Malloy v. Trileaf Corporation et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DEBORAH MALLOY, 	)
)
Plaintiff, 	)
)
v. 	) 	No. 4:24 CV 506 CDP
)
TRILEAF CORPORATION, et al., 	)
)
Defendants. 	)
MEMORANDUM AND ORDER
Presently before the Court is defendants Trileaf Corporation and T. Scott
Muschany’s Joint Motion for Sanctions Based on Plaintiff’s Discovery Misconduct,
wherein defendants seek to recover attorney’s fees they incurred because of plaintiff
Deborah Malloy’s deliberate misconduct committed during the discovery process in
this case. 	Defendants also request that I strike Malloy’s pleadings and dismiss the
case with prejudice. 	Upon careful consideration of the parties’ positions on the
motion and the exhibits submitted, I will grant defendants’ motion for sanctions in
the form of attorney’s fees caused by the misconduct and will direct defendants to
file a verified statement of those fees. 	I will deny as moot defendants’ request to
strike pleadings and dismiss the case as I recently granted defendants summary
judgment on all of Malloy’s remaining claims.
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Relevant Background
Plaintiff Malloy filed this action in April 2024 claiming inter alia that
defendants unlawfully terminated her employment with Trileaf in violation of the
Fair Labor Standards Act. 	During the period relevant to defendants’ motion for
sanctions, discovery was scheduled to close on March 28, 2025; summary judgment
motions were due April 18, 2025; and jury trial was set for August 18, 2025.
Defendants timely filed motions for summary judgment on April 18 and filed the
instant motion for sanctions on May 9. 	Given the pendency of the motions and the
issues raised, I removed the case from the August 18 trial docket. 	On January 8,
2026, I granted defendants summary judgment on all of Malloy’s remaining claims,
terminating the case. 	The motion for sanctions remains pending.
With evidentiary support, defendants have established that during the course
of discovery, Malloy provided false, sworn interrogatory answers and deposition
testimony regarding her employment and earnings history, criminal history,
bankruptcy history, and educational background; and she provided an incorrect date
of birth under penalty of perjury on a Social Security Administration form, which
defendants requested in order to obtain an accurate earnings statement. 	Defendants
contend that Malloy’s deceitful conduct caused them to expend extensive time and
effort investigating Malloy’s background to secure accurate information and
prejudiced them by impeding their ability to obtain information relevant to their
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defense. 	Regarding the SSA form particularly, defendants aver that the SSA’s
rejection of the form in April 2025 because of the inaccurate birthdate thwarted their
ability to timely obtain relevant information for purposes of summary judgment and
trial.
In response, Malloy argues that sanctions are not warranted here because she
was not deliberately offering falsehoods in her interrogatory answers and deposition
testimony, but rather simply forgot some information. 	Moreover, Malloy contends
that none of the information that forms the basis of defendants’ motion was relevant
to the case because she did not intend to introduce any related evidence at trial and
defendants had other evidence to present in their defense. 	As to the SSA form,
Malloy’s attorney, Matthew Ghio, admits that he provided a blank form to Malloy to
sign under penalty of perjury and that Ghio merely committed a scrivener’s error
when he completed the form later.
Discussion
As an initial matter, I will deny defendants’ motion to the extent it asks me to
strike Malloy’s complaint and dismiss the case with prejudice as a sanction for
Malloy’s misconduct. 	On January 8, 2026, I granted defendants summary
judgment on the remaining claims in the case, thereby mooting their request to
dismiss.
As to defendants’ request for attorney’s fees, defendants invoke Federal Rule
of Civil Procedure 26(g)(3) as authority for imposing sanctions on the signer of a
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discovery response who improperly certifies compliance with Rule 26(g)(1); as well
as Rule 37(b)(2)(A) as authority for imposing sanctions for failure to comply with a
court’s discovery order. 	Defendants also invoke the court’s inherent authority to
impose sanctions for bad-faith conduct, regardless of whether the conduct is
sanctionable under the Federal Rules of Civil Procedure.
“The inherent power of a court [to impose sanctions] can be invoked even if
procedural rules exist which sanction the same conduct.” 	Chambers v. NASCO,
Inc., 501 U.S. 32, 49 (1991) (citation modified). 	Invoking inherent authority “is
plainly the case where the conduct at issue is not covered by one of the other
sanctioning provisions.” 	Id. at 50. 	“But neither is a federal court forbidden to
sanction bad-faith conduct by means of the inherent power simply because that
conduct could also be sanctioned under . . . the Rules.” 	Id. 	A “court may safely
rely on its inherent power” if in its “informed discretion . . . the Rules are [not] up to
the task.” 	Id. 	See also Schlafly v. Eagle F., 970 F.3d 924, 936 (8th Cir. 2020).
“Because of their very potency, inherent powers must be exercised with
restraint and discretion. 	A primary aspect of that discretion is the ability to fashion
an appropriate sanction for conduct which abuses the judicial process.” 	Chambers,
501 U.S. at 44-45 (citation modified). 	Abuse of the judicial process includes
discovery abuses such as a party’s “engaging in a pattern of deceit by presenting
false and misleading answers and testimony under oath in order to prevent their
opponent from fairly presenting its case.” 	Chrysler Corp. v. Carey, 186 F.3d 1016,
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1022 (8th Cir. 1999).
Within a court’s inherent power is an assessment of attorney’s fees as a
sanction “when a party has acted in bad faith, vexatiously, wantonly, or for
oppressive reasons.” 	Chambers, 501 U.S. at 45-46 (citation modified). 	Bad faith
may be shown by a party’s delay or disruption of the litigation or their hampering
enforcement of a court order, thus warranting an assessment of attorney’s fees. 	Id.
at 46. 	See also Schlafly, 970 F.3d at 936-37. 	The power to award attorney’s fees
for bad-faith conduct “depends not on which party wins the lawsuit, but on how the
parties conduct themselves during the litigation.” 	Chambers, 501 U.S. at 53.
“A remedial award of attorney’s fees as a sanction occurs when the fee is paid
to the opposing party as compensation for the attorney’s fees incurred as a direct
result of the unethical behavior.” 	Schlafly, 970 F.3d at 937 (citation modified).
While I have broad discretion in awarding such fees, the award must be limited to
only those incurred solely because of the misconduct. 	Goodyear Tire & Rubber
Co. v. Haeger, 581 U.S. 101, 103-04 (2017). 	Otherwise, the sanction may be
considered punitive to which procedural guarantees applicable in criminal cases
would apply. 	Id. at 108.
I have carefully reviewed Malloy’s deposition testimony, answers to
interrogatories, SSA form, and all other documents filed by the parties on
defendants’ motion for sanctions. 	On the evidence submitted and for the reasons
set out in defendants’ motion, Malloy’s challenged deposition testimony and
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answers to certain interrogatories were plainly not credible and possibly perjurious.
Malloy provides no defense for her false answers and testimony given under oath,
other than she merely forgot about her criminal charge and conviction. 	She
provides no reason or explanation for her false and/or misleading answers and
testimony regarding her employment history, employment references and contact
information, educational history, and bankruptcy history. 	Moreover, attorney Ghio
admits that Malloy signed a blank SSA form despite declaring under penalty of
perjury that she had “examined all the information on this form, and on any
accompanying statements or forms, and it is true and correct to the best of my
knowledge” (ECF 69-6, signed SSA form); that it was he who completed the form
after Malloy signed it; and that that process has “always been” his practice in
securing authorization forms from Malloy in this case. 	(See ECF 82, Pltf’s Opp. at
p. 4.) 	Regardless of counsel’s questionable practice and his claimed scrivener’s
error in his completing the form, his admission nevertheless shows that Malloy’s
declaration on the SSA form was false.
The repeated and consistent nature of Malloy’s sworn falsehoods and
misrepresentations during discovery threatened the integrity of this litigation
particularly and the judicial process generally. 	See Chrysler Corp., 186 F.3d at
1021. 	Other than explaining her false testimony on past criminal convictions,
Malloy does not deny that her pattern of deceit prejudiced defendants’ ability to
fully prepare and fairly present all their defenses to her claims. 	Her claim of
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relevance is without merit, see Lutzeier v. Citigroup Inc., No. 4:14CV183 RLW,
2015 WL 1853820, at *2 (E.D. Mo. Apr. 22, 2015) (plaintiff’s credibility and after-
acquired evidence relevant to defense); and her red-herring complaint regarding
defense counsel’s role does not excuse or negate her own misconduct. 	Sanctions
are therefore warranted. 	Chrysler Corp., 186 F.3d at 1022.
Therefore, pursuant to my inherent authority, I will grant defendants’ motion
for sanctions to the extent defendants seek to recover attorney’s fees that were
incurred and caused solely because of Malloy’s false and misleading answers to
interrogatories and deposition testimony regarding her employment and earnings
history, criminal history, bankruptcy history, and educational background; and by
the provision of incorrect information on Social Security Administration form SSA-
7050-F4 (11-2022), signed under penalty of perjury on December 16, 2024. 	Those
attorney’s fees may include reasonable fees incurred in preparing and litigating the
motion for sanctions. 	Given the nature of the misconduct, including counsel’s
practice in securing Malloy’s authorizations in the case, I will impose the sanctions
jointly and severally upon plaintiff Deborah Malloy and her attorney, Matthew
Ghio. 	I will deny as moot defendants’ motion to the extent defendants seek to
strike Malloy’s pleadings and to dismiss this action with prejudice as a sanction.
Accordingly,
IT IS HEREBY ORDERED that defendants’ Joint Motion for Sanctions
Based on Plaintiff’s Discovery Misconduct [68] is GRANTED in part and
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DENIED AS MOOT in part as set out above.
IT IS FURTHER ORDERED that sanctions in the form of attorney’s fees
are awarded to defendants Trileaf Corporation and T. Scott Muschany and assessed
against plaintiff Deborah Malloy and her attorney, Matthew Ghio, jointly and
severally.
IT IS FURTHER ORDERED that within fourteen (14) days of the date of
this Order, defendants shall filed a verified statement of the attorney’s fees they
reasonably incurred that were caused because of plaintiff Deborah Malloy’s false
and misleading answers to interrogatories and deposition testimony regarding her
employment and earnings history, criminal history, bankruptcy history, and
educational background; and by the provision of incorrect information on Social
Security Administration form SSA-7050-F4 (11-2022), signed under penalty of
perjury on December 16, 2024.
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 14th day of January, 2026.
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