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Drollinger v. Network Global Logistics, LLC

United States District Court, D. Colorado

March 9, 2018

ASHLEY DROLLINGER, individually and on behalf of similarly situated persons, Plaintiff,
v.
NETWORK GLOBAL LOGISTICS, LLC; ACTION COURIERS, INC.; and MEDICAL LOGISTIC SOLUTIONS, LLC, Defendants.

          OPINION AND ORDER OVERRULING OBJECTIONS AND AFFIRMING MAGISTRATE JUDGE ORDERS

          MARCIA S. KRIEGER CHIEF UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court pursuant to the Defendants' Objection (# 168) to the Magistrate Judge's January 8, 20128 Order (# 161), and the Plaintiffs' response (# 173); the Defendants' Objection (# 175) to the Magistrate Judge's January 17, 2018 Order (# 166), the Plaintiffs' response (# 182, 184), and the Defendants' reply (# 189).

         In this case, Mr. Drollinger and a group of opt-in Plaintiffs are “medical couriers who used their own automobiles to deliver laboratory specimens, organs, blood, pharmaceuticals, patient records, and other medical goods” under the employ of the Defendants. The Plaintiffs allege that, because the Defendants “fail to reimburse [employees] for the cost of the business use of their vehicles, . . . the medical couriers' net wages [ ] fall below” the minimum wage set by the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.[1] The Court authorized the Plaintiffs to pursue this matter as an FLSA collective action, and at present, some 135 couriers have opted into the litigation.

         Discovery Dispute

         On October 4, 2017, the Plaintiffs moved (# 140) for a protective order in response to interrogatories and document requests to all 135 Plaintiffs. The Plaintiffs argued that the requests were overbroad, sought irrelevant material, and were unduly burdensome. This Court referred the motion to the Magistrate Judge and on January 8, 2018, the Magistrate Judge granted (# 161) the Plaintiffs' motion. Specifically, the Magistrate Judge found that the breadth of the Defendants' requested discovery “bears no proportionality to the value of the claims in this case” and that allowing extensive discovery directed to each Plaintiff would “defeat the purpose of allowing employees to bring collective actions under the FLSA.” Instead of allowing full discovery from each Plaintiff, the Magistrate Judge determined that a more streamlined approach was necessary, directing that the parties develop a “sworn questionnaire . . . straightforward enough that it can be responded to without the assistance of counsel” that could be sent to and completed by each individual Plaintiff. Thereafter, if the questionnaire responses “identify additional opt-in Plaintiffs from whom [the Defendants] determine they need further written discovery, ” the Defendants could seek such discovery.[2]

         The Defendants filed timely Objections (# 168) to the Magistrate Judge's Order. The Defendants argue that the Magistrate Judge's instructions “preclude[ ] Defendants from utilizing any of the discovery vehicles under the Federal Rules to assess and test” the Plaintiffs' assertion, and that it “completely eliminates cross examination or any other method of validation.” The Defendants' particular arguments are: (i) the Magistrate Judge erred in not assessing “the importance of the issues at stake in the litigation” before deciding to limit the Defendants' resort to discovery tools; and (ii) the Magistrate Judge erred in requiring the Defendants to resort to “intermediate” discovery measures despite the fact that each Plaintiff here is treated as a full-fledged party, as doing so deprives the Defendants of the ability to test each Plaintiff's claim.

         The Court reviews the Magistrate Judge's Order pursuant to Fed.R.Civ.P. 72(a) to determine whether it is “clearly erroneous or contrary to law.” The Court must affirm the Magistrate Judge's ruling unless, having examined the entire record, it is “left with the definite and firm conviction that a mistake has been committed.” Allen v. Sybase, Inc., 468 F.3d 642, 658 (10th Cir. 2006).

         Having reviewed the Defendants' Objections and the Magistrate Judge's Order, the Court cannot say that the Magistrate Judge erred. Although discovery should not be narrowly circumscribed, the desire to afford broad discovery is not without limits and the trial court is given wide discretion in balancing the needs and rights of both plaintiff and defendant. Sprague v. Thorn Americas, Inc., 129 F.3d 1355, 1368 (10th Cir. 1997). The Magistrate Judge's conclusion that the Plaintiffs' concerns of cost and expediency were more important here than the Defendants' concerns of comprehensiveness and certainty was a legitimate place to strike that balance. The Court is particularly persuaded by the fact that although the Magistrate Judge required the Defendant to initially conduct discovery from the Plaintiffs through sworn responses on questionnaires, the Magistrate Judge left open the possibility that those questionnaires could reveal situations in which follow-up discovery on a focused, individual basis might be warranted.

         Although the Defendants are correct that FLSA collective actions are, at bottom, collections of what are effectively single-plaintiff claims, that fact does not entitle the Defendants to discovery equivalent to that which would occur in 135 separate single-plaintiff lawsuits. The FLSA collective action process is designed to give “plaintiffs the advantage of lower individual costs to vindicate rights by the pooling of resources” and to give courts “benefits by the efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” Hoffman-LaRoche, Inc. v. Sperling, 493 U.S. 165, 170 (1989). Such advantages are, of course, gained at a cost, and here, the cost is visited upon employers like the Defendants, who would typically prefer costly and comprehensive procedures to inexpensive and efficient ones. But that is a decision that has already been made by Congress. Here, the Magistrate Judge correctly identified the Congressional priorities, Docket # 161 at 4 (identifying “efficient resolution” as “the purpose of allowing employees to bring collective actions”), and correctly discerned that the costs of individual-plaintiff discovery could be avoided, without undue unfairness, by resorting to broader and more informal discovery tools. In a case with as many Plaintiffs as this one, it would not be at all surprising that large groups of Plaintiffs will have largely similar sets of vehicle expenses - many are likely to drive vehicles that get the same or similar gas mileage, cost the same or similar amounts to insure, or have similar maintenance and repair histories - such that their expenses can be reasonably aggregated across a large group, ameliorating the need for individual discovery. Imposing such a mechanism upon the Defendants, at least as an initial screening tool, effectuates the Congressional purposes behind the FLSA collective action and constitutes an appropriate balancing of the relative interests of the parties.

         Thus, because the Court finds that the Magistrate Judge did not err, the Court overrules the Defendants' Objections and affirms the Magistrate Judge's ruling.

         Sanctions Dispute

         Independently of this lawsuit, the U.S. Department of Labor (“DOL”) commenced an audit of the Defendants wage and hour records under a different statute, the Service Contract Act (“SCA”). The DOL concluded that the Defendants had not made all of the wage payments required by the SCA, and directed the Defendants to make payments to employees as a remedy. In September 2017, the Defendants sent letters directly to the affected employees, notifying them that “it was determined that you are owed additional payment for services provided during your employment, ” enclosing a check, and including a “receipt” form that was drafted by the DOL.

         The receipt form requires some explanation. It referred to the payment of wages “based on the findings of a [Department of Labor] investigation” and was “required by the Act(s) indicated below.” Immediately below that sentence is a checked box identifying the “Service Contract Act. After several additional paragraphs of information, the form concluded with a space for the employee's signature, plus waiver language which read “I understand that my signature on this receipt and waive attests to the fact that I have actually received the payment indicated above . . . and that I waive my right to bring suit as described above and covering the period set forth above.”

         Upon learning of such communications between the Defendants and Plaintiffs, the Plaintiffs' counsel became concerned for several reasons. Most significantly, the Plaintiffs' counsel was concerned about the waiver language and the effects, both actual and perceived, it might have on the Plaintiffs. The Plaintiffs' counsel e-mailed the Defendants' counsel, requesting that the Defendants confirm that they “will not seek to rely on the payments currently offered [under the Service Contract Act] as a defense to any liability in our law suit, either based on waiver, accord and satisfaction, or any other defense.” The Defendants' counsel responded that they “do not understand your concern, ” state that “the forms are government forms that . . . have not been altered” by the Defendants, and that “the waiver, drafted by the government, says what it says.” Specifically responding to the Plaintiffs' concern that the waiver language might be used in this action, the Defendants' counsel responded “To the extent that [Plaintiffs] performed non-SCA work in a different pay period and claims that [the Defendants] failed to pay them the minimum wage, then the waiver would have not effect on such a claim.” After additional discussions with the DOL, counsel for the Plaintiffs again wrote ...


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