Hernandez Gomez v. The GEO Group, Inc. ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JOSE HERNANDEZ GOMEZ, et al. Case No. 1:22-cv-00868-ADA-CDB 12 Plaintiffs, ORDER GRANTING MOTION FOR LEAVE TO FILE A SECOND AMENDED 13 v. COMPLAINT 14 THE GEO GROUP, INC. (ECF No. 36) 15 Defendant. 16 17 18 Before this Court is Plaintiffs Jose Ruben Hernandez Gomez, Salesh Prasad, Guillermo 19 Medina Reyes, Edgar Sanchez, Adan Castillo Merino, Oliva Sierra Ivan, Fidel Garcia, Issac 20 Cardona Hernandez, and Pedro Jesus Figueroa Padilla’s (“Plaintiffs”) motion to file a second 21 amended complaint (ECF No. 36), Defendant The Geo Group, Inc.’s (“Defendant”) opposition 22 (ECF No. 42), and Plaintiffs’ reply (ECF No. 43). For the reasons explained herein, Plaintiffs’ 23 motion to file a second amended complaint shall be granted. 24 Background 25 On July 13, 2022, Plaintiffs filed a complaint for declaratory and injunctive relief and 26 damages against Defendant. (ECF No. 1). Plaintiffs asserted six causes of action against 27 Defendant including a representative action pursuant to the Private Attorneys General Act of 2004 (“PAGA”). Id. On September 21, 2022, Defendant filed a motion to dismiss Plaintiffs’ 1 initial complaint. (ECF No. 21). On October 4, 2022, Plaintiffs filed a first amended complaint 2 (“FAC”). (ECF No. 24) and the Court subsequently denied Defendant’s motion to dismiss as 3 moot. (See ECF No. 34 citing Ramirez v. Cnty. of San Bernardino, 806 F.3d 1002, 1008 (9th Cir. 4 2015)). 5 On October 29, 2022, Defendant filed a motion to dismiss Plaintiffs’ FAC. (ECF No. 32). 6 On November 8, 2022, Plaintiffs filed an opposition to Defendant’s motion to dismiss and the 7 instant motion to file a second amended complaint. (ECF Nos. 35- 36). On November 14, 2022, 8 the parties filed a stipulation to stay briefing on Defendant’s motion to dismiss pending a ruling 9 on Plaintiffs’ motion to file a second amended complaint. (ECF No. 40). On November 15, 10 2022, the Court issued an order granting the parties’ stipulation. (ECF No. 41). On November 11 22, 2022, Defendant filed an opposition to Plaintiffs’ motion to file a second amended complaint. 12 (ECF No. 42). On December 2, 2022, Plaintiffs filed a reply. (ECF No. 43). 13 Legal Standard 14 Twenty-one days after a responsive pleading or a motion to dismiss is filed, a plaintiff 15 may amend the complaint only by leave of the court or by written consent of the adverse party. 16 Fed. R. Civ. P. 15(a). “Rule 15(a) is very liberal” and a court should freely give leave to amend 17 when “justice so requires.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 18 (9th Cir. 2006); see Chodos v. W. Publ. Co., 292 F.3d 992, 1003 (9th Cir. 2002) (“it is generally 19 our policy to permit amendment with ‘extreme liberality’”) (citing Morongo Band of Mission 20 Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir.1990)). Granting or denying leave to amend a 21 complaint under Rule 15 is in the discretion of the court. Swanson v. United States Forest 22 Service, 87 F.3d 339, 343 (9th Cir. 1996). “In exercising this discretion, a court must be guided 23 by the underlying purpose of Rule 15 to facilitate decision on the merits, rather than on the 24 pleadings or technicalities.” United States v. Webb, 655 F.2d 977, 979 (9th Cir, 1981); Chudacoff 25 v. Univ. Med. Ctr., 649 F.3d 1143, 1152 (9th Cir. 2011) (“refusing Chudacoff leave to amend a 26 technical pleading error, albeit one he should have noticed earlier, would run contrary to Rule 27 15(a)’s intent.”). 1 A court ordinarily considers five factors to assess whether to grant leave to amend: “(1) 2 bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5) 3 whether the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805, 4 808 (9th Cir. 2004). The factors are not weighed equally. Bonin v. Calderon, 59 F.3d 815, 845 5 (9th Cir. 1995); see Atkins v. Astrue, 2011 WL 1335607, at *3 (N.D. Cal. April 7, 2011) (the five 6 factors “need not all be considered in each case”). Undue delay, “by itself…is insufficient to 7 justify denying a motion to amend.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). On the 8 other hand, futility of amendment and prejudice to the opposing party can, by themselves, justify 9 the denial of a motion for leave to amend. Bonin, 59 F.3d at 845; see Eminence Capital, LLC v. 10 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (the consideration of prejudice to the opposing 11 party carries the greatest weight). 12 In conducting this five-factor analysis, the court generally grants all inferences in favor of 13 permitting amendment. Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). 14 Moreover, the court must be mindful that, for each of these factors, the party opposing 15 amendment has the burden of showing that amendment is not warranted. DCD Programs, Ltd. v. 16 Leighton, 833 F.2d 183, 187 (9th Cir. 1987). 17 Discussion 18 The Court addresses the relevant Nunes factors below. Defendant opposes Plaintiffs’ 19 motion for leave to file a second amended complaint based on four of the five factors:.1 The 20 Court addresses each in turn. 21 1. Prior amendments 22 The Court’s discretion to deny an amendment is “particularly broad” where a party has 23 previously amended the pleading. Allen v. Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). 24 Here, the amendment sought will be the second amendment to the pleadings. Although Plaintiffs 25 concede they mistakenly omitted the fact of notification to LDWA in their first amended 26 complaint (see ECF No. 36 at 3, 8), the Court finds Plaintiffs’ errors in the earlier-amended 27 1 Defendant opposes Plaintiffs’ motion for leave to amended based on four of the five factors 1 complaint are not of such a recurring pattern that this factor would weigh against granting the 2 motion to amend. Cf. McGlinchy v. Shell Chem Co., 845 F.2d 802, 809-10 (9th Cir. 1988) 3 (“Repeated failure to cure deficiencies by amendments previously allowed is another valid reason 4 for a district court to deny a party leave to amend.”). 5 2. Undue delay 6 By itself, undue delay is insufficient to prevent the Court from granting leave to amend 7 pleadings. Howey v. United States, 481 F.2d 1187, 1191 (9th Cir. 1973); DCD Programs, Ltd., 8 833 F.2d at 186. In combination with other factors, delay may be sufficient to deny amendment. 9 Webb, 655 F.2d at 979-80. To determine undue delay, a court shall consider if “the moving party 10 knew or should have known the facts and theories raised by the amendment in the original 11 pleading.” Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990) (citations omitted). 12 The fact that a party could have amended a complaint earlier does not in itself constitute an 13 adequate basis for denying leave to amend. Howey, 481 F.2d at 1190-91. Whether there has been 14 “undue delay” should be considered in the context of (1) the length of the delay measured from 15 the time the moving party obtained relevant facts; (2) whether discovery has closed; and (3) 16 proximity to the trial date. Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 798-99 (9th Cir. 1991). 17 Defendant asserts Plaintiffs should have been “aware of all operative facts at the time of 18 filing of their First Amended Complaint.” (ECF No. 42 at 3). The Court agrees that Plaintiffs 19 should have included in their FAC that they provided notification to LDWA via LDWA’s 20 electronic filing system and that on July 28, 2022, they served on Defendant a copy of the initial 21 complaint identifying the specific provisions of the Labor Code they allegedly violated. (ECF 22 No. 36 at 4). Indeed, Plaintiffs admit these omissions were a mistake on their part. Id. at 3, 8. 23 Plaintiffs contend the proposed amendments are not the product of undue delay. (ECF 24 No. 43 at 3). Plaintiffs argue the same day they discovered an error in the FAC they notified 25 Defendant’s counsel, drafted a revised complaint, engaged in the necessary meet and confer 26 process, and filed the motion as quickly as possible. Id. at 4. Plaintiffs also note this case is in its 27 “earliest stages, with no discovery taken yet.” (ECF No. 36 at 4). 1 The Court finds no undue delay that would support denying leave to amend. While 2 Plaintiffs did fail to include operative facts in their FAC, the record shows Plaintiffs promptly 3 took steps to correct the pleadings. Moreover, a scheduling conference has not been held and 4 discovery deadlines and a trial date has not been set in this action. See (ECF No. 17). Thus, this 5 factor weighs in favor of amendment. 6 3. Futility of amendment 7 A court may deny leave to amend if the proposed amendment is futile or would be subject 8 to dismissal. Carrico v. City & Cnty. of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011). An 9 amendment is futile if it is clear that the complaint could not be saved by amendment. United 10 States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). However, denial of leave to 11 amend on futility grounds is “rare.” Zurich Am. Ins. Co. of Illinois v. VForce Inc., No. 2:18-cv- 12 02066-TLN-CKD, 2020 WL 2732046, at *3 (E.D. Cal. May 26, 2020) (citing Netbula, LLC v. 13 Distinct Corp., 212 F.R.D. 534, 539 (N.D. Cal. 2003). “Ordinarily, ‘courts will defer 14 consideration of challenges to the merits of a proposed amended pleading until after leave to 15 amend is granted and the amended pleading is filed.”’ Id. 16 Defendant asserts Plaintiffs’ attempt to amend their complaint to establish that their 17 PAGA claims have been exhausted is futile. (ECF No. 42 at 2). Defendant contends Plaintiffs’ 18 FAC failed to identify Plaintiffs had engaged in agency exhaustion of their PAGA claims and 19 Plaintiffs’ proposed amendment would not cure his deficiency. Id. at 2-3. In contrast, Plaintiffs 20 primarily argue the request to amend is “to correct a simple factual error.” (ECF No. 36 at 8-9). 21 In addition, Plaintiffs claim Defendant’s futility argument under Rule 15 is premature and only 22 “applies where a plaintiff is attempting to cure a pleading defect after the complaint has been 23 dismissed.” (ECF No. 43 at 2) (citing Sonoma Cnty. Ass’n of Retired Emps. v. Sonoma County, 24 708 F.3d 1109, 1117-18 (9th Cir. 2013). 25 The Court finds that the ordinary practice of deferring Defendant’s challenge to the 26 merits of the proposed amended complaint until after the filing of the amended complaint is 27 appropriate. See Zurich Am. Ins. Co. of Illinois, 2020 WL 2732046, at *3; White v. United Parcel 1 2020). Accordingly, the Court makes no determination regarding futility of amendment and this 2 factor does not weigh against granting leave to amend. 3 4. Prejudice to the opposing party 4 The most critical factor in determining whether to grant leave to amend is prejudice to the 5 opposing party. Eminence Capital, 316 F.3d at 1052. The burden of showing prejudice is on the 6 party opposing an amendment to the complaint. DCD Programs, Ltd., 833 F.2d at 187. There is 7 a presumption in favor of granting leave to amend where prejudice is not shown under Rule 15(a). 8 Eminence Capital, 316 F.3d at 1052. 9 Defendant claims if Plaintiffs are allowed to amend, Defendant “would be made to redraft 10 and re-file its motion to dismiss as to the new complaint…” (ECF No. 42 at 4). Defendant argues 11 this refiling would result in a “needless expenditure of resources and fees”. Id. Additionally, 12 Defendant claims Plaintiff has yet to exhaust its PAGA claim, and to allow amendment would 13 force it to defend against Plaintiffs’ PAGA claims in two forums. Id. 14 Plaintiffs contend Defendant was not prejudiced as it was informed of factual errors in the 15 FAC and Plaintiffs’ intent to cure the complaint but “by its own strategic choice” drafted and 16 filed a motion to dismiss. (ECF No. 43 at 5). Plaintiffs aver that even if there is some prejudice 17 to Defendant for having to redraft its motion to dismiss, the prejudice is “minor” as the proposed 18 amendments impact only one of Plaintiffs’ seven claims. Id. Additionally, Plaintiffs argue 19 Defendant will not have to defend itself in two forums as the exhaustion process related to its 20 PAGA claims is already complete. Id. at 5-6. 21 Defendant fails to meet its burden of showing prejudice. DCD Programs, Ltd., 833 F.2d 22 at 187. Plaintiffs’ proposed amendment allegedly seeks only to correct factual records both 23 parties were aware of before Defendant filed its motion to dismiss. The expenditure of resources 24 and fees to re-draft and re-file a motion to dismiss that addresses the proposed changes to 25 Plaintiffs’ PAGA claims is minor at best. Contra Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) 26 (“The new claims set forth in the amended complaint would have greatly altered the nature of the 27 litigation and would have required defendants to have undertaken, at a late hour, an entirely 1 | claims in two forums, this is another challenge to the merits of Plaintiffs’ PAGA claims and 2 | again, shall be deferred. Consequently, this factor weighs in favor of granting leave to amend. 3 | Conclusion and Order 4 Based on the foregoing, the Nunez factors set forth by the Ninth Circuit weigh in favor of 5 | allowing Plaintiffs to file a second amended complaint. Therefore, the Court exercises its 6 | discretion to grant Plaintiffs’ motion for leave to file a second amended complaint. Swanson, 87 7 | F.3d at 343. Accordingly, IT IS HEREBY ORDERED: 8 1. Plaintiffs’ motion for leave to file a second amended complaint (ECF No. 36) is 9 GRANTED; and, 10 2. Within seven days of entry of this Order, Plaintiffs shall file a second amended complaint 11 electronically as a standalone docket entry in this case. Upon filing, the second amended 12 complaint will become the operative complaint in this action. 13 | IT IS SO ORDERED. Dated: December 16, 2022 | br 15 UNITED STATES MAGISTRATE JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28