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Lloyd v. J.P. Morgan Chase & Co.

United States District Court, S.D. New York

March 20, 2015

JEFFREY LLOYD, on behalf of himself and those similarly situated, et al., Plaintiffs,
v.
J.P. MORGAN CHASE & CO., et al., Defendants. KENNETH CIULLO, individually and on behalf of all others similarly situated, et al., Plaintiffs,
v.
JP MORGAN CHASE & CO., et al., Defendants.

ORDER

HENRY PITMAN, Magistrate Judge.

I. Introduction

I write to resolve the parties' dispute concerning the scope of discovery that defendants may seek from the opt-in plaintiffs who are not subject to any arbitration agreement.[1]

For the reasons set forth below, defendants may serve written discovery on 100 opt-in plaintiffs not subject to any arbitration agreement and may depose 20 of those opt-in plaintiffs. Deponents are to be chosen by one of the two methods described below. I reserve decision with respect to the number of interrogatories and document requests that may be served upon the opt-ins pending further submissions by the parties.

II. Facts[2]

These cases are, in principal part, collective actions brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. Plaintiffs in these putative collective and class actions are Financial Advisors and Financial Advisor Associates (collectively, "FAs") who presently or formerly worked selling defendants' investment products. Defendants classified plaintiffs as "exempt" employees under the FLSA and did not pay them overtime compensation at the rate of one and one-half times their regular rate for any hours worked in excess of 40 hours per week. Plaintiffs challenge this classification, asserting claims on behalf of a nationwide collective under the FLSA and on behalf of New York and New Jersey classes under New York and New Jersey state law, respectively.

In her September 9, 2013 Memorandum Order, Judge Swain conditionally certified the collective pursuant to 28 U.S.C. § 216(b). Lloyd v. J.P. Morgan Chase & Co., supra, 2013 WL 4828588 at *8.

Approximately 1, 049 individuals have filed consents to join this action (Letter of Thomas A. Linthorst, Esq. to the undersigned, dated February 2, 2015, (Docket Item 249 in 11 Civ. 9305) ("Defs.' Feb. 2 Letter") at 1). While defendants required that some of their FAs sign one of two different forms of arbitration agreements, there are approximately 100 FAs who did not sign any form of arbitration agreement (Defs.' Feb. 2 Letter, at 1; Letter of Rachel Bien to the undersigned, dated February 9, 2015, (Docket Item 250 in 11 Civ. 9305) ("Pls.' Letter") at 1).

Defendants originally served 19 interrogatories and 27 document requests on all of the opt-ins, reserving the right to depose each of them (Defs.' Feb. 2 Letter, at 1; see also Defendants' First Request for Production of Documents to Opt-In David Bernard Adams, dated September 24, 2014, annexed as Exhibit A to Pls.' Letter; Defendants' First Set of Interrogatories to Opt-In David Bernard Adams, dated September 24, 2014, annexed as Exhibit B to Pls.' Letter). Plaintiffs objected (Defs.' Feb. 2 Letter, at 1). Defendants now seek to serve 15 document requests and 15 interrogatories, on all 100 opt-ins who are not subject to an arbitration agreement and to depose 20 opt-ins of their choice, "without prejudice to their right to seek additional depositions if there is reason to do so." (Defs.' Feb. 2 Letter, at 1).

Defendants contend that individualized discovery is particularly appropriate where, as here, defendants plan to seek decertification of the collective (Letter of Thomas A. Linthorst to the undersigned, dated February 11, 2015, (Docket Item 251 in 11 Civ. 9305) (Defs.' Feb. 11 Letter) at 1). Plaintiffs argue that the discovery defendants' seek is burdensome and excessive and that discovery should be limited to a representative sample of plaintiffs, consisting of written discovery from 25% of the opt-ins who did not sign an arbitration agreement and depositions of 10% of the opt-ins who did not sign an arbitration agreement (Pls.' Letter at 1).[3] Plaintiffs also request that (1) "[b]oth parties... have a role in selecting opt-ins who submit to discovery or [that] a portion... be selected at random, " (2) defendants be limited to 10 written discovery requests, (3) defendants be precluded from seeking information that they already have and (4) depositions be limited to three hours (Pls.' Letter, at 3).

III. Discussion

"Generally, there are two lines of cases regarding individualized discovery in opt-in class actions': one allowing all opt-in plaintiffs to be subject to discovery and one allowing only a sample of opt-in plaintiffs to be subject to discovery." Forauer v. Vt. Country Store, Inc., No. 5:12-cv-276, 2014 WL 2612044 at *2 (D. Vt. June 11, 2014), quoting Coldiron v. Pizza Hut, Inc ., No. CV03-05865 (TJH) (MCX), 2004 WL 2601180 at *2 (C.D. Cal. Oct. 25, 2004).

Courts that have allowed individualized discovery "treat opt-in plaintiffs in a[n FLSA] collective action as ordinary party plaintiffs subject to the full range of discovery permitted by the Federal Rules of Civil Procedure.'" Forauer v. Vt. Country Store, Inc., supra, 2014 WL 2612044 at *3, quoting Khadera v. ABM Indus. Inc., No. C08-417 (RSM), 2011 WL 3651031 at *2 (W.D. Wash. Aug. 18, 2011). Many of these courts have permitted individualized discovery in light of the two-step process used to determine whether the FLSA action should proceed as a collective action. See Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010) (The first step involves conditional certification and sending notice to potential opt-ins who may be "similarly situated, " and the second step involves determining on a fuller record whether the opt-ins are, in fact, "similarly situated" or whether the action should be decertified.). After conditional certification, where a defendant has indicated it will seek decertification, some courts have allowed individualized discovery to determine whether the opt-ins are "similarly situated." See Strauch v. Computer Scis. Corp., No. 3:14 CV 956 (JBA), 2015 WL 540911 at *3 (D. Conn. Feb. 10, 2015); Forauer v. Vt. Country Store, Inc., supra, 2014 WL 2612044 at *3 (collecting cases); see also Daniel v. Quail Int'l, Inc., No. 3:07-CV-53 (CDL), 2010 WL 55941 at *1 (M.D. Ga. Jan. 5, 2010) ("[I]n an FLSA collective action where the plaintiff class is small and the discovery is related to... whether the individual plaintiffs are similarly situated... individualized discovery is often permitted.").

Courts that have declined to allow individualized discovery in FLSA actions "have concluded that collective actions under the FLSA should be governed by the same standards as govern discovery in [Fed.R.Civ.P. 23] class actions and should be limited to only class wide and class based discovery' because '[t]o permit individualized discovery... would undermine the purpose and utility of both class and collective actions.'" Forauer v. Vt. Country Store, Inc., supra, 2014 WL 2612044 at *2, quoting Smith v. Lowe's Home Ctrs., Inc., 236 F.R.D. 354, 357 (S.D. Ohio 2006); see also Scott v. Chipotle Mexican Grill, Inc., supra, 300 F.R.D. at 192. Accordingly, these courts, "particularly when the opt-in plaintiffs are numerous[, ]'... [have] permit[ted] discovery only from a statistically ...


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