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Scott v. Chipotle Mexican Grill, Inc.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Sep 29, 2014
12-CV-08333 (ALC)(SN) (S.D.N.Y. Sep. 29, 2014)

Summary

noting that the attorney-client relationship arises only if the plaintiff has opted in

Summary of this case from Shibetti v. Z Rest., Diner & Lounge, Inc.

Opinion

12-CV-08333 (ALC)(SN)

09-29-2014

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


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.

The parties have agreed not to present the declaration to the Court until a determination is made on whether the Court will permit its use in this litigation. --------

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); see also 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 to benefit 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 members become stricter upon certification and "apply as though each class member is a client of the class counsel"). Thus, in a FLSA action, every opt-in plaintiff is represented, and every opt-in plaintiff's written consent and name is listed on the searchable ECF docket. In other words, whether an employee is represented in a FLSA collective action can be discovered instantly. Indeed, a search for "Vasquez" on the ECF docket in this case reveals immediately that Gabriel Vasquez filed his consent to opt in on January 2, 2014, and thus has been represented by class counsel since that time. (See ECF Docket Entry 487.)

Chipotle contends that it conducted a search of its own internal list of opt-in plaintiffs for New York only and that Vasquez did not appear because he was on the list for New Jersey, where he had also worked. During the interview, Vasquez had in fact told the Chipotle lawyer that he worked as an Apprentice in New Jersey. Chipotle's decision to search a partial and unofficial internal plaintiff list when a complete and authoritative plaintiff list is readily available on ECF was unreasonable. Worse, Chipotle's failure to search ECF or its own New Jersey list immediately after Vasquez stated he worked there as an Apprentice is strongly suggestive of "evad[ing] the requirement of obtaining the consent of counsel by ignoring the obvious." Rule 4.2(a), cmt. 8.

Accordingly, in light of the apparent ease with which Chipotle could have prevented communicating with a represented party and the fact that it failed to terminate the interview for further confirmation once Vasquez discussed his work as an Apprentice in New Jersey, the Court concludes that Chipotle's counsel have violated Rule 4.2 of the New York Rules of Professional Conduct. There is no evidence that counsel's unauthorized communication with a represented party was willful or done with the active knowledge that such contact interfered with an attorney-client relationship; but counsel cannot be excused from the Court's conclusion simply because of sloppy case management.

B. Fashioning an Appropriate Remedy

Chipotle argues that, even if it is found to have violated Rule 4.2, the Court should permit the use of the "uncoerced and truthful statement from Mr. Vasquez." Chipotle's argument focuses on the relevance of the statement and its probative value to the ultimate merits determination in this case. While the "search for truth" is factor to be accorded significant weight when deciding how to approach evidence obtained in violation of the rules, Chipotle's position fails to assign any weight to the very real policy concerns that animate Rule 4.2 and which are particularly salient in class actions, where courts face a heightened duty to guard against improper communications between class members and counsel. This duty is higher still in a FLSA collective action, where many of the opt-in plaintiffs remain employed by the defendant at the time of litigation. In cases like this one where the defendant is also the employer of members of the collective, the "workplace relationship" and the defendant's "knowledge of sensitive information about current and former employees, put [the defendant] in a position to exercise strong coercion[.]" Urtubia v. B.A. Victory Corp., 857 F. Supp. 2d 476, 485 (S.D.N.Y. 2012); see also EEOC. v. Morgan Stanley & Co., 206 F. Supp. 2d 559, 562 (S.D.N.Y. 2002) ("Courts have found the danger of such coercion between employers and employees sufficient to warrant the imposition of restrictions regarding communication between defendants and potential class members."); Ralph Oldsmobile, Inc. v. Gen. Motors Corp., 99 Civ. 4567 (AGS), 2001 WL 1035132, at *3 (S.D.N.Y. Sept. 7, 2001) ("'[I]f the class and the class opponent are involved in an ongoing business relationship, communications from the class opponent to the class may be coercive.'") (quoting Kleiner v. First Nat'l Bank, 751 F.2d 1193, 1202 (11th Cir. 1985)); Brown v. Mustang Sally's Spirits & Grill, Inc., 12 Civ. 529S (WMS), 2012 WL 4764585, at *3 (W.D.N.Y. Oct. 5, 2012).

The circumstances here compound the distinct concerns that animate the case law cited above and Rule 4.2(a). Counsel for Chipotle risked eliciting harmful disclosures by exploiting the disparity in legal skills between her and Vasquez, a concern at the foundation of Rule 4.2(a). See Mori v. Saito, 785 F. Supp. 2d 427, 432 (S.D.N.Y. 2011) ("[Rule 4.2(a)] guarantees fairness in the adversarial system, and prevents unprincipled attorneys from exploiting the disparity in legal skills between attorney and laypeople.") (internal quotation marks omitted); Polycast Tech Corp., 129 F.R.D. at 625 ("[Rule 4.2(a)] prevents a lawyer from circumventing opposing counsel to obtain unwise statements from the adversary party."). Counsel for Chipotle also created a situation where Vasquez had to choose between providing information potentially harmful to his and his co-plaintiffs' rights and refusing the request of his employer, the type of situation "fraught with potential for abuse" that is at the foundation of case law requiring close judicial oversight of communications in class actions. Urtubia, 857 F. Supp. 2d at 485.

Moreover, Chipotle's focus on the importance of this particular statement is appropriately challenged by plaintiffs' counsel, who correctly point out that Chipotle has access to hundreds of other current and former employees from whom it can, presumably, obtain similar testimony. Indeed, although the Court has not reviewed the Vasquez Declaration, see note 1, Chipotle has not claimed that Mr. Vasquez had unique or specialized knowledge such that his statement alone would be dispositive to the issues in dispute.

In light of the principles underlying Rule 4.2(a) and a judge's duty to protect the rights of class members and the fairness of the litigation, it would be improper and would provide undesirable incentives for the Court to allow Chipotle to benefit from its inappropriate, albeit unintentional, conduct. Cf. Gortat v. Capala Bros., 07 Civ. 3629 (ILG)(SMG), 2009 WL 3347091, at *5 (E.D.N.Y. Oct. 16, 2009), report and recommendation adopted, 2010 WL 1423018 (Apr. 9, 2010)) (declining to consider for class certification affidavits obtained by defendants through unsupervised communications with putative class members). Therefore, the Court GRANTS the plaintiffs' first request and bars Chipotle from using or relying on the Vasquez Declaration in this litigation.

The Court, however, DENIES the remaining relief requested by the plaintiffs. By barring the use of the Declaration, the Court aims to place the parties in the position they were at before the unauthorized communication occurred. Permitting the plaintiffs to benefit by receiving counsel's interview notes or any draft statements would be inconsistent with this goal and would, paradoxically, interfere with Chipotle's attorney-client relationship. Additionally, the plaintiffs have not made a sufficient showing to justify requiring Chipotle to make additional admonishments or provide other protective warnings before contacting former or current employees who are potential class members. See Zamboni, 2013 WL 978935, at *2 (quoting Gulf Oil Co., 452 U.S. at 101-02) ("'[A]n order limiting communications between parties and potential class members should be based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties.'"). The Court is satisfied that the in terrorem effect of this Order will prevent a recurrence of this conduct.

SO ORDERED.

/s/_________

SARAH NETBURN

United States Magistrate Judge DATED: New York, New York

September 29, 2014


Summaries of

Scott v. Chipotle Mexican Grill, Inc.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Sep 29, 2014
12-CV-08333 (ALC)(SN) (S.D.N.Y. Sep. 29, 2014)

noting that the attorney-client relationship arises only if the plaintiff has opted in

Summary of this case from Shibetti v. Z Rest., Diner & Lounge, Inc.
Case details for

Scott v. Chipotle Mexican Grill, Inc.

Case Details

Full title:MAXCIMO SCOTT, et al., on behalf of themselves and all others similarly…

Court:UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Date published: Sep 29, 2014

Citations

12-CV-08333 (ALC)(SN) (S.D.N.Y. Sep. 29, 2014)

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