Medlock v. Taco Bell Corp., et al.
Filing
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MEMORANDUM DECISION and ORDER Re Plaintiff's 210 Amended Motion for Leave to File First Amended Consolidated Complaint signed by Judge Oliver W. Wanger on 5/3/2011. ( Proposed Order Consistent with Memorandum Decision Deadline: 5/10/2011)(Figueroa, O)
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UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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IN RE TACO BELL WAGES AND HOUR
ACTIONS
Master file:
1:07-cv-01314 OWW DLB
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MEMORANDUM DECISION AND ORDER
RE PLAINTIFF‟S AMENDED MOTION
FOR LEAVE TO FILE FIRST
AMENDED CONSOLIDATED
COMPLAINT.
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(DOC. 210)
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I.
INTRODUCTION
Plaintiffs move for leave to file a First Amended
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Consolidated Complaint. Doc. 210. Defendants oppose the motion.
Doc. 214. The matter was heard on April 11, 2011.
II.
FACTUAL BACKGROUND
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This case is a consolidation of six related cases: (1)
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Medlock v. Taco Bell Corp., Case No. 1:07-cv-01314; (2) Hardiman
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v. Taco Bell Corp., Case No. 1:08-cv-01081; (3) Leyva v. Taco
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Bell Corp., et al., Case No. 1:09-cv-00200; (4) Naranjo v. Yum!
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Brands, Inc., Case No. 1:09-cv-00246; (5) Widjaja v. Yum Brands,
Inc., Case No. 1:09-cv-01074; and (6) Nave v. Taco Bell Corp.,
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Case No. 1:10-cv-02222.
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The Medlock case was originally filed September 7, 2007.
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Pursuant to the Original and Amended Scheduling Conference Order,
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the deadline to file any motions to amend the complaint was March
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24, 2008. Docs. 38 and 42. On that date, the Medlock Plaintiffs
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moved for leave to file a Second Amended Complaint, which was
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denied. Doc. 61.
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The Medlock, Hardiman, Leyva, and Naranjo cases were
consolidated May 19, 2009; the consolidated action was designated
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In re Taco Bell Wage and Hour Actions. Docs. 104, 109. A
scheduling conference order dated June 29, 2009 (Doc. 117) and an
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amended scheduling conference dated July 7, 2009 (Doc. 119) set
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forth the following schedule: (1) June 30, 2009: deadline to file
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a Consolidated Complaint; (2) June 24, 2010: deadline for class
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certification discovery; (3) August 26, 2010 (extended to
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December 30, 2010 (Doc. 178)): deadline to file motions regarding
class certification; (4) October 26, 2010 (extended to April 22,
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2011 (Doc. 202)): deadline for Defendants‟ opposition to class
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certification; (5) December 6, 2010 (extended to May 20, 2011
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(Doc. 202)): deadline for Plaintiffs‟ reply; and (6) January 10,
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2011 (continued to June 6, 2011 (Doc. 202)): class certification
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hearing.
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On June 29, 2009, Plaintiffs filed a Consolidated Complaint
alleging: (1) unpaid overtime; (2) unpaid minimum wages; (3)
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unpaid wages; (4) missed meal periods; (5) missed rest periods;
(6) non-compliant wage statements; (7) unreimbursed business
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expenses; (8) vested accrued vacation wages; (9) non-payment of
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wages upon termination; and (10) non-payment of wages during
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employment. The Consolidated Complaint also asserts a claim for
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violation of California Business & Professions Code 17200, et
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seq. and penalties pursuant to California Labor Code sections
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2698, et seq. (“PAGA”). Doc. 118-1.
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The Widjaja action was consolidated with In re Taco Bell on
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October 22, 2009. Doc. 132.
On November 29, 2010, Teresa Nave filed a putative class
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action against Defendants alleging: (1) missed rest periods, (2)
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unpaid vested accrued vacation time, (3) non-payment of wages
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upon termination, and (4) violation of California Business &
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Professions Code §§ 17200, et seq. Case No. 1:10-cv-2222-OWW-DVB,
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Doc. 1. On December 9, 2010, the Nave complaint was amended,
adding Christopher Duggan, Kevin Taylor, and Debra Doyle as named
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Plaintiffs. Id. at Doc. 10. The Nave case was consolidated with
In re Taco Bell on December 16, 2010.
On December 30, 2010, Plaintiffs filed a motion for class
certification. Doc. 185.
On March 14, 2011, Plaintiffs filed an amended motion for
leave to file the First Amended Consolidated Complaint (Doc.
210). Defendants filed an opposition (Doc. 214), to which
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Plaintiffs replied (Doc. 215).
III. LEGAL STANDARD
Because a Rule 16 scheduling order is in place establishing
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a timetable for amending pleadings and the deadline expired
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before Plaintiffs moved to amend the Consolidated Complaint,
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resolution of the motion to amend is governed by Federal Rule of
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Civil Procedure 16. Coleman v. Quaker Oats Co., 232 F.3d 1271,
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1294 (9th Cir. 2000). Rule 16(b) provides that “[a] schedule shall
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be modified only for good cause and with the judge‟s consent.”
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Fed. R. Civ. P. 16(b)(4). Rule 16(b)'s “good cause” standard
primarily considers the diligence of the party seeking the
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amendment. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,
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609 (9th Cir. 1992).
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[C]arelessness is not compatible with a finding of diligence
and offers no reason for relief ... Although the existence
or degree of prejudice to the party opposing the
modification might supply additional reasons to deny a
motion, the focus of the inquiry is upon the moving party's
reasons for seeking modification ... If that party was not
diligent, the inquiry should end.
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Id.
If “good cause” within the meaning of Rule 16(b) is shown,
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the party seeking leave to amend must then demonstrate that leave
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to amend is appropriate under Rule 15, Federal Rules of Civil
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Procedure. See id. at 608.
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Rule 15(a) of the Federal Rules of Civil Procedure provides
that a party may amend its pleadings “only with the opposing
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party‟s written consent or the court‟s leave” and that “the court
should freely give leave when justice so requires.” Fed. R. Civ.
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P. 15(a)(2). This rule should be applied with “extreme
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liberality” in favor of allowing amendments in the early stages
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of a case. See Jones v. Bates, 127 F.3d 839, 847 n.8 (9th Cir.
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1997). A court should consider four factors in determining
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whether to grant leave to amend: (1) undue delay, (2) bad faith,
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(3) futility of amendment, and (4) prejudice to the opposing
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party. United States v. Pend Oreille Pub. Util. Dist. No. 1, 926
F.2d 1502, 1511 (9th Cir. 1991). Delay alone is not sufficient
grounds for denying leave to amend. Id. The consideration of
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prejudice to the opposing party is the most important factor.
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Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th
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Cir. 2003) (“Prejudice is the „touchstone of the inquiry under
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Rule 15(a)”). Absent prejudice, or a strong showing of any of the
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remaining factors, there is a presumption under Rule 15(a) in
favor of granting leave to amend. Id. “‟Where there is a lack of
prejudice to the opposing party and the amended complaint is
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obviously not frivolous, or made as a dilatory maneuver in bad
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faith, it is an abuse of discretion‟ to deny leave to amend.”
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Pend Oreille, 926 F.2d at 1511-1512 (citing Howey v. U.S., 481
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F.2d 1187, 1190-91 (9th Cir. 1973)). However, “[w]hile
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Fed.R.Civ.P. 15(a) encourages leave to amend, district courts
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need not accommodate futile amendments.” Newland v. Dalton, 81
F.3d 904, 907 (9th Cir. 1996).
IV.
ANALYSIS
1. Addition of New Nave Named Plaintiff
Plaintiffs seek leave to add Hilario Escobar to the original
Nave Plaintiffs. Plaintiffs assert that the addition of Mr.
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Escobar is necessary to represent the non-management employee
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vacation subclass.
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In support of Plaintiffs‟ Motion for Class Certification
filed December 30, 2010, only Teresa Nave and Kevin Taylor of the
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original Nave Plaintiffs submitted declarations. During Mr.
Taylor‟s January 27, 2011 deposition, his paycheck verification
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reports were produced, which revealed that Mr. Taylor had worked
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between 10-15 hours per week and was not eligible for vacation
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pay. On February 17, 2011, Defendants produced Ms. Nave‟s
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employee file, which revealed that Ms. Nave was paid accrued
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vacation on or about the date she was terminated, July 17, 2007.
Ms. Nave is in the process of withdrawing as a named
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Plaintiff. At the hearing, Plaintiffs stated that the Nave
Plaintiffs do not have a proper class representative.
Plaintiffs assert that once it became apparent that Ms. Nave
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and Mr. Taylor could not represent the non-management employee
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vacation subclass, they immediately conducted a diligent search
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before finding Mr. Escobar. Defendants rejoin that Plaintiffs did
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not act with diligence: (1) Plaintiffs could have obtained Ms.
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Nave and Mr. Taylor‟s employment records before filing the
lawsuit and (2) Ms. Nave and Mr. Taylor authorized the release of
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their employment records in December 2010 but Plaintiffs did not
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request their records until late January and February 2011.
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However, the Nave class was represented by different counsel
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before its consolidation with this action.
Plaintiffs contend that allowing Plaintiffs to amend their
Complaint to add a new named plaintiff to serve as a potential
class representative is mandated by case law. Kagan v. Gibraltar
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Sav. & Loan Ass’n, 35 Cal.3d 582, 596, 200 Cal.Rptr. 38 (1984)
(“However, should the trial court conclude that plaintiff cannot
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suitably represent the class, it should afford her „the
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opportunity to amend [her] complaint, to redefine the class, or
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to add new individual plaintiffs, or both, in order to establish
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a suitable representative.‟” (quoting La Sala v. American Sav. &
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Loan Assn., 5 Cal. 3d 864, 872 (1971)), overruled on other
grounds, Meyer v. Sprint Spectrum L.P., 45 Cal. 4th 634 (2009).
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The Nave lawsuit was filed November 29, 2010; Plaintiffs
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discovered that Ms. Nave and Mr. Taylor could not represent the
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non-management employee vacation subclass on January 27, 2011 and
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February 17, 2011, respectively; and Plaintiffs‟ motion to amend
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was filed March 14, 2011. Only two and half months have lapsed
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since the initiation of the Nave lawsuit on November 29, 2010 and
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February 17, 2011, when Plaintiffs learned they did not have a
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class representative. Because Plaintiffs have been diligent,
Plaintiffs‟ motion to add a new named Plaintiff to represent the
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Nave subclass is supported by good cause. There is no evidence of
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Plaintiffs‟ bad faith. Plaintiffs believe that Mr. Escobar‟s
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claims are typical of the class. It is not explained how the
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addition of a new named Plaintiff to represent the Nave
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Plaintiffs causes prejudice to Defendants.
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Plaintiffs‟ motion to amend the Consolidated Complaint to
add Hilario Escobar as a named Plaintiff is GRANTED.
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2. Amendment of Plaintiff Subclass Definitions
Plaintiffs also seek leave to amend the Plaintiff subclass
definitions, as follows:
a. Subclass 1 (“Late Meal Break Subclass Taco Bell Unpaid
Wages Subclass”):
All persons who work or worked as a non-exempt, hourlypaid employee at a corporate-owned Taco Bell restaurant
in California from September 7, 2003 until the resolution
of this lawsuit All non-exempt or hourly-paid employees
of TACO BELL CORP. and/or TACO BELL OF AMERICA, INC. in
the State of California from September 7, 2003 until the
resolution of this lawsuit;
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b. Subclass 2 (“Underpaid Automatic Adjustments Subclass
Yum! Unpaid Wages Subclass”): All persons who work or
worked as a non-exempt, hourly-paid employee at a
corporate-owned Taco Bell restaurant in California from
September 7, 2003 until the resolution of this lawsuit
who received at least one 30-minute automatic adjustment
on Taco Bell‟s Time and Attendance System All non-exempt
or hourly-paid employees of YUM! BRANDS, INC. in the
State of California from November 5, 2004 until the
resolution of this lawsuit, excluding any members of
Subclass 1;
c. Subclass 3 (“On-Duty Meal Period Agreement Subclass Taco
Bell Improper Wage Statements Subclass”):All persons who
work or worked as a nonexempt, hourly-paid employee at a
corporate-owned Taco Bell restaurant in California from
September 7, 2003 until the resolution of this lawsuit
who
signed an on-duty meal period agreement All non-exempt or
hourly-paid employees of TACO BELL CORP. and/or TACO BELL
OF AMERICA, INC. in the State of California who were
provided inaccurate wages statements from September 7,
2006 until the resolution of this lawsuit;
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d. Subclass 4 (“Unpaid On-Duty Meal Period Subclass Yum!
Improper Wage Statements Subclass”): All persons who work
or worked as a non-exempt, hourly-paid employee at a
corporate-owned Taco Bell restaurant in California from
September 7, 2003 until the resolution of this lawsuit
who signed an onduty meal period agreement All non-exempt
or hourly-paid employees of YUM! BRANDS, INC. in the
State of California who were provided inaccurate wages
statements from November 5, 2007 until the resolution of
this lawsuit, excluding any members of Subclass 3;
e. Subclass 5 (“Rest Break Subclass Taco Bell Unreimbursed
Business Expenses Subclass”): All persons who work or
worked as a non-exempt, hourly-paid employee at a
corporate-owned Taco Bell restaurant in California from
September 7, 2003 until the resolution of this lawsuit,
and who worked in any non-management employee position,
including, without limitation, any of the following job
positions: Crew Member, Team Member, Food Champion,
Service Champion, Service/Food Champion, Shift Lead,
Shift Lead Trainee, Team Member Trainer, and/or Trainee
All non-exempt or hourly-paid employees of TACO BELL
CORP. and/or TACO BELL OF AMERICA, INC. in the State of
California who incurred business-related expenses and
costs that were not reimbursed from September 7, 2003
until the resolution of this lawsuit;
f. Subclass 6 (“Final Pay Subclass Yum! Unreimbursed
Business Expenses Subclass”): All persons who were
terminated involuntarily as a non-exempt, hourly-paid
employee at a corporate-owned Taco Bell restaurant in
California from September 7, 2004 until the resolution of
this lawsuit who were not timely tendered their wages
upon involuntary termination of employment. All nonexempt or hourly-paid employees of YUM! BRANDS, INC. in
the State of California who incurred business-related
expenses and costs that were not reimbursed from November
5, 2004 until the resolution of this lawsuit, excluding
any members of Subclass 5; and
g. Subclass 7 (“Vested Accrued Vacation Wages Time
Subclass”): All persons who formerly worked as an
employee at a corporate-owned Taco Bell restaurant in
California from November 5, 2004 until the resolution of
this lawsuit who were not paid all vested accrued
vacation wages (including, but not limited to, vacation
pay, personal day pay, personal holiday pay, and/or
floating holiday pay) at the end of their employment; and
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All non-exempt or hourly-paidpast employees of TACO BELL
CORP., TACO BELL OF AMERICA, INC., and/or YUM! BRANDS,
INC. in the State of California who were not paid all
vested accrued vacation wages (including, but not limited
to, vacation pay, personal day pay, personal holiday pay,
and/or floating holiday pay) at the end of their
employment from November 5, 2004 until the resolution of
this lawsuit.
h. Subclass 8 (“Non-Management Employee Vacation Subclass
Taco Bell Final Pay Subclass”): All persons who formerly
worked as a non-exempt, hourly-paid employee at a
corporate-owned Taco Bell restaurant in California from
September 7, 2003 until the resolution of this lawsuit
who were not paid all vested accrued vacation wages
(including, but not limited to, vacation pay, personal
day pay, personal holiday pay, and/or floating holiday
pay) at the end of their employment, and who worked in
any non-management employee position, including, without
limitation, any of the following job positions: Crew
Member, Team Member, Food Champion, Service Champion,
Service/Food Champion, Shift Lead, Shift Lead Trainee,
Team Member Trainer, and/or Trainee. All non-exempt or
hourly-paid employees of TACO BELL CORP. and/or TACO BELL
OF AMERICA, INC. in the State of California who were not
timely tendered their wages upon termination of
employment from September 7, 2004 until the resolution of
this lawsuit;
i. Subclass 9 (“Yum! Final Pay Subclass”): All non-exempt or
hourly-paid employees of YUM! BRANDS, INC. in the State
of California who were not timely tendered their wages
upon termination of employment from November 5, 2005
until the resolution of this lawsuit, excluding any
members of Subclass 8;
Doc. 210-2, Ex. B, ¶ 23.
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Defendant contends that the amendment to Subclass 1 adds a
new subclass for late meal breaks that was not, but should have
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been, included in the original Consolidated Complaint. Plaintiff
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rejoins that it was included in the Consolidated Complaint,
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albeit not in the Subclass definitions. The original Consolidated
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Complaint alleges:
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During the relevant time period, Plaintiffs, the other class
members, and the other aggrieved employees who were
scheduled to work for a period of time in excess of six (6)
hours were required to work for periods longer than five (5)
hours without a meal period of not less than thirty (30)
minutes.
Doc. 118-1, ¶ 77. It also alleges: “Defendants‟ conduct violates
applicable IWC Wage Orders and California Labor Code sections
226.7 and 512(a).” Id.
Defendant contends that the amendment to Subclass 3 adds a
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new class for on-duty meal period agreements. Plaintiffs rejoin
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that the allegations were encompassed in the following allegation
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in the original Consolidated Complaint: “Defendants‟ conduct
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violates applicable IWC Wage Orders and California Labor Code
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sections 226.7 and 512(a).” Doc. 118-1, ¶ 77.
Defendant objects that Plaintiffs have expanded the statute
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of limitations for the vacation subclass from November 5, 2004
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(Doc. 118-1, ¶ 19(g)) to September 7, 2003 (Doc. Doc. 210-2, Ex.
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A, ¶ 23(h)). Defendant also asserts that the vacation subclass in
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the Consolidated Complaint consisted only of non-exempt, hourly
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employees, while the amended subclass encompasses all employees.
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Plaintiffs rejoin that the amendments conform the Nave vacation
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class definition prior to consolidation.
Plaintiffs have not explained why they have waited to
seek leave to amend the Consolidated Complaint, over three years
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after the original Medlock lawsuit was filed, almost two years
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after the original Consolidated Complaint was filed, after the
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Motion for Class Certification has already been filed, and
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shortly before the deadline for Defendant‟s opposition to the
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Motion for Class Certification. The proposed changes to the
Subclasses substantively change the scope of the purported class
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action. Plaintiffs assert that the changes conform to facts
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revealed in discovery; however, discovery on class certification
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closed June 24, 2010, nine months before Plaintiffs moved to
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amend the Consolidated Complaint. Plaintiffs contend that the
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changes conform the vacation subclass to the Nave subclasses;
however, the changes expand the statute of limitations and
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broaden the vacation subclass.
Plaintiffs have not offered facts
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to demonstrate good cause for their belated motion to amend the
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proposed Plaintiff Subclasses from the original Consolidated
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Complaint. It is likely discovery would have to be reopened.
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Plaintiffs‟ undue delay and substantive alterations to the class
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definitions prejudice Defendant on the eve of filing their
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opposition to the Motion for Class Certification, after
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Plaintiffs‟ Motion for Class Certification has been filed.
Plaintiffs‟ motion to amend the Consolidated Complaint to
amend the proposed Plaintiff Subclasses is DENIED.
3. Conforming Complaint to Facts Learned in Discovery
Plaintiffs also seek leave to amend the Consolidated
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Complaint to make the following changes:
(a)
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in the preamble, paragraphs 9 through 12, and 40
through 43, add allegations concerning Endang Widjaja,
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Christopher Duggan, Kevin Taylor, and Debra Doyle;
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(b)
Brands, Inc.;
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delete all allegations related to defendant Yum!
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in the Prayer for Relief, modify the Prayer for Relief
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to specify the proposed appointments of class and/or
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liaison counsel;
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(d)
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in Paragraph 7, amend Plaintiff Miriam Leyva‟s current
residence; and
(e)
in Paragraphs 36 through 39, amend allegations
pertaining to Plaintiffs Sandrika Medlock, Lisa
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Hardiman, Miriam Leyva and Loraine Naranjo to reflect
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their positions and approximate dates of employment for
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Defendants.
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Plaintiffs contend that these clean-up amendments reflect
changes that have occurred since the filing of the Consolidated
Complaint, i.e., dismissal of Yum! Brands, Inc. as a defendant,
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consolidation of the Widjaja and Nave lawsuits, and discovery of
relevant employment data. The Widjaja lawsuit was consolidated
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October 22, 2009; Yum! Brands was dismissed from the lawsuit
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March 31, 2010; class certification discovery ended June 24,
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2010; and the Nave lawsuit was consolidated November 29, 2010.
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Plaintiffs have not explained why they did not seek to amend the
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Consolidated Complaint earlier to reflect these changes. These
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amendments result from Plaintiffs‟ lack of diligence. However,
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Defendant does not claim prejudice from these non-substantive
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changes.
Plaintiffs‟ motion to amend the Consolidated Complaint to
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conform it with facts learned in discovery is GRANTED without
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prejudice.
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V.
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CONCLUSION
For the reasons stated:
1. Plaintiffs‟ motion for leave to file a first amended
consolidated complaint is GRANTED in part and DENIED in
part, as follows:
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a. Plaintiffs‟ motion to add Mr. Escobar to the
Consolidated Complaint is GRANTED;
b. Plaintiffs‟ motion to amend the proposed Plaintiff
Subclasses is DENIED; and
c. Plaintiffs‟ motion to amend the Consolidated Complaint
to conform it with facts learned in discovery is
GRANTED.
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2. Plaintiffs shall submit a proposed form of order consistent
with this memorandum decision within five (5) days of
electronic service of this memorandum decision.
SO ORDERED.
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DATED: May 3, 2011.
__/s/ Oliver W. Wanger____ _
Oliver W. Wanger
United States District Judge
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