Perez v. Austin Electric Services LLC et al
Filing
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ORDER granting in part and denying in part Defendants' 185 Motion for Rule 37(c) Sanctions. Signed by Senior Judge Roslyn O Silver on 10/15/18. (CLB)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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R Alexander Acosta,
No. CV-16-02737-PHX-ROS
Plaintiff,
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ORDER
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v.
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Austin Electric Services LLC and Toby
Thomas,
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Defendants.
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Plaintiff Secretary of Labor (“the Secretary”) alleges Defendants Austin
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Electric Services LLC and Toby Thomas, Austin Electric’s President (collectively,
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“Defendants”), failed to pay employees overtime compensation and to keep employee
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records, in violation of the Fair Labor Standards Act (“FLSA”). In anticipation of the
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limited reopening of discovery, Defendants moved for Rule 37(c) sanctions to exclude
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29 of the Secretary’s trial witnesses and all damages calculations beyond July 2015.
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(Doc. 185.) For the foregoing reasons, Defendants’ motion will be granted in part and
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denied in part.
BACKGROUND
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The Secretary alleges Defendants violated the FLSA by failing to pay employees
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overtime compensation and failing to keep employee records. The case proceeded to
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discovery, which, except as discussed below, ended in October 2017. Trial is set to begin
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on January 15, 2019. (Doc. 172.)
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A key component of the Secretary’s case is the testimony of informer witnesses—
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current and former employees of Defendants who were allegedly denied overtime
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compensation.
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government’s informants privilege, the Court allowed the Secretary to withhold the
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identities of informer trial witnesses until shortly before trial. The Court ordered the
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Secretary to disclose the identities of its informer witnesses who will testify at trial—as
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well as any unredacted documents relating to those witnesses—by October 1, 2018.
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(Docs. 102, 172.)
Because the identities of these witnesses are protected by the
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Following these disclosures, discovery is scheduled to reopen for 15 days,
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beginning October 15, 2018 and ending November 2, 2018. During this time, Defendants
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will have the opportunity to “interview and/or depose the Secretary’s informer witnesses
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and other individuals who may be disclosed in the documents and information the
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Secretary produces.” (Doc. 172 at 20:14–16.)
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On October 3, 2018, after receiving the Secretary’s disclosure of 40 witness
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names, Defendants filed a motion for Rule 37(c) sanctions. (Doc. 185.) Defendants
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argue the Secretary failed to disclose required information relating to the Secretary’s
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informer witnesses and ask the Court to exclude 29 of the 40 witnesses. In addition,
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Defendants argue that damages calculations beyond July 2015 should be excluded due to
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untimely disclosure.
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The Court granted Defendants’ request for expedited briefing, in consideration of
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depositions scheduled to begin on October 15. (Doc. 188.) The Secretary filed a
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response to Defendants’ motion on October 11, (Doc. 189), and Defendants filed their
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reply on October 12. (Doc. 191.)
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I.
Rule 37(c) Sanctions
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As an initial matter, Defendants’ motion for Rule 37(c) sanctions does not violate
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meet-and-confer requirements regarding discovery disputes. Unlike Rule 37(a), Rule
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37(c) does not require a certification that the “the movant has in good faith conferred or
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attempted to confer.” Fed. R. Civ. P. 37(a)(1). “Any local rule requiring a conference
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prior to the court’s imposition of sanctions under Rule 37(c) would be inconsistent with
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Rule 37(c) and, therefore, unenforceable.” Hoffman v. Constr. Protective Servs., Inc.,
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541 F.3d 1175, 1179 (9th Cir. 2008), as amended (Sept. 16, 2008); see also Dayton
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Valley Inv’rs., LLC v. Union Pacific R.R. Co., No. 08-cv-00127, 2010 WL 3829219, at *2
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(D. Nev. Sept. 24, 2010) (“Ultimately, this is a non-issue as personal consultation is not
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required prior to a motion for sanctions pursuant to Rule 37(c).”). Accordingly, the Court
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will not deny Defendants’ motion on this basis.1
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II.
The 29 Witnesses
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Defendants argue the Secretary violated Rule 26(a) and the Court’s Orders by
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failing to disclose required information for all 40 witnesses. However, because the
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Secretary provided limited disclosures relating to 11 witnesses,2 Defendants request the
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exclusion of only 29 of the 40 witnesses.
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According to Defendants, the Secretary failed to disclose the 29 witnesses’ contact
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information and descriptions of the subject matter of each witness’s anticipated testimony
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in violation of Rule 26(a).
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documents—including interview-related documents and statements from employees—
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relating to the 29 informer witnesses, as required by this Court’s Orders. In support of
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their argument, Defendants point out the 29 witnesses “do not make a single appearance
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in the DOL’s production of interview-related documents—no employee statements, no
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interview summaries, no interview notes, no notes of calls made to employees, no notes
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of calls from employees, and no notes of meetings with employees.” (Doc. 185 at 5:5–
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8.) Pursuant to Rule 37(c), Defendants request the Court sanction the Secretary by
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excluding the 29 witnesses. Fed. R. Civ. P. 37(c) (“If a party fails to provide information
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or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that
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information or witness to supply evidence on a motion, at a hearing, or at a trial, unless
In addition, the Secretary failed to produce unredacted
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In any event, Defendants’ motion is one for Rule 37(c) sanctions rather than a discovery
motion.
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Defendants note the Secretary produced interview summaries for 11 witnesses.
Defendants plan to proceed with depositions of some these witnesses when discovery
reopens. (Doc. 185 at 5, n.6.)
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the failure was substantially justified or is harmless.”). Although Defendants did not cite
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to Rule 37(b), which allows for sanctions for a failure to comply with a court order, the
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Court notes it is applicable here. Fed. R. Civ. P. 37(b).
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The Secretary responds that 86 pages of documents that three informer witnesses
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had provided to the Secretary were produced, as well as an interview statement for one of
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the three witnesses. (Doc. 189.) For the remaining 26 witnesses, the Secretary states that
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no responsive documents exist because “[t]hese 26 witnesses did not provide any
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documents to the Secretary, nor did the Secretary previously redact documents about
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them solely on the basis of the Government Informants Privilege.” (Doc. 189 at 1:26–
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28.)
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recently and after fact discovery closed, obviously preventing [him] from previously
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redacting documents about them.” (Doc. 189 at 1:28–2:1-2 (emphasis in original).)
The Secretary explains meetings with many of these witnesses occurred “only
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In reply, Defendants counter that the Secretary’s lack of a single document about
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26 witnesses “strains credulity” and ask the Court to conduct an in camera review of the
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Secretary’s documents. (Doc. 191 at 7:4–5.)
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The Court’s Orders regarding informer witness disclosures are clear: The
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Secretary “shall disclose the identities of its informer witnesses who will testify at trial,
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and any unredacted documents relating to them, no later than October 1, 2018.” (Doc.
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172 at 20:10–12); see also Doc. 102 at 5:12–17 (“[T]he Secretary shall produce the un-
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redacted documents relating to the Secretary’s informer witnesses who will testify at trial,
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including any documents these informer witnesses provided to the Secretary as well as
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those documents previously redacted on the basis of the Government Informants
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Privilege (to the extent not protected by other privileges or the work product doctrine[.]”)
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Nowhere in the Orders does the Court suggest the Secretary’s production shall be
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limited exclusively to (1) documents provided to the Secretary by informer witnesses; or
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(2) documents previously withheld or redacted based on the government’s informants
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privilege. In parts of the response, the Secretary apparently concludes that there are no
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responsive documents relating to 26 witnesses because no documents fall under these two
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mandatory categories. (Doc. 189 at 1:26–28, 7:24–28.) If this is indeed the Secretary’s
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interpretation, it plainly violates the Court’s Orders: All documents relating to informer
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trial witnesses that are not protected by “other privileges or the work product doctrine”
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should have been produced, regardless of how and when the Secretary obtained or
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generated them.
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To the extent the Secretary has failed to produce trial witness–related documents
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solely because they did not fall under the two categories, the Secretary is now ordered to
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produce any such information no later than October 16, 2018. Those witnesses may well
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be excluded under Rule 37(c), unless the Secretary’s failure to disclose was substantially
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justified or harmless. With regard to documents withheld due to other privileges or the
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work product doctrine, the Secretary shall produce, no later than October 16, 2018, a
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privilege log indicating all responsive documents withheld on the basis of any privilege.
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Defendants’ request for in camera review, raised for the first time in reply, is denied as
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disproportionate and unnecessary at this time. See, e.g., Diamond State Ins. Co. v. Rebel
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Oil Co., Inc., 157 F.R.D. 691, 700 (D. Nev. 1994) (“Resort to in camera review is
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appropriate only after the burdened party has submitted detailed affidavits and other
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evidence to the extent possible.”).
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III.
Damages Calculations
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Defendants ask the Court to exclude the Secretary’s damages calculations beyond
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July 2015 due to untimely disclosure. According to Defendants, the Secretary’s back
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wages calculations have increased from $691,608.29 during discovery to $1,124,435.12
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in October 2018. Notably, the Secretary’s damages calculations that were disclosed
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during discovery did not include any damages calculations beyond July 2015. Rather, in
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the Pretrial Disclosures of the Secretary, dated October 23, 2017, the Secretary stated
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“[b]ackwage calculation worksheets” would be offered at the time of trial. (Doc. 185,
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Ex. 7 at 7:13.)
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In the response, the Secretary argues that because Defendants’ FLSA violations
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are allegedly ongoing, the Secretary’s back wage calculations would naturally increase
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with time. Furthermore, because the Secretary added 99 individuals to the case in April
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2018, the updated damages calculations include back wages for those individuals. The
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Secretary also points out that final calculations will depend on the supplemental
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disclosures of payroll information that Defendants have yet to disclose.
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The Court agrees with the Secretary that Defendants were not prejudiced by the
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timing of damages disclosure. Fed. R. Civ. P. 37(c) (providing for the exclusion of
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information for a failure to disclose “unless the failure was substantially justified or is
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harmless”). Throughout this litigation, Defendants have always known that the Secretary
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alleges ongoing violations of the FLSA and that damages calculations would increase
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with time. Defendants also knew the Secretary added 99 individuals to this case in April
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2018 and that those individuals claim additional back wage damages. Furthermore, the
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Secretary states the supplemental back wage calculations provided use the same
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methodology as previous calculations, of which Defendants are well aware. Defendants
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both knew and should have expected the Secretary’s damages calculations would
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increase. Therefore, Defendants’ motion to exclude damages calculations is denied.
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IV.
The Other 11 Witnesses
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Defendants do not request the exclusion of the other 11 trial witnesses but insist
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the Secretary has not fully complied with his disclosure obligations. (Doc. 185 at 5.)
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While the Secretary provided interview summaries for these 11 witnesses, other required
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information was not disclosed, including contact information for the witnesses. The
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parties dispute whether Defendants were already in possession of such information and
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whether they were harmed by this failure to disclose. To the extent the Secretary has up-
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to-date contact information for trial witnesses that Defendant does not have, the Secretary
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shall disclose that information no later than October 16, 2018.
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V.
Documents Unrelated to Trial Witnesses
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The parties dispute the production of a number of documents unrelated to the trial
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witnesses. In their reply, Defendants curiously argue that the Court intended to include
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documents unrelated to trial witnesses when it ordered disclosure of the “the un-redacted
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documents relating to the Secretary’s informer witnesses who will testify at trial,
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including any documents these informer witnesses provided to the Secretary as well as
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those documents previously redacted on the basis of the Government Informants
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Privilege.” (Doc. 102 (emphasis added).) This reading defies all logic. The literal
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import of this Order does not contemplate production of documents unrelated to trial
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witnesses. Accordingly, the Court will not impose sanctions for these failures to produce.
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VI.
Attorneys’ Fees
The Court will not impose additional monetary sanctions and each party shall bear
its own costs.
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Accordingly,
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IT IS ORDERED Defendants’ Motion for Rule 37(c) Sanctions, (Doc. 185), is
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GRANTED IN PART and DENIED IN PART.
Dated this 15th day of October, 2018.
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Honorable Roslyn O. Silver
Senior United States District Judge
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