Maar v. Beall's, Inc.
| Decision Date | 27 February 2017 |
| Docket Number | CASE NO: 16–cv–14121–MIDDLEBROOKS/LYNCH |
| Parties | Eric MAAR and Lindiane Wess, individually and on behalf of others similarly situated, Plaintiffs, v. BEALL'S, INC., Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Charles Gershbaum, David A. Roth, Marc Hepworth, Rebecca Predovan, Hepworth, Gershbaum & Roth, PLLC, New York, NY, Paolo Chagas Meireles, Susan Hilary Stern, Gregg I. Shavitz, Shavitz Law Group, P.A., Boca Raton, FL, for Plaintiffs.
Kevin David Johnson, Thompson Sizemore Gonzalez & Hearing, Tampa, FL, for Defendant.
ORDER GRANTING PLAINTIFFS' MOTION TO COMPEL REQUESTS FOR PRODUCTION OF DOCUMENTS NOS. 17, 24, & 25 AND DEPOSITION TESTIMONY
THIS CAUSE comes before the Court upon Plaintiffs Eric Maar and Lindiane Wess's (together with all opt-in Plaintiffs) ("Plaintiffs") Motion to Compel Requests for Production of Documents Nos. 17, 24, & 25 and Deposition Testimony ("Motion"), filed on December 23, 2016. (DE 54). Defendant Beall's, Inc. ("Beall's") filed a Response in opposition on January 13, 2017 (DE 57), to which Plaintiffs replied on January 27, 2017 (DE 63). For the reasons stated below, the Motion is granted.
This is a collective action under the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq. ("FLSA"), by employees of Beall's that were classified as Area Managers ("AMs"). (DE 1 at ¶ 24). Plaintiffs' Complaint alleges that Beall's violated the FLSA by failing to pay overtime wage to AMs (id. at ¶ 31), whom Beall's had misclassified as "exempt"—employees for whom the statutory overtime requirements do not apply. (Id. at ¶¶ 37–45). The Complaint alleges further that Beall's misclassification, and consequent overtime violation, was "willful." (Id. at ¶¶ 46, 56–57). Beall's Answer denies that the company erred in its AM classification (DE 8 at 5), but the Third and Fifth Affirmative Defenses also stress that if it did, any such error was, respectively, not willful and made in a good faith attempt to comply with the law. (Id. at 8). Whether Beall's classification of AMs as exempt employees was willful is a material "question of law and fact", Allen v. Bd of Pub. Educ. for Bibb Cty. , 495 F.3d 1306, 1324 (11th Cir. 2007), because the running of the statute of limitations and availability of liquidated damages both turn on the state of mind of Beall's officials. See 29 U.S.C. §§ 255(a), 260.
On May 27, 2016, Plaintiffs served Interrogatories and Requests for Production of Documents ("RFPs") on Beall's. (DE 54 at 2). In Interrogatory No. 10, Plaintiffs requested Beall's to:
Describe and identify all facts supporting each of Defendant's Affirmative Defenses, including for each defense upon which you rely, identifying (a) the records and documents relied upon; and (b) all witnesses with knowledge of the facts underlying each exemption.
(DE 54–1 at 9). Correspondingly, Request No. 24 of the RFP asked for "[d]ocuments or records relied upon as a basis for responding the Plaintiffs' First Set of Interrogatories to Defendant." (DE 54–2 at 11). Request No. 25 asked more specifically for "all documents supporting any affirmative defenses relied upon by Defendant ...." (Id. at 12). In a more encompassing question, Request No. 17, Plaintiffs also requested "Defendant's communications with others regarding this lawsuit or the subject matter of this action." (Id. at 9).
In response to Interrogatory No. 10, as to the Third Affirmative Defenses, Beall's stated, in pertinent part, that:
If a Court should find that Plaintiffs were misclassified, Plaintiffs have not presented and cannot present any evidence that demonstrates Defendant's actions were willful, because Defendant made good faith efforts to properly classify its employees according to the duties for which they were responsible and the significance of those duties.
(DE 54–1 at 10, 11). As to the Fifth Defense, Beall's repeated the same answer but added at the end of the sentence that Beall's "consulted with legal counsel regarding such classification. " (Id. at 11) (emphasis added).1 In addition Beall's objected to Document Requests Nos. 17 and 24, in part, because they "seek[ ] documents protected by the attorney-client and/or work product privileges." (DE 54–2 at 9, 11), Beall's objected to Document Request No. 25 on the ground that a request for "all" documents was "overly broad." (Id. at 12).2
According to Plaintiffs, after they communicated with Beall's regarding the company's objections, Beall's served amended answers to the interrogatories, which substituted the reference to the advice of legal counsel with the following:
... Defendant regularly reviewed and evaluated the job descriptions of [AMs] and the work performed by [AMs], reviewed the relevant regulations and regulatory guidance, partook in relevant educational events and seminars for Human Resources professionals regarding wage and hour laws, and reviewed relevant trade publications on the issue
(DE 54–4 at 13). Finally, as is relevant to this Motion, on July 14, 2016, Plaintiffs deposed Daniel Doyle ("Doyle"), Beall's corporate representative. (DE 54 at 7). During the deposition, Doyle confirmed that Beall's had retained an attorney, Ellen Kearns ("Kearns"), between 2004 and 2005 to examine the exempt status of AMs, and that Kearns had written a letter describing her conclusions. (DE 54–7 at 50). However, Beall's counsel directed Doyle not to answer questions concerning the letter's application to classification policies or Doyle's communications with present counsel regarding AMs' classification. (Id. at 51–52)
In the instant Motion, Plaintiffs request that Beall's be compelled to produce documents responsive to the three RFPs at issue (Nos. 17, 24, & 25) and to re-produce Doyle to testify concerning "all aspects of [Beall's] affirmative defenses of good faith and lack of willfulness, including all communications with [ ] Kearns or any other counsel." (DE 54 at 9).
There is one material point in dispute: whether Beall's impliedly waived the attorney-client privilege by putting its state of mind directly at issue.3 The Eleventh Circuit's standard for evaluating this form of waiver is found in Cox v. Administrator U.S. Steel & Carnegie , 17 F.3d 1386, 1417–20 (11th Cir. 1994). That decision examined whether, in a suit by union members, a defendant employer waived the privilege when it raised an affirmative defense that it did not believe an agreement to specially compensate union negotiators was illegal. Id. In holding that the employer had waived the privilege, the Cox Court adopted the principle enunciated by the Fifth Circuit that "the attorney-client privilege is waived when a litigant places information protected by it in issue through some affirmative act for his own benefit, and to allow the privilege to protect against disclosure of such information would be manifestly unfair to the opposing party." Cox , 17 F.3d 1386, 1417 (quoting Conkling v. Turner , 883 F.2d 431, 434 (5th Cir. 1989) ) (emphasis in original); accord United States v. Bilzerian , 926 F.2d 1285, 1292–94 (2d Cir. 1991) (); Chevron Corp. v. Pen n zoil Co. , 974 F.2d 1156, 1162–63 (9th Cir. 1992) ().4 In such instances, the client impermissibly uses the privilege as a "sword" rather than a "shield," as was intended. Cox , 17 F.3d at 1417. Cox went on to cite with approval the Eighth Circuit's list of possible situations where a litigant uses the privilege offensively: "(1) when a client testifies concerning portions of the attorney-client communication, (2) when a client places the attorney-client relationship directly at issue, and (3) when a client asserts reliance on an attorney's advice as an element of a claim or defense." Id. at 1418 (quoting Sedco Int'l S.A. v. Cory , 683 F.2d 1201, 1206 (8th Cir. 1982) )
Plaintiffs contend that Beall's implicated the attorney-client relationship when it asserted the affirmative defense of good faith. In their view, such a defense "necessarily involves an inquiry into the state of mind which typically calls forth the implied waiver of attorney-client privilege," regardless of any reference to advice of counsel. (DE 54 at 11) (quoting In re Cty. of Erie , 546 F.3d 222, 228–29 (2d Cir. 2008) ). Beall's insists that the mere fact of having pled a good faith defense cannot, by itself, constitute a waiver.
A comparison between this case and Cox demonstrates that the substance of Beall's Fifth Affirmative Defense indeed translates to a standalone waiver of attorney-client privilege as to the information sought by Plaintiffs. The Cox Court stressed that the source of the waiver must be an "affirmative act." Cox , 17 F.3d at 1419 (). The employer defendant in that case, USX, maintained that its affirmative defense did not qualify because it was merely a response to the plaintiff's injection of "state of mind" issues via the complaint's "allegations of intentional, criminal wrongdoing." Cox , 17 F.3d at 1418. But the Eleventh Circuit, analogizing to Bilzerian , rejected this reasoning and found that USX had "gone beyond mere denial" of criminal intent—and thereby waived the privilege—when it asserted by way of affirmative defense "that it believed that its change in...
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...And, such denials—without more—do not amount to a waiver of the protections afforded the matters here. Maar v. Beall's, Inc., 237 F. Supp. 3d 1336, 1340 (S.D. Fla. 2017) (FLSA case in which court cited Cox for the proposition that "a defendant can always deny the element of a plaintiff's cl......