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Santiago Rojas, Josefino Ramirez, Catalina v. Marko Zaninovich

December 21, 2011



I. History

Defendants Marko Zaninovich, Inc. and Sunview Vineyards of California Inc. are commercial table grape growers based in Kern County. Plaintiffs are former employees of Defendants. The case has a complex procedural history. The operative complaint alleges Defendants violated various employment laws by, among other things, failing to properly pay wages by forcing employees to work off the clock, forcing employees to purchase tools out of pocket, failing to pay minimum required wages, failing to provide meal and rest periods, failing to provide accurate itemized wage statements, and failing to maintain time records. Defendant Marko Zaninovich was dismissed by stipulation of the parties. Plaintiffs have moved for class certification against the remaining Defendant, Sunview. In support of their motion, they have provided Aaron Woolfson as an expert on database analysis. Defendant provided Plaintiffs with internal records (in the form of databases) that set out payroll and time records. Mr. Woolfson was retained by Plaintiffs to give an opinion on these records, specifically to quantify the number of alleged labor law violations committed.

Expert witnesses had to be disclosed by February 11, 2011, and expert discovery was to be completed by April 1, 2011. Doc. 27. By stipulation of the parties, Magistrate Judge Thurston modified the schedule to allow expert reports to be produced by April 18, 2011. Doc. 33. Mr. Woolfson produced a timely expert report. Doc. 162, Part 3, Ex. 3. Mr. Woolfson gave opinions as to the number of workers (and/or shifts) who were paid less than required under various California regulations. He was given two datasets to work with: "Sunview's payroll system consists of two primary data sets: (1) a Payroll Detail file with individual records recording hours worked, type of pay, and rates of compensation for employees at Sunview, and (2) a Payroll Register file listing the checks issued with the total hours worked and the total payments made to employees." Doc. 144, Part 1, Nickerson Report, at 3:3-7. These datasets contained entries that were labeled using a series of numerical codes. Mr. Woolfson was provided with a list of confidential codes. Woolfson Deposition, at 84:1-5. That list does not appear to have been provided to the court. Mr. Woolfson was also on a conference call with Defendant's IT representatives to resolve technical issues with transferring the information between different database programs. Woolfson Deposition, at 82:7-25. From this data, Mr. Woolfson concluded that 2,348 workers were paid below minimum wage in 391,276 shifts and received no overtime pay in 4,500 shifts. Doc. 162, Part 3, Ex. 3, Woolfson Expert Report, at 8:17-9:3.

Defendant's counsel then deposed Mr. Woolfson on May 3, 2011.*fn1 During the deposition, Mr. Woolfson discovered that Defendant was using certain codes in a way that did not correspond to his analysis. Further, Mr. Woolfson discovered that Plaintiffs' counsel, on April 5, 2011, had deposed Daniel Gallegos, Defendant's person most knowledgeable about the datasets. In the course of his deposition, Mr. Gallegos appears to have produced another list of codes that helped to explain the datasets. Plaintiffs' counsel did not provide this second list to Mr. Woolfson, he appears to have seen it for the first time during his deposition on May 3, 2011. Woolfson Deposition, at 176:1-179:2. On May 16, 2011, Mr. Woolfson submitted a declaration in support of Plaintiffs' motion for class certification which supplemented his earlier expert report to account for some of the new information he learned at his deposition. Doc. 39. Plaintiffs seek to use this declaration as a supplement to Mr. Woolfson's earlier submitted expert report.

Defendant made a motion to strike both Mr. Woolfson's declaration and his original expert report on the basis that (1) the supplement was untimely, (2) Mr. Woolfson is not qualified as an expert, and (3) Mr. Woolfson's conclusions are methodologically unsound as they are based on Plaintiffs' attorneys' representations rather than the underlying data. Doc. 105. Plaintiffs opposed the motion. Doc. 150. Judge Thurston held a hearing on the motion. Doc. 177, September 16, 2011 Transcript. She ultimately granted Defendant's motion; in her September 19, 2011 order, Judge Thurston found that Mr. Woolfson's May 16, 2011 declaration was an improper supplement to his earlier expert report and that Mr. Woolfson's methodology was flawed; as a sanction, she ordered the May 16, 2011 declaration stricken and all opinion by Mr. Woolfson up to that point stricken. Doc. 158. Plaintiffs have sought reconsideration of the order. Doc. 161. Defendant opposes reconsideration. Doc. 175. No hearing on this motion was held.

II. Legal Standards

Fed. Rule Civ. Proc. 72(a) allows a party to serve and file objections to a Magistrate Judge's nondispositive order, to be decided by the District Judge. In the Eastern District of California, this type of objection is treated as a motion for reconsideration by the assigned District Court Judge. See Local Rule 303.

When filing a motion for reconsideration, Local Rule 230(j) requires a party to show "what new or different facts or circumstances are claimed to exist which did not exist or were not shown upon such prior motion, or what other grounds exist for the motion." The court reviews a motion to reconsider a Magistrate Judge's ruling under the "clearly erroneous or contrary to law" standard set forth in 28 U.S.C. § 636(b)(1)(A). See also Fed. Rule Civ. Proc. 72(a). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court, after reviewing the entire evidence, is left with the definite and firm conviction that a mistake has been committed." United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948); see also Anderson v. Equifax Info. Services LLC, 2007 WL 2412249, *1 (D. Or. 2007) ("Though Section 636(b)(1)(A) has been interpreted to permit de novo review of the legal findings of a magistrate judge, magistrate judges are given broad discretion on discovery matters and should not be overruled absent a showing of clear abuse of discretion."). Motions to reconsider are committed to the discretion of the trial court. Rodgers v. Watt, 722 F.2d 456, 460 (9th Cir. 1983).

III. Discussion

A. Mr. Woolfson's Methodology For His Original Expert Report

Judge Thurston outlined the many problems with Mr. Woolfson's original analysis contained in his expert report:

Mr. Woolfson fails to adequately explain why he took certain actions, i.e. excluding certain 'pay types' such as 'make boxes' or to outline the assumptions he made in his tabulations. For example, he asserts that Defendant is flat wrong that there are no 'purely piece rate workers' - he concludes this is the case because he finds pay codes without associated hours - and that it has wrongly described its pay codes....Perhaps most damning is Mr. Woolfson's admission that, 'So there's certain things that I was aware of and how to use them, but the description here and the way that I was told to use it is different than what I had been led to understand it to mean.' Therefore, considering Woolfson's admitted error regarding the pay code 031, his failure to conduct any expert investigation or analysis into the meaning of Defendant's pay codes, his apparent willingness to offer conclusions about ultimate issues, i.e. lack of meal and rest breaks, without adequate foundation and given that he failed to conduct a holistic verification of his results by comparing them against Defendant's payroll register, the Court lacks any confidence in the reliability of Mr. Woolfson's findings.

Doc. 158, September 19, 2011 Order, at 14:10-15:9.

The root of the methodological problem is the fact that Mr. Woolfson relied upon the representations of Plaintiffs' attorneys instead of directly examining any additional materials provided by Sunview. When asked, Woolfson admitted that "I have not seen any transcripts of anything in this case." Woolfson Deposition, at 43:9-10. In fact, he was not aware that Mr. Gallegos had been deposed and was not given the documents he produced. Woolfson Deposition, at 174:24-175:3 and 183:2-7. As part of his deposition, Mr. Gallegos gave to Plaintiffs' attorneys a document which listed certain pay codes and explained their meaning. Woolfson did not learn the content of that document before producing his expert report. Woolfson Deposition, at 176:1-179:2. Based upon the discussion between Defendant's counsel and Mr. Woolfson in his deposition, the court surmises that this list produced by Mr. Gallegos is in the record as Doc. 162, Part 1, Ex. 1. This document is entitled "List Pay Codes" and provides a basic description and explanation for the pay codes 010, 011, 021, 031, 400, 412, and 413. The record reflects that Mr. Woolfson relied upon the representations of Plaintiffs' attorney, Tom Lynch, to understand what several of these pay codes meant. Woolfson Deposition, at 114:7-19 and 145:21-146:7. Mr. Woolfson admitted: "Q. The answer is - who told you how to use pay code 31? A. Oh, okay. Tom Lynch....Q. Who told you how to use pay code 10? Who? A. It's - well, Tom Lynch. Q. Tom Lynch - A. Tom Lynch told me how to use all the pay codes, except they were to apply specifically not to certain job codes." Woolfson Deposition, at 181:18-182:3. Indeed, Mr. Woolfson also admitted that he had to call Tom Lynch and Steve Hernandez, both attorneys for Plaintiffs, during a break in his deposition to learn more about the pay codes. Woolfson Deposition, at 128:14-130:8. At one point, Mr. Woolfson does deny relying on anything but the Payroll Detail, Payroll Register, confidential list of pay codes, and Sunview IT in producing his expert report, but that assertion is contradicted by his other testimony. Woolfson Deposition, at 84:13-88:2. Mr. Woolfson admitted that the deposition transcript of Mr. Gallegos and the list of pay codes he produced would have changed his analysis: "I think that any information ...

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