Summary
finding that the plaintiff's opportunity to respond to Rule 37 sanction in his reply brief was sufficient
Summary of this case from Werenka v. City of BoiseOpinion
Demian Camacho, U.S. Dept. of Labor, Los Angeles, CA, Joseph Michael Lake, Marc Anthony Pilotin, Susan Seletsky, Kimberly Anne Robinson, U.S. Dept. of Labor— Office of the Solicitor, San Francisco, CA, for Plaintiff.
Jennifer Rachel Yee, Joshua Robert Woodard, Snell & Wilmer LLP, Phoenix, AZ, for Defendants.
ORDER
Honorable Roslyn O. Silver, Senior United States District Judge
The parties dispute whether Defendants Austin Electric Services LLC and Toby Thomas, Austin Electric’s President, (collectively "Defendants") paid employees overtime compensation and kept employee records as required by the Fair Labor Standards Act ("FLSA"). After Defendants failed to comply with an order directing them to produce their unredacted general ledger, Plaintiff Secretary of Labor ("Plaintiff") moved to enforce compliance under Rule 37(b). In response, Defendants requested the Court award them attorney’s fees for Plaintiff’s failure to meet and confer prior to filing the motion. The Court permitted Defendants to request attorney’s fees, and Plaintiff filed a motion for reconsideration, to which Defendants responded. Because Defendants inappropriately requested attorney’s fees pursuant to Rule 37(a), even though Plaintiff’s underlying motion was brought pursuant to Rule 37(b) which does not have a meet and confer requirement, Plaintiff’s motion for reconsideration will be granted. As such, Defendants’ motion for attorney’s fees will be denied as moot.
BACKGROUND
Plaintiff alleges Defendants failed to pay employees overtime compensation and failed to keep employee records, in violation of the FLSA. The case proceeded to discovery, during which several discovery disputes arose. One of these involved the DOL’s request for Defendants’ general ledger, and Defendants’ alleged failure to produce it. (Doc. 40). Plaintiff explained they requested Defendants’ "financial records," including Defendants’ "complete, unredacted general ledger reports and supporting documents for labor categories," but that, instead of producing the entire general ledger, Defendants only produced monthly financial statements drawn from the general ledger, with non-labor categories redacted. (Doc. 40-1 at 7). Plaintiff explained they needed to review Defendants’ unredacted general ledger in part because they needed to examine "all expense categories" to "determine whether they contain misplaced or mischaracterized labor costs." (Doc. 40).
The Court granted Plaintiff’s request and ordered Defendants to produce an "unredacted general ledger." (Doc. 43). Yet, instead of producing their general ledger, Defendants again produced financial statements drawn from the general ledger, though this time in unredacted form. (Doc. 62). As a result, Plaintiff filed a motion requesting the Court enforce its discovery order and citing some of the sanctions available under Rule 37(b), including "taking facts as established, precluding evidence, and dismissing the action or entering default judgment." (Id. ).
After reviewing the parties’ positions, the Court reaffirmed its prior decision and again ordered Defendants to produce their unredacted general ledger, including all categories of expenses, such that Plaintiff could determine if Defendants mischaracterized labor costs as other expenses. (Doc. 70). The Court warned Defendants that, if they failed to produce the general ledger by November 20, 2017, the Court would impose sanctions pursuant to Rule 37(b), including awarding attorney’s fees or rendering a default judgment. (Id. ).
However, in response to Plaintiff’s motion to enforce the discovery order, Defendants noted Plaintiff had failed to confer with them prior to filing the motion, and requested an award of attorney’s fees pursuant to Rule 37(a)(5)(B). (Doc. 65). Plaintiff replied, arguing the parties had met and conferred, and that Plaintiff’s request for attorney’s fees should be denied. (Doc. 68).
The Court recognized that Plaintiff failed to certify that it met and conferred with Defendants prior to filing its motion, and also noted that the parties’ briefing suggested any attempts to meet and confer were minimal, and were initiated by Defendants’ counsel. Thus, the Court instructed Plaintiff to come to the Interim Status Conference prepared to explain why Defendants should not be entitled to reasonable expenses and fees incurred in responding to Plaintiff’s motion, as provided by Federal Rule of Civil Procedure 37(a)(5)(B). (Doc. 70). At the time, the Interim Status Conference was set for December 6, 2017.
Following the Court’s order, on November 15, 2017, the Parties filed a stipulated amended scheduling order, advising the Court that the Parties were scheduled to participate in mediation on December 13, 2017. (Doc. 72). To accommodate the Parties’ mediation, the Court vacated the December 6, 2017, Interim Status Conference, and reset it for January 4, 2018. (Doc. 74). The Court then directed the parties to "confer and determine the appropriate amount of attorney’s fees Defendants are entitled to as the result of Plaintiff’s premature Motion to Enforce Discovery Order." (Doc. 77). The Court further instructed that, "[i]f the parties are unable to reach an agreement, Defendants shall file a motion for attorney’s fees." (Id. ).
Pursuant to the Court’s order, the Parties met and conferred. (Docs. 81-2; 80, at n.1). Defendants requested the full amount of their attorney’s fees, and Plaintiff requested Defendants withdraw their request for attorney’s fees. (Docs. 81-2; 80, at n.1). Following this unsuccessful meet and confer, Defendants filed a motion for attorney’s fees, requesting the full $5,384.50 in attorney’s fees incurred in defending against Plaintiff’s motion to enforce the discovery order, plus interest. (Doc. 80). Plaintiff responded, arguing this amount was unreasonable in light of the time Defendants spent defending against Plaintiff’s motion, (Doc. 83), and Defendants replied, (Doc. 85).
Plaintiff also filed a motion requesting the Court reconsider its order permitting Defendants to request attorney’s fees, arguing attorney’s fees were inappropriate because Plaintiff was denied an opportunity to be heard and because Plaintiff filed its motion pursuant to Rule 37(b), which does not include a meet and confer requirement. (Doc. 81). The Court ordered Defendants to respond, (Doc. 86), which Defendants did. (Doc. 87). Defendants argued Plaintiff had an opportunity to be heard because it could have responded to Defendants’ request for attorney’s fees in its reply brief, and also that Defendants’ request for attorney’s fees pursuant to Rule 37(a) was appropriate because Plaintiff was not simply attempting to enforce the Court’s prior discovery order, but was actually seeking documents "beyond those initially ordered in the Court’s prior discovery dispute Order." Plaintiff replied, arguing its motion was properly styled under Rule 37(b) because Plaintiff was not requesting additional documents but only seeking to enforce the Court’s prior order that Defendants produce their unredacted general ledger. (Doc. 88).
ANALYSIS
There are two pending motions: (1) Plaintiff’s motion for reconsideration, (Doc. 81), and (2) Defendants’ motion for attorney’s fees, (Doc. 80). Plaintiff’s motion for reconsideration will be addressed first. Courts have discretion to reconsider and vacate a prior order. Motorola, Inc. v. J.B. Rodgers Mech. Contractors, 215 F.R.D. 581, 582 (D. Ariz. 2003) (citations omitted). Motions for reconsideration will be granted when the moving party can show either a "manifest error" or "new facts or legal authority that could not have been brought to [the court’s] attention earlier with reasonable diligence." L. R. Civ. 7.2(g).
Among Plaintiff’s arguments, Plaintiff notes that, pursuant to Rule 37(a)(5)(B), Plaintiff cannot be required to pay Defendants’ attorney’s fees until the Court affords Plaintiff an opportunity to be heard. The Court agrees. Rule 37(a)(5)(B) does not permit a Court to impose sanctions unless the sanctioned party is first given an opportunity to be heard. However, Plaintiff was afforded such an opportunity. Defendants’ brief gave Plaintiff notice that attorneys fees were requested, and Plaintiff was afforded an opportunity to respond to this request in its reply brief. This is sufficient. See Paladin Assocs., Inc. v. Montana Power Co., 328 F.3d 1145, 1164 (9th Cir. 2003) (an opportunity to be heard orally is not necessary when a party has an opportunity to respond in writing); Hudson v. Moore Bus. Forms, Inc., 898 F.2d 684, 686 (9th Cir. 1990) (same). Thus, this does not provide a valid basis for vacating the Court’s prior order.
Beyond this, Plaintiff argues it filed its motion to enforce a discovery order pursuant to Rule 37(b), meaning it was not required to meet and confer as required by Rule 37(a), and could not be sanctioned for failing to do so. Specifically, Plaintiff explains that, because the Court had previously ordered Defendants to produce their unredacted general ledger, (Doc. 43), Plaintiff’s subsequent motion was simply a request to enforce this order under Rule 37(b), not a motion to compel discovery under Rule 37(a). (Doc. 81 at 9).
Plaintiff is correct that there are important differences between Rules 37(a) and 37(b). Rule 37(a) governs motions for orders "compelling disclosure or discovery," such as when a party fails to answer an interrogatory, a deponent fails to answer a question, or fails to produce requested documents. Fed.R.Civ.P. 37(a). Any such motions "must include a certification that the movant has in good faith conferred or attempted to confer" with the opposing party prior to involving the Court. Id. In contrast, Rule 37(b) lists the various sanctions a court may impose for a party’s failure to comply with a court’s order, including an order to provide or permit discovery. Fed.R.Civ.P. 37(b). These sanctions include striking pleadings, dismissing the action, and rendering default judgment. Id. Importantly, unlike Rule 37(a), Rule 37(b) does not require the moving party include a certification that the parties met and conferred prior to involving the court. Id.
Plaintiff is also correct that it styled its motion as one for sanctions for failure to comply with a discovery order, pursuant to Rule 37(b). However, Defendants still requested sanctions under Rule 37(a). In defense of this, Defendants argue Plaintiff’s motion should have been brought under Rule 37(a), because Plaintiff’s motion sought additional documents Plaintiff had not previously requested and which the Court had not previously ordered Defendants to produce. And as such, Defendants argue its request for attorney’s fees, based on Plaintiff’s failure to meet and confer as required by Rule 37(a), was appropriate.
Defendants are incorrect. After the parties submitted their initial discovery dispute regarding the general ledger, the Court ordered Defendants to produce an "unredacted general ledger." (Doc. 43). Instead of doing so, Defendants simply produced unredacted financial statements drawn from their general ledger. (Doc. 62). Plaintiff then filed a motion to enforce the Court’s prior discovery order. (Doc. 62). The Court again ordered Defendants to produce their "unredacted general ledger." (Doc. 70). Although the Court’s second order provided additional detail regarding the definition of a general ledger, this was only to resolve Defendants’ alleged confusion regarding the Court’s prior order and the meaning of a general ledger. It did not in any way expand upon what Defendants were already obligated to produce. Moreover, that Defendants then produced an additional 110,000 pages of documents does not demonstrate Plaintiff’s second request was any broader than Plaintiff’s first, only that Defendants had not fully complied with the Court’s initial order. Most importantly, because Plaintiff’s motion was not requesting additional documents, it was not governed by Rule 37(a), and Plaintiff was not required to meet and confer with Defendants prior to filing it. As such, Defendants should not have requested the Court award attorney’s fees pursuant to Rule 37(a)(5)(B). Further, the Court considers the equities of the parties’ positions. This discovery is replete with instances of Defendants’ failure to comply with clear discovery requests pursuant to the Rules of Civil Procedure. An award of attorney’s fees to Defendants is not warranted and would be unjust. Thus, Plaintiff’s motion for reconsideration will be granted.
Finally, because Plaintiff’s motion for reconsideration will be granted, Defendant’s motion for attorney’s fees is now moot.
Accordingly,
IT IS ORDERED Plaintiff’s Motion for Reconsideration, (Doc. 81), is GRANTED.
IT IS FURTHER ORDERED Defendants’ Motion for Attorney’s Fees, (Doc. 80), is DENIED AS MOOT.