Cruz Mejia et al v. Brothers Petroleum, LLC et al

Filing 284

ORDER AND REASONS: As stated herein, Defendants' 264 Motion to Extend the Stay is GRANTED. Signed by Judge Sarah S. Vance on 7/30/2019. (Reference: 12-02842)(mm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DANIA GISELLE CRUZ MEJIA, ET AL.

CIVIL ACTION

VERSUS

NO. 12-2842
c/w NO. 13-4831

BROTHERS PETROLEUM, LLC, ET AL.

SECTION “R” (3)

ORDER AND REASONS
Before the Court are: (1) defendants’ motion to extend the stay in this
case,1 and (2) defendants’ objections to plaintiffs’ requests for discovery.2
The Court extends the stay in this case except as to document discovery to
which neither party has objected.

I.

BACKGROUND
This is a collective action lawsuit seeking damages for alleged

violations of overtime and minimum wage provisions of the Fair Labor
Standards Act (FLSA). 29 U.S.C. §§ 206, 207. Defendants are a network of
convenience stores operating under the name “Brothers Food Mart,” and the
owners of the businesses—Imad Faiez Hamdan, Abdel Raoyf Mousa, and

1
2

R. Doc. 264.
R. Doc. 275.

Ziad Mousa. Plaintiffs allege that they were employed as cooks, cashiers,
store operators, and similar positions at the convenience stores, and that
they worked between fifty and eighty hours per week but were not paid
overtime wages. 3
On July 16, 2014, Judge Helen Berrigan conditionally certified the
plaintiffs to proceed as a collective action and requested a full list of opt-in
plaintiffs.4

On August 5, 2014, defendants moved to stay all proceedings

because defendants had become aware that the U.S. Attorney’s Office was
conducting a criminal investigation into defendant Imad Hamdan’s alleged
hiring of undocumented workers.5 On August 15, 2014, before the motion to
stay was fully briefed, defendants produced a partial list of employees who
worked for Hamdan at the Brother Food Mart convenience stores. 6 Hamdan
invoked his Fifth Amendment right against self-incrimination “with respect
to the identity of any additional opt-in plaintiffs.”7 On September 3, 2014,
Judge Berrigan imposed a limited stay on the proceedings. 8 She ordered

R. Doc. 205 at 10-11.
R. Doc. 79.
5
R. Doc. 88.
6
R. Doc. 95-1. This list included only potential plaintiffs who worked
for Hamdan. Plaintiffs added the Mousas as defendants in an amended
complaint filed on September 11, 2014. See R. Doc. 113. Thus, plaintiffs were
never given a list of Mousa employees.
7
Id.
8
R. Doc. 107.
2
3

4

defendants to produce a full list of all documented workers, but she stayed
discovery as to any undocumented workers.9
On September 12, 2014, the case was reassigned to this Section. 10 The
Court extended the partial stay on December 11, 2014,11 and again on June
12, 2015.12 On September 9, 2015, the Court converted the partial stay into
a complete stay because of the active criminal investigation and close
connection between the civil and criminal cases.13 Between September 3,
2014, when the limited stay was imposed, and September 9, 2015, when the
complete stay was imposed, plaintiffs were free to conduct discovery as to
the documented workers, and several plaintiffs opted into the collective
action.

Following the Court’s originally imposed complete stay, it has

extended the stay three times due to the continuing active criminal
investigation. 14
On March 29, 2019, the government issued an indictment naming
Hamdan and Ziad Mousa. Shortly thereafter, defendants filed the instant
motion to extend the stay on the basis of the indictment. 15 On April 23, 2019,

9
10
11
12
13
14
15

Id. at 6.
R. Doc. 114.
R. Doc. 161.
R. Doc. 203.
R. Doc. 211.
R. Doc. 233; R. Doc. 249; R. Doc. 259.
R. Doc. 264.
3

the Court held a status conference, at which the Court raised the possibility
of the parties’ agreeing to limited document discovery pertaining to
documented workers in order to alleviate potential prejudice to plaintiffs
given the extended length of the stay. To this end, the Court ordered
plaintiffs to identify the materials that they were seeking from defendants. 16
It ordered the defendants to confer with Hamdan’s and Ziad Mousa’s
criminal attorneys and brief their position on the disclosure of the requested
materials. 17 The Court also ordered defendants to produce a list of all
documented workers that had not yet been disclosed to plaintiffs.18
On May 9, 2019, defendants filed objections to plaintiffs’ requested
materials. 19 Plaintiffs have responded to the objections. 20 They also oppose
the defendants’ motion to extend the stay. 21

II.

LEGAL STANDARD
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

16
17
18
19
20
21

R. Doc. 273.
Id.
Id.
R. Doc. 274.
R. Doc. 279.
R. Doc. 266.
4

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 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. Tex. Webb Cty., 625 F. Supp. 2d 391, 399 (S.D. Tex. 2009)
(collecting district court cases in the Fifth Circuit applying this test). Of
these, the first factor is the most important. Dominguez v. Hartford Fin.
Servs. Grp., Inc., 530 F. Supp. 2d 902, 907 (S.D. Tex. 2008). Although
5

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).

III. DISCUSSION
Defendants request that the Court extend the complete stay in this
case. The Court finds that such an extension is warranted because many of
the same conditions that formed the basis for the Court’s initial decision to
impose a stay still exist, and the issuance of an indictment has only
strengthened the basis for the stay.
Under the first Alcala factor, there is significant overlap between the
criminal case and the civil case. For example, the allegations that Hamdan
and Mousa failed to withhold taxes and underreported their employees’
income are closely connected to the civil allegations that defendants
underpaid their employees by failing to pay overtime wages. Further, there
is a significant likelihood that key witnesses—such as Hamdan, Mousa, and
the store managers 22—would assert their Fifth Amendment rights to avoid

Although the store managers are not included in the current
indictment, the allegations in the indictment refer multiple times to actions
6
22

possible criminal exposure. A party claiming a Fifth Amendment privilege
can constitute a “special circumstance” in which a stay is necessary “to
prevent a party from suffering substantial and irreparable prejudice.” SEC
v. First Fin. Grp. of Tex. Inc., 659 F.2d 660, 668 (5th Cir. 1981). When a
significant portion of questions posed to a defendant would likely result in
the defendant’s asserting his Fifth Amendment rights, this weighs heavily in
favor of a stay. Dominguez v. Hartford Fin. Servs. Grp., Inc., 530 F. Supp.
2d 902, 907 (S.D. Tex. 2008). The Court cannot avoid this problem by
requiring the witnesses to testify under a protective order. See Andover Data
Servs., a Div. of Players Computer, Inc. v. Statistical Tabulating Corp., 876
F.2d 1080, 1084 (2d Cir. 1989) (holding that “a non-consenting witness may
not be forced to answer potentially incriminating questions in reliance upon
[a protective] order” because “the protections of a Rule 26(c) order simply
are not as ‘certain’ as the protections of either the fifth amendment or a
statutory grant of use immunity”). The first factor, the most important,
therefore weighs heavily in favor of a stay.
Under the second factor, the recent return of a criminal indictment
requires that the Court “strongly consider staying the civil proceedings until

taken by store managers. The managers thus face a substantial threat of
future criminal proceedings.
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the related criminal proceedings are resolved.” Whitney Nat. Bank v. Air
Ambulance ex rel. B & C Flight Mgmt., Inc., No. 04-2220, 2007 WL 1468417,
at *3 (S.D. Tex. May 18, 2007); see also Cazaubon v. MR Precious Metals,
LLC, No. 14-2241, 2015 WL 4937888, at *3 (E.D. La. Aug. 17, 2015) (finding
that a stay is more likely to be necessary after an indictment is issued because
“there is greater risk of self-incrimination”). Skipping to the fourth factor for
the moment, a stay is necessary when, as here, a defendant must choose
between exercising his Fifth Amendment rights and jeopardizing his defense
in a civil suit. Doe v. Morris, No. 11-1532, 2012 WL 359315, at *2 (E.D. La.
Feb. 2, 2012).
Finally, under the fifth and sixth factors, the Court has an interest in
adjudicating this dispute efficiently. State Farm Lloyds v. Wood, No. 06503, 2006 WL 3691115, at *3 (S.D. Tex. Dec. 12, 2006). A stay serves this
goal because it allows the Court to avoid the lengthy discovery disputes
prompted by requiring the defendants to object individually to every
document request and question that implicates their Fifth Amendment
rights. Further, “[t]he 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.” Doe, No. 11-1532, 2012 WL 359315,
at *2.
8

Plaintiffs argue that, under the third, fifth, and sixth Alcala factors,
plaintiffs are prejudiced, and the public interest is not served by extending
the stay because this case has already been stayed for multiple years. 23 But
a “plaintiff [must] establish more prejudice than simply a delay in his right
to expeditiously pursue his claim.” State Farm Lloyds, No. 06-503, 2006
WL 3691115, at *2. Similarly, the public interest in proceeding expeditiously
is outweighed by the need to protect the defendants’ constitutional rights.
Plaintiffs have asserted additional prejudice because potential opt-in
plaintiffs may move or become harder to contact over time. 24 But plaintiffs
have already had several workers opt-in to this litigation. For those workers
who have not yet received official notice, their claims have been tolled. 25
Ultimately, even if plaintiffs suffer some prejudice, this harm is
subordinate to the Court’s need to protect defendants’ Fifth Amendment
rights.

See Volmar Distribs., Inc. v. N.Y. Post Co., 152 F.R.D. 36, 40

(S.D.N.Y. 1993) (recognizing that a stay “will result in inconvenience and
delay to plaintiffs” but holding that “under settled authority the Fifth
Amendment is the more important consideration.”). Now that an indictment
has been issued, the requirements of the Speedy Trial Act will ensure that the

23
24
25

R. Doc. 266 at 5-6.
Id. at 5.
See R. Doc. 255.
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criminal action proceeds to its conclusion without unnecessary delay.
Plaintiffs’ prejudice is also mitigated by the agreement between the parties
to conduct limited discovery to the extent possible before the conclusion of
the criminal proceedings.
The Court finds that a stay is necessary to protect the defendants’ right
to a fair trial in the criminal case. The Alcala factors therefore weigh in favor
of a stay, which is the only way to ensure that defendants’ rights are
protected. See State Farm Lloyds, No. 06-503, 2006 WL 3691115, at *3
(“[T]he public’s interest in the integrity of the criminal case is entitled to
precedence over the civil litigant.” (quoting Javier H. v. Garcia-Botello, 218
F.R.D. 72, 75 (W.D.N.Y. 2003))).
A.

Limited Discovery by Agreement

At the Court’s suggestion, the parties have agreed to conduct limited
document discovery, which will relate only to issues outside the scope of the
criminal case, to help alleviate the burden to plaintiffs caused by the length
of the stay. See Campbell v. Eastland, 307 F.2d 478, 487 (5th Cir. 1962)
(stating that, when appropriate, “the trial judge should use [her] discretion
to narrow the range of discovery” for civil proceedings in which a defendant
is the subject of a criminal investigation); see also United States v. Parcels
of Land, 903 F.2d 36, 44 (1st Cir. 1990) (“[S]o long as a district court
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attempts to accommodate a claimant’s fifth amendment interests, the nature
and extent of accommodation should be left primarily to that court’s
discretion.”).

To this end, plaintiffs requested thirteen categories of

documents from defendants after the status conference. These are: (1)
payroll summaries that show hours worked and amounts paid to employees
by the week; (2) check stubs; (3) cancelled paychecks; (4) receipts for cash
payments; (5) receipts for any other payments; (6) schedules for cashiers,
operators, and cooks; (7) timesheets and clock-in and -out records; (8) W2
forms; (9) any other documents showing payments made or time worked for
cashiers, operators, and cooks; (10) a list identifying all non-exempt hourly
documented

cashiers,

operators,

and

cooks;

(11)

communications

concerning documented cashiers’, operators’, and cooks’ hours worked or
compensation; (12) training, orientation, and interview documents
concerning the hours worked by documented cashiers, operators, and cooks;
and (13) policies, practices, and procedures regarding documented cashiers’,
operators’, and cooks’ timekeeping and compensation, including business
expenses,

reimbursements,

benefits,

commissions. 26

26

See R. Doc. 275 at 1-2.
11

deductions,

bonuses,

and

Defendants have objected to five of these document categories. These
are: (4) receipts for cash payments; (5) receipts for other payments; (10) a
list identifying all non-exempt hourly documented workers; (12) training,
orientation, and interview documents; and (13) policies, practices, and
procedures regarding timekeeping and compensation.27 Defendants object
to producing receipts for cash and other payments because these receipts
outside of the official payroll could indicate that the defendants made
payments in cash that they did not report for tax purposes, or that they made
payments to undocumented workers.28 Defendants object to producing a list
of documented workers employed by the Mousa defendants because they
argue that the list could serve as an admission that other hourly workers not
included on the list were undocumented. 29 Defendants object to producing
training materials and workplace policies and procedures because they argue
that, to the extent that defendants used different documents to train and
interview documented workers and undocumented workers, producing the
materials would be an admission of the existence of undocumented
workers. 30

27
28
29
30

Id. at 2-3.
Id. at 2.
Id. at 4.
Id. at 3.
12

The Court has authorized plaintiffs to proceed with discovery only to
the extent that this discovery does not overlap with the criminal proceedings.
For the reasons pointed out by defendants in their objections, the Court finds
that disclosing these documents before the conclusion of the criminal case
could affect defendants’ right to a fair criminal trial or hinder their ability to
defend themselves in the civil case. The Court therefore sustains defendants’
objections. The parties shall promptly exchange the other categories of
documents. If documents or copies of documents in these categories are not
currently in defendants’ possession because they have been turned over to
the government, defendants shall produce these documents as soon as the
government returns them.

IV.

CONCLUSION
For the foregoing reasons, defendants’ motion to extend the stay is

GRANTED.

The complete stay is extended, except as to the limited

document discovery agreed to by the parties. All other discovery and motion
practice shall remain closed.
30th
New Orleans, Louisiana, this _____ day of July, 2019.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
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