Davis v. Social Service Coordinators, Inc.

Filing 24

MEMORANDUM, DECISION and ORDER RE: Motion to Amend 18 , signed by Judge Oliver W. Wanger on 7/28/2011. (Kusamura, W)

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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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1:10-cv-02372-OWW-SKO

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LISA DAVIS,

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MEMORANDUM DECISION AND ORDER
RE: MOTION TO AMEND (Doc. 18)

Plaintiff,

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v.

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SOCIAL SERVICE COORDINATORS,
Inc., et al.,

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Defendants.

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I. INTRODUCTION.

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Lisa Davis (“Plaintiff”) proceeds with an action pursuant to

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29 U.S.C. § 201 et seq. against Social Service Coordinators, Inc.

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and Social Service Coordinators, LLC (“Defendants”).1

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filed a first amended complaint (“FAC”) on January 18, 2011. (Doc.

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6).

Plaintiff

Defendants filed a motion to dismiss the FAC on February 8,

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2011.

(Doc. 11).

Plaintiff filed a second amended complaint on

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March 21, 2011.

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amended complaint on March 31, 2011 for failure to obtain leave.

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(Doc. 17). The order striking Plaintiff’s second amended complaint

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directed Plaintiff to file either opposition to Defendants motion

(Doc.

22).

The court struck Plaintiff’s second

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Plaintiff seeks to proceed as a class representative pursuant to Fed. R. Civ.
P. 23. The court does not reach the class certification issue at this time.

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to dismiss the FAC or, alternatively, a motion for leave to amend.

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Plaintiff filed a motion for leave to amend the complaint on

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April 20, 2011.

(Doc. 19).

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motion to amend on May 16, 2011.

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reply on May 25, 2011.

(Doc. 20).

Plaintiff filed a

(Doc. 21).

II. FACTUAL BACKGROUND.

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Defendants filed opposition to the

Defendant Social Services Coordinators, Inc. (“SSC”) hired

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Plaintiff

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terminated Plaintiff on November 25, 2010.

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SSC’s

as

a

“remote

business

case

manager”

includes

in

August

telemarketing

2010.

to

SSC

Medicare

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beneficiaries in order to qualify beneficiaries for particular

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benefit programs.

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“intake/outreach employees;” SSC gave these employees titles such

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as “remote case managers,” “case managers,” “case reviewers,” “case

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examiners,” “intake progress services,” “already-enrolled unit,”

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“golden touch unit,” “mailing services,” and “disability screener”

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managers,” “intake specialists,” “intake coordinators,” “community

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program specialists,” “in-progress services,” “already-enrolled

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unit,” “golden touch unit,” “mailing services,” and “disability

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screener.” The primary job duty of intake/outreach employees is to

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make telephone calls to predetermined senior citizens enrolled in

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particular Medicare plans.

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various job titles given to intake/outreach employees in order to

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facilitate SSC’s practice of wrongfully classifying such employees

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as exempt from applicable federal and state wage and hour laws.

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Plaintiff seeks to serve as the class action representative for all

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similarly

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Defendants’ alleged unlawful conduct.

SSC employs persons characterized by the FAC as

situated

Plaintiff alleges SSC created the

intake/outreach

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employees

subjected

to

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Plaintiff worked in excess of eight hours in a workday and/or

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in excess of forty hours in a work week.

SSC failed to pay premium

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compensation for overtime hours, failed to provide off-duty meal

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and rest breaks, failed to provide reimbursement of business

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expenses incurred by Plaintiff, failed to provide accurate wage

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statements, and failed to provide immediate payment of earned and

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unpaid wages at the time of employment termination.
III. LEGAL STANDARD.

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Rule 15(a) of the Federal Rules of Civil Procedure provides

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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

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should freely give leave when justice so requires." Fed. R. Civ. P.

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15(a) (2).

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in favor of allowing

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Jones v. Bates, 127 F.3d 839, 847 n.8 (9th Cir. 1997). A court

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should consider four factors in determining whether to grant leave

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to

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amendment, and (4) prejudice to the opposing party. United States

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v. Pend Oreille Pub. Util. Dist. No. 1, 926 F.2d 1502, 1511 (9th

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Cir. 1991). Delay alone is not sufficient grounds for denying leave

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to amend. Id. The consideration of prejudice to the opposing party

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is the most important factor. Eminence Capital, LLC v. Aspeon,

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Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) ("Prejudice is the

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"touchstone of the inquiry under Rule 15(a)"). Absent prejudice, or

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a strong showing of any of the remaining factors, there is a

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presumption under Rule 15(a) in favor of granting leave to amend.

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Id. "'Where there is a lack of prejudice to the opposing party and

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the amended complaint is obviously not frivolous, or made as a

amend:

This rule should be applied with "extreme liberality"

(1)

amendments in the early stages of a case. See

undue

delay,

(2)

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bad

faith,

(3)

futility

of

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dilatory maneuver in bad faith, it is an abuse of discretion' to

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deny leave to amend." Pend Oreille, 926 F.2d at 1511-1512 (citing

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Howey v. U.S., 481 F.2d 1187, 1190-91 (9th Cir. 1973)). However,

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"[w]hile Fed.R.Civ.P. 15(a) encourages leave to amend, district

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courts need not accommodate futile amendments." Newland v. Dalton,

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81 F.3d 904, 907 (9th Cir. 1996).
IV. DISCUSSION.

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Defendants contend that Plaintiff’s motion to amend should be

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denied because (1) Plaintiff does not have a good faith basis to

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amend her class action allegations; (2) Defendants will suffer

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undue prejudice if leave to amend is granted; (3) Plaintiff has not

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cured the deficiencies identified in Defendants’ motion to dismiss;

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and (4) amendment is futile.

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A. Bad Faith

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Defendants contend that Plaintiff cannot amend her complaint

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to properly assert any claims on behalf of a “California Class” or

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“California Labor Subclass” because Defendants have represented to

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Plaintiff that she was the only “remote case manager” employed in

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California

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contention lacks merit.

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abandon

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representation.

during

her

the

claims

relevant

time

period.2

Defendants’

First, Plaintiff is not required to
based

on

Defendants’

self-serving

Second, Defendants’ representation, even if true,

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Defendants submit a declaration from a current human resources employee who
represents that no other remote case managers were employed in California during
the operative time frame. The declaration does not aver that Defendants did not
employ other individuals in California with job duties substantially similar to
those of a remote case manager, however.
At oral argument, Defense counsel
represented that Defendants did not employ any other employees in California
during the relevant time frame; there is no evidence of this assertion, and in
any event, it is inappropriate to deny leave to amend based on such extrinsic
evidence at this stage in the proceedings.

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is not dispositive in light of Plaintiff’s theory that SSC gave

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employees with essentially the same job duties different titles in

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furtherance of SSC’s scheme to wrongfully claim such employees as

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exempt from relevant wage and hour laws.

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established that Plaintiff’s motion to amend is brought in bad

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faith.

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B. Prejudice

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Defendants have not

Defendants contend they will suffer undue prejudice “defending
claims that have not been asserted in good faith.”

(Opposition at

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5-6). Defendants complain that they will be subjected to “needless

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discovery costs and continued litigation.” (Id.).

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evidence that Plaintiff’s claims are brought in bad faith, and the

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prejudice

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inconvenience always present when a party is required to defend

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against a law suit.

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there is no basis to find that granting leave to amend will

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prejudice Defendants.

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C. Deficiency of the Proposed Amended Complaint

Defendants

complain

of

is

nothing

There is no

more

than

the

As this case is still in its early stages,

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Defendants cite Foman v. Davis, 371 U.S. 178, 182 (1962) for

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the proposition that leave to amend should be denied because

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Plaintiff has “repeatedly” failed to cure deficiencies in her

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previous

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misreading of Foman and the federal rules.

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Foman suggests that further leave to amend should be denied where

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a

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amendments previously allowed.”

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amendment to the complaint has been “previously allowed;” Plaintiff

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has only amended

party

complaints.

exhibits

Defendants

“repeated

contention

failure

to

is

based

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once,

a

The passage cited from

cure

deficiencies

Id. (emphasis added).

her complaint

on

and

that

by

Here, no

amendment was

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effected as of right pursuant to Federal Rule of Civil Procedure

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15(a).

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of allowing

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F.3d at 847.

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D. Futility

Rule 15 must be applied with "extreme liberality" in favor
amendments in the early stages of a case.

Jones, 127

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Defendants advance the conclusory contention that “Plaintiff's

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proposed SAC is ‘futile’ because it fails to cure the fatal defects

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discussed more fully above, and cited by SSC in its Motion to

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Dismiss.”

(Opposition at 7).

Nothing in Defendants’ motion to

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dismiss establishes that amendment is futile; to the contrary the

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motion to dismiss is predicated on Plaintiff’s lack of specificity

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in pleading her claims.

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The "extreme liberality" in favor of allowing

amendments in

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the early stages of a case requires that Plaintiff be given an

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opportunity to file an amended complain.

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Plaintiff’s motion is GRANTED.

Jones, 127 F.3d at 847.

ORDER

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For the reasons stated, IT IS ORDERED:

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1) Plaintiff’s motion to amend is GRANTED;

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2) Plaintiff’s shall file an amended complaint by August 9,

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2011;

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3) Defendants shall respond to the amended complaint within

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twenty-one days following electronic service of the amended

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complaint.

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IT IS SO ORDERED.

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Dated:
hkh80h

July 28, 2011

/s/ Oliver W. Wanger
UNITED STATES DISTRICT JUDGE

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