Zhou v. Chai

Background

This wage-and-hour lawsuit was pending before Judge Araceli Martinez-Olguin, and discovery disputes had been referred to Chief Magistrate Judge Donna M. Ryu. Plaintiffs moved under Federal Rule of Civil Procedure 37 and the court’s inherent authority for sanctions based on defendants’ discovery violations. They sought terminating sanctions in the form of default judgment, issue sanctions concerning particular discovery responses, and $21,909.50 in monetary sanctions.

Defendants had served late or insufficient responses to interrogatories, requests for admission, and requests for production. The court had previously ordered defendants to provide complete responses, correct inaccurate answers, search diligently for responsive documents, and file a declaration confirming that diligence. The court found that several supplemental responses still did not comply with those orders.

Recommended evidentiary sanctions

The court granted plaintiffs’ motion in part and recommended evidentiary sanctions concerning interrogatories 1 through 3, 4, and 6, and requests for admission 35 and 37. Because these sanctions could affect issues in the case, Judge Ryu recommended them to the district judge rather than entering them as final orders. Parties could object to the recommendations within 14 days after service.

For interrogatory 4, which sought employee pay rates and payroll periods, the court recommended deeming established proposed facts about three full-time cooks, their fixed monthly salaries, the inaccuracy of the hourly rates shown on their wage statements, and six full-time non-cook employees who were paid hourly at the rates shown on their wage statements. The court also recommended applying those proposed findings to 13 employees whose identities were not provided in the interrogatory responses.

For requests for admission 35 and 37, the court recommended that the requests be deemed admitted. Those requests concerned whether cooks other than the plaintiffs were paid monthly salaries and whether they were paid through a combination of cash and checks. For interrogatory 6, the court recommended treating the answer as stating that cash compensation was not included in the employees’ itemized wage statements.

Orders on discovery

The court ordered defendants to produce Vi Van Tang for a two-hour deposition because plaintiffs had shown prejudice from inaccurate or incomplete information about his work period. Defendants had to pay the deposition expenses other than plaintiffs’ attorneys’ fees, including court reporter, interpreter if needed, and transcript costs.

The court also ordered defendants to produce one defendant selected by plaintiffs for an additional two-and-a-half-hour deposition. Defendants likewise had to pay the related deposition expenses, except for plaintiffs’ attorneys’ fees.

The court did not impose sanctions concerning interrogatories 12 through 15 because it found that defendants’ supplemental responses identified the facts on which they intended to rely for their affirmative defenses. It also found that some other alleged discovery failures did not warrant additional sanctions. The court denied a request concerning plaintiffs’ daily work hours because the request was not adequately presented in the opening motion, and it declined to establish allegations that merely restated the law under the Private Attorneys General Act.

Terminating sanctions

The court recommended denial of plaintiffs’ request for terminating sanctions, which sought to strike defendants’ answer and enter default. Although defendants and their counsel showed a serious lack of diligence and care, the court found that plaintiffs had not shown intentional deception undermining the judicial process. It also found that the discovery misconduct had not made a fair trial impossible or prevented plaintiffs from presenting their case.

Monetary sanctions

The court ordered $17,415 in attorneys’ fees under Rule 37. It found that plaintiffs reasonably billed 38.7 compensable hours at $450 per hour for work caused by defendants’ discovery misconduct. The award did not include time and costs related to a deposition that plaintiffs had not shown would have been avoided without the misconduct.

Attorney Timothy Allen Reed was ordered to pay 75% of the fee sanction, and defendants were ordered to pay 25%. Full payment was required within 30 days of the order. The order did not decide the underlying wage-and-hour claims.