Summary:The Court denied Plaintiffs' motion to compel discovery, for spoliation, and for sanctions against Defendant Clear Wireless, finding that Clear had produced the requested documents in response to a modified discovery request and that Plaintiffs had failed to provide evidence of intentional destruction of Clear's nationwide job descriptions and Randi Peterson's ESI.
Court:United States District Court, D. Minnesota
Date decided:
Judge:Noel, Franklin L.
Kenneth LINDSAY et al., Plaintiffs, v. CLEAR WIRELESS LLC et al., Defendants Civil No. 13-834 (DSD/FLN) United States District Court, D. Minnesota Signed July 10, 2014 Counsel Jarvis Jones and Eric Satre for Plaintiffs. Kerry Middleton and Rhiannon Beckendorf for Defendant Clear Wireless LLC. Joyce Ackerbaum Cox and Mary Knoblauch for Defendant Workforce Logic LLC. Noel, Franklin L., United States Magistrate Judge ORDER *1 THIS MATTER came before the undersigned United States Magistrate Judge on June 16, 2014 on two motions: (1) Plaintiffs’ motion to compel Defendants’ compliance with the Court’s order on conditional certification (ECF No. 215) and (2) Plaintiffs’ motion to compel discovery, for spoliation, and for sanctions against Defendant Clear Wireless (ECF No. 250). For the reasons set forth below, Plaintiffs’ motion to compel compliance with the conditional certification order is GRANTED in part and DENIED in part and Plaintiffs’ motion to compel discovery and for spoliation sanctions is DENIED. I. Background Defendant Clear Wireless LLC (Clear) sold 4G network products and contracted with third party agencies, including Defendant Workforce Logic LLC (Workforce), to staff sales positions. Plaintiffs commenced this action under the Fair Labor Standards Act (FLSA) in April 2013, alleging minimum wage and overtime violations.[1] See 29 U.S.C. §§ 206-07; Compl. ¶¶ 48-68, ECF No. 1. On January 3, 2014, Magistrate Judge Arthur Boylan granted Plaintiffs’ motion for conditional class certification. Order, ECF No. 100. The putative class of similarly situated individuals was defined as follows: The putative class of similarly situated individuals shall consist of person in a nationwide class defined as Clear Wireless and Workforce Logic’s employees and/or contractors that were employed in a sales related capacity to sell Clear Wireless’ 4G broadband products in Clear Wireless’ retail and national retail sub-distribution channels and markets as either Retail Sales Representatives and/or National Retail Account Executives from April 2010 to the present. ECF No. 100 at 2. The Order further specified that “Defendants shall produce the names and last known addresses of identified class members ... in electronic form by January 20, 2014.” Id. II. Analysis A. Motion to Compel Compliance with the Conditional Certification Order (ECF No. 215). Plaintiffs maintain that both Defendants Clear and Workforce have produced incomplete lists of putative class members. Pl.s’ Mem. of Law in Supp. of Mot. for Compliance with Ct. Order 1-2, ECF No. 217. Accordingly, Plaintiffs seek to compel production of complete putative class member information by Clear and Workforce, as required by the Court’s January 2014 Order. Pl.s’ Mot. for Compliance with Court Order, ECF No. 215. 1. Clear Wireless. On January 20, 2014, Clear produced information relating to 704 putative class members it employed as Retail Sales Representatives (RSRs) and National Retail Account Executives (NRAEs). Def. Clear’s Mem. in Opp. to Pl.s’ Mot to Compel Compliance 3, ECF No. 225. Plaintiffs argue that this production is deficient in primarily two ways: (1) Clear failed to produce information for individuals who were employed by Clear through third party contractors and (2) Clear failed to produce information for employees or contractors who worked with the company after December 2011. ECF No. 217 at 12. i. Third Party New WiMAX. *2 Specifically at issue is whether Clear must produce information for individuals associated with third party contractor New WiMAX.[2] The record reflects that New WiMAX provided products through Clear’s indirect sub-distribution channel. As noted above, the Court defined the putative class as employees or contractors selling products within “Clear Wireless’ retail and national retail sub-distribution channels and markets.” ECF No. 100 at 2 (emphasis added). The term “markets” is not explicitly defined in the conditional class certification order. Plaintiffs nevertheless argue that New WiMAX employees meet the putative class definition because they fall under the “market” category listed within the definition. Clear contends that because New WiMAX was not a sub-retail distribution channel in the “retail” or “national retail” categories, any information pertaining to New WiMAX employees and contractors is outside of the class definition. ECF No. 225 at 7. The Court agrees with Clear that New WiMAX’s employees and contractors do not fall within the putative class definition. A plain language reading of the definition supports this conclusion. New WiMAX operated as an indirect sub-retail distribution channel, not a retail or national retail sub-distribution channel as specified by the Court’s January 2014 Order. The Court is aware of no evidence that the phrase “and markets” intended to encompass other sub-retail distribution channels. Indeed, Plaintiffs previously defined “markets” in their own memorandum as major metropolitan areas in which Clear Wireless sold its 4G products. See Mem. in Supp. of Conditional Certification 3-4, ECF No. 78 (listing various cities as Clear Wireless’ 4G broadband “markets”). ii. Post-December 2011 Employees. Plaintiffs further claim that Clear’s production is incomplete because it failed to include putative class member information for Clear employees and contractors working with the company after December 2011. ECF No. 217 at 12 and 31. Clear asserts that its production is complete. According to Clear, the list of putative class members provided reflects the fact that by December 2011 Clear did not directly employ individuals as RSRs and NRAEs, but rather outsourced this labor function to third party vendors like Workforce. ECF No. 225 at 3. Clear accordingly did not maintain contact information for contractors—such information was preserved by the third party vendors. Id. The Court agrees with Clear. Clear represents that it did not maintain any records related to third party contractors; therefore, Clear cannot be required to produce information not in existence. American Need, Inc. v. New Orleans, Civil No. 4-7806, 2012 WL 4327395 (N.D. Ill. Aug. 17, 2012) (“The Court cannot compel the [Defendants] to produce documents they claim do not exist when the Court has no evidence to the contrary.”). Accordingly, Plaintiffs’ motion to compel compliance with the conditional certification order as it pertains to defendant Clear is DENIED. 2. Workforce. Plaintiffs assert that Workforce produced an incomplete list of putative class members by not providing contact information for employees and contractors of Workforce prior to January 2012. ECF No. 217 at 14-15. Workforce refutes these allegation, stating that it had no employees or contractors prior to January 5, 2012 because the entity was not yet in operation prior to that date.[3] Workforce’s Mem. in Opp. to Pl.s’ Mot. to Compel Compliance 7-9, ECF No. 227. Because Workforce had no staff (employees, contractors, or otherwise) prior to its creation on January 5, 2012, Workforce argues that it cannot be expected to produce pre-January 2012 putative class information. Id. Workforce admits that it has within its possession potentially relevant pre-January 2012 information pertaining to other third party contractors, having acquired this information in the asset transfer which established Workforce as a limited liability company. Id. at 11, n. 6. However, Workforce maintains that any such information is not subject to discovery because the plain language of the January 2014 Order only requires Workforce to produce information related to its own employees or contractors (not information pertaining to third parties). Id. at 10-11. As such, Workforce contends that production is complete. *3 The Court agrees with Plaintiffs that the putative class definition should not be construed so narrowly as to exclude putative class information Workforce may have in its “possession, custody, or control” relating to other third party contractors. See Fed. R. Civ. P. 36(a)(1)(a party may seek documents within the responding party’s “possession, custody, or control”). To the extent Workforce has information identifying putative class members, regardless of whether or not such individuals were actual employees or contractors of Workforce, such information must be produced. Plaintiffs’ motion to compel compliance with the conditional certification order as it relates to Defendant Workforce is GRANTED. B. Motion to Compel Discovery, for Spoliation, and for Sanctions Against Clear Wireless (ECF No. 250). 1. Motion to Compel. Plaintiffs move to compel supplemental discovery responses from Defendant Clear in regards to any contractual agreements between Clear and New WiMAX (Interrogatory No. 10 and Document Request No. 10). See Pl.s’Mem. in Supp. of Mot. to Compel and for Spoliation 14-18, ECF No. 246. Clear argues that Plaintiffs have withdrawn their initial discovery requests pertaining to the agreements and, as such, Clear is under no obligation to provide supplementary responses. Mem. in Opp. to Mot. to Compel and for Spoliation 6-7, ECF No. 254. Clear nevertheless provided the contractual agreement between Clear and NewWiMAX in response to a modified discovery request issued by Plaintiffs, although this request was not referred to or cited in Plaintiffs’ motion. Id. at 6. The record indicates that Plaintiffs did indeed withdraw Interrogatory No. 10 and Document Request No. 10 in April 2014. Jones Aff. 1, ECF No. 247-5. However, on June 5, 2014, Clear produced responsive documents relating to the current modified discovery request, including the relevant Authorized Retailer Distributor Agreement between Clear and NewWiMAX. ECF No. 254 at 6. Accordingly, the Court considers Plaintiffs’ motion to compel Clear’s agreement with New WiMAX as moot and the motion is therefore DENIED. 2. Motion for Spoliation. Plaintiffs also seek sanctions for spoliation, claiming that Clear failed to preserve nationwide job descriptions and electronically stored information pertaining to Clear sales manager Randi Peterson. ECF No. 246 at 18-19. “A spoliation-of-evidence sanction requires ‘a finding of intentional destruction indicating a desire to suppress the truth.’ ” Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007)(quoting Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 745 (8th Cir. 2004)). “Intent is rarely proved by direct evidence, and a district court has substantial leeway to determine intent through consideration of circumstantial evidence ....” Id. (quoting Morris v. Union Pac. R.R., 373 Fiv.3d 896, 902 (8th Cir. 2004). No evidence exists before this Court, circumstantial or otherwise, that supports the conclusion that destruction of Clear’s nationwide job descriptions and Randi Peterson’s electronically stored information was intentional. Plaintiffs’ motion for spoliation is therefore DENIED, but such denial is made without prejudice. Plaintiffs may re-file this motion if evidence of intentional destruction is subsequently discovered. III. Conclusion Based upon all the files, records and proceedings herein, IT IS HEREBY ORDERED that: A. Plaintiffs’ motion to compel Defendants’ compliance with the Court’s Order on conditional certification [ECF No. 215] is GRANTED in part and DENIED in part as follows: 1. To the extent Plaintiffs seek to compel Defendant Clear to produce additional putative class member information, the motion is DENIED. *4 2. To the extent Plaintiffs seek to compel Defendant Workforce to produce additional class member information in its possession, even if such information pertains to individuals who were not direct employees or contractors of Workforce, the motion is GRANTED. In all other respects, the motion is DENIED. B. Plaintiffs’ motion to compel discovery, for spoliation, and for sanctions against Defendant Clear [ECF No. 250] is DENIED without prejudice. Footnotes [1] This Court dismissed Plaintiffs’ minimum wage claim on March 29, 2014 based on Plaintiffs’ repeated indications that they were not pursuing such a claim. Order, ECF No. 234. [2] Plaintiffs’ argument regarding whether Clear must produce class information pertaining to third parties also referred to third party entities Gary D. Nelson Associates, Inc. (GDNA) and Workforce. However, at the hearing and in the papers, the parties focused their arguments on third party New WiMAX. To the extent Plaintiffs seek production from Clear pertaining to GDNA and Workforce, the motion is DENIED on the basis that Clear states that it has no relevant information pertaining to third parties. See ECF No. 225 at 5 (“Clear does not maintain contact information for its contractors, including those who sold for Clear through Workforce Logic.”). [3] The formation of Defendant Workforce as an operating entity occurred as follows. Between 2006 and 2011, Clear contracted with ABE Services LLC to perform “payrolling services.” ECF No. 227 at 2. ABE Services was organized by parent company GDNA. Id. at 3. In 2011, GDNA entered into an agreement whereby it would sell certain assets to APC Workforce Solutions d/b/a ZeroChaos (ZeroChaos). Id. In February 2013, GDNA established a wholly owned subsidiary to effectuate its sale of assets to ZeroChaos—the subsidiary created was Workforce Logic LLC (the Defendant in this action). Id. According to Workforce, “although it existed on paper, Workforce Logic LLC did not begin operations until January 2012. This entity was ultimately used as the vehicle to transfer the purchased assets from GDNA to ZeroChaos.” Id. at 3-4.