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Holick v. Cellular Sales of New York, LLC

United States District Court, N.D. New York

September 24, 2014

JAN P. HOLICK, JR., et al., Plaintiff,


RANDOLPH F. TREECE, Magistrate Judge.

Plaintiffs' Fair Labor Standard Act (FLSA) case is premised upon the allegations that Defendants systemically and intentionally misclassified them, while serving as Sales Representatives, as independent contractors prior to January 1, 2012; but, thereafter, Defendants reclassified Sales Representatives as employees having performed the same basic duties Plaintiffs performed as "independent contractors." Dkt. No. 19, Am. Compl. at ΒΆΒΆ 1-2.

Although there has been limited discovery relative to determining the conditional class, discovery commenced in earnest very recently. Dkt. No. 126, Pretrial Sch. Order, dated July 22, 2014. Just prior to the issuance of the Scheduling Order, discovery disputes abound. By a Discovery Order, dated July 18, 2014, the Court resolved several of those issues while permitting further briefing as to another. Dkt. No. 125. Further briefing was required as to whether inquiries into Defendants' reclassification of Sales Representatives from independent contractors to wage employees effective January 1, 2012, is an appropriate subject of discovery. Pursuant to the Discovery Order, both parties have filed their respective Letter-Briefs. Dkt. Nos. 127, Pls.' Lt.-Br., dated July 31, 2014, & 128, Defs.' Lt.-Br., dated Sept. 1, 2014.

In support of discovery of this topical matter, Plaintiffs argue that the subject of the reclassification bears materially on several "controverted material issues of fact in this litigation":

! prior to reclassification, Sales Representatives were employees in that Cellular Sales of New York, LLC (CSNY) evinced control over the manner, means, and results of the Sales Representatives;
! that CSNY and Cellular Sales of Knoxville, Inc. (CSOKI) were joint employers of the Sales Representatives; and
! Plaintiff will need to maintain certification of their FLSA action, pursue a Rule 23 class certification of this action, and/or defend against a motion to decertify this collective action.

Dkt. No. 127, Pls.' Lt., dated July 31, 2014.

Plaintiffs submit that inquiries into the reclassification may generate admissible evidence pertinent to those enumerated material issues.

Defendants vigorously contest each argument raised by Plaintiffs. Though specifically objecting to each of Plaintiffs' points of view, Defendants interject the overarching propositions that Plaintiffs consequently limited the scope of the discovery by tactically limiting the time-frame of their claims to periods prior to January 1, 2012, and that "none of the opt-in plaintiffs were reclassified." Defendants further contend that because the reclassification may be considered a subsequent remedial measure, Federal Rule of Evidence 407 bars the introduction of such evidence to prove negligence or culpable conduct. To the extent that this evidence may be barred, Defendants contend that Plaintiffs cannot demonstrate that such inquiries into the reclassification is reasonably calculated to lead to admissible evidence. Dkt. No. 128, Defs.' Lt.-Br., dated Sept. 2, 2014.

As this Court has observed in the past, "discovery in federal lawsuits is supposed to be significant, flexible, and broad with the court retaining authority to either expand or contract discovery to meet the needs of the particular litigation." Banner Indus. of N.E., Inc. v. Wicks, 2013 WL 5722812, at *4 (N.D.N.Y. Oct. 21, 2013. Recognizing that discovery is expansive and liberal, guided by the reasonable needs of the case, when determining the relevance of any particular matter,

the request for information must be "germane" to the subject matter of the claims, defenses, or counterclaims, though not necessarily limited by such pleadings, and is not controlled by whether it will be admissible at trial. In re Surety Ass'n, 388 F.2d at 414 ("[P]arties should not be permitted to roam in the shadow zones of relevancy and to explore matter which does not presently appear germane on the theory that might conceivably become so."). Relevance to the subject matter "has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case[, ]" and yet "like all matter of procedure, has ultimate and necessary boundaries." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351-52 (1978) (citations omitted); accord Maresco v. Evans Chemetics. Div. of W.R. Grace & Co., 964 F.2d 106, 114 (2d Cir.1992) (citing Oppenheimer ); Daval Steel Prods., a Div of Francosteel Corp. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir.1991). However, the demarcation between what information is relevant to the claims and defenses and relevant to the subject matter cannot be defined with precision. Fed.R.Civ.P. 26 Advisory Comm. Notes 2000 Amend. Thus, the court must weigh a host of factors to determine relevancy and reasonableness, including common sense. See In re Surety Ass'n, 388 F.2d at 414 (the trial judge has considerable discretion on the issue of relevancy); In re Agent Orange Prod. Liab. Litig., 517 F.3d 76, 103 (2d Cir.2008).

Id. at *4-5.

Both parties have made compelling, albeit competing, legal arguments over the measurement of relevancy as to this FLSA case, though the burden of establishing relevancy rests with Plaintiffs who are seeking the disclosure. The task of calculating as to what may lead to admissible evidence lacks preciseness, and there is no slide rule a court can employ to predict that such an outcome would occur. Therefore, discovery should not rest solely on this precept alone. In ...

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