Cruz Mejia et al v. Brothers Petroleum, LLC et al
Filing
161
ORDER AND REASONS denying 128 Motion to lift the limited stay.. Signed by Chief Judge Sarah S. Vance on 12/11/14. (jjs)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DANIA GISSELL CRUZ MEJIA, et. al.,
CIVIL ACTION
Plaintiffs,
NO: 12-2842
VERSUS
BROTHERS PETROLEUM, LLC, et al.,
SECTION: R(3)
Defendants.
ORDER AND REASONS
Before the Court is plaintiffs' motion to lift the limited
stay
the
Court1
imposed
on
September
3,
2014,
which
stayed
discovery owed by Imad Hamdan regarding undocumented employees.2
The Court DENIES plaintiffs' motion, because defendant Hamdan's
Fifth Amendment rights will be jeopardized if the Court lifts the
limited stay.
I.
Background
This is a "collective action" seeking damages for alleged
violations of the overtime and minimum wage provisions of the Fair
Labor Standard Act ("FLSA"). 29 U.S.C. ยงยง 206 and 207. Defendants
employed plaintiffs at various Brothers Food Mart convenience
1
This matter was previously before Judge Helen Berrigan.
After issuing the order imposing the limited stay, Judge Berrigan
recused herself and the case was reassigned to this Section. See
R. Doc. 114.
2
R. Doc. 107.
stores throughout Louisiana and allegedly failed to compensate
plaintiffs adequately during the period from November 28, 2009 to
the present.3
On July 16, 2014, Judge Berrigan conditionally certified the
collective action and defined the class as "[a]ll current and
former non-exempt, hourly employees who have been employed by
Brothers Petroleum, LLC d/b/a Brothers Food Mart or Brothers Food
Mart in the State of Louisiana during the time period of November
28, 2009 through the present."4
Judge Berrigan ordered defendants
to produce a list of "all potential opt-in plaintiffs' names, last
known
mailing
addresses,
and
email
addresses."5
Defendants
produced a partial list of employees but omitted the names and
contact
information
defendants.6
of
undocumented
workers
employed
by
Defendants then moved the Court to stay the civil
proceeding due to the United States Attorney's Office's criminal
investigation
of
defendant
undocumented workers.7
Imad
Hamdan's
alleged
hiring
of
Defendants argued that allowing discovery
to proceed concerning undocumented employees would force Mr. Hamdan
3
R. Doc. 113.
4
R. Doc. 79 at 3.
5
Id. at 8.
6
At the time the Court imposed the limited stay, only
Brothers Petroleum, LLC and Imad Hamdan, the sole owner of
Brothers Petroleum, were defendants in this action.
7
R. Doc. 88.
2
to chose between his right against self-incrimination and defending
against the allegations raised in this civil proceeding.
On
September 3, 2014, Judge Berrigan denied defendants' motion to stay
the
proceeding
in
its
entirety
but
issued
a
limited
stay.
Specifically, the Court found that a temporary and limited stay of
the outstanding discovery was appropriate until "the parameters of
any criminal investigation [are] determined."8
Accordingly, the
Court ordered that "[n]o discovery as to undocumented workers may
proceed for a period of two (2) months from the date of this order,
at which time the Court will consider appropriate motions including
a motion to reopen and/or another motion to stay, if appropriate."9
After Judge Berrigan imposed the limited stay, plaintiffs
filed
their
Second
Amended
defendants to the action.10
Complaint
and
added
forty-four
These additional defendants are not
covered by the Court's September 3, 2014 order imposing the limited
stay.
Plaintiffs now move the Court to lift the limited stay that
applies to Hamdan and Brother Petroleum, LLC.
Plaintiffs contend
that a continued stay is unwarranted because two months have passed
and defendants have not demonstrated any meaningful developments in
the criminal investigation.11 Apparently all defendants, including
8
R. Doc. 107 at 5.
9
Id. at 6 (emphasis in original).
10
R. Doc. 113.
11
R. Doc. 128-1 at 2.
3
newly added defendants, oppose the motion arguing that Hamdan and
two
other
defendants
were
recently
served
with
Grand
Jury
subpoenas.12 This ruling applies only to the parties covered by the
original stay.
II.
Discussion
When a defendant in a civil case is facing criminal charges,
a district court may, in its discretion, stay the civil action.
United States v. Kordel, 397 U.S. 1, 12 (1970); see also In re Ramu
Corp., 903 F.2d 312, 318 (5th Cir. 1990) ("The stay of a pending
matter is ordinarily within the trial court's wide discretion to
control the course of litigation, which includes authority to
control the scope and pace of discovery.").
The Fifth Circuit has
instructed that, in ruling on requests for stays of the civil side
of parallel civil/criminal proceedings, "judicial discretion and
procedural
flexibility
should
be
utilized
to
harmonize
the
conflicting rules and to prevent the rules and policies applicable
to one suit from doing violence to those pertaining to the other."
United States v. Gieger Transfer Serv., Inc., 174 F.R.D. 382, 385
(S.D. Miss. 1997) (citing Campbell v. Eastland, 307 F.2d 478, 487
(5th Cir. 1962)).
When determining whether a stay is warranted, courts consider:
(1) the extent of overlap between the criminal case and the civil
12
R. Doc. 135 at 4-5.
4
case; (2) the status of the criminal case, including whether the
defendant has been indicted; (3) the interests of the plaintiff in
proceeding expeditiously, weighed against the prejudice to the
plaintiff caused by the delay; (4) the interests of and the burden
on the defendant; (5) the interests of the courts; and (6) the
public interest.
Alcala v. Texas Webb Cty., 625 F. Supp.2d 391,
399 (S.D. Tex. 2009) (collecting district court cases in the Fifth
Circuit applying this test).
Although district courts have wide
discretion to determine whether a stay is warranted, "[e]ven
discretionary stays . . . will be reversed when they are immoderate
or of an indefinite duration."
In re Ramu Corp., 903 F.2d at 318
(internal citations omitted).
A.
Extent to Which Issues in the Civil and Criminal Cases
Overlap
The most important factor in determining whether to grant a
stay is the similarity in the issues in the civil and criminal
actions.
Dominguez v. Hartford Fin. Servs. Grp., Inc., 530 F.
Supp. 2d 902, 906-07 (S.D. Tex. 2008).
Overlapping issues in
parallel civil and criminal proceedings militate in favor of a
stay.
See United States v. ATP Oil & Gas Corp., CIV. A. No. 13-
0262, 2013 WL 6184991, at *3 (E.D. La. Nov. 26, 2013).
In
determining whether issues in civil and criminal cases are related,
courts impose a "common-sense, fact-bound analysis."
903 F.2d at 319.
5
In re Ramu,
Here, the Court is unable to determine with certainty the
extent
to
which
the
civil
case
overlaps
with
the
criminal
investigation because none of the defendants has been indicted.
See SEC v. AmeriFirst Funding, Inc., CIV. A. No. 3:07-1188, 2008 WL
866065, at *3 (N.D. Tex. Mar. 17, 2008) ("Because no indictment has
as yet been handed up against [defendant], the court cannot
determine with certainty the degree of overlap between this [civil]
action and the criminal investigation."). The few indications that
the Court does have, however, suggest that the criminal charges, if
they are forthcoming, will be directed at defendant Hamdan's
alleged practice of hiring undocumented workers.13 The scope of the
criminal proceeding thus will likely be limited to undocumented
employees. The civil proceeding, on the other hand, relates to all
of the defendants' current and former non-exempt, hourly employees,
including undocumented employees, as the FLSA applies to citizens
and undocumented workers alike.14 Although the undocumented workers
status as such is not an issue in the civil case, the information
sought
by
plaintiffs
in
this
proceeding--names
and
contact
information of undocumented workers employed by defendants--is the
13
Defendants attached as exhibits to their opposition
subpoenas addressed to defendants Imad Hamdan, Brothers
Petroleum, LLC, and Ziad Mousa requiring production on October
31, 2014 of "all accounting records of every Brothers location,
to include any handwritten payroll and/or accounting records."
R. Doc. 135-2.
14
R. Doc. 113 at 1.
6
apparent crux of the criminal investigation.
Accordingly, the
Court finds that the overlap between the civil case and the
criminal investigation weighs in favor of continuing the limited
stay.
B.
Status of the Criminal Proceeding and Defendants'
Burden
The second factor, the status of the criminal case, "is
largely linked with the fourth factor, the potential burden on
Defendant in not granting the stay." LeBouef v. Global X-Ray, CIV.
A. No. 07-5755, 2008 WL 239752, at *2 (E.D. La. Jan. 29, 2008).
When a criminal indictment has been issued, there is greater risk
of
self-incrimination,
and
"a
court
should
strongly
consider
staying the civil proceeding until the related criminal proceedings
are resolved."
Whitney Nat'l Bank v. Air Ambulance ex rel. B. & C
Mgmt., CIV. A. No. 04-2220, 2007 WL 1468417, at *3 (S.D. Tex. May
19, 2007).
Although this factor weighs most heavily in favor of a
stay when an indictment has been issued, that an indictment has not
been issued does not necessarily mean that a stay of discovery is
unwarranted.
S.E.C. v. Offill, CIV. A. No. 3:07-1643, 2008 WL
958072, at *3 (N.D. Tex. Apr. 9, 2008).
See also Brumfield v.
Shelton, 727 F. Supp. 282, 284 (E.D. La. 1989) (finding preindictment stay appropriate when a "criminal investigation . . .
parallels the ongoing civil action").
Here, although Hamdan has not been indicted, defendants have
provided evidence demonstrating that a criminal investigation into
7
Hamdan's hiring practices is underway.15
plaintiffs
would
have
Hamdan
disclose
Moreover, given that
the
names
and
contact
information of any undocumented employees, the Court finds that
Hamdan "would be burdened by civil discovery on the same issues"
that are the subject of the criminal investigation.
Bank, 2007 WL 1468417, at *3.
Whitney Nat'l
Indeed, absent a stay, Hamdan would
be forced to chose between his civil discovery obligations and his
Fifth Amendment privilege against self-incrimination.
See Doe v.
Morris, CIV. A. No. 11-1532, 2012 WL 359315, at *2 (E.D. La. Feb.
2, 2012).
Thus, while the pre-indictment status of the criminal
investigation does not counsel in favor of a complete stay, the
Court finds that the second and fourth factors weigh in favor of
continuing the limited stay.
See Waste Mgmt. of Louisiana, LLC v.
River Birch, Inc., CIV. A. No. 11-2405, 2012 WL 520660, at *4 (E.D.
La. Feb. 15, 2012) (finding pre-indictment stay appropriate because
"the criminal investigation is extremely active, and this weighs in
favor of a stay").
C.
Plaintiffs' Interest
Typically, courts require a plaintiff who opposes a stay to
demonstrate undue burden from a stay. See Whitney Nat'l Bank, 2007
WL 1468417, at *3 (citing In re Adelphia Commc'ns Sec. Litig., No.
02-1781, 2003 WL 22358819, at *4 (E.D. Pa. May 13, 2003)).
Here,
plaintiffs argue that undocumented workers will be prejudiced if
15
See supra note 12.
8
the Court continues the limited stay. First, plaintiffs argue that
because the statute of limitations on FLSA claims runs until
potential plaintiffs opt into the action, potential undocumented
plaintiffs may lose their rights to participate in this action if
the limited stay remains in effect.16 Second, plaintiffs argue that
contact information for undocumented workers quickly becomes stale
so that a prolonged stay will decrease the number of plaintiffs who
receive notice.17
As to the first argument, defendants have signed a stipulation
agreeing to toll the statute of limitations with regard to the
claims
of
undocumented
Accordingly,
workers
plaintiffs'
first
until
the
argument
stay
is
lifted.18
is
without
merit.
Plaintiffs' second argument--that potential plaintiffs may be less
likely to receive notice of this action if the limited stay is
continued--is belied by the fact that plaintiffs' proposed class
period runs from November 28, 2009 until the present.
Over five
years has already elapsed since the beginning of the proposed class
period, and the Court is not convinced that extending the limited
stay
of
discovery
will
materially
alter
the
likelihood
that
potential undocumented opt-in plaintiffs will receive notice of
16
R. Doc. 182-1 at 9.
17
R. Doc. 139-2 at 5.
18
R. Doc. 130.
9
this
action.
Accordingly,
the
Court
finds
that
plaintiffs'
interest in lifting the stay is de minimis.
D.
Interests of Court and Public
The
Court
has
an
interest
in
conducting litigation expeditiously.
judicial
economy
and
in
Alcala, 625 F. Supp.2d at
407. In addition, the "public has an interest in the resolution of
disputes with minimal delay, but only to the extent that the
integrity of the defendant's rights can be maintained."
Id.
(quoting St. Martin v. Jones, CIV. A. No. 08-1047, 2008 WL 4534398,
at *3 (E.D. La. Oct. 2, 2008)).
Here, the Court issued its
scheduling order on September 12, 2014, and trial is currently set
for June 22, 2015. Further, although the public has an interest in
the timely resolution of cases, granting a stay delays resolution
of the matter only temporarily.
Doe v. Morris, CIV. A. No. 11-
1532, 2012 WL 359315, at *2 (E.D. La. Feb. 2, 2012). The Court
finds that the court's interest and the public interest counsel in
favor of continuing the limited stay. Cf. Whitney Nat'l Bank, 2007
WL 1468417, at *3 (court's interest and public interest factors
weighed
against
granting
a
stay
when
parties
had
completed
discovery and were prepared for trial).
III. Conclusion
For the foregoing reasons, plaintiffs' motion to lift the
limited stay is DENIED.
10
IT IS FURTHER ORDERED that the limited stay imposed in the
Court's September 3, 2014 order staying defendants Imad Hamdan's
and Brother Petroleum, LLC's discovery obligations concerning
undocumented employees is hereby continued for a period of three
(3) months from the date of this order, at which time the Court
will consider appropriate motions to lift or continue the stay.
To the extent that other defendants believe their Fifth
Amendment
rights
are
implicated
in
this
proceeding,
those
defendants may seek appropriate relief based upon a particularized
showing.
11th
New Orleans, Louisiana, this _____ day of December, 2014.
_____________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
11
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?