Wright v. Frontier Management LLC ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 JOSHUA WRIGHT, on behalf of No. 2:19-cv-01767-JAM-CKD himself and all others 12 similarly situated, 13 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S 14 v. MOTION TO AMEND 15 FRONTIER MANAGEMENT LLC, FRONTIER SENIOR LIVING LLC, 16 and GH SENIOR LIVING LLC, dba GREENHAVEN ESTATES ASSISTED 17 LIVING, 18 Defendants. 19 20 On September 6, 2019, Joshua Wright (“Plaintiff”) sued 21 Frontier Management LLC, Frontier Senior Living LLC, and GH 22 Senior Living LLC (collectively, “Defendants”), on behalf of 23 himself and other employees, over several of their wage and hour 24 policies. See Compl., ECF No. 1. Plaintiff seeks leave to amend 25 his complaint to include additional named plaintiffs and wage and 26 hour claims on behalf of proposed Rule 23 classes in Washington, 27 Oregon, and Illinois. See Mot. to Amend Compl. (“Mot.”), ECF No. 28 50. 1 For the reasons set forth below, the Court GRANTS IN PART 2 AND DENIES IN PART Plaintiff’s Motion to Amend.1 3 4 I. BACKGROUND 5 Defendants operate a chain of retirement and assisted living 6 communities. Compl. ¶ 30. Plaintiff worked as a medication 7 technician at one of the assisted living locations in California 8 from April 12, 2018, until March 15, 2019. Compl. ¶ 31. On 9 September 6, 2019, Plaintiff filed suit against Defendants. See 10 Compl. Plaintiff alleges that Defendants’ wage and hour 11 practices violate the Fair Labor Standards Act (“FLSA”), 29 12 U.S.C. § 201, et seq., and several provisions of the California 13 Labor Code, and amount to unfair business practices in violation 14 of the California Business and Professions Code. Compl. ¶¶ 62– 15 94, 103–113, 123–132, 140–151. Plaintiff further alleges 16 Defendants do not permit meal and rest periods and fail to 17 provide accurate itemized wage statements and reimburse necessary 18 business expenses as required by law. Compl. ¶¶ 95–102, 114–122, 19 133–139. 20 Plaintiff sued on behalf of himself and class and collective 21 members for all unpaid wages, compensation, penalties, and other 22 damages owed. Compl. ¶ 9. The class members are people who are 23 or have been employed by Defendants as hourly, non-exempt 24 employees in California within four years preceding the filing of 25 the original complaint. Compl. ¶ 12. The collective members are 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for January 26, 2021. 1 people who are or have been employed by Defendants as hourly, 2 non-exempt employees in the United States at any time within 3 three years preceding the filing of the stipulated motion for 4 conditional certification. See Am. Stip. and Order to 5 Conditionally Certify the Collective, ECF No. 15. The stipulated 6 motion for conditional certification was filed on March 13, 2020. 7 See Stip. and Proposed Order to Conditionally Certify the 8 Collective, ECF No. 13. 9 Plaintiff now requests leave to file an amended complaint to 10 add: (1) Loretta Stanley, Haley Quam, and Aiesha Lewis as named 11 plaintiffs; (2) six causes of action for violations of the 12 Washington Minimum Wage Act and other Washington state laws; 13 (3) six causes of action for violations of the Oregon Revised 14 Statutes and other Oregon state laws; and (3) five causes of 15 action for violations of the Illinois Minimum Wage Law and other 16 Illinois state laws. See Mot. at 5. Plaintiff also seeks to 17 clarify the allegations concerning hours worked off the clock and 18 compensation of putative class and collective members. Id. 19 Defendants oppose amendment, arguing Plaintiff’s proposed 20 amendments wrongfully use September 6, 2019, the commencement 21 date of the California Rule 23 class, to relate back and toll the 22 statute of limitations applicable to the new Washington, Oregon, 23 and Illinois class claims. See generally Opp’n, ECF No. 51. 24 Defendants further argue Plaintiff’s proposed amendments 25 improperly change the start of the FLSA collective period to the 26 commencement date of the California Rule 23 class. Id. 27 /// 28 /// 1 II. OPINION 2 A. Leave to Amend 3 Before a court issues the scheduling order in a case, it 4 must “freely grant leave to amend when justice so requires.” 5 Fed. R. Civ. Proc. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182 6 (1962). Rule 15’s policy of favoring amendments to pleadings 7 “is to be applied with extreme liberality.” Desertrain v. City 8 of Los Angeles, 754 F.3d 1147, 1154 (9th Cir. 2014) (internal 9 quotations and citation omitted). “Amendments seeking to add 10 claims are to be granted [even] more freely than amendments 11 adding parties.” Union Pacif. R. Co. v. Nevada Power Co., 950 12 F.2d 1429, 1432 (9th Cir. 1991). Rule 15(a)(2)’s mandate rests 13 upon the notion that “[i]f the underlying facts or circumstances 14 relied upon by a plaintiff may be a proper subject of relief, he 15 ought to be afforded an opportunity to test his claim on the 16 merits.” Foman, 371 U.S. at 182. 17 In light of Rule 15(a)’s text and purpose, the Ninth Circuit 18 has instructed that “[c]ourts may decline to grant leave to amend 19 only if there is strong evidence of ‘undue delay, bad faith or 20 dilatory motive on the part of the movant, repeated failure to 21 cure deficiencies by amendments previously allowed, undue 22 prejudice to the opposing party by virtue of allowance of the 23 amendment, [or] futility of amendment, etc.’” Sonoma Cnty. Ass’n 24 of Retired Employees v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th 25 Cir. 2013) (quoting Foman, 371 U.S. at 182). 26 1. Futility 27 Defendants oppose amendment insofar as it would be futile. 28 See Opp’n at 5–12. Futility of amendment can, by itself, justify 1 the denial of a motion for leave to amend. Nunes v. Ashcroft, 2 375 F.3d 805, 808 (9th Cir. 2004). An amendment is futile when 3 “no set of facts can be proved under the amendment to the 4 pleadings that would constitute a valid and sufficient claim or 5 defense.” Missouri ex rel. Koster v. Harris, 847 F.3d 646, 656 6 (9th Cir. 2017) (quoting Miller v. Rykoff–Sexton, Inc., 845 F.2d 7 209, 214 (9th Cir. 1988)). 8 Plaintiff’s original complaint asserts nine causes of action 9 against Defendants for violations of FLSA and California law. 10 See generally Compl. Plaintiff’s proposed first amended 11 complaint alters the FLSA collective action to incorporate the 12 new named plaintiffs and their representative classes and start 13 the collective period on September 6, 2016. See Proposed First 14 Am. Compl. (“Proposed FAC”) ¶ 58, Ex. 1 to Mot., ECF No. 50-2. 15 As for the class claims, Plaintiff’s proposed first amended 16 complaint expands them to include seventeen new causes of action 17 for violations of Washington, Oregon, and Illinois law, and seeks 18 to relate them back to September 6, 2019. See Proposed FAC 19 ¶¶ 39, 181–383. 20 Defendants’ argue that amendment would be futile because the 21 proposed Washington, Oregon, and Illinois class claims do not 22 relate back to the original complaint and cannot be tolled to the 23 filing date of the original complaint. Opp’n at 5–11. This 24 argument misses the mark. That the amended and additional claims 25 should not relate back or be tolled to the original complaint 26 does not necessarily mean they are futile. Notably, Defendants 27 do not argue that, absent relation back or tolling, the proposed 28 claims would be time-barred. See, e.g., Twersky v. Yeshiva 1 Univ., 579 Fed.Appx. 7, 12 (2d Cir. 2014) (“[T]he district court 2 correctly concluded that amendment would have been futile” where 3 the amendments involved untimely claims.). Nor do they present 4 any other reason why the Court should find the proposed 5 amendments futile. 6 The Court, therefore, grants Plaintiff leave to amend the 7 complaint to add Loretta Stanley, Haley Quam, and Aiesha Lewis as 8 named plaintiffs, include additional class claims under 9 Washington, Oregon, and Illinois law, and clarify preexisting 10 allegations. However, as discussed below, Plaintiff is denied 11 leave to relate back and toll the statute of limitations 12 applicable to the new class claims to the filing of the original 13 complaint. Plaintiff is also denied leave to begin the FLSA 14 collective period on September 6, 2016. 15 B. Relation Back 16 Generally, an amendment of a pleading relates back to the 17 date of the original pleading when the new claim asserted arose 18 out of the “conduct, transaction, or occurrence set forth or 19 attempted to be set forth in the original pleading.” Fed. R. 20 Civ. P. 15(c)(1)(B); Immigr. Assistance Project of the L.A. Cnty. 21 Fed’n of Lab. v. INS, 306 F.3d 842, 857 (9th Cir. 2002). An 22 amendment adding a plaintiff relates back to the date of the 23 original pleading “only when: (1) the original complaint gave the 24 defendant adequate notice of the claims of the newly proposed 25 plaintiff; (2) the relation back does not unfairly prejudice the 26 defendant; and (3) there is an identity of interests between the 27 original and newly proposed plaintiff.” Immigr. Assistance 28 Project, 306 F.3d at 857 (citation omitted). 1 Here, Plaintiff’s original complaint alleges a FLSA claim 2 and a class action involving California employees working at 3 California retirement and assisted living communities where the 4 wage and hour practices violate several sections of the 5 California Labor Code and the California Business and Professions 6 Code. See Compl. ¶¶ 8, 12, 58, 72–151 (“Plaintiff also pursues 7 claims under [the] California Labor Code to challenge Defendants’ 8 policies and practices . . . .”). Plaintiff’s proposed 9 amendments add three new classes, see Proposed FAC ¶¶ 19–21, 74- 10 77, and several new class claims alleging violations of the wage 11 and hour laws of other states, see Proposed FAC ¶¶ 181–383. In 12 addition, the proposed first amended complaint asserts a six-year 13 look back period for the Oregon claims, which reaches farther 14 back than the original three-year FLSA and four-year California 15 limitations periods. See Proposed FAC ¶ 288. 16 Plaintiff argues Defendants were put on notice of the new 17 Washington, Oregon, and Illinois class claims because the 18 original FLSA claim applies to a “nationwide collective.” See 19 Reply at 4, ECF No. 53. The Court disagrees. The original 20 pleading did not provide Defendants with fair notice of the 21 proposed state law individual and class claims. Plaintiff 22 “do[es] not identify any authority suggesting that [the FLSA and 23 California] claims put [Defendants] on notice that [they] might 24 be sued, in this action, by different plaintiffs asserting 25 individual and class claims under the wage-and-hour laws of 26 [three] additional states.” See Charlot v. Ecolab, Inc., 97 27 F.Supp.3d 40, 72 (E.D.N.Y. 2015). 28 Plaintiff, instead, cites to Ramirez v. Ghilotti Bros. Inc., 1 941 F.Supp.2d 1197 (N.D. Cal. 2013) in support of the contention 2 that Defendants were put on notice of additional state law claims 3 on behalf of employees in other states. Reply at 4. However, 4 there are important distinctions between Ramirez and the instant 5 matter. In Ramirez, the plaintiffs’ original complaint alleged 6 FLSA and California state law violations based on a construction 7 company’s wage and hour practices. 941 F.Supp.2d at 1201. The 8 same plaintiffs later included additional violations of the 9 California Labor Code, for which the underlying facts were 10 largely included in the original complaint. Id. at 1209–10. 11 Thus, the court found the subsequently alleged violations of 12 California law related back to the original pleading. Id. 1208- 13 10. By contrast, Plaintiff seeks to add new named plaintiffs and 14 class claims under the laws of entirely different states. 15 Under Plaintiff’s theory, he “would be permitted to stop the 16 clock on all state law wage-and-hour claims possibly brought 17 against an employer in multiple states by filing a single FLSA 18 collective action, as long as [he] were later able to identify 19 plaintiffs in other states.” Charlot, 97 F.Supp.3d at 73. “This 20 is not fair notice.” Id. Although the basic facts of 21 Defendants’ allegedly unlawful wage and hour practices are the 22 same under federal law, “the state standards vary such that a 23 defendant facing multi-state claims must analyze its records and 24 scope of liability under each state law separately.” Id. It 25 would be unfair to expect a defendant to engage in this review 26 before at least one employee from a state has stepped forward as 27 a plaintiff. Id. 28 Accordingly, Plaintiff has not demonstrated fair notice and 1 relation back is not proper under Rule 15(c)(1)(B). Moreover, 2 Plaintiff does not argue that relation back is appropriate 3 because either Washington, Oregon, or Illinois law “provides 4 [that] the applicable statute of limitations allows relation 5 back.” See Fed. R. Civ. P. 15(c)(1)(A). Thus, Plaintiff is 6 denied leave to amend the complaint such that the new Rule 23 7 non-California classes and non-California state law claims relate 8 back to the original complaint filed on September 6, 2019. July 9 8, 2020, the day Plaintiff provided Defendants with the proposed 10 first amended complaint, shall instead define the temporal scope 11 of the Washington, Oregon, and Illinois classes. See Edelstein 12 Decl. ¶ 4, ECF No. 50-1; see also Charlot, 97 F.Supp.3d at 87 13 (plaintiffs were permitted to add clams that did not relate back 14 to the original complaint so long as they were timely as of the 15 day plaintiffs informed defendant of their intent to amend the 16 complaint). 17 C. Tolling 18 Defendants also argue that Plaintiff’s proposed amendments 19 should not be tolled to the filing of the original complaint. 20 See Opp’n at 9–11. Plaintiff does not dispute that tolling 21 pursuant to Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) 22 does not apply here. Instead, Plaintiff argues the Court should 23 apply equitable tolling. See Reply at 5. “Equitable tolling 24 applies when the plaintiff is prevented from asserting a claim 25 by wrongful conduct on the part of the defendant, or when 26 extraordinary circumstances beyond the plaintiff’s control made 27 it impossible to file a claim on time.” Stoll v. Runyon, 165 28 F.3d 1238, 1241 (9th Cir. 1999). 1 Plaintiff does not contend either situation applies. 2 Moreover, Plaintiff does not argue that equitable tolling is 3 necessary to bring these additional claims within the applicable 4 statutes of limitations. Plaintiff alleges “Defendants 5 specifically agreed to toll the statute of limitations for these 6 new class claims,” but fails to offer the Court evidence of 7 that. See Reply at 5. Plaintiff cites to docket number 56, 8 however, the docket ends at 55. Plaintiff’s counsel references 9 a tolling agreement executed on August 7, 2020, but that 10 agreement expired on October 5, 2020. Edelstein Decl. ¶ 4. 11 Accordingly, the Court declines to apply equitable tolling 12 to the proposed class claims at this stage. 13 D. FLSA Collective Period 14 Finally, Defendants argue Plaintiff’s proposed amendments 15 incorrectly relate the start of the FLSA collective period back 16 to the filing date of the original complaint on September 6, 17 2019, such that the collective period begins on September 6, 18 2016. See Opp’n at 11; Proposed FAC ¶ 58. Defendants are 19 correct. Pursuant to 29 § U.S.C. 216(b), the parties stipulated 20 to the collective period beginning “three years prior to the date 21 of filing of stipulated motion for conditional certification.” 22 See Stip. and Order to Conditionally Certify the Collective. In 23 doing so, the parties agreed to override the language of the 24 original complaint, which did have the collective period 25 beginning three years prior to the filing of the original 26 complaint. See Compl. ¶ 42. The stipulation was filed on March 27 13, 2020. Thus, the collective period begins on March 13, 2017. 28 As a result, Plaintiff may amend the complaint to include —— mmm ROS EIRENE IRIE III RISD ENE NOI IOI EOE IIE ESS eee 1 the start date of the collective period, but that date is March 2 13, 2017, unless the parties stipulate otherwise. 3 4 Til. ORDER 5 For the reasons set forth above, the Court GRANTS IN PART 6 | AND DENIES IN PART Plaintiff’s Motion to Amend. Plaintiff is 7 permitted to amend the complaint to add the new named plaintiffs 8 and their claims, but only to the extent that such claims were 9 timely as of July 8, 2020. The commencement of the FLSA 10 collective period should be amended to March 13, 2017. Plaintiff 11 shall file a First Amended Complaint within twenty days (20) of 12 this Order. Defendants’ responsive pleading is due twenty days 13 thereafter. 14 IT IS SO ORDERED. 15 Dated: February 5, 2021 16 ke Me 17 teiren staves odermacr 7008 18 19 20 21 22 23 24 25 26 27 28 11