Josendis v. Wall to Wall Residence Repairs, Inc. , 662 F.3d 1292 ( 2011 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 09-12266 NOVEMBER 17, 2011
JOHN LEY
________________________
CLERK
D. C. Docket No. 08-61175-CV-WJZ
LUIS CARLOS JOSENDIS,
and similarly situated individuals,
Plaintiff-Appellant,
versus
WALL TO WALL RESIDENCE REPAIRS INC.,
a Florida corporation, and,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(November 17, 2011)
Before TJOFLAT and COX, Circuit Judges, and KORMAN,* District Judge.
TJOFLAT, Circuit Judge:
This is a Fair Labor Standards Act case. Luis Carlos Josendis sued his
former employer, Wall to Wall Residence Repairs, Inc.,1 for unpaid overtime and
back wages pursuant to the Fair Labor Standards Act of 1938 (the “FLSA”),2 its
implementing regulations, and Florida law for unpaid overtime and back wages.
Wall to Wall moved to dismiss the complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim for relief. Because Wall to Wall
attached an affidavit and a statement of undisputed facts to its motion, the district
court converted the motion to a motion for summary judgment pursuant to Rule
12(d) and gave the parties “a reasonable opportunity to present all the material that
[was] pertinent to the motion.”3 Josendis did not avail himself of that opportunity
*
Honorable Edward R. Korman, United States District Judge for the Eastern District of New
York, sitting by designation.
1
Josendis also sued Wall to Wall’s co-owners, Jorge Acosta and Eloisa Lim.
2
See 29 U.S.C. § 201 et seq.
3
Federal Rule of Civil Procedure 12(d) states, in pertinent part:
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12(d).
2
until after the date the district court set for the completion of discovery, when he
served Wall to Wall with a battery of discovery requests. Wall to Wall objected to
this discovery and moved the court for a protective order under Rule 26(c).4 The
court granted Josendis leave to engage in discovery limited to the issues presented
4
Federal Rule of Civil Procedure 26(c) states:
(1) In General. A party or any person from whom discovery is sought may move
for a protective order in the court where the action is pending—or as an
alternative on matters relating to a deposition, in the court for the district where
the deposition will be taken. The motion must include a certification that the
movant has in good faith conferred or attempted to confer with other affected
parties in an effort to resolve the dispute without court action. The court may, for
good cause, issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including one or more of
the following:
(A) forbidding the disclosure or discovery;
(B) specifying terms, including time and place, for the disclosure or discovery;
(C) prescribing a discovery method other than the one selected by the party
seeking discovery;
(D) forbidding inquiry into certain matters, or limiting the scope of disclosure or
discovery to certain matters;
(E) designating the persons who may be present while the discovery is conducted;
(F) requiring that a deposition be sealed and opened only on court order;
(G) requiring that a trade secret or other confidential research, development, or
commercial information not be revealed or be revealed only in a specified way;
and
(H) requiring that the parties simultaneously file specified documents or
information in sealed envelopes, to be opened as the court directs.
Fed. R. Civ. P. 26(c).
3
in Wall to Wall’s motion, and sanctioned Josendis’s attorney pursuant to Rule
37(a)(5)(B) for abusing the discovery process.5
At the close of this limited discovery, the court granted Wall to Wall
summary judgment on Josendis’s FLSA claim and dismissed his state law claim
without prejudice. Josendis now appeals that ruling. He contends that material
issues of fact precluded summary judgment and, alternatively, that, had the district
court not limited his discovery as it did, he would have uncovered evidence that
would have created material issues of fact. Josendis also appeals the district
court’s sanctions order against his attorney.
This opinion is organized as follows. Part I describes the FLSA, the facts
germane to Josendis’s FLSA claim, and the proceedings in the district court. Part
II addresses the limited discovery the district court afforded Josendis after the time
for discovery had closed, reviews the court’s sanctions order, and concludes that
5
Federal Rule of Civil Procedure 37(a)(5)(B) states:
If the Motion Is Denied. If the motion is denied, the court may issue any
protective order authorized under Rule 26(c) and must, after giving an
opportunity to be heard, require the movant, the attorney filing the motion, or
both to pay the party or deponent who opposed the motion its reasonable
expenses incurred in opposing the motion, including attorney’s fees. But the court
must not order this payment if the motion was substantially justified or other
circumstances make an award of expenses unjust.
Fed. R. Civ. P. 37(a)(5)(B).
4
neither decision constituted an abuse of discretion. Part III deals with and rejects
Josendis’s challenges to the summary judgment. Part IV concludes.
I.
A.
The FLSA mandates that an “employee[]” who is “engaged in interstate
commerce” must be paid an overtime wage of one and one-half times his regular
rate for all hours he works in excess of forty hours per week. 29 U.S.C. § 207(a).6
If a covered employee is not paid the statutory wage, the FLSA creates for that
employee a private cause of action against his employer for the recovery of unpaid
overtime wages and back pay. Id. § 216(b).7
6
The relevant provision states:
Except as otherwise provided in this section, no employer shall employ any of his
employees who in any workweek is engaged in commerce or in the production of
goods for commerce, or is employed in an enterprise engaged in commerce or in
the production of goods for commerce, for a workweek longer than forty hours
unless such employee receives compensation for his employment in excess of the
hours above specified at a rate not less than one and one-half times the regular
rate at which he is employed.
29 U.S.C. § 207(a)(1).
7
Section 216(b) provides in relevant part, “[a]ny employer who violates the provisions of [29
U.S.C. § 207] shall be liable to the employee or employees affected in the amount of . . . their
unpaid overtime compensation . . . and in an additional equal amount as liquidated damages.”
29 U.S.C. § 216(b).
5
As defined by the statute, and subject to certain exceptions not at issue here,
an employee is “any individual employed by an employer.” Id. § 203(e)(1). The
statutory definition of “employer” is similarly broad; it encompasses both the
employer for whom the employee directly works as well as “any person acting
directly or indirectly in the interests of an employer in relation to an employee.”
Id. § 203(d). We have accordingly held that the FLSA contemplates that a covered
employee may file suit directly against an employer that fails to pay him the
statutory wage, or may make a derivative claim against any person who (1) acts on
behalf of that employer and (2) asserts control over conditions of the employee’s
employment. See Patel v. Wargo, 803 F.2d 632, 637–38 (11th Cir. 1986) (citing
Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983) (explaining that a person
is derivatively liable if he is intimately involved in the day-to-day operations of an
employer that would be directly liable under the FLSA).
In order to be eligible for FLSA overtime, however, an employee must first
demonstrate that he is “covered” by the FLSA. There are two possible types of
FLSA coverage. See, e.g., Ares v. Manuel Diaz Farms, Inc., 318 F.3d 1054, 1056
(11th Cir. 2003) (citing 29 U.S.C. § 207(a)(1)). First, an employee may claim
“individual coverage” if he regularly and “directly participat[es] in the actual
movement of persons or things in interstate commerce.” Thorne v. All Restoration
6
Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006) (citing 29 C.F.R. § 776.23(d)(2)
(2005); 29 C.F.R. § 776.24 (2005)); see also 29 U.S.C. § 207(a)(1) (mandating
time-and-a-half for “employees . . . engaged in [interstate] commerce or in the
production of goods for [interstate] commerce”). Second, an employee is subject
to enterprise coverage if he is “employed in an enterprise engaged in commerce or
in the production of goods for commerce,” 29 U.S.C. § 207(a)(1), where commerce
means “trade, commerce, transportation, transmission, or communication among
the several States or between any State and any place outside thereof,” id. § 203(b),
and an “enterprise” is the activities performed by a person or persons who are (1)
engaged in “related activities,” (2) under “unified operation or common control,”
and (3) have a “common business purpose,” id. § 203(r)(1).
In relevant part, an enterprise is engaged in commerce or in the production
of goods for commerce if it
(i) has employees engaged in commerce or in the production of goods
for commerce, or that has employees handling, selling, or otherwise
working on goods or materials that have been moved in or produced
for commerce by any person; and
(ii) is an enterprise whose annual gross volume of sales made or
business done is not less than $500,000.
Id. § 203(s)(1)(A)(i)–(ii) (emphasis added). Alternatively, enterprise coverage is
available to any employee of an enterprise “engaged in the operation of a hospital
[or] an institution primarily engaged in the care of . . . the aged . . . who [also]
7
reside on the premises of such institution.” Id. § 203(s)(1)(B). An employee may
be subject to either type, or both types, of FLSA coverage. See Ares, 318 F.3d at
1056 (citing 29 U.S.C. § 207(a)(1)).
In aid of that statutory language, the U.S. Department of Labor (the “DOL”)
has issued interpretive regulations pertaining to both individual and enterprise
coverage.8 We defer to those regulations when the statutory language is
ambiguous or the statutory terms are undefined. Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, 467 U.S. 837, 843–45, 104 S. Ct. 2778, 2781–83, 81 L. Ed. 2d
694 (1984) (requiring deference where the statutory language is ambiguous and the
rule-making agency’s regulation is a reasonable interpretation of Congress’s
intent); see also Falken v. Glynn Cnty., Ga., 197 F.3d 1341, 1345–46 (11th Cir.
1999) (deferring to the DOL’s implementing regulation defining “fire protection
activities,” a term left undefined by the FLSA). But we apply the statutory
language as written when it is unambiguous. Chevron, 467 U.S. at 842–43, 104 S.
Ct. at 2781; see also Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A.,
530 U.S. 1, 6, 120 S. Ct. 1942, 1947, 147 L. Ed. 2d 1 (2000) (“[W]hen the statute’s
language is plain, the sole function of the courts—at least where the disposition
8
Congress tasked the DOL with interpreting the terms of the FLSA and issuing regulations
thereunder. See generally 29 U.S.C. § 204 (creating the DOL’s Wage and Hour Division to
administer the substantive provisions of the FLSA).
8
required by the text is not absurd—is to enforce it according to its terms.” (quoting
United States v. Ron Pair Enters., 489 U.S. 235, 241, 109 S. Ct. 1026, 1030, 103 L.
Ed. 2d 290 (1989) (internal quotations marks omitted)). Regulations entitled to
Chevron deference bind us in regard to the ambiguous text only. Chevron, 467
U.S. at 843–45, 104 S. Ct. at 2781–83; cf. Skidmore v. Swift & Co., 323 U.S. 134,
140, 65 S. Ct. 161, 164, 89 L. Ed. 124 (1944) (applying limited deference to
agency interpretations that, “while not controlling upon the courts by reason of
their authority, do constitute a body of experience and informed judgment to which
courts and litigants may properly resort for guidance”); Pugliese v. Pukka Dev.,
Inc., 550 F.3d 1299, 1305 (11th Cir. 2008) (applying Skidmore deference).
One DOL regulation is at issue here, 29 C.F.R. § 776.23, which seeks to
extend enterprise coverage to all employees engaged in construction work that is
“closely or intimately related to the functioning of existing instrumentalities and
channels of interstate commerce or facilities for the production of goods for such
commerce.” Id. at § 776.23(c). The relevant regulatory text reads:
All employees who are employed in connection with construction
work which is closely or intimately related to the functioning of
existing instrumentalities and channels of interstate commerce or
facilities for the production of goods for such commerce are within
the scope of the [FLSA]. Closely or intimately related construction
work includes the maintenance, repair, reconstruction, redesigning,
improvement, replacement, enlargement, or extension of a covered
facility. If the construction project is subject to the [FLSA], all
9
employees who participate in the integrated effort are covered,
including not only those who are engaged in work at the site of
construction such as mechanics, laborers, handymen, truckdrivers,
watchmen, guards, timekeepers, inspectors, checkers, surveyors,
payroll workers, and repair men, but also office, clerical,
bookkeeping, auditing, promotional, drafting, engineering, custodial
and stock room employees.
Id. (footnote omitted).9 Under § 776.23(c), then, any employee who takes part in
qualifying construction work, or is employed by an employer engaged in such
work, would ostensibly be entitled to enforce the FLSA’s wage provisions and
collect FLSA mandated overtime—so long as § 776.23 is given the force of law.
The present appeal requires us to interpret the FLSA’s individual and
enterprise coverage provisions in light of the following operative facts and also to
decide whether § 776.23(c) is deserving of Chevron deference. Now, having laid
the statutory and regulatory groundwork for this appeal, we turn to those facts.
B.
Wall to Wall, formerly a Florida corporation engaged in the home
restoration and repair business,10 employed Josendis from November 8, 2006, until
February 11, 2008—excepting two months in 2007 when Josendis worked for a
9
Section 776.23(c) approximates language that was once found in 29 U.S.C. § 203(s)(4) and
that subjected employees engaged in construction or reconstruction to enterprise coverage. See,
e.g,, Ferguson v. Neighborhood Hous. Servs. of Cleveland, Inc., 780 F.2d 549, 554 (6th Cir.
1986). That language, however, is no longer a part of the FLSA.
10
Wall to Wall is no longer an active corporation under Florida law.
10
separate construction enterprise. Jorge Acosta and Eloisa Lim, both codefendants,
managed Wall to Wall and its employees and were directly involved in all of Wall
to Wall’s business activities during that period.
While working for Wall to Wall, Josendis was assigned to various
construction projects in and around southern Florida. His duties included
plumbing and tiling; window, door, floor, and kitchen installation; and stucco and
granite work. He worked more than forty hours a week and earned approximately
$120 per day. Wall to Wall did not, however, pay Josendis the overtime rate
mandated by 29 U.S.C. § 207(a) for covered employees.
C.
Josendis ceased working for Wall to Wall on February 11, 2008, after he got
into a dispute over back wages he claimed that Wall to Wall still owed to him. On
July 25, 2008, he brought this lawsuit against Wall to Wall, Acosta, and Lim
(collectively “Wall to Wall”),11 seeking back wages, unpaid overtime, liquidated
damages, prejudgment interest, attorney’s fees, and litigation expenses under the
FLSA in Count I, and Fla. Stat. § 448.08, in Count II.12
11
See supra note 1.
12
The district court had jurisdiction over Count I pursuant to 29 U.S.C. § 217. The court had
jurisdiction over Count II pursuant to 28 U.S.C. § 1367.
Josendis sued on behalf of himself and other similarly situated Wall to Wall employees
and former employees. His complaint contained no class allegations, however, and presumably
11
Wall to Wall responded on September 3, 2008, with a motion to dismiss the
complaint for failure to state a claim for relief, see Fed. R. Civ. P. 12(b)(6), a
statement of undisputed facts, an affidavit provided by Acosta, and a verified copy
of Wall to Wall’s 2006 federal tax return.13 Wall to Wall argued that the complaint
should be dismissed because its allegations—coupled with the statement of
undisputed facts, the affidavit, and the federal tax return—showed that Josendis
was ineligible for overtime compensation under the FLSA via individual coverage
and enterprise coverage. As Acosta stated in his affidavit, (1) Josendis had not
engaged in interstate commerce as a Wall to Wall employee, and (2) the $249,719
of income reported in the federal tax return evidenced that Wall to Wall had not
satisfied the gross receipts threshold of $500,000 in any of the years in which Wall
to Wall had employed Josendis.14 In its motion to dismiss, Wall to Wall asked the
for that reason he never sought class certification. See generally Fed. R. Civ. P. 23 (pertaining to
class actions). We therefore consider Josendis’s case as presenting only his individual claims.
13
Because Acosta and Lim were only derivatively liable, Wall to Wall’s motion asked the court
to dismiss the FLSA claim against them as well.
14
Wall to Wall also raised an alternative theory in support of its motion to dismiss. In his
affidavit, Acosta explained that Josendis was an illegal alien and that Wall to Wall had fired him
immediately after Acosta learned about his immigration status. Wall to Wall suggested that, as
an illegal alien, Josendis was not entitled to bring a FLSA claim.
In that regard, Wall to Wall claimed that the Supreme Court’s decision in Hoffman
Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 122 S. Ct. 1275, 152 L. Ed. 2d 271 (2002),
which held that an illegal alien fired in violation of the National Labor Relations Act, 29 U.S.C.
§ 151 et seq., was not entitled to an equitable award of back pay for the period during which he
was unlawfully deprived of his rights to work, implicitly overruled our decision in Patel v.
Quality Inn South, 846 F.2d 700 (11th Cir. 1988), which explicitly held that an illegal alien
12
district court to treat the motion as a motion for summary judgment, see Fed. R.
Civ. P. 12(d), to the extent the court looked beyond the four corners of the
complaint to reach the merits of its motion.
On September 19, 2008, Josendis filed a Verified Amended Complaint (the
“VAC”).15 The VAC presented the district court with additional factual allegations
not found in his original complaint. In particular, the VAC stated that: (1) Josendis
performed at least fifteen kitchen replacements for Wall to Wall, at a minimum
average value of $8,000 apiece, in 2007; (2) he, like all of Wall to Wall’s other
employees, worked on multiple jobs and at multiple job sites while employed by
Wall to Wall; (3) in 2007, in addition to its regular remodeling work, Wall to Wall
had also been hired to renovate twenty to thirty apartments at the Miami Jewish
Home and Hospital for the Aged (the “Miami Home”); (4) Wall to Wall earned
approximately $56,000 for one of the many jobs it completed in 2007; and (5)
covered by the FLSA could recover unpaid back wages and overtime for work he actually
performed. We hold that the district court properly granted summary judgment for Wall to Wall
on Josendis’s claims to individual and enterprise coverage, and thus we do not address this
alternative theory.
15
The VAC is the operative pleading in this appeal. See Fed. R. Civ. P. 15(a)(1)(B) (permitting
a party to amend his pleading as of right within twenty-one days of a responsive motion brought
in accordance with Fed. R. Civ. P. 12(b)). Because the VAC was a verified pleading bearing
Josendis’s signature, Josendis swore, under penalty of perjury, that the factual allegations
contained therein were true and correct to the best of his knowledge and belief. With minor
exceptions not pertinent here, however, the VAC did not indicate which of the factual allegations
were based on Josendis’s personal knowledge, which were based on otherwise admissible
evidence or testimony, and which were based on inadmissible hearsay or conjecture.
13
management provided Wall to Wall employees with the use of approximately ten
company-owned vehicles as transportation to and from job sites.
The VAC also alleged that Acosta had regularly asked Wall to Wall’s clients
to make out checks payable directly to him or Lim instead of to Wall to Wall in
exchange for not charging those clients sales tax, inferring that Wall to Wall’s
2006 federal tax return had underreported the gross sales for that year and that
Wall to Wall’s 2007 and 2008 returns would likewise underreport the gross
receipts. Extrapolating from the number of employees working for Wall to Wall,
the number of jobs completed by Wall to Wall, the expenses sustained by Wall to
Wall in completing those jobs, and Josendis’s knowledge of Wall to Wall’s
average prices for specific jobs, the VAC alleged that Josendis’s “belie[f]” was
that Wall to Wall had gross sales in excess of $500,000 in both 2007 and 2008.
On October 3, 2008, Wall to Wall moved the district court to dismiss the
VAC for failure to state a claim for relief or, alternatively, for summary judgment
on the same grounds asserted in its September 3 motion: Josendis was ineligible
for overtime compensation under the FLSA via individual and enterprise coverage.
Josendis filed a memorandum in opposition to the motion on October 24, 2008. In
the memorandum, he stated that he could not adequately defend against the motion,
14
if treated as a motion for summary judgment, without additional time to complete
the discovery he thought would be necessary to establish FLSA coverage.
Despite the memorandum’s statement that additional time was needed for
discovery, Josendis did nothing to obtain this necessary information while Wall to
Wall’s motion was pending. In fact, nothing happened in the case until January 16,
2009, when the district court entered an order stating that it was treating Wall to
Wall’s motion as a motion for summary judgment pursuant to Federal Rule of
Civil Procedure 12(d) and granting Josendis “additional time for discovery.” The
order required him to “propound [all] discovery requests seeking information
necessary to defend against the instant Motion for Summary Judgment” by noon
on February 3, 2009. The court gave Wall to Wall fifteen days to respond to such
discovery requests and Josendis ten additional days to, if necessary, supplement his
memorandum in opposition to the motion.
When the clock struck noon on February 3, Josendis had not noticed the
taking of any depositions or served Wall to Wall with any interrogatories or
requests for admissions or production of documents. Nonetheless, approximately
two hours after the court-imposed deadline had passed, Josendis faxed to defense
counsel three sets of extensive discovery requests and a “notice” that he intended
15
to serve a subpoena on the Miami Home to obtain all of the financial records
relating to its dealings with Wall to Wall.
The first set of discovery requests, sent at approximately 2:09 p.m.,
requested the production of twenty-three different categories of documents,
covering the entire field of Wall to Wall’s operations. Josendis’s second set of
requests, faxed forty-four minutes later, sought thirteen different admissions, most
of which pertained to Wall to Wall’s vehicles, equipment, employees, job history,
and work at the Miami Home. His third set of requests, sent around 3:43 p.m.,
included nine interrogatories pertaining to Wall to Wall’s customers, employees,
and accounting practices.
The next day, February 4, 2009, Josendis moved the district court nunc pro
tunc to extend the discovery period by four hours, i.e., to permit the discovery he
had launched the afternoon of February 3, or, alternatively, for leave to conduct
limited discovery pertaining only to Wall to Wall’s work at the Miami Home.
Josendis sought discovery of the work done at the Miami Home based on 29
C.F.R. § 776.23. To summarize, Josendis claimed that, because the Miami Home
was a hospital or institution for the care of the aged, it was an enterprise involved
in interstate commerce for purposes of FLSA coverage, 29 U.S.C. § 203(s)(1)(B),
and that evidence of Wall to Wall’s work at the Miami Home would accordingly
16
help him demonstrate that he was subject to enterprise coverage by virtue of 29
C.F.R. § 776.23(c).16 The Miami Home’s financial records could also have helped
Josendis to establish that Wall to Wall had at least $500,000 in gross sales in 2007.
Wall to Wall opposed Josendis’s motion on two grounds. First, the requests,
including the subpoena Josendis intended to have issued to Miami Homes, were
untimely.17 Second, it argued that the requests were unnecessarily voluminous
insofar as Josendis sought information that was not necessary to challenge the
basis of Wall to Wall’s motion for summary judgment—that Josendis could not
establish FLSA coverage.
16
To be more specific, Josendis reasoned that (1) the Miami Home qualified as a hospital or
home for the aged and was, accordingly, a covered enterprise pursuant to 29 U.S.C.
§ 203(s)(1)(B); (2) by virtue of his work at the Miami home, he was, therefore, “employed in
connection with construction work which [was] closely or intimately related to the functioning
of [an] existing” covered enterprise, 29 C.F.R. § 776.23(c); (3) a covered enterprise is the
functional equivalent of an “instrumentalit[y] and channel[] of interstate commerce or [a]
facilit[y] for the production of goods for [interstate] commerce,” id.; and (4) consequently,
§ 776.23(c) demanded that he be treated as “within the scope” of the FLSA’s individual
coverage protections, id. We address the merits of this syllogism in part III.C, infra.
17
In addition to claiming that Josendis’s requests were untimely, Wall to Wall also argued that,
because the parties to litigation must give each other prior notice before serving a subpoena on a
third party, Josendis should have given it notice of his intent to serve a subpoena on the Miami
Home three full days before the noon deadline on February 3, 2009. See Fed. R. Civ. P. 45(b)(1)
(mandating that, if a subpoena “commands the production of documents, electronically stored
information, or tangible things or the inspection of premises before trial, then before it is served,
a notice must be served on each party”). Wall to Wall further contended that, in any event, the
court’s January 16, 2009 order did not authorize Josendis to subpoena third parties and that the
proposed subpoena was improper on that ground.
17
The court granted in part and denied in part Josendis’s nunc pro tunc motion
and denied Josendis’s request for leave to subpoena the Miami Home’s records.
To the extent the court found Josendis’s discovery requests germane to Wall to
Wall’s motion, it gave him leave to propound such requests. The court, however,
tailored certain requests to the penultimate issues before the court: individual
coverage and enterprise coverage. The court denied the motion as to the remainder
of Josendis’s requests, describing those requests as “overbroad and
irrelevant”—meaning they did not pertain to Josendis’s or Wall to Wall’s
involvement in interstate commerce or to the amount of Wall to Wall’s gross
receipts—or as “redundant.”18
The district court then construed Wall to Wall’s opposition to the discovery
demands Josendis made after the February 3 deadline as a motion for a Rule 26(c)
protective order with respect to “overbroad and irrelevant” or “redundant” requests
the court disallowed.19 The court granted the protective order and, based on the
18
In all, the court granted Josendis’s motion for additional time to serve Wall to Wall with five
of twenty-three requests for production and limited the scope of two additional requests to
certain documents pertaining to out-of-state transactions. The court approved six of thirteen
requests for admission and “disallowed” the remaining requests for admission as “overbroad and
irrelevant for purposes of responding to [the motion for summary judgment.]” The court finally
approved three of nine interrogatories and limited an additional interrogatory seeking out-of-
state addresses. It denied all of Josendis’s other requests.
19
Rule 26(c) states, in pertinent part:
(1) In General. A party . . . from whom discovery is sought may move for a
18
scattershot nature of Josendis’s discovery demands, concluded that sanctions
against Josendis’s attorney, Gary A. Costales, were called for. As the court stated,
“[i]t is obvious that the drafting of [Josendis’s] instant discovery requests was done
without any effort to constrain them within the bounds set for discovery at this
time: responding to [Wall to Wall’s summary judgment motion].” The court
subsequently ordered Costales to pay Wall to Wall $330 in attorney’s fees. See
Fed. R. Civ. P. 26(c)(3), 37(a)(5).20
Wall to Wall thereafter complied with the court’s instructions and
completed, to the best of its ability, the ordered discovery.21 On March 5, 2009,
protective order in the court where the action is pending . . . . The court may, for
good cause, issue an order to protect a party . . . from annoyance, embarrassment,
oppression, or undue burden or expense, including one or more of the following:
(A) forbidding the disclosure or discovery;
....
(C) prescribing a discovery method other than the one selected by the party
seeking discovery; [and]
(D) forbidding inquiry into certain matters, or limiting the scope of disclosure or
discovery to certain matters[.]
20
Fed. R. Civ. P. 26(c)(3), concerning protective orders, permits a court to award expenses to
any party who prevails in obtaining a protective order pursuant to Rule 37(a)(5), concerning
motions to compel. In turn, Fed. R. Civ. P. 37(a)(5)(B) and (C), concerning motions to compel
that are denied or that are granted in part and denied in part, respectively, authorizes any court
who orders a protective order in response to a motion to compel to “apportion the reasonable
expenses” associated with obtaining the protective order.
21
Wall to Wall, however, was unable to provide Josendis with any of its financial documents
from 2006, 2007, or 2008, save for the 2006 tax return and a financial summary prepared by
Acosta in preparation for a separate FLSA lawsuit previously filed against Wall to Wall. At
some point after the initiation of Josendis’s suit, Wall to Wall had been evicted from its office
for not paying rent. Once the property owner reentered the premises, Wall to Wall’s business
records were placed on the street. Neither Acosta nor Lim rescued those records, and they were
19
after reviewing the discovery Wall to Wall provided, Josendis filed a supplement
to his opposition to the motion for summary judgment. The supplement
incorporated Josendis’s earlier response to the motion and argued that there was a
genuine issue of material fact under both theories of FLSA liability: individual and
enterprise coverage. As to the former theory, Josendis argued that his use of Wall
to Wall’s vehicles and the Global Positioning Satellite (“GPS”) units installed in
them presented a material issue of fact regarding individual coverage. As to the
latter theory, Josendis argued that issues of fact remained as to whether (1) Wall to
Wall had two or more employees handling, selling, or otherwise working on goods
or materials that had moved in or had been produced for commerce and (2) Wall to
Wall grossed more than $500,000 per year in 2006, 2007, or 2008. He also argued
that 29 C.F.R. § 776.23(c) precluded summary judgment on his regulatory claim of
enterprise coverage.22
Josendis found support for these arguments in the factual allegations of the
VAC,23 the discovery Wall to Wall provided, the affidavits of Troy Allen Whitten
lost forever.
22
In 2010 Fed. R. Civ. P. 56 was reorganized and altered. The district court’s citation to Rule
Fed. R. Civ. P. 56(e) is now Fed. R. Civ. P. 56(c)(4). The changes to the rules do not affect our
analysis in any way. For clarity, we will refer to Fed. R. Civ. P. 56 as it appeared when the
district court ruled on the motion for summary judgment.
23
At the summary judgment stage, a verified pleading like the VAC may also serve as an
affidavit—thereby providing evidence of the factual allegations contained therein—so long as it
20
and Wilard Dulanto, and the inferences reasonably drawn from this body of
evidence. In their affidavits, Whitten and Dulanto stated that they had witnessed
Wall to Wall customers pay Acosta, Lim, or individuals cooperating with Acosta
and Lim, for work done by Wall to Wall employees. Whitten added that, in a
conversation with Acosta, Acosta told him that Wall to Wall stood to make
$13,000 to $14,000 per apartment remodeled at the Miami Home and that Wall to
Wall might be asked to remodel all of Miami Homes’ 101 apartments. Whitten
said that he “believed” that in 2007 and 2008, Wall to Wall had “repaired or
worked on at least thirty-one (31) [of those] apartments.” Dulanto made a similar
statement of belief in his affidavit. Whitten also said that he had witnessed a Wall
to Wall secretary ordering over the internet—from a source she described as being
“outside the State of Florida”—parts for the GPS units installed in each of the
company’s vehicles. Whitten lacked knowledge, though, of where the parts were
actually manufactured, stored, or shipped.
On March 6, the day after filing his supplement, Josendis filed an affidavit
augmenting what Whitten said about the GPS units. In his affidavit, Josendis
conforms to the requirements of Fed. R. Civ. P. 56(e). United States v. Four Parcels of Real
Prop., 941 F.2d 1428, 1444 n.35 (11th Cir. 1991) (explaining that, so long as Rule 56(e)—now
Rule 56(c)(4)—is satisfied, the verified allegations in a complaint are treated as evidence at the
summary judgment stage). As we explain infra, the VAC fails, in large part, to comply with
Rule 56(e)’s personal knowledge requirement and therefore, to the extent of the failure, is not
evidence a court may consider at summary judgment.
21
stated that he “regularly drove company vans which [he] believed were owned by
[Wall to Wall] during the time of [his] employment” in 2006 and 2007, that those
vans were equipped with GPS units, and that he used a GPS unit every day.
The district court granted summary judgment to Wall to Wall on Count I of
the VAC on March 30, 2009. Josendis v. Wall to Wall Residence Repairs, Inc.,
606 F. Supp. 2d 1376 (S.D. Fla. 2009). The court refused to consider many of the
VAC’s factual allegations because they did not comport with Rule 56(e)’s personal
knowledge requirement;24 two of Josendis’s sworn “facts” were prefaced with the
phrase, “[i]t is believed,” and the rest were qualified by Josendis’s statement that
they were true “to the best of [his] knowledge and belief.” Id. at 1379–80
(emphasis added). After discarding these allegations, all that was left to support
Josendis’s claim of individual coverage were his and Whitten’s affidavit statements
regarding the use of Wall to Wall’s vehicles and GPS units. The court held that
those statements were insufficient as a matter of law to establish individual
coverage because they did not yield a permissible inference that Josendis engaged
in interstate commerce when he used the vehicles or GPS units. Id. at 1383–84.
24
Rule 56(e) states, in pertinent part, that “[a] supporting or opposing affidavit must be made on
personal knowledge, set out facts that would be admissible in evidence, and show that the affiant
is competent to testify on the matters stated.” Fed. R. Civ. P. 56(e)(1) (2009) (amended 2010).
22
The district court also found nothing in the VAC and the affidavit Josendis
attached to his supplemented opposition to Wall to Wall’s motion that called into
question, much less controverted, Acosta’s affidavit statement that Wall to Wall
had not grossed over $500,000 in sales in 2006, 2007, or 2008. Id. at 1380–81.
Because there was no genuine issue of material fact as to that prerequisite for
enterprise coverage, the court held that summary judgment was also warranted on
that theory. Id. at 1381, 1383.
The district court then addressed and discarded Josendis’s regulatory claim
of enterprise coverage. Specifically, the court held that Josendis’s reliance on 29
C.F.R. § 776.23 was misplaced for two reasons: (1) the proof that the Miami Home
was a hospital or home for the aged as described by 29 U.S.C. § 203(s)(1)(B) was
insufficient as a matter of law; and (2) section 776.23(c) was not entitled to
Chevron deference because it concerned an unambiguous section of the FLSA. Id.
at 1381–82. Having reached the foregoing holdings, the court entered a final
judgment in favor of Wall to Wall.25
Josendis now appeals the district court’s ruling. As indicated in the
introduction to this opinion, Josendis submits that material issues of fact precluded
25
The district court issued a separate order dismissing Count II of the VAC. The court reasoned
that, having dismissed the federal claim which gave rise to its subject matter jurisdiction,
dismissal of the state law claim was appropriate in the exercise of its discretion. 28 U.S.C.
§ 1367(c)(3).
23
summary judgment, and that the court would have agreed had it afforded him the
discovery he requested. He also appeals the court’s sanctions ruling against
Costales.26 We turn first to the discovery and sanctions issues, then to the merits of
the summary judgment disposition.
II.
A.
The district court has broad discretion under Federal Rule of Civil Procedure
26 to compel or deny discovery; we therefore review the court’s discovery rulings
for an abuse of that discretion. Sanderlin v. Seminole Tribe of Fla., 243 F.3d 1282,
1285 (11th Cir. 2001). “Discretion means the district court has a ‘range of choice,
and that its decision will not be disturbed as long as it stays within that range and is
not influenced by any mistake of law.’” Betty K Agencies, Ltd. v. M/V Monada,
432 F.3d 1333, 1337 (11th Cir. 2005) (quoting Guideone Elite Ins. Co. v. Old
Cutler Presbyterian Church, Inc., 420 F.3d 1317, 1324 (11th Cir.2005)).
Accordingly, under “the abuse of discretion standard, we will leave undisturbed a
district court’s ruling unless we find that the district court has made a clear error of
judgment, or has applied the wrong legal standard.” Guideone, 420 F.3d at 1325.
Moreover, discovery rulings will not be overturned “unless it is shown that [they]
26
We have jurisdiction over Josendis’s appeal pursuant to 28 U.S.C. § 1291.
24
resulted in substantial harm to the appellant’s case.” Iraola & CIA, S.A. v.
Kimberly-Clark Corp., 325 F.3d 1274, 1286 (11th Cir. 2003) (quoting Carmical v.
Bell Helicopter Textron, Inc., 117 F.3d 490, 493 (11th Cir. 1997) (citation and
internal quotation mark omitted).
First, the district court did not abuse its discretion by denying Josendis’s
request to subpoena the Miami Home for the financial records arising out of its
dealings with Wall to Wall. The court ordered that all discovery requests be
submitted before noon on February 3, 2009. The court therefore had discretion to
grant Wall to Wall a protective order in response to any discovery requests that
were not submitted at or before that deadline. See Fed. R. Civ. P. 26(b) (reserving
for the district courts broad authority to control the scope of discovery). And
though the court had the authority to grant a post hoc extension of the discovery
deadline for good cause, it was under no obligation to do so; in fact, we have often
held that a district court’s decision to hold litigants to the clear terms of its
scheduling orders is not an abuse of discretion. E.g., Bearint ex rel. Bearint v.
Dorell Juvenile Grp., Inc., 389 F.3d 1339, 1348–49 (11th Cir. 2004) (upholding
under an abuse of discretion standard a district court’s decision excluding an expert
report disclosed after the deadline the court had established for its submission).
25
That premise is especially true when, as here, the party who seeks a reprieve
from the court has not yet taken any discovery. Josendis’s original complaint was
filed on July 25, 2008; the discovery deadline was February 3, 2009; and, in
between, Josendis propounded no interrogatories or requests and scheduled no
depositions to obtain evidence that he had to have known would be, by the terms of
his complaint, relevant to his claims. As such, because the district court had no
duty to permit any discovery, its decision to deny Josendis’s subpoena request as
untimely noticed was not an abuse of discretion. See id.; see also Corwin v. Walt
Disney World Co., 475 F.3d 1239, 1249 (11th Cir. 2007) (indicating that a district
court commits an abuse of discretion only where it has clearly acted contrary to the
law or the facts).
Second, the court did not abuse its discretion in denying in part Josendis’s
motion for additional time to begin discovery and granting Wall to Wall a
protective order covering the denied discovery requests—in other words, the court
was within the range of its broad discretion in declaring that the denied requests
were either overbroad, irrelevant, or otherwise redundant. The court had
previously ordered the parties to conduct only that discovery necessary to enable
Josendis to respond to Wall to Wall’s summary judgment motion. The ordered
discovery, then, was intentionally limited by the court to the issues raised in that
26
motion; those issues—individual and enterprise coverage under the
FLSA—defined the contours of permissible discovery. See Fed. R. Civ. P. 12(d)
(requiring district courts to give the parties “a reasonable opportunity to present all
the material that is pertinent to the motion” (emphasis added)). Any discovery
requests that were not directly tied to individual and enterprise coverage
accordingly exceeded the scope of the ordered discovery and, cabined by the
court’s discretion, were subject to denial and the issuance of a protective order.
See Fed. R. Civ. P. 26(b–c); see also Washington v. Brown & Williamson Tobacco
Corp., 959 F.2d 1566, 1570–71 (11th Cir. 1992) (finding no abuse of discretion
when the district court denied discovery requests that were irrelevant to class
certification).
As we explain in more detail below, the court correctly determined that the
denied discovery requests were either outside the scope of its discovery order or
otherwise flawed. At the very least, the court’s decision was within its “range of
choice” allotted under the abuse of discretion standard. See Betty K Agencies, 432
F.3d at 1337. For that reason alone, we must uphold the district court’s decision to
deny in part Josendis’s motion and grant the protective order.
1.
27
The court disallowed the following requests for production in Plaintiff's First
Request for Production to Defendants as “overbroad” or “irrelevant,” Order at 2–3,
Josendis v. Wall to Wall Residence Repairs, Inc., No. 0:08-cv-61175-WJZ (S.D.
Fla. Feb. 5, 2009):
1. Any and all documents that support, evidence, prove or relate to the
allegations made in the [VAC].
2. Any and all documents that support, evidence, prove or relate to
any of [Wall to Wall’s] affirmative defenses.
3. All of the income reporting documents submitted by [Wall to Wall]
to the Internal Revenue Service regarding the Plaintiff for [three
calendar years prior to the filing of Josendis’s original complaint on
July 25, 2008 (the “relevant period of time”)].
4. All of the income reporting documents submitted by [Wall to Wall]
to the Internal Revenue Service regarding all hourly employees who
worked for [Wall to Wall] for the relevant period of time . . . .
5. All of the income reporting documents submitted by [Wall to Wall]
to the Internal Revenue Service regarding all employees who held the
same position or similar position(s) as Plaintiff who worked for [Wall
to Wall] for the relevant period of time . . . .
6. All time sheets, time cards, time records, attendance records and
documents which evidence the hours worked by all employees of
[Wall to Wall] for the relevant period of time.
7. Any and all documents relating to any wage claim and wage and
hour complaint filed by any of [Wall to Wall’s] former or current
employees for alleged violations of the federal and/or state wage-hour
statutes.
....
9. For each pay period commencing on the relevant period of time, all
paychecks, pay reports, pay stubs, computer reports or printouts or
other documents evidencing the amount paid to all employees of
[Wall to Wall] for the relevant period of time.
10. All documents maintained pursuant to . . . 29 C.F.R. § 516.2
[(requiring employers to “maintain and preserve payroll or other
28
records” pertaining to employees covered by the FLSA)] relating to
all employees.
11. All documents evidencing the reporting of the earnings of all
employees of [Wall to Wall] to all third parties, which shall include,
but shall not be limited to, insurance carriers, worker’s compensation
carriers, insurance agents and/or representatives, federal, state and
local taxing authorities and the Florida Unemployment Compensation
Fund.
12. To the extent any part of the remuneration and/or compensation
paid to [Wall to Wall’s] employees was not reflected in their
respective paychecks, produce all documents evidencing the amount,
date and nature and purpose of all such payments.
13. All documents pertaining the [sic] employees named in . . . [the
VAC].
....
15. All documents pertaining to [Wall to Wall’s] work at the kitchen
remodeling projects mentioned in . . . the [VAC].
16. All documents pertaining to vehicles owned or leased by [Wall to
Wall] for [Wall to Wall’s]’ construction or related businesses.
....
21. All documents pertaining to any remodeling or construction work
performed by [Wall to Wall] for the relevant time period.
....
23. All bank records pertaining to [Wall to Wall] for the relevant
period of time.27
27
The district court granted outright Josendis’s nunc pro tunc motion, Order at 2–3, Josendis v.
Wall to Wall Residence Repairs, Inc., No. 0:08-cv-61175-WJZ (S.D. Fla. Feb. 5, 2009) as to the
following requests for production:
8. All records reflecting a summary of the gross income of [Wall to Wall]
including, but not limited to, IRS tax records, bank statements, balance sheets and
records of any financial audit(s).
....
14. All documents pertaining to [Wall to Wall’s]’ work at the Miami Jewish
Home and Hospital, including, but not limited to, bills, contracts, invoices,
permits, vendor receipts, vendor invoices and change orders.
....
17. All documents pertaining to unemployment compensation premiums or other
29
Record, vol. 1, no. 33, Exhibit A at 3–5.
Josendis argues that these requests could be grouped into three categories:
(1) documents in which Wall to Wall reported its income to the federal
government; (2) documents pertaining to the earnings of employees; and (3)
documents concerning Wall to Wall’s past and present jobs. He also suggests that
each of these document categories could have potentially led to the discovery of
admissible evidence, namely circumstantial evidence that Wall to Wall had
$500,000 or more in gross sales in any of the three years in which it employed
amounts paid to the State or reported to the IRS.
18. All documents pertaining to worker’s compensation insurance.
....
22. All documents pertaining to any remodeling or construction work performed
by [Wall to Wall] for any hospital or home for the aged.
Record, vol. 1, no. 33, Exhibit A at 4–5.
We agree that the court properly granted Josendis’s motion in regard to these requests,
which were neither overbroad nor irrelevant to FLSA coverage.
The court also approved two additional production requests, Order at 2, Josendis v. Wall
to Wall Residence Repairs, Inc., No. 0:08-cv-61175-WJZ (S.D. Fla. Feb. 5, 2009), but ordered
that they be narrowly read to pertain only to out-of-state projects and vendors, respectively.
Those two requests were:
19. Copies of all permits pulled or sought by [Wall to Wall] or on behalf of
customers of [Wall to Wall].
20. All receipt, invoices or other documents pertaining to any supplies purchased
by [Wall to Wall].
Record, vol. 1, no. 33, Exhibit A at 5.
Because one of the penultimate issues in this case is whether Wall to Wall engaged in
construction work that crossed state lines, 29 U.S.C. §§ 203(b), 203(s)(1)(A)(i), we see no abuse
of discretion in the limitations the court placed on these requests.
30
Josendis. Presumably, Josendis reasons that, if he could have established that Wall
to Wall’s expenditures had exceeded a certain sum, he could have then argued that
Wall to Wall must have met the statutory threshold for enterprise coverage. And
seeing as he raised the possibility that Acosta had intentionally underreported Wall
to Wall’s income in 2006, Josendis asks that we overrule the district court and
order the court to grant him additional discovery.28
Because the district court accurately characterized the denied requests,
however, we cannot do as he asks. For instance, request 1, which seeks every
document that relates to any of the allegations made in the VAC, was fairly
construed as overbroad. Request 2 was certainly irrelevant, as Wall to Wall never
once raised the possibility of asserting an affirmative defense to Josendis’s claims.
Requests 3 through 6 and 9 through 12 were also arguably irrelevant—they were
aimed at subsidiary questions of how many hours Josendis and his fellow
employees worked and how much they were paid, the answers to which would
28
Josendis further states that he needed additional leeway to complete discovery because Wall
to Wall’s corporate records had been destroyed. See supra note 21. This argument is unavailing.
Josendis could have moved the district court to consider the destruction of Wall to Wall’s
corporate records as a bad faith act of spoilation, see, e.g, Mann v. Taser Int’l, Inc., 588 F.3d
1291, 1310 (11th Cir. 2009) (“In the Eleventh Circuit, ‘an adverse inference is drawn from a
party’s failure to preserve evidence only when the absence of that evidence is predicated on bad
faith.’” (quoting Bashir v. Amtrak, 119 F.3d 929, 931 (11th Cir. 1997) (per curiam)), but he
failed to do so. Absent a finding of spoilation, we cannot hold against Wall to Wall the loss of
its financial records.
31
have little to nothing to do with interstate commerce or Wall to Wall’s gross sales.
Indeed, evidence obtained by virtue of those requests would only have been
relevant if the court eventually found that Josendis was a covered employee under
one type of FLSA coverage and then certified a class encompassing all of Wall to
Wall’s employees.
Furthermore, request 7 was entirely unmoored from issues of individual and
enterprise coverage. Instead, it seeks information relating to potential past
violations of wage-hour statutes, including violations of state laws outside the
scope of the federal wage statute at issue here. And the remaining requests—13,
15, 16, 21, and 23—are all overbroad; each request solicits a broad spectrum of
documents that, at first glance, would include a great number of materials unrelated
to interstate commerce or the measure of Wall to Wall’s sales in any fiscal year.
In that sense, it does not matter that Josendis believes he might have
obtained circumstantial evidence of Wall to Wall’s gross receipts from the
documents he requested. The district court’s denial was not unreasonable based on
the limitations it placed on discovery under Federal Rule of Civil Procedure 12(d)
and its inherent power to control discovery under Rule 26. We will not upset a
district court’s discovery ruling where, as now, its decision was within the realm of
32
reasonable choices allotted to it. See Corwin, 475 F.3d at 1249; Betty K Agencies,
432 F.3d at 1337.
2.
The same is true in regard to the following requests for admissions:
1. [The attached are] pictures of some of the vehicles owned or leased
by . . . [Wall to Wall] . . . at some point during 2005-2008.
2. At any time during 2005–2008, [Wall to Wall] leased more than
five vans or other vehicles for its construction work.
3. At any time during 2005–2008, [Wall to Wall] leased more than
eight vans or other vehicles for its construction work.
4. At any time during 2005–2008, [Wall to Wall] lease or leased [sic]
more than ten vans or other vehicles for its construction work.
5. At any time during 2005–2008, [Wall to Wall] leased at least one
other vehicle for its construction work.
....
12. [Wall to Wall] remodeled at least fifteen . . . kitchens during 2008.
13. [Wall to Wall] remodeled at least fifteen . . . kitchens during
2007.29
29
By way of contrast to the denied requests for admissions, the court granted Josendis’s motion
for additional time as to the following requests, Order at 3, Josendis v. Wall to Wall Residence
Repairs, Inc., No. 0:08-cv-61175-WJZ (S.D. Fla. Feb. 5, 2009), all of which were on point and
relevant to the question of enterprise coverage:
6. [Wall to Wall] performed work for the Miami Jewish Home and Hospital at
some point during 2005–2008.
7.[Wall to Wall] performed work for the Miami Jewish Home and Hospital
located at 5200 N.E. 2nd Avenue at some point during 2005–2008.
8. Plaintiff performed work on behalf of [Wall to Wall] at the Miami Jewish
Home and Hospital.
9. [Wall to Wall] employed more than fifteen (15) employees in 2007.
10. [Wall to Wall] employed more than fifteen (15) independent contractors in
2007.
11. [Wall to Wall] was paid more than fifty-thousand dollars ($50,000) for its
work at the Miami Jewish Home.
33
Record, vol. 1, no. 33, Exhibit C at 1–2.
The district court denied these requests as either “overbroad” or “irrelevant.”
Order at 3, Josendis v. Wall to Wall Residence Repairs, Inc., No. 0: 08-cv-61175-
WJZ (S.D. Fla. Feb. 5, 2009). Josendis again claims, however, that had Wall to
Wall been compelled to admit the foregoing facts he could have eventually proved
that Wall to Wall’s gross receipts were in excess of the $500,000 statutory
threshold. Yet again we see no error in the court’s characterizations of these
requests. Requests 1 through 5 all deal with the vehicles Wall to Wall provided to
its employees for their use in traveling to and from job sites. But any connection
between Wall to Wall’s decision to lease vehicles and its gross receipts was, at
best, tenuous.30 The court, then, made a permissible choice in denying Josendis’s
motion to requests 1 through 5.
Record, vol. 1, no. 33, Exhibit C at 2.
30
Presumably, Josendis’s position is as follows: Wall to Wall could not have remained in
business for long if it outspent its earnings, and if Josendis could establish how much Wall to
Wall had spent on its vehicles, Josendis could assume that Wall to Wall had, at the very least,
earned that amount during the relevant time period.
There were two problems with that reasoning. First, earnings and spending are only
loosely correlated; an enterprise can outspend its earnings in one year if that enterprise had a
surplus in a previous year, and it could also borrow against projected future earnings to make up
for a loss in the present year. Second, and more concretely, Wall to Wall actually failed, so it
can be inferred that Wall to Wall actually spent more than it earned. Accordingly, even if
Josendis were able to get the information he requested, he would still be unable to establish with
any certainty—that is, beyond mere speculation—that Wall to Wall’s expenditures bore any
relationship to its earnings. As a result, the district court did not abuse its discretion when it
denied Josendis the opportunity to obtain such circumstantial evidence.
34
Neither did the court abuse its discretion in deeming requests 12 and 13,
both of which pertained to the number of kitchen renovations Wall to Wall
employees performed during Josendis’s employment, irrelevant to the question of
FLSA coverage. The issue was not whether Wall to Wall actually performed
remodeling work, but whether Wall to Wall had grossed $500,000 or more in sales
per year as a result of that work. For that reason, the court’s decision on requests
12 and 13 was an acceptable exercise of its discretion. See Corwin, 475 F.3d at
1249; Betty K Agencies, 432 F.3d at 1337.
3.
Finally, the district court did not abuse its discretion in denying Josendis’s
motion to compel as applied to the following interrogatories:
2. Please list the names of all businesses for which [Wall to Wall]
performed any work, or provided services to, at any time between
2005–2008.
....
5. Has [Wall to Wall] ever leased or purchased any vehicles, or has
some third party (or either individual Defendant) leased or purchased
any vehicle for the use of [Wall to Wall]. If so, please state the make,
model and year of the vehicle, and the dates owned or leased.
6. Please provide the last known names, addresses and phone numbers
for all of the individuals referenced in Plaintiff’s complaint and
alleged to be current or former employees of [Wall to Wall].
7. Provide the names, last known addresses and telephone numbers of
all employees of [Wall to Wall] who worked for [Wall to Wall] at any
time during the three years preceding the time that Plaintiff’s
Complaint was filed.
35
8. State the name, address and telephone number of all Certified
Public Accounting firms, accounts, accounting services, bookkeeping
services and payroll services who provided services to [Wall to Wall]
during the relevant period of time and include the name of each
individual accountant or bookkeeper who performed such services if
the Certified Public Accounting firm, accounting firm or bookkeeping
firm is or was a partnership, corporation or professional association.31
Record, vol. 1, no. 33, Exhibit B at 5, 8–11.
The court denied Josendis’s motion to compel as to each of these
interrogatories because they were either overbroad, irrelevant, or “redundant to
other discovery requests already allowed.” The court was correct that the denied
interrogatories were not specifically tailored to the issues raised in Wall to Wall’s
summary judgment motion. Interrogatories 1, 2, and 5, for example, were
31
The district court granted Josendis’s nunc pro tunc motion as to interrogatories 3, 4, and 9.
Order at 3, Josendis v. Wall to Wall Residence Repairs, Inc., No. 0:08-cv-61175-WJZ (S.D. Fla.
Feb. 5, 2009). They read as follows:
3. Please list the type of businesses for which [Wall to Wall] performed any work,
or provided services to, at any time between 2005–2008.
4. For any address or business listed in response to Interrogatories 1 through 3,
please state whether Plaintiff performed any work for any such business or
residences, and if so, which ones.
....
9. Please state the name and job title of the person(s) affirming these
interrogatories.
Record, vol. 1, no. 33, Exhibit B at 6–7, 12.
The court also permitted Josendis to request, in interrogatory 1, that Wall to Wall provide
“all addresses of all construction or remodeling jobs performed by [Wall to Wall] from
2005–2008,” but limited the scope of that request to “all addresses for construction or
remodeling jobs outside the State of Florida.” Id. As before, we find no abuse of discretion in
the court’s limitation. See supra note 27.
36
overbroad and irrelevant based on our prior discussion. Interrogatories 1 and 2
were also redundant based on the district court’s decision to compel Wall to Wall
to respond in limited fashion to interrogatory 1, which requested that Wall to Wall
provide the addresses of all of its construction or remodeling jobs during the
relevant time period, and to interrogatories 3 and 4, which requested that Wall to
Wall list the clients for whom Wall to Wall and/or Josendis had performed any
work between 2005 and 2008.
Interrogatories 6 and 7, which again sought information about other Wall to
Wall employees employed at the same time as Josendis, were irrelevant for the
same reasons that the just-discussed requests were irrelevant. Also, interrogatory
8, concerning Wall to Wall’s accounting practices, was redundant based on the
court’s prior decision to compel Wall to Wall to produce “[a]ll records reflecting a
summary of the gross income of [Wall to Wall] including, but not limited to, IRS
tax records, bank statements, balance sheets and records of any financial
audit(s).”32
Ultimately, then, we find nothing in the record to indicate that the district
court abused its discretion in denying Josendis’ motion to compel. As applied to
the above requests and interrogatories, the court’s order denying the motion was
32
See supra note 31.
37
within the bounds of reason and the law, and we will not disturb it. See Corwin,
475 F.3d at 1249; Betty K Agencies, 432 F.3d at 1337. We now turn to the
question of sanctions.
B.
“[T]he standard of review for an appellate court in considering an appeal of
sanctions under [Federal Rule of Civil Procedure] 37 is sharply limited to a search
for abuse of discretion and a determination that the findings of the trial court are
fully supported by the record.” Carlucci v. Piper Aircraft Corp., 775 F.2d 1440,
1447 (11th Cir. 1985) (internal quotation marks omitted). A district court abuses
its discretion only when it misapplies the law or bases its decision on findings of
fact that are clearly erroneous. Mincey v. Head, 206 F.3d 1106, 1137 n.69 (11th
Cir. 2000). Therefore, we will not reverse the imposition of sanctions under Rule
37 unless we are “left with a definite and firm conviction that the court below
committed a clear error of judgment in the conclusion it reached upon a weighing
of relevant factors.” Dorey v. Dorey, 609 F.2d 1128, 1135–36 (5th Cir. 1980)
(internal quotation marks omitted) (quoting Wilson v. Volkswagen of Am., Inc.,
561 F.2d 494, 506 (4th Cir. 1977)).33
33
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.
38
A district court may award sanctions under Rule 37(a)(5)(B) only if, upon
considering a Rule 26(c) motion for a protective order set against a Rule 37(a)
motion to compel discovery, the court (1) denies the motion to compel because it
was not “substantially justified,” and (2) issues the protective order.34 Fed. R. Civ.
P. 37(a)(5)(B). In that case, unless “other circumstances make an award of
expenses unjust,” the court may award the prevailing party the “reasonable
expenses incurred in opposing the motion” to compel, including attorney’s fees.
Id. Those sanctions may issue against the party seeking discovery, that party’s
attorney, or both. Id. Rule 37(a)(5)(C) similarly permits a court to “apportion the
reasonable expenses” incurred in opposing a motion to compel if the court denies
in part and grants in part a party’s motion to compel.
In the context of these two rules, a motion to compel is “substantially
justified” so long as “there is a genuine dispute, or if reasonable people could differ
as to [the appropriateness of the contested action].” Pierce v. Underwood, 487
U.S. 552, 565, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988) (alteration in
original) (citations and internal quotation marks omitted) (comparing Rule 37’s
34
Federal Rule of Civil Procedure 37(a)(5)(B) states that a district court “must not order” the
payment of attorney’s fees after denying a motion to compel if the party moving to compel
discovery was “substantially justified” in making the requests or if “other circumstances make an
award of expenses unjust.” Thus, if a motion to compel is “substantially justified,” sanctions
cannot issue. Fed. R. Civ. P. 37(a)(5)(B).
39
“substantially justified” language to a similar provision in the Equal Access to
Justice Act, 28 U.S.C. § 2412(d)(1)(A)). Thus, as would be expected, the award of
sanctions under Rule 37(a)(5) turns on the specifics of each individual case.
Here, the district court awarded $330, the amount of attorney’s fees incurred
by Wall to Wall in opposing Josendis’s post-deadline discovery demands, in the
form of sanctions against Costales. The court did so only after finding that
Costales had “obvious[ly]” drafted his discovery requests “without any effort to
constrain them within the bounds set for discovery” by the court. Based on its
impression of Costales’s work, the district court then determined that the requests
were “not substantially justified” in light of the limitations imposed. Costales now
argues that the court abused its discretion in imposing sanctions because the
discovery requests should not have been denied or, alternatively, were made in
good faith, as the court’s discovery order did not specifically indicate how far into
the evidence it would allow Josendis to reach in opposing summary judgment.
Costales also argues that his service as a member of the federal bar, during which
time he had only once been sanctioned prior to this controversy, counsels against
the imposition of sanctions in this case.
The record, however, fully supports the district court’s holding that the
denied discovery requests were not “substantially justified.” As we previously
40
explained, the court did not err in deeming those requests overbroad, irrelevant, or
redundant. Neither do we believe that the district court’s finding that reasonable
people could not differ as to the appropriateness of the denied requests was
“clearly erroneous,” Mincey, 206 F.3d at 1137 n.69, or a “clear error of judgment,”
Dorey, 609 F.2d at 1136. Moreover, although we laud Costales for his prior
service, past good behavior is no defense against present misconduct.
Accordingly, we uphold the court’s imposition of sanctions against Costales and
proceed to discuss the appropriateness of the court’s order granting summary
judgment to Wall to Wall.
III.
We review a district court’s grant of summary judgment de novo and apply
the same legal standards as the district court, “construing the facts and drawing all
reasonable inferences therefrom in the light most favorable to the non-moving
party.” Centurion Air Cargo, Inc. v. United Parcel Serv. Co., 420 F.3d 1146, 1149
(11th Cir. 2005). We affirm a district court’s grant of summary judgment when the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(c) (2009) (amended 2010).
41
The party moving for summary judgment “bears the initial responsibility of
informing the district court of the basis for its motion.” Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Once the
moving party makes the required showing, the burden shifts to the non-moving
party to rebut that showing by producing affidavits or other relevant and
admissible evidence beyond the pleadings. Id. at 324, 106 S. Ct. at 2553; see also
Corwin v. Walt Disney Co., 475 F.3d 1239, 1249 (11th Cir. 2007) (explaining that
evidence inadmissible at trial may not generally be considered at summary
judgment). All affidavits must be based on personal knowledge and must set forth
facts that would be admissible under the Federal Rules of Evidence, Macuba v.
DeBoer, 193 F.3d 1316, 1322–23 (11th Cir. 1999), and the non-moving party
cannot satisfy its burden if the rebuttal evidence “is merely colorable, or is not
significantly probative” of a disputed fact, Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249–50, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986) (citation
omitted). When the non-moving party fails under this rubric to “make a showing
sufficient to establish” an essential element of its case, summary judgment is
appropriate. Celotex, 477 U.S. at 322, 106 S. Ct. at 2552; see also Johnson v. Bd.
of Regents of the Univ. of Ga., 263 F.3d 1234, 1243 (11th Cir. 2001) (“[T]he plain
language of Rule 56[] mandates the entry of summary judgment . . . against a party
42
who fails to make a showing sufficient to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of proof
at trial.”(third alteration in original)).
There appears to be no dispute in this case that Josendis was an employee of
Wall to Wall, an employer, or that Acosta and Lim would be derivatively liable for
unpaid back wages and FLSA overtime if Josendis were entitled to recover against
Wall to Wall. The question we must face, then, is whether Wall to Wall’s 2006 tax
return35 combined with the factual statements contained in the VAC and the
affidavits before the district court—those executed by Acosta, Josendis, Whitten,
and Dulanto—would be: (1) admissible at trial, and (2) sufficiently probative of an
essential element of his case to raise a genuine issue of material fact.36
As explained below, Josendis has failed to make a showing sufficient to
survive summary judgment. In short, he has not satisfied his burden of coming
forward with any admissible evidence beyond mere speculation to rebut Wall to
Wall’s evidence on the essential elements of individual and enterprise coverage.
35
Josendis does not dispute that Wall to Wall’s 2006 tax return would be admissible evidence at
trial.
36
In deciding this question, we must, as always, liberally construe the FLSA’s terms to ensure
that coverage extends “to the furthest reaches consistent with congressional direction,” while
narrowly construing coverage exemptions. Tony & Susan Alamo Found. v. Sec’y of Labor, 471
U.S. 290, 296, 105 S. Ct. 1953, 1959, 85 L. Ed. 2d 278 (1985).
43
A.
An employee is subject to individual coverage if he is directly and regularly
“engaged in” interstate commerce. Thorne v. All Restoration Servs., Inc., 448 F.3d
1264, 1266 (11th Cir. 2006). As Thorne explains, indirect or sporadic involvement
in commerce is insufficient:
[F]or an employee to be “engaged in commerce” under the FLSA, he
must be directly participating in the actual movement of persons or
things in interstate commerce by (i) working for an instrumentality of
interstate commerce, e.g., transportation or communication industry
employees, or (ii) by regularly using the instrumentalities of interstate
commerce in his work, e.g., regular and recurrent use of interstate
telephone, telegraph, mails, or travel.
Id. (emphasis added) (citing McLeod v. Threlkeld, 319 U.S. 491, 493–98, 63 S. Ct.
1248, 1249–52, 87 L. Ed. 1538 (1943)).
For Josendis to survive summary judgment, he needed to produce admissible
evidence that he (1) worked directly for an instrumentality of interstate commerce,
or (2) regularly used the instrumentalities of interstate commerce. See Corwin, 475
F.3d at 1249. Josendis was not working directly for an instrumentality of interstate
commerce. Josendis would therefore have had to come forward with evidence,
beyond mere speculation, that, as a part of his work duties, he repeatedly traveled
to and from Wall to Wall job sites outside of Florida or used an item moving in
interstate commerce. See Celotex, 477 U.S. at 324, 106 S. Ct. at 2553. Josendis
44
did not make a showing that he directly engaged in interstate commerce as a part of
his responsibilities and, thus, cannot survive summary judgment on this record.
See Thorne, 448 F.3d at 1266 (“The Supreme Court has articulated that it is the
intent of Congress to regulate only activities constituting interstate commerce, not
activities merely affecting commerce.” (emphasis added)).
First, Josendis never traveled outside of Florida for purposes of his
employment with Wall to Wall. In the affidavit attached to Wall to Wall’s
summary judgment motion, Acosta declared that Josendis had no interaction with
Wall to Wall’s customers and only performed construction and remodeling work
within Florida. Josendis presented no evidence to dispute Acosta’s declaration.
Because Josendis did not travel across state lines as part of his work for Wall to
Wall, he cannot claim individual coverage based on any of the travel he completed.
Second, Josendis produced no evidence to indicate that he ever participated
in the actual movement of any object in interstate commerce. As noted previously,
Josendis never claimed that he used Wall to Wall’s vehicles to travel to a job site
outside Florida. Instead, Josendis claimed only that Wall to Wall had purchased or
leased vehicles that had, at some point, moved in interstate commerce and
equipped those vehicles with GPS units that took parts ordered over the internet
45
from other states.37 While the point of origin of these vehicles may be relevant
under a theory of enterprise coverage, their origin is irrelevant to the issue of
individual coverage—namely, whether Josendis himself directly participated in the
actual movement of persons or things in interstate commerce. See id. at 1266.
Furthermore, although parts for the GPS units may have come from outside
Florida, Josendis did not show that he was directly involved in the acquisition or
use of those parts; instead, Josendis’s own evidence shows that he used fully
assembled GPS units entirely within Florida. Thus, Josendis was not participating
in the “actual movement of persons or things in interstate commerce,” and is not
covered individually by the FLSA. See id. at 1268 (holding that an employee
engaged in restoration work for an enterprise that operated entirely intrastate was
not individually covered under the FLSA based on use of goods that previously
moved in interstate commerce).
In sum, Josendis produced nothing to create a material issue of genuine fact
as to his “direct[] participat[ion]” in interstate commerce under an individual
coverage theory. Id. at 1266.
37
Josendis and Whitten also mentioned an air compressor that used parts purchased from out of
state by a Wall to Wall secretary. Josendis does not, however, appear to argue that his use of the
air compressor, including those parts purchased from out of state, entitles him to individual
coverage under the FLSA, nor would he succeed if he did for the same reasons we discuss in
relation to Wall to Wall’s vehicles and GPS units.
46
B.
An enterprise like Wall to Wall is subject to the FLSA’s overtime wage
provision, so long as it (1) has at least two employees engaged in interstate
commerce or the production of goods for interstate commerce, or who handle, sell,
or otherwise work on goods or materials that had once moved or been produced for
in interstate commerce, and (2) has gross sales of at least $500,000 in sales
annually. 29 U.S.C. § 203(s)(l)(A)(i)–(ii) (2006). Acosta’s affidavit was, once
again, evidence in support of Wall to Wall’s position that none of Wall to Wall’s
employees utilized goods or materials that had previously moved in interstate
commerce and that Wall to Wall never grossed, at minimum, $500,000 in sales in
2006, 2007, or 2008. Therefore, to create a genuine issue of material fact, Josendis
needed to provide concrete, admissible evidence that Wall to Wall met both
statutory requirements.38 Josendis, however, did not make that showing.
At the outset, we hold that Josendis failed to provide any concrete evidence
that Wall to Wall had gross sales of at least $500,000 in any one year. This alone
means that his argument must fail. The district court aptly described the problem
38
Josendis has repeatedly argued that he only needed to present evidence of Wall to Wall’s
gross receipts. It is his position that, if he can prove that Wall to Wall grossed at least $500,000
in 2006, 2007, or 2008, then, by virtue of that fact alone, Wall to Wall will be subject to
enterprise coverage. While it might prove true that virtually every enterprise with $500,000 or
more in gross sales is engaged in interstate commerce, the statute is clear, and Josendis must
address both prongs of 29 U.S.C. § 203(s)(l)(A).
47
with Josendis’s opposition to Wall to Wall’s motion for summary judgment: in his
opposition, Josendis principally relied on conjecture and speculation, not
admissible evidence based on personal knowledge. For example, the VAC and the
affidavits Josendis submitted to the district court do nothing more than describe
how much Wall to Wall stood to make on each of its projects—evidence that, on
its own, does not establish that Wall to Wall satisfied the statutory threshold. The
VAC and the affidavits then extrapolate from that evidence a “belief” that Wall to
Wall’s gross sales met or exceed $500,000 annually. Whatever the merit of
Josendis’s belief, his showing before the district court was not enough to preclude
summary judgment. Cf. Pace v. Capobianco, 283 F.3d 1275, 1278 (11th Cir.
2002) (interpreting the Federal Rules of Civil Procedure’s personal knowledge
requirement to require more than affidavits based only on “information and
belief”); Stewart v. Booker T. Washington Ins., 232 F.3d 844, 851 (11th Cir. 2000)
(stating that assertions of fact based “[u]pon information and belief” are
insufficient (alteration in original)).
The relevant factual allegations found in the VAC indicate that Wall to Wall
employed twenty employees from 2006 through 2008, paid those employees $120
per week, utilized approximately ten vehicles, earned $56,000 for one project
completed in 2007, charged approximately $8,000 for each of fifteen kitchen
48
remodels performed by Josendis in 2007, and, as evidenced by Josendis’s
knowledge that Acosta had received personal checks for Wall to Wall’s work,
potentially underreported its income to the Internal Revenue Service in 2007. Each
of these allegations was “true and correct . . . to the best of [Josendis’s] knowledge
and belief.” The VAC then concluded with Josendis twice alleging that, “[i]t is
believed, based on [the foregoing allegations] that [Wall to Wall] had gross sales
of more than . . . $500,000 . . . in [2007 and 2008].”
Whitten’s affidavit likewise provided some evidence that Acosta had been
paid personally for Wall to Wall’s work, as Whitten stated that, at Acosta’s
direction, he had personally cashed at least one check from a Wall to Wall client
for $5,000. Furthermore, Whitten indicated that he “believe[d]” Wall to Wall had
completed work on thirty-one apartments at the Miami Home at a minimum
average cost of $13,000 to $14,000 per apartment.39 At most, this evidence
establishes that Wall to Wall potentially earned $56,000 for one job in 2007;
approximately $120,000 for kitchen remodels also in 2007; $5,000 for an unknown
project at an unknown date; and about $434,000 for work at the Miami Home over
a two-year period in 2007 and 2008.
39
Dulanto’s affidavit, mentioned previously, did not provide any information that would be
relevant to Wall to Wall’s gross sales.
49
But as Josendis and Whitten did not ground their projections in admissible
evidence concretely establishing the true measure of Wall to Wall’s gross sales per
year, nor did they explain how they came to their belief that Wall to Wall had
earned $500,000 in any one of the relevant years, we cannot accept their word on
the matter.40 Even accepting that the evidence establishes that Wall to Wall earned
the amounts identified above, Josendis still fails to show that in any one year Wall
to Wall met the $500,000 threshold; pointing to estimated income obtained at some
unknown point over a two-year period was simply not sufficient.
Unreliable conjecture that Wall to Wall worked on a certain number of
apartments, presented as a “belief” without any basis in ascertainable fact, was not
the type of admissible evidence required to survive a motion for summary
judgment. See Corwin, 475 F.3d at 1249 (stating that evidence inadmissible at trial
generally may not be considered at summary judgment). At the summary
judgment stage, such “evidence,” consisting of one speculative inference heaped
upon another, was entirely insufficient. See Cordoba v. Dillard’s, Inc., 419 F.3d
1169, 1181 (11th Cir 2005). Absent more “significantly probative” evidence of
Wall to Wall’s gross sales, Anderson, 477 U.S. at 249–50, 106 S. Ct. at 2511,
40
For example, Josendis might have obtained a corporate ledger indicating that Wall to Wall
made at least $500,000 in 2006, 2007, or 2008. Alternatively, Josendis or Whitten might have
stated that they directly witnessed a transactions in which Wall to Wall was paid certain, specific
sums and then added those sums together to reach the $500,000 statutory threshold.
50
Josendis cannot establish that Wall to Wall’s gross sales met the FLSA’s gross
sales requirement for enterprise coverage, see 29 U.S.C. § 203(s)(1)(A)(ii). This is
true even when the evidence upon which Josendis relies is viewed in the light most
favorable to him. See Centurion Air Cargo, 420 F.3d at 1149.
Having found that Josendis did not make a sufficient showing to establish
that Wall to Wall’s annual gross sales reached the $500,000 statutory threshold, we
need not dwell on the other element necessary to establish enterprise
coverage—whether the use of the vehicles, parts for the GPS device, and any other
object that Josendis claims he handled qualifies as a “good or material that has
been moved” previously in interstate commerce. In Polycarpe v. E&S
Landscaping Service, Inc., 616 F.3d 1217 (11th Cir. 2010) (per curiam), this court
carefully analyzed the language of § 203(s)(1)(A), providing the framework for
any future analysis. In doing so, the Polycarpe court once more rejected the
“coming to rest” doctrine as a basis for claiming that a good or material that had
previously moved in interstate commerce can somehow lose its interstate character
if it “comes to rest” prior to the intrastate purchase by a business. See id. at 1221
(“An erroneous view of FLSA enterprise coverage—one that hangs on what is
called the ‘coming to rest’ doctrine—is at odds with this statutory text.”)
51
At the same time, however, the Polycarpe panel also highlighted the
continued applicability of the “ultimate-consumer exception” found in the statutory
text itself. Id. at 1222 (“Included in this definition of ‘goods’ is a clause often
referred to as the ultimate-consumer exception.”); see also 29 U.S.C. § 203(i)
(“‘Goods’ means goods (including ships and marine equipment), wares, products,
commodities, merchandise, or articles or subjects of commerce of any character, or
any part or ingredient thereof, but does not include goods after their delivery into
the actual physical possession of the ultimate consumer thereof other than a
producer, manufacturer, or processor thereof.” (emphasis added)). Congress failed
to define the term “materials” in the FLSA, so we attempted to do so in Polycarpe.
The Polycarpe panel concluded that the term “materials” in the FLSA means “tools
or other articles necessary for doing or making something.” 616 F.3d at 1223–24
(noting that the best definition of materials is the one that does not “impliedly
repeal” any of the statutory definition of “goods”). As that panel noted, the
distinction between whether an object is a good, where the ultimate-consumer
exception applies, or a material, where there is no exception, is a crucial one. See
id. at 1222 (“We must be able to distinguish ‘goods’ from ‘materials’ to know
whether the ultimate-consumer exception might apply: the exception applies to
some ‘goods’ but never to ‘materials.’”).
52
Because we find, even viewing the evidence in the light most favorable to
him, that Josendis failed to show that Wall to Wall generated gross sales of
$500,000 in any one year, we need not engage in the herculean task of determining
whether vehicles, such as cars and trucks; parts of a GPS unit; and other tools and
supplies, such as paint, tape, drywall, or nails are best characterized as “goods” or,
alternatively, “materials” under the FLSA. Likewise, we need not then determine
whether the “goods” were subject to the ultimate-consumer exception. Josendis,
therefore, failed to create a genuine issue of material fact as to Wall to Wall’s sales,
and the district court did not err in granting summary judgment.
C.
Finally, we also concur in the district court's rejection of Josendis’s
regulatory argument. Josendis seeks to claim enterprise coverage based on 29
C.F.R. § 776.23(c), which purports to bring “within the scope” of the FLSA all
employees engaged in construction work, including maintenance and repair work,
that is “closely or intimately related” to a covered enterprise. Josendis claims that
this coverage is available to him by virtue of his remodeling work at the Miami
Home, which he contends is an “enterprise engaged in commerce or the production
of goods for commerce” under 29 U.S.C. § 203(s)(1)(B), which defines a covered
enterprise as one “engaged in the operation of a hospital, [or] an institution
53
primarily engaged in the care of . . . the aged . . . who reside on the premises of
such institution.” Josendis asserts that we must, under Chevron U.S.A. Inc. v.
Natural Resources Defense Council Inc., 467 U.S. 837, 843–45, 104 S. Ct. 2778,
2781–83, 81 L. Ed. 2d 694 (1984), defer to the DOL’s regulatory language and
find enterprise coverage applicable here.
The district court disagreed with Josendis and refused to apply Chevron
deference for two reasons. First, the court found insufficient evidence in the record
to determine whether the Miami Home was a facility for interstate commerce
pursuant to § 203(s)(1)(B)—that is, whether the Miami Home was a hospital or
institution engaged in the care of aged individuals residing on its premises.
Second, the district court held that, even assuming the Miami Home was an
interstate facility, § 776.23(c) was not a binding interpretation of the statutory text.
While we express no opinion on the district court’s first ground for denying
enterprise coverage under § 776.23(c), we find that the court correctly determined
that Chevron deference is unwarranted. We apply Chevron deference when an
agency properly exercises their authority, expressly or implicitly delegated by
Congress, to interpret an ambiguous statute, and then promulgate rules and
regulations carrying the force of law. See Chevron, 467 U.S. at 843–44, 104 S. Ct.
at 2782; see also United States v. Mead Corp., 533 U.S. 218, 226–27, 121 S. Ct.
54
2164, 2171, 150 L. Ed. 2d 292 (2001) (holding that Chevron deference applies
“when it appears that Congress delegated authority to the agency generally to make
rules carrying the force of law, and that the agency interpretation claiming
deference was promulgated in the exercise of that authority”). We do not apply
Chevron deference, however, when a statutory command of Congress is
unambiguous or the regulation is “arbitrary, capricious, or manifestly contrary to
the statute.” Chevron, 467 U.S. at 842–44, 104 S. Ct. at 2781–82. Where the
statutory language in clear, agency regulations have no effect. Carcieri v. Salazar,
--- U.S. ---, 129 S. Ct. 1058, 1063–64, 172 L. Ed. 2d 791 (2009) (holding that if the
statutory text is unambiguous then we apply the statute according to its terms).
The FLSA’s text concerning enterprise coverage, at least as it relates to
Josendis’s case, is clear and unambiguous. An employee must be employed “in an
enterprise engaged in commerce or in the production of goods for commerce” in
order to be entitled to FLSA overtime under an enterprise coverage theory. 29
U.S.C. § 207(a)(1) (2006). We, like the district court, believe that this text can
only be construed to cover employees actually employed by the covered enterprise;
in any event, it cannot stretch so far to accommodate employees employed by a
third party that performs sporadic work for a covered enterprise.
55
Josendis was not employed in a covered enterprise;41 as we previously
explained, Wall to Wall was entitled to summary judgment because, as Josendis’s
employer, it did not satisfy the statutory annual gross sales requirement found in 29
U.S.C. § 203(s)(l)(A)(ii). Furthermore, Josendis never alleged that he was actually
employed by the Miami Home—potentially a FLSA-covered enterprise pursuant to
§ 203(s)(1)(B). In fact, Josendis clearly characterized the work he completed at the
Miami Home as being the work of Wall to Wall. Therefore, under the FLSA’s
clear terms, Josendis’s regulatory theory fails, and summary judgment for Wall to
Wall was also proper on that ground.
IV.
41
The FLSA defines an enterprise as an activity where a person or persons are: (1) engaged in
related activities, (2) under unified operation or common control, and (3) have a common
business purpose. 29 U.S.C. § 203(r)(1) (2006). Under that definition, the Miami Home and
Wall to Wall cannot be considered a single enterprise: they were not engaged in related
activities; they were controlled by different persons; and they have widely divergent business
purposes. Because the Miami Home and Wall to Wall were not a single enterprise, the fact that
Josendis was “employed in” an enterprise consisting of Wall to Wall and its employees, does not
permit him to claim enterprise coverage by virtue of the work he did for Wall to Wall at the
Miami Home. Stated a different way, because Wall to Wall and the Miami Home were separate
enterprises, Josendis would have to prove that he was “employed in” the Miami Home enterprise
to claim enterprise coverage under the FLSA.
Furthermore, an enterprise does “not include . . . related activities performed for [a
covered] enterprise by an independent contractor.” Id. Therefore, the enterprise consisting of
the Miami Home does not include the activities conducted by Josendis; Josendis was not an
employee of the Miami Home, but rather should be characterized as either an independent
contractor brokered through Wall to Wall or an employee of Wall to Wall, also an independent
contractor. By virtue of this definition, Josendis was not “employed in” the Miami Home’s
enterprise, and thus he cannot claim enterprise coverage on that ground either.
56
Having found no error in the district court’s discovery decisions, imposition
of sanctions, or its order granting summary judgment in favor of Wall to Wall, we
hereby AFFIRM the district court’s decision in this case.
AFFIRMED.
57
KORMAN, District Judge, dissenting:
I agree with the conclusion of the majority opinion in Part III.C and its
rejection of “enterprise coverage” based on 29 C.F.R. § 776.23(c). I also agree
with the majority opinion that Josendis failed to come forward with sufficient
evidence that, as part of his duties, he repeatedly operated an item moving in
interstate commerce or travelled to Wall to Wall job sites outside of Florida.
I have some serious problems with respect to the issue whether Josendis is
covered pursuant to the provisions of 29 U.S.C. § 203(s)(1)(A), which provides
coverage to employees of an enterprise that (1) has employees who handle, sell, or
otherwise work on goods or materials that had once moved in or been produced for
interstate commerce, and (2) has gross sales of at least $500,000. Contrary to the
majority, there is a compelling argument to be made that the district court should
have denied the motion for summary judgment. The motion turns solely on the
credibility of the affidavit of Jorge Acosta, one of the principals of Wall to Wall,
which the jury would have a reasonable basis for discrediting. Indeed, there is
uncontroverted evidence that the principals of Wall to Wall were engaged in a
conspiracy to defraud the Internal Revenue Service by deliberately concealing and
understating Wall to Wall’s gross income. Under these circumstances, the fact that
Josendis was unable to come forward with “admissible evidence concretely
58
establishing the true measure of Wall to Wall’s gross sales per year,” Maj. Op. at
49, should not justify granting Wall to Wall’s motion for summary judgment.
I.
I begin with a discussion of the overtime wage provision, namely, whether
Wall to Wall had gross sales of at least $500,000. Wall to Wall failed to produce
any of its financial records for the years 2006 to 2008, “save for the 2006 tax return
and a financial summary prepared by Acosta in preparation for a separate FLSA
lawsuit previously filed against Wall to Wall.” Id. at 19 n.21. Jorge Acosta stated
in support of the defendants’ motion for summary judgment that no tax returns
were prepared for 2007 (or, apparently, for 2008). Acosta Decl. ¶ 4. Moreover, in
an unsworn response to a document request, he alleged (in the words of the
majority opinion) that, “[a]t some point after the initiation of Josendis’s suit [on
July 25, 2008], Wall to Wall had been evicted from its office for not paying rent.
Once the property owner reentered the premises, Wall to Wall’s business records
were placed on the street. Neither Acosta nor Lim rescued those records, and they
were lost forever.” Maj. Op. at 19 n.21 (emphasis added). Nevertheless, the
majority opinion finds that Wall to Wall “complied with the court’s instructions
[ordering the production of these documents] and completed, to the best of its
ability, the ordered discovery.” Id. at 19. Moreover, the majority goes on to
59
suggest—in the face of Wall to Wall’s admission that its business records “were
lost forever”—that “Josendis might have obtained a corporate ledger indicating
that Wall to Wall made at least $500,000 in 2006, 2007, or 2008.” Id. at 49 n.40.
While Wall to Wall’s explanation for its failure to produce its financial
records is more imaginative than blaming it on a fire, I find it difficult to accept.
Nor am I willing to fault Josendis for not producing documents that Wall to Wall,
by its own admission, failed to preserve and allowed its landlord to dispose of as
garbage. More importantly, a jury could conclude that the documents were either
destroyed or not produced because they would have shown that Wall to Wall in
fact had at least $500,000 in gross sales. Indeed, the majority opinion alludes to
the doctrine of spoliation, pursuant to which “an adverse inference is drawn from a
party’s failure to preserve evidence only when the absence of that evidence is
predicated on bad faith.” Id. at 30 n.28 (internal quotation marks omitted).
Nevertheless, the majority opinion suggests that it was up to Josendis to “have
moved the district court to consider the destruction of Wall to Wall’s corporate
records as a bad faith act of spoilation,” and that “[a]bsent a finding of spoilation,
we cannot hold against Wall to Wall the loss of its financial records.” Id.
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The doctrine of spoliation permits the trier of fact to draw an inference that,
if records were destroyed in bad faith, it was done so to impede the opposing party
from obtaining evidence that would support the latter’s position. More
specifically, it provides a basis for denying a motion for summary judgment where
there is sufficient probative evidence for a jury to find an act of spoliation and to
draw the inference derived from such an act. Thus, in Bashir v. Amtrak, 119 F.3d
929, 931 (11th Cir. 1997) (per curiam), we agreed with the district court that “there
was no probative evidence in this case to indicate appellees purposely lost or
destroyed the relevant portion of the [evidence].” Consequently, we concluded
that the district court had not erred in rejecting the adverse inference and granting
the motion for summary judgment. Id. By contrast, in Kronisch v. United States,
150 F.3d 112, 127 (2d Cir. 1998), a case in which this inference turned on the
veracity of the defendants’ explanation for the destruction of relevant documents,
“the district court presumed for purposes of considering the motion for summary
judgment that defendants had an obligation to preserve the files and that the
destruction was intentional,” and this approach was characterized as “sound” by
the Second Circuit. A factual finding of spoliation is necessary only where the
district judge seeks to impose a particular sanction beyond submitting the issue to
the jury.
61
Nevertheless, I accept, for present purposes, the majority’s suggestion that,
without a finding of bad faith by the district judge, we are precluded from
considering whether Wall to Wall’s failure to produce its financial records supports
an inference that would preclude summary judgment. The absence of those
records, however, is not without consequence. The principal source of admissible
evidence concerning Wall to Wall’s gross sales was the company’s own financial
records. Because those apparently no longer exist, the evidence upon which the
district court and the majority opinion conclude that Wall to Wall ought to prevail
on summary judgment is the declaration of the principal alleged wrongdoer,
Acosta, that Wall to Wall did not have at least $500,000 in gross sales in the years
relevant to this lawsuit. This consideration, along with the inability of Josendis to
obtain the relevant records, has a significant impact on the application of principles
relating to summary judgment.
We have previously held that,
[i]n applying the basic principles [governing summary judgment,] the
factor of access to proof must . . . be seriously considered in ruling on
a defendant’s motion for summary judgment, particularly . . . where
plaintiff’s proof must come mainly from sources largely within the
control of the defendants and from the mouths of the alleged
wrongdoers.
Ala. Farm Bureau Mut. Cas. Co., Inc. v. Am. Fidelity Life Ins. Co., 606 F.2d 602,
609 (5th Cir. 1979) (quoting 6 Moore’s Federal Practice P 56.17(60) at 56-1065
62
(1976 ed.)).1 Consequently, “[s]ummary judgment should not . . . ordinarily be
granted before discovery has been completed.” Id. In the present case, discovery
has not been completed because of the destruction of the most relevant evidence
necessary for Josendis to establish his case and because the district court
improperly constricted the scope of discovery. Thus, to cite one example, the
district judge denied Josendis’s request to discover “[a]ll of the income reporting
documents submitted by [Wall to Wall] to the Internal Revenue Service regarding
the Plaintiff for [three calendar years prior to the filing of Josendis’s original
complaint on July 25, 2008 (the ‘relevant period of time’)].” Maj. Op. at 27
(second and third alterations in original). The majority finds no abuse of discretion
in this ruling because the request was “arguably irrelevant” in a case in which the
issue is the amount of the gross sales that Wall to Wall engaged in during those
years. Id. at 31. Nevertheless, I decline to get involved in a nitty-gritty discussion
of the various discovery rulings because, in the end, Josendis would never have
obtained these documents, since Acosta had allowed them to be trashed.
This brings me to the second aspect of the relevant rule regarding the
propriety of granting summary judgment in a case such as this. As Professors
Wright, Miller, and Kane observe, “[t]he party opposing summary judgment does
1
We have adopted as binding precedent the decisions of the Fifth Circuit decided before October
1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
63
not have a duty to present evidence in opposition to a motion under Rule 56 in . . .
circumstances . . . when there is an issue as to the credibility of the movant’s
evidentiary material.” 10A Charles Alan Wright, Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure § 2727, at 480, 485 (3d ed. 1998). As
described by one commentator, the question of when the burden will shift to the
party opposing summary judgment depends on the type of proof used by the
moving party:
Thus if the proof in support of the motion is largely documentary and
has a high degree of credibility the opponent must produce convincing
proof attacking the documents in order to sustain his burden . . . . If
the moving party’s proof is less convincing, as in cases where he
relies on his own testimony or has exclusive knowledge of the
transaction, the burden of providing evidence may never shift to the
opponent.
John A. Bauman, A Rationale of Summary Judgment, 33 Ind. L.J. 467, 483-84
(1958) (alteration in original) (quoted in Wright, Miller & Kane, supra, at 486).
Indeed, we have held that “[c]ases in which the underlying issue is one of
motivation, intent, or some other subjective fact are particularly inappropriate for
summary judgment, as are those in which the issues turn on the credibility of the
affiants.” Ala. Farm Bureau Mut. Cas. Co., 606 F.2d at 609 (emphasis added)
(quoting Slavin v. Curry, 574 F.2d 1256, 1267 (5th Cir. 1978)). As Judge Frank
observed in one of the leading cases on this issue,
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where . . . the facts asserted by movant are peculiarly within the
knowledge of the movant, then the opponent must be given the
opportunity to disprove that fact by cross-examination and by the
demeanor of the movant while testifying. In such a case—a case like
the one before us—the failure of the opponent to file a counter-
affidavit has no significance.
Subin v. Goldsmith, 224 F.2d 753, 760 (2d Cir. 1955); see also Ala. Great S. R.R.
Co. v. Louisville & Nashville R.R. Co., 224 F.2d 1, 5 (5th Cir. 1955) (describing
Subin as “a thorough going exposition of why a summary judgment should, and
should not, be granted”); Shahid v. Gulf Power Co., 291 F.2d 422, 424 (5th Cir.
1961); Fed. R. Civ. P. 56 advisory committee’s note to 1963 amendment (“Where
an issue as to a material fact cannot be resolved without observation of the
demeanor of witnesses in order to evaluate their credibility, summary judgment is
not appropriate.”).
A corollary of this principle is the long-recognized prerogative of the jury to
disbelieve the testimony of a party and conclude that the opposite of his testimony
is true. Judge Learned Hand’s oft-quoted observation, which has been echoed by
the Supreme Court, NLRB v. Walton Mfg. Co., 369 U.S. 404, 408 (1962) (per
curiam); Wright v. West, 505 U.S. 277, 296 (1992), is particularly apposite here.
Specifically, Judge Hand observed that demeanor “evidence may satisfy the
tribunal, not only that the witness’ testimony is not true, but that the truth is the
opposite of his story; for the denial of one, who has a motive to deny, may be
65
uttered with such hesitation, discomfort, arrogance or defiance, as to give
assurance that he is fabricating, and that, if he is, there is no alternative but to
assume the truth of what he denies.” Dyer v. MacDougall, 201 F.2d 265, 269 (2d
Cir. 1952); see also NLRB v. Dixie Gas, Inc., 323 F.2d 433, 435-36 (5th Cir. 1963).
Indeed, even in a criminal case, where a defendant cannot be forced to testify, we
have held that
a statement by a defendant, if disbelieved by the jury, may be
considered as substantive evidence of the defendant’s guilt. . . . To be
more specific, we have said that, when a defendant chooses to testify,
he runs the risk that if disbelieved “the jury might conclude the
opposite of his testimony is true.”
United States v. Brown, 53 F.3d 312, 314 (11th Cir. 1995) (quoting Atkins v.
Singletary, 965 F.2d 952, 961 n.7 (11th Cir. 1992)); see also West, 505 U.S. at 296.
There is, to be sure, the caveat that the jury’s disbelief alone may be insufficient by
itself to justify a conviction in a criminal case or a verdict in favor of the opposite
party in a civil case; some corroborative evidence may be required to support the
verdict. Waffenschmidt v. MacKay, 763 F.2d 711, 724 (5th Cir. 1985); United
States v. Marchand, 564 F.2d 983, 985-86 (2d Cir. 1977). Indeed, notwithstanding
his observation about the significance of demeanor evidence, Judge Hand observed
that a verdict in favor of the plaintiff solely on the basis of its disbelief of the
defendant would not be sufficient to justify a judgment in his favor. Dyer, 201
66
F.2d at 269. Nevertheless, the foregoing caveat is inapplicable if independent
evidence supports the inference that the truth is the opposite of the facts to which a
party witness testified. See United States v. Spencer, 129 F.3d 246, 251 (2d Cir.
1997) (“The rule in Dyer is inapplicable if independent evidence supports the
government’s case.”); see also United States v. Eisen, 974 F.2d 246, 262 & n.6 (2d
Cir. 1992).
In my view, a reasonable jury could conclude that Jorge Acosta is not
worthy of belief and that the opposite of his testimony is, in fact, true. Passing
over the fact, to which I’ve already alluded, that Wall to Wall concededly allowed
its records to be trashed after the commencement of this lawsuit and failed to come
forward with so much as a sworn affidavit explaining the circumstances regarding
its failure to produce those records, Josendis came forward with substantial
evidence to support his claim. Specifically, the affidavit of Josendis, as well as
those of Troy Allan Whitten and Willard Dulanto, see R 37, provide an ample basis
for concluding that Wall to Wall must have been, like many such construction
enterprises (which also often employ illegal aliens), an on-and-off-the-books
operation and that Acosta was engaged in a blatant scheme to defraud the IRS.
These affidavits, which are based on personal knowledge, and which are not
controverted by Wall to Wall, establish that, for a period of time in 2007, Wall to
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Wall employees (including Whitten) worked only at the Miami Jewish Hospital
(“MJH”). Acosta told Whitten that the MJH “wanted him to repair all 101
apartments” at the facility. Moreover, based on what Jorge Acosta told Whitten,
“Wall to Wall Residences was paid between thirteen and fourteen [thousand
dollars] ($13,000-$14,000) per unit.” Acosta asked Whitten to pick up the checks,
which were usually in a closed envelope. Acosta instructed him to open the
envelope to verify that the amount written on the check was correct. More
significantly, Whitten “noticed that the checks were made out to Jorge Acosta.”
This was not the only instance that Whitten noticed of checks made out to
Jorge Acosta and his wife. Whitten’s affidavit also attested to the fact that “Acosta
also instructed customers to write checks to [Whitten’s] name (for work done by
Wall to Wall). [Whitten] would cash the check and then give the cash to Acosta.”
This occurred at least “two or three times monthly.” Finally, “Acosta would also
write company checks directly to [Whitten] for one or two thousand dollars and
then [Whitten] would cash the checks [at a check cashing store] and give the cash
to Acosta.” The check cashing store was identified in the affidavit. Although the
affidavit of Willard Dulanto was not as detailed, he nevertheless confirmed the
work at the MJH from 2007 to 2008 and expressly stated he had been given a
check for $11,000 in a closed envelope, which he saw was made out to Acosta.
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The contents of the verified amended complaint, which are set out on page
13 of the majority opinion, are also entirely consistent with these two affidavits.
The combination of the three, in the words of the majority opinion, “establishes
that Wall to Wall potentially earned $56,000 for one job in 2007; approximately
$120,000 for kitchen remodels also in 2007; $5,000 for an unknown project at an
unknown date; and about $434,000 for work at the Miami Home over a two-year
period in 2007 and 2008.” Maj. Op. at 49. Nevertheless, the majority concludes
that, because “Josendis and Whitten did not ground their projections in admissible
evidence concretely establishing the true measure of Wall to Wall’s gross sales per
year, nor did they explain how they came to their belief that Wall to Wall had
earned $500,000 in any one of the relevant years, we cannot accept their word on
the matter.” Id. While the majority opinion may be correct in its suggestion that
the affidavits are not based on “admissible evidence concretely establishing the
true measure of Wall to Wall’s gross sales per year,” the reason for this is that Wall
to Wall failed to retain required financial records.
Moreover, there is also evidence that Acosta submitted a false declaration in
this case, alleging that he fired Josendis after learning that Josendis was an illegal
alien. Acosta Decl. ¶ 6. A letter he wrote to Josendis, however, clearly indicates
that such a termination did not occur for the reasons alleged by Wall to Wall.
69
R 23, Josendis Aff., Ex. A. Indeed, when pressed at oral argument, Wall to Wall’s
counsel grabbed onto the life preserver that a member of the panel generously
tossed him by conceding that, at the very least, this was an issue of fact.
Under these circumstances, a jury would be perfectly justified in returning a
verdict in favor of Josendis based on a finding (1) that Wall to Wall generated
substantial revenues, (2) that Acosta and his wife were both engaged in a scheme
to defraud the IRS, which included conduct that caused the earnings of Wall to
Wall to be significantly understated, and (3) that Acosta was a liar and that the
opposite of his testimony was true. These inferences become even more
compelling because of Wall to Wall’s inability to produce its own financial
records. And this is so whether or not the jury believed the preposterous claim,
assuming Acosta was willing to testify to it under oath, that his former landlord
carried the documents to the street (after Josendis filed his complaint) from which
they disappeared forever.
II.
I turn now to the first prong of 29 U.S.C. § 203(s)(1)(A), which requires
that, in addition to gross sales of at least $500,000, the enterprise use goods or
materials that had once moved in interstate commerce. Specifically, relying on
Flores v. Nuvoc, Inc., 610 F. Supp. 2d 1349 (S.D. Fla. 2008), Wall to Wall invoked
70
the “coming to rest” doctrine, according to which, “[w]here the enterprise acquired
from within the state the goods or materials used by its employees and has no role
in causing goods or materials to move in interstate commerce to employees for
their use in the business, enterprise coverage is not triggered.” Br. at 26 (quoting
Flores, 610 F. Supp. 2d at 1354). The problem with this argument is that we
explicitly rejected it in Polycarpe v. E&S Landscaping Serv., Inc., 616 F.3d 1217
(11th Cir. 2010) (per curiam), which decided six cases consolidated for appeal,
including one in which Wall to Wall was a defendant, Vallecillo v. Wall to Wall
Residence Repairs, Inc., 595 F. Supp. 2d 1374 (S.D. Fla. 2009). In the course of
describing the district court holding in Vallecillo, we observed that “[b]ecause one
of [the] uncontested facts was that Defendants bought all materials from local
retailers, the district court [erroneously] concluded that there was no commerce as
defined in the FLSA.” Polycarpe, 616 F.3d at 1227 n.10. The Acosta declaration
in this case, which presumably mirrors the one he filed in Vallecillo, says no more
than that Wall to Wall “purchased tools and supplies from local retailers (primarily
Home Depot) in South Florida. We have never bought or sold anything across
state lines.” Acosta Decl. ¶ 2. This declaration is no more adequate here than it
was in Vallecillo to justify summary judgment for Wall to Wall on this premise.
See Polycarpe, 616 F.3d at 1227 n.10.
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While the majority does not reach the merits of this claim, because it
concludes that Josendis failed to satisfy the $500,000 element of the FLSA’s
overtime wage provision, I would not address the issue for a different reason. Wall
to Wall opened its brief on appeal here with an expression of its “desire to adopt
the Brief submitted in Vallecillo v. Wall to Wall Residence Repairs, Inc., Case No.
08-22271-CIV-ZLOCH.” Br. at viii. Nevertheless, it failed to call to our attention
the ultimate decision in the Polycarpe case, which vacated the district court
decision in Vallecillo, and is clearly adverse to Wall to Wall in this case. Nor did
Wall to Wall seek a remand to the district court for consideration of the argument
the majority raises sua sponte, namely, whether the term “materials” in the FLSA
means “tools or other articles necessary for doing or making something.” Maj. Op.
at 51 (quoting Polycarpe, 616 F.3d at 1223-24). The failure of Wall to Wall to do
so is not surprising, since it is inconceivable that a construction company would
not be using materials, for the purpose of “doing or making something,” that
previously moved in interstate commerce. Under these circumstances, I would
reverse the order granting Wall to Wall’s motion for summary judgment without
addressing the issue.
III.
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I recognize that the result for which I have argued would require us to reach
the issue whether Josendis, an illegal alien, is entitled to the protection of the
FLSA. I agree with the position expressed in the letter brief submitted by the
Solicitor of the United States Department of Labor, which we requested, that
“undocumented workers are entitled to recover minimum wages and overtime pay
for hours worked under the FLSA,” DOL Letter at 10, as another panel of the
Eleventh Circuit recently held in an unpublished opinion, Galdames v. N & D Inv.
Corp., Nos. 10–11984, 10–14523, 2011 WL 2496280 (11th Cir. June 23, 2011)
(per curiam), following Eleventh Circuit precedent, Patel v. Quality Inn South, 846
F.2d 700 (11th Cir. 1988). Nor would a contrary result deter illegal aliens seeking
employment in the United States. Instead, denying them the protection of the
FLSA would only encourage employers to hire illegal aliens, as opposed to
citizens, because in so doing employers could avoid the expense of complying with
the FLSA. Such a result is contrary to public policy and, for that reason alone, we
should reject Acosta’s suggestion that we decline to follow binding precedent on
this issue.2
2
The majority also affirms the imposition of sanctions in the amount of $330 against Josendis’s
attorney for fees incurred by Wall to Wall in opposing Josendis’s discovery demands. This is a
result with which I also disagree. In my view, Wall to Wall forfeited any right to sanctions
because of the misconduct that it engaged in by making no effort to preserve critical business
records and allowing them to be treated as garbage by its landlord—assuming anyone believes
this unsworn and fanciful explanation. Indeed, if any sanctions are warranted in this case, the
73
IV.
The judgment of the district court should be reversed, and the case should be
remanded for trial.
district court should have imposed sanctions on the defendants and not on Josendis’s attorney.
74