Avendano v. Averus, Inc. et al

Filing 120

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE that Plaintiffs' Motion for Leave to Amend Complaint Pursuant to Fed. R. Civ. P. 15(a) and for Tolling Pursuant to American Pipe 109 be DENIED, by Magistrate Judge Michael J. Watanabe on 4/14/17. (sgrim, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-01614-CMA-MJW
ALFONSO AVENDANO, on behalf of himself and others similarly situated,
Plaintiff,
v.
AVERUS, INC., and
MICHAEL SHANK,
Defendants.
RECOMMENDATION ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND
COMPLAINT PURSUANT TO FED. R. CIV. P. 15(A) AND FOR TOLLING PURSUANT
TO AMERICAN PIPE (Docket No. 109)
Entered by Magistrate Judge Michael J. Watanabe
This matter is before the Court on Plaintiffs’ Motion for Leave to Amend
Complaint Pursuant to Fed. R. Civ. P. 15(a) and for Tolling Pursuant to American Pipe
(Docket No. 109). Plaintiff seeks leave to amend to add four newly named plaintiffs to
this action as well as several state-law claims under the laws of Missouri, Minnesota,
Illinois, and Tennessee. Defendants filed a response (Docket No. 117). Plaintiff has not
filed a reply and his deadline to do so has elapsed. D.C.COLO.LCivR 7.1(d). The Court
has carefully considered the subject motion (Docket No. 109) and Defendants’ response
(Docket No. 117). In addition, the Court has taken judicial notice of the Court’s file, and
has considered the applicable Federal Rules of Civil Procedure and case law. The
Court now being fully informed makes the following findings of fact, conclusions of law,
and recommendations.

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Background
A brief history of this case is helpful. On June 9, 2014, Plaintiff initiated this
lawsuit by filing his complaint, alleging overtime violations of the Fair Labor Standards
Act (“FLSA”) and bringing state law claims under Colorado law. (Docket No. 1). Plaintiff,
a former employee of Defendant Averus, Inc., sought a collective class under the FLSA
for employees in all states in which it operates and a Rule 23 class under Colorado law.
On December 4, 2014, Plaintiff filed a First Amended Complaint, which is the complaint
Plaintiff now seeks to amend. (Docket No. 42). On July 17, 2014, Plaintiff filed a motion
for conditionally certify a collective action under Section 216(b) of the FLSA for certain
employees who worked at all of Defendant Averus Inc.’s locations. (Docket No. 16). On
March 31, 2015, Judge Arguello conditionally certified a collective action under Section
216(b) of the FLSA for employees in Colorado only. (Docket No. 51). On October 30,
2015, Plaintiff filed another motion again seeking to conditionally certify a collective
action under Section 216(b) of the FLSA for certain employees at all other Averus, Inc.
locations (i.e., Illinois, Indiana, Minnesota, Missouri and Tennessee). (Docket No. 69).
Plaintiff also sought to certify a Rule 23 class under Colorado law for employees in
Colorado, Illinois, Indiana, Minnesota, Missouri and Tennessee. (Docket No. 70). On
September 29, 2016, Judge Arguello granted Plaintiff’s second motion conditionally
certifying a FLSA collective class and a Rule 23 Colorado class, but denied certifying a
Rule 23 class action for employees in the other states because Plaintiff never worked in
those states and, therefore, did not have standing to bring a class action on behalf of
individuals in those states. (Docket No. 91 & 92).

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Analysis
As noted above, Plaintiff now seeks to file a Second Amended Complaint which
would add four new plaintiffs and state law claims under the laws of Illinois, Minnesota,
Missouri and Tennessee. (Docket No. 109-2). The scheduling order required that
amendments be filed twenty (20) days after a ruling on a motion to certify under Section
216(b) of the FLSA and/or Rule 23, whichever is later. (Docket No. 33). The deadline to
amend pleadings was therefore October 19, 2016. The instant motion (Docket No. 109)
was filed on February 22, 2017, more than four months after the deadline.
Pursuant to Fed. R. Civ. P. 15(a)(2), “[t]he court should freely give leave [to
amend] when justice so requires.” “Refusing leave to amend is generally only justified
upon a showing of undue delay, undue prejudice to the opposing party, bad faith or
dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility
of amendment.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (quoting Frank v.
U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993)). “The liberal granting of motions for
leave to amend reflects the basic policy that pleadings should enable a claim to be
heard on its merits.” Carr v. Hanley, 2009 WL 4693870, *1 (D. Colo. Dec. 3, 2009)
(quoting Calderon v. Kansas Dep’t of Soc. & Rehab. Servs., 181 F.3d 1180, 1186 (10th
Cir. 1999)). The Court also notes that the Federal Rules of Civil Procedure in general,
and Rule 15 in particular, favor resolving disputes on their merits, which counsels in
favor of allowing amendment and permitting defendants to file appropriate motions to
dismiss or for summary judgment. Gocolay v. New Mexico Federal Sav. & Loan Ass'n,
968 F.2d 1017, 1021 (1992) (citations omitted). In addition to Rule 15, Rule 16(b)
applies when the deadline for amendment of pleadings as set in the scheduling order
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has passed. A scheduling order deadline “may be modified only for good cause and
with the judge's consent.” Fed. R. Civ. P. 16(b)(4). Thus, the requirements of both rules
must be satisfied in the present situation. “After a scheduling order deadline, a party
seeking leave to amend must demonstrate (1) good cause for seeking modification
under Fed. R. Civ. P. 16(b)(4) and (2) satisfaction of the Rule 15(a) standard.” Gorsuch,
Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014) (citing
Pumpco, Inc. v. Schenker Int'l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001)).
In this case, Plaintiff argues that he meets Rule 16's good cause standard
because “the new Plaintiffs were all absent class members who only now seek to
become named Plaintiffs because, though they were members of the putative class,
they are not members of the Colorado-only class certified by the Court.” (Docket No.
109 at 4). Plaintiff further argues that “[t]he new Plaintiffs cannot be faulted for waiting
for denial of class certification to intervene individually.” (Id.) Defendants argue that
amendment is untimely because “Plaintiff was aware of all the facts necessary to assert
these state law claims for unpaid wages. He does not identify any new facts or change
in the law that demonstrates good cause to request leave to amend the complaint a
second time long after the Court’s deadline has passed.” (Docket No. 117).
“Rule 16's good cause requirement may be satisfied, for example, if a plaintiff
learns new information through discovery or if the underlying law has changed.”
Gorsuch, 771 F.3d at 1240 (citation omitted). Good cause does not exist where the
plaintiff knew of the underlying conduct but failed to raise corresponding claims. Id.
“[U]ntimeliness alone is a sufficient reason to deny leave to amend . . . when the party
filing the motion has no adequate explanation for the delay.” Pater v. City of Casper,
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646 F.3d 1290, 1299 (10th Cir. 2011) (quoting Frank v. U.S. West, Inc., 3 F.3d 1357,
1365-66 (10th Cir.1993)).
Applying this standard, the Court concludes that Plaintiff has not met Rule 16's
good cause standard. Plaintiff’s explanation for why the instant motion was filed four
months after the deadline for amendment of pleadings is simply that the proposed new
Plaintiffs wanted to wait until Judge Arguello ruled on the question of class certification.
That is precisely why the scheduling order afforded Plaintiff the opportunity to amend
within 20 days of such a decision. Instead, Plaintiff waited an additional four months to
file the instant motion. Plaintiff’s second argument, that counsel was retained in midJanuary (Docket No. 109 at 5), does not change the Court’s conclusion. Plaintiff’s
counsel filed the FLSA Opt-In Notices for two of the proposed new plaintiffs on
November 21, 2016 (Docket No. 104). Plaintiff does not address why these two
individuals waited an additional three months before seeking to become named plaintiffs
in this lawsuit. In short, Plaintiff fails to sufficiently explain the delay in seeking leave to
amend and, as a result, the Court concludes that he has not met the requirements of
Rule 16. As discussed above, Plaintiff must satisfy both Rule 16 and Rule 15 in order to
succeed on his motion. Because the Court concludes that he does not meet Rule 16's
requirements, the Court need not address Rule 15's requirements.
Recommendation
WHEREFORE, for the foregoing reasons, it is hereby
RECOMMENDED that Plaintiffs’ Motion for Leave to Amend Complaint Pursuant
to Fed. R. Civ. P. 15(a) and for Tolling Pursuant to American Pipe (Docket No. 109) be

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DENIED.
NOTICE: Pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed. R. Civ. P. 72(b)(2),
the parties have fourteen (14) days after service of this recommendation to serve
and file specific written objections to the above recommendation with the District
Judge assigned to the case. A party may respond to another party’s objections
within fourteen (14) days after being served with a copy. The District Judge need
not consider frivolous, conclusive, or general objections. A party’s failure to file
and serve such written, specific objections waives de novo review of the
recommendation by the District Judge, Thomas v. Arn, 474 U.S. 140, 148-53
(1985), and also waives appellate review of both factual and legal questions.
Makin v. Colo. Dep’t of Corr., 183 F.3d 1205, 1210 (10th Cir. 1999); Talley v. Hesse,
91 F.3d 1411, 1412-13 (10th Cir. 1996).
Date: April 14, 2017
Denver, Colorado

s/ Michael J. Watanabe
Michael J. Watanabe
United States Magistrate Judge

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