Cruz Mejia et al v. Brothers Petroleum, LLC et al, No. 2:2012cv02842 - Document 284 (E.D. La. 2019)

Court Description: ORDER AND REASONS: As stated herein, Defendants' 264 Motion to Extend the Stay is GRANTED. Signed by Judge Sarah S. Vance on 7/30/2019. (Reference: 12-02842)(mm)
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Cruz Mejia et al v. Brothers Petroleum, LLC et al Doc. 284 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA DANIA GISELLE CRUZ MEJ IA, ET AL. CIVIL ACTION VERSUS NO. 12-2842 c/ w NO. 13-4831 BROTHERS PETROLEUM, LLC, ET AL. SECTION “R” (3) ORD ER AN D REASON S Before the Court are: (1) defendants’ m otion to extend the stay in this case, 1 and (2) defendants’ objections to plaintiffs’ requests for discovery. 2 The Court extends the stay in this case except as to docum ent discovery to which neither party has objected. I. BACKGROU N D This is a collective action lawsuit seeking dam ages for alleged violations of overtim e and m inim um wage provisions of the Fair Labor Standards Act (FLSA). 29 U.S.C. §§ 20 6, 20 7. Defendants are a network of convenience stores operating under the nam e “Brothers Food Mart,” and the owners of the businesses—Im ad Faiez Ham dan, Abdel Raoyf Mousa, and 1 2 R. Doc. 264. R. Doc. 275. Ziad Mousa. Plaintiffs allege that they were employed as cooks, cashiers, store operators, and sim ilar positions at the convenience stores, and that they worked between fifty and eighty hours per week but were not paid overtim e wages. 3 On J uly 16, 20 14, J udge Helen Berrigan conditionally certified the plaintiffs to proceed as a collective action and requested a full list of opt-in plaintiffs. 4 On August 5, 20 14, defendants m oved to stay all proceedings because defendants had become aware that the U.S. Attorney’s Office was conducting a crim inal investigation into defendant Im ad Ham dan’s alleged hiring of undocum ented workers. 5 On August 15, 20 14, before the m otion to stay was fully briefed, defendants produced a partial list of em ployees who worked for Ham dan at the Brother Food Mart convenience stores. 6 Ham dan invoked his Fifth Am endment right against self-incrim ination “with respect to the identity of any additional opt-in plaintiffs.”7 On September 3, 20 14, J udge Berrigan imposed a lim ited stay on the proceedings. 8 She ordered 3 R. Doc. 20 5 at 10 -11. R. Doc. 79. 5 R. Doc. 88. 6 R. Doc. 95-1. This list included only potential plaintiffs who worked for Ham dan. Plaintiffs added the Mousas as defendants in an am ended com plaint filed on September 11, 20 14. See R. Doc. 113. Thus, plaintiffs were never given a list of Mousa employees. 7 Id. 8 R. Doc. 10 7. 2 4 defendants to produce a full list of all docum ented workers, but she stayed discovery as to any undocum ented workers. 9 On September 12, 20 14, the case was reassigned to this Section. 10 The Court extended the partial stay on Decem ber 11, 20 14, 11 and again on J une 12, 20 15. 12 On Septem ber 9, 20 15, the Court converted the partial stay into a com plete stay because of the active crim inal investigation and close connection between the civil and crim inal cases. 13 Between Septem ber 3, 20 14, when the lim ited stay was im posed, and September 9, 20 15, when the com plete stay was im posed, plaintiffs were free to conduct discovery as to the docum ented workers, and several plaintiffs opted into the collective action. Following the Court’s originally im posed com plete stay, it has extended the stay three tim es due to the continuing active crim inal investigation. 14 On March 29, 20 19, the governm ent issued an indictm ent nam ing Ham dan and Ziad Mousa. Shortly thereafter, defendants filed the instant m otion to extend the stay on the basis of the indictm ent. 15 On April 23, 20 19, 9 10 11 12 13 14 15 Id. at 6. R. Doc. 114. R. Doc. 161. R. Doc. 20 3. R. Doc. 211. R. Doc. 233; R. Doc. 249; R. Doc. 259. R. Doc. 264. 3 the Court held a status conference, at which the Court raised the possibility of the parties’ agreeing to lim ited docum ent discovery pertaining to docum ented workers in order to alleviate potential prejudice to plaintiffs given the extended length of the stay. To this end, the Court ordered plaintiffs to identify the m aterials that they were seeking from defendants. 16 It ordered the defendants to confer with Ham dan’s and Ziad Mousa’s crim inal attorneys and brief their position on the disclosure of the requested m aterials. 17 The Court also ordered defendants to produce a list of all docum ented workers that had not yet been disclosed to plaintiffs. 18 On May 9, 20 19, defendants filed objections to plaintiffs’ requested m aterials. 19 Plaintiffs have responded to the objections. 20 They also oppose the defendants’ m otion to extend the stay. 21 II. LEGAL STAN D ARD When a defendant in a civil case is facing crim inal charges, a district court m ay, in its discretion, stay the civil action. United States v. Kordel, 397 16 17 18 19 20 21 R. Doc. 273. Id. Id. R. Doc. 274. R. Doc. 279. R. Doc. 266. 4 U.S. 1, 12 (1970 ); see also In re Ram u Corp., 90 3 F.2d 312, 318 (5th Cir. 1990 ) (“The stay of a pending m atter is ordinarily within the trial court’s wide discretion to control the course of litigation, which includes authority to control the scope and pace of discovery.”). The Fifth Circuit has instructed that, in ruling on requests for stays of the civil side of parallel civil/ crim inal proceedings, “judicial discretion and procedural flexibility should be utilized to harm onize the conflicting rules and to prevent the rules and policies applicable to one suit from doing violence to those pertaining to the other.” United States v. Gieger Transfer Serv., Inc., 174 F.R.D. 382, 385 (S.D. Miss. 1997) (citing Cam pbell v. Eastland, 30 7 F.2d 478, 487 (5th Cir. 1962)). When determ ining whether a stay is warranted, courts consider: (1) the extent of overlap between the crim inal case and the civil case; (2) the status of the crim inal case, including whether the defendant has been indicted; (3) the interests of the plaintiff in proceeding expeditiously, weighed against the prejudice to the plaintiff caused by the delay; (4) the interests of and the burden on the defendant; (5) the interests of the courts; and (6) the public interest. Alcala v. Tex. W ebb Cty ., 625 F. Supp. 2d 391, 399 (S.D. Tex. 20 0 9) (collecting district court cases in the Fifth Circuit applying this test). Of these, the first factor is the m ost im portant. Dom inguez v. Hartford Fin. Servs. Grp., Inc., 530 F. Supp. 2d 90 2, 90 7 (S.D. Tex. 20 0 8). Although 5 district courts have wide discretion to determ ine whether a stay is warranted, “[e]ven discretionary stays . . . will be reversed when they are im m oderate or of an indefinite duration.” In re Ram u Corp., 90 3 F.2d at 318 (internal citations om itted). III. D ISCU SSION Defendants request that the Court extend the com plete stay in this case. The Court finds that such an extension is warranted because many of the same conditions that form ed the basis for the Court’s initial decision to im pose a stay still exist, and the issuance of an indictm ent has only strengthened the basis for the stay. Under the first Alcala factor, there is significant overlap between the crim inal case and the civil case. For exam ple, the allegations that Ham dan and Mousa failed to withhold taxes and underreported their em ployees’ incom e are closely connected to the civil allegations that defendants underpaid their employees by failing to pay overtim e wages. Further, there is a significant likelihood that key witnesses—such as Ham dan, Mousa, and the store m anagers 22 —would assert their Fifth Am endm ent rights to avoid 22 Although the store m anagers are not included in the current indictm ent, the allegations in the indictm ent refer m ultiple tim es to actions 6 possible crim inal exposure. A party claim ing a Fifth Amendm ent privilege can constitute a “special circum stance” in which a stay is necessary “to prevent a party from suffering substantial and irreparable prejudice.” SEC v. First Fin. Grp. of Tex. Inc., 659 F.2d 660 , 668 (5th Cir. 1981). When a significant portion of questions posed to a defendant would likely result in the defendant’s asserting his Fifth Amendm ent rights, this weighs heavily in favor of a stay. Dom inguez v. Hartford Fin. Servs. Grp., Inc., 530 F. Supp. 2d 90 2, 90 7 (S.D. Tex. 20 0 8). The Court cannot avoid this problem by requiring the witnesses to testify under a protective order. See Andover Data Servs., a Div. of Play ers Com puter, Inc. v. Statistical Tabulating Corp., 876 F.2d 10 80 , 10 84 (2d Cir. 1989) (holding that “a non-consenting witness m ay not be forced to answer potentially incrim inating questions in reliance upon [a protective] order” because “the protections of a Rule 26(c) order sim ply are not as ‘certain’ as the protections of either the fifth am endment or a statutory grant of use im m unity”). The first factor, the m ost im portant, therefore weighs heavily in favor of a stay. Under the second factor, the recent return of a crim inal indictm ent requires that the Court “strongly consider staying the civil proceedings until taken by store m anagers. The m anagers thus face a substantial threat of future crim inal proceedings. 7 the related crim inal proceedings are resolved.” W hitney N at. Bank v. Air Am bulance ex rel. B & C Flight Mgm t., Inc., No. 0 4-2220 , 20 0 7 WL 1468417, at *3 (S.D. Tex. May 18, 20 0 7); see also Cazaubon v. MR Precious Metals, LLC, No. 14-2241, 20 15 WL 4937888, at *3 (E.D. La. Aug. 17, 20 15) (finding that a stay is m ore likely to be necessary after an indictm ent is issued because “there is greater risk of self-incrim ination”). Skipping to the fourth factor for the m om ent, a stay is necessary when, as here, a defendant m ust choose between exercising his Fifth Am endment rights and jeopardizing his defense in a civil suit. Doe v. Morris, No. 11-1532, 20 12 WL 359315, at *2 (E.D. La. Feb. 2, 20 12). Finally, under the fifth and sixth factors, the Court has an interest in adjudicating this dispute efficiently. State Farm Lloy ds v. W ood, No. 0 650 3, 20 0 6 WL 3691115, at *3 (S.D. Tex. Dec. 12, 20 0 6). A stay serves this goal because it allows the Court to avoid the lengthy discovery disputes prom pted by requiring the defendants to object individually to every docum ent request and question that im plicates their Fifth Am endm ent rights. Further, “[t]he public has an interest in the resolution of disputes with m inim al delay, but only to the extent that the integrity of the defendant’s rights can be m aintained.” Doe, No. 11-1532, 20 12 WL 359315, at *2. 8 Plaintiffs argue that, under the third, fifth, and sixth Alcala factors, plaintiffs are prejudiced, and the public interest is not served by extending the stay because this case has already been stayed for m ultiple years. 23 But a “plaintiff [m ust] establish m ore prejudice than simply a delay in his right to expeditiously pursue his claim .” State Farm Lloy ds, No. 0 6-50 3, 20 0 6 WL 3691115, at *2. Sim ilarly, the public interest in proceeding expeditiously is outweighed by the need to protect the defendants’ constitutional rights. Plaintiffs have asserted additional prejudice because potential opt-in plaintiffs m ay m ove or become harder to contact over time. 24 But plaintiffs have already had several workers opt-in to this litigation. For those workers who have not yet received official notice, their claims have been tolled. 25 Ultim ately, even if plaintiffs suffer some prejudice, this harm is subordinate to the Court’s need to protect defendants’ Fifth Am endm ent rights. See Volm ar Distribs., Inc. v. N.Y. Post Co., 152 F.R.D. 36, 40 (S.D.N.Y. 1993) (recognizing that a stay “will result in inconvenience and delay to plaintiffs” but holding that “under settled authority the Fifth Am endm ent is the m ore important consideration.”). Now that an indictm ent has been issued, the requirements of the Speedy Trial Act will ensure that the 23 24 25 R. Doc. 266 at 5-6. Id. at 5. See R. Doc. 255. 9 crim inal action proceeds to its conclusion without unnecessary delay. Plaintiffs’ prejudice is also m itigated by the agreement between the parties to conduct lim ited discovery to the extent possible before the conclusion of the crim inal proceedings. The Court finds that a stay is necessary to protect the defendants’ right to a fair trial in the crim inal case. The Alcala factors therefore weigh in favor of a stay, which is the only way to ensure that defendants’ rights are protected. See State Farm Lloy ds, No. 0 6-50 3, 20 0 6 WL 3691115, at *3 (“[T]he public’s interest in the integrity of the crim inal case is entitled to precedence over the civil litigant.” (quoting Javier H. v. Garcia-Botello, 218 F.R.D. 72, 75 (W.D.N.Y. 20 0 3))). A. Lim ite d D is co ve ry by Agre e m e n t At the Court’s suggestion, the parties have agreed to conduct lim ited docum ent discovery, which will relate only to issues outside the scope of the crim inal case, to help alleviate the burden to plaintiffs caused by the length of the stay. See Cam pbell v. Eastland, 30 7 F.2d 478, 487 (5th Cir. 1962) (stating that, when appropriate, “the trial judge should use [her] discretion to narrow the range of discovery” for civil proceedings in which a defendant is the subject of a crim inal investigation); see also United States v. Parcels of Land, 90 3 F.2d 36, 44 (1st Cir. 1990 ) (“[S]o long as a district court 10 attem pts to accomm odate a claim ant’s fifth am endment interests, the nature and extent of accom m odation should be left prim arily to that court’s discretion.”). To this end, plaintiffs requested thirteen categories of docum ents from defendants after the status conference. These are: (1) payroll sum m aries that show hours worked and am ounts paid to em ployees by the week; (2) check stubs; (3) cancelled paychecks; (4) receipts for cash payments; (5) receipts for any other payments; (6) schedules for cashiers, operators, and cooks; (7) tim esheets and clock-in and -out records; (8) W2 form s; (9) any other docum ents showing paym ents m ade or tim e worked for cashiers, operators, and cooks; (10 ) a list identifying all non-exem pt hourly docum ented cashiers, operators, and cooks; (11) com m unications concerning documented cashiers’, operators’, and cooks’ hours worked or com pensation; (12) training, orientation, and interview docum ents concerning the hours worked by docum ented cashiers, operators, and cooks; and (13) policies, practices, and procedures regarding docum ented cashiers’, operators’, and cooks’ tim ekeeping and com pensation, including business expenses, reimbursements, benefits, com m issions. 26 26 See R. Doc. 275 at 1-2. 11 deductions, bonuses, and Defendants have objected to five of these docum ent categories. These are: (4) receipts for cash paym ents; (5) receipts for other payments; (10 ) a list identifying all non-exem pt hourly docum ented workers; (12) training, orientation, and interview documents; and (13) policies, practices, and procedures regarding tim ekeeping and com pensation. 27 Defendants object to producing receipts for cash and other payments because these receipts outside of the official payroll could indicate that the defendants m ade payments in cash that they did not report for tax purposes, or that they m ade payments to undocum ented workers. 28 Defendants object to producing a list of docum ented workers em ployed by the Mousa defendants because they argue that the list could serve as an adm ission that other hourly workers not included on the list were undocum ented. 29 Defendants object to producing training m aterials and workplace policies and procedures because they argue that, to the extent that defendants used different docum ents to train and interview documented workers and undocum ented workers, producing the m aterials would be an adm ission of the existence of undocum ented workers. 30 27 28 29 30 Id. at Id. at Id. at Id. at 2-3. 2. 4. 3. 12 The Court has authorized plaintiffs to proceed with discovery only to the extent that this discovery does not overlap with the crim inal proceedings. For the reasons pointed out by defendants in their objections, the Court finds that disclosing these docum ents before the conclusion of the crim inal case could affect defendants’ right to a fair crim inal trial or hinder their ability to defend themselves in the civil case. The Court therefore sustains defendants’ objections. The parties shall prom ptly exchange the other categories of docum ents. If docum ents or copies of docum ents in these categories are not currently in defendants’ possession because they have been turned over to the governm ent, defendants shall produce these docum ents as soon as the governm ent returns them. IV. CON CLU SION For the foregoing reasons, defendants’ m otion to extend the stay is GRANTED. The com plete stay is extended, except as to the lim ited docum ent discovery agreed to by the parties. All other discovery and m otion practice shall rem ain closed. New Orleans, Louisiana, this _ 30th _ _ _ _ day of J uly, 20 19. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 13