Eighth Circuit Disallows New Evidence from FLSA Plaintiffs, First Proffered in their Summary Judgment Opposition Papers, and Grants Summary JudgmentMay 10, 2013 | David Eisenberg
In Carmody v. Kansas City Board of Police Commissioners, - F.3d -, 2013 U.S. App. LEXIS 8128 (8th Cir. Apr. 23, 2013), Plaintiff police officers had filed a complaint under the Fair Labor Standards Act, alleging that the Kansas City Police Department’s “flextime” pay system for its officers was improperly administered, resulting in under-payment of statutorily required overtime compensation by the Department.
The city had issued interrogatories to plaintiffs about the particulars of their claims, and, in response, plaintiffs confirmed the flextime practice that was the subject of their complaint, and described occurrences when it was used; but did not suggest the number of uncompensated hours or the amount of money owed. Plaintiffs stated that they would need access to department documents, such as daily activity sheets and other records, in order to formulate more accurate responses.
The city furnished nearly 13,000 activity sheets, after action reports and other documents to plaintiffs by January 27, 2012, and another 165 documents by February 16th. The city deposed the officers between February 21 and March 2, 2012, and discovery closed on March 2nd. Plaintiffs did not update their Rule 26 disclosures, or their discovery responses.
On March 30, 2012, the city moved for summary judgment, asserting among other things that the officers could not, as a matter of law, satisfy their evidentiary burden. The officers attempted to defeat summary judgment by attaching affidavits to their response. These affidavits contained precise estimations, week by week, of hours owed. The city moved to strike the affidavits, and the federal district court struck the officers’ affidavits and granted the city’s motion for summary judgment, deciding the officers unjustifiably failed to comply with their discovery obligations and that, without the affidavits, the officers failed to satisfy their burden of production by showing “the amount and extent of their alleged overtime work.”
The Eighth Circuit affirmed, emphasizing that the Federal Rule of Civil Procedure 26(a)(1)(A)(iii) requires parties to make initial disclosures, including a computation of damages, which under Rule 26(e)(1)(A) must be supplemented when new information comes to light. The district court has discretion under Rule 37(c)(1) to apply sanctions against a party who has failed to satisfy initial or supplemental disclosure requirements; for example, excluding the evidence or testimony entirely.
Thus, the Court concluded that the district court had not abused its discretion by barring plaintiffs’ affidavits on the grounds they had “unjustifiably failed to comply with Rule 26(e)(1)(A),” and that without any admissible evidence from plaintiffs showing “the amount and extent of their alleged overtime work,” summary judgment was properly granted.
The Carmody decision should serve as a reminder to employers of an important part of their summary judgment “toolkit.” If the plaintiffs have been vague about the exact nature of their claims and how they have been damaged, and they attempt for the first time to present new information in their papers opposing summary judgment, the defendant should be ready to pounce. Information that should have been but was not made part of plaintiffs’ Rule 26 disclosures, or supplements thereto, may be excludable in a motion to strike, and this may make the difference between defendant winning or losing its summary judgment motion.
The United States District Court for the District of Kansas Local Rule 37.1 limits the time for bringing discovery motions to 30 days. It states:
Any motion to compel discovery in compliance with D. Kan. Rules 7.1 and 37.1 must be filed and served within 30 days of the default or service of the response, answer, or objection that is the subject of the motion, unless the court extends the time for filing such motion for good cause. Otherwise, the objection to the default, response, answer, or objection is waived.
D. Kan. Rule 37.1(b).
The trigger for the 30-day period is the date a party serves, or was required to serve, its discovery responses, and it is not tolled to account for the time parties spend engaged in efforts to resolve a discovery dispute. The parties themselves may not agree to extend the 30-day deadline; they must move the court for an extension for good cause or risk waiving any discovery objections.
The reported and unreported caselaw are replete with holdings striking untimely motions to compel to arguably inadequate discovery responses. In one recent case, the responding party, in response to a request for production, objected to the production of documents that both parties knew existed and were in defendant’s possession. Instead of moving to compel, pursuant to Local Rule 37.1, the propounding party moved for sanctions. That motion was denied. More than 30 days later, the propounding party moved to compel production of those same documents, and the court denied the motion as untimely.
In The United States District Court for the District of Kansas, a party has only 30 days to compel discovery responses or forever waive any objections.
 Layne Christensen Co. v. Purolite Co., 2011 WL 124538 at *3 (D. Kan. 2011)
The Judges and Magistrates of U.S. District Court for the District of Kansas have recently begun instructing lawyers appearing before them in Rule 26(f) conferences that they consider it malpractice for parties not to have a clawback provision included in the submitted draft Scheduling Order. A clawback provision, as expressly permitted by Rule 502(d) of the Federal Rules of Evidence, allows parties to recover inadvertently disclosed privileged information, without being held to have waived attorney-client privilege or work product protection.
Some background: not too many years ago, if a party inadvertently turned over an attorney-client privileged or work product document in discovery, there was a significant likelihood that the party would be held to have waived its claim privilege, by the act of turning over the document. In today’s world, most documents are electronically stored, and depending on the type of case before a court, discovery can require the disclosure of thousands, or tens of thousands, or even millions of pages of documents to an adverse party. In 2008, in recognition of the problems associated with possible inadvertent disclosure, especially where the case involves large amounts of potentially relevant ESI, Rule 502 of the Federal Rules of Evidence was enacted, providing a framework for avoiding waiver, where privileged documents have inadvertently been produced.
Rule 502 takes a two-tiered approach. First, as a general rule, subject matter waiver will be limited to instances of either intentional disclosure (502(a)), or an inadvertent disclosure that the holder of the privilege did not take reasonable steps to prevent (502(b)). Thus, if the parties to a lawsuit have reached no agreement, and the Scheduling Order says nothing about the re-capture of inadvertently disclosed privileged documents, the parties might themselves in a legal donnybrook, if a disclosing party claims to have accidentally turned over privileged material, and the receiving party disputes whether “reasonable steps” were in fact taken to prevent inadvertent disclosure.
The second tier of Rule 502 – subsections (d) and (e) - allows for broader protection against waiver, and it is these provisions to which Judge Waxse referred in his comment about potential “malpractice”. Rule 502(d) permits “a federal court [to] order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court – in which event the disclosure is also not a waiver in any other federal or state proceeding.” There are two important aspects to Rule 502(d): it can eliminate any potential dispute over whether “reasonable steps” were taken to prevent inadvertent disclosure; and it is available only if incorporated in a court order (commonly, the Scheduling Order, but also quite possibly in a court-approved confidentiality agreement between the parties). Rule 502(e) states that an agreement between the parties not incorporated in a court order “will be binding only on the parties to the agreement” and will have no effect in a subsequent court action or on nonparties. So, it is clearly in the best interest of a party seeking a clawback agreement to have it adopted by the court, in an order, to ensure the protections of Rule 502(d).
A recent example of the significance of Rule 502(d) appeared in the case of Brookfield Asset Mgmt., Inc. v. AIG Fin. Prods. Corp., No. 09 Civ. 8285-PGG-FM, 2013 WL 142503 (S.D.N.Y. Jan. 7, 2013), where privileged information had been redacted from the face of a document, but could be viewed in the metadata, resulting in its inadvertent disclosure. “Dueling letters” ensued between counsel as to whether privilege had been waived. The court reminded the parties, however, that while this event underscored “the need for counsel for a producing party to keep a watchful eye over their e-discovery vendors”, privilege was not waived because a Rule 502(d) order had been entered in the case. The court pointed to the language of the order that “Defendants’ production of any documents in this proceeding shall not, for the purposes of this proceeding or any other proceeding in any other court, constitute a waiver by Defendants of any privilege applicable to those documents, including the attorney-client privilege…”, and concluded that Defendant had “the right to claw back the minutes, no matter what the circumstances giving rise to their production were.” (Emphasis added.)
The lesson here is clear: any party to a lawsuit – and especially a corporate defendant who may be called upon to disclose large amounts of electronic data in discovery – is well-advised to seek a clawback agreement, preferably adopting a “no fault” standard that takes avoids any possible debate over whether “reasonable steps” were taken - and have it approved and entered into an order of the court.
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