United States District Court, W.D. North Carolina, Charlotte Division
ROSEANN GEIGER et. al., Plaintiffs,
H&H FRANCHISING SYSTEMS INC. et. al., Defendants.
MEMORANDUM AND RECOMMENDATION AND ORDER
S. Cayer, United States Magistrate Judge
MATTER is before the Court on “Plaintiffs'
… Motion for Sanctions” (document #80) and
“Motion to Compel Responses to Deposition Questions and
… for [Further] Sanctions” (document #100) as
well as the parties' briefs and exhibits.
matter has been referred to the undersigned Magistrate Judge
pursuant to 28 U.S.C. § 636(b)(1) and this Motion is now
ripe for the Court's consideration.
seek unpaid minimum and overtime wages as well as statutory
penalties for violations of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 201 et
seq., and the North Carolina Wage and Hour Act, N.C.
Gen. Stat. §§ 95-25.1 et seq. Plaintiffs
also seek to represent all similarly situated employees
through an FLSA collective action.
2, 2018, the Glenkat Defendants filed their “Motion to
Compel Arbitration and Dismiss or Stay Action”
(document #55). On August 21, 2018, the Court
granted Defendants' Motion, ordered
Plaintiff Geiger and opt-in Plaintiffs Carmon and Moss to
arbitrate their claims, and stayed the case as to
those claims. See “Memorandum and Order”
February 15, 2019, the American Arbitration Association
notified Plaintiffs' counsel that the Glenkat Defendants
were unable to pay the costs of the arbitration as they were
obligated to do under the terms of the arbitration agreement.
February 26, 2019, Plaintiffs filed their “Motion to
Lift Stay … and Motion for Sanctions” (document
#80). On March 8, 2019, the Court lifted the stay.
See “Order” (document #91).
remaining issue before the Court is whether to impose
sanctions on the Glenkat Defendants pursuant to the
Court's “inherent power to police those appearing
before them." Purchasing Power, LLC v. Bluestem
Brands, Inc., 851 F.3d 1218, 1223 (11th Cir. 2017). The
Court's inherent power “to police those before
them” is governed by a subjective standard of bad
faith. Chambers v. NASCO, Inc., 501 U.S. 32, 47 n.11
(1991). This power must be exercised with discretion and
restraint. Id. at 44-45. This power is not directed
at protracted litigation. It is for rectifying disobedience.
Id. at 44. "Courts considering whether to
impose sanctions under their inherent power should look for
disobedience and be guided by the purpose of vindicating
judicial authority.” Purchasing Power, LLC,
851 F.3d at 1225. The Court must examine competent evidence
in the context and circumstances of the particular case.
Chambers, 501 U.S. at 50.
faith standard for purposes of sanctions is necessarily a
stringent one. Adams v. Carlson, 521 F.2d 168, 170
(7th Cir. 1975). There must be "clear evidence"
that the challenged actions are in bad faith, without color,
and taken for reasons of harassment, delay or improper
purpose. Weinberger v. Kendrick, 698 F.2d 61, 80 (2d
Cir. 1982). Bad faith includes oppressive or vexatious
conduct, or conduct to perpetrate a fraud upon the Court.
Haeger v. Goodyear Tire & Rubber Co., 793 F.3d
1122 (9th Cir. 2015). "Recklessness" does not
satisfy the inherent powers standard nor does it constitute
bad faith. Purchasing Power, 851 F.3d at 1225.
have not alleged that Defendants acted with subjective bad
faith sufficient to warrant sanctions. Accordingly, the
undersigned respectfully recommends that Plaintiffs'
Motion for Sanctions be denied. Plaintiffs'
Motion to Compel discovery in furtherance of their Motion for
Sanctions is denied.
IS ORDERED that Plaintiffs' “Motion to
Compel Responses to Deposition Questions and … for
[Further] Sanctions” (document #100) is
FOR THE FOREGOING REASONS, the undersigned
respectfully recommends that “Plaintiffs' …
Motion for Sanctions” (document #80) be