Banh v. New Orleans Crispy Chicken & Chili Dogs
Banh v. New Orleans Crispy Chicken & Chili Dogs
2018 WL 11507575 (W.D. Mich. 2018)
October 30, 2018
Kent, Ray, United States Magistrate Judge
Summary
The court ordered defendant Le to provide ESI, including payroll records, bank account documents, and other company rules. When he failed to comply with two court orders to compel, the court issued a default judgment against him as a sanction for his failure to cooperate in discovery and failure to obey a discovery order.
Additional Decisions
THU BANH and VI NGUYEN, Plaintiffs,
v.
NEW ORLEANS CRISPY CHICKEN AND CHILI DOGS, a Michigan Limited Liability Company, and ANDREW KERN SANG VAN LE, an individual, Defendants
v.
NEW ORLEANS CRISPY CHICKEN AND CHILI DOGS, a Michigan Limited Liability Company, and ANDREW KERN SANG VAN LE, an individual, Defendants
Case No. 1:17-cv-62
United States District Court, W.D. Michigan, Southern Division
Filed October 30, 2018
Counsel
Robert Anthony Alvarez, Kristin Lynn Sage, Avanti Law Group PLLC, Wyoming, MI, for Plaintiffs.Andrew Kern Sang Van Le, Grand Rapids, MI, Pro Se.
Kent, Ray, United States Magistrate Judge
ORDER
*1 This matter is now before the Court on “Plaintiffs’ Motion for default judgment and sanctions against defendant Andrew Le” (ECF No. 59). Plaintiff's motion is unopposed. In their complaint, plaintiffs alleged that defendants New Orleans Crispy Chicken and Chili Dogs, a Michigan Limited Liability Company (sometimes referred to as “New Orleans Crispy Chicken”)[1] and Andrew Kern Sang Van Le violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. and the Workforce Opportunity Wage Act, M.C.L. § 408.411 et seq. Defendants were initially represented by counsel, who filed an answer and affirmative defenses. In the joint status report, defendants stated among other things: that the case arose out of a business dispute between defendant Andrew Kern Sang Van Le and his former business partner Banh Hung; that plaintiff Thu Banh is eldest daughter and plaintiff Vi Nguyen is the spouse of defendant Le's former business partner; that “[t] he evidence will show that Plaintiffs were volunteers at the business and helped with miscellaneous activities to get the business launched and operating during its short-term lifespan;” and that “Plaintiffs were volunteers who were never employed or considered employees with the business, although the business did employ various other hourly employees.” See Joint Status Report (ECF No. 8). On April 21, 2017, the parties consented to have the undersigned conduct all further proceedings and the entry of judgment in accordance with 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73. See Order (ECF No. 9). A case management order was entered on April 12, 2017, which included an early settlement conference on June 20, 2017, a discovery deadline of November 1, 2017, and a second settlement conference for June 20, 2018, and a jury trial on August 6, 2018. See Case Management Order (ECF No. 12). Some months later, defendants’ counsel moved to withdraw, which the Court allowed on November 20, 2017. See Order (ECF No. 38).
Plaintiffs’ brief set forth a summary of the history of this case, including their efforts to obtain discovery regarding the business operations and employees of New Orleans Crispy Chicken:
There was a Case Management Order entered in this matter on April 26, 2017. Per the Case Management Order, Plaintiffs provided Defendants with Rule 26 Initial Disclosures on June 7, 2017 and Requests to Produce, and Interrogatories on June 9, 2017. (ECF 12). Due to Defendant's failure to adequately produce the documents, Plaintiffs moved to compel discovery on October 20, 2017 (ECF 27). A hearing on this motion was held November 20, 2017, however since Defendants’ counsel was also withdrawing representation at this time, the Court ordered the hearing to be rescheduled granting time for Defendants to obtain new counsel (ECF 38). The Court then scheduled a show-cause hearing December 22, 2017 in the event that if Defendant New Orleans Crispy Chicken and Chili Dogs failed to obtain counsel by that time then they should answer why relief should not be granted to Plaintiffs (ECF 39). On December 22, 2017 the show cause hearing took place and corporate Defendant New Orleans Crispy Chicken and Chili Dogs was given 14 days to file a consent judgment or else the Court will render a default judgment on the defendant (ECF 43). On February 7, 2018, as a consent judgment was not filed before deadline and corporate Defendant was still unrepresented as required by 28 U.S.C. § 1654, the Court entered a Default judgment against Defendant New Orleans Crispy Chicken and Chili Dogs (ECF 44). On February 28, 2018, the Court granted Plaintiffs’ Motion to Compel and gave Defendant Le fourteen (14) days to respond to Plaintiffs’ Interrogatory No. 4 and Requests for Productions Nos. 1, 2, 3, 4, 7, 12, 13, 14, and 17. Defendant Le answered after the deadline on March 20, 2018, however Defendant did not respond to Plaintiffs’ Interrogatories at all, and still did not provide adequate answers to any of Request for Productions. On April 30, 2018, Plaintiffs filed a second Motion to Compel Discovery which also asked the Court to enter default judgment against Defendant Le for defying a Court Order (ECF 53). On June 25, 2018, an Order was filed granting the Motion to Compel which gave Defendant until July 13, 2018 to fully respond to the outstanding discovery requests (ECF 58).
*2 Plaintiffs’ Brief (ECF No. 60, PageID.229-230).
In that order, the Court included the following warning to defendant Le:
Defendant Le has a history of refusing to cooperate in discovery ... [which] resulted in the Court granting plaintiffs’ first motion to compel. Plaintiffs have now filed a second motion to compel to obtain discovery which they requested over one year ago. Defendant Le has not responded to this motion. Enough is enough. The fact that plaintiff was reportedly undergoing physical therapy on June 18, 2018, is no excuse for his failure to provide discovery responses which were served over one year ago. Upon due consideration, plaintiffs’ second motion to compel will be granted. Defendant Le is advised that if he fails to provide an adequate response to the requested discovery by July 13, 2018, the Court may exercise its right to issue sanctions which could include prohibiting defendant Le “from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence” or entering a default judgment against him. See Fed. R. Civ. P. 37(b)(2)(A)(ii) and (vi).
Order at PageID.223-224.
Plaintiffs’ recitation of the case history continued as follows:
Defendant was ordered to completely respond to Plaintiffs’ Interrogatory No. 4 and Requests for Production Nos. 1, 2, 3, 4, 7, 12, 13, 14, and 17 no later than July 13, 2018 (ECF 58). The time has elapsed and to this day [July 23, 2018] Plaintiffs still do not have in their possession any of the ordered discovery requests. Defendant has also failed to produce any records of any employees, with the exception of payroll records, and any employment policies and procedures. Basically, the only employment documents, for any employee, that Defendant has produced are payroll records. This does not give Plaintiffs an overview of the operation of Defendant's’ Business....
Because of the many issues that have arisen during discovery, the parties agreed to a Stipulation to Amend the Case Management Order and therefore extending discovery in this matter, and filed the Stipulation and Proposed Order with this Court on September 29, 2017 and are awaiting a decision on this proposed order. (ECF No. 26) and again when the Court granted Motion to Compel and Extend Discovery to April 30, 2018 (ECF 48). Finally, when the Court granted Plaintiffs’ Second Motion to Compel on June 25, 2018, the Court had to adjourn the final pretrial conference and trial without date. Further, Defendant now has disobeyed two Court Orders and failed to adequately to [sic] produce sufficient responses to Plaintiffs’ discovery requests... [S]ince the last Motion to Compel, absolutely no depositions have taken place though Plaintiffs have noticed the deposition of Defendant Le and a 30(b)(6) deposition of the business but had to adjourn those depositions due to the Defendant's failure to adequately respond to discovery.
Plaintiffs’ Brief (ECF No. 60, PageID.231-232).
In addition to these matters, the Court notes that due to defendants’ failure to cooperate in discovery, both settlement conferences were adjourned. See Order and Notice (ECF Nos. 18 and 57). As discussed, after the Court granted plaintiff's first motion to compel, defendant Le did not respond within the 14-day deadline ordered by the Court, did not file a certificate of service, did not date the response (which was post-marked March 20, 2018), and did not sign the response. See Exhibit 60-1, PageID.244. In his response, defendant Le stated that there were not records and that plaintiffs were not employees. However, Le did not produce the requested payroll records, copies of documents related to his personal bank accounts, copies of documents related to his business bank accounts, copies of the employer's federal quarterly tax returns, or copies of any documents “regarding timekeeping, payroll, scheduling, overtime, job duties, sales, or other company rules.” See Exh. 60-1, PageID.238-243. Plaintiff referred to the bank records as not applicable (“N/A”). When asked to provide copies of purchase orders and vendor invoices during plaintiffs’ employment, defendant Le responded “2yr ago I don't get any in for [illegible].” PageID.242. While defendant Le identified some tax documents, he did not produce any of them stating “my payroll say the hot dog close 2 yr ago – they can't get out the [illegible]”. PageID.243.
*3 Plaintiffs have moved for default judgment against defendant Le as a sanction for his failure to co-operate in discovery and failure to obey a discovery order pursuant to Fed. R. Civ. P. 37(b)(2)(A)(vi), which provides that:
If a party or a party's officer, director, or managing agent -- or a witness designated under Rule 30(b)(6) or 31(a)(4)--fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include the following: ... (vi) rendering a default judgment against the disobedient party[.]
Plaintiffs seek the most severe sanction available against a party for discovery violations. The Sixth Circuit has set out a four-part test for determining whether an entry of default judgment is an appropriate sanction:
1) whether the party's failure to cooperate in discovery is due to willful bad faith and not mere inability to cooperate, 2) whether the opposing party was prejudiced, 3) whether the offending party was warned that failure to cooperate could result in default judgment, and 4) whether less drastic sanctions were considered prior to an entry of default.
Ndabishuriye v. Albert Schweitzer Society, USA, Inc., 136 Fed. Appx. 795, 800 (6th Cir. 2005), citing Bank One of Cleveland, N.A. v. Abbe, 916 F.2d 1067, 1073 (6th Cir.1990). “In general, the first factor—bad faith—is the most important.” Id.
With respect to the first – and most important – factor, the Court concludes that defendant Le has acted in willful bad faith. Despite the extensions and admonishments, defendant Le has not merely failed to cooperate in discovery, he has refused to participate in good faith with the Court's procedures and failed to comply with two Court orders to compel. As discussed, defendant Le's litigation position appears to be that plaintiffs were not his employees and that they are entitled to nothing from him. Le's litigation strategy appears to be that he will prevail by repeating this mantra, declaring requested records as “not applicable” to him, refusing to provide records, failing to sign court papers, and failing to follow court rules.
With respect to the second factor, the record reflects that plaintiffs have been prejudiced. They have spent significant time and energy filing motions to extract information which defendant Le should have provided over a year ago. The case management order was amended, discovery extended, settlement conferences cancelled, and the final pre-trial conference and trial dates adjourned. While it is not uncommon for the Court to grant extensions, cancel settlement conferences, and experience delays in pre-trial discovery, the extensions, cancellations and delays in this case arose from defendant Le's refusal to participate in the pre-trial proceedings. Plaintiffs filed this case over 11//2 years ago, and have little in the form of pre-trial discovery to show for their efforts.
With respect to the third factor, defendant Le has been warned that failure to cooperate could result in default judgment.
Finally, with respect to the fourth factor, the Court has considered lesser sanctions. However, given that defendant Le is tone deaf to the Court's rules and orders, the Court concludes that such sanctions would bear no fruit in this case. For these reasons, the Court finds that plaintiffs are entitled to entry of default judgment against defendant Le pursuant to Fed. R. Civ. P. 37(b)(2)(A)(vi).
*4 Finally, the Clerk has entered a default against defendant New Orleans Crispy Chicken pursuant to Fed. R. Civ. P. 55(a) (ECF No. 46). At this juncture, plaintiffs need to move for a default judgment against New Orleans Crispy Chicken pursuant to Fed. R. Civ. P. 55(b). Once that has been accomplished, the Court can proceed with a hearing on damages in this case. Accordingly,
IT IS ORDERED that plaintiffs’ motion for default judgment as to defendant Andrew Kern Sang Van Le (ECF No. 59) is GRANTED.
IT IS FURTHER ORDERED that plaintiffs may seek entry of a default judgment against defendant New Orleans Crispy Chicken by filing an appropriate motion for entry of default judgment pursuant to Fed. R. Civ. P. 55(b)(2) by no later than November 14, 2018. If plaintiffs fail to seek default judgment within that time frame, then New Orleans Crispy Chicken will be dismissed for lack of prosecution.
IT IS FURTHER ORDERED that the Court will set a hearing on damages after a default judgment is entered against defendant New Orleans Crispy Chicken or after defendant New Orleans Crispy Chicken is dismissed from this action.
Footnotes
In the answer, New Orleans Crispy Chicken, through counsel, stated that its correct designation is “All-American Chili Dogs and New Orleans Crispy Chicken, LLC.” See Answer (ECF No. 7). However, defendant's counsel later contradicted this designation in the Joint Status Report (ECF No. 8, PageID.45) stating “There is some confusion regarding the official name of the business, which was originally formed as ‘New Orleans Crispy Chicken, LLC’ on February 28, 2014 as filed with the State of Michigan and a predecessor business called ‘All-American Chili Dogs, LLC.’ ”