Thomas v. FTS USA, LLC et al

Filing 217

MEMORANDUM OPINION. See for complete details. Signed by District Judge Robert E. Payne on 06/24/2016. (nbrow)

IL
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

JUN 2 4 2016
CLt:ilK,

u_s_

DIS I P!C I COLl8T

RICH! -'1Ci--iD. V.l\

-------·------··---------·-----

KELVIN M. THOMAS, et al.,
Plaintiffs,

v.

Civil Case No. 3:13cv825

FTS USA, LLC, et al.,
Defendants.
MEMORANDUM OPINION

This matter

is

before

AND MOTION TO STRIKE

the

(ECF No.

Court

173).

on

PLAINTIFF'S

OBJECTION

For the reasons set forth

herein, the motion will be granted in part and denied in part.
BACKGROUND

On December 11, 2013, Plaintiff Kelvin Thomas
a

class

action complaint

similarly

situated,

("FT s II) '

and

on behalf of

alleging

Unitek

Global

collectively,

"Defendants")

Re po rt ing

( "FCRA") .

Act

The Complaint alleges
and

Two

allege

respectively.

that

himself

defendants

Services,

had

violated

(Complaint

of

§

and all
FTS

filed
others

USA,

LLC

( ("Unitek");

Inc.

Fair

the

("Compl. ")

four Counts under the

violations

("Thomas")

(ECF

FCRA.

No.

Credit
1)).

Counts One

1681b (b) (2) (A) (i)

Section 1681b(b) (2) (A) provides that:

a person may not procure a consumer report,
or cause a consumer report to be procured,
for employment purposes with respect to any

and

(ii),

consumer,
unless:
( i)
a
clear
and
conspicuous disclosure has been made in
writing to the consumer at any time before
the report is procured or caused to be
procured, in a document that consists solely
of the disclosure, that a consumer report
may be obtained for employment purposes; and
(ii) the consumer has authorized in writing
(which authorization may be made on the
document referred to in clause
(i))
the
procurement of the report by that person.
Counts Three and Four allege violations of
and (ii), respectively.

§§

1681b (b) (3) (A) (i)

Those sections require that:

In using a consumer report for employment
purposes, before taking any adverse action
based in whole or in part on the report, the
person intending to take such adverse action
shall provide to the consumer to whom the
report relates: (i) a copy of the report;
and (ii) a description in writing of the
rights
of
the
consumer
under
this
subchapter, as presented by the Bureau under
Section 1681g (c) (3) of this title.
On

June

Schedu:)._ing
"phases"

13,

Order.

of

2014,

the

(ECF

discovery.

No.

Court

entered

26).

That

"Phase

I

immediately following the parties'

the

initial

Order

discovery,"

Agreed

delineated
which

two

commenced

initial Rule 2 6 conference,

directed that the parties conduct discovery concerning "(1)

the

merits of the Plaintiff's claims that the Fair Credit Reporting
Act

('FCRA')

was violated with respect to him;

and

(2)

evidence

necessary for the Parties to litigate class certification."
"Phase

II

discovery,"

which would proceed only to

the

Id.

extent

necessary pending the Court's resolution of class certification

2

issues and any prior dispositive motions, would include "whether
the FCRA was violated with respect to unnamed class members and
factual issues bearing on whether the alleged violations of the
FCRA were willful.
devoted

to

FCRA

compliance,

These issues include resources and efforts
compliance,

class-wide

identities."

audits

factual

undertaken

discovery,

and

to

confirm

class

member

Id.

In June 2015, the parties came before the Court to resolve
Defendants'

many objections to Thomas'

that hearing,

discovery requests.

the Court ordered Defendants to produce,

At

by June

12, 2015, all documents concerning:
( 1)

any

FCRA

policies

that

in

place

at

either

Defendant at any time during the class period;
(2)

any FCRA summary of rights forms

Defendant

at

any

time

during

the

used by either
applicable

time

period;
(3)

any

pre-

used by either

or

post-adverse

Defendant

action

during

the

notice

letters

applicable

time

period;
(4)

any

contracts

between

either

Defendant

and

any

consumer reporting agency from which either Defendant
obtained consumer reports

for

employment purposes

any time during the applicable period;

3

at

any

(5)

communications,

policies,

memoranda,

or

training materials governing either Defendant's use of
background reports for employment purposes during the
applicable time period;
(6)

any

documents

demonstrate that

on

their

which

Defendants

FCRA violations,

relied

if any,

to
were

negligent or otherwise not willful;
( 7)

all

class

documents

action

supporting

should

fail

the

claim that

because

of

a

Thomas'
lack

of

numerosity, a lack of predominance of questions of law
and fact,

a lack of typicality, a lack of adequacy, or

a lack of superiority as those terms are understood in
class action practice; and
( 8)

all

documents

supporting

Defendants'

claim

that

the claims stated by Thomas are individual in nature
and improper for treatment as a class action.
(Transcript of June 4,
The Court found
The

Court

2015 Hearing

Defendants'

also

("Hrg.

Tr.",

ECF No.

79)).

objections to be largely baseless.

cautioned

Defendants

against

discovery

gamesmanship and repeatedly warned them that they would be bound
by what they produced in response to those discovery requests.
Id. at 13-14, 16-17, 22-23.
On January 7, 2016, the Court granted in part and denied in
part

Thomas'

motion to

certify two
4

classes.

(Order,

ECF No.

105) .

The Court first certified a so-called "Impermissible Use

Class," defined as follows:
All natural persons residing in the United
States
(including all territories and other
political subdivisions of the United States) ,
who applied for an employment position with
Defendants or any of their subsidiaries within
the two years immediately preceding the filing
of the Complaint in this matter on December 11,
2013, and as part of this application process
were the subject of a consumer report obtained
by Defendants, (a) where the defendants failed
to provide a written disclosure as stated at 15
U.S.C. § 1681b(b) (2) (A) (i)
to the applicant
that they intended to obtain a consumer report
for employment purposes,
(b) and where as a
result the Defendants failed to obtain a proper
written authorization as stated at 15 U.S.C. §
1681b (b) (2) (A) (ii)
signed
by
the
applicant
prior to obtaining the consumer report.
The

Court

also

certified

an

"Adverse

Action

Sub-Class,"

defined as follows:
All natural persons residing in the United
States
(including all territories and other
political subdivisions of the United States) ,
who applied for an employment position with
Defendants or any of their subsidiaries within
the two years immediately preceding the filing
of the Complaint in this matter on December 11,
2013, and as part of this application process
were the subject of a consumer report obtained
by Defendants, (a) where the defendants failed
to provide a written disclosure as stated at 15
U.S.C. § 1681b(b) (2) (A) (i)
to the applicant
that they intended to obtain a consumer report
for employment purposes,
(b) and where as a
result the Defendants failed to obtain a proper
written authorization as stated at 15 U.S.C. §
168 lb (b) ( 2) (A) (ii)
signed
by
the
applicant
prior to obtaining the consumer report, and (c)
whom
Defendants
found
ineligible
for
the
position for which the applicant had applied
5

based on the applicant's consumer report; (d)
to whom Defendants did not provide a copy of
the consumer report as stated at 15 U.S. C. §
1681b (b) (3) (A) (i) at least five business days
before the date the adverse employment decision
is first noted in Defendants' records, ( d) and
to whom Defendants did not provide a written
summary of Fair Credit Reporting Act rights as
stated at 15 U.S.C. § 1681b(b) (3) (A) (ii) at
least five business days before the date the
adverse
employment decision is first noted in
Defendant's records.
After
limited

the

certification

Phase

II

decision,

discovery.

the

commenced

Defendants

Again,

parties

resisted

discovery, thereby necessitating repeated judicial intervention.
See

ECF

No.

124

(Transcript

of

February

22,

2016

Hearing,

overruling Defendants' objections to class notice plan); ECF No.
122

(Order

plan);

ECF

overruling
No.

138

addressing

various

protective

order,

Defendants'
(Transcript

disputes
and

to

class

resolved) .
responses

list

that were

March

concerning

class

late,

23,

class

class

notice

2016

Hearing,

list,

proposed

ECF

No.

14 6

confirming that disputes

member

Phase II,

to

depositions) ;

2016 Hearing,

and

Throughout

of

class member

(Transcript of April 26,
as

objections

depositions

had

been

Defendants provided discovery

piecemeal,

or

in a

format

that was

difficult or impossible for class counsel to review.

See id.

Phase II discovery closed on May 13, 2016.
On

May

16,

2016,

Defendants

filed

a

second

motion

summary judgment and a motion to decertify the classes

6

for

(ECF Nos.

On that same date, Thomas filed a motion for partial

154, 156).

summary judgment

( ECF No.

164)

seeking summary judgment "on al

[sic] questions other than damages."
In
Thomas'

support

of

their

two

Id.

motions

and

in

motion for partial summary judgment,

opposition

to

Defendants raised

several heretofore unmentioned defenses to the claims of Thomas
and

the

class.

Incorporated

First,

("CSS"),

a

background

that

contended

Defendants

check

vendor

engaged

css
by

Defendants, sent out pre-adverse action notices to some subclass
members,

in compliance with

asserted

that

several

or

settlement

agreements
related

claims

class

against

Second,

members

agreements

Defendants

signed

168lb(b) (3).

§

severance

had

releasing
Third,

Defendants.

all

employment-

Defendants

argued

that several class members had signed forum selection agreements
in

conj unction

that

with

required all

Pennsylvania,
Eastern

and

District

their

claims

employment
against

therefore
of

that

Virginia

with

Uni Tek

Defendants

to

subsidiaries

be

pursued

venue

is

improper

to

those

class

as

in

in
the

members.

Finally, Defendants contended that Thomas is an inadequate class
representative and should be

judicially estopped from pursuing

the claims at issue because he had failed to disclose the claims
made in this litigation as assets in his Chapter 13 bankruptcy
proceedings,
(Memorandum

which
of

Law

he

was

statutorily

in

Support
7

of

required

Defendants'

to

Motion

do.
for

Decertification
Defendants'

Motion

Memorandum
Partial

(ECF No.

of

Defendants

for

Law

Summary

155); Memorandum of Law in Support of

in

Summary
Opposition

Judgment

contend that

(ECF

Judgment

(ECF

to

Plaintiff's

No.

they are

157);

No.
Motion

for

Accordingly,

166) ) .

entitled to

summary

judgment

against the affected class members and that this action is no
longer amenable to class treatment.
In

support

declaration

of

of

those

Lauren

arguments,

Dudley

("Dudley"),

Director of Human Resources

(ECF No.

exhibits

newly

relating

to

the

Defendants

off er

Defendants'

the

Senior

159) and numerous attached

raised

defenses.

Dudley's

declaration states that she is UniTek's Senior Director of Human
Resources,

and that,

therefore,

she has personal

all of the exhibits appended thereto.
exhibits

are:

supplement

a

(1)

a

"Statement

previously

(ECF No.

of

produced

Work"

contract

knowledge

159-1).

that

Those

purports

between

of

CSS

to
and

Defendants, and adverse action notices that CSS purportedly sent
to

subclass

members

before

Defendants

action against those subclass members
a

"sample"

selection

of

severance

took

adverse

employment

(the "CSS documents");
and

settlement

(2)

agreements,

signed by some class members, that purport to release all of the
signatories'

claims against Defendants

and Satisfaction Documents");
selection

agreements,

( 3)

allegedly
8

(the "Release and Accord

a "sample" selection of forum
signed

by

350

class

members,

that require all disputes against Defendants to be resolved in
Pennsylvania

(the

"Venue

Documents") ;

and

( 4)

lists

of

class

members whose claims Defendants contend are affected by all of
the

foregoing

off er

the

(ECF Nos.

documents.

CSS

and

Release

Defendants

159-1-159-8).

documents

the

and

Accord

and

Satisfaction Documents in support of both their decertification
motion

and

their

motion

renewed

judgment.

summary

for

Defendants offer the Venue Documents only in support of their
decertification motion.
On May 19, 2016, after the close of Phase II discovery and
after the

filing of their motions

for

decertification and for

summary judgment, Defendants served Thomas' counsel with amended
disclosures under Fed. R. Civ. P. 26(a), in which Defendants for
the

first

time

disclosed

bearing on Defendants'

Dudley

claims.

as

a

witness

(ECF No.

with

knowledge

On that same

174-10).

day, Defendants also produced a flash drive containing documents
relating to
flash

Defendants'

drive was

recently

filed motions.

However,

encrypted and unreadable by Thomas'

the

counsel's

computers.
On May 26,

2016, Thomas filed this objection and motion to

strike.

First,

disclosure

of

violated
Orders.

both

Thomas

Dudley
Fed.

(Memorandum

argues

and

R.
in

Civ.

the
P.

Support
9

that

exhibits

Defendants'
to
the

her

26

and

of

Plaintiff's

belated

declaration

Court's

previous

Objection

and

Motion

to

Therefore,

Strike

("Pl.

Mero.,"

13-14).

at

(thereby foreclosing their use in support

of the pending motions),

Id.

174)

No.

Thomas seeks to strike Dudley's declaration and all

the exhibits thereto

trial,

ECF

and to
Second,

affirmative

foreclose
Thomas

use of the

contends

defenses

improper venue,

to preclude Dudley from testifying at

of

that

release,

Dudley exhibits at trial. 1
Defendants
accord

and judicial estoppel,

have

and

waived

the

satisfaction,

and therefore should be

precluded from asserting those defenses in the currently pending
motions or at trial.
At

oral

longer

will

accord

and

Id. at 16-18.

argument,
rely

on

Defendants

the

satisfaction

represented

affirmative
in

defenses

support

of

decertification motion or summary judgment motion.

that
of

they

no

release

or

either

their

Accordingly,

Thomas' motion will be denied as moot as to those defenses,
they are not addressed further herein.

Each of the

and

remaining

issues is addressed in turn.

Thomas' motion also objected to, and sought to strike, the
declaration
of Collin
Dougherty,
Defendants'
counsel,
and
unspecified attachments thereto.
(Pl. Mero. at 1).
However, at
oral argument,
Thomas withdrew that aspect of his motion.
Therefore,
to
the
extent
that
Thomas'
motion
concerns
Dougherty's declaration, the motion will be denied as moot.
Accordingly, Dougherty's declaration is not addressed further
herein.
1

10

DISCUSSION
A. The Motion
Thereto

to

Strike

Dudley's

Declaration

and

Exhibits

The process of determining whether to impose sanctions such as
those requested by Thomas involves three steps:
( 1)
determining that
a
violation of a
discovery order or one of the Federal Rules
of Civil Procedure occurred; ( 2) determining
whether that violation was harmless and
substantially justified,
by reference to
Southern States Rack & Fixture,
Inc. v.
Sherwin-Williams Co., 318 F.3d 592, 597 (4th
Cir. 2003); and (3) fitting a sanction to
the violation, if one is found.
Samsung Elecs. Co., Ltd. v. Nvidia Corp., 314 F.R.D. 190, 195-96
(E.D.

Va.

2016).

production

of

For the reasons set forth below,

Dudley's

violated both the
Orders;

the

justified;

declaration

rules

untimely

and

the

attached

exhibits

of discovery and the Court's previous
production

striking

and

the belated

the

was

evidence

neither
and

harmless

precluding

nor

Dudley's

testimony at trial are the only appropriate sanctions.
a. The Existence of Violations

Fed.

R.

Civ.

P.

26(a) (1) (A) (i)

provide to its opponent,
the

name

of

each

that

claims

defenses,

or

impeachment.

the

Fed.

R.

that

a

party

without awaiting a discovery request,

individual

information

requires

likely

to

have

disclosing party may use
unless
Civ.

the
P.

use

would

26(a) (1) (A) (i).
11

discoverable

to

support

its

be

solely

for

Also,

a

party

must

provide

copy

a

or

description

electronically stored information,

"all

of

documents,

and tangible things that the

disclosing party has in its possession,

custody,

or control and

may use to support its claims or defenses, unless the use would
Fed. R.

be solely for impeachment [.]"

Civ.

P.

26(a) (1) (A) (ii).

These initial disclosures must be made within fourteen days of
the parties'
P.

first discovery planning conference.
In addition,

26(a) (1) (C).

Rule 26 (e) (1) (A)

Fed. R. Civ.

requires that a

party must supplement or correct these initial disclosures in a
timely manner,

if the additional or corrective information has

not otherwise been made

known to the other parties during the

discovery process or in writing.

Fed. R. Civ. P. 26(e) (1) (A).

These rules obligated Defendants to disclose Dudley either
within fourteen days of the parties'
or "in a

timely manner."

Here,

initial planning conference

Defendants

supplemented their

Rule 26 disclosures to add Dudley a full week after the second
phase

of

discovery

had

closed

and

three

days

after

filed her declaration in support of their motions
judgment

and

for

decertification.

Although

they had

for

Thomas

summary

was

made

aware of Dudley's existence by the filing of her declaration in
support

of

Defendants'

motions,

12

Defendants'

failure

to

give

Thomas

prior

notice

of

Dudley's

key

role

in

Defendants'

case

utterly fails to satisfy Rule 26. 2
Defendants

contend

that

Dudley's

disclosure

was

timely

because she was promoted to her current position as Defendants'
Senior

Director

of

Human

disclosed on May 19, 2016.
Plaintiff's Motion to Strike
at

And,

7-8).

Defendants

predecessor,

Carole Slover

disclosures,

and

Thomas

Resources

in

April

2016,

and

was

(Memorandum of Law in Opposition to
("Def. Mero.
add,

they

("Slover")

chose

not

in Opp.," ECF No.
had

disclosed

181)

Dudley's

in their initial Rule 26

to

depose

her.

Id.

The

latter point is simply irrelevant to Defendants' duty to timely
disclose

Dudley.

And,

as

to

the

first,

Defendants

had ample

opportunity between Dudley's promotion in April and the filing
of their summary judgment and decertification motions on May 16,
2016, to give Thomas notice of Dudley's existence and knowledge.
Instead,

Defendants

chose

to

wait

to

amend

their

Rule

26

disclosures until after Dudley's declaration had been filed and
after discovery had ended.
that,

In so doing, Defendants demonstrated

even after numerous warnings from the Court over the past

Given that nearly all of the documents appended to Dudley's
declaration were executed or sent before her promotion to this
position, the Court questions whether Dudley has sufficient
personal knowledge of the events leading to the creation of
those documents to satisfy Fed. R. Evict. 701, 702 and 901.
However, it is not necessary to decide that issue, because
Dudley's declaration is subject to exclusion on other grounds.
2

13

year, they have not yet renounced the gamesmanship in which they
have engaged throughout discovery.
The

disclosure

of

the

exhibits

2014,

to

Dudley's

In the initial Scheduling Order,

declaration was also untimely.
dated June 13,

appended

the Court explicitly provided that Phase I

discovery would include "evidence necessary for the Parties to
litigate

class

certification."

hearing on June 5,
produce

all

2015,

(ECF

No.

And,

26).

at

the

the Court again ordered Defendants to

documents

relating

class

to

certification,

specifically:
(1)

any

Defendant

FCRA
at

policies

any

time

that

in

place

during

the

class

at

either

period, see

Hrg. Tr. at 11-15;
( 2)

any FCRA summary of rights

Defendant

at

any

time

forms

during

the

used by either
applicable

time

period, id. at 16-17;
(3)

any

used by

preeither

or

post-adverse

Defendant

action

during

the

notice

letters

applicable

time

period, id. at 17-19;
(4)

any

contracts

between

either

Defendant

and

any

consumer reporting agency from which either Defendant
obtained consumer

reports

for

employment purposes

any time during the applicable period, id. at 20-21;

14

at

communications,

any

( 5)

or

policies,

memoranda,

training materials governing either Defendant's use of
background reports

for employment purposes during the

applicable time period, id. at 21-22;
(6)

any

documents

demonstrate that

on

their

which

Defendants

FCRA violations,

relied

if any,

to
were

negligent or otherwise not willful, id. at 23-24;
( 7)

all

class

documents

action

numerosity,
and fact,

supporting

should

the

fail

claim that

because

of

a

Thomas'
lack

of

a lack of predominance of questions of law

a lack of typicality,

a lack of adequacy,

or

a lack of superiority as those terms are understood in
class action practice, id. at 24; and
(8)

all

documents

supporting

the claims stated by Thomas

Defendants'

are

and improper for treatment as

a

claim

individual

that

in nature

class action,

id. at

28.
Now,
sponsored,
their

through Dudley's declaration and the exhibits therein
Defendants

motion

for

seek to introduce evidence in support of

summary

judgment

and

their

motion

for

decertification showing that:
(1)
that

Defendants had an agreement with CSS that provided
CSS

would

send

pre-adverse

action

Defendants' behalf (ECF No. 159-1); and
15

notices

on

(2)

some class members did receive pre-adverse action

notices and an FCRA summary of rights in conjunction
with

their

application

for

employment

with

certain

UniTek subsidiaries (ECF Nos. 159-2, 159-3).
In support of their motion for decertification,
seek to

introduce evidence

showing that

signed forum selection agreements,

Defendants also

several

class members

such that the resolution of
(ECF Nos.

the class claims will require individualized inquiry.
159-7, 159-8).
Clearly,

both

the

initial

Scheduling

Order

specific directives at the hearing on June 5,
Defendants

to

produce

the

evidence

that

not

counsel at

produced these

counsel's

oral argument,
documents

computers. 3

And,

in a
even

to this
format
if

the

the

more

2015 required the
they

now

Moreover,

introduce through Dudley's declaration.
Thomas'

and

seek

to

according to

day Defendants have
readable
Court

by Thomas'

were

to

give

Defendants credit for producing these documents somewhere on one
of two unreadable

flash drives provided to Thomas'

May 13 and May 20, 2016,
Now,

Defendants

class
and

the production was nearly a year late.

seek summary

judgment and

within

their

control

long

initial decision on that issue.
3

seek to

certification using evidence that was

exclusively

counsel on

Defendants did not rebut that contention.
16

re-litigate

available to them
before

the

Court's

Defendants argue that the production of these documents was
timely because "discovery in this case closed in May 2016," and
that these "class-member specific documents obviously could not
be,

and

were

themselves

not,

were

identified

identified,

until

in

argument

the

conjunction

completely

overlooks

class

members

the

Court's

with

(Def. Mem.

scheduling of Phase II discovery."
Defendants'

after

in Opp. at 2-3).

the

fact

that

the

Court specifically and repeatedly directed Defendants to produce
all

documents

to

class

(See generally Hrg.

discovery.
ECF No.

relevant

26).

certification

Tr.;

during

Phase

I

see also Scheduling Order,

When Defendants attempted to limit their Phase I

production to documents specific to Thomas, the Court explicitly
clarified that any documents pertaining to class certification
used by either Defendant, not only those related to Thomas, were
required to be produced by June 12,

2015.

See,

e.g.,

Hrg.

Tr.

reasons

set

at 17, 19.
Defendants'

argument

also

fails

for

the

same

forth in the recent opinion in Milbourne v. JRK Residential Am.,
2016 WL 1071564,
case,

the

at *9-10

defendant

(E.D.

argued that

Va.
it

Mar.

15,

2016).

could not have

In that
raised the

issue that several class members had signed binding arbitration
agreements until after the Court had certified a class because
the named plaintiff had not signed such an agreement,
absent class members had not yet been identified.
17

and the

Id. at *9.

The

Court

held

even

that,

though
class

absent

it

members

jurisdiction

over

certification,

"[the defendant's]

lacked

assertion

in

personem
class

before

or mention

of

its

right at that point would have fundamentally changed the course
of

the

litigation,

resolution

of

ensured

the

trial,

1112,

Set-Top
1118

Cable

and

Television

(10th Cir.

more

2015)

expedient

and

[the

prevented

Id. at * 9

improper gamesmanship."
Inc.

a

efficient

defendant's]

(quoting In re Cox Enters.,

Box Antitrust

Litig.,

790

F.3d

The same

(emphasis in original)).

is true here.
For the foregoing reasons,
Dudley and the documents

Defendants'

failure to disclose

appended to her declaration prior to

May 2016 constitutes a violation of Rule 26 and of the Court's
Orders of June 2014 and June 2015.
b. Harmlessness and Substantial Justification

If

a

party

fails

required by Rules 26(a)

to

identify

and 26(e)

witnesses

or

documents

or a court order,

is subject to sanctions pursuant to Fed.

R.

Civ.

that party

P.

That rule provides that:
If a party fails to provide information or
identify a witness as required by Rule 26(a)
or (e), the party is not allowed to use that
information or witness to supply evidence on
a motion, at a hearing, or at a trial,
unless
the
failure
was
substantially
justified or is harmless.
In addition to or
instead of this sanction, the court, on

18

as

37 (c) (1).

motion and after giving an opportunity to be
heard:
(A)

May
order
payment
of
the
reasonable
expenses, including attorney's fees, caused
by the failure;

(B)

May inform the jury of the party's failure;
and

(C)

May
impose
other
appropriate
sanctions,
including any of the orders listed in Rule
37 (b) (2) (A) (i) - (vi).

Fed. R. Civ. P. 37(c) (1)
Fed.

R.

Civ.

P.

(emphasis added).

37 (b) (2) (A) (i)- (vi)

provides the following

by way of alternate or additional sanctions:
( 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
disobedient party.

judgment

The basic purpose of these

rules

and prejudice to the opposing party."
at 596.

is

against

the

to prevent

"surprise

Southern States, 318 F.3d

It is not necessary that the nondisclosure be in "bad

19

faith

or

callous

evidence

to

nondisclosing

be

disregard

of

excluded.

party

to

the

discovery
The

Id.

show

rules"

burden

harmlessness

and

for

the

on

the

is

justification.

Wilkins v. Montgomery, 751 F.3d 214, 222 (4th Cir. 2014).
When assessing whether the nondisclosure was substantially
justified

or

harmless,

should consider:

the

" ( 1)

court,

the

broad

discretion,

( 2)

the ability of the party to

(3) the extent to which allowing the evidence

would disrupt the trial;
( 5)

its

the surprise to the party against whom

the evidence would be offered;
cure the surprise;

in

nondisclosing

(4) the importance of the evidence; and

party's

disclose

the

evidence."

However,

the

court

reaching

a

need

explanation

Southern
not

for

States,

consider

conclusion on harmlessness

all

318
of

and

its

failure

F.3d
the

at

to

597.

factors

justification.

in
See

Hoyle v. Freightliner, LLC, 650 F.3d 321, 330 (4th Cir. 2011).
Applying the Southern States factors
clear that Defendants'
nor

substantially

surprised by

case,

it

is

failure to disclose was neither harmless

justified.

Dudley's

to this

First,

declaration and

Thomas
the

was

certainly

attached

documents,

revealed only after the close of discovery, several months after
the Court's decision on class certification,

and nearly a year

after the Court explicitly ordered Defendants to produce all of
the documents relevant to the Rule 23 analysis.

20

Moreover,
evidence

not

after

declaration

only

been

the

evidence

and

examined

evidence

to

Defendants

having

contradict Defendants'
when

did

about

support

ordered

to

Rule

to

do

so,

disclose
but

this

Dudley's

thereto

affirmatively

prior discovery responses.

For example,

the
the

appended

existence

of

assertion that

provided any pre-adverse action notices
Defendants'

fail

30(b) (6)

any

documents

or

other

any third-party vendor
on Defendants'

behalf,

Steven

Conlin

representative,

("Conlin") testified:
Q. Now other than this document [from
Backgroundchecks.com],
what
basis
does
UniTek-and now I'm asking the company under
the company under Rule 3 6 again.
I mean
generally these questions are--are 30 (b) ( 6)
questions,
but
I'm--I
really
want
to
emphasize or--or bold that--this 30 (b) (6)
series.
Other than this document, what
basis did UniTek have to believe that the
background check companies that we have
discussed was sending the pre-adverse action
notice on [UniTek's] behalf?

A. Other than this document,
no other reference.
(ECF No.

165-1,

123:8-18) . 4

Deposition of Steven Conlin

there was
("Conlin Dep. ")

at

Conlin's testimony directly contradicts the evidence

4

Conlin's deposition provides an independent reason to exclude
Dudley's declaration and the evidence Defendants now offer that
directly contradicts Conlin' s testimony.
" [I] t is well settled
in the Fourth Circuit that as a general proposition, a party may
not submit an affidavit or declaration at the summary judgment
stage contradicting its earlier deposition testimony," including
corporate testimony taken pursuant to Rule 30(b) (6).
Caraustar
Indus., Inc. v. N. Ga. Converting, Inc., 2006 WL 3751453, at *6
21

that

Defendants now seek to offer regarding pre-adverse action
It is no wonder that Thomas'

notices sent by CSS.

Similarly,

surprised.
Production

requesting

notice/letter
either

time

responded

(FCRA
during

that

they

(ECF

Request."

in

a

response

"copy

1681b)

§

the

in

174-2

no
at

Thomas'

the

form

force

at

applicable

"ha[d]

No.

of

to

time

documents
2).

counsel was
Request

pre-adverse
either

action

Defendant

period,"

at

Defendants

responsive

Additionally,

for

to

this

when

asked

whether anyone else in the company dealt with background check
screening

or

would

be

familiar

with

UniTek' s

agreements

with

various background check vendors, Conlin stated that he "was the
only

guy

that

company."

30 (b) ( 6)

this

particular

position

in

the

entire

(Conlin Dep. at 109).

Thus,
June 12,

did

based on the evidence Defendants had produced as of
2015 and the subsequent testimony of Defendants'

designee,

Thomas had no reason to know of Dudley or to

depose her predecessor,
of the exhibits

Rule

much less suspect the existence of any

appended to

Dudley's declaration.

Defendants'

(W.D.N.C. Dec. 19, 2006)
(citing Rohrbourgh v. Wyeth Labs.,
Inc., 916 F.2d 970, 975 (4th Cir. 1990); Wiley v. United Parcel
Serv., Inc., 102 F. Supp. 2d 643, 653 (M.D.N.C. 1999)).
Because
Defendants have made no showing that they were unaware of the
importance of their Senior Director of Human Resources to their
defense or that the accompanying exhibits were unavailable at
the time of the Rule 30 (b) ( 6) depositions, they may not now take
"legal and factual positions that vary materially [from] those
taken by their corporate representative[]."
Rainey v. Am.
Forest & Paper Assoc., Inc., 26 F. Supp. 2d 82, 95 (D.D.C.
1998).
22

failure to identify Dudley or to produce any of the documents
appended

to

previous

representations

into

her

believing

declaration,

that

in

the

particularly

discovery,

record

as

not

to

but also deprived him of the

discovery

in

Thomas

had

no

to

reason

Defendants'
to

develop

light

only

class

complete,

response

in

of

their

lulled Thomas

certification was

opportunity to conduct
Likewise,

new evidence.
evidence

in

response

to

Defendants' motion for summary judgment.
Only when

Defendants

filed

the

currently pending motions

did it become apparent that Dudley and the exhibits appended to
her declaration would be critical to Thomas'
for trial and to oppose Defendants'

ability to prepare

recent motions.

Defendants

cannot represent to Thomas and the Court that they have produced
all the requested or ordered documents and then later, after the
close of discovery and the filing.of their dispositive motions,
reverse themselves.
Defendants do not specifically address the Southern States
factors in their brief, but appear to contend that Thomas cannot
claim surprise because the mere existence of Phase II discovery
should

have

pertaining
(Def. Mem.

alerted
to

him

previously

in Opp. at 2-4).

to

the

possibility

unidentified

absent

of

new

defenses

class

members.

This argument simply misunderstands

the respective purposes of the phases of discovery.

23

As explained above,
documents

relevant

discovery.

When

Defendants were ordered to produce all

to

it

class

became

certification

clear

that

during

Defendants

Phase
had

I

either

misunderstood or disobeyed the Court's initial Scheduling Order,
the

Court,

at

Defendants

to

information

the

June

produce
they

hearing,

documents

now

Also,

declaration.

2015

seek

the

that

to

Court

specifically

would have

introduce
specifically

that they would be bound by the documents
class

certification

Therefore,

in

June

disclosed

through
warned

the

Dudley's
Defendants

they produced as

(Hrg.

2015.

ordered

there is absolutely no basis for

Tr.

at

12,

to

17).

Defendants to have

believed that they had no obligation to disclose this evidence
during

Phase

hollow

one,

existence

or

I

discovery.

because

In

any

Defendants

relevance

or

event,

did

produce

not

the

the

argument

disclose

exhibits

is

a

Dudley's

until

after

discovery was closed.
Second,

this case has been certified as a class action and

discovered and prepared for trial as a class action.
Pretrial Conference is
set

for

absent

July 18,
a

set for

2016.

continuance

of

July 13,

The Final

2016 and the trial is

It is too

late to cure the surprise,

the

to

trial

allow

class

counsel

to

prepare to confront multiple entirely new theories at trial and
to represent a potentially substantially different class.
counsel would also doubtless

need to depose
24

Class

Dudley and gather

information
attached

as

to

to

the

her

origins

and
and

declaration,

validity
would

responsive case on new theories.
approaching,

Defendants

still

need

Moreover,

have

not

of

the
to

documents
develop

a

with trial rapidly

provided

class

counsel

with readable and reviewable versions of the relevant documents.
Defendants have also thus far filed only a small "sample" of the
documents

with

the

Court,

and

have

provided

lists

of

class

members whom they claim are affected by the proffered documents
(ECF Nos.
the

Court

159-3,

159-6,

159-8);

can

evaluate

the

but,

neither class counsel nor

validity

of

Defendants'

claims

concerning the composition of the class or the substance of the
motion

for

summary

judgment without

produced in their entirety.

In sum,

the

documents

having been

there is no possibility of

cure without a continuance.
Third,

a

continuance,

disrupt the scheduled trial,

of

course,

would

significantly

at which numerous witnesses,

from

several parts of the country,

will appear.

Even if additional

discovery were not necessary,

the introduction of new theories

as to willfulness and the maintenance of this suit as a class
action would substantially change the character of the case and
render obsolete much of the parties'
also worth emphasizing that

it

is

trial preparation.

not

only the

rights

It is
of the

parties currently before the Court that are at stake; thousands
of

unnamed

class

members

will

also
25

be

affected by

unforeseen

changes in the course of this litigation that would be necessary
if Dudley's declaration and exhibits were to be allowed.
Moreover,

summary judgment and decertification briefing is

already complete; motions in limine have already been filed; and
This

the final pretrial conference is less than a month away.
case has been pending for nearly three years,
previously
Defendants'

extended

discovery

recalcitrant

deadlines

discovery

and the Court has

to

compensate
Allowing

conduct.

for
this

evidence and continuing the trial would only serve to draw the
litigation out further.
the

potential

class,

to

Additionally, because this evidence has

substantially

impact

the

composition

of

the

and the parties have already approved and mailed notice

of this action to the class,

it would be necessary to alert the

affected class members and potentially resend all class notices,
causing further delay, expense, and consumer confusion.
Fourth,

as emphasized above,

Dudley's declaration and the

evidence attached thereto have the potential to not only shape
the progression of the trial, but also shape the composition of
the

class.

Defendants

clearly

recognize

this,

because

they

of fer Dudley's declaration in support of both their motion for
summary

judgment

Accordingly,

the

and

their

importance

motion

of

the

for

evidence

decertification.
weighs

finding that Defendants' violations were harmless.

26

against

a

Finally,
entirely

offered

explanations

the

Defendants

unsatisfactory.

are

Defendants

by

essentially

contend

that

they did not disclose Dudley or the exhibits sooner because they
Specifically, Defendants argue that

were not required to do so.

(1) they disclosed

their disclosures were satisfactory because:
Dudley's predecessor,
the

existence

of

Phase

reli tigate class
part A.1. a

declined to depose;

whom Thomas
II

discovery

For the reasons

certification.

above,

those

constituted

arguments

are

and

( 2)

free

rein

to

set

forth

in

Therefore,

unavailing.

Defendants have failed to justify their violations.
c. The Appropriate Sanction

Having determined that a violation occurred,

and that the

violation was neither harmless nor substantially justified,

it

is necessary to determine what sanction to impose.

"Although

Fed.

automatic

R.

Civ.

P.

37 (c) (1)

preclusion sanction against a

is

often

read

as

an

noncomplying party that prevents

that party from offering the nondisclosed evidence in support of
a motion or at trial,

the second sentence of the rule permits

'other appropriate sanctions'
automatic
Rambus,
(E.D.
select

preclusion."

Inc.

Va.

v.

Samsung,

Infineon Techs.

2001)).

District

an appropriate

circumstances.

in addition to or in lieu of the
314
AG,

courts

F.R.D.

145 F.

Supp.

200

(citing

2d 721,

enjoy broad discretion

remedy in light

of the

Southern States, 318 F.3d at 593.
27

at

724
to

totality of the

In

applying

that

Circuit consider:
bad

faith;

caused

courts

within

the

Fourth

"(1) whether the non-complying party acted in

(2)

the

discretion,

the

amount

adversary;

(3)

of

prejudice

the

need

particular sort of noncompliance;

that

for

and

( 4)

sanctions would have been effective."

non-compliance

deterrence

of

the

whether less drastic

Law Enforcement Alliance

of Arn., Inc. v. USA Direct, Inc., 61 F. App'x 822, 830 (4th Cir.
2003)

(quoting Anderson

Employment of Arn.
Applying those
Court

finds

Dudley's

Found.

Indians,

factors

that

v.

the

declaration

For Advancement,

155 F.3d 500,

504

Educ.

(4th Cir.

to the circumstances of this
appropriate
and

the

remedy

evidence

is

to:

attached

1998)).

case,

(1)

And

the

exclude

thereto

from

consideration in deciding Defendants' decertification motion and
summary judgment motion;
trial;

and

(3)

(2)

preclude

preclude Dudley from testifying at

Defendants

from

introducing

the

CSS

documents at trial.
i. Bad Faith

Although

the

Court

does

not

lightly

infer

bad

faith,

Defendants here have persisted in a pattern of obfuscation and
gamesmanship
discovery,

throughout

follow

responses,

in

this

case.

they have objected to reasonable requests;

meet deadlines;
to

discovery

Throughout
failed to

refused to cooperate with class counsel;

Court

orders;

sometimes

and

formatted

offered
in

28

a

way

failed

piecemeal

discovery

that

documents

made

difficult

or

impossible

for

Thomas'

counsel

to

review

in

an

efficient manner.
For example,

the

June

2015

hearing became

necessary only

because Defendants had refused to comply with Thomas' most basic
discovery
off er

At

requests.

no

cogent

that

hearing,
for

any

Court

gave

explanation

boilerplate

objections,

the

instructions

to

all

produce

when

documents

Defendants

could

their

numerous

Defendants

explicit

of

relating

to

the

issues

that Defendants now attempt to reli tigate on the eve of trial.
As another example,

during Phase I I discovery,

produced class member files

in a

format

that

Defendants first
required Thomas'

counsel to review each page of each document as a separate .pdf
file,

ultimately

forcing

the

Court

Defendants to produce the files

to

specifically

in a usable format.

direct
(ECF No.

138, Transcript of March 23, 2016 Hearing, at 4).
Moreover,
the

February

when the Court specifically asked Defendants at
1,

2016

hearing

what

discovery

they

conduct in Phase II, Defendants responded:
Deposition of the plaintiff has not been
taken, and then there's two sub-classes Your
Honor is aware of, as well as some different
processes
that
happen depending
on
the
specific subsidiary.
Some-background checks
are
common;
it's
not
used
by
every
subsidiary.
So there would be depositions
of plaintiffs,
from other class members,
from other subsidiaries of UniTek other than
FTS.

29

wished

to

(ECF No. 110 at 9:25-10:7).

That response in no way gave notice

of

evidence,

the

broad

defense,

scope

that

declaration

of

the

now

Defendants

and

its

exhibits.

or

the

proffer

day

of

judgment

Phase

II

discovery,

theories

then

provided

class

the first on the last

three

days

before

and decertification motions

were

due,

(along with their amended Rule 26 (a)

of

Dudley's

through

Defendants

counsel with two unreadable flash drives,

new

the

and

disclosures)

summary

the

second

a week after

discovery had closed.
In

sum,

throughout

both

phases

of

discovery,

Defendants'

obfuscatory conduct has forced Thomas to file multiple discovery
motions,
the

which have

Court.

At

in

turn

required

best,

this

pattern

significant misapprehension
Court's orders.

of

the

repeated
of

rules

intervention by

behavior
of

suggests

a

discovery and the

Given this course of conduct,

failure to heed the Court's repeated warnings,

and Defendants'
the Court cannot

help but conclude that Defendants acted in bad faith in failing
to

produce

fashion.

Dudley's

declaration

Accordingly,

or

its

exhibits

in

a

timely

this factor weighs in favor of exclusion

of that evidence.

ii.

Prejudice

Forcing
adequately

Thomas

analyze,

to

proceed

depose,

and

to

trial

supplement

without
on

the

time

to

previously

undisclosed information would constitute significant prejudice.
30

Not only would Thomas likely need to depose Dudley and possibly
her

predecessor

heretofore

to

determine

unmentioned

the

contracts

validity
between

of

several

Defendants

hundred

and

class

members, but Thomas would also likely need to conduct discovery
as

to

CSS,

completely
30 (b) ( 6)

whose

role

belied

by

testimony.

in

Defendants'

Defendants'

Thomas has

latest

shaped his

certification and trial around Defendants'

was

productions

previous

motions

and

strategy for

representations, many

of which Defendants have now completely reversed.

Moreover, had

Dudley and the documents

been timely identified,

have

on

conducted

Defendants
could

in their quest

have

issues.

developed

The

production
options

discovery

to

amended

Thomas.

followed

Federal Rules

orders,

and

issues

that

Defendants

now

would

by

should

have

26

Finally,

that

have

resources of the Court.

presented by

to

Thomas

respecting

those

delay

been

forcing

the

Also,

disclosures
by

to

properly
an

evidence

could

their

document

foreclosed
repeated

unnecessary

had

those

judicial
Defendants

governing discovery or the Court's

asking

imposed

now

Thomas

summary judgment.

decision

Rule

intervention
the

for

issues

responsive

Defendants'

and

the

class

relitigate

have

been

unwarranted

class

raised
burden

certification
much

on

the

earlier,
limited

This factor warrants, at a minimum, the

sanction of exclusion.

31

iii. Need for Deterrence

Sanctions must be "sufficient not only to remedy the harm
caused, but to provide a sufficient deterrent such that present
and future
Beach

parties will be

Mart,

(E.D.N.C.

Inc.

v.

2014).

L&L

As

the

forewarned
Wings,

from acting similarly."

Inc.,

Court

302

recently

F.R.D.

noted,

396,

"deterrence

is ... necessary in the broader sense because nondisclosure,
untreated,

414

left

gives rise to nasty snarls that eat up the parties'

time, the Court's time, and the jury's time, in contravention of
the rule that cases should be resolved in a
inexpensive manner.
201.

The

Fed. R. Civ. P. l."

violations

here

just,

speedy,

and

Samsung, 314 F.R.D. at
which

presented,

represent

a

continuance of Defendants' pattern of unnecessarily complicating
the discovery process throughout this litigation, evince a need
to deter both willful nondisclosure and gamesmanship.
finds

The Court

that exclusion of Dudley's declaration and the exhibits

attached thereto is both necessary and appropriate to discourage
defendants,

both

disregarding

in

the

this

action

and

in

the

Court's

orders

and

the

future,

Rules

from

governing

discovery.
iv.

Less Drastic Sanctions

Considering
conclusion
motion,

that

the
the

first

three

appropriate

factors
sanction

yields
is

to

the

initial

grant

Thomas'

strike the Dudley declaration and its exhibits,
32

and to

preclude any testimony or evidence based on the topics therein.
However,

before taking an action of that sort,

to assess whether a
payment of Thomas'

less drastic
fees

it is necessary

sanction would suffice.

and expenses and allowing the evidence
Fed.

subject to a jury instruction are alternate sanctions.
Civ.

37 (c) (1) (B)

P.

and

(C).

Civ.

37 (b) (2) (A) (1) (i),

P.

this situation.
too harsh.
The

for their

The alternate sanctions offered by

utterly improper behavior.
R.

R.

Neither would cure the prejudice

faced by Thomas or appropriately sanction Defendants

Fed.

The

(iii),

(iv)

and

(v)

do

fit

The sanction of default judgment in the case is

Fed. R. Civ. P.
sanction

(2) (A) (vi).

presented

by

parallels the sanction of Fed.
of the improperly withheld,

Civ.

R.

Civ.

P.

37 (c) (1),

untimely evidence,

declaration and its exhibits.
set forth herein,

R.

Fed.

Accordingly,

P.

(2) (A)

(ii)

preclusion

namely,

Dudley's

and for the reasons

the Court finds that that is the appropriate

sanction.

B. Waiver of
Estoppel

the

Defenses

of

Improper

Venue

and

Judicial

In their second motion for summary judgment and motion for
decertification,

Defendants raised four new affirmative defenses

for the first time:
venue;

release;

and judicial estoppel.

accord and satisfaction;

improper

Thomas contends that Defendants

have waived these defenses by failing to raise them previously.

33

As

noted

they

no

above,

Defendants

longer

release

and

seek

accord

to
and

represented

present

the

at

oral

argument

affirmative

satisfaction;

therefore,

that

defenses
it

is

of
not

necessary to determine whether those defenses have been waived.
Absent

unfair

surprise

or

prejudice,

some

courts

have

allowed a party to raise an affirmative defense for the first
time as late as trial,

but only where the evidence supporting
See 5 Charles Alan

the defense is introduced without objection.

Wright & Arthur R. Miller et al., Federal Practice & Procedure§
1238

(3d

ed.

2011)

(listing

and

discussing

cases).

More

importantly for this case, the Fourth Circuit has held that,

~if

a plaintiff receives notice of an affirmative defense by some
means
comply

other
with

prejudice.'"
459

than

the

Rule

8(c)

different

797

facts

Nonetheless,

does

'the

not

defendant's

cause

the

failure

plaintiff

to
any

Grunley Walsh U.S., LLC v. Raap, 386 F. App'x 455,

(4th Cir. 2010)

885 F.2d 795,

pleadings,

(quoting Grant v.
(11th Cir.

than

those

1989)).
that

Preferred Research,

Inc.,

This case presents quite

led to

the

holding

in

Raap.

Raap teaches that the failure to timely amend the

Answer to add an affirmative defense does not,
establish prejudice.

Rather,

standing alone,

the waiver issue must be assessed

on a case-by-case basis. 5

The proper procedure is to move for leave to amend the Answer
to add an affirmative defense, if one is discovered after the

5

34

1. Defendants
have
Improper Venue.

Improper

venue

Waived

is

an

the

Affirmative

affirmative

defense

Defense

that

must

of

be

raised before or simultaneously with the filing of a responsive
pleading.
(S.D.W.
that

Leonard v.

Va.

rule

2010);
is

Mylan,

Fed.

to

R.

give

Inc.,

Civ.

the

P.

718

chance to

Labs.,

Illinois

Inc.

(1971).

v.

Univ.

of

notice

744

of

the

Blonder-Tongue

it.

Found.,

741,

The purpose of

party

rebut

2d

402

U.S.

313,

350

Accordingly, failure to assert any affirmative defense,

including venue,
defense

would

results

result

in

Emergency One,

Inc. v. Am.

270

2003);

(4th Cir.

F.3d 598,
general

Supp.

12(b)(3). 6

opposing

affirmative defense and a

F.

612

rule

in a

unfair

a

surprise

or

if

Brinkley v.

party's

allowing

prejudice.

Fire Eagle Engine Co.,

(4th Cir. 1999)
that

binding waiver

the
See

332 F.3d 264,

Harbour Recreation Club,

180

("Although it is indisputably the
failure

to

raise

an

affirmative

defense in the appropriate pleading results in waiver ... there is
ample authority in this Circuit for the proposition that absent
unfair

surprise

or

prejudice

to

the

plaintiff,

a

defendant's

Answer has been filed and during the course of discovery.
That,
of course, affords the opposing party a chance to develop any
responses during discovery and an opportunity to be heard.
Hence, it is only rarely that the untimely assertion of an
affirmative defense will not be prejudicial.
6

Improper venue may be raised in the Answer or by a motion under
Fed. R. Civ. P. 12(b).
35

affirmative defense is not waived when it is first raised in a
pre-trial dispositive motion.").
Although
Answer,

Defendants

improper venue

defenses.

(ECF

Defendants'

Motion

Defendants
Thomas'
when

Court

the

twenty

appear

Nor

class

pressed

specify the

motion,

issue

appear

11).

Nor

lengthy

Defendants

issue of forum selection clauses.

the

issues
did

to
Even

79).

February

in
did

opposition

(ECF No.

certification.
at

enumerated

No.

their

Defendants

their

the

(ECF

in

in

defenses

among those

does

Dismiss.
issue

telephonic hearing to
decertification

not

18).

to

motion for

the

does

No.

raise

pleaded

22,

2016

that warranted their
not

(ECF No.

even
126,

mention

the

Transcript of

Feb. 22, 2016 Hearing at 12-14).
Now,

on the eve of trial,

after discovery has closed and

after class notices have already been sent out,
summary

judgment

certification

and

seek

to

by

using

decision

possessed for years.

dismantle

Defendants seek

the

information

As Thomas points out,

Court's
that

class

they

have

he has not had the

opportunity to depose Dudley or to engage in any other discovery
on the topic of forum selection clauses.
nearly

three

years

ago,

and

Defendants

This case was filed
cannot

point

to

any

filing or discovery request or response from which Thomas should
have received notice of the defense of improper venue before May
16,

2016.

This appears to have been an intentional,
36

tactical

decision.

Allowing Defendants to raise that defense now would

cause unfair surprise and prejudice to Thomas.
Defendants

contend

that

there

is

no

prejudice

as

to

the

affirmative defense of improper venue because they specifically
denied that
Opp.

at

the

venue

4).

issue

Answer.

was

proper

in their Answer.

That is simply false.
of

venue

Moreover,

in

that

Mero.

in

Defendants do not mention

twenty

"defenses"

pled

in

their

Defendants' Answer does not specifically deny

that venue is proper;
allegations

the

(Def.

it simply denies Thomas'

"[t] he

occurred in Richmond,"

specific factual

job application process
that

"[t] he

relevant

alleged herein

employment

records

are maintained in Richmond," and that "[t] he witnesses work in
Richmond."
that
Id.

(ECF No.

"Defendant

18

at

However,

3).

FTS operates

Defendants

admitted

in the Commonweal th of Virginia."

at 4.

Those statements fail to provide even the slightest

hint that

Defendants intended to argue that venue was improper

because

some

class members

agreed to

litigate

their

claims

in

Pennsylvania.
Second,

Defendants

because

"affirmative

summary

judgment

(Def.

Mero.

in

Cincinnati

Ins.

defenses

motions

Opp.

categorically so.

contend

at

See,
Co.,

raised

will

353

the
for

provide

5).
e.g.,

that

That
S.
F.3d
37

can

the
be

defense
the

is

first

requisite
true,

timely
time

notice."

but

Wallace Edward & Sons,
367,

373

(4th

in

Cir.

is

not

Inc.

v.

2003)

(upholding

district

waived

affirmative

the

therefore could not
judgment) .

court's

finding

defense

raise

it

of

in

that

the

statute

support

of

had

limitations

and

of motion for

summary

Not once in the time that this case has been pending
Defendants do not,

did the Defendants raise the issue of venue.
and could not,
they

defendant

simply

contend that this evidence is newly discovered;

chose

circumstances,

not

that

to

reveal

decision has

it

until

Under

now.

these

caused prejudice and surprise

to Thomas.
Furthermore,

the fact that venue was not raised previously

has led Thomas to the belief that this case would be tried in
this

district

and

it

is

set

for

trial

A

here.

move

to

Pennsylvania would mean that the trial would be further delayed.
That

is prejudice where,

as here,

the case

is

ready to go to

trial.
Finally,
occurred
actual

Defendants argue that,

post-certification

identification

of

the

and

"because Phase II discovery
contemporaneously

class

members,

with

Plaintiffs

the
[sic]

suggestion that the Defendants should have-or even could haveutilized,

reviewed,

and/or produced any of these documents at an

earlier date is preposterous."

(Def. Mem.

argument

It

too

is

applicability of

unavailing.
class-member

is

in Opp.

well

at 3).

settled

specific affirmative

that

defenses

an integral and ubiquitous facet of the Rule 23 inquiry.
38

This
the
is

e.g.,

Broussard

F.3d 331,

342

defenses

v.

Meineke

(4th Cir.

Discount

1998)

(such as ... the

Muffler

Home

(internal

Prods.,

Inc.,

statute

of

(observing

that

where

they

"apply

raise

complex,

2016

WL

citation

2016 WL

limitations)

to

the

3125472

may

majority

questions") ;

(D.S.C.

June

may depend

Brown

(11th Cir.

defenses

vast

indi victual

155

on

class certification is

omitted);

1085517

affirmative

Inc.,

(noting that where "'affirmative

facts peculiar to each plaintiff's case,'
erroneous")

Shops,

v.

Electrolux

Mar.

defeat

2016)

predominance

of

class

Romig

v.

3,

21,

members
Pella

Corp.,

(noting

2016)

and

that

individualized affirmative defenses are relevant to typicality,
predominance,
affirmative

and

superiority) .

defenses

can

certification stage,
Moreover,

only

class

lacks

potential
December

of

class
of

are,

follows

raised

at

the

that
class

although these defenses become applicable

over

the

It

is

in

the
class

absent

class,

since the

2013.

and

certification,

jurisdiction

certification

be,

necessarily

even where they do not apply to the named

plaintiff.
after

It

Defendants

class

sense

that

members
were

the
before

aware

action Complaint was

simply inconceivable

Court

that

of
filed

the
the
in

Defendants

were entirely unaware of these issues before Phase II discovery.
The Court's ongoing duty to monitor the feasibility of the
class action does not give Defendants carte blanche to withhold
relevant

evidence

and

waste

class
39

counsel's

and

the

Court's

resources

re-litigating

class

certification based

only on

the

piecemeal production of evidence that Defendants possessed long
before the Court's initial decision on the matter.

Accordingly,

Defendants

of

have

waived

the

affirmative

defense

improper

venue.
2. Defendants Have Not
Judicial Estoppel.

Waived

the

Affirmative

Defense

of

Defendants also failed to plead the affirmative defense of
judicial estoppel in their Answer, and failed to raise the issue
in

their

However,

opposition
because

to

Thomas

Thomas'

class

had notice

of

certification
this

issue

motion. 7

long before

Defendants filed the currently pending motions, Thomas can claim
neither

prejudice

nor

surprise

failure to plead that defense.
served by the doctrine

as

a

result

of

Defendants'

Moreover, because "the interests

concern the

judicial process more than

fairness to the opposing party," it is appropriate for the Court
to address the issue on the merits.

Cathcart v. Flagstar Corp.,

155 F.3d 558 (Table), 1998 WL 390834, at *8 n.2 (4th Cir. 1998).
Thomas received notice of this defense no later than June
13,

2014,

the date that Defendants first

concerning Thomas' previous bankruptcies.
that time,

requested information
(ECF No. 158-11).

rather than respond to the request,

At

Thomas objected

that:
7

Pursuant to Fed. R. Civ. P. 8 (c), judicial estoppel
affirmative defense that should be raised in the Answer.
40

is

an

any bankruptcies that Plaintiff filed before
the
facts
arose
which
give
rise
to
Plaintiff's Complaint are neither relevant
nor calculated to lead to the discovery of
admissible evidence.
Instead, the inquiry
could
only
be
pursued
to
harass
and
embarrass Plaintiff.
If Plaintiff filed for
bankruptcy after this cause of action arose,
Plaintiff will respond relating to that
bankruptcy.
Id.

Thomas initially filed for Chapter 13 bankruptcy in 2009,

and his debts were ultimately discharged in May 2014.

(ECF No.

158-10,

the

time

aware

of

Bankruptcy

Defendants'

Docket

initial

Sheet).

request,

bankruptcy proceedings,

Thomas

Therefore,

any prejudice

direct

result

his

provide a

full

was

and he and his

them.

of

Thus,

failure

at

well

investigate

and timely response

to

the

counsel did not reveal

that Thomas now suffers
to

of

the

Defendants'

is a

matter
request

and
in

2014.
Furthermore,
during

Phase

II

after

discovering

discovery

prior obfuscation of

the

Thomas'

bankruptcy

(largely by chance,
issue),

Defendants

due

filing

to Thomas'

questioned Thomas

extensively about the chronology of his bankruptcy proceedings
at his deposition on March 22,

2016.

(ECF No.

158-3).

Those

questions put Thomas on notice of a judicial estoppel defense as
well.

See,

e.g., Cook v.

St.

*6 (E.D. Mich. May 29, 2013)

John Health,

2013 WL 2338376,

at

(holding that the plaintiff was not

prejudiced by the defendants' failure to plead judicial estoppel

41

because

questions

concerning her

bankruptcy at

put her on notice of the defense); Thompson v.
Org.,

725

Therefore,

F.

Supp.

2d

701,

710

(M.D.

her

deposition

Davidson Transit

Tenn.

2010)

(same) .

it seems obvious that Thomas should have been aware

of the judicial estoppel issue well before Defendants filed the
motion for summary judgment or decertification.
Additionally,
estoppel

differs

purpose,

first

the
from

and

Fourth Circuit
other

has

estoppel

foremost,

is

to

held that

defenses
'protect

in
the

"judicial
that

its

essential

integrity of the judicial process,' rather than the interests of
the

opposing

party."

Cathcart,

1998

(quoting Allen v. Zurich Ins. Co.,
1982)).

For that

reason,

the

WL

390834,

at

*8

n.2

667 F.2d 1162, 1166 (4th Cir.

Fourth Circuit

has

been

fairly

forgiving of parties' failure to plead judicial estoppel, noting
that

it may be

appropriate

for

courts

to

raise the

issue sua

sponte and even considering the argument on appeal when it was
not raised in the court below.
For the foregoing

Id.

reasons,

Defendants have not waived the

affirmative defense of judicial estoppel,

and Thomas' motion to

strike will be denied as to that defense.
CONCLUSION

For the foregoing reasons,

PLAINTIFF'S OBJECTION AND MOTION

TO STRIKE will be granted in part and denied in part as follows:
( 1)

the motion will be denied as moot as to the Declaration of
42

Colin Dougherty (ECF No. 158);

(2) the motion will be granted as

to the Declaration of Lauren Dudley and attachments thereto
No.

159);

(3)

(ECF

the motion will be granted as to the affirmative

defense of venue;

( 4)

the motion will be denied as moot as to

the affirmative defenses of release and accord and satisfaction;
and

(5)

the motion will be denied as to the affirmative defense

of judicial estoppel.
It is so ORDERED.
/s/
Robert E. Payne
Senior United States District Judge
Richmond, Virginia
Date: June L!t' 2016

43