[00:00:05] Speaker 00: Good morning, counsel. [00:00:06] Speaker 04: Good morning, Your Honor. [00:00:10] Speaker 04: My name's Phil Trenchak. [00:00:11] Speaker 04: I'm representing the appellants. [00:00:14] Speaker 04: I'd like to reserve five minutes for rebuttal. [00:00:16] Speaker 00: Counsel, please be reminded that the time shown is your total time remaining. [00:00:21] Speaker 04: Yes, Your Honor. [00:00:24] Speaker 04: May it please the Court, we are here this morning because of a very basic principle regarding a late-raised affirmative defense. [00:00:35] Speaker 04: And we look at whether there's prejudice given the fact that there was an absence of notice, and whether this absence of notice causing extreme prejudice then waives the affirmative defense, which is the Motor Carriers Act exemption. [00:00:58] Speaker 00: Council, what's our standard of review? [00:01:01] Speaker 04: What's that? [00:01:02] Speaker 04: What is our standard of review? [00:01:04] Speaker 04: Oh, pardon me. [00:01:04] Speaker 04: It's abuse of discretion regarding the 60B motion and de novo regarding the summary judgment. [00:01:12] Speaker 04: So defendants or appellees filed an answer eight days after the close of discovery. [00:01:19] Speaker 04: The answer was 60 days, 62 days late pursuant to FRCP 15A3. [00:01:27] Speaker 00: So how do we evaluate the district court's decision [00:01:31] Speaker 00: to allow that late raise defense? [00:01:35] Speaker 04: Well, Your Honor, there was the district court made a determination that our assumption that, well, if I could just read the minute order. [00:01:46] Speaker 00: Well, could I just get you to answer the question? [00:01:49] Speaker 00: What's our review of the district court's decision to allow that late affirmative defense? [00:01:56] Speaker 00: It's an abusive discretion review. [00:01:58] Speaker 00: And how did the district court abuse its discretion [00:02:01] Speaker 00: what rule or what case tells us that the District Court abused his discretion? [00:02:06] Speaker 04: Well, I believe the Wishak versus the City National Bank and also the Coleman case. [00:02:18] Speaker 04: Coleman versus Quaker Oats. [00:02:22] Speaker 04: That's another action. [00:02:23] Speaker 04: Let's show that fairly clearly. [00:02:27] Speaker 04: There's a Magana case. [00:02:31] Speaker 04: All these cases stated that, well, Coleman states good cause is required to modify the scheduling order. [00:02:42] Speaker 04: And the fact that the affirmative defense of the Motor Carriers Exemption Act was not ever uttered during discovery at any point. [00:03:00] Speaker 04: There's been an allegation that it was stated there was one glib question to the former dispatcher Kathy Watkins regarding the Motor Carrier Act, not the Federal Motor Carrier Act. [00:03:12] Speaker 04: It was just referred to as the Motor Carrier Act. [00:03:16] Speaker 04: And the proper name of the act is the Federal Motor Carrier Act. [00:03:23] Speaker 04: There was one glib question. [00:03:25] Speaker 04: We conducted eight, approximately eight [00:03:29] Speaker 04: depositions, most of them going two full days, and this never came up. [00:03:36] Speaker 04: It was not brought up until eight days following the close of discovery. [00:03:40] Speaker 02: What's your prejudice? [00:03:44] Speaker 02: The prejudice is... How are your clients harmed? [00:03:48] Speaker 02: Pardon me, Your Honor. [00:03:50] Speaker 02: How were your clients harmed by the late disclosure? [00:03:56] Speaker 04: Your Honor, this resulted in a trial by ambush. [00:03:59] Speaker 04: There was no notice, there was no ability to do discovery. [00:04:11] Speaker 04: My recollection is there were five out-of-state trips and possibly two pages of fuel logs. [00:04:21] Speaker 04: This was all produced after the close of discovery, after the eight-day mark [00:04:27] Speaker 04: 30 days after discovery actually closed. [00:04:30] Speaker 02: The close of discovery. [00:04:31] Speaker 02: Our understanding, I think, correct me if I'm wrong, after it was closed, the defendants raised this affirmative defense. [00:04:43] Speaker 02: What did you do? [00:04:44] Speaker 02: What did your clients do? [00:04:47] Speaker 02: Did you ask for additional time to conduct additional discovery? [00:04:51] Speaker 02: No, we do not, but it's my understanding there's no... What additional discovery would you have pursued had this affirmative defense been disclosed early on? [00:05:05] Speaker 04: Well, we would have asked about it during these eight depositions that took 16 days. [00:05:11] Speaker 04: They were two-day depositions. [00:05:13] Speaker 04: It's a question of law, isn't it? [00:05:17] Speaker 04: Well, it's a question of fact if they actually are a motor carrier, we would have been able to, because this is a concrete pumping company, so if they're... Okay, I understand where you're going. [00:05:29] Speaker 04: We had no ability to do, to make these requests and it's not, I'm sorry, if you have, I didn't mean to interrupt. [00:05:35] Speaker 02: Well, I get to the point that you just made, and that is, had it been disclosed earlier, during the course of discovery, you could have gone into the details [00:05:47] Speaker 02: of these travels, et cetera, and whether they fit within this affirmative defense. [00:05:54] Speaker 02: Do I catch the drift? [00:05:55] Speaker 02: Correct, Your Honor. [00:05:56] Speaker 02: Did you ask the district court for additional time to do that? [00:06:02] Speaker 02: Your Honor, we did not. [00:06:06] Speaker 04: I take it the answer to my question. [00:06:08] Speaker 04: The answer to my question is no, you did not. [00:06:10] Speaker 04: That's correct. [00:06:11] Speaker 04: We did not, but it's not the plaintiff's [00:06:15] Speaker 04: to breathe air into their affirmative defenses, there were no... But it is your duty to show prejudice. [00:06:22] Speaker 00: And so that's the problem, is how can you show prejudice if you didn't take advantage of the opportunity to conduct additional discovery? [00:06:32] Speaker 04: There was no opportunity. [00:06:34] Speaker 00: You could have asked the district court to give you an opportunity, and then if the district court denied that, you would have a strong prejudice argument [00:06:44] Speaker 00: but not having even attempted to get the additional discovery, it's difficult to say you were prejudiced because it's kind of because of your lack of request. [00:06:56] Speaker 04: Understood. [00:06:57] Speaker 04: Your Honor, if you look at the actual affirmative defenses, they were written in a boilerplate fashion and it did not appear, they do not appear that there's actual [00:07:14] Speaker 04: that this is something that needed to be gone into. [00:07:21] Speaker 00: But once you became aware, once you became aware that this was an affirmative defense that was going to make a difference in the case, then at that point, was there a recognition that there should have been requests for additional discovery? [00:07:39] Speaker 04: Your Honor, there was so much [00:07:40] Speaker 04: that went into getting this done by the close of discovery. [00:07:43] Speaker 04: There were approximately 16 full-day depositions. [00:07:48] Speaker 04: And for no one to have brought it up, and then it was just in a glib boilerplate fashion in the affirmative defenses and the answer, it did not appear to be viable until, and we're talking about five out-of-state trips. [00:08:03] Speaker 04: This is a construction company, local in Las Vegas. [00:08:10] Speaker 04: The fact that it popped up in the motion for summary judgment, it did not appear. [00:08:17] Speaker 04: This appeared to be a boilerplate attempt. [00:08:23] Speaker 04: And I believe there may have been three total pages devoted to this. [00:08:28] Speaker 04: But the fact remains, this came up after we'd just done all of our depositions, our written discovery. [00:08:36] Speaker 04: This comes up eight days after. [00:08:38] Speaker 04: And no, we're not burdened with providing them a defense. [00:08:46] Speaker 04: They have to come forward with a claim. [00:08:50] Speaker 04: And we didn't have notice during the appropriate discovery period. [00:08:55] Speaker 04: There was no opportunity. [00:08:56] Speaker 02: So this disclosure of this affirmative defense made, after the close of discovery, [00:09:08] Speaker 02: We now know from your responses that you did not ask the district court for additional time to conduct additional discovery to get into the weeds of this affirmative defense. [00:09:22] Speaker 02: We know that. [00:09:24] Speaker 02: When they filed a motion for summary judgment based on that, did you ask the district court to suspend the summary judgment proceedings and allow you [00:09:37] Speaker 02: to conduct discovery into this issue. [00:09:41] Speaker 04: We did not, Your Honor, but we did make the argument that it was time-barred, that it was over time, that it was disallowed, that it was waived, that they waived this affirmative defense. [00:09:55] Speaker 04: They did no discovery on it. [00:09:57] Speaker 04: They provided nothing, not during the appropriate discovery period. [00:10:06] Speaker 04: I'm going to reserve the five minutes. [00:10:08] Speaker 00: Okay. [00:10:09] Speaker 00: When you come back, would you just refresh my memory? [00:10:13] Speaker 00: I thought this affirmative defense was made in response to an amended complaint. [00:10:19] Speaker 00: Could you refresh my memory on that? [00:10:21] Speaker 00: Well, Your Honor, yes, but it was- And it was timely as far as the answer to the amended complaint? [00:10:27] Speaker 04: It was filed 83 days after the amended complaint was filed, 62 days late, according to- It was a late response to the amended complaint. [00:10:37] Speaker 00: Yes. [00:10:38] Speaker 04: Still 62 days, 82 days. [00:10:40] Speaker 00: I'm just asking the question. [00:10:53] Speaker 03: May it please the court, my name is Richard Scott. [00:10:55] Speaker 03: I'm counsel for the appellees who I will refer to collectively as Southwest. [00:11:02] Speaker 03: Council for the Appellants are correct that there needs to be fair notice of the affirmative defense and they were entitled to it and they did in fact receive it here. [00:11:13] Speaker 03: Your Honor asked the apt question as how does this court determine whether the lower court exercised its reasonable discretion? [00:11:23] Speaker 03: And the discretion that this court below needed to exercise is whether there was prejudice that would require [00:11:31] Speaker 03: some remedy such as extending the deadline for the opposition to the summary judgment or allowing discovery, things to which the appellant didn't even ask for. [00:11:44] Speaker 00: Counsel, so you concede that the affirmative defense was untimely. [00:11:51] Speaker 00: Do you? [00:11:52] Speaker 03: We concede that, Judge. [00:11:53] Speaker 03: We concede that. [00:11:55] Speaker 03: And that doesn't make a difference in terms of whether the district court can exercise its discretion to allow it in ruling on a dispositive motion, which is what the district court did here. [00:12:12] Speaker 03: In order to determine whether it was proper for the district court to exercise its discretion, you need to look at the facts before the court and the history of the case. [00:12:21] Speaker 03: And in this case, Judge, we provided a very specific and clearly articulated affirmative defense where we said in our fifth affirmative defense [00:12:31] Speaker 03: Plaintiff's claims for overtime pay are barred by the Federal Motor Carrier Act exemption. [00:12:37] Speaker 03: Next, we provided that six months prior to the deadline for their opposition to our motion for summary judgment. [00:12:46] Speaker 03: That was before the district court. [00:12:48] Speaker 03: That was more than enough time for the appellants to come before the lower court and ask for more time if they had wanted to do so. [00:12:57] Speaker 03: They never asked. [00:12:57] Speaker 02: Yes, Judge. [00:13:01] Speaker 02: piece the scenario here. [00:13:04] Speaker 02: These employees filed a complaint contending they're entitled to overtime pay, correct? [00:13:11] Speaker 02: Correct, Judge. [00:13:12] Speaker 02: And there ensues discovery that lasted how long? [00:13:18] Speaker 02: I believe about a year, Judge. [00:13:20] Speaker 02: Okay. [00:13:21] Speaker 02: Of individual Southwest employees saying, I worked these amount of hours and this amount of it was overtime. [00:13:31] Speaker 02: Correct? [00:13:32] Speaker 02: That's correct, Judge. [00:13:33] Speaker 02: And so the court has imposed, or perhaps the parties agreed to, a deadline by which discovery would close. [00:13:45] Speaker 02: The court did that. [00:13:46] Speaker 02: Is that correct? [00:13:48] Speaker 03: That is. [00:13:48] Speaker 03: Yes, that is correct. [00:13:49] Speaker 03: In the scheduling order, ER 028, the judge... We've got all of that. [00:13:54] Speaker 02: Yes. [00:13:55] Speaker 02: We've got all of that. [00:13:56] Speaker 02: I'll tell you what it makes me, as a long-time civil litigator, wonder whether some law clerk looked at discovery and said, you know what? [00:14:12] Speaker 02: The Motor Vehicle Act exemption for overtime covers it. [00:14:21] Speaker 02: As we look at the facts, it doesn't look like [00:14:26] Speaker 02: This applies, and let's raise this now. [00:14:32] Speaker 02: Why wasn't that the case? [00:14:34] Speaker 02: Why can't we? [00:14:35] Speaker 03: Judge, when I came on the case and I promptly took action to file the answer to the second amended complaint, and we added the affirmative defense. [00:14:44] Speaker 00: Was it prompt? [00:14:44] Speaker 00: I thought it was untimely. [00:14:46] Speaker 03: Pardon, Judge? [00:14:47] Speaker 03: I thought it was untimely. [00:14:48] Speaker 03: You said you acted promptly. [00:14:50] Speaker 03: When I came on the case, we asserted the Motor Vehicle Act exception. [00:14:56] Speaker 03: And the district court looked at this and relied on it in granting summary judgment, knowing that there was an opportunity by the appellants to ask for more time. [00:15:06] Speaker 03: That was in the scheduling order. [00:15:08] Speaker 03: The judge said, this is a complex case. [00:15:10] Speaker 03: The parties can reopen for additional discovery if they felt it was necessary. [00:15:16] Speaker 03: And the appellants didn't bring a motion to strike. [00:15:19] Speaker 03: They could have done that if they thought that the affirmative defense was untimely. [00:15:25] Speaker 03: They didn't do it. [00:15:25] Speaker 03: They weren't required to, and that would have been good practice, but they didn't do that. [00:15:30] Speaker 02: There was... When you filed your amended pleading, either in the written words or in your appearances before the district court, did you tell the court [00:15:43] Speaker 02: We understand that this late raised affirmative defense may have some implication on discovery, and we do not object to a request to conduct that discovery. [00:15:59] Speaker 02: Did you do that? [00:16:01] Speaker 03: We didn't invite additional discovery, Judge. [00:16:04] Speaker 03: I understand you're not obligated to, but did you? [00:16:07] Speaker 03: We didn't do that, Judge. [00:16:09] Speaker 03: And we believe that, sitting here now, Rule 56D, as determined by this Court, put an absolute requirement on the appellant to come forward and say, we did not have an opportunity to do discovery. [00:16:24] Speaker 03: This is the discovery we want to do. [00:16:26] Speaker 03: This is why we want to do it. [00:16:29] Speaker 03: This is what we hope to find. [00:16:31] Speaker 03: They didn't do that. [00:16:32] Speaker 03: That was in front of this judge when this judge made the determination to rely upon the Motor Vehicle Carrier Act to grant summary judgment. [00:16:41] Speaker 03: This judge had just recently before them. [00:16:43] Speaker 03: So you don't have to yell at us. [00:16:45] Speaker 03: Oh, I'm sorry. [00:16:46] Speaker 03: I'm sorry. [00:16:47] Speaker 03: I apologize. [00:16:49] Speaker 03: This judge had recently made a determination that Rule 56, this is a prior case, that Rule 56D was not properly invoked [00:17:00] Speaker 03: And on that basis, the court denied additional discovery. [00:17:06] Speaker 03: And I cited to that case, I believe. [00:17:09] Speaker 03: Did you come into this case after it was filed? [00:17:17] Speaker 03: Yes, Judge. [00:17:17] Speaker 03: I came into this case at the time the answer to the second minute complaint was filed. [00:17:21] Speaker 03: But there was no compliance. [00:17:24] Speaker 03: This court has very clearly said must several times. [00:17:29] Speaker 03: It was the US versus Kitsap case saying a Rule 56D motion must be brought before summary judgment is decided. [00:17:35] Speaker 03: It must show by affidavit what it hopes to discover by discovery. [00:17:42] Speaker 03: It must say more than just conclusory speculative statements. [00:17:48] Speaker 03: Here, we didn't even have that. [00:17:50] Speaker 03: All we had from the appellant is- We get your point on that. [00:17:53] Speaker 03: We get your point. [00:17:54] Speaker 03: All right. [00:17:54] Speaker 03: There needs to be more, Judge. [00:17:57] Speaker 03: And the additional facts that I just wanted to bring out to Your Honor is in April of 2024, four months after the close of discovery, there was a global discovery hearing. [00:18:10] Speaker 03: Plaintiffs had filed three different motions to compel, and they were still, after close of discovery, [00:18:17] Speaker 03: asking for all this discovery. [00:18:19] Speaker 03: You know what they didn't ask for? [00:18:20] Speaker 03: They didn't ask for information on the Motor Carrier Act. [00:18:24] Speaker 03: They asked for 25 different things. [00:18:26] Speaker 03: They didn't feel it important enough to ask for that. [00:18:30] Speaker 03: They didn't ask for it then. [00:18:31] Speaker 03: They didn't ask for it when they received the motion for summary judgment. [00:18:37] Speaker 03: Judge, that was the information in front of the district court when she determined [00:18:43] Speaker 03: that there was no proof of prejudice, no showing of prejudice. [00:18:47] Speaker 03: That's the standard. [00:18:48] Speaker 03: That's the foundational standard by which the judge is supposed to determine whether to allow an affirmative defense to be used to grant a motion for summary judgment. [00:19:01] Speaker 01: We have the Magata... So from your perspective, the plaintiff's had plenty of opportunity to ask all kinds of things. [00:19:10] Speaker 01: They simply asked for the wrong thing. [00:19:11] Speaker 01: Is that right? [00:19:16] Speaker 03: They elected intentionally not to ask about the Motor Carrier Act. [00:19:21] Speaker 01: They had six months to do so. [00:19:23] Speaker 01: They didn't go to that. [00:19:26] Speaker 03: Right. [00:19:26] Speaker 03: Any prejudice was by their own hand. [00:19:29] Speaker 03: They had six months, six months judge to fix this. [00:19:33] Speaker 03: And the circuit court decisions have said an affirmative defense can be considered by the judge, even if that affirmative defense is asserted after a timely answer. [00:19:46] Speaker 03: The circuit courts have said even if it's after the close of discovery, it can be considered. [00:19:52] Speaker 03: They've said that even if it's pled, in the absence of a motion to amend, it can be considered. [00:20:00] Speaker 03: They've actually said that it can even be considered if it's not pled, if it's asserted in a legal memorandum in a motion for summary judgment. [00:20:10] Speaker 00: We understand your point, counsel. [00:20:13] Speaker 00: Is there something else that you wanted to tell us? [00:20:21] Speaker 02: Judge, I will just... There's an old expression. [00:20:25] Speaker 02: Wait while you're ahead. [00:20:28] Speaker 03: All right, Judge. [00:20:30] Speaker 03: I appreciate your Honor's time. [00:20:33] Speaker 03: I'm sorry I'm not used to these mics and I got kind of excited. [00:20:37] Speaker 03: I'm sorry for shouting. [00:20:38] Speaker 03: That's understandable. [00:20:40] Speaker 03: Thank you. [00:20:42] Speaker 02: Okay, so we now seem to be at point. [00:20:46] Speaker 02: What's your excuse [00:20:48] Speaker 02: for not relying upon rule 56D. [00:20:52] Speaker 04: These are new facts. [00:20:54] Speaker 04: Under FRCP 16B, you have to show good cause to introduce new facts. [00:21:03] Speaker 04: This was after the close of discovery. [00:21:05] Speaker 02: 56D places, as I understand the rule, places upon you in this circumstance the obligation to ask the court to [00:21:15] Speaker 02: delay the summary judgment procedure and to ask for additional time to conduct discovery to flesh out the facts to respond to the motion for summary judgment. [00:21:28] Speaker 02: It in effect says, Your Honor, I can't respond to the motion for summary judgment because additional discovery is needed. [00:21:37] Speaker 02: And the law on that is very clear that if you don't do that, you're in trouble. [00:21:44] Speaker 04: How about FRCP 37C1? [00:21:48] Speaker 04: I mean, these are facts that were not introduced until discovery closed. [00:21:53] Speaker 04: And now the idea that the burden's on the plaintiff to essentially ask for discovery when none was done. [00:22:01] Speaker 02: We are past that, counsel. [00:22:02] Speaker 02: We are past that. [00:22:02] Speaker 02: You've already told us that when this affirmative defense was raised, you did not ask to reopen discovery, to extend the deadline, et cetera. [00:22:13] Speaker 02: Where we're at now is you had a motion for summary judgment based on an affirmative defense under this particular federal statute. [00:22:23] Speaker 02: And whether Rule 56D placed upon you an obligation to tell the court, I need more time to develop the facts to respond to the motion, which you did not do. [00:22:36] Speaker 04: Wouldn't this be considered an amendment if you're adding another [00:22:42] Speaker 04: another aspect to a case that had never come up there in discovery. [00:22:46] Speaker 04: Oh, and Mr. Scotty was not on the case when the Second Amendment complaint was filed. [00:22:51] Speaker 04: That was prior counsel. [00:22:52] Speaker 02: Sounds like he did some legal research. [00:22:56] Speaker 02: And can you tell us from the record how long after he got on the case that he raised this affirmative defense? [00:23:06] Speaker 04: Oh, no. [00:23:07] Speaker 04: The affirmative defense was filed by the prior counsel. [00:23:11] Speaker 04: Oh. [00:23:13] Speaker 04: Well, that's just procedure. [00:23:15] Speaker 02: He seems to disagree. [00:23:16] Speaker 04: I believe he does, but I just recall that it was filed December 5th of 23. [00:23:24] Speaker 04: And, you know, okay, it's fine. [00:23:30] Speaker 04: If Mr. Scotty wants to have been on the case, I just know that... Well, we can see from the record. [00:23:35] Speaker 00: It will be easy for us to determine that. [00:23:38] Speaker 04: Understood. [00:23:42] Speaker 04: Prejudice has shown, my understanding was the burden is not on the plaintiff to breathe life into these affirmative defenses. [00:23:53] Speaker 00: If nothing is done to prove an affirmative defense essentially, then plaintiff is not- It's not your burden to prove an affirmative defense, but if you are complaining that you didn't have the opportunity to do discovery about that affirmative defense, [00:24:12] Speaker 00: The burden is on you to request that discovery. [00:24:19] Speaker 04: Your Honor, I don't believe the case laws. [00:24:22] Speaker 04: The rule says that. [00:24:24] Speaker 00: Rule 56D says that. [00:24:29] Speaker 04: The Johnson case. [00:24:40] Speaker 04: District Court has an independent duty to prevent prejudice from a late-raised defense. [00:24:44] Speaker 04: And that's where we're at here. [00:24:50] Speaker 04: Because this is an amendment, because this is new information, which was not brought up during the discovery process. [00:24:58] Speaker 04: It's brought up afterward. [00:25:00] Speaker 04: My understanding is this, 50-60, I believed it was a red herring. [00:25:05] Speaker 04: In Magana, that party had ample notice and opportunity to hear [00:25:09] Speaker 04: They caused the prejudice. [00:25:13] Speaker 04: We had depositions. [00:25:14] Speaker 04: We deposed the owner of their company. [00:25:16] Speaker 04: We deposed, and no one brought it up, ever. [00:25:20] Speaker 04: It was not brought up during this discovery period, but this was intentional. [00:25:23] Speaker 04: This was a trial by ambush. [00:25:26] Speaker 04: And I'll submit on that. [00:25:27] Speaker 00: All right. [00:25:27] Speaker 00: Thank you, counsel. [00:25:28] Speaker 00: Thank you to both counsels. [00:25:30] Speaker 00: The case just argued is submitted for a decision by the court that completes our calendar for the morning. [00:25:35] Speaker 00: We are in recess until 9.30 a.m. [00:25:37] Speaker 00: tomorrow morning.