Kiley et al v. MedFirst Consulting Healthcare Staffing, LLC

Filing 225

MEMORANDUM OPINION. Signed by Judge R David Proctor on 12/10/2019. (KAM)

FILED
2019 Dec-10 PM 04:17
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION

JILL KILEY, et al.,
Plaintiffs,
v.
MEDFIRST CONSULTING
HEALTHCARE STAFFING, LLC,
Defendant.

}
}
}
}
}
}
}
}
}
}

Case No.: 2:17-cv-01756-RDP

MEMORANDUM OPINION
This case is before the court on Plaintiffs’ Renewed Motion to Amend Complaint (Doc. #
218). The Motion has been fully briefed (see Docs. # 218, 219, 220, 221, and 222) and is ripe for
review. For the reasons discussed below, the Motion is due to be granted.
I.

Background
Plaintiffs have moved to amend their complaint to add as a defendant Brian Smith, the

President and CEO of MedFirst Consulting Healthcare Staffing, LLC (“Defendant”). (Doc. # 218
at 2). Specifically, Plaintiffs argue that under Federal Rule Civil Procedure 15(a) and 16(b), the
court should allow them to amend their complaint and name Smith as a party because they have
received information that Defendant ceased all operations, thus foreclosing the ability for a
potential settlement. (Id.). Defendant objects to Plaintiffs’ Motion, stating that Plaintiffs have
failed to satisfy the Eleventh Circuit’s “due diligence” standard for amendment of the pleadings
after the deadline set by the court’s Scheduling Order. Defendant further contends that Plaintiffs
“have long understood that [Defendant] has minimal resources and faces financial limitation.”
(Doc. # 219 at 1, 3). Defendant also asserts that it has not ceased operations; it is only

experiencing a slow-down of available projects. (Doc. # 219 at 4; Doc. # 220 at 2, ¶ 4).
II.

Standards of Review
A. Federal Rule of Civil Procedure 16(b)
District courts are required to “enter a scheduling order that limits the time to . . . join

other parties and to amend the pleadings . . . .” Fed. R. Civ. P. 16(b). Scheduling orders “control
the subsequent course of the action unless modified by a subsequent order,” see Fed. R. Civ. P.
16(e), and may be modified only “upon a showing of good cause” and “consent from the court.”
Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1418 (11th Cir. 1998) (citing Fed. R. Civ. P. 16(b));
Volvo Fin. Servs. v. JRD Contracting, Inc., 2018 WL 1913550, at * 1 (S.D. Ala. Feb. 15, 2018).
“This good cause standard precludes modification unless the schedule cannot ‘be met despite the
diligence of the party seeking the extension.’” Id. (citing Fed. R. Civ. P. 16 advisory committee’s
note); see also Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir.1992) (“Rule
16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the
amendment.”). “[D]iligence, not lack of prejudice, is the key to the Rule 16(b)(4) inquiry.” Volvo
Fin. Servs., 2018 WL 1913550, at * 1 (quoting Rogers v. Hartford Life and Acc. Ins. Co., 2012
WL 2395194, *3 (S.D. Ala. June 22, 2012)).
B. Federal Rule of Civil Procedure 15(a)
Rule 15 instructs that a court should freely give leave to amend when justice so requires.
See Foman v. Davis, 371 U.S. 178, 182 (1962). In light of Rule 15(a)’s liberal approach to
granting leave to amend, the Eleventh Circuit has generally required a substantial reason to
justify denial of leave to amend. Reese v. Herbert, 527 F.3d 1253, 1263 (11th Cir. 2008); Shipner
v. E. Air Lines, Inc., 868 F.2d 401, 407 (11th Cir. 1989). For example, a court may deny leave to
amend (1) where there has been undue delay, bad faith, dilatory motive, or repeated failure to

2

cure deficiencies by amendments previously allowed; (2) where allowing amendment would
cause undue prejudice to the opposing party; or (3) where amendment would be futile. Bryant v.
Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001) (per curiam); see also Foman, 371 U.S. at 182.
A district court may, in the exercise of its inherent power to manage the conduct of
litigation before it, deny leave to amend a complaint, so long as it does not outright refuse to
grant the leave without any justifying reason. Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d
597, 603 (4th Cir. 2010); see also Reese, 527 F.3d at 1263.
III.

Analysis
At the outset, if a “motion to amend [is] filed after the scheduling order’s deadline, [a

plaintiff] must first demonstrate good cause under Rule 16(b) before [the court] will consider
whether [the] amendment is proper under Rule 15(a).” Sosa, 133 F.3d at 1419; see also Mann v.
Taser Intl., Inc., 588 F.3d 1291, 1312 (11th Cir. 2009) (ruling that when a request to amend
“comes long after the deadlines for filing motions to amend established in the scheduling order[ ]
entered in this case,” the plaintiff is “required to show good cause under Federal Rule of Civil
Procedure 16(b)”); Dozier v. Rowan Drilling Co., Inc., 397 F. Supp. 2d 837, 855 (S.D. Tex.
2005) (“Only upon the movant’s demonstration of good cause to modify the scheduling order
will the more liberal standard of Rule 15(a) apply to the district court’s decision to grant or deny
leave.” (quoting S & W Enters., L.L.C. v. SouthTrust Bank of Ala., 315 F.3d 533, 536 (5th Cir.
2003))).
A. Plaintiffs Have Shown Good Cause Under Rule 16(b)
On August 13, 2019, the court denied without prejudice Plaintiffs’ first motion to amend
their complaint, stating that if it was appropriate, Plaintiffs could refile the motion in accordance
with applicable standards (i.e., adherence to Rule 16(b)). (Doc. # 212). Plaintiffs now argue that

3

they can show “good cause” because they just recently discovered (in October 2019) that
Defendant may no longer be in operation. (Doc. # 218 at 6). Defendant, however, counters this
assertion by providing sworn testimony that Defendant has not ceased operations,1 and, in any
event, asserts that Plaintiffs knew about Defendant’s financial situation from a very early point in
the litigation but did nothing to join Smith. (Doc. # 219 at 3).
Plaintiffs acted promptly after receiving information indicating that Defendant may have
ceased (or at least scaled back) operations. While Defendant denies it has ceased operations,
Plaintiffs are entitled to discovery on the merits, which is still ongoing, to explore the financial
status of Defendant.
Based on the record, the court concludes that Plaintiffs acted with sufficient diligence in
filing their Motion to Amend the Complaint after receiving information from an opt-in Plaintiff
that Defendant’s company may have ceased operations. See Allstate Ins. Co. v. Regions Bank,
2014 WL 4162264, at *8 n.5 (S.D. Ala. Aug. 19, 2014) (“[P]laintiff showed good cause for
untimely amendment of complaint where plaintiff had learned new information on which
amendment was based at deposition eight days prior to moving for leave to amend”) (citing
Bowers v. American Heart Ass’n, Inc., 513 F.Supp.2d 1364, 1368 (N.D. Ga. 2007)); Id. (“The
moving party may demonstrate ‘good cause’ by moving to amend promptly after the discovery
of new evidence following the scheduling deadline.” (quoting Kodak Graphic Commc’ns Can.
Co. v. E.I. du Pont de Nemours and Co., 2011 WL 4711968, at *5 (W.D.N.Y. Sept. 23, 2011))).
Therefore, good cause is present here. The inquiry now turns to whether Plaintiffs can satisfy the
standards set out in Rule 15(a).

1
Smith testified that MedFirst is “a service-based company, and its business is dictated by the needs of the
healthcare facilities[.] [T]he business fluctuates substantially depending on a number of circumstances and gaps in
the project work do occur.” (Doc. # 220 at 2, ¶ 4).

4

B. Plaintiffs Are Permitted to Amend Under Rule 15(a)
Under Rule 15, “trial courts have broad discretion in permitting or refusing to grant leave
to amend.” Garfield v. NDC Health Corp., 466 F.3d 1255, 1270 (11th Cir. 2006). “[T]he leave
sought should, as the rules require, be ‘freely given.’” Id.; Burger King Corp. v. Weaver, 169
F.3d 1310, 1319 (11th Cir. 1999) (“Leave to amend should be liberally granted when necessary
in the interest of justice. [U]nless there is a substantial reason to deny leave to amend, the
discretion of the district court is not broad enough to permit denial.” (citing Federal Rule Civil
Procedure 15(a))). “In exercising its discretion, the trial court may consider factors such as
‘undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue
of allowance of the amendment, [and] futility of amendment.’” Best Canvas Prods. & Supplies,
Inc. v. Ploof Truck Lines, Inc., 713 F.2d 618, 622-23 (11th Cir. 1983) (quoting Gregory v.
Mitchell, 634 F.2d 199, 203 (5th Cir. 1981)).
In considering Plaintiff’s Motion, the record does not reflect “bad faith or dilatory motive
on the part of the movant.” Best Canvas, 713 F.2d at 622-23 (quoting Gregory v. Mitchell, 634
F.2d 199, 203 (5th Cir. 1981)). While there may be evidence of some delay, as Plaintiffs did not
request to join Smith as a defendant in their initial complaint, first amended complaint, or second
amended complaint, this does not rise to the level of “undue” delay to warrant the denial of
Plaintiffs’ Motion to Amend Complaint. See Bryant v. Dupree, 252 F.3d 1161, 1164 (11th Cir.
2001) (“The lengthy nature of litigation, without any other evidence of prejudice to the
defendants or bad faith on the part of the plaintiffs, does not justify denying the plaintiffs the
opportunity to amend their complaint.”); Taylor v. Fla. State Fair Auth., 875 F. Supp. 812, 815
(M.D. Fla. 1995) (holding that the plaintiff’s actions did not constitute undue delay, but even if

5

they had, the defendant would not be prejudiced from any resulting delay because the case is in
the early stages of litigation).
Additionally, there is no evidence that unfair prejudice would result from Plaintiffs
amending their pleadings. This case was previously stayed and is still in the early stages of
discovery. The discovery deadline is not until February 13, 2020, and many depositions,
including Smith’s, have not yet been taken. (Docs. # 182; 222). The deadline to file any
dispositive motions is not until April 21, 2020. (Id.). And, Smith has been aware of this matter
since its inception.
Relatedly, Defendant would not be prejudiced by Smith being joined as a defendant
because Smith, as the CEO and sole member of MedFirst, would be deposed regardless, and
there would be minimal additional discovery conducted if he is made a party.
Moreover, “[t]he FLSA creates a private right of action against any ‘employer’ who
violates its minimum-wage or overtime provisions. Lamonica v. Safe Hurricane Shutters, Inc.,
711 F.3d 1299, 1309 (11th Cir. 2013) (citing 29 U.S.C. § 216(b)). “The Act defines the term
employer broadly to include both the employer for whom the employee directly works as well as
any person acting directly or indirectly in the interests of an employer in relation to an
employee.” Id. (international quotation marks omitted). Here, the question of whether Smith is
Plaintiffs’ employer is properly addressed at another stage of this litigation, but there is no
indication that Defendant would be prejudiced by joining Smith as a defendant.
Thus, after careful review, the court concludes that Plaintiff’s Motion to Amend/Correct
Complaint (see Doc. # 218) is due to be granted. An Order consistent with this Memorandum
Opinion will be entered.

6

DONE and ORDERED this December 10, 2019.

_________________________________
R. DAVID PROCTOR
UNITED STATES DISTRICT JUDGE

7