Kidwell v. Ruby IV, L.L.C.

Filing 503

ORDER, REASONS, AND RECOMMENDATION - Consistent with the reasons set forth, the two motions for sanctions (rec. docs. 361 , 496 ) are GRANTED. Additionally, the undersigned recommends to the District Judge the following additional sanction be assessed against Defendants for the blatant violation of this Courts order (rec. doc. 456 ) and the misconduct that preceded it. (SEE ORDER.) Signed by Magistrate Judge Michael North on 11/2/2020. (Reference: 18-2052) (dw) (NEF: Section M)

Case 2:18-cv-02052-BWA-MBN Document 503 Filed 11/02/20 Page 1 of 20

TAMMY KIDWELL, ET AL.
VERSUS

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

RUBY IV, L.L.C., ET AL.

CIVIL ACTION

NUMBER: 18-02052
SECTION: "M"(5)

ORDER, REASONS, AND RECOMMENDATION
Before the Court are two motions for sanctions filed by Plaintiffs. (Rec. docs. 361,

496). Defendants filed opposition memoranda to each (rec. docs. 369, 498) and Plaintiffs
filed reply memoranda. (Rec. docs. 384, 501). Defendants also filed a “supplemental”
opposition memorandum to the first of Plaintiffs’ motions. (Rec. doc. 377).

Having now closely reviewed these pleadings and the associated exhibits and having

lived through the years-long fiasco that has been discovery in this matter, the Court rules on
the motions as follows.
I.

The First Motion for Sanctions

Plaintiffs’ first motion seeks monetary and other sanctions against Defendants for a host

of transgressions dating back to the earliest days of this litigation. It was filed after this Court

issued an order granting as unopposed an earlier motion to compel filed by Plaintiffs. (Rec.

doc. 332). In that order, dated March 4, 2020, the Court ordered Defendants to make a
supplemental production they had previously (and repeatedly) agreed to make and further

stated “Plaintiffs may brief the Court on the type and amount of sanctions that may be

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properly imposed in this matter commensurate with the extent of Defendants’ compliance
with this order.” 1 (Id.).

Defendants filed a motion to reconsider that order, arguing they had made an

“inadvertent calendaring mistake, to their utmost chagrin” but that such mistake was not an

indication of disrespect to the Court or their opponents. (Rec. doc. 333). After a telephonic
hearing on that motion, the Court ordered Defendants – again – to produce the re-formatted

b-50 reports they had previously agreed to produce no later than March 30, 2020. (Rec. doc.
336). 2

The first pending motion for sanctions (the one contemplated by the Court’s

aforementioned March 4, 2020 order), was filed by Plaintiffs on June 2, 2020. In it, Plaintiffs
complain of the following conduct, all of which they argue is sanctionable:
•

•

Attempting to “buy off” Plaintiff, Tammy Kidwell, by giving her an $868 check for
“missing overtime hours” after this litigation had begun;

Failing three times to comply with this Court’s July 25, 2018 minute entry (rec. doc.

•

46);

•

that search;

•

Failing to timely search the emails of agreed-to custodians, omitting certain of those
custodians from their ultimate search, and omitting agreed-upon search terms from

Attempting to dissuade potential class members from joining the lawsuit;

Repeatedly avoiding properly noticed depositions of their principals by terminating
counsel and lying about the deponents’ whereabouts; and,

The disputed production consisted of so-called “b-50” payroll reports in a particular format requested by
Plaintiffs’ counsel and previously agreed to by prior defense counsel.
2 The Court convened that hearing without allowing Plaintiffs an opportunity to file a responsive brief.
1

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•

Failing to timely produce usable time-and-pay records.

(Rec. doc. 361).

Defendants responded to this motion by pointing out that most of the allegedly

sanctionable conduct was unrelated to and predated the discovery skirmish concerning the

b-50 reports and that many of the alleged transgressions occurred while Defendants were

represented by one of their three prior law firms. (Rec. doc. 369). Specifically, counsel

argued that, as to the format of production for the b-50 reports, counsel were unaware of

any agreement by prior counsel to re-produce those reports in a different format and that

they had since made such a production. Thus, they claim the motion to compel that they
failed to oppose was “arguably unnecessary.” (Id.).

They go on to argue that the remaining instances of allegedly sanctionable conduct

presented in Plaintiffs’ motion are not properly subject of a motion for sanctions because:
they (1) do not relate to the motion to compel that precipitated the motion for sanctions, (2)
occurred years earlier and involved prior counsel, (3) were subject of prior requests for
sanctions that were denied, and/or (4) are not discovery related. (Id.).

Plaintiffs filed a reply memorandum expressing disbelief that Defense counsel could

argue they were unaware of Defendants’ prior agreements to re-produce the b-50 reports
and explaining in some detail why that argument is not worthy of belief. (Rec. doc. 384).

They go on to explain that the other transgressions pointed out in their motion should be
grist for the mill in a “totality-of-the-circumstances” consideration by the Court of Plaintiffs’
sanctions motion. (Id.).

As noted above, the Court is all too familiar with the ridiculous procedural history of

this case when it comes to Defendants’ responses to discovery. I have presided over more
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hearings and status conferences in this case than in any other single case since taking the
bench. Considering the tortured history of the case and after thoroughly considering the

briefing and exhibits associated with Plaintiffs’ first pending motion for sanctions, I find that

the motion has merit and will grant it, albeit partially, for the following reasons and in the
following particulars.

Federal Rule of Civil Procedure 37(a)(5) provides that, when a motion to compel is

granted, the Court:

must, after giving an opportunity to be heard, require the party
or deponent whose conduct necessitated the motion, the party
or attorney advising that conduct, or both to pay the movant's
reasonable expenses incurred in making the motion, including
attorney's fees. But the court must not order this payment if:
(i) the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without court
action;
(ii) the opposing party's nondisclosure, response, or
objection was substantially justified; or
(iii) other circumstances make an award of expenses
unjust.
Fed. R. Civ. P. 37(a)(5)(A)

Here, the Court already determined that sanctions were warranted in its order of

March 4, 2020, stating that Plaintiffs “may brief the Court on the type and amount of

sanctions that may be properly imposed in this matter commensurate with the extent of
Defendants’ compliance with this order.” (Rec. doc. 332). Notably, that order required

compliance by March 23, 2020. As noted above, for various reasons, Defendants did not
comply with that order until at least April 16, 2020. (Rec. doc. 361-1).

Defendants’ counsel’s protestations that there were unaware of any agreement

between the parties concerning the production format of the b-50 reports is both

unconvincing and not relevant to their clients’ obligations to conduct discovery in good faith.
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Importantly, Plaintiffs’ counsel had been explaining the nature of the agreement and asking
for documents as far back as November of 2019; the Court itself discussed the matter
repeatedly in status conferences with counsel for all parties. It is not credible for counsel to

suggest in their clients’ defense that they were unaware of any such agreement – when they
took over the case as Defendants’ fourth law firm they were charged with doing more than

sticking their heads in the sand about their new clients’ extant discovery obligations and
agreements. 3 But that is exactly what they did.

The Defendants in this case have a documented history of taking extraordinary steps

to avoid discovery, particularly depositions. As will be discussed below, for instance, the
saga of Rule 30(b)(6) depositions in this case has been nothing short of depressing. Whether

they are serially firing counsel, showing up unprepared for their depositions, sending
unprepared employees to testify, or pretending not to understand the Courts’ orders or
agreements their own counsel have made, the Defendants’ principals have seriously

retarded the progress of this case. Their failure to produce the re-formatted b-50 reports as
agreed (and ordered) was yet another example of their dilatory conduct.

For that very reason, the Court finds that Defendants should be sanctioned for failing

to produce the documents in a timely fashion and for causing unnecessary motion practice,

up to and including the pending first motion for sanctions. Their sanctionable conduct in

this arena includes: (1) failing for months to produce the documents requested by Plaintiffs
and agreed to by their counsel, thereby necessitating the filing of a motion to compel; (2)

claiming not to have received the pre-motion correspondence sent by Plaintiffs’ counsel
This is particularly true given the half dozen or so times Plaintiffs’ counsel informed them of said obligations
and agreements.

3

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addressing that failure when the record reveals they undoubtedly did receive that

correspondence; (3) and failing (even if through neglect) to respond to that motion to
compel, necessitating a round of motion practice aimed at having the Court reconsider its
order granting that motion.

The Court further finds that the appropriate sanction for this discovery misconduct

is an award of attorneys’ fees to Plaintiffs for the work associated with the filing of the
(unopposed) motion to compel, their correspondence, and attendance at a status conference

on Defendants’ motion for reconsideration, and the filing of the present first motion for
sanctions. After thorough consideration of the nature and scope of these pleadings, the Court

finds that an attorneys’ fee award in the amount of $6,000 is reasonable and appropriate and

will order Defendants to remit such a payment to counsel for Plaintiffs no later than
November 16, 2020.

Notably, this is the third time the Court has issued a monetary sanction against

Defendants. Alas, it will not be the last.
II.

The Second Motion for Sanctions

Plaintiffs’ second motion for sanctions arises out of a recent (second) Rule 30(b)(6)

deposition that the Court ordered to go forward on three topics. (Rec. doc. 456). In response
to a motion to compel (rec. doc. 418) filed by Plaintiffs after Defendants’ corporate designee
was unable to answer questions on three topics in the deposition notice (topics 3, 6, and 7),
the Court ordered:

The Court finds that the corporate designee presented by
Defendants was unprepared to testify as a knowledgeable
witness pursuant to Rule 30(b)(6) as to topics 3, 6, and 7 of the
deposition notice. Defendants’ justifications for presenting a
witness woefully unprepared to testify on these topics ring
hollow. . . .
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The Plaintiffs shall be allowed to reconvene the 30(b)(6)
deposition on topics 3, 6, and 7, to include inquiry into the
previous Department of Labor (“DOL”) investigation referenced
in Plaintiffs’ motion papers. Defendants may avoid this
deposition if they agree, no later than August 25, 2020 to
stipulate to: (1) the accuracy of the information in the DOL
findings and narrative reports, and (2) the admissibility of that
information and related documents at trial.
(Id.).

In that order, the Court assessed a monetary sanction of $1,500 in attorneys’ fees for

Defendants’ initial failure to present a witness with any capability of responding to topics 3,
6, and 7. (Id.).

Remarkably, Plaintiffs now call to the Courts’ attention that the individual designated

for the second deposition ordered by the Court was, like the first, unprepared to testify about
those topics because he had spoken to no one and reviewed no documents in advance of the

deposition. (Rec. doc. 496-1). They attach deposition transcripts in which the deponent,

Jhonathan Abrego (“Abrego”), admitted to the following:
•

•

•

•

He has worked for the Defendants since 2015. (Rec. doc. 496-4 at p. 7).

He has worked only as a restaurant general manager or assistant manager – never in
management above a single-restaurant level . (Id. at pp. 5-7).

He spoke to no one with personal knowledge and reviewed no documents to prepare
to testify about topics 3, 6, and 7. (Id. at pp. 7-8).

He could not provide testimony about any of the 30 compensation-related complaints
listed in Defendants’ interrogatory responses (which were attached to the deposition
notice regarding topic 3). (Id. at pp. 9-15).
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•

He could not testify concerning any of the prior wage-and-hour lawsuits filed against
the Defendants, which clearly fell within the scope of the deposition as ordered by the
Court.

Finally, Plaintiffs point out that Abrego testified completely at odds with the facts

concerning the Department of Labor (“DOL”) findings in its prior investigations of

Defendants’ companies. Plaintiffs point out that Abrego testified that the DOL had concluded

that Defendants had not violated the Fair Labor Standards Act in any way, when it is clear
from the DOL documents and findings that the Department found dozens of violations. (Rec.
doc. 496-5).

In trying to fend off the inevitable, Defendants predictably plead innocent mistake and

good faith. This is all more of the same – tiresome arguments in defense of the indefensible.

Recalling that this deposition was conducted specifically pursuant to this Court’s order, here

are Defendants’ justifications for ignoring that order.

First, they argue that a particular stipulation reached between the parties insulates

Defendants from presenting a witness knowledgeable on the three aforementioned topics,
notwithstanding a specific order directing Defendants to present a knowledgeable witness.
This argument borders on farcical, considering that I already rejected that very argument in

the order directing the deposition to proceed and Defendants failed to object to that order.

(Rec. doc. 456). To be clear, if counsel thinks or hopes that a post-order stipulation relieves
their client from complying with a court order, counsel should raise that argument with the

Court before they decide to violate that order. This should be common sense. Here, though,

Defendants persist in arguing that this stipulation has a much more far-reaching effect than
Plaintiffs do.

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Whatever Defendants believe the effect of that stipulation should be, they cannot

assume they are right and then proceed to violate an un-appealed discovery order, while just
hoping for the best.

Next, Defendants suggest that their designee “did provide answers” to the relevant

questions. (Rec. doc. 498 at p. 3). Well, I suppose “I don’t know” is technically an answer,

but it hardly demonstrates compliance with Rule 30(b)(6) and my order that Defendants
provide a knowledgeable witness. I have now been forced to review the entire transcript of

Abrego’s testimony and it is perfectly clear he had no real idea what he was talking about
when it came to the topics of this second deposition, which I must I assume is not his fault.
He appears to be the latest sacrificial employee sent to the deposition room to say “I don’t
know” over and over again. 4

Suffice to say my review of the transcript easily establishes to my satisfaction that,

while Abrego may have “provide[d] answers” to Plaintiffs’ counsel’s questions, they were
nowhere near what was required by Rule 30 and my order.

Next, Defendants suggest that they were not in bad faith in perpetuating this fiasco. I

disagree.

Defendants required Tina Cao to respond to discovery requests involving issues that occurred more than four
years before she was employed by Defendants - and verify them under penalty of perjury – and then be deposed
about those responses. Her deposition testimony made clear that she was, to quote Plaintiffs, “thrown to the
wolves” in this litigation. (Rec. doc. 113-5 at pp. 95, 120-121). Then there was the corporate designee for the
first 30(b)(6) deposition, Dhiya Esmail, who testified that he had minimal involvement with the Ruby
companies’ operations before 2019. (Rec. doc. 418-3 at p. 10). He did not speak with any employees or other
persons associated with the corporate Defendants (other than counsel) to obtain the knowledge necessary to
testify as a 30(b)(6) deponent, nor did he review any documents to prepare for the deposition. (Id. at pp. 6-9).
It was his inability to answer any questions on topics 3, 6, and 7 that precipitated this Court’s order directing
Defendants to provide a knowledgeable witness on those topics and awarding sanctions to Plaintiffs in the form
of attorneys’ fees for presenting an unprepared witness at the first corporate deposition. (Rec. doc. 456).
4

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The procedural history surrounding Plaintiffs’ efforts to obtain Rule 30(b)(6)

depositions and meaningful depositions of the principals, the Esmails, is, to say the least,
tortured. That history, replete throughout this record and including developments brought

to the Court’s attention in this motion, establish a pattern of avoidance and dereliction by
Defendants of their most basic discovery obligations. This recent Rule 30(b)(6) episode is
just the latest chapter. Unfortunately, it appears that no amount of forbearance by this Court

can reel Defendants into the place they have needed to be in from the start – nor has the
procession of new lawyers advising them been able to convince Defendants of the

importance of complying with the rules. 5

I can only hope the ruling on these motions once and for all changes that.

III.

The Relevant Law on Sanctions

There are a number of mechanisms by which district courts exercise sanction powers,

including the Federal Rules of Civil Procedure (through Rules 11, 26, 30, and/or 37); 28 U.S.C.
§1927; and the inherent power of the courts to manage their own proceedings and to control

the conduct of those who appear before them. Regardless of the source, it is widely accepted
that the primary purpose of sanctions is to deter frivolous litigation and abusive tactics.

Sanctions seek to deter both the culpable attorney and members of the bar in general. See,
e.g., Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 126-27 (1989) (the

primary purpose of Rule 11 is deterrence, not compensation); Fred A. Smith Lumber Co. v.

Edidin, 845 F.2d 750, 752 (7th Cir. 1988)(“the most important purpose of Rule 11 sanctions

is to deter frivolous litigation and the abusive practices of attorneys”); Gregory P. Joseph,
It is worth mentioning here that fully a year ago, the District Judge weighed in on Defendants’ delay tactics
and, while declining to issue a harsh, dispositive sanction at that time, did go so far as to assess a monetary
sanction against Defendants for those tactics. (Rec. doc. 288).

5

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Sanctions: The Federal Law of Litigation Abuse §47(A) (2d ed.) (the purpose of Rule 37 is fourfold: “(1) penalizing the culpable party or attorney; (2) deterring others from engaging in

similar conduct; (3) compensating the court and other parties for the expense caused by the
abusive conduct; and (4) compelling discovery”); Id. at §20 (the purpose of 28 U.S.C. §1927
is to deter unnecessary delays in litigation).

Whether a court wields its sanction powers under the Federal Rules, 28 U.S.C. §1927,

or its inherent power, it does so at its “broad discretion.” Topalian v. Ehrman, 3 F.3d 931, 934
(5th Cir. 1993). “The discretion vested in the trial court is granted so its thoughtful exercise

will carry out the educational and deterrent functions of the rule.” Jennings v. Joshua I.S.D.,
948 F.2d 194, 199 (5th Cir. 1991), cert. denied, 504 U.S. 956 (1992).

The Court finds in the present matter that Rule 37 and the cases interpreting its

sanctions provisions provide the rules of decision.
Rule 37(b)(2) provides in relevant part:

(2) Sanctions Sought in the District Where the Action Is Pending.
(A) For Not Obeying a Discovery Order. If a party or a party's
officer, director, or managing agent—or a witness designated
under Rule 30(b)(6) or 31(a)(4)—fails to obey an order to
provide or permit discovery, including an order under Rule
26(f), 35, or 37(a), the court where the action is pending may
issue further just orders. They may include the following:
(i) directing that the matters embraced in the order or
other designated facts be taken as established for
purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting
or opposing designated claims or defenses, or from
introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is
obeyed;
(v) dismissing the action or proceeding in whole or in
part;
(vi) rendering a default judgment against the
disobedient party; or
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(vii) treating as contempt of court the failure to obey
any order except an order to submit to a physical or
mental examination.
....
(C) Payment of Expenses. Instead of or in addition to the orders
above, the court must order the disobedient party, the attorney
advising that party, or both to pay the reasonable expenses,
including attorney's fees, caused by the failure, unless the failure
was substantially justified or other circumstances make an
award of expenses unjust.
Fed. R. Civ. P. 37(b)(2).

In the present motion, Plaintiffs ask the Court to assess the most draconian of the Rule

37 sanctions. They ask the Court to “strike the Defendants’ pleadings, including their
affirmative defenses, pursuant to its authority under Rule 37(b)(2)(A), or to enter a default
judgment against them.” (Rec doc. 496-1 at p. 9). Failing the imposition of such sanctions,

Plaintiffs suggest an alternative, which the Court will discuss below after first addressing the
request for dispositive sanctions.

Sanctions that strike pleadings and defenses or result in the imposition of a default

judgment are the most severe provided for under Rule 37 and are reserved for the most
egregious circumstances. This sort of dispositive remedy is reserved exclusively for clear

records of contumacious and continuing discovery misconduct or delay, ordinarily involving

stubborn resistance to authority by failure to comply with multiple court orders. Doe v. Am.
Airlines, 283 Fed.Appx. 289, 291 (5th Cir. 2008); Davis v. Auto Club Family Ins. Co., No. 07-CV-

8545, 2008 WL 5110619 at *1 (E.D. La. Dec. 2, 2008) (Vance, J.) (citing Fed. Deposit Ins. Corp.
v. Conner, 20 F.3d 1376, 1380-81 (5th Cir. 1994); E.E.O.C. v. Gen. Dynamics Corp., 999 F.2d 113,

119 (5th Cir. 1993); and Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511, 515 (5th Cir. 1985)).

“[I]t is not a party’s negligence–regardless of how careless, inconsiderate, or understandably
exasperating–that makes conduct contumacious; instead it is the stubborn resistance to
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authority which justifies a dismissal with prejudice” of a claim or affirmative defense. Brown
v. Oil States Skagit Smatco, 664 F.3d 71, 77 (5th Cir. 2011) (quoting McNeal v. Papasan, 842
F.2d 787, 792 (5th Cir. 1988)) (internal quotation omitted).

There is a strong argument to be made in this case – and no doubt Plaintiffs’ counsel

firmly believe that we have reached this point – that Defendants’ conduct has been

contumacious and represents a stubborn resistance to authority. It is a very close call for the

Court, but, guided by the ample caselaw teaching how rarely such sanctions should be

deployed, I will not recommend to the District Judge that he impose what would be casedispositive sanctions at this point. That being said, Defendants’ ongoing disruptive and
dilatory conduct must be met with serious consequences.

The alternative sanction sought by Plaintiffs is a request that the Court enter an order

“(i) directing that the matters embraced in the order or other designated facts be taken as
established for purposes of the action, as the prevailing party claims; . . .” Fed. R. Civ. P.

37(b)(2)(i). Specifically, Plaintiffs request in the alternative that the following sanctions are
appropriate:
•

The Court should deem admitted all information and allegations in Exhibit 7 to the
30(b)(6) deposition, including, but not limited to: (1) the findings of the Department
of Labor and the agency’s observations in their narrative reports, (2) the allegations
in the Bourg lawsuit that the corporate defendants did not give notice of the tip credit
and manipulated server’s tip amounts to make it appear as though they were earning
minimum wage, and (3) the FLSA violations alleged in the Van Cott FLSA lawsuit, and
(4) the allegations in the thirty (30) employee claims/complaints that the corporate
designee was unable to answer. This sanction should also include that the foregoing
information shall be admissible at trial and that Defendants shall be prohibited from
presenting any evidence attempting to contest the matters deemed admitted (along
with an appropriate instruction to the jury to be included in the Court’s jury
instructions).
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•

The Court should require Defendants to pay the attorney’s fees, costs, and expenses
associated with both Rule 30(b)(6) depositions, including the time spent preparing
for the depositions and for all motion practice related to same.
(Rec. doc. 496-1 at p. 10).

The Court will address the request that certain information be deemed admitted first.

I have closely reviewed the transcript of the two failed corporate depositions as they pertain

to the allegations Plaintiffs want the Court to deem admitted. There is no doubt whatsoever
that Plaintiffs have diligently attempted to have Defendants address these allegations on the

merits for months, if not longer, and these efforts have been stymied at every possible turn
by Defendants. Most recently, Defendants brazenly went so far as to ignore a Court order on

this very topic and to present, for a second time, a designee with no personal knowledge of
the matters within the scope of the deposition notice who made no effort to prepare to testify
by reviewing documents or speaking with actual, knowledgeable persons.

Because the relief requested above is narrowly tailored by addressing the specific

allegations and findings that were the subject of two failed corporate depositions6 and is

proportional to the ongoing and egregious discovery misconduct described above, I find it is

entirely appropriate to grant Plaintiffs’ request as a sanction for that misconduct. I will
recommend to the District Judge that such relief be granted.

Before moving to the request for fees and costs associated with the two failed

depositions, it is important to address two of Defendants’ additional arguments against
imposition of the sort of sanction I am recommending here.

6 Defendants admit in their opposition memorandum: “Admittedly, the defendants’ designee was unable to
provide answers to questions regarding the thirty (30) employee claims/complaints regarding compensation
and the Bourg and Van Cott lawsuits.” (Rec. doc. 498). One is left to wonder how, after years of litigation and
discovery disputes in this case, Defendants can present a witness admittedly unable to answer core questions
in a corporate deposition ordered by the Court, yet continue to maintain they are litigating in good faith.

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Quite incredibly, after twice failing to produce a knowledgeable deponent on topics 3,

6, and 7 – and blatantly violating a court order in the meantime – Defendants suggest the
Court should give them yet another chance to make this right by allowing for a third

corporate deposition on these topics. (Rec. doc. 498 at p. 4).

The old saying “insanity is doing the same thing over and over again and expecting a

different result” is commonly mis-attributed to Albert Einstein, which is fine because I don’t

have to be Einstein to know what a bad idea it would be to allow Defendants to continue

playing games with the rules, the Court, and their opponents without consequences. To
allow this fiasco to continue as Defendants suggest I should would be both foolish and
patently unfair to Plaintiffs.

Finally, Defendants make this bizarre argument against the imposition of sanctions:

“Typically, Rule 37(b) sanctions are not available until the court has issued a specific

discovery order so it is clear that the offending party has been alerted to what is required
and the potential seriousness of non-compliance.” (Id. at 5). I am honestly dumfounded by

this statement. I did issue such a “specific order.” I did make clear what was required of the

“offending party.” I did make clear the “potential seriousness of non-compliance.” 7 In fact, I
actually sanctioned Defendants in that very same order for their previous non-compliance.
(Rec. doc. 456). I honestly cannot fathom the thinking behind this statement, but that makes

no difference in the end because despite what they suggest by that statement, this motion is,
in fact, about Defendants’ clear violation of a discovery order issued by this Court.

Not that the Court should have to educate a litigant of the undesirable consequences of violating court orders
– that’s why they have lawyers after all.

7

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Turning to Plaintiffs’ request for the additional sanction of attorneys’ fees and costs,

for the reasons stated above and consistent with the other three occasions on which

attorneys’ fees have been awarded against Defendants for their misconduct in this case, I will
award them here: Plaintiffs request fees and costs for both Rule 30(b)(6) depositions and

all motion practice related to them. (Rec. doc. 496-1 at p. 10). As noted above, though, I have
already awarded fees in connection with the first deposition and motion. (Rec. doc. 456).
The question, then, is what is an appropriate award of reasonable fees and costs associated

with the second, failed deposition and this motion practice. I answer this question in two
parts.

First, I will assess against Defendants what I believe to be a reasonable fee for this

work, which upon consideration I believe to be $5,000. As for the costs of the second
deposition, Plaintiffs have not submitted proof of those costs but I will allow them to do so.

Plaintiffs’ counsel will submit that figure and proof supporting it to Defendants’ counsel. If
the parties cannot agree that Plaintiffs are entitled to recover that figure pursuant to this

order, the parties may submit that dispute to me. That effort will also be compensable to the
prevailing party so I urge the attorneys in the case to act reasonably and make their best
efforts to resolve that part of this dispute among themselves.

Finally, in an effort to fully implement the deterrent purpose of Rule 37 sanctions, I

will make an additional award to Plaintiffs’ counsel that represents the amount of time the

Court has had to expend (and waste) dealing with Defendants’ serial violations of the Rules
and orders of this Court.

The matter of the “value” of a federal court’s time for purposes of assessing sanctions

against a litigant for wasting that time has been the subject of discussion in a number of
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courts over the years. A 1982 study sponsored by the Rand Corporation Institute for Civil

Justice concluded that a single hour spent by a federal judge in a tort case cost the

government approximately $600 in 1982. See Levin & Colliers, Containing the Cost of

Litigation, 37 Rutgers L. Rev. 219, 219–22 (1985). That calculation has been approved and
adopted by numerous courts since. See, e.g., Lapin v. U.S., 118 F.R.D. 632, 645-46 (D. Hawaii

1987); Thiel v. First Federal Savings & Loan Ass'n of Marion, 646 F.Supp. 592, 598 (N.D. Ind.

1986), aff’d in part dis’d in part, 828 F.2d 21 (7th Cir. 1987)(imposing a sanction of $3,600

based upon $600 per hour); Dyson v. Sposeep, 637 F.Supp. 616, 624 (N.D. Ind. 1986)(using
the $600/hour formula and stating it would also be used in the future); Advo Sys., Inc. v.

Walters, 110 F.R.D. 426, 433 (E.D. Mich. 1986)(noting that the court cannot tolerate an

unnecessary drain on judicial resources caused by actions without merit and that in future
cases the $600 per hour formula would be used to impose sanctions).

With the passage of time, other courts, including this one, have continued to employ

this formula, adjusting the hourly rate for inflation. See, e.g., Nogess v. Poydras Center, LLC,
No. 16-CV-15227, 2017 WL 396307 at *14-15 (E.D. La); Seneca Res. Corp. v. Moody, 135 B.R.

260, 261 (Bkptcy. S.D. Tex. 1991)(imposing Rule 11 sanctions at $890 per hour); Enright v.

Auto–Owners Ins. Co., 2 F.Supp.2d 1072, 1076 n. 2 (N.D. Ind. 1998)(adjusting the rate to $900

per hour); International Union of Electronic, Electrical, Salaried, Machine & Furniture Workers
(AFL–CIO), Local 84907 v. Visteon Systems, LLC, No. 06-CV-0275, 2007 WL 647499 (S.D. Ind.
2007)(same).

In a 2012 decision citing to the foregoing authority, a court employed the United

States Department of Labor, Bureau of Labor Statistics, Consumer Price Index Inflation
Calculator (“CPI Calculator”) to calculate that the $600-per-hour rate in 1982 should be
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adjusted to $1,430.58 in 2012. In re Kentwood Pharmacy, L.L.C., 475 B.R. 602, 610-12

(Bkptcy. W.D. Mich. 2012)(citing CPI calculator, found on the web at bls.gov/data/inflation_

calculator.htm). This Court has employed this method to arrive at appropriate sanctions for
wasting the Court’s time. See Nogess 2017 WL 396307 at *14-15.

This Court finds the foregoing process and reasoning appropriate here. Employing

the CPI Calculator, the Court finds that an hour of its time in 2020 is worth $1,650 (rounded
down from $1,656.08).

Although the Court has expended substantially more than six hours on the extensive

discovery litigation occasioned by Defendants’ recalcitrance and misconduct subject of these
motions, it will assess a sanction in addition to that described above equivalent to six hours
of its time wasted in this matter. That figure is $9,900.
IV.

Conclusion

Litigation is not a game, it is a search for the truth and an effort to obtain justice. See

Sims v. ANR, 77 F.3d 846, 849 (5th Cir. 1996); Hall v. Freese, 735 F.2d 956, 961-62 (5th Cir.

1984); Bintliff v. U.S., 462 F.2d 403, 407 (5th Cir. 1972). Defendants have treated this lawsuit
as a game from the start – in addition to all of the discovery misconduct discussed here

already, Defendants have demonstrated their disdain for these proceedings and the rules

that govern them through, for instance: (1) their apparent efforts to coerce the named
Plaintiff into quitting the lawsuit by writing her check after suit was filed for $868.00 with
the words “missing overtime hours” in the memo line (rec. doc. 361-5) and (2) Dhiya

Esmail’s 8 direct communication with a Plaintiff in violation of the Court’s protective order
This is the same Dhiya Esmail whose inability to testify about certain topics in the first Rule 30(b)(6)
deposition was the genesis of this very motion. See note 3, supra.

88

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(rec. doc. 81), telling her “Ur trying to join a lawsuit against us you have no case �.” (Rec.

doc. 361-1).

It also obviously bears mention that this is fourth time in this litigation that Defendants

are being sanctioned. At some point the Court has to bear down on the deterrent purpose of
discovery sanctions and decide if that deterrent purpose is to be honored, enough has to be
enough.

That time has arrived.

Consistent with the reasons set forth above, the two motions for sanctions (rec. docs.

361, 496) are granted. The undersigned hereby awards against Defendants the following
monetary sanctions:

(1) $6,000 payable to Plaintiffs’ counsel for the filing of the

(unopposed) motion to compel, their correspondence and attendance at a status conference

regarding Defendants’ motion for reconsideration, and the filing of the present first motion

for sanctions; (2) $5,000 payable to Plaintiffs’ counsel for the filing of the second motion to
compel and fees associated with the failed second Rule 30(b)(6) deposition of the Plaintiffs;

(3) $9,900 payable to Plaintiffs’ counsel consistent with the deterrent purpose of Rule 37,

representing six hours of the Court’s time wasted refereeing disputes that never should have
arisen; and (4) costs for the second Rule 30(b)(6) deposition to be determined consistent
with this opinion as set forth above.

Additionally, the undersigned recommends to the District Judge the following

additional sanction be assessed against Defendants for the blatant violation of this Court’s
order (rec. doc. 456) and the misconduct that preceded it:

It is recommended that the District Judge deem admitted all information and

allegations in Exhibit 7 to the Rule 30(b)(6) deposition, including, but not limited to: (1) the
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Case 2:18-cv-02052-BWA-MBN Document 503 Filed 11/02/20 Page 20 of 20
findings of the Department of Labor and the agency’s observations in their narrative reports,
(2) the allegations in the Bourg lawsuit that the corporate defendants did not give notice of
the tip credit and manipulated server’s tip amounts to make it appear as though they were

earning minimum wage, (3) the FLSA violations alleged in the Van Cott FLSA lawsuit, and (4)

the allegations in the thirty (30) employee claims/complaints that the corporate designee
was unable to answer. This sanction should also include that the foregoing information shall

be admissible at trial and that Defendants shall be prohibited from presenting any evidence

attempting to contest the matters deemed admitted (along with an appropriate instruction
to the jury to be included in the Court’s jury instructions).

I sincerely hope and expect that these sanctions will resonate with Defendants and

bring them in line with the rules and their obligations to litigate this matter in good faith. I
expect any remaining discovery to proceed apace and without additional issues.
New Orleans, Louisiana, this 2nd day of

November

, 2020.

MICHAEL B. NORTH
UNITED STATES MAGISTRATE JUDGE

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