Camacho v. The Barrier Group Inc.

Background

Luis Sergio Camacho sued The Barrier Group Inc., Sub Enterprises Inc. doing business as Drip Drop Waterproofing, and Joel Reich under the Fair Labor Standards Act, New York Labor Law, and the Wage Theft Prevention Act. The case concerned Camacho’s allegations of wage-and-hour violations.

The parties’ discovery period ended in 2022, and the case had progressed through pretrial preparation. In February 2024, defendants informed the court that they possessed additional relevant documents, called the “Records,” that had not previously been produced. Defendants said the Records were important to their defense. They later argued that producing them could implicate Reich’s constitutional protection against being forced to provide self-incriminating information. Camacho moved to prevent defendants from using the Records and sought additional monetary sanctions. Defendants moved to pause the civil case while Reich’s criminal case was pending.

Preclusion of the Records

Judge Krause granted Camacho’s motion to preclude. Federal Rule of Civil Procedure 26 required defendants to disclose documents in their possession that they might use to support their defenses, even without a discovery request. Defendants also were required to identify trial exhibits during pretrial preparation. The court found that defendants should have disclosed the Records during the initial disclosure period, before mediation, or by the time the proposed joint pretrial order was filed.

The court found that defendants’ failure was neither adequately justified nor harmless. Defendants gave no meaningful explanation for withholding the Records during the earlier stages of the case. Allowing the Records to be used would have prejudiced Camacho, potentially required reopening discovery, and caused further delay. Although the Records appeared important to defendants’ defense, the court concluded that the other factors supported preclusion. Defendants therefore may not use the Records to provide evidence on a motion, at a hearing, or at trial.

The court emphasized that the preclusion ruling was not based on Reich’s later assertion of his protection against self-incrimination. It did not decide whether producing the Records would actually have created a risk of self-incrimination. Instead, the ruling rested on defendants’ earlier failures to comply with disclosure and pretrial obligations.

Monetary Sanctions

The court denied in part and denied without prejudice in part Camacho’s request for additional monetary sanctions. It denied the request for money to compensate for expenses associated with the late-disclosure dispute, explaining that preclusion was already a significant sanction and that Camacho’s submissions devoted substantial attention to the separate stay motion.

The court denied without prejudice the portion seeking sanctions for Reich’s failure to attend court conferences in 2023. It stated that, if the court later had to consider a motion for default judgment, Camacho could renew an application for monetary sanctions concerning those missed conferences. The court did not impose those sanctions in this order.

Motion to Stay

The court denied as moot defendants’ motion to stay the civil case during Reich’s criminal proceedings. By the time of the decision, Reich had pleaded guilty and was awaiting sentencing. Judge Krause found no basis to conclude that the remaining criminal-case issues would affect the civil litigation, particularly because the criminal sentencing submissions concerned real-estate holdings and a financial institution’s interest in those properties rather than the corporate payroll records relevant to the civil case.

Further Proceedings and Disposition

The court set deadlines for the proposed joint pretrial order, trial exhibits, proposed jury questions, proposed jury instructions, verdict form, and motions addressing evidence before trial. The scheduling section set jury selection and trial for April 29, 2025, and set a final pretrial conference for April 8, 2025. The order also directed that previously filed motions addressing evidence be treated as moot if the parties wished to raise those issues again through properly filed motions.

The final dispositions were: Camacho’s motion to preclude was granted; Camacho’s motion for additional monetary sanctions was denied in part and denied without prejudice in part; and defendants’ motion to stay was denied as moot. The order did not decide the underlying wage claims.