Acosta v. Austin Electric Services LLC et al, No. 2:2016cv02737 - Document 207 (D. Ariz. 2018)
Court Description: ORDER granting in part and denying in part Defendants' 185 Motion for Rule 37(c) Sanctions. Signed by Senior Judge Roslyn O Silver on 10/15/18. (CLB)
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Acosta v. Austin Electric Services LLC et al 1 Doc. 207 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 R Alexander Acosta, No. CV-16-02737-PHX-ROS Plaintiff, 10 ORDER 11 v. 12 Austin Electric Services LLC and Toby Thomas, 13 14 Defendants. 15 16 Plaintiff Secretary of Labor (“the Secretary”) alleges Defendants Austin 17 Electric Services LLC and Toby Thomas, Austin Electric’s President (collectively, 18 “Defendants”), failed to pay employees overtime compensation and to keep employee 19 records, in violation of the Fair Labor Standards Act (“FLSA”). In anticipation of the 20 limited reopening of discovery, Defendants moved for Rule 37(c) sanctions to exclude 21 29 of the Secretary’s trial witnesses and all damages calculations beyond July 2015. 22 (Doc. 185.) For the foregoing reasons, Defendants’ motion will be granted in part and 23 denied in part. BACKGROUND 24 25 The Secretary alleges Defendants violated the FLSA by failing to pay employees 26 overtime compensation and failing to keep employee records. The case proceeded to 27 discovery, which, except as discussed below, ended in October 2017. Trial is set to begin 28 on January 15, 2019. (Doc. 172.) Dockets.Justia.com 1 A key component of the Secretary’s case is the testimony of informer witnesses— 2 current and former employees of Defendants who were allegedly denied overtime 3 compensation. 4 government’s informants privilege, the Court allowed the Secretary to withhold the 5 identities of informer trial witnesses until shortly before trial. The Court ordered the 6 Secretary to disclose the identities of its informer witnesses who will testify at trial—as 7 well as any unredacted documents relating to those witnesses—by October 1, 2018. 8 (Docs. 102, 172.) Because the identities of these witnesses are protected by the 9 Following these disclosures, discovery is scheduled to reopen for 15 days, 10 beginning October 15, 2018 and ending November 2, 2018. During this time, Defendants 11 will have the opportunity to “interview and/or depose the Secretary’s informer witnesses 12 and other individuals who may be disclosed in the documents and information the 13 Secretary produces.” (Doc. 172 at 20:14–16.) 14 On October 3, 2018, after receiving the Secretary’s disclosure of 40 witness 15 names, Defendants filed a motion for Rule 37(c) sanctions. (Doc. 185.) Defendants 16 argue the Secretary failed to disclose required information relating to the Secretary’s 17 informer witnesses and ask the Court to exclude 29 of the 40 witnesses. In addition, 18 Defendants argue that damages calculations beyond July 2015 should be excluded due to 19 untimely disclosure. 20 The Court granted Defendants’ request for expedited briefing, in consideration of 21 depositions scheduled to begin on October 15. (Doc. 188.) The Secretary filed a 22 response to Defendants’ motion on October 11, (Doc. 189), and Defendants filed their 23 reply on October 12. (Doc. 191.) 24 I. Rule 37(c) Sanctions 25 As an initial matter, Defendants’ motion for Rule 37(c) sanctions does not violate 26 meet-and-confer requirements regarding discovery disputes. Unlike Rule 37(a), Rule 27 37(c) does not require a certification that the “the movant has in good faith conferred or 28 attempted to confer.” Fed. R. Civ. P. 37(a)(1). “Any local rule requiring a conference -2- 1 prior to the court’s imposition of sanctions under Rule 37(c) would be inconsistent with 2 Rule 37(c) and, therefore, unenforceable.” Hoffman v. Constr. Protective Servs., Inc., 3 541 F.3d 1175, 1179 (9th Cir. 2008), as amended (Sept. 16, 2008); see also Dayton 4 Valley Inv’rs., LLC v. Union Pacific R.R. Co., No. 08-cv-00127, 2010 WL 3829219, at *2 5 (D. Nev. Sept. 24, 2010) (“Ultimately, this is a non-issue as personal consultation is not 6 required prior to a motion for sanctions pursuant to Rule 37(c).”). Accordingly, the Court 7 will not deny Defendants’ motion on this basis.1 8 II. The 29 Witnesses 9 Defendants argue the Secretary violated Rule 26(a) and the Court’s Orders by 10 failing to disclose required information for all 40 witnesses. However, because the 11 Secretary provided limited disclosures relating to 11 witnesses,2 Defendants request the 12 exclusion of only 29 of the 40 witnesses. 13 According to Defendants, the Secretary failed to disclose the 29 witnesses’ contact 14 information and descriptions of the subject matter of each witness’s anticipated testimony 15 in violation of Rule 26(a). 16 documents—including interview-related documents and statements from employees— 17 relating to the 29 informer witnesses, as required by this Court’s Orders. In support of 18 their argument, Defendants point out the 29 witnesses “do not make a single appearance 19 in the DOL’s production of interview-related documents—no employee statements, no 20 interview summaries, no interview notes, no notes of calls made to employees, no notes 21 of calls from employees, and no notes of meetings with employees.” (Doc. 185 at 5:5– 22 8.) Pursuant to Rule 37(c), Defendants request the Court sanction the Secretary by 23 excluding the 29 witnesses. Fed. R. Civ. P. 37(c) (“If a party fails to provide information 24 or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that 25 information or witness to supply evidence on a motion, at a hearing, or at a trial, unless In addition, the Secretary failed to produce unredacted 26 1 27 28 In any event, Defendants’ motion is one for Rule 37(c) sanctions rather than a discovery motion. 2 Defendants note the Secretary produced interview summaries for 11 witnesses. Defendants plan to proceed with depositions of some these witnesses when discovery reopens. (Doc. 185 at 5, n.6.) -3- 1 the failure was substantially justified or is harmless.”). Although Defendants did not cite 2 to Rule 37(b), which allows for sanctions for a failure to comply with a court order, the 3 Court notes it is applicable here. Fed. R. Civ. P. 37(b). 4 The Secretary responds that 86 pages of documents that three informer witnesses 5 had provided to the Secretary were produced, as well as an interview statement for one of 6 the three witnesses. (Doc. 189.) For the remaining 26 witnesses, the Secretary states that 7 no responsive documents exist because “[t]hese 26 witnesses did not provide any 8 documents to the Secretary, nor did the Secretary previously redact documents about 9 them solely on the basis of the Government Informants Privilege.” (Doc. 189 at 1:26– 10 28.) 11 recently and after fact discovery closed, obviously preventing [him] from previously 12 redacting documents about them.” (Doc. 189 at 1:28–2:1-2 (emphasis in original).) The Secretary explains meetings with many of these witnesses occurred “only 13 In reply, Defendants counter that the Secretary’s lack of a single document about 14 26 witnesses “strains credulity” and ask the Court to conduct an in camera review of the 15 Secretary’s documents. (Doc. 191 at 7:4–5.) 16 The Court’s Orders regarding informer witness disclosures are clear: The 17 Secretary “shall disclose the identities of its informer witnesses who will testify at trial, 18 and any unredacted documents relating to them, no later than October 1, 2018.” (Doc. 19 172 at 20:10–12); see also Doc. 102 at 5:12–17 (“[T]he Secretary shall produce the un- 20 redacted documents relating to the Secretary’s informer witnesses who will testify at trial, 21 including any documents these informer witnesses provided to the Secretary as well as 22 those documents previously redacted on the basis of the Government Informants 23 Privilege (to the extent not protected by other privileges or the work product doctrine[.]”) 24 Nowhere in the Orders does the Court suggest the Secretary’s production shall be 25 limited exclusively to (1) documents provided to the Secretary by informer witnesses; or 26 (2) documents previously withheld or redacted based on the government’s informants 27 privilege. In parts of the response, the Secretary apparently concludes that there are no 28 responsive documents relating to 26 witnesses because no documents fall under these two -4- 1 mandatory categories. (Doc. 189 at 1:26–28, 7:24–28.) If this is indeed the Secretary’s 2 interpretation, it plainly violates the Court’s Orders: All documents relating to informer 3 trial witnesses that are not protected by “other privileges or the work product doctrine” 4 should have been produced, regardless of how and when the Secretary obtained or 5 generated them. 6 To the extent the Secretary has failed to produce trial witness–related documents 7 solely because they did not fall under the two categories, the Secretary is now ordered to 8 produce any such information no later than October 16, 2018. Those witnesses may well 9 be excluded under Rule 37(c), unless the Secretary’s failure to disclose was substantially 10 justified or harmless. With regard to documents withheld due to other privileges or the 11 work product doctrine, the Secretary shall produce, no later than October 16, 2018, a 12 privilege log indicating all responsive documents withheld on the basis of any privilege. 13 Defendants’ request for in camera review, raised for the first time in reply, is denied as 14 disproportionate and unnecessary at this time. See, e.g., Diamond State Ins. Co. v. Rebel 15 Oil Co., Inc., 157 F.R.D. 691, 700 (D. Nev. 1994) (“Resort to in camera review is 16 appropriate only after the burdened party has submitted detailed affidavits and other 17 evidence to the extent possible.”). 18 III. Damages Calculations 19 Defendants ask the Court to exclude the Secretary’s damages calculations beyond 20 July 2015 due to untimely disclosure. According to Defendants, the Secretary’s back 21 wages calculations have increased from $691,608.29 during discovery to $1,124,435.12 22 in October 2018. Notably, the Secretary’s damages calculations that were disclosed 23 during discovery did not include any damages calculations beyond July 2015. Rather, in 24 the Pretrial Disclosures of the Secretary, dated October 23, 2017, the Secretary stated 25 “[b]ackwage calculation worksheets” would be offered at the time of trial. (Doc. 185, 26 Ex. 7 at 7:13.) 27 In the response, the Secretary argues that because Defendants’ FLSA violations 28 are allegedly ongoing, the Secretary’s back wage calculations would naturally increase -5- 1 with time. Furthermore, because the Secretary added 99 individuals to the case in April 2 2018, the updated damages calculations include back wages for those individuals. The 3 Secretary also points out that final calculations will depend on the supplemental 4 disclosures of payroll information that Defendants have yet to disclose. 5 The Court agrees with the Secretary that Defendants were not prejudiced by the 6 timing of damages disclosure. Fed. R. Civ. P. 37(c) (providing for the exclusion of 7 information for a failure to disclose “unless the failure was substantially justified or is 8 harmless”). Throughout this litigation, Defendants have always known that the Secretary 9 alleges ongoing violations of the FLSA and that damages calculations would increase 10 with time. Defendants also knew the Secretary added 99 individuals to this case in April 11 2018 and that those individuals claim additional back wage damages. Furthermore, the 12 Secretary states the supplemental back wage calculations provided use the same 13 methodology as previous calculations, of which Defendants are well aware. Defendants 14 both knew and should have expected the Secretary’s damages calculations would 15 increase. Therefore, Defendants’ motion to exclude damages calculations is denied. 16 IV. The Other 11 Witnesses 17 Defendants do not request the exclusion of the other 11 trial witnesses but insist 18 the Secretary has not fully complied with his disclosure obligations. (Doc. 185 at 5.) 19 While the Secretary provided interview summaries for these 11 witnesses, other required 20 information was not disclosed, including contact information for the witnesses. The 21 parties dispute whether Defendants were already in possession of such information and 22 whether they were harmed by this failure to disclose. To the extent the Secretary has up- 23 to-date contact information for trial witnesses that Defendant does not have, the Secretary 24 shall disclose that information no later than October 16, 2018. 25 V. Documents Unrelated to Trial Witnesses 26 The parties dispute the production of a number of documents unrelated to the trial 27 witnesses. In their reply, Defendants curiously argue that the Court intended to include 28 documents unrelated to trial witnesses when it ordered disclosure of the “the un-redacted -6- 1 documents relating to the Secretary’s informer witnesses who will testify at trial, 2 including any documents these informer witnesses provided to the Secretary as well as 3 those documents previously redacted on the basis of the Government Informants 4 Privilege.” (Doc. 102 (emphasis added).) This reading defies all logic. The literal 5 import of this Order does not contemplate production of documents unrelated to trial 6 witnesses. Accordingly, the Court will not impose sanctions for these failures to produce. 7 8 9 VI. Attorneys’ Fees The Court will not impose additional monetary sanctions and each party shall bear its own costs. 10 Accordingly, 11 IT IS ORDERED Defendants’ Motion for Rule 37(c) Sanctions, (Doc. 185), is 12 13 GRANTED IN PART and DENIED IN PART. Dated this 15th day of October, 2018. 14 15 16 Honorable Roslyn O. Silver Senior United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 -7-
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