Harris v. Subcontracting Concepts, LLC
MEMORANDUM-DECISION AND ORDER denying SCI LLC's 13 Motion for Reconsideration. Signed by Magistrate Judge Randolph F. Treece on 3/11/2013. (amt)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
SETH HARRIS, Acting Secretary of Labor,
United States Department of Labor,
Civ. No. 1:12-MC-82
SUBCONTRACTING CONCEPTS, LLC
UNITED STATES DEPARTMENT OF LABOR
OFFICER OF THE SOLICITOR
ANDREW M. KATZ, ESQ.
Attorneys for the Petitioner
201 Varick Street, Room 983
New York, New York 10014
Attorneys for the Respondent
60 Park Place, 8th Floor
Newark, New Jersey 07102
DAVID F. JASINSKI, ESQ.
RANDOLPH F. TREECE
United States Magistrate Judge
MEMORANDUM-DECISION and ORDER
This matter was submitted to this Court by the United States Department of
Labor’s Wage and Hour Division (hereinafter “DOL”) seeking to compel
Subcontracting Concepts, LLC (hereinafter “SCI LLC”) to comply with its Subpoena
Ad Testificandum (hereinafter “Subpoena”). Dkt. No. 1, Pet’r Mot. to Compel. On
February 11, 2013, this Court issued a Memorandum-Decision and Order (hereinafter
“MDO”) granting in part DOL’s Motion. Dkt. No. 12. For the most part, SCI LLC
was directed to testify at a deposition and to produce requested documents, albeit with
specific limitations. Some of the production is subject to representative sampling,
while disclosure of SCI LLC’s client list was contingent upon “the understanding that
DOL is not to publish, disclose, nor reveal this list to any third party outside the
context of any prospective litigation.” Id. at p. 20. Lastly, the applicable statute of
limitations was tolled for a definite duration. Id. at pp. 21-22.
On February 25, 2013, SCI LLC filed a Motion for Reconsideration of the
MDO on the ground of newly discovered evidence. Dkt. No. 13. Additionally, SCI
LLC seeks clarification of the MDO as well as a more formal and extensive protective
Pursuant to the Court’s Amended Text Notice, the Motion for
Reconsideration was placed on an expedited schedule requiring DOL to file its
Response in Opposition to the Motion on an abbreviated time table, Dkt. No. 14,
DOL’s Opp’n, dated Mar. 5, 2013, and eliminating the need for replies and surT
MOTION FOR RECONSIDERATION STANDARD
Normally, prior decisions made within the same case must be followed under
the law of the case doctrine. Cantanzano by Catanzano v. Wing, 103 F.3d 223, 231
n. 5 (2d Cir. 1996); Shomo v. City of New York, 579 F.3d 176, 186 (2d Cir. 2009);
United States v. Millett, 208 F.3d 204 (2d Cir. 2000) (noting that court should “not
depart from this sound policy absent cogent or compelling reasons”). Generally,
reconsideration of a court’s prior decision is warranted only where the moving party
demonstrates (1) an intervening change of controlling law; (2) the availability of new
evidence; and/or (3) the need to correct a clear error or prevent manifest injustice.
Crucible Materials Corp. v. Certain Underwriters at Lloyd’s London & London
Market Companies, 681 F. Supp. 2d 216, 225 (N.D.N.Y. 2010); Caidor v. Harrington,
2009 WL 799954, at *1 (N.D.N.Y. Mar. 24, 2009) (Suddaby, J.) (quoting United
States v. Sanchez, 35 F.3d 673, 677 (2d Cir.), cert. denied, 514 U.S. 1038 (1995); see
also Pescatore v. Pan American World Airways, Inc., 97 F.3d 1, 8 (2d. Cir. 1996) (one
ground for reconsideration includes an intervening change of controlling law);
Delaney v. Selsky, 899 F. Supp. 923, 925 (N.D.N.Y. 1995) (citing Doe v. New York
City Dep’t of Soc. Servs., 709 F.2d 782, 789 (2d Cir.), cert. denied, 464 U.S. 864
(1983)). Thus, the moving party must “point to controlling decisions or data that the
court overlooked – matters, in other words, that might reasonably be expected to alter
the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257
(2d Cir. 1995) (citations omitted).
“[A] motion to reconsider should not be granted where the moving party seeks
solely to relitigate an issue already decided.” Id. at 257. “[A]ny litigant considering
bringing a motion for reconsideration must evaluate whether what may seem to be a
clear error of law is in fact simply a point of disagreement between the Court and the
litigant.” Gaston v. Coughlin, 102 F. Supp. 2d 81, 83 (N.D.N.Y. 2000) (citation
omitted). Of significance here, “[a] motion for reconsideration is not an opportunity
for a losing party to advance new arguments to supplant those that failed in the prior
briefing of the issue.” Fredericks v. Chemipal, Ltd., 2007 WL 1975441, at *1
(S.D.N.Y. July 6, 2007). In other words, it is not an opportunity to take a “second bite
at the apple.” Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d
Cir. 2012) (quoting Sequa Corp v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)); see
also In re Health Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp. 2d 613, 614 (S.D.N.Y.
2000) (“[R]econsideration of a previous order is an extraordinary remedy to be
employed sparingly in the interests of finality and conservation of scarce judicial
resources.”) (quotation marks and citations omitted); In re Bird, 222 B.R. 229, 235
(Bankr. S.D.N.Y. 1998) (“A motion for reconsideration is not a forum for new
theories or for plugging the gaps of a lost motion with additional matters.”) (internal
quotation marks and citation omitted).
NEWLY DISCOVERED EVIDENCE
SCI LLC seeks reconsideration of the MDO based upon newly discovered
evidence. The Court is told that this new revelation became apparent to SCI LLC
during the latter stage of the Motion to Compel discourse when DOL filed its reply
and included an especially curious exhibit. That curious exhibit was a redacted check
issued by Subcontracting Concepts, Inc (hereinafter “SCI”).1 See Dkt. No. 8-1, Lisa
Schneider Supp. Decl. & Supp. Ex. A. Relying upon Investigator Schneider’s
averment that she had “obtained copies of checks issued by “‘SCI’ to one of the
individuals termed an independent contractor” in order to show that there may be a
business relationship between SCI LLC and SCI, this Court accepted it for what it
portrayed - a blank check. See id. at ¶ 3 (attaching a copy of “a partially redacted
[check] to protect the identity of the payee”). However, still inexplicable to this
Court, SCI LLC was able to discern that this Exhibit was a check issued to Milton
Greene, who had previously challenged his independent contractor status with the
New York State Division of Human Rights and the Equal Employment Opportunity
Commission. Dkt. Nos. 13-1, Resp’t Mem. of Law at p. 1, 13-3, Peter Fidopiastis,
Esq., Decl., dated Feb. 25, 2013, at ¶¶ 3 & 7-12. Prior to this revelation, SCI LLC
“had no idea why DOL was investigating its global operation,” Fidopiastis Decl. at
¶ 4, and now posits that “DOL’s investigation and “unrestrained demands for
information were prompted by a single complaint filed by Milton Greene,” Resp’t
Mem. of Law at p. 1. Purportedly contributing to SCI LLC’s suspicion that Mr.
Subcontracting Concepts Inc. is a separate entity that may have a business connection to
SCI LLC. That connection or relationship is to be explored during the ordered deposition of SCI
Greene is the sole impetus for this investigation is DOL’s letter to SCI LLC reminding
it not to retaliate against Mr. Greene for the disclosure of his name in this case. Dkt.
No. 13-4, Pet’r Lt., dated Feb. 11, 2013.2
Based upon this newly unearthed revelation and DOL’s Letter, SCI LLC
extrapolates that Greene’s complaint is the sole impetus for DOL’s investigation,
which would not justify the magnitude of DOL’s investigation and the unreasonable
production of documents demanded by DOL.
SCI LLC exclaims that DOL
intentionally kept it and the Court “in the dark as to the real basis for its investigation”
and the Court was “deprived of this vital piece of evidence” which would have
critically impacted the ultimate decision rendered in the MDO. Resp’t Mem. of Law
at pp. 5-6.
With this in mind, SCI LLC argues that DOL’s investigation is
unreasonable and its investigative powers have been stretched “well beyond justifiable
end[s],” the ordered production is disproportionate to the “real” scope of the
investigation, and that DOL has no evidence that SCI LLC committed any violations
of the Fair Labor Standard Act (hereinafter “FLSA”). See generally Resp’t Mem. of
Law. Lastly, SCI LLC seeks clarification of the MDO by asking that a more formal
Apparently, the impetus for DOL’s Letter was SCI LLC’s General Counsel’s Supplemental
Declaration identifying Mr. Greene. Dkt. No. 10-1, Peter Fidopiastis Supp. Decl., dated Feb. 7,
2013, at ¶¶ 3-9. Because Mr. Greene was identified in this manner and concerned about its
overarching implications, DOL felt compelled to remind SCI LLC that it would be unlawful to
retaliate against “any employee.” Dkt. No. 13-4, Ex. B at p. 1.
protective order be issued under these circumstances. Id.
In opposing the Motion for Reconsideration, DOL chides the entire premise of
SCI LLC’s Application, especially the propositions that this constitutes newly
discovered evidence and that its investigation is constrained solely to Mr. Greene or
even to a single complaint. See Dkt. No. 14, Pet’r Opp’n Mem. of Law, dated Mar.
5, 2013. DOL contends that the wholly redacted check, which contains no personal
identify information, “say[s] nothing about the origin of the Secretary’s investigation”
and, the proposition that this investigation should be limited to only those transactions
involving Mr. Greene would “lead to an absurd result - the Secretary [of Labor] would
be impeded from investigating widespread and pervasive employment violations
where the trigger for the investigation was a single complaint.” Id. at pp. 3 & 4. For
the Petitioner, this Motion for Reconsideration constitutes nothing short of a ruse to
supplement SCI LLC’s previously ineffectual opposition to its Motion to Compel and
poses as a veiled opportunity to re-argue relevancy, reasonableness, burden, and
confidentiality, which were firmly rejected by the Court. See generally Pet’r Mem.
of Law. Thus, DOL seeks a denial of this Motion for Reconsideration.
Even if the Court was to deem Mr. Greene’s identity and his role in this
investigation as newly discovered evidence, it could only serve as an abstract or
obtuse fact having no purposeful bearing on this Court’s MDO. This Court does not
adopt SCI LLC’s myopic view that a single complaint legally impedes DOL from
conducting a much more broader investigation. To do so would require a tremendous
leap in logic. It is well established that an agency cannot conjure up an investigation
and its demands to produce are subject to the limitations of reasonableness, United
States v. Constr. Prod. Research, Inc., 73 F.3d 464, 471 (2d Cir. 1996), but as long
as the investigation is conducted pursuant to a legitimate purpose, the information is
not already within the agency’s possession, and all required administrative steps have
been followed, a court’s role in enforcing an administrative subpoena is “extremely
limited,” E.E.O.C. v. United Parcel Serv., Inc., 587 F.3d 136, 139 (2d Cir. 2009).
Under the statute, DOL may investigate and gather information relative to wages,
hours and conditions of employment in order to determine if there has been a
violation. See 29 U.S.C. §§ 209 & 211(a) & Mem.-Dec. & Order at pp. 3-4.
Even though DOL has not fully disclosed the genesis of its investigation, nor
does it have to, SCI LLC knows full well, or should know, that this investigation does
not rest solely on Mr. Greene’s complaint alone. To argue otherwise is pure
obfuscation. A better indicator as to why DOL’s investigation has encompassed SCI
LLC is DOL’s ongoing investigation regarding Zion Delivery Services Inc., a client
of SCI LLC. Dkt. No. 8, Attach. A, Peter Fidopiastis Decl., dated Dec. 31, 2012, &
B, Cent. Dist. of California Case No. 12-09956, Order, dated Jan. 15, 2013. SCI LLC
is keenly aware that DOL brought a petition to enforce an administrative subpoena to
obtain drivers’ 1099s completed by SCI LC, which was ultimately upheld by that
district court. Dkt. No. 8, Ex. B, Order, dated Jan. 15, 2013. The California
investigation was not narrowly confined to a particular driver, and obviously neither
is this investigation. Setting all of that aside, this Court already found that the purpose
of this investigation is to determine whether the independent owner operators are
misclassified as independent contractors rather than employees and whether SCI LLC
and the logistic couriers may be joint employers of these drivers. Mem.-Dec. & Order
at p. 9.
Newly discovered evidence must have some significance to conceivably change
the outcome of the previous ruling, but none can be found in this presentation. In re
Bernard L. Madoff Inv. Sec., LLC, 489 F. App’x 519, 520 (2d Cir. 2012) (citing
United States v. Int’ Bhd. of Teamsters, 247 F.3d 370, 392 (2d Cir. 2001). Mr.
Greene’s complaint and its impact as to the reasonableness of its scope is of minute
importance. Hence this Court does not find that this is relevant newly discovered
evidence nor would it require a modification to the MDO, and accordingly there is no
legitimate basis for this Motion.
Continuing, because it deserves mentioning, this Court agrees with DOL that
this Motion is uniquely disguised as “a second bite of the apple” as SCI LLC reargues
all of the issues that should have been fully addressed during the Motion to Compel.
This is nothing more than a veiled attempt to overcome previous deficiencies and to
plug in information SCI LLC failed to reveal earlier. For example, when the Court
addressed the matter of disclosing SCI LLC’s client list, I noted that “[o]ther than
conclusory statements that its client list is ‘carefully guarded,’ SCI LLC has not
outlined in any detail how it protects or guards its customer lists[.]” Mem.-Dec. &
Order at p. 19. Now, SCI LLC presents Affidavits, especially one from Ryan Wise,
the Vice President of Information Technology, extolling in graphic detail all of the
steps SCI LLC takes to maintain the confidentiality of its “proprietary” information.
See Dkt. No. 13-5, Ryan Wise Decl., dated Feb. 25, 2013. Additionally, SCI LLC’s
Memorandum of Law is merely a recapitulation of those same central themes it argued
in opposing the Motion to Compel - relevance, reasonableness, burdensome, trade
secrets, and confidentiality.
These are belated submissions to overcome previous deficiencies. This Court
will not allow SCI LLC another opportunity to pitch its position, and the MDO and
all of its directions stand.
Nonetheless, this Court takes a moment to address SCI LLC’s complaint that
if it has to adhere to the MDO, it will have to produce nearly 45,000 pages of
documents. Initially, the Court realized the DOL was seeking an enormous amount
of documents and, in that respect, I reduced the scope of the Subpoena and also
imposed representative sampling in order to make the demand for documents more
reasonable. See generally Mem.-Dec. & Order. By directing that SCI LLC give a
deposition within sixty days, it is conceivable that the size of disclosure may be
decreased. But this Court finds Ryan Wise’s Declaration very telling in terms of SCI
LLC’s ability to produce these documents without unfairly intruding upon its twentytwo (22) employees. Both the client list and 1099 tax records are in both “physical
form” and “in electronic form in [its] computer and server systems.” Wise Decl. at
¶¶ 2-3. Although this Court may not share the technological sophistication of Mr.
Wise, I certainly know that the amount of time, cost, and effort expended to produce
these records from the computer is significantly less than by hand. With the advent
of software, predictive coding, spreadsheets, and similar advances, the time and cost
to produce large reams of documents can be dramatically reduced.
suggesting to DOL to accept the production of these documents in either native
format, or through a zip file, or some other electronic transaction should minimize SCI
LLC’s anxiety. Hence, the Court is more convinced than ever that SCI LLC is not
subject to an overwhelming and incomprehensible burden. See e.g., E.E.O.C. v.
Sterling Jewelers, Inc., 2011 WL 5282622, at *5 (W.D.N.Y. Nov. 2, 2011) (noting
that reviewing 54,000 personnel files was not burdensome nor would it disrupt the
business). Quite frankly, no manifest injustice has been demonstrated.
Finally, SCI LLC’s request for a more formal protective order to ensure that all
necessary measures are taken by DOL to protect the names and addresses of its clients
is as baseless as it is superfluous. Throughout its argument against the Motion to
Compel, SCI LLC raised the alarm that DOL will reveal its proprietary information
and that its profitability would be impaired. To remind SCI LLC, the Court found its
“fear that DOL intends to share all of this information with SCI LLC’s universe of
competitors  utterly without basis.” Mem.-Dec. & Order at p. 16. Nonetheless, the
Court directed DOL “not to publish, disclose nor reveal this list to any third party
outside the context of any prospective litigation.” Id. at p. 20. To suggest that this
broadly stated protective order is toothless because a penalty or consequence was not
definitely and explicitly meted out should this federal agency not abide by the Court’s
order is meritless.
Parties to litigation are expected to fully comprehend the
magnitude of an order and the consequences to bear for failing to abide by such an
order. And to surmise that a party will breach such an order is presumptuous and
unfounded. SCI LLC has conveniently forgotten that this Court maintains jurisdiction
over this application for the enforcement of a subpoena and clearly has the power of
contempt when a party has failed to comply with such a clearly stated directive.3 Thus
a more formal protective order is not necessary.
Based upon the foregoing, it is hereby Ordered that SCI LLC’s Motion for
Reconsideration, Dkt. No. 13, is denied. To reiterate further, the entire MDO remains
IT IS SO ORDERED.
March 11, 2013
Albany, New York
The Court may turn to those inherent powers, which are innate to its creation, to impose
respect for its lawful mandates. United States v. Seltzer, 227 F.3d 36, 39-42 (2d Cir. 2000); DLC
Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 136 (2d Cir. 1998). Federal courts have always
had the inherent power to manage their own proceedings and to control the conduct of those who
may appear before them, and when a party acts “in bad faith, vexatiously, wantonly, or for
oppressive reasons,” the courts may exercise their discretion in fashioning a remedy. Chambers v.
Nasco, Inc., 501 U.S. 32, 45-46 (1991). Additionally, the Court may rely upon the authority granted
in the Federal Rules of Civil Procedure. FED. R. CIV. P. 37(b)(2)(A)(vii) & 45(e).