Stowers v. WinCo Foods LLC et al

Filing 51

ORDER Granting 39 Plaintiff's Motion for Leave to Amend Complaint. The 04/21/14 Hearing on the motion is VACATED. Signed by Judge Thelton E. Henderson on 04/17/14. (tehlc2, COURT STAFF) (Filed on 4/17/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VICTORIA STOWERS,
Plaintiff,

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v.

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WINCO FOODS LLC, et al.,

Case No. 13-cv-02631-TEH
ORDER GRANTING PLAINTIFF’S
MOTION FOR LEAVE TO AMEND
COMPLAINT

Defendants.

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Now before the Court is a motion by Plaintiff Victoria Stowers (“Plaintiff”) for

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United States District Court
Northern District of California

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leave to file a first amended complaint. Docket No. 39. The motion is scheduled for

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hearing on April 21, 2014. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter

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appropriate for resolution without oral argument, and hereby VACATES the hearing. For

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the reasons set forth below, the Court GRANTS Plaintiff’s motion.

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BACKGROUND

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As the parties are familiar with the facts and procedural history of the case, the

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Court addresses each with brevity. Plaintiff worked as a cashier at a WinCo supermarket

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in Brentwood, California from October 11, 2007 to June 7, 2012, when she was terminated

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for exceeding her allowable absences from work. Proposed Amended Complaint (“PAC”)

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¶¶ 28, 55, Docket No. 39-5. On June 7, 2013, Plaintiff filed the instant action, alleging

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that Defendants1 violated her rights by not properly crediting time she took off of work due

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to several medical conditions and procedures, and to care for her children, by unfairly

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applying its attendance policy as to her, and by unlawfully terminating her employment.

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The Defendants are WinCo Foods LLC, WinCo Foods Foundation, Inc., and WinCo
Holdings, Inc. Defendants argued elsewhere that WinCo Holdings, Inc. is the sole entity
that employed Plaintiff, and that the other entities are not proper defendants. See Docket
No. 28 at n. 2. The Court expresses no opinion on the merits of this position, but refers to
the entity that employed Plaintiff as “Defendant” or “WinCo” for simplicity.

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Id. at ¶ 26-63. In this suit, Plaintiff asserts numerous causes of action, including but not

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limited to, violations of California’s Fair Employment and Housing Act (“FEHA”),

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California Government Code § 12920 et seq., for sex discrimination, disability

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discrimination, failure to accommodate, failure to engage in the interactive process, and

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retaliation. Id. at ¶¶ 64-120; see also id. ¶¶ 121-151 (asserting additional causes of action

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under state and federal law). Defendant answered the complaint on August 19, 2013. The

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Court held case management conferences on November 4, 2013 and January 13, 2014. No

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pretrial motions or dispositive motions have been filed; trial is set for March 17, 2015. See

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Docket No. 22. On January 17, 2014, Proposed-Intervenor Phyllis W. Cheng, Director of
the California Department of Fair Employment and Housing (“DFEH”) moved to

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United States District Court
Northern District of California

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intervene pursuant to Rule 24 of the Federal Rules of Civil Procedure.2 Defendant

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opposed the motion and Plaintiff filed a notice of non-opposition. At the March 3, 2014

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hearing on the motion to intervene, Plaintiff advised the Court that she intended to amend

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her complaint, which could impact DFEH’s motion to intervene. The Court took the

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motion to intervene under submission pending an anticipated stipulation to amend or

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motion for leave to amend. Plaintiff filed the instant motion, along with the PAC, on

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March 7, 2014. On April 17, 2014, DFEH and Defendant filed a stipulation providing that

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DFEH would withdraw the pending motion to intervene in this case without prejudice

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pursuant to terms agreed upon by the parties in this case and in Cheng v. WinCo Foods,

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L.L.C. (“Cheng”), No. 14-cv- 0483 JST (N.D. Cal. filed Jan. 31, 2014).

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LEGAL STANDARD
After a party has amended a pleading once as a matter of course, it may only amend

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further after obtaining leave of the court, or by consent of the adverse party. Fed. R. Civ.

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P. 15(a). Rule 15 advises the court that “leave shall be freely given when justice so

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requires.” Fed. R. Civ. P. 15(a)(2). “[T]his policy is to be applied with extreme

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All references to “Rule” hereinafter refer to the Federal Rules of Civil Procedure unless
otherwise specified.
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liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001).

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“Courts may decline to grant leave to amend only if there is strong evidence of ‘undue

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delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure

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deficiencies by amendments previously allowed, undue prejudice to the opposing party by

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virtue of allowance of the amendment, [or] futility of amendment, etc.’” Sonoma Cnty.

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Ass’n of Retired Employees v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (citing

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Foman v. Davis, 371 U.S. 178, 182 (1962)). Of these so-called Foman factors, prejudice is

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the weightiest and most important. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048,

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1052 (9th Cir. 2003). “Absent prejudice, or a strong showing of any of the remaining
Foman factors, there exists a presumption under Rule 15(a) in favor of granting leave to

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United States District Court
Northern District of California

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amend.” Id. (emphasis in original). “The party opposing amendment bears the burden of

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showing prejudice.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987).

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Evaluation of the Foman factors “should be performed with all inferences in favor of

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granting the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999).

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DISCUSSION

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Defendant urges the Court to deny Plaintiff’s motion on the grounds that

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amendment is futile, will prejudice Defendant, and stems from Plaintiff’s bad faith and

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dilatory motive. The Court, however, finds that Defendant has not demonstrated futility of

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amendment, prejudice or otherwise overcome the presumption in favor of granting leave to

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amend. The Court therefore GRANTS Plaintiff’s motion.

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Defendant’s main argument in opposition to granting leave is that any amendment

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related to WinCo’s “100% healed policy” would be futile as such a claim is time-barred by

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FEHA’s one-year statute of limitation. “[A] proposed amendment is futile only if no set of

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facts can be proved under the amendment to the pleadings that would constitute a valid and

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sufficient claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir.

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1988). Under FEHA, an employee must file a charge with the DFEH one year after the

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allegedly unlawful conduct occurs. Cal. Gov’t Code § 12960(d). Plaintiff alleges in the
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PAC that Defendant denied her April/May 2011 request for light or modified duty

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following a medical procedure due to its enforcement of policies prohibiting employees

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with non-work-related injuries from returning to work until they are 100% recovered (the

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100% healed policy). PAC ¶¶ 38-41. If this were Plaintiff’s only allegation of unlawful

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conduct with respect to the 100% healed policy, and her causes of action under FEHA for

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Failure to Accommodate and for Failure to Engage in the Interactive Process were based

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solely on this incident, then these claims would be time-barred as Plaintiff filed her

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administrative complaint with DFEH on February 20, 2013, more than one year after this

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alleged unlawful conduct occurred. Plaintiff, however, argues that these claims survive
because of the continuing violation doctrine, which allows a FEHA claim to cover conduct

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United States District Court
Northern District of California

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that occurred outside the limitation period if some of the allegedly unlawful conduct also

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occurred within the limitation period. Richards v. CH2M Hill, Inc., 26 Cal. 4th 798, 823

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(2001). To prove a FEHA claim under a continuing violation theory, a plaintiff must show

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that the employer’s unlawful actions are (1) sufficiently similar in kind; (2) have occurred

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with reasonable frequency; (3) and have not acquired a degree of permanence (i.e. “an

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employer’s statements and actions make clear to a reasonable employee that any further

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efforts at informal conciliation to obtain reasonable accommodation or end harassment will

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be futile”). Id. Defendant also contends that amendment is futile notwithstanding the

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continuing violation doctrine because, according to Defendant, any subsequent alleged

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discriminatory conduct is not sufficiently similar (the 100% healed policy is not similar to

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the attendance and leave policies Plaintiff challenges), did not occur with reasonable

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frequency, and the April/May 2011 incident acquired a degree of permanence when she

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returned to work with a full-work release.

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At this procedural stage, however, the Court cannot conclude that Plaintiff would be

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unable to prove a FEHA claim under a continuing violation theory related to Defendant’s

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100% healed policy. Plaintiff argues that the April/May 2011 incident was the first in a

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series of refusals to engage in the interactive process with her to determine whether an

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accommodation for her disability could be provided. PAC ¶ 63. For example, Plaintiff
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alleges that Defendant denied her request for medical leave and accommodation in May

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2012 and unfairly applied its attendance policy by penalizing her with attendance points

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stemming from these incidents. Id. ¶ 52. Plaintiff also alleges that the 100% healed policy

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and the attendance policies are part of an overall failure to engage in a good faith

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interactive process. Id. ¶¶ 52, 55, 61-63. This May 2012 incident occurred one month

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before Defendant terminated Plaintiff’s employment; both of these incidents occurred

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within one year of the filing of her administrative complaint with DFEH. The Richards

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court recognized that “similar kinds of unlawful employer conduct, such as acts of

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harassment or failures to reasonably accommodate disability, may take a number of
different forms.” Richards, 26 Cal. 4th at 823. As discovery has yet to occur in earnest,

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United States District Court
Northern District of California

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and Plaintiff alleges a failure to engage in the interactive process that continued into the

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applicable statutory period, the Court cannot agree with Defendant’s assertion that “[a]ny

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attempt” by Plaintiff to argue that she was subject to a continuing course of discriminatory

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conduct “would fail” because her claim arising from the 100% healed policy is separate

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and unique from any of her claims arising out of Defendant’s attendance policies and her

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ultimate termination. Opp’n at 5, Docket No. 46. While Plaintiff’s April/May 2011 claim

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arising from the 100% healed policy would be time-barred, the Court cannot conclude – at

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this procedural stage – that “no set of facts” could be proved by Plaintiff “under the

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amendment to the pleadings that would constitute a valid and sufficient” FEHA claim

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based on a continuing violation theory, Miller, 845 F.2d at 214, especially where proving

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such a claim requires additional discovery, and will turn on evidence not presently before

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the Court. Accordingly, the Court cannot make the futility finding advocated by

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Defendant at this time.

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The Court also finds that Defendant has not met its burden of showing that it will

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suffer prejudice should Plaintiff’s motion be granted. Defendant argues that it will be

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forced to move to dismiss or strike time-barred claims under Rule 12, which will result in

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litigation expenses, and if the motion should be denied, to defend against a time-barred

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claim for this case as a whole. Opp’n at 8. Because Plaintiff contends that discovery is
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needed to determine whether her claim with respect to the 100% healed policy is viable

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under a continuing violations theory, the Court finds Defendant’s argument about

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prejudice unpersuasive. First, the PAC does not add any new cause of action, and in fact,

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removes three. This streamlining simplifies the case and reduces litigation expenses.

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Second, Plaintiff’s original complaint includes the allegation that in April/May 2011

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Defendant “told Plaintiff that if she couldn’t work full shifts, she couldn’t return to work

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and would need to go back to her physician and request to be fully released and cleared for

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full work duty without any restrictions.” Compl. ¶ 31. In the PAC, Plaintiff seeks to add

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the allegation that this denial and subsequent failures to engage in the interactive process
were, in part, linked to Defendant’s 100% healed policy, PAC ¶¶ 89-112, which Plaintiff’s

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Northern District of California

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counsel only learned about after filing suit. Supp. Schwarz. Decl. ¶ 2, Docket No. 48-1.

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In essence, Plaintiff seeks to conform the pleading to newly discovered evidence. The

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Court discerns no prejudice that would befall Defendant from this addition. Third, the

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Court notes that Plaintiff alleged the underlying conduct related to the April/May 2011

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incident in the original complaint, even if she did not refer to the 100% healed policy by

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name, and Defendant did not assert any Rule 12(b) defenses prior to answering the

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complaint. See Fed. R. Civ. P. 12 (requiring that “[a] motion asserting any of these [Rule

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12(b)] defenses must be made before pleading if a responsive pleading is allowed”). Thus,

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Defendant could presumably challenge this claim on summary judgment in the status quo.

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By granting leave to amend, Defendant will have an opportunity to assert Rule 12(b)

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defenses in a properly noticed motion prior to answering the amended complaint. The

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Court does not find such a process unduly burdensome. As Defendant has identified no

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other grounds by which it would be prejudiced other than general litigation expense, the

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Court discerns no prejudice that would befall Defendant by allowing Plaintiff leave to

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amend the complaint.

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Lastly, Defendant argues that Plaintiff’s motion for leave to amend the complaint

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was brought with “bad faith” and “dilatory motive.” This contention is based on

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Defendant’s representation that Plaintiff was on notice that her claims relating to
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Defendant’s 100% healed policy are barred by the statute of limitations, and therefore

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baseless, based on conversations between counsel, and that Plaintiff should have brought

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the motion for leave to amend within a reasonable amount of time after learning of the

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existence of the 100% healed policy on or about October 31, 2013, as opposed to waiting

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until the hearing on DFEH’s motion to intervene on March 3, 2014 to raise the issue. See

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Opp’n at 9 & Warren Decl. ¶¶ 3-10, Docket No. 47. Plaintiff, in contrast, argues that the

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continuing violations doctrine shows that amendment is not futile, and that any delay in

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amendment is a result of Defendant’s refusal to stipulate and act in good faith. Reply at 2-

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3 & Schwarz Decl. ¶¶ 5-11, Docket No. 39-3 & Organ Decl. ¶¶ 3-7, Docket No. 39-4. To
the extent the parties offer dueling versions of their adversary’s bad faith and dilatory

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Northern District of California

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motives, the Court must draw factual inferences “in favor of granting the motion.” Griggs,

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170 F.3d at 880. The Court notes, however, that even if Defendant’s version of events

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were credited, the Court would find that Defendant failed to make the required “strong

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showing” that Plaintiff acted in bad faith and with the dilatory motive necessary to

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overcome the presumption in favor of granting leave. Eminence Capital, 316 F.3d at 1052.

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Thus, these remaining Foman factors do not counsel against granting leave to amend.

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Accordingly, with good cause appearing, the Court GRANTS Plaintiff’s motion for

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leave to file the proposed amended complaint. The April 21, 2014 hearing on the motion

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is VACATED. The amended complaint shall be filed no later than April 28, 2014.

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IT IS SO ORDERED.

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Dated: 04/17/14

_____________________________________
THELTON E. HENDERSON
United States District Judge

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