Opinion
99 Civ. 9115 (CSH)
September 6, 2001
MEMORANDUM OPINION AND ORDER HAIGHT. Senior District Judge.
A trial is scheduled in this case for September 10, 2001, and the parties have submitted motions in limine in anticipation of the trial. Plaintiff moves for the exclusion of five witnesses proposed by defendant and for the exclusion of evidence relating to plaintiff's prior felony conviction. Defendant moves for the exclusion of evidence pertaining to plaintiffs compensation on a salary basis, for the admission of certain personnel forms, for the exclusion of evidence concerning a "bogus check scheme," and for the bifurcation of the liability and damages phases of the trial. The Court heard oral argument at a conference on September 5.
I. Defendant's Proposed Witnesses
Plaintiff argues that five of the witnesses proposed by defendant were not identified during the discovery period and therefore that defendant should be precluded from calling those witnesses at trial. Following an initial conference, the Court ordered on December 20, 1999, that all pre-trial discovery be completed by April 17, 2000; that deadline was subsequently extended to June 30, 2000. Plaintiffs amended First Set of Interrogatories, which were served on March 10, 2000, requested that defendant identify "every person with knowledge of relevant facts" (¶ 3). Defendant responded to plaintiffs interrogatories on April 12, 2000, and identified six persons with knowledge of relevant information: Christopher Turner, Ernest Wright (the plaintiff), Herb Freedman, David Berezin, Arthur Bratter, and John Preto. After the close of discovery, defendant filed a motion for summary judgment, which the Court denied on February 1, 2001. See Wright v. Aargo Security Services, Inc., 2001 WL 91705 (S.D.N.Y. Feb. 2, 2001). Following a conference held on March 2, 2001, the Court scheduled the trial for September 10, 2001, ordered the parties to submit pre-trial statements by April 20, 2001, and ordered the parties to file any motions in limine by July 16, 2001. In defendant's Pre-Trial Statement dated April 12, 2001, defendant named the following persons as possible witnesses at trial: Herbert Freedman, David Berezin, Arthur Bratter, John Preto, Ernest Wright, Darlene Bailey, Sara Harper, Steven Moncrief, Frederick Smith, and Linda Swinton. The first five of these witnesses were identified in defendant's response to plaintiffs interrogatories on April 12, 2000. On the same date that defendant submitted its Pre-Trial Statement, and nine and a half months after the close of discovery, defendant also served an amended response to plaintiffs interrogatories, in which defendant identified for the first time Darlene Bailey, Sara Harper, Steven Moncrief, Frederick Smith, and Linda Swinton ("the five witnesses") as persons having relevant knowledge.
Plaintiff contends that defendant had no justification for its failure to identify the five witnesses during the discovery period and that defendant's delay in identifying the five witnesses prejudiced plaintiffs trial strategy. Plaintiff points out that the five witnesses were employed by defendant at the same time as plaintiff and therefore that defendant should have known during the discovery period that the five witnesses had knowledge relevant to this case. Plaintiff concludes that the defendant acted "in bad faith to ambush the plaintiff at trial." Mem. of Law at 5. In opposition to plaintiffs motion, defendant argues that it made a reasonable inquiry in response to plaintiffs interrogatories and properly supplemented its response when it became aware that the five witnesses had relevant knowledge. Furthermore, defendant asserts that plaintiff has not been prejudiced by its delay in identifying the five witnesses, because plaintiff should have been aware that the five witnesses, who were his coworkers, had relevant knowledge and because plaintiff would not have sought discovery regarding the five witnesses had defendant identified them earlier. Defendant notes that plaintiff has not sought discovery related to the five witnesses in the time since defendant identified them and that plaintiff has conducted a total of one deposition in this case.
Plaintiff also argues that defendant's delay in identifying the five witnesses prejudiced plaintiffs ability to respond to defendant's motion for summary judgment. Since plaintiff did not move for reconsideration of the Court's decision on defendant's motion for summary judgment on this basis, I do not consider this argument, except to note that plaintiffs status as a salaried employee (the issue resolved in defendant's favor on summary judgment) turned upon the amounts and timing of plaintiffs compensation. See 2001 WL 91705, at * 4-9. It is not readily apparent how the testimony of these five co-workers would have added to or subtracted from that analysis.
Plaintiff in his reply brief urges the Court not to consider defendant's memorandum of law in opposition, because it was filed after the time provided by Local Rule 6.1(b)' depriving plaintiff of adequate time to draft a substantive reply. At a conference on September 5, 2001, I gave plaintiff the opportunity to respond to arguments raised by defendant in its opposition brief.
Rules 26(e)(2) and 37(c)(1) of the Federal Rules of Civil Procedure govern the duty to amend responses to interrogatories and the consequences of a party's failure to do so. Rule 26(e)(2) provides:
A party is under a duty seasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.
Rule 37(c)(1) provides:
A party that without substantial justification fails to disclose information required by Rule 26(a) or 26 (e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed.
The version of Rule 37(c)(1) in effect prior to December 2000 did not refer to Rule 26(e)(2), but courts could exercise their broad discretion to impose sanctions for discovery violations and prohibit the use of evidence at trial that was not properly disclosed in response to discovery requests. See Wilson., 250 F.3d at 19-20; Scranton Gillette Communications, Inc. v. Dannhausen, No. 96 C 8353, 1998 WL 566668, at *1 (N.D. Ill. Aug. 26, 1999).
The burden to prove substantial justification or harmlessness rests with the party who has failed to disclose information pursuant to Rule 26. Yeti by Molly Ltd. v. Deckers Outdoor Corp, 2001 WL 883708, at *3 (9th Cir. Aug. 8, 2001); Wilson v. Bradlees of New England, Inc., 250 F.3d 10, 20-21 (1st Cir. 2001).
Defendant argues that it complied with Rule 26(e)(2) when it supplemented its response to plaintiffs interrogatories on April 12, 2001, after learning that the five witnesses had relevant knowledge. Defendant asserts that it made a reasonable inquiry at the time it received plaintiffs interrogatories and that it did not learn that the five witnesses had relevant knowledge until it was preparing for trial. Defendant does not describe the "reasonable inquiry" it made during the discovery period, nor does it explain what investigation later led it to realize that the five witnesses had relevant knowledge. Considering that the five witnesses are, or were, employees of defendant, I conclude that defendant's failure to identify the five witnesses during the discovery period was due to a lack of diligence. See Grajales-Romero v. American Airlines, Inc., 194 F.3d 288, 297 (1st Cir. 1999) (holding that defendant had no substantial justification for failure to disclose in response to interrogatories identities of employees whom it wished to substitute as witnesses). As defendant itself states, "There can be no surprise that the five individuals named in the supplemental interrogatory responses had relevant knowledge of this matter." Mem. of Law in Opposition at 4. The time for diligent investigation into the evidence relevant to a case is during the period allotted for discovery, not during final preparations for trial.
Defendant simultaneously argues that "Plaintiff fails to demonstrate a connection between the fact that these individuals were employed by the Defendant and a conclusion that the Defendant readily knew of the knowledge each of the employees possessed" and that "Plaintiff cannot genuinely express surprise that individuals with whom he worked have knowledge of his duties and responsibilities." Mem. of Law in Opposition at 2, 4. Defendant does not acknowledge or explain the apparent contradictions between its positions.
Nevertheless, I do not prohibit defendant from calling the five witnesses at trial, because the identities of the five witnesses have been made known to plaintiff during the discovery process in satisfaction of Rule 26(e)(2), despite defendant's failure to respond fully to plaintiffs interrogatories in a timely fashion, and, in any event, under Rule 37(c)(1) plaintiff was not harmed by defendant's delay. In response to plaintiffs document requests, defendant produced personnel forms that were completed by plaintiff concerning various employees, including the five witnesses. Therefore, it was made known to plaintiff during the discovery process that the five witnesses had knowledge relevant to plaintiffs supervisory duties. Furthermore, plaintiff surely knew through his own experience which of his coworkers were familiar with the duties he performed.
Plaintiff argues that he might have deposed the five witnesses had defendant identified them during the discovery period and therefore that he was prejudiced by defendant's delay. Since plaintiff was aware that the five witnesses, his coworkers, had knowledge regarding plaintiffs job duties, plaintiff could have deposed any of them despite defendant's failure to specifically identify them during the discovery period. It seems highly unlikely, however, that plaintiff would have deposed any of the five witnesses even if defendant had specifically identified them in its initial response to plaintiff's interrogatories. Plaintiff has deposed only one person, Herbert Freeman, in this case. Plaintiff explains that he did not depose David Berezin, Arthur Bratter, or John Preto, whom defendant did identify during discovery, because "their knowledge of the facts involved here were either minimal or anticipated to be in direct contradiction to the plaintiffs testimony"; but plaintiff argues that he might have deposed the five witnesses had defendant identified them during discovery because they "could provide testimonial evidence to support the testimony of Mr. Berezin, Bratter and Preto." Mem. of Law at 5. If the testimony of the five witnesses supports the testimony of Berezin, Bratter, and Preto, then, following plaintiffs reasoning, the testimony of the five witnesses would be "minimal" or "in direct contradiction to the plaintiffs testimony" and therefore not worth exploring through depositions. I am not persuaded by plaintiffs contention that timely identification of the five witnesses would have affected his trial preparation.
I further note that if plaintiff considered the testimony of the five belatedly identified witnesses to be potentially probative, he could have asked the Court to reopen discovery during the period between April and September in order to depose them. It is difficult to accept plaintiffs characterization of an "ambush at trial" when plaintiff was aware of the enemy troops in the hills five months before the relief column reached the pass.
In summary, defendant provides no good justification for its failure to identify the five witnesses in its initial response to plaintiff's interrogatories. Nevertheless, the identities of the five witnesses were otherwise made known to plaintiff during the discovery process, and plaintiff was not harmed by defendant's delay in identifying them. Therefore, defendant did not violate Rule 26(e)(2), and Rule 37(c)(1) does not preclude defendant from calling the five witnesses to testify at trial.
II. Plaintiff's Prior Conviction
Plaintiff asks the Court to prohibit defendant from presenting evidence of plaintiff's conviction for attempted arson in 1982. Rule 609 of the Federal Rules of Evidence permits, in certain circumstances, the introduction of evidence that a witness has been convicted of a crime in order to impeach the witness's credibility:
Rule 609. Impeachment by Evidence of Conviction of Crime
(a) General rule. For the purpose of attacking the credibility of a witness,
(1) evidence that a witness other than an accused has been convicted of a crime shall be admitted, subject to Rule 403, if the crime was punishable by death or imprisonment in excess of one year under the law under which the witness was convicted, and evidence that an accused has been convicted of such a crime shall be admitted if the court determines that the probative value of admitting this evidence outweighs its prejudicial effect to the accused; and
(2) evidence that any witness has been convicted of a crime shall be admitted if it involved dishonesty or false statement, regardless of the punishment.
(b) Time limit. Evidence of a conviction under this rule is not admissible if a period of more than ten years has elapsed since the date of the conviction or of the release of the witness from the confinement imposed for that conviction, whichever is the later date, unless the court determines, in the interests ofjustice, that the probative value of the conviction supported by specific facts and circumstances substantially outweighs its prejudicial effect . . .
Since plaintiff was convicted in 1982 and completed his sentence in 1985, more than fifteen years ago, section (b) applies, and evidence of the conviction is not admissible unless its probative value "substantially outweighs" its prejudicial effect. Plaintiff argues that his conviction has no probative value, because it is unrelated to defendant's failure to pay overtime wages. Defendant counters that the conviction has probative value, because it is relevant to plaintiff's fraudulent intent in the check-cashing scheme and because it undermines plaintiff's portrayal of himself as a naive victim of defendant's fraud. The parties' briefs misconstrue Rule 609, which permits admission of evidence of a witness's criminal conviction for the purpose of impeaching the witness, i.e. showing that the witness cannot be trusted to tell the truth. See Rule 609, Advisory Committee Notes to 1990 Amendments ("[T]he title of the rule, its first sentence, and its placement among the impeachment rules clearly establish that evidence offered under Rule 609 is offered only for purposes of impeachment."). Furthermore, defendant's arguments ignore Rule 404(a), which prohibits using evidence of a crime "to prove the character of a person in order to show action in conformity therewith." See United States v. Nachamie, 101 F. Supp. 2 d 134, 137-46 (S.D.N.Y. 2000) (excluding evidence of prior convictions of arson and medicare fraud, which were relevant as background to charged conspiracy, because of risk of substantial prejudice under Rules 403 and 404(a)). To the extent that defendant argued at the September 5 conference for admission of this prior conviction under Rule 404(b), the argument is unpersuasive.
I conclude that the probative value of the conviction, with regard to plaintiff's credibility, does not substantially outweigh its prejudicial effect. Convictions may be admitted under Rule 609(b) "very rarely and only in exceptional circumstances." Zinman v. Black Decker(US.), Inc., 983 F.2d 431, 434 (2d Cir. 1993) (quoting congressional report). Defendant does not point to any "specific facts and circumstances" showing the probative value of the conviction for purposes of impeachment. Arson is not a crime that inherently involves dishonesty, Nachamie, 101 F. Supp. 2d at 150 n. 6, and plaintiff's conviction is nearly twenty years old, see United States v. Salameh, 152 F.3d 88, 131 (2d Cir. 1998) (upholding exclusion of conviction for robbery, assault, and sodomy that was more than twenty-five years old); cf United States v. Walker, 817 F.2d 461, 463-64 (8th Cir. 1987) (upholding admission of conviction for arson that was less than ten years old). The main issues of fact at trial-the duties performed by plaintiff, the hours he worked, and the compensation he received-do not turn solely on the credibility of plaintiff's testimony but rather can be proven through other witnesses as well. Therefore, the probative value of the conviction is slight. Cf. Zinman, 983 F.2d at 434 (upholding admission of conviction for Medicare fraud, because crime involved deceit and because witness's credibility was highly relevant to disputed issues). Introducing the conviction would be prejudicial to plaintiff, because it would portray him as a bad character, possibly causing him to lose the jury's sympathy. See Rule 609, Advisory Committee Notes to 1972 Proposed Rules (approving view that character evidence "subtly permits the trier of fact to reward the good man and to punish the bad man because of their respective characters despite what the evidence in the case shows actually happened"). For these reasons, I will not permit evidence of plaintiff's conviction to be admitted during either phase of the trial, which will be bifurcated for the reasons discussed at Point VI infra. III. Plaintiff's Compensation on a Salary Basis
After discovery in this case was completed, defendant moved for summary judgment on the basis that plaintiff was an exempt administrative employee and therefore not entitled to overtime pay under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., or the New York State Labor Law, N.Y. Labor Law §§ 1 et seq. The parties in their briefs and the Court in its Opinion of February 1, 2001, treated the administrative employee exemption under state law as identical to the exemption under federal law. The Court first found that defendant adequately pleaded the administrative employee exemption as an affirmative defense. The Court then explained that under the applicable "short test" for employees compensated above a certain amount, an employee must be paid on a salary basis and must perform certain types of duties to qualify as an administrative employee. The Court then decided as a matter of law that plaintiff was a salaried employee from August 24, 1996 to May 22, 1998, but found that there were disputed issues of material fact related to plaintiff's duties. Therefore, the Court declined to dismiss the claims against defendant.
Both New York state law and federal law provide that an employee is "administrative" if he earns more than a certain amount per month on a salary basis and if he performs certain duties. 29 C.F.R. § 541.2; N.Y. Comp. Codes R. Regs. tit. 12, § 141-3.2(c)(1)(ii). The federal regulation provides a "long test" with respect to the duties of an employee who receives a salary of at least $155 per week, and a "short test" with respect to the duties of an employee who receives a salary of at least $250 per week. 29 C.F.R. § 541.2 (setting forth "long test" in sections (a) through (e) and setting forth "short test" as proviso at end of section (e)); see also 29 C.F.R. § 541.2 14(a) (explaining that special proviso in § 541.2 functions as alternative to requirements set forth in (a) through (e)). The state regulation provides a single test of duties, applicable to employees who receive a salary of at least $318.75 per week N.Y. Comp. Codes R. Regs. tit. 12, § 141-3.2(c)(1)(ii).
That holding, see 2001 WL 91705, at *9, constituted a partial summary judgment in defendant's favor. While the Court did not use that phrase in the opinion and order, the effect was clear from the context, and any lingering ambiguity was resolved at the September 5 conference.
Defendant asks the Court to prohibit the introduction of evidence at trial on the issue of whether or not plaintiff was a salaried employee for purposes of the administrative exemption. Plaintiff protests that statements by defendant that plaintiff was paid an hourly wage are nonhearsay and relevant, but plaintiff fails to explain how such evidence is relevant to an issue at trial. Since the Court has decided as a matter of law that plaintiff was a salaried employee from August 24, 1996 to May 22, 1998, that issue will not be submitted for the jury to decide at trial. In order for defendant's statements concerning plaintiff's status as an hourly employee to be admissible, they would need to be relevant to some other issue that will be determined by the jury. Plaintiff may not introduce evidence concerning his status as an hourly or salaried employee on the issue of liability, which turns on the applicability of the administrative exemption or, to state the issue more precisely, the nature of the duties plaintiff performed for defendant. There is no present need to consider the relevance of such evidence on the issue of damages, if that question is reached.
IV. The Personnel Forms
Defendant originally sought to admit numerous personnel forms completed by plaintiff. Plaintiff does not object to the admission of those personnel forms that were signed by him but does object to admission of personnel forms that are unsigned or signed by other persons. At oral argument on these motions on September 5, 2001, defendant's counsel stated that defendant intended to offer only those forms signed by plaintiff. Accordingly, this dispute appears to be mooted.
V. The "Bogus Check Scheme"
Defendant asks the Court to exclude evidence of a "bogus check scheme," by which plaintiff regularly received from defendant money, in addition to his salary, in the form of payroll checks issued to fictitious persons. Defendant argues that the scheme has no relevance to plaintiff's salaried status (which was resolved as a matter of law), to the nature of plaintiff's duties, or to the willfulness of defendant's alleged misconduct. Defendant further argues that evidence of the scheme would be highly prejudicial to defendant, because it would characterize defendant as a lawbreaker and bad company. Plaintiff responds that evidence of the "bogus check scheme" is relevant, because the jury can infer from this evidence that plaintiff was not an exempt employee and that defendant willfully violated overtime laws. Plaintiff also argues that the evidence would not unfairly characterize defendant as a lawbreaker, because defendant did in fact break the laws.
The "bogus check scheme," and defendant's intentions with respect to that scheme, are not relevant to the issue of whether plaintiff was statutorily entitled to overtime wages or whether he was exempt as an administrative employee. See 29 U.S.C. § 207 (compensation for overtime), § 213 (exemption for administrative employees); 29 C.F.R. § 541.2 (definition of administrative employee); 29 C.F.R. § 541.214 (explaining operation of 29 C.F.R. § 541.2); N Y Labor Law § 232 (compensation for overtime), § 230 (definition of building service employee); N Y Comp. Codes R. Regs. tit. 12, § 14 1-3.2 (exemption for administrative employee and definition). At oral argument, plaintiff's counsel suggested that defendant's conduct with respect to these checks would constitute "admissions" binding upon the defendant. And so it might, if conducted by persons of the requisite authority. But plaintiff fails to demonstrate how admissions with respect to the mechanics of compensating plaintiff are relevant to the nature of the duties he performed, the key issue on liability.
Given the potential prejudice to defendant of this unorthodox method of payment, and the absence of probative value on the liability issue, I will not receive evidence of the "bogus check scheme" on the liability phase of the trial.
Such evidence may be relevant to damages issues, such as the willfulness of defendant's conduct, but I need not consider that now. If plaintiff prevails on liability, I will entertain an offer of proof and consider admissibility under the rules of evidence, including Rule 403.
VI. Bifurcation of the Trial
Defendant requests that the trial be bifurcated into a liability phase and a damages phase, because the proofs submitted for liability and damages would differ completely. Defendant asserts that the only issue in the liability phase is whether plaintiff was an exempt employee, involving evidence only of plaintiff's duties, whereas the issues in the damages phase are the amount of overtime pay to which plaintiff is entitled, involving proofs of the total number of hours worked by plaintiff and the compensation he received, and the willfulness of defendant's failure to pay overtime. Defendant also argues that, if plaintiff is permitted to introduce evidence of the "bogus check scheme" to prove willful violation of labor laws, bifurcation is necessary to prevent that evidence from prejudicing defendant in the liability phase. Plaintiff responds that bifurcation is inappropriate, because the administrative exemption under New York law differs from the administrative exemption under federal law and involves issues that are intertwined with proof of damages, in particular whether plaintiff "customarily and regularly" exercised discretion and independent judgment.
"The decision to bifurcate a trial into liability and damages phases . ., is firmly within the discretion of the trial court under Fed.R.Civ.P. 42(b)." Katsaros v. Cody, 744 F.2d 270, 278 (2d Cir. 1984) (citation and internal quotation marks omitted). "Rule 42(b) of the Federal Rules of Civil Procedure affords a trial court the discretion to order separate trials where such an order will further convenience, avoid prejudice, or promote efficiency." Amato v. City of Saratoga Springs, N.Y., 170 F.3d 311, 316 (2d Cir. 1999). See also Vichare v. Ambac Inc., 106 F.3d 457, 466 (2d Cir. 1996) ("The interests served by bifurcated trials are convenience, negation of prejudice, and judicial efficiency."). Bifurcation may be appropriate where "the two phases involved different types of evidence," Katsaros, 744 F.2d at 278, or where "the litigation of the first issue might eliminate the need to litigate the second issue," Amato, 170 F.3d at 316.
In the case at bar, I am persuaded that efficiency and fairness would best be served by submitting the question of liability to the jury before proceeding to the proof on damages. It appears that the central issue related to liability is the nature of plaintiff's job duties, while the central issues related to damages are the total number of hours worked by plaintiff, the amount of compensation he received, and the willfulness of defendant's alleged violation. Contrary to plaintiff's assertion, both state and federal law require that an administrative employee customarily and regularly" exercise discretion and independent judgment in performing certain tasks. 29 C.F.R. § 541.2; 29 C.F.R. § 541.2 14; N.Y. Comp. Codes R. Regs. tit. 12, § 141-3.2. Furthermore, the proof on the issue of whether plaintiff customarily exercised discretion is not, as plaintiff argues, inextricably entwined with the proof on the issue of how many hours plaintiff worked. The former may be based on generalizations, while the latter necessarily relies upon numerical calculations. Finally, evidence of a "bogus check scheme" could potentially confuse the jury's consideration of liability and prejudice the defendant on that issue. Therefore, the trial will be bifurcated into a liability phase and a damages phase, tried before the same jury, with the damages phase to commence immediately after the jury reaches a verdict on liability.
CONCLUSION
For the foregoing reasons, I decide that defendant may present the testimony of Darlene Bailey, Sara Harper, Steven Moncrief, Frederick Smith, and Linda Swinton; defendant may not introduce evidence of plaintiff's conviction for attempted arson in 1982; the issue of plaintiff's compensation on a salary basis will not be tried before the jury; evidence of a "bogus check scheme" is not admissible on the issue of liability but may be admissible on the issue of willfulness in the damages phase; and the liability and damages phases of the trial will be bifurcated.
It is SO ORDERED.