Geiger et al v. Master United 12 LLC et al

Filing 233

ORDER Granting in part and Denying in part 115 Plaintiff's Motion for Contempt, Sanctions, and Relief from Dates in Order Granting Motion for Conditional Certification. Signed by Judge Robert E. Blackburn on 3/30/2016.(cmira)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 14-cv-00240-REB-NYW
ZACH GEIGER, et al.,
Plaintiffs,
v.
Z-ULTIMATE SELF DEFENSE STUDIOS LLC, et al.,
Defendants.

ORDER CONCERNING MOTION FOR
CONTEMPT, SANCTIONS, and OTHER RELIEF
Blackburn, J.
This matter is before me on the Plaintiffs’ Motion for Contempt, Sanctions, and
Relief From Dates in Order Granting Motion for Conditional Certification [#115]1 filed
April 3, 2015. The defendants filed a response [#128], and the plaintiffs filed a reply
[#138]. I grant the motion in part and deny it in part.
I. STANDARD OF REVIEW
Under Fed. R. Civ. P. 37(b)(2), a district court may impose sanctions on a party for
failure to obey a court order to provide or permit discovery. A district court also has the
inherent power to enforce its orders through civil contempt.2 Shillitani v. United States,
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“[#115]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.
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Contempt proceedings are either civil or criminal in nature. Consistent with the objectives
underlying civil and criminal contempts, if the sentence imposed is conditional and grants the defendant
the ability to end the penalty by complying with the order, the contempt is civil. Colombo v. New York,
405 U.S. 9, 10-11 (1972); Shillitani v. United States, 384 U.S. 364, 369-70 (1966); Cheff v.
Schnackenberg, 384 U.S. 373, 377 (1966). If the penalty is fixed and there is no possibility of complying

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384 U.S. 364, 370 (1966). A finding of civil contempt is proper when (1) a valid court order
existed; (2) the subject of the order had knowledge of the order; and (3) the subject of the
order disobeyed the order. FTC v. Kuykendall, 371 F.3d 745, 756-57 (10th Cir. 2004)
(citing Reliance Ins. Co. v. Mast Constr. Co., 159 F.3d 1311, 1315 (10th Cir. 1998)). See
also 18 U.S.C. § 401(3).
II. BACKGROUND
This case has been conditionally certified as a collective action under the Fair Labor
Standards Act (FLSA). In my Order Granting Motion for Conditional Certification
[#110], I ordered the defendants to provide to the plaintiffs “the names, addresses,
telephone numbers, and e-mail addresses of all current and former Chief Instructors
employed by any of the defendants on or after March 10, 2011, whether designated as an
employee or as an independent contractor. “ Id., p. 6.
The defendants provided a list to the plaintiffs, but, as the plaintiffs note in their
motion, the list did not include all current or former Chief Instructors. In addition, the list
did not include complete addresses, telephone numbers, and other information for all of
the Chief Instructors shown on the list. Exhibit A to the motion [#115-1] is a chart showing
the 119 names on the list provided by the defendants to the plaintiffs. The chart shows the
absent or incomplete information provided by the defendants when they produced their list.
According to the defendants, some of the Chief Instructors on the list “elected not to
provide their personal email and telephone numbers.” Response [#128], p. 1. However, it
is undisputed that the defendants were required to maintain name and address records for
each employee and independent contractor, for the purpose of filing or delivering relevant

with the court order, the contempt is criminal. Shillitani, 384 U.S. at 369-70.

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tax forms for these employees and independent contractors. In many cases, as shown on
Exhibit A [#115-1], the defendants failed to provide home address information the
defendants were required to maintain for purposes of tax compliance. In their response
[#128], the defendants provide additional information about some Chief Instructors, a
demonstration that the defendants likely had access to this information, but did not
produce it, when they produced their list, as required by my order [#110]. The defendants
note also that additional information and more complete information has been provided to
the plaintiffs in subsequent discovery. This circumstance also shows that the defendants
likely had access to this information, but did not produce it, when they produced their list,
as required by my order [#110]. In addition, I note, there are a large number of defendant
entities in this case. The record keeping of these entities is not, in many cases, centralized
or coordinated. To some extent, this fact likely played a role in creating some of the flaws
on the list provided by the defendants to the plaintiffs. In discovery, the plaintiffs have
sought and obtained a large amount of information, including additional information about
Chief Instructors who have worked for the defendant entities.
The plaintiffs contend that the lack of timely information from the defendants has
prevented the plaintiffs from providing to certain potential opt-in plaintiffs notice of the Fair
Labor Standards Act claims in this case. The plaintiffs note that at least 49 of the Chief
Instructors shown on the list produced by the defendants have not received notice of the
FLSA claims at any address provided by the defendants, despite the efforts of the plaintiffs
to send mail to those addresses. Reply [#138], p. 9.
Recently, the plaintiffs filed Plaintiffs’ Motion for Class Action Certification,
Appointment of Class Counsel, and Notice Approval [#224] filed March 4, 2016. They
seek to pursue their claims of fraud, negligent misrepresentation, and civil conspiracy as a
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class action under Fed. R. Civ. P. 23. The key factual and legal issues underlying those
claims are largely the same as the key factual and legal issues underlying the FLSA
claims. Those issues include: (1) were instructors used by the defendants properly
classified as independent contractors rather than employees?; and (2) if the instructors
properly should have been classified as employees, were those employees properly paid
for the hours they worked? If the motion to certify a class action is granted, another round
of notice to potential plaintiffs will be required.
III. ANALYSIS
There is no question that my order [#110] requiring the defendants to provide
information about past and current Chief Instructors is a valid court order. There is no
question that the defendants had knowledge of the order. The defendants argue that, in
producing their list, they were in substantial compliance with the order. They argue also
that the more complete information later provided to the plaintiffs also mitigates their initial
lack of complete compliance with the order [#110].
I find and conclude that the defendants were not in substantial compliance with my
order [#110]. In their response [#128], the defendants provided some additional
information about certain Chief Instructors which was not included on the list of Chief
Instructors provided to the plaintiffs less than one month before the response [#128] was
filed. In discovery, the defendants provided additional and more complete information
about certain Chief Instructors. The defendants are required to maintain tax records with
home address information of their employees and independent contractors, but, in many
cases, the defendants failed to provide this information to the plaintiffs. These
circumstances demonstrate that the defendants likely had access to this additional
information, but did not produce it as required by my order [#110] when they produced
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their list.
Given the circumstances of this case, I conclude that the sanction described below
is the best remedy for the partial non-compliance of the defendants with my order [#110]. I
impose this sanction under Fed. R. Civ. P. 37(b)(2) as a sanction for failure to fully obey an
order to provide or permit discovery.
Based on the more complete information gathered by the plaintiffs to date, the
plaintiffs now are in a position to determine which potential opt-in plaintiffs did not receive
timely notice of their right to opt-in to this FLSA collective action due to the failure of the
defendants to provide complete information in the possession of the defendants, as
ordered by the court. Identifying the potential opt-in plaintiffs for whom notice was delayed
or denied due to the failure of the defendants to provide complete and timely information,
in response to the order [#110] of the court, will permit the court to remedy any harm so
caused.
On or before April 18, 2016, the plaintiffs may file a motion identifying potential optin plaintiffs who did not receive timely notice of this FLSA collective action due to the
failure of the defendants to provide complete information in the possession of the
defendants, as ordered by the court in its order [#110]. A response and reply will be
marshaled in the time and manner provided in D.C.COLO.LCivR 7.1(d).
If I conclude that the failure of the defendants to provide timely and accurate
information likely did, in fact, impair the ability of the plaintiffs to provide notice to certain
potential opt-in plaintiffs, then the court will grant the plaintiffs a brief additional time to
provide FLSA collective action notice, limited to the potential opt-in plaintiffs for whom
notice was delayed or prevented by the failure of the defendants to provide timely and
complete information. If such additional notice is ordered, I will order the defendants to
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pay the cost of providing such additional notice to these potential opt-in plaintiffs.
If the plaintiffs file such a motion, it will be ripe shortly after the motion for Rule 23
class certification becomes ripe. If the motion for class certification is granted, a Rule 23
notice period will be necessary. If the court provides the plaintiffs with additional time to
provide FLSA collective action notice to certain potential plaintiffs, then the Rule 23 notice
and any additional FLSA notice can and should be coordinated. If the motion for Rule 23
class certification is denied, then the plaintiff can provide only FLSA collective action notice
to the additional opt-in plaintiffs for whom such notice is necessary. This will remedy any
specific harm caused by the lack of compliance by the defendants with my order [#110].
IV. CONCLUSION & ORDERS
The record demonstrates that the defendants failed to comply substantially with my
order [#110], which required the defendants to provide to the plaintiffs “the names,
addresses, telephone numbers, and e-mail addresses of all current and former Chief
Instructors employed by any of the defendants on or after March 10, 2011, whether
designated as an employee or as an independent contractor. “ Order [#110], p. 6. The
evidence in the record shows the defendants likely had specific and relevant information in
their possession, but failed to include that information as directed in my order [#110] when
they provided information to the plaintiffs. Under Fed. R. Civ. P. 37(b)(2), I sanction the
defendants for failure to obey fully an order to provide or permit discovery, which order is
lawful and within the ability of the defendants to obey.
THEREFORE, IT IS ORDERED as follows:
1. That the Plaintiffs’ Motion for Contempt, Sanctions, and Relief From Dates
in Order Granting Motion for Conditional Certification [#115] filed April 3, 2015, is
granted in part;
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2. That under Fed. R. Civ. P. 37(b)(2), I sanction the defendants their failure to fully
obey my order [#110] to provide or permit discovery;
3. That on or before April 18, 2016, the plaintiffs may file a motion identifying
potential opt-in plaintiffs who did not receive timely notice of this FLSA collective action
due to the failure of the defendants to provide timely and complete information as ordered
by the court in its order [#110];
4. That if the plaintiffs file such a motion, a response and reply shall be marshaled
in the time and manner provided in D.C.COLO.LCivR 7.1(d);
5. That based on the motion, response, and reply, the court shall determine if the
plaintiffs will be permitted a brief additional time to provide notice to certain potential FLSA
opt-in plaintiffs;
6. That If such additional FLSA notice is ordered, the defendants shall pay the cost
of providing such additional notice to these potential opt-in plaintiffs; and
7. That otherwise, the Plaintiffs’ Motion for Contempt, Sanctions, and Relief
From Dates in Order Granting Motion for Conditional Certification [#115] filed April 3,
2015, is denied.
Dated March 30, 2016, at Denver, Colorado.
BY THE COURT:

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