Wells v. Altenburg et al

Filing 24

MEMORANDUM DECISION AND ORDER. IT IS ORDERED: Plaintiff's Motion for Leave to File Amended Motion for Leave to File Amended Complaint 21 is GRANTED. Plaintiff must immediately file her Amended Complaint. Defendants' Motion to Dismiss 9 is DEEMED MOOT. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
SHAWNA WELLS,

Case No. 414-cv-00450-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
SKYNET DIGITAL, LLC, an Idaho limited
liability company, d/b/a MEDICAL
SPECIALTIES OF IDAHO; and AARON J.
ALTENBURG, M.D., individually,

Defendant.

INTRODUCTION
Before the Court is Plaintiff Shawna Wells’ Amended Motion for Leave to File
Amended Complaint (Dkt.21). For the reasons explained below, the Court will grant the
motion.
BACKGROUND
Wells filed a complaint against Defendants Skynet Digital, LLC (“Skynet”) and
Aaron J. Altenburg, M.D. (“Altenburg”) on October 22, 2014 (Dkt.1). The complaint
alleged a variety of claims related to Wells’s dismissal from Skynet.
During initial disclosures, Wells learned of additional facts and sought to amend
her complaint. Defendants would not agree to the proposed amended complaint, so Wells
filed her first motion to amend on January 22, 2015.

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Defendant Altenburg filed a response to that motion, attaching declarations which
contained yet more information not known to Wells. This included statements and
documents pertaining to the employment relationship between Skynet, Altenburg, and
Aaron J. Altenburg, M.D., P.C. (“Altenburg PC”). Wells therefore withdrew her original
motion to amend and filed the pending second motion to amend on February 27, 2015
(Dkt. 16). Defendant Altenburg opposes the motion.
Alternburg has also filed a motion to dismiss Count Six (Dkt. 9). The pending
motion to amend removes Count Six from the complaint. Therefore, by granting the
motion to amend as explained below, the motion to dismiss is rendered moot.
LEGAL STANDARD
Generally, leave to amend a pleading “shall be freely given when justice so
requires.” Fed.R.Civ.P. 15(a). Leave to amend lies within the sound discretion of the trial
court, which “must be guided by the underlying purpose of Rule 15 to facilitate decisions
on the merits, rather than on the pleadings or technicalities.” United States v. Webb, 655
F.2d 977, 979 (9th Cir.1981). Thus, Rule 15’s policy of favoring amendments to
pleadings should be applied with “extreme liberality.” Id. (citation omitted); see Ascon
Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir.1989).
The United States Supreme Court has identified four factors relevant to whether a
motion for leave to amend should be denied: undue delay, bad faith or dilatory motive,
futility of amendment, and prejudice to the opposing party. Foman v. Davis, 371 U.S.
178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). The Ninth Circuit holds that these

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factors are not of equal weight; specifically, “delay alone no matter how lengthy is an
insufficient ground for denial of leave to amend.” Webb, 655 F.2d at 980; accord Bowles
v. Reade, 198 F.3d 752, 758 (9th Cir.1999). The most important factor is whether
amendment would prejudice the opposing party. Howey v. United States, 481 F.2d 1187,
1190 (9th Cir.1973). But futility of amendment can, by itself, justify denial of a motion
for leave to amend. Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir.1995). A proposed
amended pleading is futile “only if no set of facts can be proved under the amendment to
the pleadings that would constitute a valid and sufficient claim or defense.” Miller v.
RykoffSexton, Inc., 845 F.2d 209, 214 (9th Cir.1988).
ANALYSIS
1. Motion to Amend
Three of the factors the Court must address when considering whether to allow
amendment – undue delay, bad faith or dilatory motive, and prejudice to the opposing
party – are of little significance here. Accordingly, the Court will address those three
factors in short order. The Court will then address the fourth factor – futility of
amendment – in more detail. Foman v. Davis, 371 U.S. 178, 182 (1962).
A. Undue Delay
Although Altenburg claims that the timing of the amended complaint shows a lack
of diligence, Wells explains that the amendment could not have been filed earlier because
it incorporates information she obtained from initial disclosures. She filed the motion to

MEMORANDUM DECISION AND ORDER - 3

amend not long after receiving that information. Therefore, there has been no undue
delay.
B. Bad Faith or Dilatory Motive
Altenburg takes issue with Wells changing and updating exact names of parties,
their legal status, and their relationship one to another. But these are changes due to the
information Wells learned from discovery. As Wells notes, the nature of the business
relationship between Altenburg individually or as Altenburg PC and Skynet was not
known to her until Defendants produced the necessary documentation. Under these
circumstances, there was no bad faith on Wells’ part; she was simply trying to accurately
reflect her new understanding of the relationships after receiving discovery.
C. Prejudice to the Opposing Party
There is no prejudice to the opposing party because Altenburg has not filed an
answer and Altenburg PC has not yet been named as a defendant.
D. Futility of Amendment
The final factor in determining whether the motion to amend should be denied is
futility of the proposed amendment. Typically, a plaintiff is allowed to amend her
complaint in order to accurately reflect the correct nature of the circumstances
surrounding the alleged wrongs. However, when an amendment to the complaint would
be futile, leave to amend should not be granted. Miller v. Rykoff-Sexton, Inc., 845 F.2d
209, 214 (9th Cir. 1988).

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In his brief, Altenburg lists multiple arguments contesting the proposed
amendments. But not all of the arguments are clear. For example, some arguments are
listed, but never discussed. Others are not clearly stated. Additionally, some sections
consist almost exclusively of case citations followed by quoted parentheticals, without
any analysis. Still other arguments, while potentially important to this case at some point,
are not relevant to determining whether the Court should grant the motion to amend. The
Court is simply unable to understand other arguments.
The Court (and Plaintiff for that matter) is not expected to comb through the
record, read and research lists of cases, and build defendant’s arguments for him. Under
these circumstances, the Court will address only the arguments which are relevant,
analyzed, and understandable. These include: (1) Whether Wells’s claims with the EEOC
were filed correctly and whether she exhausted her available EEOC remedies; (2)
Whether Wells’s claims are adequate under the American with Disabilities Act; (3)
Whether Altenburg or his professional corporation is a single or joint employer with
Skynet; (4) Whether Wells can add a claim for intentional interference; and (5) Whether
the Court has jurisdiction to hear the claims.
1. EEOC
Altenburg claims that Wells has not exhausted her administrative remedies with
the EEOC. Specifically, Altenburg claims that the parties were not correctly named and
that Wells did not file a timely complaint. As best the Court can tell, Altenburg cites
Bratton v. Bethlehem Steel Corp.,649 F.2d 658, 666 (9th Cir. 1980) for his argument that

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the failure to name defendants, or allege facts from which it could be inferred that a
defendant violated Title VII in an EEOC claim, precludes subsequent action against a
defendant.
Here, Wells named Altenburg in her complaint filed January 14, 2015,
approximately two weeks before the February 1, 2015 deadline for amending pleadings.
Altenburg was therefore correctly and timely named in the complaint. But the complaint
did not name Altenburg PC until February 18, 2015, a little over two weeks after the
deadline. However, a complaint is valid so long as it alleges facts from which it can be
inferred that a claim will be brought. Id. Moreover, “Title VII charges can be brought
against persons not named in an E.E.O.C. complaint as long as they were involved in the
acts giving rise to the E.E.O.C. claims.” Wrighten v. Metro. Hospitals, Inc., 726 F.2d
1346, 1352 (9th Cir. 1984) citing Chung v. Pomona Valley Community Hospital, 667
F.2d 788, 792 (9th Cir.1982).
Here, Altenburg was served with a valid complaint, which stated a claim against
him personally. This was also adequate notice that his professional business could be
named because the allegations directly relate to his conduct at his professional
corporation, Altenburg PC. Whether he acted in his capacity as an employer, a business
owner, or as an individual will be cleared up during discovery, dispositive motions, and
potentially trial; but there is no doubt that Wells made allegations sufficient to notify both
Altenburg and Altenburg PC that she believed they were involved in the acts giving rise
to the EEOC claims.

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Altenburg also claims that because the EEOC did not serve defendants within 10
days of filing, Wells’s claim should be barred. Altenburg is correct that statutorily the
EEOC is required to serve the notice of charge of discrimination with 10 days after it has
been filed. But the EEOC’s failure to give that notice is not reason to prevent Wells from
bringing her claims. “The EEOC’s failure to serve the charge on [defendant] does not
interfere with [plaintiff’s] rights, [and] the commission’s failure to act is not [his]
responsibility.” Watson v. Gulf & W. Indus., 650 F.2d 990, 992-93 (9th Cir. 1981).1
Wells’s complaint is not barred because the EEOC was slow in serving Altenburg.
2. ADAAA
Altenburg contends that Wells has not sufficiently pled her Americans with
Disabilities Act Amendments Act (“ADAAA”) claims, and thus she is barred from
bringing the claim against him, individually and as an employer. By amending the ADA
in 2008, Congress clarified that under that statute, the term “disability” was to be broadly
construed and coverage applied to the “maximum extent” permitted by the ADA and the
ADAAA.” 122 Stat. at 3553. Rohr v. Salt River Project Agric. Imp. & Power Dist., 555
F.3d 850, 861 (9th Cir. 2009). The ADA states that a disability “means with respect to an
individual- (A) a physical or mental impairment that substantially limits one or more

1

See also, B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1102 (9th Cir. 2002), as amended (Feb. 20,
2002), “‘A Title VII complainant is not charged with the commission's failure to perform its statutory
duties.’ ” (quoting Russell v. Am. Tobacco Co., 528 F.2d 357, 365 (4th Cir.1975), cert. denied, 425 U.S.
935, 96 (1976)).

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major life activities of such individual; (B) a record of such impairment; or (C) being
regarded as having such an impairment.” 42 U.S.C.A. § 12102(1)(A-C) (2011) (emphasis
added). Major life activities include things such as caring for oneself, eating, sleeping,
and working. 42 U.S.C.A. § 12102(2)(A) (2011). See McAlindin v. Cnty. of San Diego,
192 F.3d 1226, 1233 (9th Cir. 1999). Not all three factors of the ADA disability
definition need to be met in order to seek relief under the Act. Furthermore, work is listed
as a major life activity, which if limited by a disability, is covered.
Wells pled at length her ADAAA cause of action in her original complaint, as well
as the proposed amended complaint. She alleged that she had told Altenburg and other
Skynet employees that Altenburg’s actions were causing her to experience severe
symptoms of depression in the workplace. Wells further alleged that Altenburg directed
Skynet to terminate her employment in part because of the depression and associated
symptoms (Dkt.21-1). These facts were disclosed when Wells filed her action under the
ADAAA. This is sufficient to plead the ADAAA claim.
3. Single or Joint Employer
Altenburg asserts that neither he nor his professional corporation is a single or
joint employer with Skynet. Without making a final determination on this issue at this
early stage in the litigation, the Court notes that Wells asserts sufficient facts to amend
the complaint to include Altenburg and Altenburg PC.
“[U]nder the ‘single employer’ doctrine, two nominally separate companies may
be so interrelated that they constitute a single employer subject to liability under Title

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VII.” Izaguirre v. Glenwood Motor Lines, Inc., 2011 WL 5325658, * 6 (D. Idaho Nov. 3,
2011)(citing Torres Negran v. Merk & Co., Inc., 488 F.3d 34, 40-41 (1st Cir. 2007)).
Additionally, an employee is deemed to have “joint employers” if each entity or
employer “control[s] the terms and conditions of employment of the employee.” Collier
v. Turner Industries Group, LLC, 797 F. Supp. 2d 1029, 1044 (D. Idaho 2011) (citing
EEOC v. Pacific Maritime Ass’n, 351 F.3d 1270 (9th Cir. 2003)).
Regarding single employer claims, the Ninth Circuit has held that two entities
should be treated as one for purposes of an employment discrimination claim if they
have: “(1) interrelated operations, (2) common management, (3) centralized control of
labor relations and (4) common ownership or financial control,” Morgan v. Safeway
Stores, Inc., 884 F.2d 1211 (9th Cir. 1989). Altenburg simply makes the blanket
statement that the entities did not have interrelated operations, centralized control, or
common ownership or financial control. These blanket assertions, without more, are not
enough to prevent Wells from amending her complaint. The allegations in the complaint
are sufficient to allege that the operations were interrelated – that was the purpose for the
business relationship. As far as common management and centralized control of labor
relations, the allegations appear to be that Amy Parslow serves in an administrative
capacity for Skynet, Altenburg, and Altenburg PC. And Wells received compensation
from both Skynet and Altenburg PC. Moreover, Altenburg’s contract seems to indicate
that he has some sort of ownership in the Skynet “team.”

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Regarding the joint employer claim, courts and the Department of Labor consider
many factors in determining if someone can be classed as an employer: (1) the degree of
the alleged employer's right to control the employee; (2) the degree of supervision of the
employee's work; (3) the right to set work schedules; (4) the power to hire and fire; (5)
the power to determine pay rates and method of payment; and (6) the power to modify
the employment conditions. EEOC v. Pacific Maritime Ass'n, 351 F.3d 1270, 1275 (9th
Cir. 2003). While these factors “may be useful” in making that determination, they are
not mandatory or all-inclusive. Real v. Dricsoll Strawberry Assoc., Inc., 603 F.2d 748,
754 (9th Cir. 1979).
Altenburg admits that he had a degree of control as well as supervision over
Wells, including many aspects of her employment. But he asserts that the key to knowing
if someone is a joint employer is if they have the right to hire, supervise, and fire
employees. Altenburg contest that he “did not have the right to control [Wells’s]
employment relationship” (Def.’s Resp. at 8, Dkt.22) and therefore is not a joint
employer.
As previously stated, not all parts of the test need be met in order to establish that
someone is an employer. Altenburg does not refute Wells’s statement that “Altenburg
asked Wells to go with him and be his medical assistant because, as he expressed to
Wells, he felt he and Wells made a good team” when Altenburg moved his practice from
Idaho Orthopaedic to SpineIdaho, PLLC (Dkt.1, ¶11). One could reasonable infer that
Altenburg had enough control or sway with Skynet to hire Wells – or to fire her. This is

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at least enough to determine that amending the complaint to assert a joint employer is not
futile.
4. Intentional Interference With Prospective Economic
Advantage
As noted above, Wells removed count six from her proposed amended complaint.
But she now asserts a tortious interference with economic advantage claim. A plaintiff
seeking to prove a claim for intentional interference with a prospective economic
advantage must show “(1) the existence of a valid economic expectancy, (2) knowledge
of the expectancy on the part of the interferer, (3) intentional interference inducing
termination of the expectancy, (4) the interference was wrongful by some measure
beyond the fact of the interference itself, and (5) resulting damage to the plaintiff whose
expectancy has been disrupted.”2 Bank of Commerce v. Jefferson Enterprises, LLC, 303
P.3d 183, 191 (2013); Quality Res. & Servs., Inc. v. Idaho Power Co., 706 F.Supp. 2d
1088, 1099 (D. Idaho 2010).
According to the allegations set forth in her amended complaint, Wells had a valid
economic expectance in her employment relationship with Skynet. Altenburg knew this –

2

As Altenburg notes, however, the stranger-to-the-contract rule applies in the context of a
Tortious Interference claim. Wilson v. St. Luke's Reg'l Med. Ctr., Ltd., No. 1:13-CV-00122-BLW, 2014
WL 7186811, at *11 (D. Idaho Dec. 16, 2014). Because of this, if the Court finds Alternburg is a single or
joint employer with Skynet, a tortious interference claim can probably not be sustained as Alternburg
cannot interfere with his own contract. When a better understanding of the relevant business relationship
is formulated, the Court will know better whether the claim survives. However, the Court must address if
the claim is even plausible.

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he helped her get the position and was her supervisor. According to the amended
complaint, Altenburg intentionally interfered with Wells’s employment by suggesting
Skynet terminate her. This was allegedly done in retaliation for Wells’s testimony in
Altenburg’s divorce proceedings, Wells’s reports to administration about the lack of
professionalism and patient care, and Wells’s depression and anxiety. This is enough to
state a claim.
5. Jurisdiction
On two separate occasions, Altenburg argues that this Court does not have
supplemental jurisdiction. First Alternburg claims that there is no federal question under
28 U.S.C. §1331 because Wells did not exhaust her administrative remedies. The Court
has already addressed that issue above, concluding that Wells did exhaust her remedies
under the EEOC and file appropriate and timely causes of action.
Second, Altenburg asserts that the Court does not have jurisdiction under 28
U.S.C. §1337. Section 1337 relates to commerce and antitrust regulation. Thus, the Court
assumes Altenburg meant to reference §1367.
Under §1367, “in any civil action of which the district courts have original
jurisdiction, the district courts shall have supplemental jurisdiction over all other claims
that are so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy under Article III of the United States Constitution.”
28 U.S.C. §1367. Again, given the Court’s finding of original jurisdiction under §1331,

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the Court may exercise supplemental jurisdiction over the related state claims because
they form part of the same case or controversy.
ORDER
IT IS ORDERED:
1. Plaintiff’s Motion for Leave to File Amended Motion for Leave to File
Amended Complaint (Dkt. 21-3) is GRANTED. Plaintiff must immediately
file her Amended Complaint.
2. Defendants’ Motion to Dismiss (Dkt. 9) is DEEMED MOOT.

DATED: July 13, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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