Roberts et al v. C.R. England et al
Filing
158
MEMORANDUM DECISION granting in part 121 Motion to Compel. Signed by Magistrate Judge Brooke C. Wells on 07/26/2013. (tls)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
Charles Roberts et al.,
Plaintiffs,
MEMORANDUM DECISION AND ORDER
GRANTING IN PART PLAINTIFFS’
MOTION TO COMPEL
v.
Case No. 2:12-cv-0302
C.R. England, Inc., et al.,
District Judge Robert Shelby
Defendants.
Magistrate Judge Brooke Wells
Before the Court is Plaintiffs’ First Motion to Compel Documents. 1 The Court heard
argument on Plaintiffs’ motion on Friday July 19, 2013. Plaintiffs were represented by Joseph
Goode, Mark Leitner, and Brennan Moss. Defendants were represented by James Jardine and
David Dibble. Having heard argument and following further consideration of the parties’ briefs
and relevant case law the Court GRANTS in PART Plaintiffs’ motion as set forth below.
BACKGROUND
This is a putative class action involving Plaintiffs who allege that Defendants
“fraudulently solicited and sold them a business opportunity to drive big rig trucks.” 2
Defendants own and operate a trucking company, a company that leases trucks, and a school that
provides instruction for students so they can obtain a commercial driver license (CDL).
Plaintiffs allege violations of various state and federal laws. In short, Plaintiffs assert that
Defendants misrepresented the income which was available to students who ended up leasing
trucks from Defendants. Plaintiffs are seeking to certify this matter as a class action and
1
Docket no. 121. The Court notes that docket no. 121 contains the redacted public version of Plaintiffs’ sealed
motion.
2
Mtn. p. 4.
currently this case is at the precertification stage. The matter of certification will be before Judge
Shelby at a future date.
In their instant motion Plaintiffs seek the following:
(i) Either answer Interrogatories Nos. 4-24 of Roberts’ Interrogatories to England
(Set One) and Interrogatories Nos. 22-23 of McKay’s Interrogatories to England
(Set Two) or, alternatively, to aggregate and produce in an electronic and
searchable format the settlement statement data sought for the 14,708 drivers who
signed Vehicle Lease Agreements and Independent Contractor Operator
Agreements since January 1, 2008 to the present;
(ii) Produce the expense related documents requested in Document Request Nos.
9-14, 16, 19, and 24-26 of Roberts’ Request for Production (Set One) and
Document Request Nos. 10(aa), 10(bb), and 10(cc) of Plaintiffs Second Set of
Requests for Documents;
(iii) Provide the last known address, phone number, and full name of each
individual identified in their December 19, 2012 amended responses to
Interrogatory No. 1 of McKay’s Interrogatories to England (Set One),
Interrogatories Nos. 15-19 of McKay’s Interrogatories to England (Set Two),
Interrogatory No. 1 to Roberts’ Interrogatories to England (Set One), and
Interrogatories Nos. 1 and 18 of Roberts’ Interrogatories to Opportunity (Set
One); and
(iv) Pay the reasonable expenses incurred in bringing this motion to compel
(including attorneys’ fees) as provided in Fed. R. Civ. P. 37(a)(5)(A). 3
At the outset after having considered Plaintiffs’ motion and discovery requests, the Court
finds Defendants nondisclosure was substantially justified in this instance given the
circumstances and current procedural posture of the case. Therefore the Court DENIES
Plaintiffs’ request for the reasonable expenses incurred in bringing this motion.
DISCUSSION
The Court finds the reasoning in Tracy v. Dean Witter Reynolds, 4 a case out of the
District of Colorado, persuasive and applies the principles from that case to the instant matter. In
3
Mtn p. 2.
2
Tracy various non-exempt employees brought suit claiming their employer failed to pay them
overtime compensation in violation of the Fair Labor Standards Act (FLSA). The plaintiffs in
Tracy sought extended discovery on several occasions. Each time, however, they were denied
because they failed to submit sufficient evidence to “satisfy [the court] that Dean Witter had a
national policy or practice which violated the FLSA.” 5 Similar to the instant matter, the
plaintiffs in Tracy sought this discovery during the precertification stage. And, just as in this
case, the plaintiffs in Tracy alleged they needed the discovery to satisfy the requirements
associated with numerosity, commonality, typicality, and adequacy of representation. 6
Some discovery is necessary prior to a determination of class certification. 7 This
includes the necessity of discovery concerning damages, 8 which must be rigorously analyzed
during the certification process. 9 The need for precertification discovery does have limits
however and it is within the discretion of the court to prevent discovery from being used as a
weapon or as a fishing expedition creating undue burden for the defendant. 10 Thus, it is the
undersigned’s responsibility to balance the need for discovery with the need to protect the rights
of all parties. 11
4
185 F.R.D. 303.
5
Id. at 304.
6
See Fed.R.Civ.P. 23(a).
7
See Tracy, 185 F.R.D. at 304-05; National Organization for Women v. Sperry Rand Corp., 88 F.R.D. 272, 276
(D.Conn.1980); East Texas Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 405-06 (1977).
8
See Comcast Corp. et al. v. Behrend et al., 133 S.Ct. 1426, 1433 (2013).
9
See Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551-2552 (2011).
10
See Tracy, 185 F.R.D. at 305; National Organization for Women, 88 F.R.D. at 277; Chateau de Ville Produciton,
Inc. v. Tams-Witmark Music Library, Inc., 586 F.2d 962, 966 (2nd Cir.1978).
11
See id.
3
Generally, there must be some factual basis for plaintiffs’ claims of classwide
discrimination before classwide discovery is allowed. 12 Further, the plaintiffs bear the burden of
“advancing a prima facie showing that the class action requirements of Fed.R.Civ.P. 23 are
satisfied, or that discovery is likely to produce substantiation of the class allegations.” 13 With
these principles in mind the Court turns to the instant matter.
During oral argument Defendants broke down Plaintiffs’ discovery requests into four
broad categories: 1) requests for production regarding Defendants’ calculations of expense
charges to independent contractors; 14 2) interrogatories and requests for production regarding the
settlement statement data; 15 3) requests for production concerning financial statements and
related accounting; 16 and 4) interrogatories seeking contact information for the names of
individuals involved in this case. 17 The Court finds this approach logical and will address each
of these categories.
1) Requests for production regarding Defendants’ calculations of expense charges to
independent contractors.
In general this category of requests seeks information concerning expenses. For example
Plaintiff Roberts request for production (RFP) 9 seeks “Documents concerning the determination
of the weekly truck lease fees charged the putative class and any formulas related thereto.”
Defendants assert that these requests are not connected to any allegation in the Complaint
12
See Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 267 (D.Minn.1991).
13
Mantollete v. Bolger, 767 F.2d 1416, 1424 (9th Cir. 1985).
14
This category of requests include Plaintiff Roberts request for production (RFP) 9, 10, 11, 13, 26 and Plaintiffs
second set of RFPs 10(aa), 10(bb), and 10(cc).
15
This category includes Plaintiff Roberts 1st set of interrogatories to Defendant England numbers 4-24, Plaintiff
McKay’s 2nd set of interrogatories to England 22 and 23, and Roberts RFP 19.
16
These include Plaintiff Roberts 1st RFP numbers 12, 14, 16, 24, and 25.
17
This category of requests includes Plaintiff McKay’s first set of interrogatories to Defendant England number 1
and McKay’s second set of interrogatories to England numbers 15-19 and Roberts first set of interrogatories to
Opportunity 18.
4
because Plaintiffs fail to assert that Defendants have misrepresented the information in these
categories of documents. The Court is not persuaded by this argument.
As noted by Plaintiffs during oral argument paragraphs 50(c), 123, and 124 of the Third
Amended Complaint (TAC) allege false, misleading or incomplete representations concerning
expenses. For example paragraph 50(c) provides:
Made false and/or misleading and/ or incomplete representations and assumptions
about the amount of income and expenses. The pro formas made unrealistic
projections about the number of weekly miles that could be driven. They did not
include all of the expenses a Driving Opportunity purchaser would incur in
connection with the Driving Opportunity thereby leading to a false and/or
misleading “bottom line” representation in the weekly and annual income sections
of the pro forma. 18
And paragraph 123 of the TAC provides in relevant part:
Defendants HORIZON and OPPORTUNITY participated in the conduct of the
ENGLAND Truck Leasing Enterprise by inducing or otherwise assisting the
purchase of the Driving Opportunity by Plaintiffs, and thousands of other Drivers;
by providing financing or otherwise assisting in providing financing for Plaintiffs
and thousands of other Drivers to lease trucks; and by knowingly misrepresenting
and omitting material facts about: (i) the costs of operating as an independent
contractor; (ii) the net revenues and profit margins that purchasers of
the Driving Opportunity could expect to receive; (iii) by entering into the Lease
Agreements, the terms of which made it virtually impossible for Plaintiffs and
those similarly situated to earn any net revenues at all, let alone enough to make
the amounts represented by HORIZON and OPPORTUNITY in order to induce
the purchase of the Driving Opportunity
Based on these sections of the Complaint, the Court finds this category of requests is
connected to Plaintiffs’ claims and pleadings. Therefore, Defendants are ORDERED to provide
answers to these discovery requests.
2) Interrogatories and requests for production regarding the settlement statement data.
During oral argument Defendants argued that these requests were insufficiently detailed
because they mix solo and team drivers as well as drivers who focus on shorter regional trips and
18
Third Amended Complaint ¶50(c), p. 20.
5
those that focus on longer national trips. Further, the questions dealing with averages cannot be
calculated according to Defendants because they involve drivers still working for them. The
Court is persuaded by these arguments. Therefore, Plaintiffs request to compel this category of
interrogatories is DENIED. Plaintiffs may rewrite these interrogatories in a manner that
specifically identifies which categories of drivers they are seeking information about.
Finally, this category also includes a RFP for “Documents reflecting the total amount of
legal fees charged by you to the putative class.” In the Court’s view this RFP is related to
expense information and does not suffer from the same fatal flaw as the other requests in this
category. As such, Defendants are ORDERED to provide a response to this RFP.
3) Requests for production concerning financial statements and related accounting.
Plaintiffs assert this category of requests is needed to show a profit motive and it relates
to a possible disgorgement damages claim, which arises under the RICO claims or the Utah
Consumer Sales Practices claims. In response Defendants argue that these requests are not
relevant because they are speculative and disgorgement is rare. Defendants also argue Plaintiffs
do not need this information at the precertification stage.
The Court is not persuaded by Defendants position. Discovery in this case was not
bifurcated and as such, Plaintiffs may request discovery regarding damages at the precertification
stage. Further, as explained by the Supreme Court recently in Comcast Corp., et al v. Behrend et
al. 19 at the class-certification stage a “’plaintiff’s damages case must be consistent with its
liability case, . . . .’” 20 Thus, there is a necessity of obtaining at least some discovery relating to
19
133 S.Ct. 1426.
20
Id. at 1433 (quoting ABA Section of Antitrust Law, Proving Antitrust Damages: Legal and Economic Issues 57,
62 (2d ed. 2010); see, e.g., Image Tech. Servs. v. Eastman Kodak Co., 125 F.3d 1195, 1224 (C.A.9 1997).
6
damages at the precertification stage. Defendants are therefore ORDERED to provide responses
to this category of requests.
4) Interrogatories seeking contact information for the names of individuals involved in this
case.
During argument the parties noted that the first interrogatory in this group of requests,
Plaintiff McKay’s First set of interrogatories to England 1, is moot because the parties resolved
this request. The remaining requests concern contact information for current and former
employees that worked in specific positions for Defendants. The Court is persuaded that this
information is relevant, or may lead to the discovery of relevant information. However, the
Court finds requiring contact information for “all current and former employees” is too large of a
burden for Defendants. Therefore in similar fashion to the parties’ previous compromise, the
Court ORDERS Defendants to provide a representative sample of the contact information for the
current and former employees that are the subject of these requests consisting of 8% of the total.
ORDER
For the reasons set forth above the Court GRANTS IN PART Plaintiffs’ First Motion to
Compel.
IT IS FURTHER ORDERED that Defendants are to provide the ordered discovery to
Plaintiffs within thirty (30) days from the date of this order.
DATED this 26 July 2013.
7
Brooke C. Wells
United States Magistrate Judge
8
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?