B. The Regents’ Arguments

{15} “Inherent judicial power is the power necessary to exercise the authority of the court”

and includes the authority to sanction. In re Jade G., 2001-NMCA-058, ¶ 27, 130 N.M. 687,

30 P.3d 376. “The rationale underlying the existence of the inherent power of the courts is

that a court must be able to command the obedience of litigants and their attorneys if it is to

perform its judicial functions.” Restaurant Mgmt. Co., 1999-NMCA-101, ¶ 11 (internal

quotation marks and citation omitted). “Under its inherent authority, a court may sanction

parties and attorneys to ensure compliance with the proceedings of the court.” In re Jade

G., 2001-NMCA-058, ¶ 28.

{16} A fundamental aspect of a court’s exercise of its inherent power is the principle that

a court’s inherent authority extends to all conduct before the court and to all parties

appearing before the court, regardless of the party’s status as a private litigant or as a

governmental/public entity. See Baca, 1995-NMSC-033, ¶ 27 (noting that “a court’s

inherent authority extends to all conduct before that court”); State v. Blenden, 748 So. 2d 77,

88-89 (Miss. 1999) (stating that “a court’s inherent power to control actions before [it] is

equally applicable to the [s]tate. When the [s]tate enters the court as a litigant, it places itself

on the same basis as any other litigant; subjecting itself to the inherent authority of the court

to control actions before it, just as any other litigant”); see also Noble Cnty. v. Rogers, 745

N.E.2d 194, 198-99 (Ind. 2001) (emphasizing that “[i]t is beyond question that [a court’s

inherent] power extends to governmental attorneys and parties” and that “while the

[l]egislature may shield the [s]tate from substantive tort liabilities, it may not immunize the

[s]tate from [the judiciary’s inherent] power to sanction the attorneys and parties appearing

before [the court]”). It follows that a district court’s authority to impose sanctions under its

inherent power is not curtailed by the fact that the wrongful party happens to be a

governmental or public entity. We note that prior New Mexico appellate decisions have

upheld a lower court’s authority to impose sanctions against a governmental or public entity

as a valid exercise of that court’s inherent power. See, e.g., Baca, 1995-NMSC-033, ¶¶ 13,

23 (holding that a New Mexico court may invoke its inherent power to award attorney fees

as a sanction against the state for bad faith litigation); State v. Candelaria, 2008-NMCA-120,

¶ 22, 144 N.M. 797, 192 P.3d 792 (upholding the metropolitan court’s dismissal of a

criminal prosecution as a sanction against the state as a valid exercise of that court’s inherent

authority).

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{17} In the case before us, the Regents maintain that they do not challenge the district

court’s authority to exercise its inherent power against both public entities and private

litigants. Instead, they raise a challenge to the nature of the sanction that a district court may

impose against a public entity under the court’s exercise of its inherent power. Specifically,

the Regents contend that the monetary sanction imposed against them constitutes an

impermissible sanction because it was not compensatory in nature—that is, it was not

intended for Plaintiffs’ benefit at all—and instead, was solely a punitive sanction designed

to punish the Regents for their conduct and to act as deterrence. Thus, according to the

Regents, while a district court has the inherent authority to impose non-compensatory

monetary sanctions against private litigants, their lawyers, or witnesses, it has no such

corresponding authority with regard to public entities regardless of the egregiousness of their

conduct. Relying exclusively on Torrance County Mental Health Program v. New Mexico

Health & Environment Department, 1992-NMSC-026, 113 N.M. 593, 830 P.2d 145, and

Baca, the Regents contend that New Mexico case law and public policy clearly establish that

district courts are prohibited from imposing a purely punitive sanction against a public

entity.

1. The Supreme Court’s Decisions in Torrance County and Baca Do Not Dictate

Reversal of the Non-Compensatory Monetary Sanction Imposed by the District

Court

{18} As an initial matter, we reject the Regents’ argument that our Supreme Court’s

decisions in Torrance County and Baca are controlling. In Torrance County, our Supreme

Court held that punitive damages are not recoverable from a governmental entity in a breach

of contract action. See 1992-NMSC-026, ¶ 2. The question there was whether our

Legislature’s silence on punitive damages could be read as expressing an intention to waive

immunity for punitive damages in contract cases. Id. ¶ 16. In reaching its holding, the Court

weighed policy interests favoring the recovery of punitive damages against those favoring

immunity for governmental entities. Id. ¶¶ 24-31. The Court ultimately concluded that the

policy interests in favor of granting immunity to governmental entities—such as the need

to protect public revenues and the injustice of punishing innocent taxpayers rather than the

officials at fault, id. ¶¶ 27-29—outweighed the countervailing policy interests favoring the

recovery of punitive damages—deterring abuse of governmental power and promoting

accountability among government officials, id. ¶ 25. The Court stated that allowing civil

juries to assess punitive damages against governmental entities in breach of contract cases

would “punish[] only the taxpayers, who took no part in the commission of the [wrongful

act]” and be a “windfall to a fully compensated plaintiff.” Id. ¶ 28 (internal quotation marks

and citation omitted).

{19} Torrance County is not controlling in this case for two reasons. First, the Supreme

Court’s analysis in Torrance County did not include any consideration or application of the

concept of a district court’s inherent power and, in particular, its inherent power to sanction

conduct that abuses the judicial process. See Fernandez v. Farmers Ins. Co. of Ariz., 1993-

NMSC-035, ¶ 15, 115 N.M. 622, 857 P.2d 22 (stating the general rule that “cases are not

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authority for propositions not considered” (internal quotation marks and citaiton omitted)).

Second, Torrance County concerned the award of punitive damages by civil juries, which

is a distinct legal concept from the exercise of a court’s inherent power to impose a monetary

sanction for misconduct by litigants, their lawyers, and others who participate in judicial

proceedings over which the judge is presiding. Although there are several differences

between the punitive damage awards and non-compensatory monetary sanctions, we point

to the following: (1) “[t]he award of punitive damages is based on a party’s misconduct

toward[] the individual[,]” whereas “[a]n award of sanctions is based on a party’s

misconduct toward[] the court,” Gonzales, 1995-NMSC-047, ¶¶ 12-13; (2) punitive damage

awards are entrusted to a fact finder, while the assessment of sanctions falls solely within the

ambit of the court’s constitutional power; and (3) “[p]unitive damages . . . are not intended

to compensate the injured party,” Torrance County, 1992-NMSC-026, ¶ 28, while sanctions

imposed under the court’s inherent authority can be both compensatory and punitive in

nature, see Baca, 1995-NMSC-033, ¶ 22. Consequently, we see no basis for applying

Torrance County to the case before us.

{20} We are likewise not persuaded by the Regents’ reliance on Baca. In Baca, the

Supreme Court held that a district court can exercise its inherent power to award attorney

fees against a governmental entity for bad faith litigation. 1995-NMSC-033, ¶¶ 12, 18.

Similar to the Regents’ position in this case, the governmental entity in Baca argued that a

sanction of attorney fees could not be imposed against them based on their status as a

governmental entity under the Supreme Court’s earlier decision in Torrance County. See

Baca, 1995-NMSC-033, ¶ 18. The Court disagreed and concluded instead that there were

distinct differences between attorney fees and punitive damages awards. See id. ¶¶ 21-23

(noting that there are certain checks upon an attorney fees award that are absent from a

punitive damages award and that attorney fees have both compensatory and punitive aspects,

whereas the purpose of punitive damages awards is punishment and deterrence). The Court

also balanced public policy concerns and determined that, while the depletion of public

revenues and the punishment of innocent taxpayers were important considerations that

weighed against the assessment of attorney fees against governmental litigants, “those

considerations must be subordinate to a court’s authority to control the parties and the

litigation before it.” Id. ¶ 25 (emphasis added). On this basis, the Court upheld the sanction

of attorney fees as an appropriate exercise of the district court’s inherent power.

{21} The Regents contend that Baca stands for the proposition that a monetary sanction

imposed against a public entity under a court’s inherent power can only be upheld where the

sanction has a compensatory effect. We disagree that our Supreme Court advanced such a

rule in Baca. Our Supreme Court did not hold, much less convey a view, in Baca that

sanctions without a compensatory aspect are the equivalent of a punitive damages award.

And while our Supreme Court relied upon the fact that the payment of attorney fees have

both compensatory and punitive effects as a means of distinguishing attorney fees from

punitive damages awards, this was just one aspect of the Court’s analysis and did not form

the sole basis for the Court’s holding. We thus decline to apply the unique characteristics

of attorney fee sanctions raised in Baca in the broad manner suggested by the Regents.

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2. The Public Policy Arguments Advanced by the Regents Do Not Outweigh a

District Court’s Authority Under Its Inherent Power to Impose a Non-

Compensatory Monetary Sanction

{22} The Regents argue that a non-compensatory monetary sanction imposed against a

public entity punishes innocent taxpayers who took no part in the wrongful conduct and

depletes public revenues and, therefore, similar to Torrance County, these public policy

concerns dictate that a district court cannot exercise its inherent power to impose a purely

punitive monetary sanction against a public entity. Although we do not take lightly the

policy concerns raised by the Regents in this case, we ultimately conclude that these

concerns are “subordinate to a court’s authority to control the parties and the litigation before

it.” Baca, 1995-NMSC-033, ¶ 25. We explain.

{23} First, we do not view the Regents’ contention that a purely punitive monetary

sanction serves to deplete public revenues and must therefore be avoided as a justifiable

basis for limiting the authority of the district court to impose a monetary sanction against a

public entity. Indeed, any sanction imposed against a public entity for disruption of the

judicial process arguably results in an expenditure of public funds. Even in cases where the

sanction imposed is compensatory in nature, such as the awarding of costs or attorney fees

incurred as a result of the misconduct, the same potential for the depletion of public revenues

would occur. We note, for example, that the Regents were assessed—and paid without

complaint—$32,000 for the attorney fees that Plaintiffs had incurred in bringing the motion

for sanctions, the costs associated with locating a replacement for Dr. Paul, and the fees that

Plaintiffs incurred for Dr. Paul’s services prior to his withdrawal.

{24} Moreover, assuming that the Regents are correct that the $100,000 sanction imposed

by the district court was solely punitive in nature, we nevertheless do not share their concern

that the punitive nature of the sanction alone—i.e. the fact that the sanction punishes

innocent taxpayers—is enough to render the sanction inappropriate on public policy grounds.

In our view, sanctions are punitive by their very nature. See Black’s Law Dictionary 1458

(9th ed. 2009) (defining a “sanction” as “a penalty or coercive measure that results from

failure to comply with a law, rule, or order”); see also Warner v. Sw. Desert Images, LLC,

180 P.3d 986, 1001 (Ariz. Ct. App. 2008) (“A sanction is by definition punitive or coercive

in nature.”). That is, sanctions such as the dismissal of a case, default judgments, exclusion

of witnesses or evidence, and monetary fines all necessarily include some degree of

punishment and deterrence for the wrongful party. For example, in the criminal context, we

have upheld a lower court’s exercise of inherent power to dismiss a criminal prosecution as

a sanction against the government, see Candelaria, 2008-NMCA-120, ¶ 22, despite

recognizing that the extreme sanction of dismissal “punishes the public, not the prosecutor,

and results in a windfall to the defendant.” State v. Jackson, 2004-NMCA-057, ¶ 15, 135

N.M. 689, 92 P.3d 1263 (internal quotation marks and citation omitted). The policy behind

a district court’s inherent authority is the need to prevent abusive litigation practice and

preserve the integrity of the judicial process. It makes little sense to effectively strip a court

of its equitable power to control and punish the misconduct of those litigants associated with

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public entities. To do so would effectively allow a public entity to hide behind a protective

shield thus giving it permission to engage in unethical conduct for which a private litigant

would surely be sanctioned. Accordingly, we decline to adopt a per se rule that a district

court cannot exercise its inherent power to impose a non-compensatory monetary sanction

against a public entity simply because the sanction may have a punitive effect.

{25} Finally, we must emphasize the unique procedural posture of this case. During the

course of the sanctions proceedings, the parties settled the underlying claims. Thus, by the

time the district court issued its letter decision imposing sanctions, the options for sanctions

available in the case were severely limited. Under these circumstances, the district court

chose a sanction that avoided many of the policy pitfalls the Regents complain of on appeal.

The imposition of a non-compensatory monetary sanction ensured that there was no windfall

to Plaintiffs yet would sufficiently deter the type of abusive conduct by litigants that

occurred here in the future.

{26} As a final matter, we reiterate the narrow holding in this case. We decide only that

a district court’s inherent power to award non-compensatory monetary sanctions applies

equally to public and private entities. We recognize that a court’s inherent powers are not

unfettered and should be invoked “sparingly and with circumspection.” Baca, 1995-NMSC-

033, ¶ 25. However, here, the Regents did not argue before the district court—and do not

argue on appeal—that the court’s factual findings of misconduct were erroneous or not based

on substantial evidence. Nor do they argue that the conduct did not rise to a level warranting

sanctions, that the amount of the sanction was not proportional to the violation, or that the

monetary distribution of the sanctioned sum to four charitable organizations was

inappropriate. Therefore, we do not address these questions in this opinion.

{27} Based on the foregoing, we conclude that a district court’s inherent power to impose

sanctions includes the authority to issue a non-compensatory monetary sanction against a

public entity.

CONCLUSION

{28} We affirm the district court’s imposition of the $100,000 non-compensatory

monetary sanction against the Regents. We deny Plaintiff’s request for attorney fees

incurred on appeal.

{29} IT IS SO ORDERED.

____________________________________

LINDA M. VANZI, Judge

I CONCUR:

____________________________________

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M. MONICA ZAMORA, Judge

TIMOTHY L. GARCIA, Judge (dissenting)

GARCIA, Judge (dissenting).

{30} I respectfully dissent in this case and view the issue very narrowly. Regents do not

contest the position that the district court can properly impose compensatory sanctions

against a governmental entity as part of its inherent authority. Nor do they appeal the award

of the compensatory sanction imposed by the district court. Instead, Regents ask this Court

to determine as a matter of first impression whether the district court has the right to exercise

its inherent legal authority to impose a purely punitive sanction against a governmental

entity for improper conduct during a legal proceeding. I disagree with the majority’s holding

that such an inherent right exists. See Majority Opinion ¶¶ 14-26.

{31} The majority labels the sanction imposed by the district court as a “non-

compensatory monetary sanction,” Majority Opinion ¶¶ 1, 11, 22, 26, and rejects Regents’

position that the $100,000 sanction was purely punitive. Majority Opinion ¶¶ 20, 23. Yet

the majority also recognizes that the sanction was issued for the purpose of being “severe

enough to put a stop to the practice” based upon “the misconduct at issue and the relative

size and resources of the wrongdoers. . . . [The court must] do more than merely compensate

the other party for their fees and expenses incurred.” Majority Opinion ¶¶ 9-10. Where a

sanction has no compensatory component and is issued exclusively for the purpose of

punishment and deterrence, the sanction is the equivalent of a punitive damages award. See

Baca, 1995-NMSC-033, ¶¶ 21-22. Here, the underlying case had settled, and Regents was

separately sanctioned for the entire amount of Plaintiffs’ compensatory expenses associated

with Sauder’s misconduct, including attorney fees, costs, and other related fees. Majority

Opinion ¶ 9. As a result and based upon the primary legal argument comparing the monetary

sanction award against Regents to a punitive damage award against a governmental entity,

the term “punitive sanction” is the appropriate term for the $100,000 sanction awarded in

this case.

{32} Regents limit their appeal to the punitive sanction awarded and the recognized

immunity governmental entities have from punitive damages under Baca and Torrance

County. Majority Opinion ¶¶ 15-16. The majority distinguishes the public policy grounds

for this governmental immunity based upon a need for additional control over abuses that

occur during the judicial process and the distinct legal concept for a jury award of damages

versus misconduct during judicial proceedings. Majority Opinion ¶ 18. It then asserts that

misconduct toward the court must be given greater weight than misconduct toward a party

when punitive punishment of a governmental entity is a consideration. Id.

{33} The majority correctly recognizes the competing public policy interests regarding the

award of punitive damages against a governmental entity that were addressed in Torrance

County. Majority Opinion ¶ 17. The need to protect public revenues and to prevent the

11

injustice of punishing innocent taxpayers rather than the officials at fault must be balanced

against the need to deter abuse of governmental power and to promote accountability among

governmental officials. Id. However, the majority failed to address the competing public

interests any further in its analysis. The majority instead continues its public policy analysis

by citing Baca to rely upon the district court’s authority to impose attorney fees as a sanction

and justify tipping the public policy scales in favor of awarding punitive sanctions for the

purpose of “control[ling] the parties and the litigation.” Majority Opinion ¶ 21. This effort

to distinguish the public policy decision expressed by our Supreme Court in Baca and

Torrance County is misplaced for two reasons.

{34} First, the competing public policy concerns must be addressed directly in order to

determine whether an actual need to impose punitive sanctions against a governmental entity

is necessary for the district court to control the parties and cases in the courtroom.

Compared to our juries, the district court already has significant non-punitive power and

authority to control the parties and the litigation under its jurisdiction. Baca, 1995-NMSC-

033, ¶ 11 (recognizing that district courts have inherent power “[t]o fine for contempt,

imprison for contumacy, enforce the observance of order” on “both litigants and attorneys,”

and to impose a variety of sanctions “in order to regulate [its] docket, promote judicial

efficiency, and deter frivolous filings” (internal quotation marks and citation omitted)); State

ex rel. Schwartz v. Kennedy, 1995-NMSC-069, ¶ 41, 120 N.M. 619, 904 P.2d 1044

(suspending or revoking a license for noncompliance with the conditions governing its

issuance was recognized as an appropriate regulatory sanction); United Nuclear Corp. v.

Gen. Atomic Co., 1980-NMSC-094, ¶ 201, 96 N.M. 155, 629 P.2d 231 (permitting a district

court to impose a variety of sanctions to command and enforce compliance with discovery

orders); State v. Martinez, 1998-NMCA-022, ¶ 6, 124 N.M. 721, 954 P.2d 1198 (allowing

the district court to impose a variety of sanctions on a defendant who fails to include a

witness he or she intends to call at trial, “including granting a continuance, prohibiting the

party from calling a witness not disclosed, or entering such other order as it deems

appropriate under the circumstances”); Enriquez v. Cochran, 1998-NMCA-157, ¶¶ 18, 48,

126 N.M. 196, 967 P.2d. 1136 (affirming the striking of its affirmative defenses and

imposing a specific duty of care on the Boys Scouts of America as a discovery sanction);

Rhinehart v. Nowlin, 1990-NMCA-136, ¶ 28, 111 N.M. 319, 805 P.2d 88 (permitting the

district court to hold a civil contempt proceeding “to coerce or force compliance with a court

order, or in the alternative, [to] impose sanctions by way of compensating the aggrieved

party and awarding that party his or her attorney fees and costs”); State ex rel. Bardacke v.

Welsh, 1985-NMCA-028, ¶ 19, 102 N.M. 592, 698 P.2d 462 (explaining that the sanction

of injunction “is warranted when the courts are being used as a vehicle of harassment”).

{35} In a real sense, these examples illustrate that the existing sanction powers possessed

by the courts are much broader than a jury’s power to deter an abuse of power or promote

accountability among governmental officials. In this case, the $1,500 sanction imposed

directly against Sauder is just one example of the latitude given to the court that is not

available to a jury. However, the broader punitive sanction of $100,000 that is neither paid

by Sauder nor capable of jeopardizing his public position or office would offer no further

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deterrent or other value to the public policy being implemented. Rather than punishing the

public official who committed the wrongful act, it is simply borne by innocent taxpayers.

The court, not the jury, already has broad power to issue effective compensatory sanctions

in order to deter any abuse of power and promote accountability among governmental

officials who appear in the courtroom. The majority’s justification for imposing an

additional punitive sanction against the public weighs heavily against the argument that the

courts, rather than juries, might need the additional authority to impose a purely punitive

award in order to deter an abuse of power and promote accountability among governmental

officials.

{36} Second, the majority’s position presumes that the jury process is incapable of

imposing punitive awards against a governmental entity in order to fulfill public policy goals

but that the courts possess some higher degree of capacity or understanding when it comes

to imposing punitive awards against the government. Such a presumption is erroneous. It

undermines the jury component of our legal system, the unique legal element that is one of

the most profound and respected aspects of our democratic society. See State v. Mann,

2000-NMCA-088, ¶ 84, 129 N.M. 600, 11 P.3d 564 (recognizing the profound democratic

function played by juries in a criminal prosecution); First Nat’l Bank v. Nor-Am Agric.

Prods., Inc., 1975-NMCA-052, ¶ 50, 88 N.M. 74, 537 P.2d 682 (recognizing juries as “the

institution best suited to reflect the sense of fairness and the conflicting values of a

democratic order”); see also Axelrod v. Phillips Acad., 74 F. Supp. 2d 106, 109 (D.C. Mass.

1999) (recognizing juries as “the foundation of our jurisprudence in a constitutional

democracy”); Holland v. State, 587 So. 2d 848, 877 (Miss. 1991) (Hawkins, J., dissenting)

(“Judgment as to what is a ‘just’ or ‘right’ decision can change with the times. Nothing,

however, can match the comfort of having men and women of your own stature pass upon

the merits of your case. The public at large in turn feels far more comfortable with a

[twelve]-man jury verdict, whatever it is, than it would with the same result having been

reached by some judge.”).

{37} It is an unfortunate mistake to presume that judges and not juries possess the

exclusive knowledge and ability to determine when a purely punitive award must be imposed

on a governmental entity and then paid by innocent taxpayers from public revenues. I

disagree with the majority view and believe the Supreme Court’s analysis in Baca directs

otherwise. See 1995-NMSC-033, ¶¶ 21-25.

____________________________________

TIMOTHY L. GARCIA, Judge

Topic Index for Harrison v. UNM Bd. of Regents, No. 32,215

APPEAL AND ERROR

Standard of Review

13

CIVIL PROCEDURE

Expert Witnesses

Sanctions

GOVERNMENT

Education and Schools

EVIDENCE

Expert Witness

Tampering with Evidence

Witnesses

REMEDIES

Punitive Damages

TORTS

Medical Malpractice

14