MICHAEL H. DOLINGER UNITED STATES MAGISTRATE JUDGE

MEMORANDUM & ORDER

:

Plaintiffs commenced this lawsuit to assert claims under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and the New York Labor Law § 190 et seq.. Their claims are premised on their allegations that while working for the defendant Kum Gang, Inc. -- a corporation that owns two Korean restaurants -- they were not paid minimum wage or overtime. They named as defendants both the corporation and five individuals who allegedly owned and/or managed the restaurant.

As we approach the scheduled trial, now set for June 4, 2014, plaintiffs have moved to impose sanctions on defendants in the form of an order precluding them from introducing into evidence a set of charts purporting to summarize time and pay records for two of the plaintiffs starting in the year 2000. They seek this relief because defendants (a) never produced the corresponding time records on which the chart is purportedly based, (b) produced the charts three weeks after the end of fact discovery, (c) produced no metadata for the charts that would assist in determining their provenance, and (d) in violation of a court order, failed to produce defendant Kyung Le Yoo (sued as Kyung Rae Yoo) for a follow-up out-of-time deposition to testify about the creation and storage of these records by the defendants.

Treating the motion as one for in limine relief as well as for sanctions, we grant the application.

Prior Proceedings

Plaintiffs served their initial Rule 34 request for documents on December 12, 2012. That request sought inter alia any time and pay records pertaining to the plaintiffs for a seven-year period. (Decl. Of Kenneth Kimerling, Esq., dated Apr. 22, 2014 (Dkt. No. 82) ("Kimerling Decl.") at ¶ 3 & Ex. B at Request No. 31). Defendants produced only a small number of punch clock time cards for six of the plaintiffs for a few weeks in 2006 and 2008. (Id. Ex. C at Response to Request No. 31). In response to a later request by plaintiffs for additional documents, defendants' counsel represented, by a March 4, 2013 letter, that "defendants have produced all responsive documents maintained during the past seven years." (Id. Ex. D & Ex. E at 2).

Discovery closed on June 3, 2013 with no further production by defendants. (Id. Ex. F (Order, dated April 26, 2013)). On June 25, 2013 defendants' counsel transmitted to plaintiffs' attorney, without explanation, a quantity of documents, referred to by counsel as "discovery documents bearing Bates numbering KGS001225-1303". (Id. ¶ 8 & Ex. G at first page). Included in these documents is a set of charts purporting to reflect on a weekly basis for two plaintiffs their daily rate of pay, the number of days they worked, the hourly rate, the amount paid, the number of hours worked (for some weeks), the amounts paid in cash and the amounts paid by check. (Id. Ex. G at Bates Nos. KGS001249-1281).

This production was unaccompanied by any metadata or any identification of the source of the summarized totals. Accordingly plaintiffs' counsel asked defendants for production of the underlying documents from which the data on the charts had been cumulated and an opportunity to depose the person who created these charts. Having received no further information from defendants' counsel, plaintiff sought court intervention by letter dated July 12, 2013. (Id. Ex. H). Defendants' counsel finally responded on July 16, 2013 that "there is no data concerning these documents". (Id. Ex. J).

At a conference on July 30, 2013, plaintiffs' counsel raised the issue of the recent production of the charts and their request to defendants for the metadata, since no underlying documentary evidence of the data had been produced, and for a deposition of the person who had inputted the data into the computer. (July 30, 2013 Tr. 3-4). In doing so, they noted defendants' refusal to honor that request and their claim that it had not been created by computer. (Id. at 3). Defendants' counsel responded by representing that her clients did not know who had prepared the charts but that they had been prepared by computer and that the underlying data for the charts had apparently been provided to the company's accountant for tax purposes, then returned to the company and destroyed by defendants. (Id. at 11). She also reported that Ms. Eunja Ko, an office employee, would be prepared to lay a foundation for the introduction of the charts. (Id. at 12). In reply, plaintiffs' counsel noted that Ms. Ko was not the person who had entered the pertinent data -- indeed she had not been trained on the computers until recently -- and that the person responsible for that record-keeping process was Mr. Yoo. (Id. at 19).

In addressing this dispute, we authorized a forensic search of defendants' computer if defendants had no one who could provide the required metadata. We also authorized a deposition of Mr. Yoo about the handling of this data and the creation of the charts. (Id. at 17, 21). We then issued an order dated August 6, 2013 directing defendants to produce information as to the metadata of these charts and the underlying data used to create them, and also authorized plaintiffs to hire an expert to conduct a forensic search of the defendants' computers. (Kimerling Decl. Ex. K).

On August 20, 2013 defendants submitted a brief declaration of Ms. Ko, who reported that she had searched for native files of the charts, but that "[n]o files were located." (Id. Ex. L). At the request of plaintiffs, on September 3, 2013 the court issued a separate order requiring defendant Kyung Le Yoo to appear for a follow-up deposition by no later than September 20, 2013 to answer questions concerning the underlying data used for the creation of the charts and the process by which those charts had been created. (id. Ex. A). The order further warned that a failure by defendant to comply could lead to entry of a default against him. (Id.).

The deposition never took place because -- according to defendants' attorney -- she was unable to contact Mr. Yoo. (Id. Ex. N). As a result, by letters dated September 27, 2013 and February 26, 2014, plaintiffs sought entry of an order barring introduction of the charts in evidence. (Id. Exs. O & P). At the instruction of the court, plaintiffs have now proceeded by formal motion for this relief.

In the interim, the court has denied a motion by defendants that sought partial summary judgment dismissing the plaintiffs' claims against Mr. Yoo. (Memorandum & Order, dated March 11, 2014 (Dkt. No. 72)). The premise for the motion was defendants' contention that Mr. Yoo was not an "employer" for purposes of statutory liability. (Id. at 1-3). In rejecting this application, we noted that Mr. Yoo was the brother of the owner of the restaurants, and that the proffered evidence indicated that he had substantial responsibilities for the management of the Queens restaurant and for the financial side of the defendant company, including financial record-keeping and computerized data entry. (Id. at 3-4, 12-16; see also Decl. of Elizabeth Joynes, dated May 6, 2014 (Dkt. No. 92) ("Joynes Decl.") Ex. S (Yoo Dep.) at 13-14, 16, 4 3-49, 61, 75-76). The record also included testimony by a plaintiff to the effect that Mr. Yoo had been involved in supervising the preparation of time records off the premises. (Id. at 15-16).

At present there is a pending motion by defendants' counsel to be relieved as attorney for Mr. Yoo. The basis for this recent application is the representation that Mr. Yoo has ceased to communicate with the attorney. (Dec. of Katie Ambroziak, Esq., dated May 1, 2014 (Dkt. No. 86) at ¶¶ 4-7).

ANALYSIS

Plaintiffs style their motion as one for sanctions against all defendants based on the late production of the charts and the failure of Mr. Yoo to appear for his deposition. There is no question that the court has broad discretion to remedy shortfalls or outright misconduct by parties in discovery. See, e.g., Reilly Natwest Mkts. Group Inc., 181 F.3d 253, 267 (2d Cir. 1999). In exercising its discretion, the court is guided by concerns that are occasionally in some tension, including the need to deter non-compliance with discovery obligations by litigants, the obligation to remedy any prejudice suffered by the discovering party as a result of the adversary's conduct, and the policy of encouraging resolution of lawsuits on the basis of their merits. See, e.g., Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 174 (2d Cir. 2001); Monaghan v. SZS 33 Assocs., L.P., 148 F.R.D. 500, 508 (S.D.N.Y. 1 993) (citing Cine Forty-Second St., 609 F.2d 1062, 1066-67 (2d Cir. 1979)). In general terms, we look whether the discovered party has engaged in willful misconduct or has a more benign reason for its non-compliance, the length of that party's default, the extent of the prejudice to the discovering party, and the availability of less draconian measure to remedy that prejudice. See, e.g., Nieves v. City of New York, 208 F.R.D. 531, 535 (S.D.N.Y. 2002).

The late production of the charts has not been explained by defendants, and we have reason to infer bad faith in their still-unexplained appearance after the close of discovery. In making this inference we rely on (1) the cited evidence from the summary-judgment motion to the effect that Mr. Yoo was arranging for the creation of false time records, (2) the failure of Mr. Yoo to appear for his court-ordered deposition, (3) the absence of any evidence that the charts were created in the ordinary course of business of the defendants, (4) the apparent absence of any back-up data from which the charts might have been legitimately completed, (5) defendants' admission that they had destroyed any back-up documentation and (6) defendants' failure to proffer any explanation for the sudden discovery of the charts.

As for prejudice to the plaintiffs, they cite the untimely production of the charts and the failure of Mr. Yoo to appear for his deposition and explain the provenance of the documents. Were there a witness other than Mr. Yoo competent to explain the source of the documents, that prejudice might have been alleviated, but defendants have offered no factual basis to suggest that anyone else has personal knowledge as to the creation of the charts or as to the documentation that underlies their summaries of hours and pay data. These circumstances suggest that preclusion is an appropriate limited response to remedy the prejudice that would be occasioned by defendants' failure to explain the origins of the data, their conceded destruction of purported underlying documentation and the failure of Mr. Yoo -- seemingly the only person with personal knowledge of the facts -- to appear for his court-ordered deposition.

Alternatively, even if plaintiffs' motion were treated as an in limine request to exclude these documents under the Federal Rules of Evidence, that application would be well taken. As the proponent of the charts, defendants bear the burden not only of demonstrating the authenticity of the proposed exhibit, Fed. R. Evid. 901, but also of satisfying the rule governing the use of summaries. By defendants' own admission, they have no one who has personal knowledge of the creation of the charts, and they have in effect admitted that they cannot offer evidence that the charts were prepared in the ordinary course of business. Moreover, insofar as the charts constitute a summary to prove the contents of underlying documents that defendants apparently failed to preserve (assuming they ever existed), they cannot satisfy the requirements of Rule 1006, which specifies that the proponent of the charts "must make the originals or duplicates [of the underlying documents] available for examination or copying or both by other parties . . . ."

In sum, there is ample basis to preclude the introduction of these charts under both the federal discovery rules and the rules of evidence.

CONCLUSION

Plaintiffs' motion for sanctions is granted. Further, we award plaintiffs the expenses of their motion pursuant to Fed. R. Civ. P. 37(b)(2)(c); see also Fed. R. Civ. P. 16(f)(2), since defendants' opposition to the Rule 37 motion was not substantially justified. Counsel are to serve and file one or more affidavits or declarations with time sheets reflecting their claimed expenses by May 19, 2014. Defendants may serve and file responding papers by May 23, 2014. Dated: New York, New York

May 12, 2014

/s/_________

MICHAEL H. DOLINGER

UNITED STATES MAGISTRATE JUDGE Copies of the foregoing Memorandum and Order have been mailed today to: Kenneth Kimerling, Esq.
Asian American Legal Defense & Education Fund
99 Hudson Street
12^th Floor
New York, New York 10013 Katie Ambroziak, Esq.
Robert Giusti, Esq. & Associates, PLLC
42-40 Bell Boulevard
Bayside, New York 11361