In re M.L. Stern Overtime Litigation

250 F.R.D. 492, 2008 U.S. Dist. LEXIS 66300, 2008 WL 2156342
CourtDistrict Court, S.D. California
DecidedJanuary 4, 2008
DocketNo. 07-CV-0118-BTM (JMA)
StatusPublished
Cited by8 cases

This text of 250 F.R.D. 492 (In re M.L. Stern Overtime Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re M.L. Stern Overtime Litigation, 250 F.R.D. 492, 2008 U.S. Dist. LEXIS 66300, 2008 WL 2156342 (S.D. Cal. 2008).

Opinion

ORDER RE PLAINTIFFS’ MOTION TO LIMIT EX PARTE COMMUNICATIONS BETWEEN DEFENDANT AND MEMBERS OF THE PROPOSED CLASS, ETC.

JAN M. ADLER, United States Magistrate Judge.

I. INTRODUCTION

On November 2, 2007, Plaintiffs filed a Motion to Limit Ex Parte Communications Between Defendant and Members of the Proposed Class, to Nullify Executed Settlement and Release Agreements, and to Impose Sanctions, Attorneys’ Fees and For Other Relief (“Motion”). [Docket No. 35] On November 21, 2007, Defendant filed an Opposition in response to the Motion. [Docket No. 36] On November 30, 2007, Plaintiffs filed a Reply to Defendant’s Opposition. [Docket No. 37] After a thorough review of the parties’ submissions and applicable law, and for the reasons set out herein, the Court GRANTS IN PART AND DENIES IN PART the Motion.

II. BACKGROUND OF PLAINTIFFS’ MOTION

On October 12, 2007, shortly before a previously-scheduled telephonic Case Management Conference was to commence, counsel for Plaintiffs contacted the Court by way of a six-page, single-spaced letter (“Wells Letter”), strenuously objecting to a letter dated September 28, 2007 from Defendant’s CEO, Milford L. Stern, to “All Account Executives” regarding “Class Action Litigation” (“Stern Letter”). (Deel. of Gerald Wells filed in support of the Motion, exhs. A & B.) The Wells Letter characterized the distribution of the Stern Letter to Account Executives currently employed by Defendant as “inappropriate, prejudicial to plaintiffs, [and] disrespectful to the judicial process____” (Wells Letter at 1.) After discussing the matter with counsel for the parties, the Court ordered:

Defendants shall immediately, and in any event not later than the close of business on October 15,2007, issue a communication by electronic mail to “All Account Executives to whom the September 28, 2007 letter was sent.” The communication shall inform the recipients that the appropriateness of the September 28, 2007 letter has been called into question by Plaintiffs’ counsel and that the issue of the appropriateness of the letter has now been placed before the Court for a ruling. The communication shall suspend the October 19, 2007 response deadline set out in the letter and shall suspend the offer of settlement contained in the letter until such time as the Court rules on the issue. Defendants shall provide a copy of the electronic mail communication to counsel for Plaintiffs and [494]*494the Court[. The Court then set a briefing schedule on the Motion.]

(Order filed October 12, 2007 [Doe. No. 34] at 1-2.)

In the Motion, Plaintiffs argue that the Stern Letter is misleading, coercive, and violates California Rules of Professional Conduct, and they contend that the Court should take curative and punitive action in response to it. Plaintiffs do not, however, provide actual evidence that Account Executives experienced coercion or felt misled by the Stern Letter and the accompanying materials. Rather, Plaintiffs essentially want the Court to infer that the Stern Letter is coercive and misleading because an unusually high percentage of Account Executives executed the Settlement and Release Agreement, because the employer/employee relationship is inherently coercive in this context, and because the Stern Letter contains the statement that the Plaintiffs’ current settlement demand “would severely impact the company’s net capital requirements and make it difficult for M.L. Stern to stay in business and out of bankruptcy." (Stern Letter at 2 (emphasis added).)1

Plaintiffs seek the following: (1) an order to Defendant to cease and desist from any further communication with proposed class members regarding the lawsuit; (2) copies of all written communications Defendant has had with any putative class member that concerns the lawsuit; (3) copies of the “97 complete surveys” Defendant cites in the Stern Letter and copies of all executed “Settlement and Release Agreements;” (4) a curative letter advising all recipients of the Stern Letter that it was factually inaccurate, misleading, and coercive; (5) an order deeming any executed releases void and unenforceable; and (6) sanctions against Defendant, including an award of attorneys’ fees and costs. (Motion at 23.) Defendants oppose the Motion, contending that pre-certifi-cation communications with putative class members are constitutionally protected and that the Stern Letter is not improper, misleading, or coercive. (See generally, Opposition.)

III. DISCUSSION

A. The Communications Between Defendant And The Current Account Executives.

According to the parties’ submissions, after this action was filed, Defendant distributed a survey to its Account Executives seeking information related to the litigation. (Decl. of Milford L. Stern filed in support of Defendant’s Opposition (“Stern Deck”) at 115 & Exh. 1.) All but one of 83 Account Executives who responded to the survey indicated that they did not want to pursue potential recovery from a class action lawsuit against Defendant seeking minimum wages, overtime pay, and compensation for missed rest and meal periods. (Id.) With that information, Defendant sent the Stern Letter to 94 Account Executives on October 8, 2007.2 Before 1:45 p.m. on October 12, 2007 (at which time, Mr. Stern sent the email communication as ordered by Judge Adler), 52 Account Executives had accepted the settlement offer; ten (10) more expressed a desire to accept the offer after the October 12 email. No Account Executives have indicated they wish to reject the settlement offer (although no rejection per se appears to be required by the terms of the Stern Letter). (Id. at 23 11117-9.)

As an initial matter, the Court finds nothing objectionable in the “Survey of ML Stern Account Executives.” (Stern Deck at Exh. 1. ) The survey consists of five (5) factually straightforward questions which can be answered by checking “yes” or “no” in four instances, while one question requests the Account Executive’s best estimate of how many hours per week she or he worked at M.L. Stern from 2002-2006. There is nothing coercive or even suggestive about the survey.

The Stern Letter, after thanking the Account Executives for responding to the sur[495]*495vey, states that it provides “an update on the lawsuit as well as [an] outline [of] a plan to offer compensation to you in exchange for a release of your claims against M.L. Stern,” and asks that the Account Executives respond by October 19, 2007. (Stern Letter at 1.) Section 1 is entitled “Update on the Litigation” and provides a description of the lawsuit, the key legal issue in the case regarding the classification of the Account Executives as either “exempt” or “non-exempt,” and the reasons why Mr. Stern believes an aggressive defense against Plaintiffs’ claims is sensible for both the company and the Account Executives. (Id. at 1-2.)3

Section 2 of the Stern Letter is entitled “Potential Class Action” and purports to describe what would take place if the action, currently being pursued by the individual Plaintiffs, were certified as a class action. (Id.

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Bluebook (online)
250 F.R.D. 492, 2008 U.S. Dist. LEXIS 66300, 2008 WL 2156342, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ml-stern-overtime-litigation-casd-2008.