United States District Court, D. Nevada
R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff,
WELLFLEET COMMUNICATIONS, LLC, et al., Defendants.
M. Navarro, Chief Judge United States District Judge.
before the Court is the Motion for Leave to Amend or Correct
the Complaint, (ECF No. 124), filed by Plaintiff Alexander
Acosta (“Plaintiff”). Defendants Wellfleet
Communications, LLC, Allen Roach, Lighthouse Communications,
LLC, New Choice Communications, Inc., and Ryan Roach
(collectively “Defendants”) filed Responses, (ECF
Nos. 128, 129), and Plaintiff filed a Reply, (ECF No. 132).
For the reasons set forth herein, Plaintiff's Motion for
Leave to Amend or Correct the Complaint is
September 18, 2017, Plaintiff filed the First Amended
Complaint before the Court alleging violations of the minimum
wage, overtime, and recordkeeping provisions of the Fair
Labor Standards Act (“FLSA”). (See Am.
Compl., ECF No. 44). In the Amended Complaint, Plaintiff
alleges that Defendants failed to pay their call center
workers the minimum wage and overtime pay required under the
FLSA. (Id.). On March 27, 2018, based on information
obtained through discovery, Plaintiff filed the instant
Motion for Leave to Amend or Correct the Complaint.
(See Mot. to Amend, ECF No. 124). In this Motion,
Plaintiff seeks to add 324 additional employees to the list
of individuals for whom Plaintiff is seeking back wages.
(Id. 2:2-5). As Plaintiff raises this motion after
the deadline to amend the pleadings, the Court treats
Plaintiff's motion as a request to modify the scheduling
order under Rule 16(b).
to the Court ruling on the Motion to Amend, Plaintiff filed
its Motion for Summary Judgment on the First Amended
Complaint. (Pl.'s MSJ, ECF No. 150). On September 29,
2018, the Court granted in part and denied in part
Plaintiff's Motion for Summary Judgment. (Order, ECF No.
170). In the Order, the Court found Defendants
liable for willful violations of the FLSA. (Id.
18:20-23). Under the FLSA, a willful violation permits
Plaintiff to recover damages beginning on October 7, 2013,
which is three years from the date Plaintiff filed the
initial Complaint in this action.
(Id.). Based on this finding, the Court ordered
Plaintiff to file a supplemental brief and proposed order on
the issue of damages and injunctive relief. As judgment has
not yet been entered in this case, however, the Court first
addresses Plaintiff's request to add employees to the
complaint for the purpose of damages.
party moves to amend the pleadings after the expiration of
the deadline established in the scheduling order, courts
review the request through a two-step process. First, courts
resolve the motion to amend the scheduling order, which is
governed by the “good cause” standard outlined in
Rule 16(b) of the Federal Rules of Civil Procedure.
See, e.g., Johnson v. Mammoth
Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992).
“Rule 16(b)'s ‘good cause' standard
primarily considers the diligence of the party seeking the
amendment.” Id. at 609. In particular, courts
look to whether the deadline set in the scheduling order
“cannot reasonably be met despite the diligence of the
party seeking the amendment.” Id.
“[C]arelessness is not compatible with a finding of
diligence and offers no reason for a grant of relief.”
Id. Although prejudice to the opposing party may
also be considered, the focus of the inquiry is on the
movant's reasons for seeking modification. Id.
“If that party was not diligent, the inquiry should
end.” Id. The party seeking amendment bears
the burden of establishing diligence. See,
e.g., Morgal v. Maricopa County Bd. Of
Sup'rs, 284 F.R.D. 452, 460 (D. Ariz. 2012).
“good cause” has been established under Rule
16(b), courts will then examine whether amendment is proper
under the standards outlined in Rule 15(a). Rule 15(a)
provides that “[t]he court should freely give leave [to
amend] when justice so requires, ” and there is a
strong public policy in favor of permitting amendment.
Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999).
As such, the Ninth Circuit has made clear that Rule 15(a) is
to be applied with “extreme liberality.”
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d
1048, 1051 (9th Cir. 2003) (per curiam). Under Rule
15(a), courts consider various factors, including: (1) bad
faith; (2) undue delay; (3) prejudice to the opposing party;
(4) futility of the amendment; and (5) whether the plaintiff
has previously amended the complaint. See Id. at
1052. These factors do not carry equal weight, however, and
prejudice is the touchstone of the analysis. See Id.
The party opposing the amendment bears the burden of showing
why leave to amend should be denied. See,
e.g., Desert Protective Council v. U.S. Dept. of
the Interior, 927 F.Supp.2d 949, 962 (S.D. Cal. 2013)
(citing Genentech, Inc. v. Abbott Labs., 127 F.R.D.
529, 530-31 (N.D. Cal. 1989)).
Motion to Amend, Plaintiff seeks to add “two
sets” of additional employees to the Amended Complaint.
(Mot. to Amend 2:8-12). The first set consists of 182
employees who received paychecks from Defendant Lighthouse
Communications, LLC (“Lighthouse”), a defendant
added to the case in September 2017. (Id.). The
second set consists of 142 employees who worked for Defendant
Wellfleet Communications, LLC (“Wellfleet”)
between October 16, 2015, and February 1, 2016.
(Id.). Plaintiff argues that good cause supports
modification because Defendants refused to produce necessary
documents during discovery. (Id. 3:15-5:18).
According to Plaintiff, it was only after subpoenaing nearly
25, 000 pages of records from non-party Wells Fargo Bank that
Plaintiff was able to identify the two-sets of additional
employees. (Id. 7:9-14).
response, Defendants argue that Plaintiff lacks good cause
for the amendment because Plaintiff was not diligent in
discovering the additional employees. (First Resp. 8:7-9:10,
ECF No. 128); (Second Resp. 3:2-5:7, ECF No. 129).
Additionally, Defendants argue that the proposed amendment
would be unduly prejudicial because it would expand the
case's scope right before the discovery deadline. (First
Resp. 2:4-4:12); (Second Resp. 2:3-3:1). Lastly, Defendants
argue that the proposed amendment would be futile because it
would add employees outside the statute of limitations period
and the relation-back doctrine does not apply. (First Resp.
8:8-14); (Second Resp. 5:10-6:12).
review, the Court agrees with Plaintiff that good cause
exists to modify the scheduling order under Rule 16(b). In
particular, the Court notes that Plaintiff explicitly sought
documents that would have revealed the new employees'
identities prior to the amendment deadline. (See
Edeli Decl. ¶ 5, Ex. 2 to Mot. to Amend, ECF No. 124-2);
(Requests for Production, Ex. 2-A to Mot. to Amend).
Defendants opposed Plaintiffs discovery at numerous points
throughout the pendency of this case, which further delayed
Plaintiffs ability to discover the at-issue employees.
(See Id. ¶¶ 6-9); (See
Correspondences, Exs. 2-B, 2-C to Mot. to Amend);
(See Pl.'s Mot. to Compel, ECF No. 85).
Moreover, after Plaintiff acquired the necessary documents
from non-party Wells Fargo, the voluminous nature of the
documents required additional time to analyze. (See
Edeli Decl. ¶¶ 14-18, Ex. 2 to Mot. to Amend).
Plaintiff has therefore met its burden of showing diligence
in accordance with the federal rules.
found good cause under 16(b), the Court next turns to Rule
15(a) as to whether leave to amend should be granted. In this
case, Defendants primarily argue that Plaintiff's Motion
to Amend should be denied based on futility and prejudice.
Given that the Court has already ruled on the applicable
statute of limitations period and relation-back issues, the
Court finds that Defendants' futility arguments are moot.
To the extent Plaintiff seeks to add employees who fall
outside the relevant limitations period, these employees are
already excluded from any liability calculations per the
Court's prior Order.
respect to Defendants' second argument, the Court finds
that Defendants will not be prejudiced by the amended
employee list. Notably, the amended list does not materially
alter the scope or substance of the underlying FLSA claim. As
indicated in the Amended Complaint, Defendants were already
on notice that Plaintiff sought to recover back wages and
liquidated damages on behalf of employees dating back to
October 15, 2012, which encompasses the at-issue employees.
Thus, the identities of Defendants' employees during the
relevant time period has always been a central issue in
discovery throughout this case. Defendants cannot now claim