Class Action

FLSA Class Action Defense Cases–Hoffman v. Construction Protective Services: Ninth Circuit Affirms Order Barring Plaintiffs From Introducing Evidence Of Damages At Trial Of Labor Law Class Action Due To Plaintiffs’ Failure To Disclose Damages

By Michael J. Hassen

FLSA Class Action Plaintiffs Required to Disclose Evidence of Computation of Damages under Rule 26(a) and Failure to do so Justified District Court Order Granting Motion In Limine Barring such Damages Evidence at Trial as Sanction under Rule 37 Ninth Circuit Holds

Plaintiffs filed a class action against Construction Protective Services alleging violations of the federal Fair Labor Standards Act (FLSA) and of the California Labor Code. Hoffman v. Construction Protective Services, Inc., 541 F.3d 1175, 1177 (9th Cir. 2008). The district court certified an opt-in class under the FLSA, and the parties provided with discovery. However, “at no time prior to trial did [named plaintiffs] disclose damage calculations either for each individual Opt-In Plaintiff other than themselves or for the group as a whole.” Id., at 1177-78. Defense attorneys moved in limine to preclude any evidence not produced pursuant to Rule 26; ultimately, the district court severed the named plaintiffs’ claims from the opt-in plaintiffs because of the court’s concern that plaintiffs’ lawyer “did not have a solid understanding of his clients' damages.” Id., at 1178. The court further excluded all evidence of damage not related to the named plaintiffs. Id. A jury returned partial verdicts in favor of the named plaintiffs, and the class appealed “the exclusion of damages evidence and the award of attorney fees.” Id. The Ninth Circuit affirmed.

The issue before the Ninth Circuit was “whether the district court erred in precluding the admission of evidence regarding damages as a sanction under [Rule 37] for failure to disclose damage calculations under Rule 26(a).” Hoffman, at 1177. Reviewing the district court’s ruling for abuse of discretion, and giving “particularly wide latitude to the district court’s discretion to issue sanctions under Rule 37(c)(1), id., at 1178, the Circuit Court first held that plaintiffs’ had not been denied a “meaningful opportunity” to oppose the motion in limine, id., at 1179. Turning to the merits of the district court’s ruling, the Ninth Circuit held plaintiffs’ failure to disclose their damage computations was not substantially justified and, accordingly, the district court had not abused its discretion in precluding plaintiffs from introducing such evidence at trial. Id., at 1179-80. Put simply, “plaintiffs’ disclosure of their damage calculations was required under Rule 26(a), and their failure to do so was not harmless. Id., at 1180. Indeed, the Ninth Circuit held that it was “eminently reasonable for the court to require full disclosure of damages for the entire case.” Id. Accordingly, it affirmed the ruling of the district court.

Full post as published by Class Action Defense Blog on October 28, 2008 (boomark / email).