Guinn v. Sugar Transport of the Northwest, Inc.

Filing 50

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 1/24/2017 re 37 Plaintiff's Motion for Leave to Amend Complaint: IT IS ORDERED that Plaintiff's Motion for Leave to Amend his Complaint be, and the same hereby is, GRANTED. Plaintiff shall file the amended complaint attached as Exhibit 1 to his Motion (Docket No. 37 Ex. 1) within five days of the date this Order is signed. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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RYAN GUINN, on behalf of
himself and all similarly
situated individuals,

CIV. NO. 2:16-325 WBS EFB
MEMORANDUM AND ORDER RE: MOTION
FOR LEAVE TO AMEND COMPLAINT

Plaintiff,
v.
SUGAR TRANSPORT OF THE
NORTHWEST, INC., a California
corporation, and DOES 1
through 100,
Defendant.

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----oo0oo---Plaintiff Ryan Guinn brought this class action against

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defendant Sugar Transport of the Northwest (“Sugar Transport”),

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alleging that defendant failed to pay him and other truck drivers

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overtime wages in violation of the Fair Labor Standards Act

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(“FLSA”) and failed to provide uninterrupted meal and break

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periods in violation of California law.

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A, Compl. (Docket No. 1-1).)

(Notice of Removal Ex.

Before the court is plaintiff’s
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Motion for leave to amend his Complaint to add two parties as

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defendants to this action.

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I.

(Pl.’s Mot. (Docket No. 37).)

Factual and Procedural Background

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Defendant is a transport company that delivers wine

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from suppliers to retailers.

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No. 14).)

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from 2008 to 2015.

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(Joint Status Report at 3 (Docket

Plaintiff was employed by defendant as a truck driver
(Compl. ¶ 43.)

On October 23, 2015, plaintiff filed this action in the
California Superior Court, alleging that defendant failed to pay

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him and other truck drivers overtime wages in violation of the

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FLSA and failed to provide uninterrupted meal and break periods

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in violation of California law.

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did not name other defendants at that time.

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plaintiff’s action to this court on February 17, 2016.

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of Removal (Docket No. 1).)

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(Id. at 1, 13, 18.)

Plaintiff

Defendant removed
(Notice

On June 17, 2016, the court issued a Scheduling Order in

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which it stated that “[n]o further joinder of parties or

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amendments to pleadings will be permitted [in this action] except

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with leave of court, good cause having been shown under Federal

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Rule of Civil Procedure 16(b).”

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(Docket No. 22).)

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parties have agreed to file any motions requesting to join

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additional parties or amend the pleadings by no later than

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December 30, 2016.”

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(June 17, 2016 Order at 2

The court noted in the Order that “[t]he

(Id.)

On December 15, 2016, plaintiff deposed John Riella, an

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employee of defendant’s.

(Decl. of James Pagano (“Pagano Decl.”)

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¶ 19 (Docket No. 37-1).)

At the deposition, Riella testified

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that : (1) “Bronco Wine Company,” a wine supplier, is the sole
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supplier for the division of Sugar Transport that plaintiff and

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putative class members were employed in; (2) Bronco Wine has a

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sales affiliate called “Classic Wines”; (3) Bronco Wine and

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Classic Wines “monitored” plaintiff and other truck drivers using

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“electronic logs and [information from] hand held tracking

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devices”; (4) Bronco Wine owns the warehouses that plaintiff and

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putative class members worked out of; and (5) Bronco Wine is

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affiliated with the company that leased the trucks plaintiff and

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putative class members drove.

(Id. ¶ 22.)

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After the deposition, plaintiff undertook further

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investigation and “learned that . . . Bronco Wine . . . and

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Classic Wines . . . had significant input on the discipline of

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[defendant’s] drivers,” and that Classic Wines “provided

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direction and instruction directly to [defendant’s] drivers

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regarding the performance of their jobs, including how to address

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particular deliveries.”

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(Id. ¶ 24.)

On December 23, 2016, plaintiff filed this Motion,

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seeking leave to amend his Complaint to add Bronco Wine and

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Classic Wines as defendants to this action.

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Defendant opposes plaintiff’s Motion.

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41).)

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II.

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(Pl.’s Mot.)

(Def.’s Opp’n (Docket No.

Legal Standard
Generally, a motion to amend is subject to Rule 15(a)

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of the Federal Rules of Civil Procedure, which provides that

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“[t]he court should freely give leave [to amend] when justice so

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requires.”

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district court ha[s] filed a pretrial scheduling order pursuant

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to Federal Rule of Civil Procedure 16[,] which establishe[s] a

Fed. R. Civ. P. 15(a)(2).

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However, “[o]nce the

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timetable for amending pleadings[,] that rule’s standards

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control[].”

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607-08 (9th Cir. 1992); see In re W. States Wholesale Nat. Gas

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Antitrust Litig., 715 F.3d 716, 737 (9th Cir. 2013).

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Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,

Under Rule 16(b), a party seeking leave to amend must

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demonstrate “good cause.”

Fed. R. Civ. P. 16(b).

“Rule 16(b)’s

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‘good cause’ standard primarily considers the diligence of the

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party seeking amendment.”

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party was not diligent, the inquiry should end.”

Johnson, 975 F.2d at 609.
Id.

“If that
Although

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“the focus of the inquiry is upon the moving party’s reasons for

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seeking modification[,]” a court may make its determination by

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assessing the prejudice to other parties.

Id.

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If good cause is founds, the court must then evaluate

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the request to amend in light of Rule 15(a)’s liberal standard.

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Id. at 608.

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(1) would cause prejudice to the opposing party, (2) is sought in

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bad faith, (3) creates undue delay, or (4) is futile.

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v. Univ. Med. Ctr. Of S. Nev., 649 F.3d 1143, 1153 (9th Cir.

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2011) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

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“Because Rule 16(b)’s ‘good cause’ inquiry essentially

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incorporates the first three factors, if a court finds that good

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cause exists, it should then deny a motion for leave to amend

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only if such amendment would be futile.”

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Reserve, No. Civ. 2:09-1464 WBS JFM, 2010 WL 2348736, at *1 (E.D.

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Cal. June 7, 2010).

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III. Discussion

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Leave to amend should be granted unless amendment:

Chudacoff

Baisa v. Indymac Fed.

Plaintiff alleges that Bronco Wine and Classic Wines
are, along with defendant, “joint employers” of plaintiff and the
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putative class for liability purposes in this action.

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Mot., Mem. (“Pl.’s Mem.”) at 5 (Docket No. 37-2).)

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that “good cause” exists to add Bronco Wine and Classic Wines

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because “he acted diligently” in discovering the facts necessary

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“to state ‘joint employer’ allegations against [them]” and adding

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them once he had enough facts.

(See Pl.’s

He argues

(Id. at 5-6.)

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Defendant contends that plaintiff did not act

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diligently in adding Bronco Wine and Classic Wines to this action

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because the facts he cites in support of adding them as joint

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employers--that Bronco Wine and Classic Wines monitored,

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instructed, and provided trucks and facilities to him and other

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truck drivers--are ones that, as a former employee of

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defendant’s, he knew or should have known from the start of this

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action.

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should have included Bronco Wine and Classic Wines as defendants

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from the start of this action.

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(Def.’s Opp’n at 4.)

Thus, defendant argues, plaintiff

The court agrees with defendant that some of the facts

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plaintiff alleges to have learned only after the Riella

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deposition are ones that, as a former employee of defendant’s, he

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knew or should have known from the start of this action.

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former truck driver for defendant, plaintiff was presumably aware

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that he delivered Bronco Wine’s wine and that Classic Wines

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instructed him and other drivers on how to make deliveries.

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As a

However, it is also plausible that plaintiff would not

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have been aware, from working as a truck driver, that: (1) Bronco

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Wine owns the warehouses he worked out of and is affiliated with

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the company that leased the trucks he drove, (2) Classic Wines

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monitored him and other truck drivers through “electronic logs
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and hand held tracking devices,” and (3) Bronco Wine and Classic

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Wines had “input on [employee] discipline.”

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has not presented any evidence indicating that plaintiff was or

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should have been aware of such facts prior to the Riella

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deposition, the court will assume, for purposes of this Motion,

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that plaintiff was not aware of such facts prior to the Riella

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deposition.

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Because defendant

In deciding whether an entity may be held liable as a
joint employer under the FLSA, the Ninth Circuit has held that

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many factors are to be considered, not merely whether the entity

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supplied goods and provided instruction.

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but are not limited to: (1) “[t]he nature and degree of control

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of the workers”; (2) “[t]he degree of supervision, direct or

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indirect, of the work”; (3) “[t]he right, directly or indirectly,

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to hire, fire, or modify the employment conditions of the

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workers”; and (4) “whether the premises and equipment of the

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employer are used for the work.”

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633, 639-40 (9th Cir. 1997).

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employer-employee relationship exists does not depend on isolated

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factors but rather upon the circumstances of the whole activity.”

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Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1469

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(9th Cir. 1983), disapproved of on other grounds in Garcia v. San

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Antonio Metro. Transit Auth., 469 U.S. 528 (1985).

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Such factors include,

Torres-Lopez v. May, 111 F.3d

“The determination of whether an

In light of the circumstantial, fact-dependent nature

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of the FLSA’s joint employer test, plaintiff did not fail to act

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diligently by waiting until he discovered additional facts to add

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Bronco Wine and Classic Wines to this action.1

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Forte Sys., LLC, No. CIV-S-06-2366 WBS GGH, 2007 WL 4180158, at

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*1-2 (E.D. Cal. Nov. 26, 2007) (finding “good cause” to add co-

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employer where plaintiff “only learned the extent of [co-

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employer’s] role during discovery”).

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Wine and Classic Wines as defendants based merely on allegations

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that they supplied defendant’s wine and provided instruction to

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its truck drivers, Bronco Wine and Classic Wines would have had a

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greater chance of succeeding on a motion to be dismissed from

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See Kalsi v.

Had plaintiff named Bronco

this action.

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Neither did plaintiff fail to act diligently in

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discovering the facts he cites in support of his joint employer

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allegations.

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related to defendant’s relationship with its suppliers one month

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after the court opened discovery in this case.

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2016 Order, with Pagano Decl. Ex. 3, Request for Production at 11

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Plaintiff propounded discovery seeking documents

(Compare June 17,

Defendant correctly notes that California’s joint
employer test is also relevant to this Motion because plaintiff
is bringing, in addition to his FLSA claims, a claim for failure
to provide meal and break periods under California law. (See
Compl. at 18.) That is not to say, however, that plaintiff could
have added Bronco Wine and Classic Wines earlier under
California’s test. Defendant reads California’s test to center
on whether Bronco Wine and Classic Wines “exercised control over
. . . plaintiff[’s] working conditions.” (Def.’s Opp’n at 4
(quoting Pena v. Taylor Farms Pac., Inc., 305 F.R.D. 197, 210
(E.D. Cal. 2015) (Mueller, J.)).) The more precise formulation
of that test, however, is whether Bronco Wine and Classic Wines
exercised “relevant control” over plaintiff. See Pena, 305
F.R.D. at 210 (emphasis added). The “relevant control” here is
control over meal and break periods. There is no indication, at
this stage of the litigation, that Bronco Wine and Classic Wines
exercised that type of control over plaintiff or other truck
drivers, or that plaintiff had reason to know whether they did
prior to the Riella deposition. Thus, plaintiff did not fail to
act diligently under California’s joint employer test either.
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(sent on July 21, 2016).)

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and a half months in order to try to settle the case.

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Decl. ¶¶ 8, 13 (discovery was stayed from August 8 to November 3,

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2016).)

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plaintiff immediately resumed discovery.

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(plaintiff requested responses to previously issued discovery on

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November 3, 2016).)

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depose defendant’s “most knowledgeable” person--Riella--one week

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after the parties lifted their discovery stay.

The parties stayed discovery for three
(Pagano

When it became clear that settlement was unlikely,
(See id. ¶ 13

He notified defendant that he would seek to

(See id. ¶ 14

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(serving notice on November 10, 2016).)

He filed this Motion one

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week after the Riella deposition.

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deposition took place on December 15, 2016), with Mot. (filed on

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December 23, 2016).)

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diligence.

(Compare id. ¶ 16 (Riella

These facts do not indicate lack of

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Lastly, the parties expressly agreed, in their Joint

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Status Report, to December 30, 2016 as the deadline for filing

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motions to add parties or amend pleadings in this action.

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Status Report at 4.)

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23, 2016, its timing does not prejudice defendant.

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any risk that defendant will have to conduct duplicate discovery

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due to Bronco Wine and Classic Wines being added, as defendant

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has not conducted any discovery to date in this action.

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Decl. ¶ 29.)

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Classic Wines will likely suffer any prejudice by being joined at

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this stage of the proceedings which cannot be cured by a minor

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modification to the Scheduling Order upon request.

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(Joint

As plaintiff’s Motion was filed on December
Nor is there

(Pagano

It likewise does not appear that Bronco Wine and

Because plaintiff was diligent in discovering facts and
adding Bronco Wine and Classic Wines to this action, and because
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defendant will not be prejudiced by plaintiff’s Motion, the court

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finds that plaintiff has demonstrated “good cause” for his

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Motion.2

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presented in plaintiff’s Motion indicate that plaintiff has a

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colorable argument that Bronco Wine and Classic Wines are joint

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employers in this action.

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111 F.3d at 639-40.

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plaintiff’s Motion.

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Futility is not a concern here because the facts

(See Pl.’s Mem. at 4); Torres-Lopez,

Accordingly, the court will grant

IT IS THEREFORE ORDERED that plaintiff’s Motion for

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leave to amend his Complaint be, and the same hereby is, GRANTED.

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Plaintiff shall file the amended complaint attached as exhibit 1

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to his Motion (Docket No. 37 Ex. 1) within five days of the date

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this Order is signed.

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Dated:

January 24, 2017

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The cases defendant cites in support of denying
plaintiff’s Motion are each distinguishable for reasons discussed
in this Order. Unlike the moving parties in Kaplan v. Rose, 49
F.3d 1363 (9th Cir. 1994) and Acri v. Int’l Ass’n of Machinists &
Aerospace Workers, 781 F.2d 1393 (9th Cir. 1986), plaintiff
likely did not have enough facts to name Bronco Wine and Classic
Wines as defendants at the start of this action. And unlike the
moving party in Martinez v. Petrenko, 792 F.3d 173 (1st Cir.
2015), there is no evidence that plaintiff’s delay in bringing
this Motion was part of a bad faith “litigation strategy.”
AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946
(9th Cir. 2006), Minter v. Prime Equip. Co., 451 F.3d 1196 (10th
Cir. 2006), Morongo Band of Mission Indians v. Rose, 893 F.2d 104
(9th Cir. 1990), and Calderon-Serra v. Wilmington Trust Co., 715
F.2d 14 (1st Cir. 2013), which defendant cites for the
proposition that “[l]eave to amend should . . . be denied when
plaintiff delayed seeking an amendment after obtaining knowledge
of the facts supporting the amendment,” (Def.’s Opp’n at 3), are
distinguishable because there is no evidence of undue delay here.
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