Thomas E. Perez v. Nuzon corporation et al

REPLY in support of APPLICATION for Leave to file Informants' Declarations In Camera 207

C.D. Cal.February 11, 2019

SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES 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 JANET M. HEROLD Regional Solicitor MARC A. PILOTIN Counsel for Wage and Hour Litigation CHARLES SONG (CSBN 204497) Senior Trial Attorney JESSICA M. FLORES JENNIFER L. STA.ANA Trial Attorneys UNITED STATES DEPARTMENT OF LABOR 350 S. Figueroa Street, Suite 370 Los Angeles, CA 90071-1202 Telephone: (213) 894-5365 Fax: (213) 894-2064 Song.Charles@dol.gov Attorneys for Plaintiff R. Alexander Acosta IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA CENTRAL DIVISION R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff, v. NUZON CORPORATION; a corporation; MARGARET’S VILLA, INC., a corporation; GERALDO ORTIZ, an individual; LILIBETH ORTIZ, an individual; FIL-LYD INVESTMENTS, LLC, a California Foreign Limited Liability Company; JUANJO INVESTMENTS, LLC, a California Foreign Limited Liability Company, Defendants. Case No. 16-CV-00363-CJC-KES SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Date: February 25, 2019 Time: 1:30 p.m. Judge: Hon. Cormac J. Carney Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 1 of 7 Page ID #:6388 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 1 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 INTRODUCTION Given Defendants’ retaliation campaign against their workers, in camera filing of worker declarations detailing that retaliation was necessary. As discussed more thoroughly in the Secretary’s Opposition to Defendants’ Motion for Partial Summary Judgment, Defendants conducted a nearly year-long retaliation campaign to punish and intimidate “ring leaders” and other confidential informants for their protected activities and from continuing to cooperate with the Secretary for trial. Given this background, workers’ fears of further retribution, which are detailed in the subject declarations, are unsurprising: • I am afraid of what will happen to me as they have already punished us two times for trying to get the wages we earned years ago. (Dkt. 204-2 ¶ 9.) • I was even more afraid when I saw the boss/landlord tr[y] to make workers who lived at the care homes move out and find new homes in 2018. (Dkt. 204-3 ¶ 7.) • I hope that Gerry and Lily don’t find out I signed this declaration because I am afraid they will get mad they [found] out I talked to the DOL and signed this declaration. (Dkt. 204-2 ¶ 9.) The government informant’s privilege exists to protect workers from retaliation. In re Perez, 749 F.3d 849, 855 (9th Cir. 2014). And, as this Court has permitted previously, where there is an ongoing and particularized fear of retaliation, the procedural protection of in camera review is warranted. To be sure, the protection may not be perpetual, and Defendants’ right to prepare for trial will be protected. The declarants’ identities will be disclosed if the Secretary intends to present them as witnesses at trial. In such a case, the Secretary will disclose the identities of the informants and unredacted versions of their declarations as part of the parties’ pretrial disclosures, which will occur at or about the time of the hearing on Defendants’ partial summary judgment motion. Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 2 of 7 Page ID #:6389 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 2 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 ARGUMENT I. Defendants Have Failed to Satisfy Their Burden of Demonstrating a Compelling Need for Overcoming the Government’s Informant Privilege, Particularly Because They Were Not Diligent in Retaliation Discovery. To overcome the government informant’s privilege, Defendants must show a “compelling need” for the information or that it is “essential” to their defense. In re Perez, 749 F.3d at 858-59. Without a showing of substantial need, witness identities need not be disclosed until closer to trial.1 Here, Defendants have failed to meet their burden of demonstrating a compelling need to learn at this time the identities of the confidential informants who signed the declarations supporting the Secretary’s opposition. Defendants2 misstate both the magnitude of the information that the Secretary has withheld and their “need” for this information. (Dkt. 208 pp. 2-3.) Indeed, in describing their need for the identities of the Workers, Defendants first complain in their Opposition about their “insufficient opportunity” to depose employees regarding retaliation which Defendants themselves 1 See, e.g., Brock v. R.J. Auto Parts and Service, Inc., 864 F.2d 677, 680 (10th Cir. 1988) (reversing district court for requiring premature identification of witnesses when defendant had failed to demonstrate any need for such); Brock v. Gingerbread House, Inc., 907 F.2d 115, 116-17 (10th Cir. 1989) (reversing district court because, absent a “substantial showing of need” at the discovery phase, the informant’s privilege protects the identities of Department informants during discovery; ruling that “the pre-trial conference is the appropriate occasion generally for identification of witnesses”); Brennan v. Engineered Prods., Inc., 506 F.2d 299, 304 (8th Cir. 1974) (five to ten days before trial a reasonable time for Secretary of Labor to disclose witness names in FLSA case); Continental Finance & Loan Co., 326 F.2d 561 at 564 (reversing district court for ordering Secretary to reveal informants’ identities during discovery and holding that “the pre-trial hearing [is] the appropriate time” “shortly before trial” for disclosing Department witnesses). 2 On page 5 of the Opposition, Defendants mistakenly claim Local Rule 7-3 applies to the Secretary’s application for administrative relief. Furthermore, the Secretary did not anticipate the need for this application because defense counsel was evasive and refused to explain the basis of their motion at the meet and confer. Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 3 of 7 Page ID #:6390 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 3 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 created. (Id. p. 3.) Defendants then make the vague argument that “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.” (Id.) The only discernible need3 they mention is that they need to know the identities of the employees “so the employees can be cross-examined on their testimony.” (Id.) However, Defendants lacked diligence in taking retaliation discovery, which is not a basis to cast aside the government informant’s privilege. Because the parties have already exchanged pretrial disclosures for the wage claims in this case, Defendants have had the Secretary’s witness list since December 2017.4 (Song Decl. ¶ 2) Indeed, Defendants had a specific opportunity to depose these employees regarding the Secretary’s retaliation claims, but simply failed to do so. (Id.) Defendants waited until the second to last week of the retaliation discovery period to subpoena employees, gave subpoenaed witnesses insufficient time to appear at the depositions, and deliberately delayed notice to the Secretary by mailing the subpoenas. (Song Decl. ¶ 3) Then, Defendants voluntarily gave up on pursuing two witnesses’ depositions, opting only to pursue one employee deposition during the discovery period. (Id. ¶ 7.) Indeed, Defendants never challenged the Secretary’s assertion of the government informant’s privilege during the retaliation phase of discovery, leaving that assertion unchallenged 3 Defendants also misleadingly state that “employees are nervous when they speak [sic] investigators” in support of their need to know the informants’ identities and cite to the Deposition of Sylvia Salazar. (Dkt. 208 p. 3.) However, Defendants conspicuously fail to note that Ms. Salazar later clarified in her deposition that employees are afraid of Defendants because they feared retaliation and being fired. (Song Decl. Ex. D, Salazar Depo. 77:13-21, 78:23-79:1, 79:24-80:6; Declaration of Silvia Salazar ¶ 3.) 4 The cost of depositions is not a substantial need that requires disclosure of the government's informants. See e.g., Brock v. On Shore Quality Control Specialists, Inc., 811 F.2d 282, 283–84 (5th Cir. 1987); Chao v. Sec. Credit Sys., Inc., 2009 WL 1748716, *4 (W.D.N.Y. June 19, 2009) (finding privilege not overcome where complaint listed 116 employees potentially affected by defendant's alleged FLSA violations). Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 4 of 7 Page ID #:6391 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 4 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 until now,5 well after discovery closed. (Id. ¶ 2.) This lack of diligence was consistent with Defendants’ dilatory discovery practices in this litigation, which has resulted in various discovery sanctions that have resulted in a total award of $12,447.50 in fees to the Secretary. (Id. ¶ 8.) Defendants’ desire to take discovery out of time is not a basis to pierce the government informant’s privilege. As discussed above, Defendants fail to demonstrate a compelling need to know the identities of the confidential informants at this time. Accordingly, as confidential informants have been retaliated against twice, they should only be identified only if and only when it becomes necessary. Balancing Defendants’ right to prepare for trial and the protection of confidential informants, the Secretary will disclose the confidential informants’ identities and unredacted versions of their declarations as part of the parties’ pre-trial disclosures if he determines that they will be witnesses at trial. II. In Camera Filing of the Workers’ Declarations is Warranted Because of Defendants’ Retaliation Campaign Against Employee-Tenants Courts, including this one, have protected workers and permitted in camera review of declarations where there is a palpable threat of retaliation.6 See, e.g., 12/22/09 5 This is Defendants first objection to the privilege. As the time to file a declaration is when the invocation is challenged, the Secretary has properly requested a declaration from the Administrator and will file it promptly. See In re Sealed Case, 121 F.3d 729, 741 (D.C. Cir. 1997) (government is not obliged to “formally invoke its privileges in advance of the motion to compel”); Solis v. New China Buffet No. 8, Inc., 2011 WL 2610296 at *2 (M.D. Ga. July 1, 2011); Chao v. Raceway Petroleum, 2008 WL 2064354 at *5 (D. N.J. May 14, 2008) (holding initial assertion by counsel for the Secretary and subsequent invocation by Administrator is proper); Perez v. El Tequila LLC, 2014 WL 5341766, at *4 (N.D. Okla. Oct. 20, 2014) (slip copy) (finding the privilege properly invoked by the Secretary of Labor by declaration in response to a motion to compel) 6 The informer’s privilege itself does not require a particularized showing of fear to invoke the privilege. “When asserting the privilege the government need not make a threshold showing that reprisal or retaliation is likely, because of the significant policy consideration behind the privilege, as well as the difficulty of such proof. Rather, the Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 5 of 7 Page ID #:6392 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 5 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 Order Granting Pl.’s Application to File Documents under Seal, Solis v. Best Miracle Corp., Case No. SACV-08-00998 CJC(MLGx) (C.D. Cal. Dec. 22, 2009) (granting motion from regarding declarations submitted to oppose summary judgment) (Dkt. 111). In Best Miracle, this Court permitted the Secretary to submit under seal nine declarations of former employees who were supporting the Secretary’s opposition to the defendants’ summary judgment motion. (Id.) Here, the threat of retaliation is stronger than what was present in Best Miracle: the declarants here are current employees. Moreover, unlike in Best Miracle, Defendants have conducted a retaliation campaign against employee-tenants, and the Court has already permitted the Secretary to pursue a claim against Defendants for retaliation. Moreover, as recounted above, the workers are clearly afraid Defendants will retaliate against them again if Defendants discover they signed declarations in support of the Secretary’s Opposition. See, supra, p. 1. Thus, the justification for in camera review here is far stronger than that which supported sealing in Best Miracle. CONCLUSION Defendants’ past retaliatory conduct has included attempting to evict their worker- tenants from their homes and coercing them into waiving their rights to back pay through having them sign false and misleading declarations. In light of this conduct, the Secretary has sought in camera review to temporarily protect the workers’ identities. Given that trial is fast approaching, this protection may be short-lived as the Secretary must disclose his trial witnesses supporting his retaliation claim. If the Secretary discloses these declarants as trial witnesses as part of the pre-trial exchange process, the Secretary will also disclose unredacted versions of their declarations. The Secretary will also immediately file unredacted copies of the declarations if this application is denied. government is granted the privilege as of right.” Dole v. Local 1942, Int’l Bhd. of Elec. Workers, AFL-CIO, 870 F.2d 368, 372 (7th Cir. 1989). Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 6 of 7 Page ID #:6393 SECRETARY’S REPLY TO DEFENDANTS’ OPPOSITION TO APPLICATION TO FILE INFORMANTS’ DECLARATIONS IN CAMERA Case No. 16-CV-00363-CJC-KES Page 6 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 Respectfully submitted, KATE S. O’SCANNLAIN Solicitor of Labor JANET M. HEROLD Regional Solicitor MARC A. PILOTIN Counsel for Wage and Hour Litigation /s/ Charles Song CHARLES C. SONG Senior Trial Attorney JESSICA M. FLORES JENNIFER L. STA.ANA Trial Attorneys Attorneys for the Secretary, U.S. Department of Labor Case 8:16-cv-00363-CJC-KES Document 211 Filed 02/11/19 Page 7 of 7 Page ID #:6394