United States District Court, D. Nevada
R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor Plaintiff,
WELLFLEET COMMUNICATIONS, LLC, et al, Defendants.
ORDER RE: MOTION TO COMPEL (ECF NO. 125)
FOLEY, JR. UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on Plaintiff's Motion to
Compel Against Defendants Ryan Roach, New Choice
Communications, Inc., and Lighthouse Communications, LLC (ECF
No. 125), filed on April 2, 2018. Defendants filed their
Opposition (ECF No. 131) on April 17, 2018, and Plaintiff
filed his Reply (ECF No. 133) on April 24, 2018. The Court
conducted a hearing in this matter on May 9, 2018.
previously filed a motion to compel production of documents
against Defendants Wellfleet Communications, LLC
(“Wellfleet”) and Allen Roach which was granted
on February 1, 2018. See Order (ECF No. 108). That
order is hereby incorporated herein as if set forth in its
entirety. This order sets forth the additional facts and
legal analysis necessary to decide the present motion.
seeks to recover unpaid minimum wages that Defendants
allegedly failed to pay their call center workers. Prior to
February 1, 2016, Defendants treated their call center
workers as independent contractors and paid them commissions
that were not tied to the hours actually worked. Plaintiff
alleges that the call center workers were employees and
should have been paid minimum wages in accordance with the
Fair Labor Standards Act (“FLSA”). Following an
investigation by Plaintiff's Wage and Hour Division
(“WHD”), Defendants Wellfleet and Allen Roach
agreed to reclassify the call center workers as employees,
effective February 1, 2016. Plaintiff subsequently filed its
complaint against Wellfleet and Allen Roach on October 7,
2016 to recover unpaid wages owed to the 1500 plus call
center workers. Complaint (ECF No. 1). Plaintiff
alleged that Defendants Wellfleet and Allen Roach were liable
for unpaid wages as far back as October 7, 2012 because
Defendants' violation of the FLSA was willful, and
therefore subject to a three-year statute of limitations; and
because Defendants had deceived the call center workers about
their rights and had impeded the WHD investigation which
justified tolling the statute of limitations for an
additional year. This Court held that for purposes of
discovery, Plaintiff had alleged sufficient grounds to
support recovery of unpaid wages back to October
alleges that the call center business was originally owned by
the father of Ryan Roach and John Martino. After the
father's death, Ryan Roach and his uncle, Allen Roach,
assumed control of the business in 2009, which they
thereafter operated under the names Wellfleet, New Choice
Communications, Inc. (“New Choice”), and
Lighthouse Communications, LLC (“Lighthouse”).
Ryan Roach was the majority owner of Wellfleet. He was also
an owner of Lighthouse and New Choice. Plaintiff alleges that
Allen Roach acted as general manager and supervised the
day-to-day operations of the call center. Ryan Roach
conferred with Allen Roach every other day and had the same
authority over the payment of workers as did Allen Roach.
Plaintiff alleges that between 2010 and March 2014,
Defendants paid the call center workers through both
Lighthouse and Wellfleet. After March 2014, Lighthouse did
not run its own payroll, and all of the call center workers
were paid through Wellfleet. Defendants, however, still
contracted with some customers under the Lighthouse name.
Motion to Compel (ECF no. 125) at 2-3.
alleges that during the WHD investigation, Allen Roach did
not disclose to the investigator that Ryan Roach was an owner
of the business or that Defendants had also operated the call
center business under the names Lighthouse and New Choice. On
April 29, 2016, Ryan Roach and Allen Roach transferred all of
Wellfleet's assets and operations to New Choice.
Wellfleet and Allen Roach did not disclose this transfer to
Plaintiff, and he did not learn of the transfer until
February 2017. After learning of the transfer, Plaintiff
moved to amend the complaint to join Ryan Roach, Lighthouse
and New Choice as Defendants. The motion was granted and the
first amended complaint was filed on September 18, 2017.
Id. at 3-4; see also First Amended
Complaint (ECF No. 44).
do not dispute the allegations regarding the ownership of
Wellfleet, Lighthouse and New Choice, or that the assets and
operations of Wellfleet were transferred to New Choice in
April 2016. They deny, however, that they concealed the
transfer from the Plaintiff. They also argue that Plaintiff
knew or could have discovered the facts relating to the
ownership and operations of Ryan Roach, Wellfleet, Lighthouse
and New Choice prior to filing the original complaint in
Ryan Roach, Lighthouse and New Choice were added as
Defendants, Plaintiff served them with requests for
production of documents that were substantially the same as
those previously served on Defendants Wellfleet and Allen
Roach. The documents sought by Plaintiff from Defendants Ryan
Roach, Lighthouse and New Choice include (1) contact
information and independent contractor agreements for the
call center workers paid by Lighthouse; (2) records related
to the hours worked and amounts paid to all call center
workers including any deductions; (3) records relevant to
Defendants' control over the work performed by the call
center workers, such as training materials, workplace rules,
and schedules; (4) ownership and financial documents related
to the new Defendants; and (5) communications relating to the
workers' status as employees or independent contractors.
Motion (ECF No. 125) at 5.
states that since the entry of Order (ECF No. 108),
Defendants Allen Roach and Wellfleet have not produced
additional records in compliance with that order. Allen Roach
has advised that he did not find any schedules, personal
conduct guidelines, disciplinary records, or time off
requests in the records in his storage facility. Id.
at 17. Arguably, such records may be in the possession,
custody or control of Ryan Roach and New Choice. Plaintiff
states, however, that Ryan Roach, Lighthouse and New Choice
have not produced any records for the time period before
February 1, 2016.
Ryan Roach, Lighthouse and New Choice oppose Plaintiff's
motion to compel on the following grounds. First, they argue
that they should only be required to produce documents for
the period three years prior to the filing of the First
Amended Complaint, i.e. since September 18, 2014. Second,
Defendants argue that the documents requested from them, to
the extent they exist, have already been obtained by
Plaintiff from Defendants Wellfleet and Allen Roach, or
through subpoenas served on third persons.
Court has reviewed Defendants Ryan Roach, Lighthouse and New
Choice's Motion to Dismiss (ECF No. 71) and Plaintiff
Opposition (ECF No. 81), which address the issue of equitable
tolling of the statute of limitations and the relation back
doctrine. In deciding whether Plaintiff is entitled to obtain
discovery back to October 2012, the Court applies the same
analysis it uses when a defendant requests a stay of
discovery pending a decision on a motion to dismiss based on
the failure to alleged a claim upon which relief can be
granted. Stays of discovery are not granted unless the court,
after taking a preliminary peak at the motion to dismiss, is
convinced that the plaintiff will be unable to state a claim.
See Kor Media Group, LLC v. Green, 294 F.R.D. 579,
581 (D.Nev. 2013); Tradebay, LLC v. eBay, Inc., 278
F.R.D. 597, 601 (D.Nev. 2011). Having reviewed
Defendants' motion to dismiss, the Court is not convinced
that Plaintiff will be unable to recover damages from
Defendants Ryan Roach, Lighthouse and New Choice for unpaid
wages as far back as October 2012.
addition, the Defendants are required to produce relevant and
responsive Wellfleet records in their possession, custody and
control that relate back to October 2012. Documents are
deemed to be within a party's possession, custody or
control if he has actual possession of the documents or has
the legal right to obtain them on demand. F.D.I.C. v.
Halpern, 271 F.R.D. 191, 193 (D.Nev. 2010). The assets
and operations of Defendant Wellfleet were transferred to New
Choice in April 2016. New Choice and Ryan Roach either have
possession of Wellfleet's business records or have the
right to obtain them on demand from whoever has them.
burden that Plaintiff's discovery requests impose on the
Defendants is not undue in light of the claims at issue.
Plaintiff is entitled to obtain relevant documents in order
to establish (1) that the call center workers were employees
under applicable law, and (2) the number of hours worked by
the call center workers and the compensation they received.
This information is primarily, if not exclusively, in the
possession of Defendants. Requiring Defendants to produce
additional records for the period from October 2012 to
September 2014 does not substantially increase the burden on
them. The real issue is whether ...