Thomas E. Perez v. Nuzon corporation et al

Opposition Opposition re: APPLICATION for Leave to file Informants' Declarations In Camera 207

C.D. Cal.February 4, 2019

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Jehan N. Jayakumar, State Bar No. 224148 jehan@cjattorneys.com Andrew E. Saxon, State Bar No. 227344 andrew@cjattorneys.com CARLSON & JAYAKUMAR LLP 2424 S. E. Bristol, Suite 300 Newport Beach, California 92660 Telephone: (949) 222-2008 Facsimile: (949) 222-2012 Attorneys for Defendants Nuzon Corporation, Margaret’s Villa, Inc., Geraldo Ortiz, Lilibeth Ortiz, Fil-Lyd Investments, LLC, and Juanjo Investments, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff, v. NUZON CORPORATION et al. Defendants. Case No. 8:16-CV-00363-CJC-KES Hon. Cormac J. Carney, Courtroom 7C DEFENDANTS’ OPPOSITION TO PLAINTIFF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Hearing Date: February 25, 2019 Time: 1:30 p.m. Court: 7C Judge: Hon. Cormac J. Carney Trial: April 16, 2019 Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 1 of 8 Page ID #:6305 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA I. INTRODUCTION The Department of Labor (“DOL”) asks the Court to deny summary judgment based upon testimony from three employees whose names and signatures have been entirely redacted. Rather than seeking leave ahead of time, the DOL simply filed this application simultaneously with the nameless declarations in its opposition to summary judgment [Dkts 204-2, 204-3, 204-4] and, after 5pm the night of its opposition file, called Defendants’ attorney with the audacity to ask if Defendants would stipulate to the redactions. There was no timely conference, which should have occurred at least seven days before filing this application per local rules. Nor did the DOL submit the proper records to confirm that the DOL properly invoked the privilege. Instead, the DOL decided to continue to rely on the informants’ privilege to block Defendants from deposing three witnesses whose newly disclosed testimony is now before the Court on an evidentiary, dispositive motion. The informant’s privilege is not absolute and gives way to disclosure in circumstances, such as these, when the Defendants have a need for the disclosure that outweighs the government’s need for concealment. As set below, with no evidence to corroborate any purported fears of retaliation, with a compelling need for disclosure advanced by Defendants, and given the proximity to trial, the Court should deny this Application. Further, the Court should allow Defendants opportunity to depose these employees, as sought by the accompanying Notice of Request to Cross-Examine Declarants. II. ARGUMENT A. The Informant’s Privilege Gives Way to Defendants’ Need to Identify the Three Workers Whose Testimony the DOL Uses Against Defendants The informant’s privilege “will give way [w]here the disclosure of an informer's identity, or of the contents of his communication, is relevant and helpful to the defense of an accused, or is essential to a fair determination of a cause.” In re Perez, 749 F.3d 849, Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 2 of 8 Page ID #:6306 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA 855–56 (9th Cir. 2014) (internal quotations omitted). “The informant’s privilege is not absolute, and courts faced with an assertion of the privilege must balance ‘the public’s interest in efficient enforcement of the FLSA, the informant’s right to be protected against possible retaliation, and the employer’s need to prepare for trial.’ As trial draws near, the balance shifts toward disclosure and the government must make a particularized factual showing regarding a danger of retaliation in order for continued validity of the privilege.” Solis v. Best Miracle Corp., No. SACV 08-0998CJC, 2009 WL 3709498, at *1 (C.D. Cal. Nov. 3, 2009) (citing Hodgson v. Charles Martin Inspectors of Petroleum, Inc., 459 F.2d 303, 305 (5th Cir.1972); Brennan v. Engineered Prods., Inc., 506 F.2d 299, 302–03 (8th Cir. 1974).) “Where the disclosure of an informer's identity, or of the contents of his communications, is relevant and helpful to the defense of an accused, or is essential to a fair determination of a cause, the privilege must give way.” Roviaro v. United States, 353 U.S. 53, 60–61 (1957). In the end, “[t]here is no bright line for determining when the privilege will apply and each case must be analyzed according to its facts under a delicate balancing test.” Sec'y of Labor v. Superior Care, Inc., 107 F.R.D. 395, 397 (E.D. N.Y. 1985). i. The Defendants Have a Compelling Need to Know the Identities of the Workers Who Submitted Sworn Testimony “In almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses.” Goldberg v. Kelly, 397 U.S. 254, 269 (1970). Here, the DOL asks the Court to deny the Defendants’ summary judgment motion on the basis of testimony from three employees whom Defendant lacked the opportunity to depose. Not only has the DOL refused to disclose the identity of witnesses that it relies upon in its already-filed opposition to partial summary judgment, regardless of how close to trial we now are, but the DOL never served initial disclosures pertaining to its FLSA Retaliation claim that was added with leave of court after the 2018 trial date was vacated. (Declaration of Andrew E. Saxon In Support Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 3 of 8 Page ID #:6307 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA of Defendants’ Opposition to Application for Leave to File Under Seal at ¶¶ 5, 6.) The DOL’s tactics, combined with the limited sixty-day window of discovery permitted by the Court on this late-added claim in Plaintiff’s Second Amended Complaint [Dkt. 148], left Defendants with insufficient opportunity to pursue depositions of all employees to attempt to discover the identities of any employees who allegedly felt that they were retaliated against by the voluntary requests for interviews and voluntary declaration process. Defendants had sought written discovery to identify those persons, but the DOL refused to disclose their identities throughout discovery, relying chiefly on the informant’s privilege. (Saxon Decl. at ¶ 5.) Defendants subpoenaed three employees for testimony, but only one was able to appear for deposition prior to the discovery the cutoff. (Id. at ¶ 7.) In short, the DOL has never provided Defendants with notice of which employees the DOL intends to rely upon and thus deprived Defendants of their due process rights to cross-examine their accusers. Moreover, at issue here is not testimony and information obtained from informants regarding generally applicable wage practices where their identities are not necessary as critical. Instead, the employees are allegedly informing the DOL and presented sworn testimony that they feel they were retaliated against. The Defendants need to depose those who believe they were subject to retaliation is greater than the need to know which employees complain about wage practices, for example. Further, without opportunity to examine the employees in deposition, the Court has no way of knowing if the workers would testify in a manner contrary to their own declarations. Defendants have a compelling need to know the identities of the declarants so the employees can be cross-examined on their testimony. Particularly when the DOL’s investigator admitted that employees are nervous when they speak investigators (Saxon Decl., at ¶ 10 & Exh. A [citing Deposition of Sylvia Salazar 75:24-76:2]), Defendants have a right to test the veracity of the statements these particular employees made in their /// Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 4 of 8 Page ID #:6308 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA declarations and to confirm whether, for instance, the DOL uses coercive tactics to obtain declarations in the DOL’s interest. ii. The DOL’s Interest in Nondisclosure is Minimal Given the Proximity to Trial and the Lack of any Objectively Reasonable “Fear” In light of the Defendants’ compelling need for this disclosure and the opportunity to depose these witnesses, the DOL must meet a “particularized showing regarding the danger of retaliation.” Solis, 2009 WL 3709498, at *1. The DOL claims that the three workers “are scared to lose their jobs and/or homes.” (Application at 1:18-19). No worker actually declares that he or she has either of these fears, and even if any worker had such fears, those fears would not overcome the Defendants’ due process rights to depose them. As to the purported fear of losing their homes, the Court has no evidence to back this up because none of the workers who allegedly signed a declaration stated in their declarations that he or she either previously, or currently, lives in one of the Defendants’ homes, and none of the workers declare that he or she fears loss of his or home in retaliation. [See Dkts. 204-2 through 204-4.] Even if the Court had some evidence of this purported fear, the fear would not be “objectively reasonable,” certainly not to the point of overcoming the Defendants’ need for this disclosure at this late phase of the litigation. The DOL harps on the alleged eviction attempts, but those allegations refer to events in about March 2018—nearly a year ago, through an alleged eviction effort that was retracted, in writing, pursuant to discussions amongst counsel for all parties. (Saxon Decl. at ¶ 11.) The DOL has never alleged that Defendants attempted to evict any employees since March 2018, which has not happened. The amount of time that has passed and the fact that the Defendants retracted any prior alleged evictions lessens, objectively, any lingering fears of “loss of home” even. As to the purported fear of employees’ losing their jobs, again, no worker declares that he or she is afraid that Defendants will terminate his or her employment. [See Dkts. 204-2 through 204-4.] Nor have there been any allegations at any time that Defendants Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 5 of 8 Page ID #:6309 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA terminated any worker’s employment, or threatened to do so, in retaliation. The Court should rule that, like any unreasonable fear of retaliatory eviction, a fear of loss of job in these circumstances is not an “objectively reasonable” fear, and not one that should overcome the Defendants’ need for this disclosure. B. The Court Should Also Deny the DOL’s Application Because the DOL Did Not Properly Invoke the Privilege Even if the informant’s privilege could still apply at this late stage of litigation with a dispositive motion pending and the informants’ testimony already submitted, the DOL failed to properly invoke the privilege to begin with. To do so, the DOL was required to submit a formal claim of privilege “lodged by the head of the department which has control over the matter, after actual personal consideration by that officer.” United States v. Reynolds, 345 U.S. 1, 7-8 (1953). The DOL did not do so, and instead submitted solely the declaration of the attorney of record. Chao v. Westside Drywall, Inc., 254 F.R.D 651, 657 (D. Or. 2009) (rejecting DOL’s claim of informant’s privilege where DOL “provided only the declarations of a wage and hour investigator and the attorney of record”). See Martin v. Albany Business Journal, 780 F.Supp.927, 933 n. 9 (N.D. N.Y. 1992) (“To permit any government attorney to assert the privilege would derogate [the purposes behind the formal claim requirement],” internal quotations omitted.) The Court should deny this Application on this ground as well. C. The Court Should Also Reject the DOL’s Application Due to the DOL’s Failure to Timely Confer with Defendants Pursuant to L.R. 7-3 The DOL’s Application for File Informants’ Declarations in Camera is not exempted from Local Rule 7-3’s requirements that counsel meet and confer prior to filing. Local Rule 7-3 requires that conference “shall take place at least seven (7) days prior to the filing of the motion.” L.R. 7-3. The DOL’s counsel knew it of this requirement, as is evident from its counsel’s inclusion of the following language in his supporting declaration: “On January 28, 2019, I spoke with defense counsel on the telephone Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 6 of 8 Page ID #:6310 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA regarding the Secretary’s Application …” (Decl. of Charles Song [Dkt. 207-1], at ¶ 3.) The DOL violated Local Rule 7-3 because the DOL did not attempt to schedule a conference with Defendants’ counsel until after 5pm the night it filed the Application. (Saxon Decl. ¶ 8.) Defendants’ counsel had insufficient opportunity to consult with their clients and no opportunity to attempt resolution with the DOL in an effort to avoid the need for this Application, which is exactly what the local rule requires. Nor did the DOL offer any explanation as to why it ignored this Court’s rules. The DOL certainly cannot claim that it lacked sufficient time to identify the purported need for this Application. In fact, the DOL was informed of the summary judgment motion nearly two months ago, on December 3, 2018, when Defendants’ attorney contacted the DOL’s attorneys to schedule the L.R. 7-3 conference over the summary judgment motion. (Saxon Decl. at ¶ 12.) The DOL waited nearly two months, until after it had both sought and obtained the declarations, and only then informed Defendants’ counsel of their intent to file this Application in hopes that Defendants would actually stipulate to this relief on the night of the filing. (Saxon Decl. at ¶ 8.) If the need for these declarations, and for these redactions, was so important, surely the DOL would have provided adequate opportunity for a conference. III. CONCLUSION Defendants request that the Court deny Plaintiff’s application and order the following: (1) require Plaintiff to provide and file unredacted versions of these declarations; (2) permit Defendants to depose each of the declarants within a period of time agreeable to the parties; and (3) permit the parties limited, supplemental briefing to present to the Court arguments pertaining to the testimony obtained from these declarants. /// /// /// /// /// Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 7 of 8 Page ID #:6311 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 DEFS’ OPPOSITION TO PLF’S APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA DATED: February 4, 2019 CARLSON & JAYAKUMAR LLP By: /s/ Andrew E. Saxon Jehan Jayakumar Andrew E. Saxon Attorneys for Defendants Nuzon Corporation, Margaret’s Villa, Inc., Geraldo Ortiz, Lilibeth Ortiz, Fil-Lyd Investments, LLC, and Juanjo Investments, LLC Case 8:16-cv-00363-CJC-KES Document 208 Filed 02/04/19 Page 8 of 8 Page ID #:6312