Geiger et al v. Master United 12 LLC et al

Filing 186

ORDER denying 176 Motion to Quash; denying 177 Motion to Quash. The Division is directed to produce the responsive documents for inspection at the location where the responsive documents are located on November 6, 2015. By Magistrate Judge Nina Y. Wang on 10/28/15. (nywlc1)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 14-cv-00240-REB-NYW
ZACH GEIGER,
ROBERT ABELARDO,
ADAM GOLDSTEIN, and
RYAN KING,
Plaintiffs,
v.
Z-ULTIMATE SELF DEFENSE STUDIOS, LLC, a California limited liability company,
PAUL TAYLOR, individually, and in his capacity as owner, partner, and corporate officer,
WILLIAM CLARK, individually and in his capacity as owner, partner, and corporate officer,
KRIS ESZLINGER, individually, and in his capacity as owner, partner, and corporate officer,
FRANK LEY, individually and in his capacity as owner, partner, and corporate officer,
HANS PROSCH, individually, and in his capacity as owner, partner, and corporate officer,
et al.,
Defendants.
______________________________________________________________________________
ORDER ON MOTIONS TO QUASH
______________________________________________________________________________
Magistrate Judge Nina Y. Wang
This matter comes before the court on non-party Colorado Department of Labor and
Employment, Division of Unemployment Insurance’s (“Division”) Motion to Quash Audit
Subpoena Duces Tecum (“Motion to Quash Audit Subpoena”). [#176, filed October 19, 2015].
Also before the court is the Division’s Motion to Quash Steinke and Wilkinson Subpoena Duces
Tecum (“Motion to Quash Steinke and Wilkinson Subpoena”). [#177, filed October 19, 2015].
These Motions were referred to the undersigned Magistrate Judge pursuant to the memorandum
dated the same day [#178] and the prior Order Referring Case dated January 29, 2014 [#4].

Upon consideration of the Parties’ papers and the applicable case law, the court DENIES the
Motions to Quash.
BACKGROUND
Plaintiffs in this case have asserted various claims against Defendants including: (1) a
declaration that the plaintiffs are “classified employees under state and federal law”; (2) for
violation of the Fair Labor Standards Act (“FLSA”) by failing to pay wages at least equal to the
minimum wage plus overtime compensation; (3) for fraud in classifying Plaintiffs as independent
contractors rather than employees; (4) for negligent misrepresentation based on the independent
contractor classification; (5) for civil conspiracy to improperly classify Plaintiffs as independent
contractors; and (6) to pierce the corporate veil based on alter ego and undercapitalization.
[#22]. A central issue to this action is whether Plaintiffs are properly classified as independent
contractors or employees.
This court entered a Protective Order in this matter on June 15, 2015. [#153]. On
October 9, 2015, Plaintiffs served a Subpoena to Produce Documents, Information, or Objects or
to Permit Inspection of Premises in a Civil Action for production of the following documents and
information:
All documents and communications related to and arising from the Department’s
audit of “Z Ultimate Self Defense Studios” including without limitation any
entities and persons including Masters United VI, WLC Management, William
Clark, and any Z-Ultimate entities that may or may not be referenced in the
attached “Notification of Audit” by UI Auditor Jason Robbins. Produce all
determinations, investigation notes, communications (including those to and from
Mr. Robbins), and documents created by or provided to the Department during all
stages of the audit or any resulting investigations.
(“Audit Subpoena”). [#176-1 at 2]. 1 The Audit Subpoena instructed the recipient to “redact

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These citations in this Order refer to the document and page number assigned by the court’s
Electronic Court Filing system.
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confidential personal identifying information including any tax ID numbers, Social Security
numbers, birthdates, and addresses from [] production,” and specified a response date and time
of October 23, 2015 before 5:00 p.m. [Id.]
The same day, Plaintiffs served a second Subpoena to Produce Documents, Information,
or Objects or to Permit Inspection of Premises in a Civil Action for production of the following
documents and information:
All documents and communications related to and arising from the Department’s
investigation and determination for (1) James Steinke and (2) Kera Wilkinson.
Produce all determinations, investigation notes, communications, and documents
created by or provided to the Department during all stages of the investigations or
any resulting determinations and appeals.
(“Steinke and Wilkinson Subpoena”). [#177-1 at 2]. The Steinke and Wilkinson Subpoena
similarly instructed the recipient to “redact confidential personal identifying information
including any tax ID numbers, Social Security numbers, birthdates, and addresses from []
production,” and specified a response date and time of October 23, 2015 before 5:00 p.m. Id.
On October 19, 2015, the Division filed the instant Motions to Quash. [#176, #177]. On
October 22, 2015, Plaintiffs filed Responses, relying on Magistrate Judge Boland’s prior order
[#74] to argue that production was proper and confidentiality was not a sufficient basis to quash
the subpoenas. [#179; #180]. On October 28, 2015, Plaintiffs filed supplemental Responses as
directed by this court regarding the relevance of the subpoenaed documents. [#184; #185].
The Division makes no objection to the form of service. Rather, the sole basis for
seeking orders quashing the subpoenas is that “[t]he documents encompassed within the
subpoena[s] are confidential under Colorado Revised Statute § 8-72-107(1).” [#176 at 2; #177 at
2]. That section provides, in relevant part:
Information thus obtained, or obtained from any individual pursuant to the
administration of articles 70 to 82 of this title . . .shall be held confidential and
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shall not be published or be open to public inspection . . . in any manner revealing
the individual’s or employing unit’s identity.
There exists a distinction between information that is confidential and that which is privileged.
Cf. Centurion Industries, Inc. v. Warren Steurer and Associates, 665 F.2d 323, 325-26 (10th Cir.
1981) (advising that if relevancy and need are shown, confidential information such as trade
secrets should be disclosed “unless they are privileged or the subpoenas are unreasonable,
oppressive, annoying, or embarrassing.”). See also Nesbit v. Industrial Comm., 607 P.2d 1024,
1025 (Colo. App. 1979) (finding no procedural due process violation where a tribunal allowed a
party to inspect but not copy documents apparently deemed confidential under the statute).
Plaintiffs assert that the documents and information sought in the Audit Subpoena are
relevant to advice and direction Defendants received from the Division regarding employment
classification. For example, during a Colorado Department of Labor and Employment Audit of
Defendants, auditor Jason Robbins exchanged emails with Defendants explaining “the concepts
of control and direction and customary engagement,” and advising Defendants on how to
properly classify a worker as an independent contractor.

[#185 at 3; #185-3].

Plaintiffs

represent that throughout the discovery process Defendants have not produced any
communications with Mr. Robbins despite specific requests to do so. [#185 at 3].
Plaintiffs assert that the documents and information sought in the Steinke and Wilkinson
Subpoena are relevant as to the classification of Defendants’ employees and the general
employment atmosphere in Defendants’ studios and as to the willfulness and knowledge element
of Plaintiffs’ fraud claim. Mr. Steinke was an instructor at a Defendant studio and applied for
unemployment insurance with the Division after he resigned his position in 2011. [#184 at 2].
Ms. Wilkinson was a Z-Ultimate Chief Instructor in 2011, and Plaintiffs have moved to add her
to this litigation as an opt-in plaintiff.

See [#165].
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Plaintiffs assert that the subpoenaed

information is relevant as to Mr. Steinke because the Division’s file will likely include a
description of Mr. Steinke’s job duties, hours worked, and compensation rate as well as
investigation notes and copies of the Division’s communications with Defendants regarding the
independence of their workers. [#184 at 3]. As to Ms. Wilkinson, Plaintiffs represent that she
informed their counsel that the Division determined during its investigation that she was an
employee of Defendants and that the Division subsequently confirmed that determination
following Defendants’ appeal. [#184 at 3-4]. This court agrees that the information sought in
the Audit Subpoena and Steinke and Wilkinson Subpoena appears relevant under Rule 26.
Therefore, IT IS HEREBY ORDERED:
(1) The Motion to Quash Audit Subpoena [#176] is DENIED;
(2) The Motion to Quash Steinke and Wilkinson Subpoena [#177] is DENIED;
(3) The Division is directed to produce the responsive documents for inspection at the
location where the responsive documents are located on November 6, 2015, and
Defendants will inspect, but not copy, unless otherwise agreed to in writing by
Plaintiffs and the Division;
(4) The Parties will limit the use of Division documents produced pursuant to this Order
and the court’s prior orders [#74; #148] to this litigation, unless otherwise ordered by
this court or another of competent jurisdiction;
(5) The Parties will redact personal identifying information pursuant to the Protective
Order [#153] prior to the filing of any documents with the court or sharing any such
information with any witnesses and/or experts; and
(6) To the extent the Parties seek to restrict access to any of the Division documents in
future filings of the court, the Parties are directed to comply with the procedures as

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set forth in D.C.COLO.LCivR 7.2. Nothing in this Order may be construed as a
determination by this court that any document produced by the Division is entitled to
restriction under Local Rule 7.2 or the applicable case law.

DATED: October 28, 2015

BY THE COURT:

s/ Nina Y. Wang
United States Magistrate Judge

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