EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. FAPS, INC.
Filing
91
MEMORANDUM and ORDER that the EEOC's Application for sanctions is GRANTED, in part, and DENIED, in part; that both Parties are directed to cease any further discovery efforts. Signed by Magistrate Judge Douglas E. Arpert on 9/9/2013. (mmh)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
Civil Action No.: 10-3095 (PGS)
MEMORANDUM AND ORDER
Plaintiff,
v.
FAPS, INC. et al.
Defendants.
Currently before the Court is an application by Plaintiff Equal Employment Opportunity
Commission (“EEOC”) for sanctions. Specifically, the EEOC seeks: (1) an order directing
defense counsel to disclose all materials, documents, notes and communications between defense
counsel or defense counsel’s agents, and the EEOC claimants; (2) an order preventing Defendant
from using any materials, statements, mental impressions and information obtained by defense
counsel from the EEOC claimants; and (3) an order permitting the EEOC to depose persons
representing Defendant who received information, directly or indirectly, from the EEOC
claimants, including but not limited to employees and agents of a private investigative firm.
EEOC’s Letter, July 26, 2013 at 6. For the reasons discussed below, the Court will GRANT, in
part, and DENY, in part, the EEOC’s application.
I.
INTRODUCTION
A.
Relevant Facts
The EEOC seeks intervention by the Court to stop DeCotiis, FitzPatrick & Cole, LLP,
counsel of record for Defendant FAPS, Inc. (“Defendant” or “FAPS”), from using a private
investigator to conduct ex parte interviews of the claimants and potential claimants in this EEOC
action. The EEOC brought this action under Title VII of the Civil Rights Act of 1964, Title I of
the Americans with Disabilities Act of 1990, and Title I of the Civil Rights Act of 1991 to
“correct unlawful employment practices on the basis of race and disability, and to provide relief
to a class of potential and actual applicants who were adversely affected by such practices.”
Compl. at 1.
On July 2, 2013, the Court received a letter on behalf of the EEOC claiming that defense
counsel had hired a private investigator to conduct ex parte interviews of the 28 claimants and
potential claimants listed in the EEOC’s Second Amended Rule 26 disclosures. 1 EEOC’s Letter,
July 2, 2013 at 1. The EEOC emailed counsel directly, demanding that the private investigator
cease all interviews with the claimants, as well as seeking copies of all information “including
written statements, questionnaires and/or notes, obtained by the private investigator.” See
EEOC’s Letter, July 2, 2013.
On July 3, 2013, Defendant submitted a letter to the Court opposing the EEOC’s
application. Specifically, Defendant claims that the attorney-client privilege does not exist as
between the EEOC and the claimants, and that the private investigator was instructed to
terminate interviews and all contact with the claimants if they informed the investigator that they
were represented by counsel. Defendant’s Letter, July 3, 2013 at 5.
Following a hearing on July 23, 2013, the EEOC submitted a Certification to the Court,
certifying that four of the claimants interviewed by the private investigator disclosed that they
were unaware that the private investigator had been hired by Defendant’s counsel. DiSavino
Cert. at 4.
1
Although the EEOC’s October 6, 2011 Letter references 29 claimants, during the July 23, 2013
hearing, counsel for both parties agreed that the list of claimants is now 28 persons.
2
On July 26, 2013, August 2, 2013 and August 7, 2013, the EEOC submitted additional
Declarations on behalf of Walter Anderson, Schakeera Walker, Darryl Britt, Harvey Glenn and
James Giles, claimants who were interviewed by the private investigator. Both Mr. Anderson
and Ms. Walker declared that the private investigator affirmatively mislead them by saying that
he “was with the EEOC” or that “he worked for Rosemary DiSavino”. Anderson Decl. at ¶ 5;
Walker Decl. at ¶ 4. The three other claimants assumed the private investigator worked for the
EEOC, even though the investigator said that he “worked for FAPS” or with “CTS Research”
(“CTS”). Britt Decl. at ¶ 5; Glenn Decl. at ¶ 4; Jiles Decl. at ¶ 4. All five claimants certified that
they are represented by the EEOC. Anderson Decl. at ¶ 5; Britt Decl. at ¶ 2, ; Glenn Decl. at ¶ 2;
Jiles Decl. at ¶ 2 ; Walker Decl. at ¶ 2.
During interviews with four of the five claimants, the private investigator apparently did
not ask whether the claimants were represented by the EEOC or other counsel. Britt Decl. at ¶ 6;
Glenn Decl. at ¶ 7; Jiles Decl. at ¶ 5. For example, Mr. Walker claims he informed the
investigator that he was represented by counsel; the investigator, however, continued the
interview. Walter Decl. at 5. On August 12, 2013, Defendant submitted Certifications from the
private investigators which disputed some or all of allegations in the claimants’ Certifications.
B.
Procedural History
Pursuant to the Court’s September 25 2012 Scheduling Order, fact discovery was set to
close on November 15, 2012. See dkt. no. 73. Because of the effects of Hurricane Sandy, on
November 19, 2012, the Court granted FAPS’ request for a stay and entered an Order staying
this action for a period of 90 days. See dkt. no. 79. In an Order dated April 4, 2013, the Court
further extended the deadline for completion of fact discovery to June 14, 2013. See dkt. no. 81.
Fact discovery was further extended until June 28, 2013 for limited purpose of allowing the
3
parties to depose a union representative from former third party defendant Local 1478. See dkt.
no. 85.
II.
LEGAL STANDARDS
1.
Parameters of attorney-client relationship in EEOC actions
Courts have reached different conclusions with respect to the parameters of the attorneyclient relationship between the EEOC and claimants or potential claimants. Indeed, the case law
“is not definitive regarding the moment when the EEOC enters into an attorney-client
relationship with members of the class it seeks to represent.” EEOC v. Morgan Stanley & Co.,
206 F.Supp.2d 559, 561 (S.D.N.Y. 2002). Courts find it problematic to expressly define this
relationship because the EEOC represents the public interest, allowing claimants and potential
claimants to bring individual actions. Id. at 4 (citing EEOC v. Johnson & Higgins, Inc., 1998 WL
778369, at *5-6 (S.D.N.Y. Nov. 6, 1998)).
In EEOC v. Dana Corp., the Court held that until there is proof of an established
attorney-client relationship between the EEOC and a class member or potential class member,
the opposing party is permitted to engage in ex parte communication with the claimants. 202 F.
Supp. 2d 827, 830 (N.D. Ind. 2002). Conversely, in EEOC v. Morgan Stanley & Co., Inc. the
Court found that “all women defined in the class are to some degree represented by the EEOC.”
206 F. Supp. 2d 559, 560 (S.D.N.Y. 2002) aff'd sub nom. EEOC v. Morgan Stanley & Co., 2002
2002 WL 1431685 (S.D.N.Y. July 1, 2002).
To prove the existence of an attorney-client relationship, some courts require the EEOC
to provide evidence that potential claimants expressly contacted the EEOC to represent them.
EEOC v. McDonnell Douglas Corp., 948 F.Supp. 54, 55 (E.D.Mo. 1996). In the same vein,
other courts have found affidavits from claimants stating that they sought legal advice from the
4
EEOC “with the understanding that their communications were confidential,” sufficient to
establish an attorney-client relationship. EEOC v. HBE Corp., 1994 WL 376273, at *2 (E.D.Mo.
May 19, 1994).
Although several jurisdictions allow ex parte communications with EEOC claimants
prior to the establishment of the attorney-client relationship, ex parte communications should be
undertaken with caution. EEOC v. Dana Corp., 202 F. Supp. 2d at 830. While permitting
defense counsel to engage in ex parte communication with potential claimants, the court in
EEOC v. Dana Corp. warned counsel that it ran “the risk of running afoul of Rule 4.2 should it
conduct ex parte communications with a represented party and should be extremely careful
before proceeding.” Id.2 Ideally, a determination of whether an attorney-client relationship exists
should, therefore, occur prior to any ex parte communication. Id.
2.
Effect of employment status on the attorney-client relationship
The employment status of the claimant plays an important role in determining the
parameters of any attorney-client relationship. Courts are more likely to find attorney-client
relationships between the EEOC and claimants when those claimants are the defendant’s current
employees. See EEOC v. Morgan Stanley, 206 F.Supp. 2d at 56, 563 (noting that “coercion of
potential class members by the class opponent may exist if both parties are involved in an
2
The New Jersey equivalent of Indiana Rule of Professional Conduct 4.2 is NJ RPC 4.2, which,
in relevant part, provides:
In representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows, or by the exercise of
reasonable diligence should know, to be represented by another lawyer in the
matter, including members of an organization’s litigation control group as
defined by RPC 1.13, unless the lawyer has the consent of the other lawyer or is
authorized by the law to do so, or unless the sole purpose of the communication is
to ascertain whether the person is in fact represented by counsel. (emphasis
supplied).
5
‘ongoing business relationship’”) (citing Ralph Oldsmobile, Inc. v. General Motors Corp., 2001
WL 1035132, at *3 (S.D.N.Y. Sept. 7, 2001) (quoting Kleiner v. First Nat’l Bank, 751 F.2d
1191, 1201 (11th Cir. 1985))).
In determining the scope of the attorney-client relationship in EEOC cases, the Court
must attempt to “balance the interest of the parties in representing their respective positions and
the interest of class members in being free from inappropriate influences” while crafting “a
carefully drawn order that limits speech as little as possible, consistent with the rights of the
parties under the circumstances.” Id. (citing Gulf Oil Co. v. Bernard, 452 U.S. 89, 101-02). To
achieve this balance between limiting ex parte communication without overly restricting speech,
the Court in EEOC v. Morgan Stanley allowed ex parte communication with potential class
members while instituting safe guards to protect potential class members from undue influence.3
206 F.Supp.2d at 563. Conversely, as former employee or non-employee class members are not
subject to the same coercive hazards as employee class members, the need to limit ex parte
communications is therefore not as pressing. EEOC v. TIC-The Indus. Co. et al, WL 3154977 at
*6 (E.D. L.A. Nov. 21, 2002).
C.
Scheduling Orders
Pursuant to FED. R. CIV. P. 16(b), a pretrial scheduling order may be “modified only for
good cause and with the judge’s consent.” The Advisory Committee Notes suggest good cause is
met only when the schedule set “cannot reasonably be met despite the diligence of the party
seeking the extension.” However, the Court “has great discretion in determining what kind of
showing the moving party must make in order to satisfy the good cause requirement of FED. R.
3
These safeguards included informing potential class members of the: (1) the existence of the
pending lawsuit; (2) that it is unlawful for Morgan Stanley to retaliate against them; (3) that they
are not required to join the EEOC action; and (4) that they have a private right of action. EEOC
v. Morgan Stanley, 206 F.Supp.2d at 563.
6
CIV. P. 16(b).” Patterson v. City of Perth Amboy, 2007 WL 3054939, at *1 (D.N.J. Oct. 11,
2007) (citation omitted).
If a party fails to comply with Rule 16, the court has wide discretion to “issue any just
orders, including those authorized by Rule 37(b)(2)(A)(ii)–(vii) . . . .” FED. R. CIV. P. 16(f). The
sanctions included in FED. R. CIV. P. 37(b)(2)(A)(ii)-(vii) include:
(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
(vii) treating as contempt of court the failure to obey any order
except an order to submit to a physical or mental examination.
III.
DISCUSSION
A.
Improper Conduct
Here, the EEOC claims that defense counsel violated NJ R.P.C. 4.2 by sending a private
investigator to engage in ex parte communications with the claimants. EEOC’s Letter, July 2,
2013 at 1.
The EEOC requests that Defendant be prohibited from engaging in ex parte
communications with the claimants and be required to disclose all information obtained from the
interviews. EEOC’s Letter, July 19, 2013 at 1-2.
Defendant, in opposition, asserts that the claimants “are not named charging parties” and,
as a result, the attorney-client privilege does not prevent them from engaging in ex parte
communications. Defendant’s Letter July 3, 2013.
Initially, the Court notes that the claimants’ employment status does not weigh in favor of
finding an attorney-client relationship. FAPS denied employment to the 28 claimants listed in the
October 6, 2011 letter.
Since the claimants are not FAPS employees, there is a stronger
7
presumption against the existence of an attorney-client relationship than in support of it. See
EEOC v. Morgan Stanley, 206 F.Supp.2d at 563.
Nevertheless, it seems unlikely that Defendant’s private investigator took sufficient
precautions to determine whether an attorney-client relationship existed between the EEOC and
the claimants prior to engaging in ex parte communications. The Court in EEOC v. Dana Corp.
warned that counsel “should be extremely careful before proceeding.” 202 F. Supp. 2d at 830. In
other words, counsel should attempt to determine whether the claimants are represented by the
EEOC prior to engaging in ex parte communications. According to the claimants’ Declarations,
the private investigator proceeded with the interviews without inquiring if the claimants were
represented by the EEOC. Likewise, it appears the investigator did not stop the interviews if and
when the claimants stated that they were represented by counsel. Britt Decl. at ¶ 2; Glenn Decl.
at ¶2; Jiles Decl. at ¶ 2; Walker Decl. at ¶ 2. Although Defendant disputes these allegations, there
is nonetheless sufficient indicia of wrongdoing for the Court to conclude some level of
misconduct occurred.
B.
Scheduling Order
Notwithstanding the questionable propriety of the private investigators’ actions, both
parties are in violation of the Court’s Case Management Order (“CMO”). See dkt. no. 81.
Although fact discovery closed on June 14, 2013, both parties continued to engage in discovery.4
Defendant’s counsel explained that the interviews with potential claimants were
undertaken to “get to the bottom of what exactly [] supports the assertion of the government’s
claim.” Defendant’s Letter, July 3, 2013 at 2. In furtherance of this goal, Defendant engaged
4
Fact discovery was extended to June 28, 2013, but only for limited purpose of allowing the
parties to depose a union representative from former third party defendant Local 1478. See dkt.
no. 85.
8
CTS, a licensed private investigator, to interview potential claimants. See Decl. of G. Frino at ¶
1. CTS began interviewing claimants on June 27, 2013, nearly two weeks after fact discovery
closed. See Decl. of C. Taylor at ¶ 2. At no time was either the EEOC or the Court made aware
of the fact that Defendant had retained CTS and was engaging in further discovery.
During the July 23, 2013 hearing, counsel for the EEOC also admitted to conducting fact
discovery outside the bounds of the CMO. Indeed, the EEOC’s expert, Dr. Palmer MorrelSamuels, mailed 851 written questionnaires and attempted to contact, by telephone, additional
FAPS applicants. EEOC’s Letter, July 26, 2013 at 5-6. Four current FAPS employees also
received questionnaires, and several responses were received after the June 28, 2013 deadline.
Id. The EEOC’s counsel expressly admitted “that these questions about race constituted some
limited ‘fact collection’” performed after expiration of the fact discovery deadline set by the
CMO. Id.
C.
Conclusion & Sanctions
Although the EEOC attempts to show “the vast difference between the intentionally
deceptive tactics undertaken by [defense counsel] and the limited race-identification inquiry
made by the EEOC,” EEOC’s Letter, July 26, 2013 at 2, at the core, both parties have violated
the CMO. See dkt. no. 81. Therefore, both parties must immediately cease all fact discovery
undertakings and are prohibited from engaging in any future discovery.
In addition, irrespective of the attorney-client privilege issue, it appears to the Court that
Defendant’s agents engaged in some level of wrongdoing with respect to their communications
with the potential claimants. That is to say, neither defense counsel nor the private investigators
exercised sufficient diligence in determining whether the claimants were represented. Likewise,
the private investigators may have concealed the fact that they were working for FAPS.
9
As a result, Defendant is directed to disclose all materials, documents, notes and
communications between defense counsel or defense counsel’s agents (i.e., CTS) and the EEOC
claimants. Furthermore, Defendant is prohibited from using any information gleened from the
CTS investigation. Finally, Defendant is prohibited from engaging in additional ex parte
communications with EEOC claimants and potential claimants.
As fact discovery has now concluded, the EEOC’s request to conduct further depositions
is denied.
IV.
CONCLUSION & ORDER
The Court having considered the papers submitted and opposition thereto pursuant to
FED. R. CIV. P. 78, and for the reasons set forth above;
IT IS on this 9th day of September, 2013,
ORDERED that the EEOC’s Application is GRANTED, in part, and DENIED, in part,
as set forth above; and it is further
ORDERED that both Parties are directed to cease any further discovery efforts.
s/ Douglas E. Arpert
DOUGLAS E. ARPERT, U.S.M.J.
10
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?