Acosta v. Wellfleet Commc'ns, LLC
Acosta v. Wellfleet Commc'ns, LLC
2018 WL 11409849 (D. Nev. 2018)
February 15, 2018
Foley Jr., George W., United States Magistrate Judge
Summary
The Department of Labor's investigative file was requested by the Defendants in their requests for production of documents. Plaintiff produced a redacted copy of the investigative file on October 10, 2017, and revised redacted versions of the employee witness statements to Defendants' counsel on November 10, 2017. The investigative file included case diaries, the FLSA narrative report, notes from interviews with confidential informants, documents collected from the employer, and a reconstruction of back wages due.
Additional Decisions
R. ALEXANDER ACOSTA Secretary of Labor, United States Department of Labor, Plaintiff,
v.
WELLFLEET COMMUNICATIONS, LLC, et al., Defendants
v.
WELLFLEET COMMUNICATIONS, LLC, et al., Defendants
Case No. 2:16-cv-02353-GMN-GWF
United States District Court, D. Nevada
Filed February 15, 2018
Counsel
Marc Anthony Pilotin, David Edeli, Katherine Kasameyer, Tara Elizabeth Stearns, Laura Bremer, U.S. Department of Labor/Office of the Solicitor Office of the Solicitor, San Francisco, CA, Patrick A. Rose, U.S. Attorney's Office, Las Vegas, NV, for Plaintiff.Anthony B. Golden, Whitney J. Selert, Garg Golden Law Firm, Henderson, NV, for Defendants.
Foley Jr., George W., United States Magistrate Judge
ORDER
*1 This matter is before the Court on Defendants’ Motion for Sanctions for DOL's Disobedience of a Discovery Order (ECF No. 92), filed on December 27, 2017. Plaintiff filed his Opposition (ECF No. 103) on January 10, 2018. Defendants filed their Reply (ECF No. 106) on January 17, 2018. The Court conducted a hearing in this matter on February 2, 2018.
BACKGROUND
Prior to the filing of this lawsuit, the Department of Labor's investigator, Alisa Ann, conducted an investigation regarding Defendants’ alleged improper characterization of its call center workers as independent contractors and failure to pay minimum wages or overtime. Defendants requested production of the Plaintiff's investigative file in their requests for production of documents. Opposition (ECF No. 103), Exhibit B. Plaintiff objected to the requests on the grounds of over breath and lack of relevancy, and on the basis of the attorney-client privilege, the work-product privilege, the government-informant privilege, the deliberative process privilege, and the governmental privilege for investigative files and techniques. Id.
On October 2, 2017, the parties entered into a Stipulation and Order Regarding Extension of Discovery (ECF No. 62). The Court approved the stipulation on October 3, 2018. Id. Pursuant to the stipulation, the parties agreed to extend discovery until December 16, 2017. The parties also agreed to schedule the deposition of Plaintiff's investigator, Alisa Ann, on October 13, 2017. The stipulation further stated: “Plaintiff will produce the investigative file and Wage and Hour Investigator Alisa Ann's responsive and non-privileged emails prior to her deposition.” Id. at 2. The stipulation was drafted by Plaintiff's attorney and was consistent with language in an email that Plaintiff's attorney sent to Defendants’ attorney on September 28, 2017. Reply (ECF No. 103), Exhibit 2.
Plaintiff's investigative file included “case diaries,” the daily notes by Plaintiff's investigator, the “FLSA narrative report” which contained the investigator's impressions and opinions, notes from interviews with confidential informants, documents collected from the employer and other sources, and a reconstruction of back wages due. Opposition (ECF No. 103), at 2. Plaintiff produced a redacted copy of the investigative file on October 10, 2017. Opposition (ECF No. 103), Laura Bremer Declaration, at ¶ 6. The copy of the FLSA narrative report initially produced by Plaintiff on October 10, 2017 was completely redacted and consisted of blank pages. Reply (ECF No. 106), Exhibit 4. Plaintiff's counsel, Laura Bremer, states that she spoke with Defendants’ counsel on October 11, 2017 and the parties agreed to reschedule Ms. Ann's deposition to October 23, 2017. During that conference, Defendants’ counsel did not assert that Plaintiff's document production violated the stipulation. Bremer Declaration, at ¶ 7. Plaintiff’ other attorney, Tara Stearns, states that during the 12 days preceding the deposition of Investigator Ann on October 23rd, Defendants’ counsel did not advise Plaintiff's counsel that Plaintiff's production of redacted documents violated the stipulation. Nor did Defendants’ counsel raise an issue about the Plaintiff's production of documents during or after Investigator Ann's deposition which was not completed on October 23rd. Opposition (ECF No. 103), Tara Stearns Declaration, at ¶¶ 6-8.[1]
*2 On November 1, 2017, Defendants’ counsel sent a letter to Plaintiff's counsel stating that she would like to schedule a conference to discuss Plaintiff's discovery responses. Opposition (ECF 103), Exhibit G. Plaintiff's counsel responded by email regarding the scheduling of depositions. Defendants’ counsel replied by email on November 2, 2017, stating that she wanted to take Investigator Ann's continued deposition first and “I want you to comply with my discovery requests before I finish her deposition. You agreed to this to get your extension of discovery.” Id.; see also Reply (ECF No. 106), Exhibit 5.
Plaintiff's counsel, Ms. Stearns, met and conferred with Defendants’ counsel by telephone on November 6, 2017. Defendants’ counsel requested that Plaintiff “redact the parts that are privileged and produce the rest. She also requested that we review our redactions to the witness statements to determine whether additional information could be provided.” Stearns Declaration, at ¶ 9. Plaintiff's counsel reviewed their document production and sent a redacted version of the FLSA Narrative Report and revised redacted versions of the employee witness statements to Defendants’ counsel on November 10, 2017. Id. at ¶ 10. The redacted FLSA Narrative Report served on November 10th, blocked out various parts of the report and indicated the privileges on which the redactions were based— including the deliberative process privilege, the attorney-client privilege, the investigative files privilege, and the government informant privilege. Id. at ¶; Opposition (ECF No. 103), Exhibit H.
Defendants’ counsel completed the deposition of Investigator Ann on November 13, 2017 during which she asked questions about the unredacted portions of the FLSA Narrative Report. Stearns Declaration, at ¶ 11. Plaintiff's and Defendants’ counsel had a subsequent meet and confer conference on December 11, 2017, during which Defendants’ counsel “brought up the Secretary's production and the redactions we had made to the investigative file.” Id. at ¶ 13. On December 12, 2017, Defendants’ counsel sent a letter to Plaintiff's counsel in which she stated:
Since appearing before Judge Foley on September 21, 2007, you gave me a redacted investigation file .... I took the deposition of DOL Investigator Alisa Ann without the “investigation file” which I was promised as an incentive to agree to your request for a discovery extension. As you are aware, you initially refused to give me the entire narrative report claiming that it was privileged by the attorney-client privilege. Then, after I requested that you take another look at it, the business day before Ann's deposition was set to continue you furnished me with a partially redacted narrative report. The portion you disclosed to me was obviously not protected by the attorney-client privilege. You implicitly admitted that the privilege you asserted was too broad. Because it was such an extreme redaction, I have asked you to review the documents which you have redacted claiming some sort of privilege applies and give them to me if you determine the privilege does not apply to all of the redacted sections. For example, the case diaries contain many redactions. I cannot tell from your privilege log whether the privilege applies. Therefore, unless you cooperate and review your privilege log and the redacted documents once more, I will have to ask the Court to perform an in-camera review pursuant to a motion to compel. I hate to take the Court's time to perform the review for you.
Opposition (ECF No. 103), Exhibit I.
*3 Plaintiff's counsel, Ms. Stearns, had a follow-up conversation with Defendants’ counsel on December 15, 2017, during which Ms. Stearns stated that Plaintiff was willing to review the privilege log and redactions once more, but that Plaintiff would need until January to complete the review. Ms. Stearns proposed completing the review by January 11, 2018 and Defendant's counsel agreed. Stearns Declaration, at ¶ 19. Ms. Stearns sent an email to Defendants’ counsel on December 15, 2017 confirming this understanding. Opposition (ECF No. 103), Exhibit J. There was no further communication between the parties on this matter before Defendants filed the instant motion for sanctions on December 27, 2017. Stearns Declaration, at ¶ 16.
DISCUSSION
In their motion for sanctions filed on December 27, 2017, Defendants argue that because Plaintiff did not honor the stipulation and order to produce the investigative file without privilege redactions, all discovery should be terminated and the First Amended Complaint should be dismissed. Motion to Compel (ECF N. 92), at 1. These assertions are repeated on page 2 of the motion. Defendants did not cite any legal authority in support of their sanctions request. In their reply brief, Defendants cite United States v. Johnson, 236 F.Supp.2d 943, 949–51 (N.D. Iowa 2002) and other cases involving the enforcement of discovery stipulations on contract principles. Defendants also revised their sanctions request to now ask that Plaintiff be ordered to produce the investigative file, that Defendants be permitted to retake Investigator Ann's deposition at Plaintiff's expense, including payment of court reporter's fee and attorney's fees for retaking the deposition, and for an award of all expenses including reasonable attorney's fees incurred by Defendants as a result of Plaintiff's failure to comply with the stipulation and order. Reply (ECF No. 106), at 6.
United States v. Johnson involved a stipulation in a criminal prosecution regarding the government's production of discovery documents to defendant's counsel. The defendant filed a motion to compel the government to produce documents in accordance with the stipulation. The magistrate judge implicitly found that the stipulation was ambiguous and that there was no meeting of the minds regarding the copying of the documents in question. 236 F.Supp.2d at 950. On appeal, the district judge stated that a stipulation must be construed according to contract principles. Id. at 949 (citing MidAmerican Energy Co. v. Great Am. Ins. Co., 171 F.Supp.2d 835, 853–55 (N.D.Iowa 2001) and Engineered Products Co. v. Donaldson Co., Inc., 225 F.Supp.2d 1069, 1131 (N.D.Iowa 2002). If a contract is ambiguous and uncertain, extrinsic evidence can be considered to help determine the intent of the parties at the time they executed the contract. Id. at 949 (citing Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999). A term is not ambiguous, however, simply because two parties disagree about its meaning. A contract will be strictly construed if its words are clear and unambiguous. Id. at 949–50 (quoting Hofmeyer v. Iowa Dist. Court for Fayette County, 640 N.W.2d 225, 228 (Iowa 2001).
In this case, Defendants did not file a motion to compel production of unredacted copies of the FLSA Narrative Report or diary entries. Instead, they moved to terminate all further discovery and for dismissal of the action based on Plaintiff's alleged violation of the stipulated discovery order. Rule 37(b)(2) states that if a party fails to obey an order to provide or permit discovery, the court may issue further just orders which may include an order (ii) striking pleadings in whole or in part; (iii) staying further proceedings until the order is obeyed; (iv) dismissing the action or proceeding in whole or in part; or (v) treating as contempt of court the failure to obey the order. The October 3, 2017 stipulated order is enforceable under Rule 37. However, even if that order unambiguously requires Plaintiff to produce its investigative file without privilege redactions, the sanctions sought by Defendants in their motion and reply briefs are not warranted.
*4 If, as Defendants contend, the stipulated order required Plaintiff to produce its investigative file without privilege redactions, then the logical step for Defendants to have taken when Plaintiff produced the heavily redacted file on October 10th, was to demand compliance with the order and then file a motion to compel if Plaintiff refused to do so. Defendants have not rebutted Plaintiff's assertion that they did not raise any issue about the redactions before or during Investigator Ann's initial deposition on October 23, 2017. Defendants did raise the issue on November 1, 2017. On November 6th, however, Plaintiff agreed to review and revise the privilege redactions. Plaintiffs served documents with amended redactions on November 10, 2017, and Defendants proceeded with Investigator Ann's continued deposition on November 13, 2017.
It was not until nearly a month later, on December 11, 2017, that Defendants again raised the issue of the redactions. In her December 12, 2017 letter, Defendants’ counsel demanded that Plaintiff's counsel produce unredacted documents if she determined that the privileges did not apply. Defendants’ counsel further stated that “unless you cooperate and review your privilege log and the redacted documents once more, I will have to ask the Court to perform an in-camera review pursuant to a motion to compel.” Opposition (ECF No. 103), Exhibit I. An in-camera review would only be necessary if there was a question whether redacted information was within the scope of an asserted privilege. In-camera review is not necessary if all privilege assertions have been waived. As Plaintiff argues, Defendants’ counsel's statements and conduct suggest that she recognized that Plaintiff did not intend to waive all privileges with respect to the investigative file. In any event, Defendants have not rebutted Plaintiffs’ assertion that the parties agreed on December 15, 2017 that Plaintiff would again review the redactions and produce documents with revised redactions by January 11, 2018. Then, without further notice, Defendants filed the instant motion for sanctions on December 27, 2017. It is the Court's understanding that prior to the hearing on February 2, 2018, Plaintiff again amended its document production which further revised and limited the privilege assertions.
There is no reasonable basis for the Court to award the sanctions requested by Defendants. The record shows that Defendants proceeded with Investigator Ann's deposition on October 23 and November 13, 2017 without insisting that Plaintiff produce the unredacted investigative file prior to the deposition. If Defendants believed that the stipulation and order required such production, then they should have moved to compel its production before they proceeded with the deposition. The Court will not reward Defendants for first failing to timely seek judicial intervention before taking the investigator's deposition, and then filing a motion for sanctions after they agreed to give Plaintiff a further opportunity to review and revise its document production by January 11, 2017. Finally, the single sentence in the stipulation and order regarding the production of the investigative file did not clearly specify whether the investigative file would be produced without redactions for privileged information. Apparently, there was no prior discussion between the parties on this point, and the language of the stipulation could be read to support either position. It is therefore ambiguous. Accordingly,
IT IS HEREBY ORDERED that Defendants’ Motion for Sanctions for DOL's Disobedience of a Discovery Order (ECF No. 92) is denied. If Defendants are still of the view that Plaintiff has asserted invalid privilege objections even after Plaintiff's most recent production of the investigate file, then it may file a motion to compel production of the investigative file without redactions. The Court will not, however, grant Defendants’ permission to re-depose Investigator Ann.
*5 DATED this 15th day of February, 2018.
Footnotes
Defendants’ counsel has not provided a declaration recounting the attorneys’ discussions or the chronology of events. Defendants’ motion and reply briefs also do not provide a detailed description of the attorneys’ communications or sequence of events. For that reason, this order relies primarily on Plaintiff's account.