Almy et al v. United States Department of Defense et al

Filing 30

MOTION for Leave to File First Amended Complaint filed by Michael D. Almy, Jason D. Knight, Anthony J. Loverde. Motion Hearing set for 5/5/2011 01:30 PM in Courtroom 3, 17th Floor, San Francisco before Hon. Richard Seeborg. (Attachments: # 1 Affidavit Woodmansee, # 2 Exhibit 1 to Declaration of Woodmansee - Proposed First Amended Complaint, # 3 Exhibit 2 to Declaration of Woodmansee - Redline, # 4 Proposed Order Granting Motion for Leave to File First Amended Complaint)(Woodmansee, Mark) (Filed on 3/16/2011)

Almy et al v. United States Department of Defense et al

Doc. 30

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M. ANDREW WOODMANSEE (CA SBN 201780) [e-mail] STEPHANIE L. FONG (CA SBN 240836) [e-mail] KIMBERLY R. GOSLING (CA SBN 247803) [e-mail] JESSICA A. ROBERTS (CA SBN 265570) [e-mail] MORRISON & FOERSTER LLP 12531 High Bluff Drive San Diego, California 92130-2040 Telephone: [phone] Facsimile: 858.720.5125 AARON D. TAX (DC SBN 501597) [e-mail] JOHN M. GOODMAN (DC SBN 383147) [e-mail] SERVICEMEMBERS LEGAL DEFENSE NETWORK P. O. Box 65301 Washington, DC 20035-5301 Telephone: [phone] Facsimile: 202.797.1635 Attorneys for Plaintiffs MICHAEL D. ALMY, JASON D. KNIGHT, and ANTHONY J. LOVERDE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA MICHAEL ALMY, JASON KNIGHT, and ANTHONY LOVERDE, Plaintiffs, v. UNITED STATES DEPARTMENT OF DEFENSE; ROBERT M. GATES, Secretary of Defense; DEPARTMENT OF THE AIR FORCE; MICHAEL B. DONLEY, Secretary, Department of the Air Force; DEPARTMENT OF THE NAVY; and RAY MABUS, Secretary, Department of the Navy, Defendants. Case No. cv 10-5627 (RS) PLAINTIFFS' NOTICE OF MOTION AND MOTION SEEKING LEAVE TO FILE FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: May 5, 2011 Time: 1:30 p.m. Place: Courtroom 3, 17th Floor Honorable Richard Seeborg

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NOTICE OF MOTION AND MOTION TO THE UNITED STATES DEPARTMENT OF DEFENSE; ROBERT M. GATES, Secretary of Defense; DEPARTMENT OF THE AIR FORCE; MICHAEL B. DONLEY, Secretary, Department of the Air Force; DEPARTMENT OF THE NAVY; and RAY MABUS, Secretary, Department of the Navy ("DEFENDANTS") AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT on May 5, 2011, in the Courtroom of the Honorable Richard Seeborg, located at 450 Golden Gate Avenue, San Francisco, California, in the hour of 1:30 p.m., Plaintiffs MICHAEL ALMY, JASON KNIGHT, and ANTHONY LOVERDE, by and through their counsel, will move and hereby do move, pursuant to Federal Rule of Civil Procedure 15(a)(2) for leave to file their First Amended Complaint. This motion is based on the accompanying Memorandum of Points and Authorities; the Declaration of M. Andrew Woodmansee in Support of Plaintiffs' Motion ("Woodmansee Decl."); and on all of the documents and records on file in this action and all matters judicially noticeable.

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MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Twice having asked for the Defendants' consent to amend their Complaint and twice having been refused, Plaintiffs Michael D. Almy, Anthony J. Loverde, and Jason D. Knight now seek the Court's leave to file a First Amended Complaint under Federal Rule of Civil Procedure 15(a)(2). The purpose of the proposed First Amended Complaint is to limit the relief sought to equitable relief that Defendants agree this Court can award. The proposed Amended Complaint drops requests for relief that Defendants claim are beyond the Court's jurisdiction and which, Defendants argue, require that this action be transferred to the Court of Federal Claims pursuant to 28 U.S.C. § 1631. (See Defs.' Mot. to Transfer at 2, ECF. No. 19.) Plaintiffs propose the amendment, not because they think it is necessary for jurisdictional purposes, but for the practical purpose of removing any doubt the Defendants -- or the Court -- may have regarding this Court's jurisdiction to review and remedy the Defendants' illegal discharge of Plaintiffs from active duty. The amendment will render moot Defendants' Motion to Transfer and dissolve the automatic stay, thus expediting a hearing on Plaintiffs' request to return to active duty service in the military.1 Defendants have refused to stipulate to the Amended Complaint unless Plaintiffs also disavow all future suits in the Court of Federal Claims relating to Plaintiffs' potential claims for credit toward retirement for time they would have served on active duty but for their discharges. Defendants maintain that such an "election of remedies" is necessary, but this position is unsupported by the law, including cases cited by Defendants in their Motion to Transfer. See Witt v. Dep't of the Air Force, No. C06-5195 RBL, 2010 WL When a motion to transfer an action to the United States Court of Federal Claims is filed in district court, no further proceedings shall be taken in the district court until 60 days after the court has ruled upon the motion. 28 U.S.C. 1292(d)(4)(B). Moreover, the statute entitles either party to an interlocutory appeal of the district court's ruling in the Court of Appeals for the Federal Circuit. Id. 1292(d)(4)(A). If an appeal is taken, proceedings shall be further stayed until the appeal has been decided by the Court of Appeals for the Federal Circuit. Id. 1292(d)(4)(B). Thus, it is perfectly conceivable that Defendants' motion will successfully delay any hearing on the merits for by well over a year. The stay does not, however, prevent the Court from allowing leave to amend. See Consolidated Edison Co. v. United States, No. 98 Civ. 4155 (WK), 1999 U.S. Dist. LEXIS 18561, at *3 (S.D.N.Y. Nov. 29, 1999) (granting motion for leave to amend complaint where statutory stay was in place under 12 U.S.C. § 1292(d)(4)(B)).
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3522519 (W.D. Wash. Sept. 7, 2010) (cited on pages 4 and 5 of Defendants' Motion to Transfer, and providing an example of a district court retaining jurisdiction of the claims involving wrongful discharge and reinstatement, and noting that the other claims could be heard in the Court of Federal Claims); (see also Defs. Mot. to Transfer at 4-5, ECF No. 19.) BACKGROUND Each of the Plaintiffs volunteered to serve in the United States military. Each of the Plaintiffs deployed to the Middle East as part of this country's "War on Terror." Each of the Plaintiffs earned exemplary records in the military. And each of the Plaintiffs was discharged under DADT in violation of his constitutional rights. To remedy this, on December 13, 2010, the Plaintiffs filed a Complaint in this Court seeking equitable relief enabling each of them to return to active duty service. (See generally Compl.) As filed, the Complaint made clear that the Plaintiffs did not seek monetary damages. (See Compl. ¶¶ 35, 47, 58.) Rather the Complaint requested equitable relief in the form of a mandatory injunction ordering the Defendants to reinstate Plaintiffs and give them the equitable remedy of credit towards retirement for time they would have served if they had not been involuntarily discharged. (See id.) Nonetheless, on February 11, 2011, the Defendants filed a motion claiming that the Complaint sought "money damages" in excess of $10,000, and that the Tucker Act (28 U.S.C. § 1491) required that this case be heard in the Court of Federal Claims. (See Mot. to Transfer at 2.) Plaintiffs carefully considered whether they wished to continue with the lawsuit as filed, or to drop the request for retirement credit at this time. Plaintiffs agreed that their priority is returning to service immediately. Consequently, Plaintiffs wish to amend their Complaint so as to achieve this goal as quickly as possible.2 Plaintiffs expressly reserve all rights they may have to petition for credit toward their retirement for time they would have served on active duty but for their discharges under DADT, and Plaintiff Almy expressly reserves his right to petition for a promotion to the rank of lieutenant colonel (a promotion for which he was recommended while DADT discharge proceedings were brought against him). Plaintiffs reserve the right to commence a separate action in the Court of Federal Claims to seek this relief. See Rowe v. United States, 633 F.2d 799, 802 (9th Cir. 1980). If Defendants believe they have valid defenses to such an action based on the Complaint in this case, they can assert them at the appropriate time in the appropriate forum.
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LEGAL STANDARD Under Federal Rule of Civil Procedure 15(a)(2), leave to amend "shall be freely given when justice so requires." Foman v. Davis, 371 U.S. 178, 182 (1962) (quoting Fed. R. Civ. P. 15(a)). In exercising its discretion to allow amendments to pleadings, "a court must be guided by the underlying purpose of Rule 15 ­ to facilitate decision on the merits, rather than on the pleadings or technicalities." Roth v. Garcia Marquez, 942 F.2d 617, 628 (9th Cir. 1991) (quoting United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981)). Leave to amend is "to be applied with extreme liberality." Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (citation omitted). Rule 15(a) thus requires a strong showing by the opposing party of prejudice, delay, futility, or bad faith before leave to amend may be denied. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051-52 (9th Cir. 2003); Foman, 371 U.S. at 182. Moreover, 28 U.S.C. § 1653 provides that a party may amend pleadings for the purpose of satisfying a court that it has jurisdiction over a matter. See 28 U.S.C. § 1653 ("Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts"). This statute has been interpreted to allow amendment to "clarify" pleadings. See Barrow Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 317 (9th Cir. 1969) (recognizing that under the statute amendment is possible to "clarify `defective' allegations of jurisdiction previously made"); Zee Med. Distrib. Ass'n v. Zee Med., Inc., 23 F. Supp. 2d 1151, 1157 (N.D. Cal. 1998) (noting that the statute allows amendment of allegations of existing jurisdiction). Here, Plaintiffs maintain that this Court has jurisdiction to hear the case, and Defendants claim that the suit should be transferred to the Court of Federal Claims because the Plaintiffs "have failed to waive any recovery of back pay, allowances, and benefits...." (Mot. to Transfer at 4, ECF No. 19.) The proposed amendment will clarify that Plaintiffs are not seeking to recover back pay, allowances, or benefits. The amended pleading thus will "clarify" the allegedly "`defective' allegations of jurisdiction previously made." See Barrow, 418 F.2d at 317.

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LEAVE TO AMEND SHOULD BE GRANTED BECAUSE DEFENDANTS CANNOT MAKE THE REQUISITE SHOWING "Four factors are commonly used to determine the propriety of a motion for leave to amend. These are: bad faith, undue delay, prejudice to the opposing party, and futility of amendment." Roth, 942 F.2d at 628. None of these factors is present here, and Plaintiffs' motion for leave should be granted. In considering whether leave to amend has been sought in bad faith, courts typically examine the purpose of the amendment. See Owens, 244 F.3d at 712 (considering whether the defendant provided a credible reason for amending its answer). Here, Plaintiffs seek to amend for the sole purpose of eliminating a request for relief to resolve the purported basis for Defendants' Motion to Transfer. The amendment would have the effect of rendering Defendants' motion moot, expediting resolution of this matter, narrowing the issues before the Court and limiting the requested remedy. Because the proposed amendment will streamline the case rather than expand it, Defendants cannot plausibly accuse Plaintiffs of seeking to amend for the purpose of causing "undue delay". See id. In fact, Plaintiffs offer the amendment to obviate the need for the Court to hear Defendants' Motion to Transfer and to dissolve the stay under 28 U.S.C. § 1292(d)(4)(B). Defendants cannot establish either of the first two factors necessary to defeat Plaintiffs' motion for leave to amend. As to the third factor, Defendants might wrongly argue that any amendment in which Plaintiffs do not disclaim all future claims for retirement credits or other remedies is improper and prejudicial. First, Defendants' argument that a plaintiff may not maintain a reinstatement case in the district court while retaining the right to bring a claim for retirement credits in the Court of Federal Claims is belied by one of the cases Defendants have cited in their own Motion to Transfer. See Witt, No. 06-5195, 2010 WL 3522519, at *2. Second, any purported "prejudice" that Defendants will allegedly suffer is highly speculative. Not only would Defendants' argument of "prejudice" presuppose that Plaintiffs will be successful in their quest for reinstatement, the argument also assumes that Plaintiffs will then decide to commence an action in the Court of

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Claims.3 Moreover, any "prejudice" to Defendants (defending a subsequent proceeding seeking a different remedy in the Court of Claims) is insubstantial, especially when compared to the prejudice Plaintiffs will suffer if they are forced to wait another year or two before this Court can reach the merits of their claims and reinstate them to active duty service. If Defendants are correct in asserting that Plaintiffs may not bring a separate action for retirement credit, Defendants can raise that as a defense in the court hearing that case; it is not a question this Court needs to resolve now. Finally, permitting Plaintiffs to amend their Complaint is not futile. When considering whether to grant a motion for leave to amend a complaint, Courts generally consider whether plaintiffs can state a claim likely to survive summary judgment. See Roth, 942 F.2d at 628-29 (noting that an amendment is futile when plaintiff cannot allege a contract in a breach of contract case). Defendants cannot point to any defect in the proposed amended pleading that is certain to result in summary judgment in favor of Defendants. Defendants cannot make a showing of futility--or any of the four factors for that matter--necessary to defeat Plaintiffs' motion for leave to amend. Allowing Plaintiffs to amend their Complaint under Rule 15(a), which counsels that courts should allow amendments freely, is consistent with the purpose of the Federal Rules. Rule 1 of the Federal Rules states that all the rules should be "construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding." Fed. R. Civ. P. 1. Here, the amendment will expedite resolution of this case and reduce costs to the parties and the Court by narrowing the issues in this case solely to the Plaintiffs' request for reinstatement on active duty service. The amendment will further reduce the burden on the Court and parties by rendering the need for a decision on Defendants' Motion to Transfer (and subsequent interlocutory appeal of any decision) moot. Defendants' claim of "prejudice" also seemingly concedes the fact that Plaintiffs do have a right to bring this second suit, or else their "prejudice" of having to litigate this second "bite at the apple" would not exist. That is, in fact, consistent with the law from the Ninth Circuit. See, e.g., Rowe, 633 F2d at 802.
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CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that the Court grant Plaintiffs

Dated: March 16, 2011

M. ANDREW WOODMANSEE STEPHANIE L. FONG KIMBERLY R. GOSLING JESSICA ANNE ROBERTS MORRISON & FOERSTER LLP AARON D. TAX JOHN M. GOODMAN SERVICEMEMBERS LEGAL DEFENSE NETWORK

By:

/s/ M. Andrew Woodmansee M. ANDREW WOODMANSEE [e-mail] Attorneys for Plaintiffs MICHAEL ALMY, JASON KNIGHT, AND ANTHONY LOVERDE

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CERTIFICATE OF SERVICE I hereby certify that all counsel of record, who are deemed to have consented to electronic service, are being served this 16th day of March, 2011, with a copy of this document via the Court's CM/ECF system.

/s/ M. Andrew Woodmansee M. Andrew Woodmansee

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