Secretary of Labor v. Maranto et al
Filing
70
ORDER denying 24 Defendants' First Motion to Compel. Signed by Honorable Timothy D. DeGiusti on 4/17/2017. (mb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
EDWARD C. HUGLER, Acting Secretary,
United States Department of Labor,
Plaintiff,
Case No. CIV-15-1378-D
v.
MARGARET MARANTO, et al.,
Defendants.
ORDER
Currently before the Court is Defendants’ First Motion to Compel Discovery [Doc.
No. 24], which is fully briefed. 1
The Court heard oral arguments concerning multiple
discovery matters on March 7, 2017, and ruled on most issues, but took the instant Motion
under advisement. Upon consideration of the parties’ written submissions, the arguments
of counsel, the case record, and governing law, the Court issues its decision.
This case involves claims by the United States Department of Labor that Defendants
Meers Store & Restaurant, Inc. and its manager, Margaret Maranto, violated the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 201 et seq., by failing to pay statutory minimum wages
to employees, failing to pay overtime compensation, failing to comply with child labor
provisions, and failing to maintain required records of wages and hours. Defendants have
issued interrogatories and requests for production of documents and, by their Motion,
1
Defendants filed a supporting brief [Doc. No. 26]; Plaintiff filed a response [Doc. No. 33];
and Defendants replied [Doc. No. 38].
challenge Plaintiff’s objections, answers, or responses to certain items. An overarching
issue is Plaintiff’s refusal to identify employees who participated in its investigation and
employees who may testify as witnesses based on an informer’s or informant’s privilege.
The Court begins by addressing this privilege and then turns to other claims of privilege
and specific discovery requests.
A.
Informer’s Privilege
It is well settled in the Tenth Circuit that the government is entitled to assert an
informer’s privilege in a civil FLSA case. See Usery v. Ritter, 547 F.2d 528, 529 (10th
Cir. 1977). This evidentiary privilege permits the government “to withhold from disclosure
the identities of persons furnishing information of law violations to law enforcement
officers.” Usery v. Local Union 720, 547 F.2d 525, 527 (10th Cir. 1977). It is a qualified
privilege that requires a balancing of the government’s interest in protecting its sources
against the defendant’s need for the information to prepare a defense. See Ritter, 547 F.2d
at 531; Local Union 720, 547 F.2d at 528. During the discovery stage of litigation, the
party seeking to overcome the privilege must show a substantial need for the identification
of informants. See Local Union 720, 547 F.2d at 528; Ritter, 547 F.2d at 531; see also
Brock v. Gingerbread House, Inc., 907 2d 115, 116 (10th Cir. 1989): Brock v. R.J. Auto
Parts & Serv., Inc., 864 F.2d 677, 678 (10th Cir. 1988).
Employers attempting to discover the identities of cooperating employees “have the
burden of showing a specific need for discovery which supersedes the need for an
informer’s privilege.” Perez v. El Tequila, LLC, No. 12-CV-588-JED-PJC, 2014 WL
2
5341766, *5 (N.D. Okla. Oct. 20, 2014) (internal quotation omitted).
In this case,
Defendants have not articulated any specific need for the identities of employees who were
interviewed by Plaintiff’s investigators. Further, Plaintiff’s counsel represents that during
the informal conference required by LCvR37.1, the government agreed to produce redacted
versions of the employees’ interview statements that omitted identifying information, and
that the redacted statements were produced to Defendants’ counsel shortly before the
government’s response brief was filed. See Pl.’s Res. Br. [Doc. No. 33] at 2-3. Defendants
do not dispute this representation or explain why the redacted statements are insufficient
to meet their discovery needs. Accordingly, the Court finds that Defendants have failed to
overcome Plaintiff’s claim of privilege regarding the identities of interviewed employees.
The case law is equally clear, however, that the informer’s privilege does not protect
the identities of trial witnesses. At some point, usually at the final pretrial conference or
“in connection with a pre-trial order, [the government] must list its witnesses” who will
testify in its case in chief. See Local Union 720, 547 F.2d at 528; Gingerbread House, 907
F.2d at 117; R.J. Auto, 864 F.2d at 679. In this district, the identification of witnesses
usually takes place during discovery through the disclosure of a final witness list, and a
standard scheduling order expressly provides: “Except for good cause shown, no witness
will be permitted to testify and no exhibit will be admitted in any party’s case in chief
unless such witness or exhibit was included in the party’s filed witness or exhibit list.” See
Scheduling Order [Doc. No. 15], at 1. In this case, the parties requested a standard
scheduling order. See Joint Status Report & Discovery Plan [Doc. No. 12], ¶ 14. Plaintiff
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now seems to assert that it need not comply with the Scheduling Order due to the informer’s
privilege but may wait and disclose its employee witnesses shortly before trial, presumably
in the Final Pretrial Report that will be filed with other trial submissions. Defendants
understandably take issue with the government’s decision to deviate from the Scheduling
Order without leave of court, and to withhold the identities of its employee witnesses.
The Court does not condone Plaintiff’s unilateral decision to disregard the
Scheduling Order and refuse to disclose potential trial witnesses. By failing to make a
timely disclosure, Plaintiff risks a ruling by the Court that employee witnesses will not be
permitted to testify in Plaintiff’s case in chief. However, Defendant does not seek this
sanction but instead seeks an order compelling Plaintiff to make a disclosure now. Because
Plaintiff has not waived its informer’s privilege, the Court declines to issue such an order.
The Court does direct that Plaintiff must disclose any potential employee witnesses, at the
latest, when identifying its trial witnesses in the Final Pretrial Report. At that time,
Defendants may move to depose or conduct discovery regarding any newly disclosed
witnesses for whom more information is needed. 2
B.
Other Privileges
Defendants also assert that Plaintiff has wrongly refused to provide information and
documents by claiming the deliberative process privilege. In response, Plaintiff has
submitted copies of supplemental discovery responses provided to Defendants on
2
The Final Pretrial Report is a jointly prepared document that Plaintiff is responsible for
preparing and arranging to file in a timely manner. See LCvR16.1(c). Thus, the names of
Plaintiff’s trial witnesses will necessarily be disclosed in the drafting process.
4
January 19, 2017, and an amended index and privilege log for produced documents. Pl.’s
Resp. Br., Ex. 3 [Doc. No. 33-3]. This submission shows that Plaintiff has withdrawn its
deliberative-process objection to some requests and has withheld only a few documents
from production based on this privilege. These documents consist of three reports, a
transmittal sheet, and a computation summary; an internal memorandum referring the case
for litigation was withheld based on this and attorney-client privileges; and a narrative
report and addendum have been redacted based on this and other privileges. Defendants
do not present any specific issue for decision with respect to these documents. Therefore,
the Court cannot make a reasoned decision regarding the applicability of the deliberative
process privilege, and declines to address this issue on the present record. 3
C.
Specific Discovery Requests
Defendants contend Plaintiff has failed to provide sufficient answers and document
production regarding certain requests in Defendants’ Amended First Set of Interrogatories,
Request for Admission, and Request for Production of Documents. 4 Defendants’ Motion
is governed by Rule 26(b)(1), which authorizes the discovery of “any nonprivileged matter
that is relevant to any party’s claim or defense and proportional to the needs of the case,
considering the importance of the issues at stake in the action, the amount in controversy,
3
Defendants also make a general request that the Court order Plaintiff to produce all
documents listed in privilege logs as withheld from production based on any privilege. See Defs.’
Br. [Doc. No. 26], at 13. This request similarly presents no specific issue for decision.
4
Defendants do not provide a copy of their discovery requests with the Motion, but the
requests are stated in Plaintiff’s responses, which are attached to Plaintiff’s brief. See Pl.’s Resp.
Br., Ex. 1 [Doc. No. 33-1].
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the parties’ relative access to relevant information, the parties’ resources, the importance
of the discovery in resolving the issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit.”
1.
Document Requests No. 1 and No. 2
Defendants asked Plaintiff to produce “diary sheets” prepared during the
investigation and documents referred to therein. Plaintiff produced responsive documents,
including the investigation file and a document containing case diary entries from which
information protected by the informer’s privilege had been redacted. 5 Defendants do not
articulate any specific reason why this production is insufficient to meet their need for
discovery. The Court finds Plaintiff’s production is sufficient.
2.
Document Requests No. 3, No. 7 and No. 8
Defendants requested the production of a “drop file” and “‘E’ establishment orders”
showing hours spent at the restaurant during the investigation. Plaintiff responded that it
was not familiar with these terms but it had produced the investigation file. Defendants
also requested records of “data and time events” regarding the investigation. Plaintiff
responded that it had produced the investigation file, including the redacted case diary
entries.
5
Plaintiff provides a copy of the redacted case diary entries with its response brief. See
Pl.’s Resp. Br., Ex. 6 [Doc. No. 33-6]. It appears that most, if not all, of the redactions are based
on the informer’s privilege. Defendants do not address the redactions or explain why the produced
documents are insufficient to meet their need for discovery.
6
In their Motion, Defendants describe the “drop file” as a file kept by investigators
or managers that is separate from the investigation file and includes evaluations of the
investigators by their supervisors. Plaintiff says no such file exists, but that investigators
are evaluated by supervisors and records of the evaluations are kept. Plaintiff contends
Defendants have not explained any relevance of these evaluations.
Defendants fail to
address this contention in their reply brief, except to insist that a “drop file” exists. See
Defs.’ Reply Br. [Doc. No. 38] at 4. Regarding “‘E’ establishment orders” and other “data
and time events” records, Plaintiff maintains it has no responsive documents other than
those already produced. Defendants make no reply to this contention.
The Court accepts Plaintiff’s representation that there is no “drop file” because
Defendants present no factual basis to find otherwise. Plaintiff cannot be compelled to
produce a file that does not exist. Defendants also present no basis to conclude that Plaintiff
has failed to produce any other requested documents. Therefore, the Court finds Plaintiff’s
responses are sufficient.
3.
Document Requests No. 5, No. 6 and No. 17
Defendants requested the production of interview statements from the investigation,
redacted interview statements, and records showing the number of employees interviewed.
Plaintiff initially objected but later produced redacted interview statements omitting
information that would identify the employees interviewed. Defendants do not contend the
redacted statements are insufficient to satisfy their discovery needs. At this point in the
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case, the Court finds this production is sufficient because the redacted information is
protected by the informer’s privilege.
4.
Document Requests No. 9 and No. 10
Defendants requested the production of handbooks or policy manuals followed by
the investigators in this case. Plaintiff responded that the applicable field operations
handbook was publicly available, and provided the internet link. Defendants contend in
their Motion that Plaintiff should be required to furnish a copy of each handbook or policy
manual used in the investigation. In response, Plaintiff identifies the applicable sections
of the identified handbook and other produced documents that explain the investigative
process. Plaintiff states that no other documents reasonably responsive to these requests
exist. The Court finds Plaintiff’s response to be sufficient under Rule 26(b)(1).
5.
Document Request No. 11
Defendants requested the production of “each written finding or written conclusion
by the Plaintiff which supports the allegation in ¶10, ¶11 and/or ¶12 [of the Complaint]
that the Defendants, or either of them, are guilty of willful violations.” See P.’s Resp. Br.,
Ex 1 [Doc. No. 33-1] at 5. Plaintiff objected, but stated that the investigation file produced
to Defendants contained a narrative report explaining the bases of the violations (with
redactions to protect privileged information). Defendants simply insist in their Motion that
Plaintiff should produce unredacted documents. They do not explain why the redacted
document is insufficient or why Plaintiff’s production is otherwise incomplete.
Accordingly, the Court finds that Plaintiff’s response is sufficient.
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6.
Document Request No. 12
Defendants requested the production of the “Dummy File” referred to in a narrative
report, which is described as a copy of the investigation file that was made to be kept at the
division office when the original was sent to the regional solicitor’s office for litigation
purposes. Plaintiff responded that the request sought duplicative information because
Defendants already had a copy of the investigation file and the dummy file contained the
same information and documents as the original file.
Defendants assert that Plaintiff should be required to produce the dummy file
because it might be different from the investigation file. They do not explain what
additional information might be obtained from a duplicate file; their arguments instead
suggest they are using the term “dummy file” to refer to some sort of file that employees
at the division office might keep to store additional documents not contained in the
investigation file. See Defs.’ Reply Br. [Doc. No. 38] at 5. However, Defendants’
discovery request sought the “dummy file” referred to in the narrative report, which is a
duplicate of the investigation file previously produced to Defendants. The Court finds
insufficient reason to require Plaintiff to produce the “dummy file” sought by Defendants’
request.
7.
Interrogatory No. 2
Defendants posed an interrogatory that asked Plaintiff to identify each person who
calculated the amounts allegedly due for unpaid minimum wages and overtime
compensation, to state the amount owed for each of these types of wages, to explain in
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detail how these amounts were calculated, and to explain how any estimates or projections
were determined and used in the calculations. Plaintiff objected on the ground that this is
an “overly broad and unduly burdensome contention interrogatory,” but it answered by
stating that the wage computations were contained in documents produced to Defendants
and identifying the documents. See Pl.’s Resp. Br., Ex. 1 [Doc. No. 33-1] at 8-9.
Defendants state in their Motion that Plaintiff’s response is insufficient, without
identifying any particular deficiency or explaining what additional information is needed.
Plaintiff responds that, based on the documents produced and the discussions between
counsel, “Defendants know that the lead investigator, Cheryl Masters, computed the back
wages” owed to employees and where to find the amounts calculated for each employee.
See Pl.’s Resp. Br. [Doc. No. 33] at 15. Plaintiff states that certain documents “detail how
amounts were calculated.” Id. Plaintiff also states that Defendants’ lack of records
required the use of wage reconstruction methods to make “back wage computations for
84 employees in multiple job categories for an approximate three-year period,” and that
“requiring the investigator to provide a narrative explanation of all computations is overly
burdensome and more than is required in this case.” See Pl.s Resp. Br. [Doc. No. 33] at 15.
Plaintiff contends Defendants should pose specific questions or obtain any additional
information they need through depositions of the investigators. Defendants only reply is:
“The accuracy and reliability of the damage/loss computations by the Plaintiff are in
question, and this discovery is proper.” See Defs.’ Reply Br. [Doc. No. 38] at 5.
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Although the wage information sought by Defendants is certainly relevant and in
this sense proper, the Court finds that Plaintiff has substantially answered this interrogatory
through the production of records, as permitted by Rule 33(d). The Court further finds that
requiring Plaintiff to draft a detailed narrative explanation of how each wage calculation
was done, how each estimation or projection was determined, and how these estimations
were used in the calculations, would not be an efficient use of Plaintiff’s resources or
proportional to the needs of the case, particularly in light of Defendants’ failure to identify
any particular insufficiency or need for additional information. Therefore, the Court
concludes that Plaintiff’s answer is sufficient under Rule 26(b)(1).
IT IS THEREFORE ORDERED that Defendants’ First Motion to Compel
Discovery [Doc. No. 24] is DENIED.
IT IS SO ORDERED this 17th day of April, 2017.
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