Richard Stafford v. Dollar Tree Stores Inc et al

Filing 101

ORDER signed by Judge Kimberly J. Mueller on 3/31/15 GRANTING IN PART 89 Motion for Leave to Amend the Complaint. Amended complaint due within 21 days. (Manzer, C)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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RICHARD STAFFORD,

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Plaintiff,

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No. 2:13-cv-01187-KJM-CKD

v.

ORDER

DOLLAR TREE STORES, INC. and
DOES 1 through 50, inclusive,
Defendant.

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This matter is before the court on plaintiff’s motion for leave to file a third

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amended complaint. Pl.’s Mot., ECF No. 89. Defendant Dollar Tree Stores, Inc. (Dollar Tree)

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opposes the motion. ECF No. 92. This motion was decided on the papers. For the following

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reasons, the court GRANTS IN PART plaintiff’s motion.

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I.

BACKGROUND
Plaintiffs Jay Narvaez and Lisa Hornsby filed a complaint in Los Angeles County

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Superior Court alleging a number of wage and hour class claims and a Private Attorney General

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Act (PAGA) claim against defendant Dollar Tree. ECF No. 1 at 33-60. They filed a first

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amended complaint on January 7, 2013, adding Richard Stafford as a plaintiff. ECF No. 1 at 87-

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114. Defendant removed the case to the Central District of California on February 5, 2013. Id. at

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4-5.

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On February 12, 2013, plaintiff Stafford filed a second amended complaint (SAC)

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in the Central District, removing the class claims and alleging the following claims, all stemming

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from his work as an assistant manager at a Dollar Tree Store: (1) failure to provide meal periods,

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Cal. Lab. Code §§ 226.7(a), 512(a), and 1198; (2) failure to provide rest periods, id. §§ 226.7(a)

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and 1198; (3) failure to pay minimum and regular wages, id. §§ 1197 and 1198; (4) failure to pay

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overtime wages, id. §§ 510 and 1198; (5) failure to maintain accurate records, id. § 1198;

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(6) failure to provide and maintain accurate itemized wage statements, id. §§ 226(a) and 1198;

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and (7) failure to timely pay wages due during employment, id. §§ 204(a) and 1198. SAC, ECF

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No. 12. Plaintiff alleges he is an “aggrieved employee” within the meaning of the PAGA,

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California’s Private Attorney General Act, Cal. Lab. Code § 2699, et seq. Id. at 6–7. Neither

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Narvaez nor Hornsby was identified as plaintiffs in the second amended complaint, and Stafford

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is the sole named plaintiff. Id. at 1. On February 26, 2013, defendant filed a motion to dismiss or

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to transfer. ECF No. 15. On March 7, 2013, plaintiff filed a motion to remand. ECF No. 22. On

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June 11, 2013, the Central District court denied the motions to remand and to dismiss and granted

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the motion to transfer the case to this district, where a related case had been filed, Stevenson v.

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DollarTree Stores, Inc., Case No. 11-CV-01433 KJM CKD. ECF No. 37.

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On March 28, 2014, this court denied plaintiff’s second motion to remand. ECF

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No. 58. On June 20, 2014, defendant removed from Solano County Superior Court to this district

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an action that is virtually identical to this action. Under Local Rule 123, defendant filed a notice

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of related action (ECF No. 70), and on July 29, 2014, that case, 2:14-cv-01465-MCE-DAD, was

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related to but not consolidated with this action (ECF No. 75). On November 21, 2014, this court

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granted defendant’s motion to bifurcate in this case and ordered plaintiff’s individual Labor Code

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claims to be determined before the representative PAGA claims; it accordingly limited discovery

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in this case to plaintiff’s individual claims (ECF Nos. 72, 80). On December 19, 2014, this court

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granted a motion to remand to state court the related case, 2:14-cv-01465-MCE-DAD.

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Meanwhile, on December 11, 2014, the court held a scheduling conference in this

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case at which both parties appeared. ECF No. 86. The court set December 18, 2014 as the

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deadline for plaintiff to file a motion for leave to amend the complaint. Id. On December 23,
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2014, the court granted the parties’ stipulated request for an extension of time to file for leave to

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amend. ECF No. 88. Plaintiff Stafford filed the instant motion on December 31, 2014, relying on

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Rule 15(a)(2), and submitted the proposed third amended complaint with his motion. ECF No.

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89. Defendant filed an opposition and accompanying request for judicial notice on January 16,

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2015. ECF Nos. 92, 93.

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II.

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REQUEST FOR JUDICIAL NOTICE
Defendant requests judicial notice of plaintiff’s Labor & Workforce Development

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Agency (LWDA) letter. ECF No. 93. Plaintiff referred to the letter in the second amended

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complaint (ECF No. 12-1 at 7), and does not dispute its authenticity or oppose the motion. The

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request for judicial notice is GRANTED. See Sarkisov v. StoneMor Partners, L.P., 2014 WL

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1340762, at *6 (N.D. Cal. Apr. 3, 2014) (taking judicial notice of LWDA pre-litigation letter).

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III.

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STANDARD
A party seeking leave to amend pleadings must first satisfy Federal Rule of Civil

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Procedure 16(b)’s “good cause” standard. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,

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608–09 (9th Cir. 1992). Rule 16(b)(4) states that a “schedule may be modified only for good

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cause and with the judge's consent,” the standard specified in the court’s scheduling order. ECF

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No. 69 at 1. This good cause evaluation “is not coextensive with an inquiry into the propriety of

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the amendment under . . . Rule 15.” Johnson, 975 F.2d at 609. Distinct from Rule 15(a)’s liberal

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amendment policy, Rule 16(b)’s good cause standard focuses primarily on the diligence of the

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moving party, id., and that party's reasons for seeking modification. C.F. ex rel. Farnan v.

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Capistrano Unified Sch. Dist., 654 F.3d 975, 984 (9th Cir. 2011).

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If good cause exists, the party next must satisfy Rule 15(a). Cf. Johnson, 975 F.2d

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at 608. Federal Rule of Civil Procedure 15(a)(2) states “[t]he court should freely give leave [to

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amend its pleading when justice so requires” and the Ninth Circuit has “stressed Rule 15’s policy

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of favoring amendments.” Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir.

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1989). “In exercising its discretion [regarding granting or denying leave to amend] ‘a court must

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be guided by the underlying purpose of Rule 15—to facilitate decision on the merits rather than

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on the pleadings or technicalities.’” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th
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Cir. 1987) (quoting United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981)). However, “the

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liberality in granting leave to amend is subject to several limitations. Leave need not be granted

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where the amendment of the complaint would cause the opposing party (1) undue prejudice, (2) is

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sought in bad faith, (3) constitutes an exercise in futility, or (4) creates undue delay.” Ascon

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Props., 866 F.2d at 1160 (internal citations omitted). The consideration of prejudice to the

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opposing party carries the greatest weight. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d

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1048, 1052 (9th Cir. 2003). In addition, a court should look to whether the plaintiff has

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previously amended the complaint, as “the district court's discretion is especially broad ‘where

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the court has already given a plaintiff one or more opportunities to amend [its] complaint.’” Id. at

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1161 (quoting Leighton, 833 F.2d at 186 n.3).

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IV.

ANALYSIS

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Plaintiff seeks to add (1) factual allegations of additional unpaid off-the-clock

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work; (2) factual allegations of defendant’s miscalculation of overtime and failure to include non-

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discretionary bonuses in employees’ regular rates of pay; and (3) a claim for defendant’s failure

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to make reimbursements for employees’ necessarily incurred business expenses, such as mileage

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and tolls, in reliance on California Labor Code § 2802. Pl.’s Mot. at 2. Plaintiff intends to pursue

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these claims as an “aggrieved employee” under PAGA. Id.; see also Cal. Lab. Code § 2699(c).

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Plaintiff argues the proposed amendment is “in the interest of justice and judicial efficiency” and

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will not prejudice defendant because defendant has been aware of plaintiff’s claims and

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supplemental factual allegations since at least June 6, 2014, when they were served the complaint

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in the related Stafford class action, 2:14-cv-01465-KJM-CKD. Id.

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Defendant argues plaintiff does not meet the threshold good cause requirement

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under Rule 16, has unreasonably delayed in moving to amend, and amendment would be futile

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because plaintiff has not met PAGA’s exhaustion requirements and his claims are time-barred.

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Opp’n at 1.

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Although plaintiff does not address Rule 16 in his motion, the court must

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nonetheless first determine whether plaintiff has demonstrated good cause because he seeks to

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amend the complaint after the court issued its pretrial scheduling order, which specified any
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amendment would require leave of court and good cause. ECF No. 69. The Rule 16 requirement

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looks to plaintiff’s reasons for amendment and whether he exercised diligence. The court finds

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good cause because plaintiff’s additional facts and cause of action will aid in focusing ongoing

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discovery and the issues to be litigated. The court finds plaintiff has been sufficiently diligent; he

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and defendant stipulated to an extended timeline for his motion for leave to file an amended

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complaint and plaintiff filed within that timeframe.

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Looking to the Rule 15 factors, the court does not find undue delay, despite

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defendant’s assertions to the contrary. This case has had a complicated procedural history and

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only recently has the court bifurcated this case and remanded the pending related case. These

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decisions affected plaintiff’s claims asserted in this action, and he sought leave to amend

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promptly after they were issued. Defendant does not show plaintiff’s bad faith, a failure to cure

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deficiencies with previous amendments, or, most importantly, any prejudice to defendant in

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allowing amendment.

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On the other hand, defendant’s argument that amendment would be futile because

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plaintiff failed to fully comply with exhaustion requirements is persuasive. Before an employee

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may bring a PAGA suit, he must “give written notice . . . to the [LWDA] and the employer of the

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specific provisions of [the California Labor Code] alleged to have been violated, including the

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facts and theories to support the alleged violation.” Archila v. KFC U.S. Properties, Inc., 420 F.

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App’x 667, 669 (9th Cir. 2011) (citing Cal. Lab. Code § 2699.3(a)(1)). The code’s plain

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language requires the letter include the “specific provisions of the code alleged to have been

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violated.” Cal. Lab. Code § 2699.3(a)(1). The requirements for exhaustion with notice to the

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LWDA are intended to give specific notice of the potential claims and facts at issue to allow for

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the possibility of correction without litigation. See Hamilton v. Genesis Logistics, Inc., No. CV

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13-01848, 2013 WL 3168373, at *4 (C.D. Cal. June 20, 2013) (LWDA notice requirement

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“intended to protect business by putting them on notice of violations”). Here, plaintiff timely

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gave notice of certain claims, but did not include in the notice a violation of Labor Code § 2802

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or any facts suggesting a failure to reimburse employees. LWDA Letter, RJN ¶ 1, ECF No. 93.

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Plaintiff contends he is not obligated to set forth all of the facts and allegations in

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his LWDA letter, because they may be developed during formal litigation, but he does not state

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why the facts underlying the reimbursement claim were not known to him at the time of sending

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the LWDA letter. Reply at 4. He also says the proposed reimbursement claim, claim 9, “relates

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back” to the time of the original complaint. But that argument is misplaced, as the jurisdictional

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requirement that plaintiff’s LWDA letter include notice of the claim is the issue, not timeliness.

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Id. Plaintiff has not cited a single case, and the court has not located one, in which plaintiff did

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not state either the section of the Labor Code or the facts supporting an alleged violation in an

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LWDA letter and a court waived the requirement of specificity in exhaustion. Specificity is what

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the law requires. See Bradescu v. Hillstone Rest. Grp., Inc., 2014 WL 5312546, at *11 (C.D. Cal.

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Sept. 18, 2014) (tentative ruling), confirmed by 2014 WL 5312574 (C.D. Cal. Oct. 10, 2014)

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(“Plaintiff should consider her PAGA claim to be limited to specifically those theories (and those

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Labor Code sections) mentioned in her PAGA notice.”); see also Soto v. Castlerock Farming &

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Transp. Inc., 2012 WL 1292519, at *8 (E.D. Cal. Apr. 16, 2012) (noting the Ninth Circuit has

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suggested it requires “an exceedingly detailed level of specificity” for the LWDA notice

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requirement to be satisfied). Without notice of either the specific Labor Code provision or the

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facts underlying the alleged violation of that provision, the jurisdictional requirements have not

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been met, and the Labor Code reimbursement claim is barred.

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Considering the applicable factors and the current state of discovery, the court will

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grant leave to amend to allow plaintiff to plead additional facts to support the claims as pled in

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the second amended complaint. To the extent plaintiff seeks to add a claim for violation of Labor

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Code § 2802, however, that claim is barred for failure to exhaust; plaintiff’s motion as to that

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claim is denied.

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V. CONCLUSION
Plaintiff’s motion for leave to file a third amended complaint is GRANTED IN

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PART as set forth above. An amended complaint consistent with this order shall be filed within

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twenty-one (21) days of the entry of this order.

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IT IS SO ORDERED.
DATED: March 31, 2015.

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UNITED STATES DISTRICT JUDGE
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