Kraxberger v. SMB Team LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Civil No. 24-5900
MEMORANDUM
Costello, J. 	November 12, 2025
Plaintiff Michelle Kraxberger formerly worked for Defendant SMB Team, LLC as a
business coach and strategist primarily serving legal professionals and law firms. ECF No. 33 at
2 ¶ 1. Plaintiff brought this action to recover allegedly unpaid overtime compensation under the
Fair Labor Standards Act (“FLSA”) and the Pennsylvania Minimum Wage Act (“PMWA”). Id.
at 1. Plaintiff moves to strike video evidence submitted by Defendant in support of its motion
for summary judgment. See ECF No. 37. For the reasons that follow, the Court will deny
Plaintiff’s motion.
I. 	BACKGROUND & PROCEDURAL HISTORY
The core issue in this action is whether Plaintiff, a salaried employee, is entitled to
overtime compensation under the FLSA, or whether she falls under the statute’s Administrative
Exemption. The Administrative Exemption applies to employees who are “(1) Compensated on
a salary or fee basis at a rate of not less than [$455 per week] . . . (2) Whose primary duty is the
performance of office or non-manual work directly related to the management or general
business operations of the employer or the employer’s customers; and (3) Whose primary duty
includes the exercise of discretion and independent judgment with respect to matters of
MICHELLE KRAXBERGER,
Plaintiff,
v.
SMB TEAM, LLC,
Defendant.
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significance.” 29 C.F.R. § 541.200(a) (2016). Both Plaintiff and Defendant moved for summary
judgment on this issue. See ECF No. 33 (Plaintiff’s motion for summary judgment); ECF No.
36-1 (Defendant’s motion for summary judgment).
Defendant contends that Plaintiff’s primary duty was executing the company’s core
business operations and characterizes her work as involving independent judgment and
discretion, including by giving Defendant’s clients individualized business advice and strategic
planning services. See ECF No. 34 at 14-17. Plaintiff disagrees with this characterization. She
argues that the undisputed evidence shows that her role as a business coach involved “routine,
heavily controlled” tasks and that she “lacked any exercise of discretion or independent
judgment.” ECF No. 33 at 1.
Defendant filed video exhibits in support of its motion for summary judgment that show
Plaintiff interacting with Defendant’s customers during business consulting sessions she
conducted. See ECF Nos. 36-7 (production cover letter), 36-10 (videos). Defendant edited the
videos to obscure the identities and oral responses of the clients to preserve their privacy. See
ECF No. 40 at 4.
Plaintiff moved to strike these videos under Federal Rules of Civil Procedure 26 and 37,
arguing that (1) they are untimely because they were disclosed just one week before the Court’s
discovery deadline, even though they were responsive to Plaintiff’s previous discovery requests;
and (2) they are prejudicial because the videos are “heavily edited and taken out of context.”
ECF No. 37 at 1. Plaintiff further argues that producing the edited videos so close to the end of
discovery “deprived Plaintiff of any realistic opportunity to investigate, depose witnesses, or test
the authenticity of the evidence” and constitutes a “trial by ambush.” ECF No. 41 at 1.
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Defendant responds that the videos are not untimely because it disclosed them during the
discovery period as supplemental discovery it identified after Plaintiff’s deposition. See ECF
No. 40 at 4-5. Plaintiff testified at her deposition that she read a script provided by Defendant
during client coaching sessions. Id. at 4. This prompted Defendant to search its records for
recordings to rebut this testimony. See ECF No. 40 at 4-5. Defendant disclosed the videos
shortly after identifying them, which was three weeks after Plaintiff’s deposition and a full week
before the close of discovery. Id. Defendant also argues that the videos are not prejudicial
because they are edited only to remove the clients’ remarks—and only Plaintiff’s remarks are
relevant to ascertaining whether her duties were more administrative or discretionary for
purposes of the FLSA. Id. at 4.
II. 	LEGAL STANDARD
Rule 37(c) provides that when a party “fails to disclose information . . . required by Rule
26(a) or (e)” that party “is not allowed to use that information . . . to supply evidence on a motion
. . . unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). The
Third Circuit considers four factors in evaluating whether the exclusion of evidence is warranted
under Rule 37: “(1) the prejudice or surprise of the party against whom the excluded evidence
would have been admitted; (2) the ability of the party to cure that prejudice; (3) the extent to
which allowing the evidence would disrupt the orderly and efficient trial of the case or other
cases in the court; and (4) bad faith or willfulness in failing to comply with a court order or
discovery obligation.” Nicholas v. Penn. State Univ., 227 F.3d 133, 148 (3d Cir. 2000). Courts
will also sometimes consider “the importance of the evidence to the proffering party.” Hill v. TD
Bank, NA, 586 Fed. App’x 874, 879 (3d Cir. 2014).
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The “exclusion of critical evidence is an extreme sanction, not normally to be imposed
absent a showing of willful deception or flagrant disregard of a court order by the proponent of
the evidence.” Konstantopoulos v. Westavco Corp., 112 F.3d 710, 719 (3d Cir. 1997) (internal
quotation marks and citations omitted); accord REACT Env’t Pro. Servs. Grp., Inc. v. Buzan,
20cv00533, 2021 WL 3604079, at *7 (E.D. Pa. Aug. 13, 2021).
III. 	DISCUSSION
a. 	Underlying Rule 26 Violation
Rule 37(c) exclusively permits sanctions for violations of Rules 26(a) and 26(e). The
former requires parties to make certain initial disclosures at the start of discovery. See Fed. R.
Civ. P. 26(a). The latter creates a duty to “supplement or correct” any discovery disclosure or
response to include information thereafter acquired if “the party learns that in some material
respect the information disclosed is incomplete or incorrect, and if the additional or corrective
information has not otherwise been made known to the other parties during the discovery
process[.]” Fed R. Civ. P. 26(e). There must be an underlying violation of one of these rules for
the Court to exclude evidence under Rule 37.
There is no such violation here. Plaintiff does not argue that Defendant failed to make
any required initial disclosures under Rule 26(a). See generally ECF No. 37. And Plaintiff
concedes that Defendant supplemented its discovery responses with the videos prior to the close
of discovery, see ECF No. 41 at 1, so there is no plain violation of Rule 26(e).
Rather, Plaintiff seems to be making a two-fold equitable argument: (1) that the video
evidence was directly responsive to Plaintiff’s initial discovery requests and should have been
disclosed sooner in response to those requests; and (2) Defendant purposefully waited until the
end of discovery to disclose the videos as supplementation to ambush Plaintiff and deprive her of
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the chance to take further discovery on the videos. See ECF No. 37 at 2 (arguing that the video
evidence was responsive to Plaintiff’s fifth document request); ECF No. 41 at 1 (arguing that
“[p]roducing previously concealed, edited video recordings a mere seven (7) days before the
close of discovery deprived Plaintiff of any realistic opportunity to investigate, depose witnesses,
or test the authenticity of the evidence”); ECF No. 41 at 3 (equating Defendant’s conduct to “trial
by ambush”).
This argument is unavailing. Defendant ultimately produced the videos as supplemental
evidence prior to the close of the discovery deadline and gave a facially plausible reason for not
producing them sooner—that Plaintiff’s deposition “caused Defendant to investigate Plaintiff’s
assertions further and discover these videos which refute her claim.” ECF No. 40 at 5. Absent a
clear underlying Rule 26(a) or (e) violation, the Court will not impose the “extreme sanction” of
excluding relevant evidence. See Konstantopoulos, 112 F.3d at 719.
b. 	Rule 37(c) Factors
Even if there was an underlying Rule 26 violation, the factors courts consider in deciding
motions under Rule 37(c) militate against exclusion of the video evidence. See Hill, 586 Fed.
App’x at 879 (setting forth factors).
Surprise/Prejudice. The production of the videos of Plaintiff’s coaching sessions should
not come as a surprise to Plaintiff. She knows the nature of what she said in her sessions because
she was present. She also knew the sessions were being recorded and should have expected
them to be produced in discovery. See Elena Myers Ct. v. LLB Gym, LLC, 16cv4848, 2018 WL
924987, at *4 (E.D. Pa. Feb. 16, 2018) (finding no surprise where party “should have thought to
interview someone” about a known issue in the litigation); Merisant Co. v. McNeil Nutritionals,
LLC, 242 F.R.D. 315, 326 (E.D. Pa. 2007) (party can hardly claim surprise or prejudice from
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inclusion of research other party knew was conducted and party did not seek to depose
researchers prior to motions in limine).
The videos are also highly probative of a core legal issue in this action—whether Plaintiff
exercised independent discretion in advising clients during coaching sessions. She presumably
has been seeking discovery and crafting her arguments related to this issue since the outset of the
litigation. See Pac-W. Distrib. NV LLC v. AFAB Indus. Servs., Inc., 19cv3584, 2023 WL
3952347, at *4 (E.D. Pa. June 12, 2023) (finding prejudice and surprise where one party failed to
disclose multiple witnesses prior to close of discovery and other party “would have prepared
differently had those new witnesses been disclosed from the start”). Under these circumstances,
it would strain credulity to conclude that Plaintiff was “surprised” by the videos.
Moreover, “a finding of prejudice is more likely the closer to trial the submission of the
late evidence takes place[.]” 800-209, LLC v. Cincinnati Indem. Co., 24cv1101, 2025 WL
2923762, at *1 n. 1 (E.D. Pa. June 3, 2025) (internal quotations omitted). Defendant produced
the evidence before the close of discovery, and no trial date has been set. Courts have found lack
of prejudice under more severe circumstances. See, e.g., id. (no prejudice where plaintiff served
expert report 29 days after the discovery cutoff); Bauder v. Phila., Bethlehem & New England
R.R. Co., 96cv7188, 1998 WL 633651, at *4 (E.D. Pa. Aug. 28, 1998), aff’d sub nom. Bauder v.
Phila., Bethlehem & New England R.R. Co., 189 F.3d 463 (3d Cir. 1999) (exclusion improper
when late expert report was submitted two months before trial, because this “was a sufficient
amount of time for Plaintiff to have either prepared an effective cross-examination of [the expert]
or to have requested the court for more time”).1
1 Plaintiff also argues that the videos should be excluded because, in their edited form, they are
missing important context and prejudice Plaintiff as presented. See ECF No. 37 at 2. This
argument is unpersuasive for three reasons. First, Defendant insists that the videos have only
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Ability to Cure Prejudice. If Plaintiff believed there was prejudice from the timing of
Defendant’s submission of the video evidence, she had opportunities to cure it prior to summary
judgment. For instance, she could have moved for an extension of the discovery deadlines or
moved to strike the evidence sooner. See Everett v. Fine Grinding Corp., 09cv5638, 2010 WL
11556828, at *5-6 (E.D. Pa. Dec. 15, 2010) (second factor weighs against exclusion where
plaintiff had several months to file Rule 56(f) motion to reopen discovery but failed to do so).
Additionally, Plaintiff had an opportunity to respond to and probe the validity of the video
evidence on reply in the summary judgment briefing. This, too, cures Plaintiff’s concerns about
being able to point out insufficiencies with the recordings. See ECF No. 37 at 2; see also
Stahlnecker v. Sears, 08cv0681, 2009 WL 661927, at *2 (E.D. Pa. Mar. 11, 2009) (if any
prejudice existed from inclusion of untimely evidence, that prejudice was cured by party’s ability
to file a response to opposing party’s summary judgment motion after receiving the evidence).
Disruption of Trial. There is no trial date set for this action, so inclusion of the video
evidence would not disrupt the orderly and efficient conduct of trial. See Pichler v. UNITE
been edited to remove Defendant’s clients’ remarks during confidential business advising
sessions. See ECF No. 40 at 4. Defendant flagged this for Plaintiff upon disclosure and offered
to discuss the evidence with Plaintiff. See ECF No. 36-7 at 3-4 (production letter accompanying
videos). There is no reason to believe Defendant is misrepresenting the extent of its editing to
the Court. It is also telling that Plaintiff did not object to the form in which these videos were
produced until months later when Defendant relied upon them in its summary judgment motion.
See ECF No. 40 at 4. Second, as Defendant argues, only Plaintiff’s remarks are relevant—not
Defendant’s clients. The central issue here is how to characterize Plaintiff’s job responsibilities.
According to Defendant, the videos show that Plaintiff “exercised independent discretion and
professional judgment when providing consulting services on behalf of [Defendant].” ECF No.
36-7 at 3. It is not clear to the Court how the clients’ remarks would add relevant context to that
inquiry. Third, there are ways that Plaintiff can rebut this evidence short of seeking additional
discovery. She was permitted to respond to the evidence in her opposition to Defendant’s motion
for summary judgment. See ECF No. 39 at 2 (arguing that Defendant relied on “cherry-picked
(and obviously edited) video clips” to support its motion). If the case survives summary
judgment, Plaintiff can also file motions in limine and probe the context of the videos during
cross-examination at trial.
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(Union of Needletrades, Indus. & Textile Emps. AFL-CIO), 04cv2841, 2006 WL 8446940, at *2-
3 (E.D. Pa. May 30, 2006) (“The third factor does not apply because this case is not scheduled
for trial.”); see also Pac-W. Distrib., Inc., 2023 WL 3952347, at *4 (Rules 26 and 37 are meant to
prevent new information from emerging “on the eve of trial” that party cannot prepare for).
Bad Faith. While the parties disagree about whether Defendant should have produced
the videos sooner than it did, there is no evidence of blatant bad faith on Defendant’s part—for
instance, willful noncompliance with the Court’s scheduling order. See SuperMedia LLC v.
Morley, 12cv2329, 2014 WL 5023386, at *12 (E.D. Pa. Oct. 8, 2014) (finding bad faith where
party displayed “willful noncompliance” with court’s discovery deadlines and Federal Rules).
Thus, this factor also weighs against excluding the video evidence.
Importance of Evidence to Proffering Party. Finally, and crucially, the video evidence is
central to Defendant’s defense and highly probative of the dispositive legal issue in this action:
whether Plaintiff was properly classified as exempt from the FLSA’s overtime provisions. The
videos are directly probative of whether Plaintiff’s job duties involved discretionary tasks or
rigid administrative duties. See Miles v. Elliot, 94cv4669, 2011 WL 857320, at *7 (E.D. Pa. Mar.
10, 2011) (fifth factor weighs against exclusion where “the evidence in question is central to
defendants’ defense”). Accordingly, the Court should not impose the “extreme sanction” of
excluding this critical evidence. See Konstantopoulos, 112 F.3d at 719.
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IV. 	CONCLUSION
Because there is no underlying Rule 26 violation, and because the Rule 37 factors weigh
against exclusion here, the Court will deny Plaintiff’s motion. An appropriate Order will follow.
BY THE COURT:
MARY KAY COSTELLO, J.
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