Sander v. Light Action Inc.
Filing
57
MEMORANDUM OPINION re motions for summary judgment. Signed by Judge Leonard P. Stark on 3/21/12. (ntl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
LESLIE L. SANDER,
Plaintiff,
v.
Civ. No. 10-684-LPS
LIGHT ACTION, INC.,
Defendant.
Jeffrey K. Martin, Esquire, of MARTIN & ASSOCIATES, P.A., Wilmington, DE.
Attorney for Plaintiff.
Scott A. Holt, Esquire and Margaret M. DiBianca, Esquire, of YOUNG CONAWAY
STARGATT & TAYLOR, LLP, Wilmington, DE.
Of Counsel: Jonathan H. Walker, Esquire, of MASON, MASON, WALKER & HEDRICK, P.C.,
Newport News, VA.
Attorneys for Defendant.
MEMORANDUM OPINION
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March 21, 2012
Wilmington, Delaware
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Pending before the Court are: (i) Plaintiffs Motion for Partial Summary Judgment for
Counts I and II of the Amended Complaint (Docket Item ("D.I.") 45 and, hereinafter, the "Partial
Summary Judgment Motion"), filed by plaintiff, Leslie L. Sander ("Plaintiff'); (ii) Defendant's
Motion for Summary Judgment (D.I. 47 and, hereinafter, the "Summary Judgment Motion"),
filed by defendant Light Action, Inc. ("Light Action" or "Defendant"); and (iii) Plaintiffs
Motion for Leave of Court to File a Second Amended Complaint (D.I. 53 and, hereinafter, the
"Motion to Amend"). For the reasons discussed below, the Court will (i) deny Plaintiffs Partial
Summary Judgment Motion; (ii) grant Defendant's Summary Judgment Motion; and (iii) deny
Plaintiffs Motion to Amend.
BACKGROUND
Plaintiff filed the complaint ("Complaint") in this action on August 12, 2010 against her
former employer, Defendant Light Action, a production company. (D.I. 1) Light Action
answered the Complaint on September 3, 2010. (D.I. 4) Plaintiffhas at all times been
represented by counsel in this matter.
Plaintiff alleges non-payment of overtime wages, in violation of the Fair Labor Standards
Act (the "FLSA"), as amended, 29 U.S.C. § 201 et. seq., as well as applicable U.S. Department
of Labor regulations, including 29 C.F .R. § 541.103 et. seq. Specifically, the Complaint alleges
that, as a Light Action manager, between May 2007 and May 2010, Plaintiff often worked in
excess of forty (40) hours during her normal work week, without being compensated for
overtime and work performed during her meals and other mandatory work periods. Plaintiff
alleges that she should have been compensated at a rate of one and one-half times her regular rate
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(i.e., time-and-one-half) for all time worked in excess of forty (40) hours per week during the
three year period.
Plaintiff alleges that the deficiencies in her compensation were a product of Defendant's
misclassification of her as an "exempt" employee; that is, an employee who does not fall within
the overtime requirements of the FLSA and applicable regulations. Plaintiff further contends that
Light Action's practices "destroyed any exemption that may have applied to Plaintiff' when
Defendant specifically mandated that she abide by certain policies and procedures. 1 (D .I. 1 ~ 18)
In addition to seeking compensation, Plaintiff seeks liquidated damages as well as attorney's fees
and costs.
On January 24, 2011, Plaintiff was granted leave to amend her Complaint, and on that day
she filed her Amended Complaint. (D.I. 12) Light Action answered the Amended Complaint on
February 7, 2011. (D.I. 16)
In the Amended Complaint, Plaintiff alleges that she "recently recognized a retaliatory
fact pattern while reviewing her time at Light Action;" she requested the opportunity to
18.
Defendant necessarily destroyed any exemption that may
have applied to Plaintiff when it specifically required her to adhere
to Defendant's policies and procedures as follows:
a.
b.
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work specifically from 9:00 a.m. to 6:00 p.m. each work
day; [and]
c.
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report to work each day no later than 9:00 a.m. with the
expectation that Plaintiff would work a minimum of nine
(9) hours per day, five (5) days per week;
report all hours worked to management.
(D.I. 1 ~ 18) (emphasis in original)
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"incorporate this information into the Complaint." (D .I. 7 at 1; see also D .I. 12) Thus, the
Amended Complaint includes a state law claim of discrimination/retaliation, alleging Defendant
"intentionally and maliciously discriminated against her in retaliation for her complaints, in
violation of 19 Del. C. § 726." (D.I. 12 ~ 42; see also id
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27-31, Count III) Asserting that
Light Action terminated her employment "with discriminatory motive" and only "after she
sought legal counsel and began questioning Light Action's exemption policies," Plaintiff
contends that Defendant's reasons for termination were purely "pretextual." (D.I. 12
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42-43)
On December 12, 2011, Plaintiff filed her Partial Summary Judgment Motion, seeking
summary judgment with respect to her claimed entitlement to overtime compensation. (D.I. 45;
see also D.I. 46; D.I. 52) Plaintiff asserts that, during her tenure with Light Action from March
1, 2007 to May 26, 2010, she did not receive all of the overtime compensation she had earned as
an hourly employee. (See D .I. 46 at 1) Plaintiff argues that because Defendant made various
deductions from Plaintiffs compensation, Plaintiff must be deemed an "hourly," as opposed to a
"salaried," employee. (!d. at 2) It follows, according to Plaintiff, that as a non-salaried, hourly
employee, she was entitled to be paid overtime, pursuant to the FLSA. Thus, Plaintiff seeks
summary judgment on Counts I and II of her Amended Complaint.
At the same time, Light Action filed its Summary Judgment Motion, seeking judgment on
all counts, on the grounds that there can be no genuine dispute that Plaintiff was exempt from the
overtime requirements of the FLSA. (See D.I. 48; D.I. 54) Specifically, Defendant claims:
(i) "Plaintiff admits that her position satisfied the primary-duties test ofthe FLSA;" (ii) "Plaintiff
was paid on a salary basis in accordance with the FLSA;" and (iii) "Plaintiffs exempt status
could not have been destroyed by virtue ofthe three policies upon which she relies." (D.I. 48 at
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2; see also D.I. 54 at 1-2) Light Action further contends that Plaintiffs Count III, which
"purports to be brought under the Delaware Discrimination in Employment Act ('DDEA'),"
instead "expressly relies on a provision" of Delaware's Persons With Disabilities Employment
Protections Act. (D.I. 48 at 1)
Additionally, on January 13, 2012, upon completion of the briefing on the two summary
judgment motions, Plaintiff filed a motion for leave to file a second amended complaint. 2 (D.I.
53) In support of her Motion to Amend, Plaintiff explains that, at paragraph 18 of her Amended
Complaint, she alleges that Defendant "destroyed any exemption claimed by Defendant pursuant
to the [FLSA]." (D.I.
53~
2) Plaintiff offers that "[w]hen this matter was initially filed and
through early discovery, Plaintiff believed that the basis for her overtime claim was that
Defendant carefully monitored her work hours and required Plaintiff to track and report her hours
worked." (!d.
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3)
As discovery progressed, a new reason for Plaintiffs entitlement to overtime
became apparent. Namely, after Defendant produced the requested pay data,
analysis of the pay calculations revealed that Defendant was making deductions
from her guaranteed $60,000 base. The deductions were not for complete days
but for part days.
(!d.
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4) Plaintiff explains that "[u]nder the FLSA, employees who may be otherwise exempt but
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The amendment proposes to add the following "partial-day deduction" allegations:
While Defendant agreed to pay Plaintiff a base salary of $60,000 (plus additional
compensation for shows and overtime to 45 hours), Defendant improperly
deducted time and compensation from her base salary when Plaintiff failed to
work at least 40 hours per week. Partial-day deductions were made from
Plaintiffs base salary.
(D.I. 53 at (proposed) 2d Am. Compl. ~ 18(d))
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whose salary is reduced by partial-day deductions lose their exempt status and become
non-exempt employees eligible for overtime compensation."
(!d.~
5)
Plaintiff emphasizes that Defendant would not suffer prejudice from her proposed
amendment, in part because "[t]he partial-day deduction has been discussed ... as the
predominant issue in this case since June 2011."
(!d.~
6; see also D.I.
52~~
2, 4 (stating while
"this issue has been the predominant issue in this case," now "Plaintiff has shifted her focus to
the partial-pay deduction"); D.l.
56~
4 ("[P]artial-day deduction/destruction of the exemption ...
has been the predominant issue in this case since ... Plaintiffs deposition on June 28, 2011."))
Defendant opposes the proposed second amended complaint as futile and prejudicial to it. (See
generally D.l. 55)
LEGAL STANDARDS
A.
Summary Judgment
"The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter oflaw." Fed. R.
Civ. P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine
issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586
n.10 (1986). A party asserting that a fact cannot be- or, alternatively, is- genuinely disputed
must be supported either by citing to "particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or declarations, stipulations
(including those made for the purposes of the motions only), admissions, interrogatory answers,
or other materials," or by "showing that the materials cited do not establish the absence or
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presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to
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support the fact." Fed. R. Civ. P. 56(c)(l)(A) & (B). If the moving party has carried its burden,
the nonmovant must then "come forward with specific facts showing that there is a genuine issue
for trial." Matsushita, 475 U.S. at 587 (internal quotation marks omitted). The Court will "draw
all reasonable inferences in favor of the nonmoving party, and it may not make credibility
determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
133, 150 (2000).
To defeat a motion for summary judgment, the non-moving party must "do more than
simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475
U.S. at 586-87; see also Podobnik v. US. Postal Service, 409 F.3d 584, 594 (3d Cir. 2005)
(stating party opposing summary judgment "must present more than just bare assertions,
conclusory allegations or suspicions to show the existence of a genuine issue") (internal
quotation marks omitted). However, the "mere existence of some alleged factual dispute
between the parties will not defeat an otherwise properly supported motion for summary
judgment;" a factual dispute is genuine only where "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
24 7-48 ( 1986). "If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted." !d. at 249-50 (internal citations omitted); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986) (stating entry of summary judgment is mandated "against a
party who failed to make a showing sufficient to establish the existence of an element essential to
that party's case, and on which that party will bear the burden of proof at trial").
B.
Amendment
Rule 15(a)(2) ofthe Federal Rules of Civil Procedure provides that after a responsive
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pleading has been filed, a party may amend its pleading "only with the opposing party's written
consent or the court's leave," and "[t]he court should freely give leave when justice so requires."
The decision to grant or deny leave to amend lies within the discretion of the court. See Foman
v. Davis, 371 U.S. 178, 182 (1962); In re Burlington Coat Factory Sees. Litig., 114 F.3d 1410,
1434 (3d Cir. 1997). The Third Circuit has adopted a liberal approach to the amendment of
pleadings. See Dole v. A reo Chem. Co., 921 F.2d 484, 487 (3d Cir. 1990). In the absence of
undue delay, bad faith, or dilatory motives on the part of the moving party, the amendment
should be freely granted, unless it is futile or unfairly prejudicial to the non-moving party. See
Foman, 371 U.S. at 182; In re Burlington, 114 F.3d at 1434.
An amendment is futile if it is frivolous, fails to state a claim upon which relief can be
granted, or "advances a claim or defense that is legally insufficient on its face." Koken v. GPC
Int'l, Inc., 443 F. Supp. 2d 631,634 (D. Del. 2006). Delay alone is an insufficient reason to deny
leave to amend, but there are grounds to deny amendment if the delay is coupled with either an
unwarranted burden on the court or undue prejudice to the non-moving party (as a result of the
amendment). See Cureton v. Nat'l Collegiate Athletic Ass 'n, 252 F.3d 267, 273 (3d Cir. 2001).
"[P]rejudice to the non-moving party is the touchstone for the denial of the amendment."
Bechtel v. Robinson, 886 F.2d 644,652 (3d Cir. 1989) (internal quotation marks omitted). To
establish prejudice, the non-moving party must make a showing that allowing the amended
pleading would (1) require the non-moving party to "expend significant additional resources to
conduct discovery and prepare for trial;" (2) "significantly delay the resolution of the dispute;" or
(3) "prevent [a party] from bringing a timely action in another jurisdiction." Long v. Wilson, 393
F.3d 390, 400 (3d Cir. 2004); see also Cureton, 252 F.3d at 273 (explaining party may suffer
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undue prejudice if proposed amendment causes surprise or results in additional discovery,
additional costs, or additional preparation to defend against new facts or theories alleged).
"Thus, while bearing in mind the liberal pleading philosophy of the federal rules," it is also true
that "substantial or undue prejudice to the non-moving party is a sufficient ground for denial of
leave to amend." Cureton, 252 F.3d at 273.
DISCUSSION
A.
Summary Judgment
1.
Compensation and Exemption
Defendant contends that Plaintiff was a manager of Light Action who was compensated
on a salary basis. Thus, Defendant continues, Plaintiff is not entitled to overtime compensation.
In Defendant's view, although Plaintiff was paid premium wages for performing work duties at
shows in the field ("gigs"), and sometimes was paid in excess of her base salary, these facts do
not take her outside the FLSA exemption, nor do they alter the fact that she received a minimum
guaranteed salary of $60,000.
Generally, the FLSA requires an employer to compensate certain of its employees "at a
rate not less than one and one-half times the regular rate" for each hour worked in excess of forty
(40) hours during a work week. 29 U.S.C. § 207(a)(l). However, the FLSA also provides
certain exemptions from its overtime requirements, including for individuals who are "employed
in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(l).
An individual employed in a 'bona fide administrative capacity' is
someone: (1) Compensated on a salary or fee basis at a rate of not
less than $455 per week ... exclusive of board, lodging or other
facilities; (2) Whose primary duty is the performance of office or
non-manual work directly related to the management or general
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business operations of the employer or the employer's customers;
and (3) Whose primary duty includes the exercise of discretion and
independent judgment with respect to matters of significance.
Swartz v. Windstream Commc'ns, Inc., 429 Fed. App'x. 102, 104 (3d Cir. 2011); see also 29
C.P.R.§ 541.200.
The Court concludes, based on the record provided, that no reasonable factfinder could
find that Plaintiff was not exempt under the FLSA as being employed in a bona fide
administrative capacity. Plaintiff concedes that her position- Warehouse & Rental Managersatisfies parts (2) and (3) of the test set forth above; i.e., the "primary duty" components of the
test. (See D.l. 48, June 28, 2011 Pl. Depo., at A82-A83; D.I. 46 at ,-r 4 ("For the purposes of this
Motion, Plaintiff does not dispute that her job duties and responsibilities were consistent with an
executive or administrative exemption if she had been paid a salary.")) The issue is whether
Plaintiff was also compensated "on a salary or fee basis."
The record demonstrates no genuine issues of material fact as to whether Plaintiff was
compensated by Defendant on a "salary basis." An employee is "compensated on a salary basis"
if"the employee regularly receives each pay period on a weekly, or less frequent basis, a
predetermined amount constituting all or part of the employee's compensation, which amount is
not subject to reduction because of variations in the quality or quantity of the work performed."
29 C.F.R. § 541.602. Here, Plaintiff was paid a guaranteed base salary of$60,000 per year (and
she could earn additional compensation). (See D.l. 48 at 4; D.l. 48 at AI, 2/12/07 Meeting Notes
of Paula DeLuca (referencing three pay components); id. at A238-39, Decl. of Scott Humphrey
("Humphrey Decl.") (discussing Plaintiff's base salary); id. at Al82 (discussion by Ms. DeLuca
of Plaintiff's "guaranteed base salary of$60,000 a year with the opportunity to earn more"); id. at
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A183-86 (same); id. at A225, Decl. of Paula DeLuca ("DeLuca Decl."),
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4, 9 (same))
This, too, is essentially undisputed. In her own briefing in connection with her Partial
Summary Judgment Motion, Plaintiff concedes that her compensation was made up of three
components: "a mix of base pay of$60,000.00; payment for 25 shows for $9,712.50; and 3 hours
of overtime per week for $4,680.00." (D.I. 46 ~ 2) Other filings, and discovery responses,
further demonstrate Plaintiffs acknowledgment of receiving at least a base of$60,000. (D.I. 48
at A 75 ("Plaintiff received at least $60,000.00 in a gross amount per year during her tenure with
Defendant."); D.I. 46 Ex.l (Depo. Ex. 7 of Paula DeLuca); D.l.
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4 (discussing "analysis of
the pay calculations," including Plaintiffs "guaranteed $60,000 base"))
Plaintiffs contention is that even assuming she was at one point in exempt status, that
status was lost by virtue of her being required to work at certain times and report her hours. (See
Am. Compl.
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18-21; see also D.I.
50~
1) The Court, however, agrees with Defendant that
Plaintiffs exempt status could not have been destroyed by virtue of the three policies upon which
she relies. (See supra n.1; see also D.I. 48 at 9-11; D.I.
50~~
1-2) An employer may require
exempt employees to track and report their time, to confirm they have worked the requisite
number of hours; an employer may also direct exempt employees to work a particular schedule
and/or a minimum number of daily or weekly hours- all without compromising the employees'
exempt status. See, e.g., Guerrero v. J W. Hutton, Inc., 458 F.3d 830, 836 (8th Cir. 2006)
("[T]he regulations do not prohibit employers from requiring employees to work a specific
number of hours per week and track their time to ensure they have worked the requisite number
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ofhours."). 3
Other regulations pose additional obstacles to Plaintiffs position. See 29 C.F.R.
§541.604(b) (providing employer may compute exempt employee's earnings "on an hourly, a
daily or a shift basis, without losing the exemption or violating the salary basis requirement, if
the employment arrangement also includes a guarantee of at least the minimum weekly required
amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a
reasonable relationship exists between the guaranteed amount and the amount actually earned");
29 C.F.R. § 541.604(a) ("An employer may provide an exempt employee with additional
compensation without losing the exemption or violating the salary basis requirement, if the
employment arrangement also includes a guarantee of at least the minimum weekly-required
amount paid on a salary basis."). There is simply no basis in the record to make any finding
other than that Plaintiff was paid a guaranteed base of $60,000 annually.
Although not entirely clear, it appears that Plaintiff also seeks summary judgment- and
opposes Defendant being awarded summary judgment - on the theory that her exempt status was
lost as a result of partial-day deductions. If so, the record is not sufficient to support a finding for
Plaintiff on this theory either. Plaintiff has identified nine weeks (out of 156) in which she
claims that improper deductions were made. (D.I. 46
at~
5) Defendant explains in careful detail
3
See also, e.g., Whisman v. Ford Motor Co., 157 Fed. App'x 792, 795 (6th Cir. 2005)
(finding employees were exempt even though employer issued memorandum requiring all
salaried employees to swipe identification badges through card reader so their time-sheets could
be audited against card reader reports); Renfro v. Ind. Mich. Power Co., 370 F.3d 512, 516 (6th
Cir. 2004) (rejecting argument employees were not exempt because they were required to
"account for at least 40 hours of work each week," "make up for partial-day absences either by
working extra hours or by taking vacation time or paid time off," or because employer exercised
"control[] [over] their work schedules and d[id] not permit them to come and go as they
please[d]"); Douglas v. Argo-Tech Corp., 113 F.3d 67,71 (6th Cir. 1997) (rejecting argument
that keeping track oftime with time clock for record-keeping purposes precluded application of
exemption).
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how the records relied on by Plaintiff do not show any improper deductions, including any
deductions that would result in loss of exempt status, being made. (D.I. 50 at 3-9) On this
record, the Court does not find any genuine disputes of material fact.
Accordingly, the Court will grant Defendant's Motion for Summary Judgment.
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2.
Retaliation
Defendant is entitled to summary judgment on Plaintiffs claim for retaliation as well.
Count III of the Amended Complaint relies on a provision of Delaware's Persons With
Disabilities Employment Protections Act. (See D.l. 12 ~ 41) But Plaintiffhas not alleged that
she is a "person with a disability."4 (See D.l. 48 at 11) To the contrary, she has admitted that she
is not such a person. (See D.l. 46 at A141-B ("Q .... You don't have any kind of handicap or
disability that prevents you in any way from doing ... what you every day, major life activities?
A. No.")) Plainly, no reasonable factfinder could find for Plaintiff on her state-law retaliation
claim.
In her briefing, Plaintiff now asks the Court to read Count III as alleging retaliation due to
her FLSA claim, even though it is not pled as such. (D.I. 49 ~ 2) The Court is unwilling to do
so. In any event, the Court agrees with Defendant, who writes:
Even if the Court were to redraft the claim as one under an entirely
different law (federal wage statute instead of state disability
statute), and did so by adding allegations that directly contradict
the otherwise undisputed evidence already in the record (including
Plaintiffs own testimony), and read Paragraph 42(a) [of the
Amended Complaint] as asserting a causal connection and a
protected activity, Plaintiffs FLSA retaliation claim still would fail
because she has failed to proffer any evidence for a jury to find that
the reason[ s] provided by Defendant for terminating Plaintiff were
4
See 19 Del. C.§ 722(4) (defining "Person with a disability").
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a mere pretext for unlawful retaliation.
(D.I. 54 at 6) Plaintiffs affidavit, under the circumstances, comes too late to create a genuine
dispute of material fact. See generally Hackman v. Valley Fair, 932 F.2d 239,241 (3d Cir. 1991)
("When, without a satisfactory explanation, a non-movant's affidavit contradicts earlier
deposition testimony, the district court may disregard the affidavit in determining whether a
genuine issue of material fact exists.").
Accordingly, the Court will grant Defendant summary judgment on Count III.
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B.
Amendment
The Court will also deny Plaintiffs Motion to Amend, by which she seeks leave to file a
Second Amended Complaint to allege that she lost her exempt status as a result of deductions
from her base salary. Although unclear, it seems that the only purpose for seeking amendment is
to make clear that Plaintiff is alleging violations of the FLSA. (D .I. 56 at ~ 3) The Court has
read the Amended Complaint as raising such allegations, and has considered the record with
respect to such allegations in connection with evaluating the summary judgment motions. Thus,
there is no need for a Second Amended Complaint.
In the alternative, to the extent the Second Amended Complaint would add something
new to the instant case, the Court denies the request for amendment as an exercise of its
discretion. The Court has "considerable discretion" in entertaining such a request; a sufficient
ground for denial is present where amendment would result in "substantial or undue prejudice to
the non-moving party." Cureton, 252 F.3d at 273, 274. This is particularly true in cases where
"no 'reasonable explanation' exist[s] to overlook the delay." See, e.g., id. at 274.
Here, in addition to discovery and summary judgment already being completed, the
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parties are within two weeks of the pretrial conference (April 5, 2012) and there are less than six
weeks until trial (May 3, 2012). It is too late- and too prejudicial and burdensome to Defendant,
as well as disruptive to the Court -to permit amendment at this point. See generally Carey v.
Beans, 500 F. Supp. 580, 582 (E.D. Pa. 1980), aff'd 659 F.2d 1065 (3d Cir. 1981) (table)
("[W]here plaintiff files a motion to amend after defendant has moved for summary judgment the
motion to amend will not be granted unless the party seeking amendment can show not only that
the proposed amendment has substantial merit, but also come forward with substantial and
convincing evidence supporting the newly asserted claim.") (internal citations and quotation
marks omitted).
CONCLUSION
For the reasons set forth above, the Court will (i) deny Plaintiffs Partial Summary
Judgment Motion, (ii) grant Defendant's Summary Judgment Motion, and (iii) deny Plaintiffs
Motion to Amend. An appropriate Order will be entered.
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