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Acosta v. Mezcal, Inc.

United States District Court, D. Maryland

August 30, 2018

R. ALEXANDER ACOSTA, Secretary of Labor, U.S. Department of Labor Plaintiff,
v.
MEZCAL, INC. d/b/a MEZCAL MEXICAN RESTAURANT & BAR, et al. Defendants.

          MEMORANDUM

          James K. Bredar, Chief Judge.

         Plaintiff, R. Alexander Acosta, Secretary of Labor, United States Department of Labor ("Plaintiff'), filed suit to enjoin Mezcal, Inc., a corporation, d/b/a Mezcal Mexican Restaurant & Bar, and Carlos Ulloa, individually, and in his capacity as manager, owner, and corporate officer of the corporation, from allegedly violating various provisions of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201, et seq. ("the Act"). Plaintiff also seeks back wage compensation and liquidated damages. Now pending before the Court is Defendants' Motion to Withdraw or Amend Deemed Admissions. (ECF No. 39.) Also pending before the Court is Plaintiffs Motion for Summary Judgment, which relies in part on the admissions Defendant seeks to withdraw. (ECF No. 43.) No. hearing is required. See Local Rule 105.6 (D. Md. 2016).

         For the reasons set forth below, Defendants' Motion will be granted in part and denied in part. In light of that ruling, Plaintiffs Motion for Summary Judgment will be denied without prejudice in order to allow time for Plaintiff to supplement discovery.

         I. Background

         Plaintiff served a first set of requests for production, interrogatories, and admissions on Defendants on August 28, 2017. (Mot. to Extend at ¶ 1, ECF No. 18.) After Defendants failed to respond within the thirty-day deadline or the ensuing two months, on December 4, 2017, the Court ordered Defendants to respond, which they did on December 6, 2017. (Id. at ¶ 2 (referring to Order of the Court, ECF No. 17).) Plaintiff then submitted a motion seeking, inter alia, to confirm that the request for admissions would be deemed admitted under Federal Rule of Civil Procedure 36(a)(3), notwithstanding Defendants' late response. (Id. at 3.) Defendants did not file any papers in opposition, and the motion was granted on January 3, 2018. (ECF No. 20.)

         Two months later, at the close of discovery, and with Defendants represented by new counsel, the parties filed a joint status report, in which Plaintiff requested additional clarification that the January 3rd order had in fact confirmed that the Requests for Admission were deemed admitted. (Am. Joint Status Rep. at 3, ECF No. 28.) Once again, and now with the benefit of new counsel, Defendants raised no objection and made no motion to withdraw or amend the deemed admissions. The Court confirmed by paperless order on March 6, 2018, that Plaintiffs December motion had been granted. (ECF No. 32.)

         Three months after that, on the last day before the deadline for dispositive motions, Defendants filed the present motion seeking for the first time to withdraw or amend the admissions. (Mot. to Withdraw or Amend Admissions, ECF No. 39 ["Mot. Withdraw"].) Plaintiff subsequently filed a motion for summary judgment, relying in part on the challenged admissions. (Mem. Supp. Mot. Summ. J. at 5-6, ECF No. 43-1.) Deadlines to complete briefing on the summary judgment motion have been postponed, pending resolution of Defendants' motion. (ECF No. 50.)

         II. Legal Standard for Withdrawal or Amendment of Admissions under Rule 36(b)

         Under Rule 36, failure to respond to a request for admissions within 30 days of being served results in the matter being automatically deemed admitted. Fed.R.Civ.P. 36(a)(3). Once admitted, a matter is "conclusively established" unless and until the Court permits withdrawal or amendment. Fed.R.Civ.P. 36(b). Withdrawal or amendment of admissions is subject to the court's discretion, if such alteration "would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining ... the action on the merits." Id. District courts have "considerable discretion over withdrawal of admissions once they have been made." Kress v. Food Emp'rs Labor Relations Ass'n, 285 F.Supp.2d 678, 681 (D. Md. 2003) (quoting U.S. v. Turk, .139 F.R.D. 615, 618 (D. Md. 1991)), aff'd 391 F.3d 563 (4th Cir. 2004). However, both factors-impact on the merits and prejudice-must be considered in exercising that discretion. Bailey v. Christian Broadcasting Network, 483 Fed.Appx. 808, 810 (4th Cir. 2012) ("[F]ailure to consider the Rule 36(b) factors in ruling on a motion [functionally equivalent to a motion to withdraw admissions] constitutes an abuse of discretion."). The party opposing withdrawal or amendment bears the burden of demonstrating prejudice. Sonoda v. Cabrera, 255 F.3d 1035, 1039 (9th Cir. 2001); Pulse Med. Instruments, Inc. v. Drug Impairment Detection Servs., Inc., Civ. No. DKC-07-1388, 2009 WL 6898404, at *16 (D. Md. Mar. 20, 2009).

         III. Analysis

         Defendants' motion focuses on four of the fifteen requests for admissions that were previously deemed admitted. (Defs. Reply in Supp. of Mot. Withdraw at 8, n.l, ECF No. 47 ["Def. Reply"] (confirming that only four admissions are at issue).) The admissions in question are:

• (No. 10) "Admit that during the relevant time period, Defendant Carlos Ulloa made decisions relating to Mezcal's policy regarding recordkeeping of hours by the employees listed in Schedule A."
• (No. 13) "Admit that during the relevant time period, Mezcal did not maintain records of the hours worked by the individuals listed in Schedule A."
• (No. 14) "Admit that you told Wage and Hour you used tip pool money for business expenses."
• (No. 15) "Admit that during the relevant time period, you never distributed tip pool money to any of the employees listed on Schedule A."

         (Pl. First Request for Admissions at 2-3, Opp'n to Mot. Withdraw Ex. C, ECF No. 46-4 ["PL RFA"].) The Court must consider whether the withdrawal and amendment of each of the above admissions will promote the presentation of the merits of this case and, if so, whether prejudice suffered by ...


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