Scott v. Chipotle Mexican Grill, Inc.

• Decision Date: 29 September 2014
• Docket Number: 12-CV-08333 (ALC)(SN)
• Parties: MAXCIMO SCOTT, et al., on behalf of themselves and all others similarly situated, Plaintiffs, v. CHIPOTLE MEXICAN GRILL, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

MAXCIMO SCOTT, et al., on behalf of themselvesand all others similarly situated, Plaintiffs, v. CHIPOTLE MEXICAN GRILL, INC., Defendant.

12-CV-08333 (ALC)(SN)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 29, 2014

ORDER

SARAH NETBURN, United States Magistrate Judge:

The plaintiff and class representative Maxcimo Scott filed a class and collective action complaint on November 15, 2012, alleging violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. ("FLSA"), and the New York Minimum Wage Act, N.Y. Lab. Law, art. 6 §§ 190, et seq., art. 19 §§ 650, et seq. ("NYLL"), against the defendant Chipotle Mexican Grill, Inc. ("Chipotle"). Later amendments to the complaint added class action claims under Missouri, Colorado, Washington, Illinois and North Carolina law. The plaintiffs - salaried "Apprentices" employed or formerly employed by Chipotle restaurants nationwide - allege that Chipotle did not pay them the overtime and spread-of-hours compensation as required by federal or state law. On December 7, 2012, the Honorable Andrew L. Carter, Jr. referred this matter to my docket for general pretrial supervision. Judge Carter conditionally certified the plaintiffs' collective action on June 20, 2013. Before the Court is the plaintiffs' application seeking relief for the defendant's unauthorized ex parte communication with a class member. After considering the papers submitted by the parties, the Court GRANTS IN PART and DENIES IN PART the plaintiffs' application.

BACKGROUND

On August 25, 2014, Chipotle filed a letter informing the Court that, on August 20, 2014, counsel for Chipotle interviewed Gabriel Vasquez, an opt-in plaintiff and current General Manager at a Chipotle restaurant located in New York, without plaintiffs' counsel's consent. Chipotle contends, and plaintiffs' counsel do not contest, that Chipotle did not realize that Vasquez was a represented party at the time the interview was conducted, and that it initiated the interview with him only after he denied that he was represented and acknowledged, verbally and in writing, that he was voluntarily providing his statement. During the interview, Vasquez discussed, among other things, the work he performed as an Apprentice in New Jersey. After the interview, Vasquez signed a declaration, which allegedly supports Chipotle's position regarding the nature and scope of Apprentices' duties and, therefore, conflicts with the legal claims asserted by Vasquez and the other plaintiffs.¹

Plaintiffs assert that this conduct violated the New York Rules of Professional Conduct and seek an order (1) barring Chipotle from using or relying on the Vasquez Declaration; (2) requiring Chipotle to produce all documents related to its contact with Vasquez; and (3) mandating that Chipotle issue a specific warning to other potential class members that it interviews. For the reasons explained below, Chipotle is prohibited from using the Vasquez Declaration; but no further relief to the plaintiffs is granted.

DISCUSSION

A district court may giant the relief sought by the plaintiffs, first, under its authority to remedy ethical violations, and, second, under its authority to manage counsel's conduct in class actions. See United States v. Hammad, 858 F.2d 834, 837 (2d Cir. 1988) (citing In Re Snyder,472 U.S. 634, 645 n.6 (1985)) (holding that federal district courts can remedy ethical breaches pursuant to their "general supervisory authority over members of the bar" and obligation to "enforce professional responsibility standards"); Gulf Oil v. Bernard, 452 U.S. 89, 100-01 (1981) ("Because of the potential for abuse, a district court has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties."). The Court considers the plaintiffs' requests in light of the principles and obligations behind these two sources of judicial authority.

I. Statements of Law

A. New York Rule of Professional Conduct 4.2(a)

Rule 4.2(a) of the New York Rule of Professional Conduct provides that "In representing a client, a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter. . . ." N.Y. Comp. Codes R. & Regs. tit. 22, § 1200.0 ("Rule 4.2(a)"). This Rule "'applies even though the represented person initiates or consents to the communication.'" S.E.C. v. Lines, 669 F. Supp. 2d 460, 463 (S.D.N.Y. 2009) (quoting Rule 4.2(a), cmt. 3). Rule 4.2(a) was designed to prevent a lawyer from "obtaining a tactical advantage by knowingly contacting a represented party without notifying her lawyer." Velez v. Novartis Pharmaceutical Corp., 04 Civ. 9194 (CM), 2010 WL 339098, at *3 (S.D.N.Y. Jan. 26, 2010). Bailing lawyers from communicating directly with an opposing party represented by counsel "preserves the integrity of the attorney-client relationship," including by preventing counsel "from driving a wedge between the opposing attorney and that attorney's client." Polycast Tech. Corp. v. Uniroyal, Inc., 129 F.R.D. 621, 625 (S.D.N.Y. 1990); see also ABA Formal Opinion 06-443 (noting that "[t]he purpose of Rule 4.2 is to prevent a skilled advocate from taking advantage of a non-lawyer").While a violation of Rule 4.2(a) requires knowledge that the party was represented, this knowledge "may be inferred from the circumstances. . . . Thus, the lawyer cannot evade the requirement of obtaining the consent of counsel by ignoring the obvious." Rule 4.2(a). cmt. 8.

"If a party is found to have violated Rule 4.2, a court may exercise its discretion to exclude the resulting statements from evidence." Lines, 669 F. Supp. 2d at 464 (citing United States v. Thompson, 35 F.3d 100, 104 (2d Cir. 1994)); see also Univ. Patents, Inc. v. Kligman, 737 F. Supp. 325, 330 (E.D. Pa. 1990) (excluding evidence upon finding that counsel, a member of the Bar of New York, engaged in ex parte communications that did not comply with Rule 4.2(a)); cf. Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 398, 416 (S.D.N.Y. 2011) (declining to exclude a declaration upon finding that it did not arise from a communication in violation of Rule 4.2(a)). Nevertheless, while the Court of Appeals has found exclusion of evidence to be within "the arsenal of remedies available to district judges confronted with ethical violations," it has also urged district courts to exercise this discretion cautiously. Hammad, 858 F.2d at 840; see also Lines, 669 F. Supp. 2d at 464-65.

B. Management of Class and Collective Actions

A district court's authority to control lawyers' conduct is particularly broad in the context of class actions and FLSA collective actions. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170-71 (1989); Gulf Oil, 452 U.S. at 100-01 (1981); Manual for Complex Litig. (Fourth) § 21 ("Manual") ("Because the stakes and scope of class action litigation can be great, class actions often require closer judicial oversight and more active judicial management than other types of litigation."). In recognition of the potential for abusive conduct in class actions, the Federal Rules of Civil Procedure expressly authorize courts to issue orders for the purpose of "protect[ing] class members and fairly conduct[ing] the litigation." Fed. R. Civ. P. 23(d); seealso In re Sch. Asbestos Litig., 842 F.2d 671, 680 (3d Cir. 1988). Courts must be especially vigilant in supervising communication between counsel and class members, and a court's authority to control such communications can apply even before an attorney-client relationship is created with a potential class member. See Zamboni v. Pepe W. 48th St. LLC, 12 Civ. 3157 (AJN)(JCF), 2013 WL 978935, at *2 (S.D.N.Y. Mar. 12, 2013) (citing Gulf Oil, 452 U.S. at 100-01 (1981)) (discussing a court's authority to "circumscribe[e] contact with putative class members" in a FLSA action); Urtubia v. B.A. Victory Corp., 857 F. Supp. 2d 476, 485 (S.D.N.Y. 2012) (ordering restrictions on the "defendants' right to communicate directly with . . . potential class members regarding this litigation and its subject matter"); In re Initial Pub. Offering Sec. Litig., 499 F. Supp. 2d 415, 418 n.13 (S.D.N.Y. 2007); cf. Manual § 21.33 ("The judge has ultimate control over communications among the parties, third parties, or their agents and class members on the subject matter of the litigation to ensure the integrity of the proceedings and the protection of the class."). When improper ex parte communications occur in a class action, a court may take various forms of curative action, including ordering "exclusion of information gained in violation of the attorney-client relationship." Manual § 21.33; see Hammond v. City of Junction City, Kan., 167 F. Supp. 2d 1271, 1293 (D. Kan. 2001), aff'd, 126 F. App'x 886 (10th Cir. 2005) (ordering that "any evidence derived from . . . counsel's ex parte contact be excluded as evidence in this case").

II. Application

A. Whether Chipotle's Counsel Violated of Rule 4.2

The circumstances here are sufficient to infer Chipotle's knowledge that Vasquez was represented by counsel and to find Chipotle's conduct inconsistent with Rule 4.2(a). Whether a party is represented is particularly obvious in the FLSA context. In order for an employee tobenefit from a judgment in a FLSA action, the employee must "opt-in" as a plaintiff to the collective action after it is conditionally certified by filing written consent with the court. 29 U.S.C. § 216(b). Once the employee opts in, an attorney-client relationship is created with class counsel. See Gortat v. Capala Bros., 07 Civ. 3629 (ILG), 2010 WL 3417847, at *1 (E.D.N.Y. Aug. 27, 2010) (citing Tedesco v. Mishkin, 629 F. Supp. 1474, 1483 (S.D.N.Y. 1986)); Manual § 21.33 (citing In re Sch. Asbestos Litig., 842 F.2d 671, 679-83 (3d Cir. 1988)) (stating that the rules governing a lawyer's communication with adversary class...