Court Opinion

ID: 4441911
Source: CourtListenerOpinion
Date Created: 2019-09-26 17:00:56.185969+00
Date Added: 2024-06-11T14:46:31.435580
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

 KANG KYU SEO, et al.,

                Plaintiffs,

        v.
                                                              No. 18-785 (RDM)
 CHARLES MOON SUK OH, et al.,

                Defendants.

                               MEMORANDUM OPINION AND ORDER

       Courts must, at times, balance the judicial interest in requiring timely compliance with

discovery schedules and the judicial interest in deciding cases on the merits. This is such a case.

       Plaintiffs are four former employees of Charlie’s Corner, a liquor store located in

Washington, D.C. Dkt. 1 at 1–2 (Compl.). They allege that the store is owned by Defendants

Charles Moon Suk Oh and Wade Road Inc. and that Defendants willfully failed to pay them

minimum wages and overtime wages in violation of the Federal Fair Labor Standards Act of

1938, as amended, 29 U.S.C. § 201 et seq. (“FLSA”), and the District of Columbia Wage

Payment and Collection Law (“DCWPCL”), D.C. Code § 32-1301 et seq. Id. at 1–2 (Compl.).

On September 10, 2018, Plaintiffs’ counsel served requests for admission, interrogatories, and

document requests on Defendants. See Dkt. 12 at 2 (Pls.’ Mot. Summ. J.). By the time

discovery closed on December 28, 2018, however, Defendants had not responded to any of these

requests. Dkt. 12-1 (Pls.’ Discovery Request). So, five days later, Plaintiffs moved for summary

judgment, relying principally on Federal Rule of Civil Procedure 36(a)(3), which deemed each of

their requests for admission “admitted” because Defendants failed to timely answer or object.

Dkt. 12 (Pls.’ Mot. for Summ. J.). In response, Defendants have sought leave under Federal
Rule of Civil Procedure 36(b) to withdraw or amend their (non)responses, Dkt. 14, and, on the

assumption that Court will grant that relief, have opposed Plaintiffs’ motion for summary

judgment, Dkt. 13.

       For the reasons discussed below, the Court will grant Defendants’ motion for leave to

withdraw or amend their (non)responses; will direct that Defendants fully respond to all

outstanding discovery requests within 21 days of this order; will award Plaintiffs reasonable

attorneys’ fees for the cost of preparing their motion for summary judgment; and will deny

Plaintiffs’ motion for summary judgment without prejudice.

                                       I. BACKGROUND

A.     The Pleadings

       On April 5, 2018, Plaintiffs filed this FLSA and DCWPCL action against Defendants,

Charles Moon Suk Oh (“Oh”) and Wade Road, Inc (“WRI”), a corporation organized under

District of Columbia law.1 Dkt. 1 (Compl. 1–2). Oh is the owner of WRI; WRI, in turn, owns

and operates Charlie’s Corner, a liquor store located in Washington, D.C. Dkt. 5 at 1–2 (Answer

¶¶ 3, 11). Plaintiffs Keong Kyu Seo, Danita Evette Chase, Michelle Johnson, and Tamora

Agnew are all former employees of Charlie’s Corner. Dkt. 1 at (Compl. ¶ 5). They allege that

Seo worked as a a cashier, although Defendants dispute this fact and allege that Seo was actually

the store manager; Plaintiffs and Defendants, however, agree that Seo was paid a monthly salary.

See Dkt. 1 at 4 (Compl. ¶¶ 4, 18); Dkt. 5 at 8 (Answer ¶¶ 90, 92). Plaintiffs also allege that

Chase, Johnson, and Agnew were each employed at Charlie’s Corner as cashiers earning $11 an

1
  Plaintiffs also brought a claim under 26 U.S.C. § 7434 but have moved to dismiss that count
without prejudice pursuant to Federal Rule of Civil Procedure 41. See Dkt. 12 at 1 (Pls.’ Mot.
for Summ. J.) That motion is unopposed, and the Court will, accordingly, dismiss Count III of
the complaint, Dkt. 1 at 11–13, without prejudice.

                                                 2
hour; that Charlie’s Corner paid them for only about 20 or 30 hours each week, even though they

worked longer hours; and that they were compensated for hours in excess of 20 or 30 hours a

week only “occasionally.” See Dkt. 1 at 5–8 (Compl. ¶¶ 28–46). They further allege that to the

extent they were paid for those additional hours, the compensation came in the form of cash or

store credits. See id. at 5–8 (Compl. ¶¶ 28–46).

       In their answer, Defendants allege that each Plaintiff was “paid at least the minimum

wage and any overtime wages.” Dkt. 5 at 8 (Answer ¶ 89). They also allege that Oh is not a

party to the employment contracts at issue and that, even if Plaintiffs are owed additional

compensation under the FLSA, Defendants “acted in good faith.” Id. at 10 (Answer ¶¶ 107,

110). Defendants also assert counterclaims for breach of contract, breach of fiduciary duty,

fraud, and unjust enrichment against Seo. Dkt. 5 at 10–13 (Answer ¶¶ 111–37). According to

Defendants’ counterclaims, Seo served as the manager of Charlie’s Corner; in that position, he

was required to keep timesheets for all the store’s employees, including for Agnew, Chase, and

Johnson; and that he was entrusted to take his and the employees’ salaries from the store’s gross

receipts. Id. at 8–9 (Answer ¶¶ 90, 102). The counterclaim further alleges that Seo embezzled

approximately $12,000 from the store. Id. at 9 (Answer ¶¶ 98–99).

B.     Subsequent Procedural History

       After Defendants answered the complaint, the Court entered an initial scheduling order

requiring, among other things, that the parties serve their initial disclosures on or before August

14, 2018 and ordered that “[f]act discovery shall close on December 28, 2018.” See Dkt. 10.

Although only required to serve their initial disclosures on opposing counsel, Defendants filed

them with the Court on August 15, 2018. Dkt. 11 (Defs.’ Initial Disclosure). On September 10,

2018, Plaintiffs served a fourteen-page discovery request on Defendants, which included

                                                   3
requests for admission, interrogatories, and requests for documents. See Dkt. 12 at 2 (Pls.’ Mot.

Summ. J.); Dkt. 14 at 2 (Defs.’ Rule 36 Mot.); Dkt. 14-1 (Copy of Pls.’ Discovery Request). Of

particular relevance to the pending motions, the requests for admission (“RFA”) asked

Defendants to admit or deny eighteen assertions, including the following:

       2. Each defendant at all times relevant here was an “employer” as that term is
          defined by 29 U.S.C. §203(d).

       4. Each defendant improperly failed to compensate each plaintiff for all time
          he or she was at work discharging his or her work-related duties.

       5. Each defendant failed to properly administer a plan under which each
          plaintiff was to be compensated for excess hours worked, in the form of
          comp time or overtime payments, for hours worked in excess of the statutory
          maximum.

       6. Each defendant failed to compensate each plaintiff for the hours actually
          worked during each pay period.

       7. Each defendant knew, or showed reckless disregard in not knowing, that
          each plaintiff was entitled to be paid for all hours he/she was at work
          discharging his/her work-related duties and was to receive minimum wages
          or overtime pay or comp time for hours worked in excess of the statutory
          maximum, and that each defendant’s failure to pay for all work at the
          appropriate rate violated the [FLSA].

 Dkt. 12-1 at 4–5 (Pls.’ Mot. for Summ. J.) (Pls.’ Ex. A).

        Defendants did not respond to any of Plaintiffs’ discovery requests, and fact discovery

 closed on December 28, 2018. Five days later, Plaintiffs moved for summary judgment, relying

 almost entirely on the unanswered requests for admission, which they asserted were deemed

 admitted, to establish the relevant elements of their claims. See Dkt. 12 at 2–3 (Pls.’ SUMF

 ¶¶ 1–18). The only other evidence Plaintiffs relied upon are declarations by each individual

 Plaintiff, which they offer primarily (although not exclusively) as evidence of their alleged

 damages. See id. at 4–7 (Pls.’ SUMF ¶¶ 19–22). Nine days after Plaintiffs moved for summary

                                                 4
 judgment, Defendants moved to withdraw or amend their (non)responses to Plaintiffs’ requests

 for admission. Dkt. 14 (Defs.’ Rule 36 Mot.).

                                         II. ANALYSIS

       Because Plaintiffs’ motion for summary judgment is premised principally on their RFAs,

which are, as explained below, deemed admitted in light of Defendants’ failure to respond, the

Court will start with Defendants’ motion for leave to amend their (non)responses before turning

to Plaintiffs’ motion for summary judgment.

A.     Defendants’ Rule 36 Motion

       Federal Rule of Civil Procedure 36(a)(1) permits a party to “serve upon any other party a

written request to admit . . . the truth of any matters within the scope” of discovery. The

opposing party then has 30 days to admit, deny, or “state in detail why [it] cannot fully admit or

deny,” or to object to each RFA. Fed. R. Civ. P. 36(a)(3)–(5). Rule 36 “seeks to serve two

important goals: truth-seeking in litigation and efficiency in dispensing justice.” Conlon v.

United States, 474 F.3d 616, 622 (9th Cir. 2007) (citing Advisory Committee Note to Fed. R.

Civ. P. 36(b)). To promote those ends, Rule 36 sets out two important mechanisms. First, once

a party secures an admission it is given binding effect, thus relieving the party of the burden of

producing evidence to prove or disprove the matter admitted. See Fed. R. Civ. P. 36(b); see also

Baker v. Potter, 212 F.R.D. 8, 11 (D.D.C. 2002) (“Rule 36 ensures that the party securing the

admissions may rely on their binding effect.”). Second, requests for admission are automatically

deemed admitted unless the party served with the requests objects within 30 days of service or

within a period specified by the court or by mutual agreement of the parties. Fed. R. Civ. P.

36(a)(3). Together, these mechanisms help secure the “just, speedy, and inexpensive

                                                 5
determination,” Fed. R. Civ. P. 1, of cases by defining and limiting “the matters in controversy

between the parties.” Baker, 212 F.R.D. at 11.

       “Despite these strictures, however, the rule provides for a safety valve to ensure that the

action is ‘resolved on the merits while assuring each party that justified reliance on an admission

. . . will not operate to [its] prejudice.’” Id. Specifically, Rule 36 allows courts, “on motion, [to]

permit[] [an] admission to be withdrawn or amended.” Fed. R. Civ. P. 36(b). A two-part test

guides whether a court should allow a party to amend or withdraw its admissions. “First, the

moving party must demonstrate that amendment or withdrawal . . . will []serve the ‘presentation

of the merits of the action.’” Rude v. Adeboyeku, No. 05-1274, 2007 WL 9770929, at *1 (D.D.C.

Aug. 31, 2007) (quoting Fed. R. Civ. P. 36(b)). “Second, if the moving party satisfies this

burden, the burden shifts to the opposing party to show ‘that withdrawal or amendment will

prejudice that party in maintaining the action.’” Id.; see also Baker, 212 F.R.D. at 12 (same).

“[I]f the court is not persuaded that [withdrawal or amendment] would prejudice” the opposing

party, it “may permit the withdrawal or amendment.” Fed. R. Civ. P. 36(b). For the reasons

explained below, the Court concludes that Defendants satisfy the first prong and that Plaintiffs

have not carried their burden to show that Defendants’ withdraw would prejudice them in a

manner cognizable by the Rule.

       1.      Adjudication on the Merits

       The Court must first decide whether permitting Defendants to withdraw or to amend their

admissions “would promote the presentation of the merits of the action. . . .” Fed. R. Civ. P.

36(b). Given the nature of the requests at issue, that requirement is easily satisfied. Although

Rule 36 permits a party to serve RFAs “relating to . . . the application of law to fact[s],” Fed. R.

Civ. P. 36(a)(1)(A), the rule does not contemplate requests that merely “demand that the

                                                  6
opposing party ratify legal conclusions that the requesting party has simply attached to operative

facts,” Disability Rights Council of Greater Wash. v. Wash. Metro. Area Transit Auth., 234

F.R.D. 1, 3 (D.D.C. 2006). Rule 36 is intended to narrow the issues in dispute; it is “not to be

used . . . in the hope that a party’s adversary will simply concede essential elements” of a claim.

Conlon, 474 F.3d at 622.

       Plaintiffs’ requests here improperly asked Defendants to “admit the truth of . . . legal

conclusion[s].” Disability Rights Council, 234 F.R.D. at 3. Defendants, of course, had a right to

object to these requests, see Fed. R. Civ. P. 36(a)(5), and they forfeited that right by failing to

respond. But the nature of the requests—and, in particular, the fact that they asked that

Defendants admit or deny the ultimate, factual and legal conclusions in the case—is relevant to

the question of whether permitting Defendants to withdraw their admissions “would promote the

presentation of the merits of the action.” Fed. R. Civ. P. 36(b); see also Green v. Blazer

Diamond Prods., No. 92-1385, 1994 WL 715632, at *24 (D.D.C. 1994) (finding the first prong

satisfied where the admission deprived the defendant of “its prime defense”). Here, because

Plaintiffs demanded admissions as to each essential element of their claims, deeming them

admitted would preclude any presentation on the merits.

       Any doubt as to this first prong is put to rest by Plaintiffs’ motion for summary judgment.

In that motion, Plaintiffs relied on the RFAs to establish eighteen of the twenty-two facts set

forth in their Statement of Undisputed Facts. Dkt. 12 at 2–8 (Pls.’ SUMF ¶¶ 1–22). Plaintiffs

cite to the RFAs to establish every element of their claims, and they rely on the RFAs to support

the core premises of their motion for summary judgment—that Defendants “paid Plaintiffs at an

hourly rate for all hours they worked, including hours worked in excess of forty (40) each week,

and that Plaintiffs were not paid for their overtime hours at the rate of one-and-one half (1.5x)

                                                  7
their ‘regular rate.’” Dkt. 12 at 10 (citing Pls.’ SUMF ¶¶ 1–18). The RFAs, moreover, if

deemed admitted, establish that each Plaintiff was an “employee,” that each Defendant was an

“employer,” and that Defendants’ failure to pay the required wages constituted “a willful and

knowing violation of the FLSA.” Dkt. 12 at 3 (Pls.’ SUMF ¶ 14); see also id. at 2 (Pls.’ SUMF

¶ 7). It may be that Plaintiffs could have demonstrated their right to recover, at least in part,

without relying on the RFAs. But that is not the approach they took and, as the motion for

summary judgment is framed, allowing the admissions to stand would conclusively establish

Defendants’ liability and willful failure to abide by the FLSA and the DCWPCL.

       The prospect that, if they were not permitted to withdraw or amend their admissions,

Defendants would be denied an opportunity to defend the case on the merits is particularly

problematic because—although late and unverified—Defendants have now provided Plaintiffs

with answers to Plaintiffs’ interrogatories that raise material defenses. They assert, for example,

that Seo was a salaried, managerial employee at the store; that Chase and Agnew “did not work

overtime;” and that Johnson entered into an agreement with WRI pursuant to which she “was

compensated for any overtime that was not paid.” Dkt. 15-4 at 2 (Defs.’ Resp. to Request for

Interrogatories at 1). They further assert that Chase worked at the store only “from February 10,

2017 to February 29, 2017” and thus “could not have worked the hours she claimed in the

complaint,” and that “Agnew quit due to sickness and worked [the] morning shift from 9:00 am

to 1:00 pm and,” thus “could not have worked the hours claimed in the complaint.” Id. at 4

(Defs.’ Resp. to Request for Interrogatories at 3). To be sure, this is not the occasion to decide

which version of the relevant facts is correct—or even whether Defendants’ interrogatory

responses are procedurally proper. The Court merely recognizes that Defendants, if given the

opportunity to answer the RFAs, would not admit many of the essential elements of Plaintiffs’

                                                  8
claims.

          2.   Prejudice to the Plaintiffs

      The second prong of the Rule 36(b) inquiry is also satisfied. As explained above,

Plaintiffs bear the burden of showing that the amendment or withdrawal would “prejudice them

in maintaining . . . the action on the merits.” Fed. R. Civ. P. 36(b); see also Rabil v. Swafford,

128 F.R.D. 1, 2 (D.D.C. 1989) (noting that a party seeking to rely on the admissions bears the

burden of showing prejudice). “The prejudice contemplated by the Rule is not simply that the

party who initially obtained the admission will now have to convince the fact finder of its truth.”

Perez v. Miami-Dade Cnty., 297 F.3d 1255, 1266 (11th Cir. 2002) (quoting Smith v. First Natl

Bank, 837 F.2d 1575, 1578 (11th Cir. 1988)). Rather, the prejudice requirement turns on

“whether the opposing party is any less able to obtain the evidence required to prove the matters

which had been admitted.” Rabil, 128 F.R.D. at 2. A party may be prejudiced, for example,

where the admissions “caused . . . the unavailability of key witnesses,” Smith, 837 F.2d at 1578,

influenced a party’s decision about whose depositions to take, see Freeman v. City of Detroit,

274 F.R.D. 610, 613 (E.D. Mich. 2011), or where the party moves to withdraw admissions on the

eve of trial, see Conlon, 474 F.3d at 624 (upholding the denial of withdrawal where the motion

was made eight days before trial). No such circumstances are present here.

      The only harm Plaintiffs identify is the time and cost associated with their preparation of a

motion for summary judgment, which was premised on the RFAs. The mere filing of a motion

for summary judgment, however, “does not establish the requisite level of prejudice.” Davis v.

Noufal, 142 F.R.D. 258, 259 (D.D.C. 1992); see also Conlon, 474 F.3d at 624 (“We agree with

the other courts that have addressed the issue and conclude that reliance on a deemed admission

in preparing a summary judgment motion does not constitute prejudice.”); In re Durability Inc.,

                                                 9
212 F.3d 551, 556 (10th Cir. 2000) (“[P]reparing a summary judgment motion in reliance upon

an erroneous admission does not constitute prejudice.” (quoting Fed. Deposit Ins. Corp. v.

Prusia, 18 F.3d 637, 640 (8th Cir. 1994) (alteration in original)). Plaintiffs respond by noting

that “Defendants failed to produce any discovery, participate in court-ordered pretrial

disclosures, or produce any statements under oath to contradict the plaintiffs’ declarations, or for

that matter, do anything.” Dkt. 15 at 17 (Pls.’ Opp. to Rule 36 Mot.). Those failures may

warrant some form of relief to Plaintiffs, potentially including proportionate discovery sanctions.

But the question for present purposes is whether Plaintiffs would suffer any cognizable prejudice

in proving the merits of their claims if the Court were to allow Defendants to withdraw their

admissions. The answer to that question is no. The Court will, accordingly, grant Defendants’

motion to amend or withdraw their (non)responses to Plaintiffs’ request for admissions.

      The Court, of course, is cognizant of the fact that Defendants’ conduct so far has shown a

disregard for their discovery obligations. Indeed, the only justification that Defendants have

mustered for their failure to respond to Plaintiffs’ RFAs is that “counsel mistook the document as

interrogatories and request[s] for production” and did not realize that, by failing to respond,

Defendants were admitting each of the essential allegations of Plaintiffs’ case. Dkt. 14 at 3. In

other words, Defendants merely thought that they were ignoring their obligations to respond to

the interrogatories and document requests. That is far from a noble excuse. At this relatively

early stage in the proceedings, however, and applying the test set forth in Rule 36(b),

Defendants’ failure to respond to the RFAs “does not warrant the harsh result of having to admit

the entire matter in dispute.” Rabil, 128 F.R.D. at 2.

      The Court will, however, order that Defendants respond to all outstanding discovery

requests—in full and in the manner prescribed by the rules—within 21 days of this order. The

                                                 10
Court will also award Plaintiffs reasonable attorneys’ fees incurred in preparing their motion for

summary judgment in reliance on Defendants’ failure timely to respond to Plaintiffs RFAs,

interrogatories, and requests for production.

B.     Plaintiffs’ Motion for Summary Judgment

       Given the Court’s decision to permit Defendants to withdraw their admissions, the Court

must also deny Plaintiffs’ pending motion for summary judgment. As explained above, that

motion is premised in large part on Defendants’ now-defunct admissions. To be sure, Plaintiffs

might have been able to premise their motion on other evidence alone—most notably, Plaintiffs’

individual declarations. But that is not how they framed or briefed their motion. Once

Defendants comply with the Court’s order to answer all outstanding discovery requests,

Plaintiffs may—if appropriate—renew their motion for summary judgment. As things now

stand, however, that motion is premature. See Haynes v. Navy Fed. Credit Union, 296 F.R.D. 9,

15 (D.D.C. 2013) (denying a motion for summary judgment as premature where it relied on Rule

36 admissions the Court permitted the non-moving party to amend); see also Perez, 297 F.3d at

1269 (vacating summary judgment where the moving party’s motion relied on Rule 36

admissions that the district court should have permitted the non-moving party to withdraw);

Raiser v. Utah Cnty., 409 F.3d 1243, 1247 (10th Cir. 2005) (same).

       The Court will, accordingly, deny Plaintiffs’ motion for summary judgment without

prejudice.

                                         CONCLUSION

       For the foregoing reasons, the Court GRANTS Defendants’ motion to withdraw or

amend its responses to Plaintiffs’ request for admissions, Dkt. 14, and DENIES Plaintiffs’

motion for summary judgment, Dkt. 12, without prejudice.

                                                11
                                /s/ Randolph D. Moss
                                RANDOLPH D. MOSS
                                United States District Judge

Date: September 26, 2019

                           12