Free Response in Opposition to Motion - District Court of Arizona - Arizona

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RYLEY, CARLOCK & APPLEWHITE One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 Telephone: 602/258-7701 Telecopier: 602/257-9582 Charles L. Chester ­ 002571 [email protected] Carolanne E. Cervetti ­ 014143 [email protected] John M. Fry - 020455 [email protected] Attorneys for Defendants

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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA KAYE E. HUTTON, as an individual and as representative of a class consisting of others similarly situated, Plaintiff, No. CV2003-2262-PHX-ROS RESPONSE TO PLAINTIFF'S MOTION TO STRIKE AFFIDAVIT OF PRICE AND ANY RELIANCE OF COUNSEL/GOOD FAITH EVIDENCE

BANK OF AMERICA, N.A., Defendant. INTRODUCTION. An old adage says that if you have the law, try the law; if you have the facts, try the facts; if you have neither law nor facts, try the other counsel. Thus is born the instant motion. II. THE LAW. A. The Non-Existent Defense.

Plaintiff contends that the Bank is asserting a "good faith/reliance of counsel" defense in regard to the willfulness issue raised in Plaintiff's Motion for Final Finding of Willfulness and in Defendant's Motion for Summary Judgment, Part IV. See

Motion, p. 1, ln. 22; p. 3, lns. 2-4; p. 5, lns. 14-15. No such affirmative defense exists
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and none is or could be asserted on the willfulness issue.1 Mills v. State of Maine, 853 F.Supp. 551 (D. Me. 1994) is demonstrative and typical. The court there first concluded an FLSA violation occurred. It then addressed liquidated damages noting, "Since I have ruled that the State violated the FLSA, it must show that it acted both reasonably and in good faith to avoid obligatory liquidated damages." (emphasis added). Id., at 554. The court concluded that the defendant, State, did not carry its burden and awarded liquidated damages. Next, the court

addressed the statute of limitations, noting, "The plaintiffs may recover three years of back pay instead of the usual two years if they show that the State's violation was willful . . . ." (emphasis added), Id., at 555. The court concluded that the plaintiffs did not carry their burden and limited back pay to the usual two years. Defendant's proof of an affirmative defense, reasonable good faith action, may defeat obligatory liquidated damages, but that issue is not before this Court at this time. On the other hand, the normal two year statute of limitations applies unless Plaintiff proves willful or reckless disregard of her FLSA rights. That issue is before this Court at this time. B. The Non-Existent Discovery Dispute.

Plaintiff argues that Defendant has defeated Plaintiff's right to depose Mr. Price and has defeated Plaintiff's right to disclosure by members of Defendant's management of the substance of conversations with him. See Motion, p. 2, lns. 6-18. As a result, Plaintiff declares she has been denied discovery on the "central issue in this matter, the misclassification of and delay in proper reclassification of the Client Manager position." Nothing is further from the truth or from Plaintiff's true motive behind this motion. Without question, massive discovery has occurred regarding the issue of

The only justification for Plaintiff's phraseology is found in a footnote (No. 14) on page 14 of Defendant's Motion for Summary Judgment. The clear language of the 27 footnote, and the facts and reasoning of the case cited, make it clear that no affirmative 28 defense is asserted. Management's consideration ("reliance" is a word of advocacy) of the California legal landscape is just inconsistent with the willful or reckless disregard Plaintiff must prove to extend the normal statute of limitations. Case 2:03-cv-02262-ROS Document 296 -2- Filed 08/21/2006 Page 2 of 7

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misclassification. Likewise, Plaintiff has conducted considerable discovery to find support for her claim that Defendant "delayed proper reclassification." For instance, Plaintiff deposed Lloyd Aubrey, submitted interrogatories to Premier Banking President John Morton, deposed Premier Banking Regional Executive Steve Cortopassi, scheduled but abandoned the deposition of Small Business Regional Executive Deborah Cannon, obtained Mr. Aubrey's notes, Client Manager job descriptions and conversion implementation documents. Also, Plaintiff has had knowledge of the California

litigation, its settlement and the Bell decision for quite some time. Further, Defendant listed Patti Roach-Fukushima as knowledgeable about the decision to convert Client Managers to overtime eligible. Plaintiff deposed her

February 26, 2006. She testified to her understanding of why the decision was made, but lacked direct knowledge of who made the decision, recalling being told Steele Alphin did so. Plaintiff sought to depose Mr. Alphin and Mr. Price. Defense counsel opposed Mr. Price's deposition, and learned and disclosed to this Court that Mark Reale actually was the Premier Banking decision maker. With that in mind, this Court ordered

Mr. Reale's deposition to be taken, but not Mr. Price's. April 5, 2006 Transcript of Proceedings, pp. 22-26, lns. 21-16. Plaintiff deposed Mr. Reale May 3, 2006. At the deposition, on and off the record, Plaintiff's counsel (a) made a record on assertions of attorney-client privilege, (b) argued that this Court had not foreclosed Mr. Price's deposition, (c) asked if Defendant intended to call Mr. Price as a witness, (d) was told by counsel undersigned, no, unless Plaintiff tried to put words in his mouth, and (e) told counsel undersigned that Plaintiff's counsel would confer and decide how to proceed. Plaintiff decided not to bring the matter of deposing Mr. Price or forcing responses to questions regarding substantive communications with Mr. Price back to this Court. That decision was strategic. Defendant does not determine the nature or
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scope of discovery; the Rules of Procedure and this Court do. The last thing Plaintiff wanted, in fact, was to open Mr. Price's mouth. Therefore, Plaintiff consciously

decided not to ask this Court to order his deposition, intending instead to put words in his mouth and cry foul if Defendant had the audacity to respond (as defense counsel had said it would). Then, in the Motion for Final Finding of Willfulness, Plaintiff put the strategy into play: In short, the Bank's in-house counsel responsible for FLSA matters, Jay Price, kept the information he learned in May 2000 to himself, and rather than acting on the _information or inquiring further to resolve the doubt of compliance raised by his paid expert consultant Mr. Aubry. Instead (and notwithstanding the California decision in Huss being decided in 2000 as well), Mr. Price continued to treat the client managers as exempt from overtime apparently until he settled the California client manager overtime litigation and implemented the reclassification in March 2002. (emphasis added). June 13, 2006 version of Motion, p. 10, lns. 9-17. See also, p. 16, lns. 13-21 ("Jay Price . . . . was responsible for the Bank's personnel policies that violated the FLSA . . . ."). Thus, Plaintiff squarely attributed acts, omissions, communications and authority to Mr. Price. Knowing of this at the time Defendant's Motion for Summary Judgment, and its Response to Plaintiff's Motion for Final Finding of Willfulness, Defendant allowed Mr. Price to defend himself in as limited a fashion as possible. Arguably new evidence presented by him in his affidavit is: a. He considered Mr. Aubry's suggestion that he consider monitoring, etc.,

to be an issue to be addressed by training. Affidavit, paragraph 9. b. c. d. e. He believed training was improving. Affidavit, paragraph 10. He saw no reason to recommend conversion. Affidavit, paragraph 10. He was concerned about the Bell decision. Affidavit, paragraph 11. His recollection of what led to the conversion is consistent with

Mr. Reale's testimony. Affidavit, paragraph 13. f. He likely painted the legal landscape Mr. Reale referred to (Bell,

increased litigation, Aubry's impressions, his beliefs and analysis, Mr. Lewis' desire to
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avoid associate litigation). Affidavit, paragraph 13. Had this Court ordered Mr. Price deposed on those questions, Plaintiff would have obtained those answers, and Plaintiff knew it. So, Plaintiff could avoid the evidence only by avoiding the deposition and by crying foul in the hopes that this Court would throw Mr. Price's affidavit out. The last thing Plaintiff wanted was resolution of the claimed discovery dispute . . . . that would lead to unwanted admissible evidence. III. THE FACTS. The facts and supporting evidence on the willfulness issue are presented in Defendant's Statement of Facts, in particular Nos. 13 through 17 and 44 through 67. These facts alone might not support an affirmative defense to liquidated damages if this Court ultimately determines one of the Client Manager Opt-ins or Ms. Hutton was performing the job in a non-exempt manner. However, these facts certainly make it clear that Plaintiff cannot meet her burden on the willfulness issue. Of all these facts, Mr. Price's affidavit is relied upon only in support of SOF Nos. 53 and 54. All of No. 53 is supported by Ms. Roach-Fukushima's affidavit and/or other SOF's, such as Nos. 49, 52, 18 and 19, except for its first sentence, which can be inferred from No. 52. No. 54 could just as well have been the subject of judicial notice and legal argument. However, while Mr. Price's affidavit perhaps was not essential to the Statement of Facts, it was submitted to counter Plaintiff's anticipated Response on the Summary Judgment motion. Defendant's concern was well taken. Plaintiff paints Mr. Price as the actual decision maker. Response on Motion for Summary Judgment, p. 13, lns. 4-6; See also, Reply on Motion for Final Finding of Willfulness, p. 4, lns. 18-21. On the contrary, in paragraph 13 of his Affidavit, Mr. Price avows his agreement with Mr. Reale's recollection. This Court will recall that Mr. Reale testified that he and Ms. Ferrer were the decision-makers. See SOF Nos. 58-60.
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IV.

THE REMEDY. There is no relevant good faith/reliance of counsel defense applicable to the

willfulness issue. Therefore, there is nothing to strike in this regard. If Plaintiff intends to ask this Court to strike Defendants' right to oppose extension of the normal statute of limitation to three years, there is no procedural or substantive basis for such an order. Rule 37 has not been complied with, nor has this Court's informal discovery dispute resolution process. Further, no prior Order of this Court has been violated. Also, no Rule 56(f) avowal has been offered by Plaintiff, and for the reasons stated above, a Rule 56(g) finding of bad faith is not at all warranted. Plaintiff could have, but never did seek this Court's assistance when the attorneyclient privilege was asserted in Ms. Roach-Fukushima's deposition or in Mr. Reale's deposition. Having failed to do so, Plaintiff should not be allowed to now block testimony "based on Mr. Price," presumably referring to testimony regarding actions and decisions with, among others, communications with Mr. Price. This is especially true as to testimony which also is based on the witnesses' own beliefs and those of others than Mr. Price. Finally, for the reasons stated above, the affidavit of Mr. Price should not be stricken. Plaintiff put Mr. Price's words, conduct and authority at issue; Defendant did nothing more than allow him to defend himself in a very limited fashion. See, e.g., Armarel v. Connell, 102 F.3d 1494, 1515-1516 (9th Cir. 1996); Amir v. Loyola University-Chicago, 423 F.Supp.2d 914, 916-917 (W.D. Wis. 2006). V. CONCLUSION. For the foregoing reasons, Plaintiff's motion should be denied.

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DATED: August 21st, 2006. RYLEY CARLOCK & APPLEWHITE By /s/ Charles L. Chester Charles L. Chester Carolanne E. Cervetti John M. Fry One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 Attorneys for Bank of America, N.A. COPY of the foregoing mailed this 21st day of August, 2006 to: Lydia A. Jones ROGERS & THEOBALD, LLP 2425 East Camelback Road Phoenix, AZ 85016 Michael J. O'Connor Jennings, Strouss & Salmon, P.L.C. The Collier Center, 11th Floor 201 E. Washington Street Phoenix, AZ 85004 By /s/Bree Bellefeuille

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