Scott v. Mobilelink Louisiana, LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

COREY D. SCOTT, et al. CIVIL ACTION

VERSUS NO. 20-826-SDD-SDJ

MOBILELINK

LOUISIANA, LLC, et al.

ORDER PARTIALLY GRANTING

PLAINTIFFS’ MOTION FOR SANCTIONS

Before the Court is Plaintiffs’ renewed Motion for Sanctions (R. Doc. 93) against

Defendant Mobilelink Louisiana, LLC, who responded by filing an Opposition (R. Doc. 94).

In their Motion, Plaintiffs allege that Defendant has still failed to comply with the Court’s

prior discovery Order (R. Doc. 82) by not fully producing: (1) the transactional sales data used to

calculate commissions between July 2017 and the present, in response to Request for Production

No. 5; as well as (2) corrective time entries for retro pay between July 2017 and the present, in

response to Request for Production No. 15. (R. Doc. 82 at 7-8, 14-17) (compelling responses to

Request for Production Nos. 5 and 15). This information is relevant to whether Defendant violated

the FLSA by “not including the commissions earned with the hourly wage for determining the

proper overtime premium.” (R. Doc. 72 at 1).

As relief, Plaintiffs ask that Defendant be (1) “prohibit[ed] from challenging Plaintiffs’

damage calculations” and (?) required to pay $11,805.00 — “the total fees incurred ‘n connection

with Mobilelink’s discovery conduct.” (R. Doc. 93-2 at 10, 11).

The Court recently received the attached Letter requesting a Conference to discuss the

status of the pending Motion for Sanctions, as its outcome may impact the parties’ upcoming

Pretrial Order. (Exhibit A) (Letter). But a conference is unnecessary as the Court now resolves the

issue that might bear on the Pretrial Order—Plaintiffs’ request that Defendant not be allowed to

challenge their calculation of damages.

“An employee who brings suit for unpaid overtime compensation generally bears the

burden of proving, with definite and certain evidence, that he performed work for which he was

not properly compensated.” Davis v. Martin Marietta Materials, Inc., 2021 WL 3603338, at *10

(N.D. Tex. Aug. 13, 2021); see also Brown v. Fam. Dollar Stores of IN, LP, 534 F.3d 593, 594

(7th Cir. 2008) (“an employee who brings suit for unpaid overtime compensation bears the burden

to prove, with definite and certain evidence, that she performed work for which she was not

properly compensated”). But where an employer fails to maintain or provide accurate payroll

records in an FLSA action, the United States Supreme Court has established a remedy. See

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946), superseded by statute on other

grounds, 29 U.S.C. § 254(a).!

In Mt. Clemens, the Supreme Court began by recognizing that the burden to establish

unpaid compensation should not be “an impossible hurdle.” Mt. Clemens, 328 U.S. at 687. With

' Plaintiffs do not reference Mr. Clemens. In fact, the relevant part of Plaintiffs’ Motion for Sanctions, in which they

ask the Court to prevent Defendant from challenging their calculation of damages, does not contain a single citation

to any legal authority supporting their position or the relief being sought, aside from a single reference to “Rule 37.”

(R. Doc. 93-2 at 1-10). Plaintiffs also focus on Rule 11 and the obligations it imposes on counsel. (R. Doc. 93-2 at 4).

But Rule 11(d) makes one thing plainly clear: “This rule does not apply to disclosures and discovery requests,

responses, objections, and motions under Rules 26 through 37.” See also Nat. Gas Pipeline Co. of Am. v. Energy

Gathering, Inc., 2 F.3d 1397, 1410 (Sth Cir. 1993) (holding that Rule 11 sanctions did not apply to the violation of a

discovery order); DR Distributors, LLC v. 21 Century Smoking, Inc., 513 F. Supp. 3d 839, 950 (N.D. Ill. 2021) (“Rule

11 cannot be used as authority for sanctions for motions under Rules 26-37.”). The lack of research and citation to

relevant case law is confounded by the fact that Plaintiffs’ Motion, at times, is somewhat hard to follow.

that in mind, the Court determined that if an employer has failed to keep proper and accurate

records and the employee cannot offer convincing substitutes:

[t]he solution .. . is not to penalize the employee by denying him any recovery on

the ground that he is unable to prove the precise extent of uncompensated work.

Such a result would place a premium on an employer's failure to keep proper

records in conformity with his statutory duty; it would allow the employer to keep

the benefits of an employee's labors without paying due compensation as

contemplated by the Fair Labor Standards Act.

Mt. Clemens, 328 U.S. at 687; see also United States Dep't of Lab. v. Five Star Automatic Fire

Prot., L.L.C., 987 F.3d 436, 439-40 (Sth Cir. 2021) (“Seventy-five years ago in [Mz Clemens], the

Supreme Court fashioned a... . lenient standard rooted in the view that an employer shouldn't

benefit from its failure to keep required payroll records, thereby making the best evidence of

damages unavailable.”’); Henderson v. Fenwick Protective Inc., 2015 WL 9582755, at *5 (N.D.

Tex. Nov. 23, 2015) (noting that “[t]ime sheets, pay stubs, and work logs” typically substantiate

claims for unpaid overtime, but because defendants “did not participate in discovery,” court would

accept plaintiffs’ declarations instead).

And so, in situations where the employer's records cannot be trusted and the employee

lacks documentation, “an employee has carried out his burden if he proves that he has in fact

performed work for which he was improperly compensated and if he produces sufficient evidence

to show the amount and extent of that work as a matter of just and reasonable inference.” Mi.

Clemens, 328 U.S. at 687; see also United States Dep't of Lab. v. Five Star Automatic Fire Prot.,

L.L.C., 987 F.3d 436, 442 (th Cir. 2021) (relying on employee testimony and noting: “The

adequacy of the records has to do with the evidence available to establish liability and damages . .

.. [W]hen the employer has kept proper and accurate records, then the employee may easily satisfy

his burden... But where, as here, the records do not allow employees to show the uncompensated

overtime work they completed, the burden-shifting framework [of] [A¢t, Clemens] applies.”);

Rafferty v. Denny’s Inc., 13 F.4th 1166, 1191-92 (11th Cir. 2021) (“Rafferty testified and met her

burden [under] [A4t, Clemens] in the very portion of her deposition” showing there were weeks her

untipped work exceeded twenty percent of her hours as a tipped employee, resulting in her

performing work for which she was not paid); Alston v. DIRECTY, Inc., 254 F. Supp. 3d 765, 788

(D.S.C. 2017) (“[A]n FLSA plaintiff's estimations offered in sworn statements as to the amount of

improperly compensated work is, alone, sufficient to meet his initial burden under the [MJ

Clemens] framework.”); Ader vy. SimonMed Imaging Inc., 465 F. Supp. 3d 953, 964 (D. Ariz. 2020)

(“Plaintiffs submit deposition testimony, interrogatories, an email communication with a

supervisor, and FSE time records” that are available. “Plaintiffs admit they can only estimate the

amount of overtime [owed]. However, estimates are not fatal. They are expected, and frequently

relied upon .. . where the employer failed to keep accurate [records].”); Heath v. TFS Dining, LLC,

2022 WL 827654, at *3 (W.D. Tex. Mar. 18, 2022) (“Typically, plaintiffs [] rely on their

employer's timekeeping records to demonstrate that they were not properly compensated for work

they performed. If the employers’ records are inadequate or inaccurate, plaintiffs may meet their

burden by producing sufficient evidence to show the amount and extent of that allegedly

uncompensated work as a matter of just and reasonable inference.”).

The burden then shifts to the employer, who must submit either evidence of the “precise

amount of work performed” or evidence negating the “reasonableness of the inference to be drawn

from the employee's evidence.” /d. at 687-88. “If the employer fails to produce such evidence, the

court may then award damages to the employee, even though the result be only approximate.” Id.

at 688.

Under Federal Rule of Civil Procedure 37(b)(2), a district court may sanction a party that

fails to obey an order to provide or permit discovery by, among other things, “prohibiting the

disobedient party from supporting or opposing designated claims or defenses, or from introducing

designated matters into evidence... .” Fed. R. Civ. P. 37(b)(2)(A) (ii). Instead of or in addition to

that sanction, “the court must order the disobedient party, the attorney advising that party, or both

to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure

was substantially justified or other circumstances make an award of expenses unjust.” Fed. R. Civ.

P.37(b\(2)(C).

Here, Defendant did produce some documents in response to Request for Production No.

5 (transactional sales data) and Request for Production No. 15 (retro pay) within the September 2,

2022 deadline set by the Court. (R. Doc. 93-2 at 3). However, Plaintiffs claim this “partial

production” does not contain any transactional sales data for 2017, 2018, and part of 2022. (R.

Doc. 93-2 at 3). Moreover, Plaintiffs represent that the documents Defendant did produce are

incomplete:

[T]he spreadsheets concerning the transactional sales data contains large gaps

wherein the dates and times of the sales were omitted. Further, the spreadsheets

concerning the retro pay were only lists of who received retro pay and in which pay

period it was paid. Absent from the production was information concerning the

workweek in which the hours were worked and not compensated originally ....

(R. Doc. 93-2 at 3). Unfortunately, Plaintiff did not attach the referenced spreadsheets for the Court

to review in considering their requested relief—that Defendant be “prohibit[ed] from challenging

Plaintiffs’ damage calculations.” (R. Doc. 93-2 at 10). □

Nonetheless, the Court agrees that Defendant has failed to comply with its discovery Order

(R. Doc. 82) by not fully producing the documents responsive to Request for Production Nos. 5

and 15 and has not met its obligation to undertake discovery in a responsible manner, as required

by Rule 26(g). See Heller v. City of Dallas, 303 F.R.D. 466, 476 (N.D. Tex. 2014) (“Rule 26(g)

imposes an affirmative duty to engage in pretrial discovery in a responsible manner that is

consistent with the spirit and purposes of Rules 26 through 37.”). As the Court previously

explained, Defendant and its corporate representative have made inconsistent representations

about whether Defendant has and maintains certain documents responsive to Request for

Production No. 5 (seeking data of transactional sales on which Plaintiffs’ commissions were

based).? (R. Doc. 90 at 2). And the Court remains unsure as to whether Defendant produced an

unprepared corporate representative at its Rule 30(b)(6) deposition, or simply failed to exercise

due diligence in gathering documents responsive to written discovery requests. (R. Doc. 90 at 3)

(“At best, it seems Mobilelink either produced an unprepared witness or has not made a diligent

effort to locate responsive materials.”). But one thing is clear —- Defendant has not fully complied

with the Court’s July 28, 2022 discovery Order (R. Doc. 82).

Under the circumstances, and considering the applicable law, the Court finds the following

sanctions are most appropriate.? See Insurance Corp. of Ireland v. Compagnie des Bauxites de

Guinee, 456 U.S. 694, 707 (1982) (“Rule 37(b)(2) contains two standards . . . that limit a district

court's discretion” “any sanction must be ‘just’” and it must “specifically relate[] to the

particular ‘claim’ which was at issue in the order to provide discovery.”). First, Plaintiffs are

entitled to prove the amount and extent of their damages under the more lenient standard outlined

by the Supreme Court in Anderson vy. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946). Second,

Defendant is prohibited under Rule 37(b)(2)(A)(Gi) from introducing any evidence to challenge

? During the August 24, 2022 Status Conference, the Court learned that Defendant “now claims to not have certain

documents related to the commissions earned by Plaintiffs,” even though its own corporate representative previously

testified that Mobilelink routinely maintained these documents. (R. Doc. 90 at 2) (Defendant claimed its Rule 30(b)(6)

deponent was wrong).

3 Although not a prerequisite to the imposition of sanctions under Rule 37(b), the Court did previously warn Defendant

that its continued failure to fully comply with the July 28, 2022 discovery Order (R. Doc. 82) may result in sanctions

(R. Doc. 90 at 3). See Hal Commodity Cycles Mgmt. Co. v. Kirsh, 825 F.2d 1136, 1139 (7th Cir. 1987) (“A district

court is not required to fire a warning shot” before imposing sanctions.); Daval Steel Prod., a Div. of Francosteel

Corp. v. M/V Fakredine, 951 F.2d 1357, 1366 (2d Cir. 1991) (the Supreme Court has never said “warnings were a

requirement” before sanctions could be imposed under Rule 37(b)(2)).

Plaintiffs’ case, including Plaintiffs’ calculation of damages, that was not produced within the

September 2, 2022 deadline set by the Court’s discovery Order (R. Doc. 82). See Aktas v. Mint

Enterprise LLC, 2022 WL 11705208, at * (D.N.J. Oct. 20, 2022) (warning that if defendants did

not comply with deadline to produce time and wage documents, “Defendants will be barred from

using ... any time and/or wage records not produced” and plaintiff will “be free to argue . . . he is

entitled to prove his FLSA claim . . . under the relaxed standard articulated in Mt. Clemens”).

Therefore,

IT IS ORDERED that Plaintiffs’ Motion for Sanctions (R. Doc. 93) is partially

GRANTED and the following sanctions are imposed on Defendant, Mobilelink Louisiana, LLC:

(1) Plaintiffs are entitled to prove the amount and extent of their damages under

the standard outlined by the Supreme Court in Anderson v. Mt.

Clemens Pottery Co., 328 U.S. 680, 687 (1946); and

(2) Defendant is prohibited under Rule 37(b)(2)(A)(ii) from introducing any

evidence to challenge Plaintiffs’ case, including Plaintiffs’ calculation of

damages, that was not produced within the September 2, 2022 deadline.

Finally, Plaintiffs’ remaining request for $11,805.00 in fees under Rule 37(b)(2)(C) is

referred back to the Magistrate Judge for resolution.

IT IS SO ORDERED.

Baton Rouge, Louisiana, this, day of January, 2023.

C SHELLY D. J Ck

CHIEF DISTRICT JUDGE

MIDDLE DISTRICT OF LOUISIANA

8322 One Calais □□□□□□

, : Baton Rouge, LA 70805

Phone: (225) 769-246;

MAN Fax: (225) 769-246:

LIMITED LIABILITY COMPANY blackwell-bullman.con

AT LAW January 19, 3023

Via Email only: SDJ_Com@lamd.uscourts.gov

Mag. Judge Scott D. Johnson

Russel B. Long Federal Building and United States Courthouse

777 Florida Street

Baton Rouge, LA 70801

Re: Corey D. Scott et al v. Mobilelink Louisiana, LLC

Middle District of Louisiana, Case No. 20-826-SDD-SDJ

Dear Hon. Judge Johnson:

I hope that this letter finds you well.

As the Court is aware, the Plaintiffs filed a Renewed Motion for Sanctions (Rec. Doc. 93)

that is still currently pending. Additionally, the Pre-Trial Order is due to be filed on February 7,

2023. The outcome of the Renewed Motion for Sanctions has an impact on the substance of the

Pre-Trial Order such as the exhibits, witness, and defenses to be offered at trial in March.

Accordingly, Plaintiffs request a telephone status conference with the Court to determine

whether the parties need to provide any further updates or information to assist the Court in ruling

on the Renewed Motion for Sanctions.

Thank you for your assistance with this matter.

With kindest regards, I am

Very truly yours,

□□□ Bullava

JRB/sIf

cc: Susan Desmond (via email)

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