Equal Employment Opportunity Commission v. Bashas' Inc.
ORDERED that the Motion for Leave to Conduct Limited Discovery by respondent Bashas, Inc. (doc. 10) is set for hearing contemporaneously with the hearing on EEOCs Application for an OSC. FURTHER ORDERED that, consistent with this courts 5/6/09 order, Bashas shall file its Response to the EEOCs Order to Show Cause Why an Administrative Subpoena Should Not be Enforced (doc. 1) no later than 5 days after the filing of this order. FINALLY ORDERED that Bashas, Inc. appear on 6/30/09 at 1:30 p.m., in Courtroom 626, Sandra Day OConnor Courthouse, 401 W. Washington Street, Phoenix, Arizona 85003, and show cause why it should not be compelled to comply with the subpoena issued to it. At the hearing, the parties each shall be prepared to submit a proposed confidentiality order. Signed by Judge Robert C Broomfield on 6/18/09. (RCB)(.pdf document is attached)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
Equal Employment Opportunity, ) Commission ) ) Petitioner, ) ) vs. ) ) Bashas', Inc., ) ) Respondent. ) )
No. CIV 09-0209-PHX-RCB ORDER
Introduction In this action, petitioner, the Equal Employment Opportunity Commission ("EEOC"), is seeking to enforce an administrative subpoena which it served upon respondent, Bashas', Inc. The EEOC
issued that subpoena on May 28, 2008, as part of its investigation into the Commissioner's Charge that Bashas' "has, since at least
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
May, 2004, violated Title VII by discriminating against Hispanics due to their national origin." (doc. 10-3) at 2. Mot. (doc. 10), exh. A thereto
That asserted discrimination took two forms: (1)
"failing to pay Hispanic employees comparable wages to non-Hispanic employees[;]" and (2) "failing to promote Hispanics into management positions." Id.
Currently pending before the court is Bashas' "Motion for Leave to Conduct Limited Discovery" on the "issue of whether the Subpoena constitutes an abuse of process[.]" Id. at 2:2-3. Additionally, Bashas' "seeks discovery to confirm that its confidentiality concerns are well based." Id. at 2:4-5. As the
discovery issue is a close question, the court will set a hearing on this discovery motion contemporaneously with the hearing on the underlying Application for an Order to Show Cause ("OSC") seeking enforcement of the subpoena. Background The court assumes familiarity with the parallel action of Parra v. Bashas', 02-0591 ("Parra"), as well as the prior proceedings herein, as Parra v. Bashas' Inc., 2009 WL 1024615 (D.Ariz. April 15, 2009), recounts. A few of those facts are worth
repeating and developing though because they take on new significance in the context of this dispute. I. Parra Litigation Responding to charges of discrimination against Bashas' by several Hispanics, the EEOC issued right-to-sue letters. After
receipt of those letters, in April 2002, Messrs. Parra and Estrada, through their counsel, Davis, Cowell & Bowe ("the Davis firm"), filed a putative class action alleging national origin -2-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
discrimination in violation of Title VII of the 1964 Civil Rights Act as amended ("Title VII"), 42 U.S.C. § 2000e, et seq. The
Parra plaintiffs allege, inter alia, that Bashas' discriminated against them with respect to pay and working conditions. After the Mot.
filing of the Parra complaint, the EEOC closed all charges. (doc. 10), exh. F thereto (Quincy Decl'n), at 16, ¶ 4:14-15.
Shortly after filing the first amended complaint in Parra, in March 2004, the Impact Fund joined in the representation of the plaintiffs therein. Discovery ensued during which Bashas' produced
fairly comprehensive wage charts for the years 1994-2003, inclusive. Id. at 16:18-19. Bashas' also produced "spreadsheets
with more than 25 data fields containing personnel information for each of the 44,698 employees listed." Id. at 16, ¶ 5:19-20. Id. at 16,
Bashas' last produced such pay data in April 2004. ¶ 5:20-21.
As part of Bashas' disclosure in Parra, this court
issued two confidentiality orders, one of which "pertains directly to a database which the EEOC is seeking through its enforcement subpoena." Parra, 2009 WL 1024615, at *5.
After the Ninth Circuit remanded on the issue of class certification of the pay claim, on February 2, 2009, this court held a status conference. Because discovery had been closed since
April 2004, plaintiffs sought "updated discovery concerning the status of [Bashas'] pay policy and its impact on the putative class." Id. at *1 (internal quotation marks and citation omitted).
The court denied that request, "[f]inding that the time for the discovery sought by Plaintiff has long since expired[.]" Id. (internal quotation marks and citation omitted). ... -3-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
EEOC Investigation Despite closing its files after issuing the right-to-sue
letters in Parra, the EEOC continued with its investigation into purported discriminatory employment practices at Bashas'. Shortly
after this court denied plaintiff's motion for reconsideration in Parra on the issue of certifying a class as to the pay claim, on May 11, 2006, the EEOC served a subpoena upon Bashas'. Mot. (doc.
10), exh. F thereto (Quincy Decl'n) at 17, ¶ 8; and exh. D thereto at 10-11. Among the subpoenaed documents were "wage charts in
effect between 1998 and the present, and all documents reflecting the racial or national origin composition of hourly employees[.]" Id. (internal quotation marks omitted). Bashas' objected to that
subpoena on a variety of grounds, including that the EEOC had closed the individual charges four years earlier. Id.
Even in the face of those objections and Bashas' failure to produce the subpoenaed documents, the EEOC did not respond to Bashas' objections. 2006, subpoena. Id. Nor did it move to enforce the May 11, Instead, four months later, on September
12, 2006, the EEOC advised Bashas' that it was "re-open[ing]" the charges as to the eight individuals who had filed EEOC charges against Bashas' in 2002, including plaintiffs Parra and Estrada. Id.; see also Mot. (doc. 10), exh. E thereto at 13. III. United Food and Commercial Workers Union ("UFCW") While the Parra action was ongoing and the EEOC continued its investigation into the "re-opened" charges, Bashas' claims that the UFCW "launched a `corporate campaign' to force [it] to voluntarily recognize UFCW as the bargaining representative of its employees without" their vote. Mot. (doc. 10) at 4:3-4; see also exh. F -4-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
thereto (Quincy Decl'n) at 15, ¶ 2; and at 17, ¶ 9.
contends that on a fairly regular basis, the Davis firm and UFCW "communicate regarding . . . [union] organizing efforts as well as the Parra litigation." Id., exh. F thereto (Quincy Decl'n) at 17, Further, it "appears" to Bashas'
¶ 10:16-18 (emphasis added).
counsel "that the EEOC is in communication with the Parra plaintiffs' counsel relating to matters extending beyond the Parra litigation. IV. Id. at 17, ¶ 11:19-20.
Commissioner's Charge Eventually, on May 9, 2007, the EEOC filed a Commissioner's
Charge against Bashas'.
Mot. (doc. 10), exh. A thereto at 2.
in Parra, the Commissioner asserts that Bashas' has violated Title VII by discriminating against Hispanics based upon their national origin with respect to wages. See id. The time frame of the
Commissioner's Charge is "since at least May 2004," which is notable given this court's refusal in Parra to allow discovery as to Bashas' pay polices after April 2004. See id.
In the year following the filing of the Commissioner's Charge, the EEOC issued another subpoena and three "requests for information." Id., exh. F thereto (Quincy Decl'n) at 18, ¶ 12:3-5; While acknowledging that
see also Resp. (doc. 14) at 2:11-14.
"Bashas' submitted partial responses to the requests," the EEOC stresses that Bashas' has "failed to fully respond to the EEOC's Request for Information." Resp. (doc. 14) at 2:14-15.
For its part, Bashas' explains that despite "repeat[ed] request[s][,]" the EEOC has "refused" to provide Bashas' "with even the most basic information about the charge so that [it] c[an] defend itself." Mot. (Doc. 10), exh. F thereto (Quincy Decl'n) at -5-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
18, ¶ 14:12-14.
Given what Bashas' perceives to be the broad scope
of the EEOC's investigation, it "argue[s] that fundamental due process and fairness require[s]" some notice as to "exactly" what allegations the EEOC believes "warrant a Commissioner's Charge." Id. at 18, ¶ 14:18-21. In addition to lack of notice concerns, Bashas' has "grave concerns about the sharing of confidential information between the EEOC, the Impact Fund, and the UFCW's attorneys," the Davis firm. Id. at 18, ¶ 15:22-23. To allay those concerns, "Bashas' proposed
that the EEOC enter into a confidentiality agreement similar to the one that the parties signed in the Parra action concerning" any disclosures to the EEOC. Id. at 18, ¶ 15:24-26. According to
Bashas', "the EEOC did not respond to Bashas' proposed confidentiality agreement nor provide any assurances that it would not share the information with the above entities[.]" Id. at 18-19, ¶ 15. V. EEOC Subpoena Instead, on May 28, 2008, the EEOC issued the subpoena which That subpoena was
19 is the subject of this enforcement action.
20 served upon Bashas' by certified mail the next day, May 29, 2008. 21 OSC (doc. 1), Manget Aff. (doc. 2-2) attached thereto at 3-4, ¶¶ 22 14-15; and attachment 8 at 50.1 That subpoena directed Bashas' to
23 mail to the EEOC investigator, on June 13, 2008, compact disks 24 containing a vast range of employee data, such as compensation 25 details, ethnicity, and union eligibility. 26 27 28
The EEOC also provided a "domestic return receipt," evidently to establish service upon Bashas' counsel, but it is impossible to discern the date of service from the copy provided to the court. See OSC (doc. 1), Manget Aff. thereto (doc. 2-2); and attachment 8 at 50.
See Mot. (doc. 10),
1 exh. K thereto at 47-51. 2 On the specified date, June 13, 2008, Bashas' informally Mot. (doc. 10), exh. F The EEOC took no action
3 asserted its objections to that subpoena. 4 thereto (Quincy Decl'n) at 19, ¶ 16:6-7. 5 for approximately seven months.
But then, on February 2, 2009, the
6 day this court denied post-April 2004 pay data discovery in Parra, 7 the EEOC filed an OSC as to why the May 28, 2008, subpoena should 8 not be enforced. 9 twofold. The EEOC's stated basis for filing that OSC is
First, the EEOC declares that Bashas' has not "compl[ied] Resp. (doc. 14) at 2. That failure has, from
10 with the subpoena."
11 the EEOC's viewpoint, "delayed and hampered [its] investigation." 12 OSC (doc. 1) at 2, ¶ 9:19-20. Second, the EEOC declares that
13 Bashas' has not "serve[d] a petition to revoke" or modify the 14 subpoena in accordance with 29 C.F.R. § 1601.16(b)(1). 15 14) at 2:26-27. Resp. (doc.
That regulation requires that "[a]ny person served
16 with a subpoena who intends not to comply shall petition . . . to 17 seek its revocation or modification[,] . . . within five days . . . 18 after service of the subpoena." 19 (emphasis added). 20 Initially, Bashas' had until April 6, 2009, by which to file See Doc. 4. Rather than responding, on 29 C.F.R. § 1601.16(b)(1)
21 its response to the OSC.2
22 April 3, 2009, Bashas' filed this motion seeking leave to conduct 23 limited discovery. Such discovery is necessary because, as Bashas'
24 depicts it, the "EEOC has engineered" the Commissioner's Charge and 25 the subpoena, "in an effort to funnel information to the plaintiffs 26 27 28
Since then, Bashas' has been granted two extensions. Most recently, this court granted Bashas' leave to file its response to the OSC no later than five days after the ruling on this motion for leave to conduct limited discovery. See Doc. 18.
1 and counsel in the pending Parra litigation, and in furtherance of 2 the UFCW's efforts to apply increased pressure on Bashas'" to 3 unionize. Mot. (doc. 10) at 8:6-9. Put differently, Bashas'
4 believes that by filing the Commissioner's Charge, and then 5 issuing the subpoena which is the subject of this enforcement 6 action, the EEOC engaged in abuse of process. 7 To substantiate its abuse of process theory, Bashas' professes
8 to be seeking leave to engage in "very limited discovery[.]" Id. at 9 11:10. First, it wants to "serve written discovery requests" not
10 just upon the EEOC, but also upon "the named plaintiffs and 11 plaintiffs' counsel in the Parra action, including the Impact Fund 12 and [the] Davis [firm] . . . individually, and the UFCW[.]" Id. at 13 11:12-15 (emphasis added). Not only is Bashas' request fairly
14 broad in terms of those from whom it is seeking discovery, but the 15 scope of the documents which it is seeking also is quite broad. 16 Bashas' wants "to obtain documents pertaining to any
17 communications, information or documents provided between the EEOC 18 and these third parties relating to this Commissioner's Charge or 19 any other charges currently under investigation by the EEOC." 20 at 11:15-18 (emphasis added). Id.
Lastly, Bashas' wants to "seek any
21 documents relating to the Parra litigation, . . . , provided to the 22 EEOC by the Parra plaintiffs or their counsel." 23 (emphasis added). Id. at 11:18-20
Assuming cooperation by the third parties,
24 Bashas' anticipates completing this discovery within six weeks. 25 For now the court will overlook the breadth of these discovery 26 requests and, instead, focus upon Bashas' claimed entitlement to 27 conduct discovery in the first place. 28 The EEOC challenges Bashas' entitlement to any discovery. -8-
1 Characterizing this discovery motion as an attempt by Bashas' to 2 seek "back door access to the EEOC's open investigative file[,]" 3 the EEOC asserts that such access is "contrary to express 4 prohibitions in Title VII, . . . and the Freedom of Information Act 5 ("FOIA")[.]" Resp. (doc. 14) at 4:4-6. Similarly, depicting
6 Bashas' discovery request as "a fishing expedition into an open law 7 enforcement file[,]" the EEOC states that Bashas' must "first 8 demonstrate an abuse of process to support" this discovery request. 9 Id. at 4:16-20 (emphasis in original). 10 Likewise, according to the EEOC, there is no justification for
11 discovery here in that Bashas' has not shown a lack of good faith 12 by the Commissioner in filing the charge. The EEOC goes on to
13 challenge the sufficiency of the evidence upon which Bashas' is 14 relying. Turning to Bashas' confidentiality concerns, the EEOC
15 retorts that it "has and will continue to comply with" Title VII 16 and FOIA's confidentiality provisions. Id. at 7:26-28. Thus, from
17 the EEOC's perspective, the confidences of Bashas' and its 18 employees "are adequately protected." 19 20 Discussion "The EEOC bears the [p]rimary responsibility for enforcing EEOC v. Federal Exp. Corp., 558 F.3d 842, 849 (9th Cir. As part of Id. at 8:14.
21 Title VII."
22 2009) (internal quotation marks and citation omitted).3
23 Title VII's "integrated, multistep enforcement procedure[,]" id. 24 (internal quotation marks and citation omitted), individuals, as 25 well as the EEOC Commissioner, have the authority to file a charge. 26 27 28
Bashas' cites to a prior version of Federal Exp., 543 F.3d 531 (9th Cir. 2008), which was "withdrawn and replaced" by the "Amended Opinion" cited above on March 3, 2009 -- prior to the filing of Bashas' motion and reply. See Federal Exp., 558 F.3d at 844.
1 Id. (citations omitted).
The filing of a discrimination charge
2 triggers the EEOC's mandatory obligation "to investigate the charge 3 and determine whether there is reasonable cause to believe that it 4 is true." Id. (internal quotation marks and citations omitted).
5 "To enable the [EEOC] to make informed decisions at each stage of 6 the enforcement process, [Title VII] confers a broad right of 7 access to relevant evidence[.]" Id. 8 citation omitted). (internal quotation marks and
"In acquiring such evidence, the EEOC may
9 exercise all powers enjoyed by the NLRB [National Labor Relations 10 Board] under 29 U.S.C. § 161, including the authority to issue 11 administrative subpoenas and to request judicial enforcement of 12 those subpoenas." 13 14 15 16 17 18 19 Id. (citing, inter alia, 42 U.S.C. § 2000e-9).
Section 161 provides in relevant part: In case of . . . refusal to obey a subpoena issued to any person, any district court of the United States . . . , within the jurisdiction of which the inquiry is carried on or within the jurisdiction of which said person is guilty of . . . refusal to obey is found or resides or transacts business, upon application by the [EEOC] shall have jurisdiction to issue to such person an order requiring such person to appear before the [EEOC], . . . , there to produce evidence if so ordered[.] Here, because the
20 29 U.S.C. § 161(2) (West 1998) (emphasis added).
21 EEOC is carrying out its inquiry within the district of Arizona, 22 and, according to the EEOC, because Bashas' is refusing to fully 23 comply with the EEOC's subpoena, section 161(2) confers 24 jurisdiction on this court. See EEOC v. City of Milwaukee, 54
25 F.Supp.2d 885, 890 n.2 (E.D.Wis. 1999) (where EEOC had filed Title 26 VII charges against a city, the court found it had jurisdiction 27 partially based upon 29 U.S.C. § 161(2) "because the City is 28 located within this dis-trict [sic]"). - 10 -
1 III. 2
"Counter-discovery" For the most part, Bashas' and the EEOC agree on the governing Both rely heavily upon In re EEOC, 709 F.2d 392 There, the Fifth Circuit "recognized . . . that
3 legal standards. 4 (5th Cir. 1983).
5 facts vary so much from case to case that it is often very 6 difficult to articulate a single general standard. 7 (citation omitted). Id. at 399
Despite that difficulty, the Fifth Circuit
8 adopted a "two-step approach" for EEOC subpoena enforcement actions 9 - an approach which for the most part the Ninth Circuit follows. 10 See id. at 399 (internal quotation marks and citation omitted). 11 The first step is for the EEOC to file a petition for
12 enforcement which "fully complie[s] with the informal guidelines 13 set out" by the Supreme Court in United States v. Powell, 379 U.S. 14 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964). 15 the EEOC: 16 17 18 19 must show  that the investigation will be conducted pursuant to a legitimate purpose,  that the inquiry may be relevant to the purpose,  that the information sought is not already within the [agency's] possession, and  that the administrative steps required by the [agency's statutes or rules] have been followed. Id. More specifically,
20 Id. (quoting Powell, 379 U.S. at 57-58, 85 S.Ct. at 255) (other 21 citations omitted). An agency such as the EEOC "generally complies
22 with the Powell requirements . . . through the simple submission of 23 appropriate affidavits." 24 Id. (citation and footnote omitted).
Here, as part of its OSC, the EEOC includes the affidavit of
25 Paul G. Manget, the "Enforcement Manager of the Phoenix District 26 Office" of the EEOC, who is "responsible for the investigation of 27 charges of employment discrimination." 28 thereto (doc. 2-2) at 2, ¶ 1:1-3. OSC (doc. 1), attached
Mr. Manget's affidavit could
- 11 -
1 have benefitted from a little more detail.
2 that Bashas' is not challenging the sufficiency of that affidavit, 3 and given that the EEOC's burden at this point is not onerous, the 4 court finds that the first step in the enforcement process is met 5 at least for present purposes. 6 At the second step, "an administrative defendant[,]" such as See In re EEOC, 709 F.2d
7 Bashas', has a "relatively heavy" burden. 8 at 400.
That is so because ordinarily, "a defendant is not
9 "`entitled to engage in counter-discovery to find grounds for 10 resisting' a subpoena[.]" Id. (quoting United States v. Litton 11 Industries, Inc., 462 F.2d 14, 17 (9th Cir. 1972)). According to
12 the Ninth Circuit, "district courts must be cautious in granting 13 discovery rights, lest they transform subpoena enforcement 14 proceedings into exhaustive inquisitions into the practices of 15 regulatory agencies." Reich v. Montana Sulphur & Chemical Co., 32
16 F.3d 440, 449 (9th Cir. 1994) (internal quotation marks and 17 citations omitted). 18 Consistent with the foregoing, "[a] limited amount of discovery
19 may be allowed if, for example, the defendant makes a preliminary 20 and substantial demonstration of abuse, that is, where the defendant 21 has presented meaningful evidence that the agency is attempting to 22 abuse its investigative authority." Reich, 32 F.3d at 449 (internal "`Anything short of this
23 quotation marks and citations omitted).
24 showing is not enough.'" Id. (quoting In re EEOC, 709 F.2d at 400). 25 A defendant seeking counter-discovery must meet this fairly
26 demanding standard partially due to the nature of subpoena 27 enforcement actions, which are "summary procedure[s][.]" See EEOC v. 28 St. Regis Paper Co. - Kraft Div., 717 F.2d 1302, 1304 (9th Cir. - 12 -
1 1983) (citations omitted).
Hence, in the Title VII context, the
2 Fifth Circuit has deemed as "absolutely unacceptable . . . 3 dilatory tactics at the subpoena enforcement stage[.]" 4 709 F.2d at 400 (footnote omitted). In re EEOC,
Likewise, the Ninth Circuit in
5 St. Regis, explained that "[d]ue to the need for speedy 6 investigation of EEOC charges of employment discrimination, 7 discovery should be allowed against the EEOC only where exceptional 8 circumstances indicate an EEOC abuse of process." 9 F.2d at 1304 (citing cases) (emphasis added). 10 OSC, it is the EEOC's delay which is evident. St. Regis, 717
Of course, in this It has never sought
11 the information in its May 11, 2006 subpoena, and it waited over 12 eight months to seek to enforce its May 8, 2008 subpoena. 13 Given that the standard for allowing counter-discovery is a
14 showing by the defendant of "a preliminary and substantial 15 demonstration of abuse," as set forth above, there is no merit to 16 the EEOC's assertion that Bashas' must "first demonstrate an abuse 17 of process" before the court allows counter-discovery. 18 (doc. 14) at 4:17-18 (emphasis in original). See Resp.
Indeed, requiring a
19 defendant to first prove abuse to support a discovery request to 20 substantiate an abuse of process claim would place the defendant in 21 an untenable "Catch-22" situation. 22 The court is fully aware, as Bashas' is quick to point out,
23 that this "preliminary and substantial demonstration" standard "does 24 not mean actual proof." 25 in original). In re EEOC, 709 F.2d at 400 n. 5 (emphasis
Consequently, to satisfy this burden "[a]ll [Bashas']
26 needs to do is develop facts from which a court might infer a 27 possibility of some wrongful conduct by the [EEOC]." See id. Whether
28 (internal quotation marks omitted) (emphasis in original). - 13 -
1 Bashas' has done so is key to the court's discovery determination. 2 Bashas' premises its abuse of process argument on three The first is the timing of the EEOC's investigation and
4 this action, which Bashas' asserts "creates a suspicion that the 5 subpoena was not issued in good faith." Reply (doc. 16) at 3:24-25.
6 Second, according to Bashas', "the EEOC has seemingly shared 7 information relating to its confidential `investigations' of 8 Bashas'" with the Parra attorneys and/or the UFCW. 9 (citation omitted) (emphasis added)4. Id. at 4:4-7
Bashas' believes that this
10 purported sharing of information is not an isolated incident. 11 Third, Bashas' contends that the EEOC's refusal to provide 12 information underlying the Charge, its refusal to enter into a 13 confidentiality agreement, and the EEOC's "extremely broad subpoena" 14 combine to "impl[y] an improper ulterior motive" for issuing the 15 Charge and the challenged subpoena. 16 (footnote and citation omitted). Id. at 4:19-20 and at 5:1
Based upon the foregoing, Bashas'
17 contends that it has made "a substantial demonstration of abuse of 18 process warranting discovery." Reply (doc. 16) at 2:3-4 (emphasis
19 omitted). Pending the hearing, at this juncture, the court will only 20 comment upon some of these factors. 21 22 A. Timing
It appears to be more than coincidental that on the same
23 day this court denied discovery in Parra as to Bashas' post-April 24 2004 pay policy, the EEOC decided to file an OSC to enforce a 25 subpoena encompassing such pay data, a subpoena which had been 26 served over eight months earlier. 27 28
It is a close question whether,
Newly added emphasis.
- 14 -
1 as Bashas' urges, the timing of the EEOC's filing of the OSC 2 "creates a suspicion that the subpoena was not issued in good 3 faith[,]" at least to a degree so as to warrant counter-discovery. 4 See Reply (doc. 16) at 3:24-25 (citations omitted). 5 To support this argument, Bashas' relies solely upon United
6 States v. Giant Industries, Inc., 1981 WL 1277 (D. Ariz. June 17, 7 1981). There, at the same time defendant was the target of a
8 criminal grand jury investigation, the Department of Energy ("DOE") 9 issued an administrative subpoena. Purportedly the documents sought
10 in that subpoena were necessary to a DOE regulatory compliance 11 investigation. In opposing DOE's enforcement petition, the
12 defendant asserted that the "subpoena was not issued in good faith 13 but was intended to obtain information for use as evidence in a 14 criminal prosecution." 15 Id. at *1.
The court in Giant Industries held that "[t]he timing of the
16 administrative subpoena create[d] a suspicion sufficient to entitle 17 Giant to limited discovery . . . to determine whether the subpoena 18 was issued for a legitimate purpose." 19 conclusion, the court reasoned: 20 21 22 23 Id. Giant should not be compelled to produce . . . information requested by the administrative subpoena if the purpose of the subpoena is, in reality, . . . [to] enable the Government to obtain evidence to support criminal charges against Giant or its officers. The court then separately ruled on each of Giant's discovery Id. at *2. In reaching that
24 requests, in a manner which appears to have narrowed the scope of 25 the discovery sought by Giant. 26 There are some obvious factual difference between Giant Perhaps most significant is that
27 Industries and the present action.
28 the DOE's issuance of an administrative subpoena in Giant Industries - 15 -
1 was preceded by a Department of Justice criminal investigation. 2 Plainly there is no similar parallel criminal investigation here. 3 Consequently, while the court does find troublesome the timing of 4 the OSC, at this juncture, without more, the timing is not a 5 sufficient basis for allowing counter-discovery. 6 7 B. "Shared Information"
Bashas' fares no better with its argument that it is entitled
8 to counter-discovery because the EEOC "seemingly shared information" 9 with the Parra attorneys and/or the UFCW. Essentially, it is
10 Bashas' position that the Parra attorneys and the UFCW have "learned 11 of information harmful to Bashas' to which they would have no access 12 except through the EEOC." Mot. (doc. 10) at 8:15-17. Bashas'
13 claims to have "repeatedly learned of incidents" where it believes 14 the EEOC improperly provided such information to the Parra 15 plaintiffs' attorneys and to the UFCW. 16 (emphasis added). See Mot. (doc. 10) at 8:14
Similarly, Bashas' further asserts that "[t]ime
17 after time" it "has learned that Parra plaintiffs' counsel, the 18 Impact Fund or the UFCW has knowledge of matters of which they 19 should not be aware." 20 Id. at 9:7-8.
Bashas' identifies only two specific instances where this Moreover, Bashas'
21 alleged improper sharing of information occurred.
22 did not elaborate at all as to the substance of the purportedly 23 "harmful information." 24 Bashas' submits an affidavit from its counsel and an excerpt
25 from a deposition taken in the related Parra action to show the 26 first instance of alleged information sharing. In that affidavit,
27 Bashas' counsel avers that "Bashas' learned that Jocelyn Larkin, 28 attorney for the Parra class, was aware of a charge of - 16 -
1 discrimination against Bashas' then being investigated by the EEOC." 2 Mot. (doc. 10), exh. F thereto (Quincy Decl'n) at 17, ¶ 11:21-23. 3 Because at that time "the EEOC had not yet filed suit against 4 Bashas' on th[at] charge," and because "Larkin was not involved in 5 th[at] charge[,] nor did she represent the charging party[,]" 6 Bashas' surmises that the EEOC was "in communication with the Parra 7 plaintiffs' counsel relating to matters extending beyond the Parra 8 litigation." 9 Id. at 17, ¶ 11. There is a
Of course, this argument is based upon conjecture.
10 serious question whether the page and a half of deposition testimony 11 to which Bashas' cites supports its view of events. In that
12 portion, the witness is being questioned as to Bashas' hiring 13 practices on the Navajo reservation. 14 (Sanford Dep'n) at 23-24. See id., Tab 1 thereto
At least on the face of it, the scant
15 proffered deposition testimony does not advance Bashas' argument of 16 shared information between the Parra attorneys and/or the UFCW. 17 The second scenario which Bashas' maintains shows abuse of
18 process is the manner in which Bashas' first learned of this 19 enforcement action. As Kristy L. Nied, Bashas' "Director of
20 Communications[,]" describes it, Bashas' first learned of the filing 21 of the OSC when she received a call from a business reporter on 22 February 4, 2009 - two days after the filing of the OSC. 23 10), exh. L thereto (Nied Decl'n), at 2, ¶ 5. Mot. (doc.
Ms. Nied declares
24 that during that call the reporter informed her that "he had 25 received information from the UFCW" that the EEOC had filed this 26 enforcement action, and he requested a comment from Bashas' on that 27 filing. Id. Ms. Nied further declares that she received a similar
28 request from a different reporter the next day, and he likewise - 17 -
1 informed her that the UFCW was the source of his information as to 2 the filing of this EEOC enforcement action. 3 See id.
Bashas' is unaware of any EEOC "announcement or press release" Mot. (doc. 10) at 6:21-22. Furthermore,
4 pertaining to this action.
5 Bashas' believes that "the filing of subpoena enforcement actions do 6 not appear on commercial docketing services generally available." 7 Id. at 6:22-23. Therefore, Bashas' claims to be "at a loss as to
8 how the union would have learned of this . . . action within days" 9 of its filing "any other way than from the EEOC." 10 2. 11 Assuming, arguendo, that events unfolded as Ms. Nied declares, Id. at 6:24-7:1-
12 i.e., that the EEOC informed the UFCW, who in turn informed the 13 reporters, of the filing of this action, the question is whether 14 this is sufficient to establish a "preliminary and substantial 15 demonstration of abuse" of process. 16 402. See In re EEOC, 709 F.2d at
Ms. Nied's declaration may well show that this is "a truly
17 exceptional case, that is, [one] where the defendant has made a 18 preliminary and substantial demonstration of abuse." See id. 19 Similarly, Ms. Nied's declaration, although partially based upon 20 hearsay, may constitute "meaningful evidence" that the EEOC "is
21 attempting to abuse its investigative authority[.]" Id. at 400 22 (internal quotation marks, citation and footnote omitted). It is
23 possible, however, that these purported concerns could be remedied 24 by entry of a confidentiality order. Accordingly, the question is
25 whether the events as Ms. Nied describes them warrant counter26 discovery or simply a confidentiality order. 27 Finally, the court is loathe to consider counter-discovery
28 based upon the wholly unsubstantiated averment in Bashas' counsel's - 18 -
1 declaration that "upon information and belief, the UFCW and Parra 2 counsel," the Davis firm, "which also represents the UFCW regularly, 3 communicate regarding the organizing efforts, as well as the Parra 4 litigation." Mot. (Doc. 10), exh. F thereto (Quincy Decl'n) at 17, Plainly, this one qualified averment Without
5 ¶ 10:16-18 (emphasis added).
6 is not meaningful evidence of abuse of process by the EEOC.
7 more, there is no link between these supposed communications and the 8 EEOC's alleged abuse of process. 9 Bashas' makes much of the fact that the EEOC did not outright Subject to the positions of the
10 deny that it shared information.
11 parties at the OSC hearing, the court is not inclined to give much 12 credence to this assertion because at this second-step the burden is 13 on Bashas' to "make a preliminary and substantial demonstration of 14 abuse[;]" the burden is not upon the EEOC. See Reich, 32 F.3d at 449 15 (internal quotation marks and citations omitted). 16 17 C. "Ulterior Motive"
Lastly, Bashas' is relying upon three factors which it believes
18 in combination "impl[y] an improper ulterior motive" for issuing the 19 challenged subpoena, and thus, by extension, a basis for engaging in 20 counter-discovery. 21 omitted). See Reply (doc. 16)at 5:1 (footnote and citation
Bashas' first points to the EEOC's refusal to provide it
22 "with even the most basic information underlying the charge[.]" Id. 23 at 4:16-17. Next, Bashas' notes the "extremely broad" scope of the
24 subpoena, seeking "computer files for over 40,000 former and current 25 employees[.]" Id. at 4:19-20. Third, Bashas' heavily relies upon
26 the EEOC's "continued dismissal of any possible consideration of a 27 confidentiality agreement[.]" Id. at 7:23. The EEOC's
28 unwillingness to enter into a confidentiality agreement as to the - 19 -
1 subpoenaed information, from Bashas' perspective, "substantiate[s] 2 its evidence of abuse of process." 3 Id. at 5:9 (emphasis omitted).
The question is whether these factors, either alone or
4 together, support a finding that this is "a truly exceptional case" 5 so as to justify counter-discovery however. 6 F.2d at 402. See In re EEOC, 709
To be sure, simply raising the specter of "due process
7 and fairness" concerns based upon lack of notice is "too remote and 8 too vague to warrant . . . [such] discovery." 9 Industries, 462 F.2d at 17. See Litton
Further, eventually it may be that the
10 EEOC's asserted refusal to adequately notify Bashas' of the nature 11 of the Commissioner's Charge could be the basis for a constitutional 12 challenge to enforcing the subpoena, but the question now is whether 13 it provides an adequate basis for allowing counter-discovery. 14 On the face of it, the challenged subpoena does appear to be Bashas' has not shown, and it does not necessarily
15 fairly broad.
16 follow, however, that an arguably broad subpoena means there has 17 been an abuse of process. In an effort to equate a broad subpoena
18 with an improper ulterior motive, Bashas' cites to EEOC v. First 19 Alabama Bank of Birmingham, 440 F.Supp. 1381 (N.D. Ala. 1977), 20 aff'd, 611 F.2d 132 (5th Cir. 1980). The facts before this court do
21 not begin to approach the egregious facts of First Alabama, however. 22 Moreover, First Alabama was in a different procedural posture There, the EEOC was seeking to enforce a
23 than the present case.
24 subpoena against the bank; the bank was not seeking counter25 discovery as is Bashas'. Not only that, First Alabama was issued
26 following a trial, so that court had the benefit of a fully 27 developed record. Accordingly, at this point in the litigation,
28 First Alabama does not provide a sufficient basis upon for allowing - 20 -
1 Bashas' to engage in counter-discovery. 2 As discussed above, the court has serious reservations as to
3 the propriety of allowing counter-discovery in this subpoena 4 enforcement action. At the same time, however, the court cannot
5 ignore the broader context in which this particular dispute has 6 arisen, and the timing of this OSC. 7 8 Conclusion Thus, for the reasons set forth herein, IT IS ORDERED that the
9 "Motion for Leave to Conduct Limited Discovery" by respondent 10 Bashas', Inc. (doc. 10) is set for hearing contemporaneously with 11 the hearing on EEOC's Application for an OSC. 12 IT IS FURTHER ORDERED that, consistent with this court's May 6,
13 2009, order, Bashas' "shall file its Response" to the EEOC's Order 14 to Show Cause Why an Administrative Subpoena Should Not be Enforced 15 (doc. 1) "no later than five (5) days after" the filing of this 16 order. 17 See Doc. 18 at 1:18-19.
IT IS FINALLY ORDERED that Bashas', Inc. appear on the 30th day
18 of June, 2009, at 1:30 p.m., in Courtroom 626, Sandra Day O'Connor 19 Courthouse, 401 W. Washington Street, Phoenix, Arizona 85003, and 20 show cause why it should not be compelled to comply with the 21 subpoena issued to it. At the hearing, the parties each shall be
22 prepared to submit a proposed confidentiality order. 23 24 25 26 27 28 Copies to counsel of record - 21 DATED this 18th day of June, 2009.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?