Lavender v. Driveline Retail Merchandising Inc

Filing 43

OPINION: Plaintiff's Motion for Leave to Substitute Class Representative and for Leave to File an Amended Class Action Complaint in Accordance with the Substitution (d/e 34 ) is GRANTED. Plaintiff shall file the Amended Class Action Complaint on or before September 11, 2019. The pending Motion for Class Certification (d/e 17 ) is DENIED AS MOOT with leave to refile. This matter is referred to Magistrate Judge Tom Schanzle-Haskins for the entry of a new scheduling order and to address the issues Defendant raised about expert reports and additional interrogatories. (SEE WRITTEN OPINION.) Entered by Judge Sue E. Myerscough on 9/6/2019. (GL, ilcd)

E-FILED

Friday, 06 September, 2019 08:50:51 AM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
SHIRLEY LAVENDER, on behalf
of herself and all others
similarly situated,
Plaintiff,
v.
DRIVELINE RETAIL
MERCHANDISING, INC.,
Defendant.

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No. 3:18-CV-2097

OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on Plaintiff’s Motion for Leave to
Substitute Class Representative and for Leave to File an Amended
Class Action Complaint in Accordance with the Substitution (d/e
34). Defendant objects, asserting that Defendant will be unfairly
prejudiced if the Motion is granted and that Plaintiff unduly delayed
filing the Motion. Because Defendant has not shown undue delay
or prejudice, the Motion is GRANTED.

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I. PROCEDURAL BACKGROUND
In April 2018, Plaintiff Shirley Lavender filed a Class Action
Complaint (d/ 1) on behalf of herself and all others similarly
situated against Defendant Driveline Retail Merchandising, Inc.
Plaintiff alleges that her name, address, zip code, date of birth, wage
and withholding information, and Social Security number, along
with that of over 15,800 other employees of Defendant, were
released by Defendant to an unknown third party. Defendant sent
the affected employees a Notice of Data Breach and offered its
employees 12 months of credit monitoring services through AllClear
ID. See Compl. ¶¶ 9, 57 Ex. A (d/e 1-1). Plaintiff brings claims for
negligence; invasion of privacy; breach of implied contract; breach
of fiduciary duty; violations of the Illinois Personal Information
Protection Act, 815 ILCS 530/1 et seq.; and violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act, 815 ILCS
505/1 et seq. Plaintiff seeks to represent a nationwide class defined
as “[a]ll current and former Driveline employees whose [personally
identifying information] was compromised as a result of the Data
Disclosure.” Compl. ¶ 63.

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On June 4, 2018, Defendant filed its Answer to the Complaint
(d/e 4). In July 2018, Magistrate Judge Tom Schanzle-Haskins
entered a Scheduling Order (d/e 10) setting various deadlines,
including January 7, 2019 as the deadline to join other parties or
amend the pleadings. Id. ¶ 2. Discovery was set to close on August
2, 2019.
Defendant asserts in its response in opposition to the Motion
for Leave that Defendant served written discovery on Plaintiff in
November 2018. Plaintiff was deposed on February 22, 2019. In
March 2019, Defendant served a second set of written discovery
requests on Plaintiff. Plaintiff has identified three experts but has
not provided expert reports on the merits. The deadline to provide
expert reports expired June 10, 2019.
On April 8, 2019, Plaintiff filed her Motion for Class
Certification (d/e 17). On June 3, 2019, Defendant filed an
objection to Plaintiff’s Motion for Class Certification (d/e 26).
Defendant argued the Motion for Class Certification should be
denied because (1) Plaintiff failed to satisfy Federal Rule of Civil
Procedure 23(b)(3)’s predominance requirement; (2) Plaintiff is not
an adequate class representative; (3) partial class certification is
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unworkable; and (4) the injunctive relief Plaintiff seeks on behalf of
the class is not appropriate. Resp. at 1. Regarding the adequacy of
Plaintiff as a class representative, Defendant argued that she
suffered a different injury from many members of the proposed
class, her choice to bring the case in Illinois impermissibly limits
potential class members’ options, and she is subject to defenses
distinct from other potential class members.
Defendant also argued that Plaintiff suffered from “major
credibility issues which could well hijack the presentation of issues
applicable to the class.” Obj. at 29. Defendant pointed to Plaintiff‘s
criminal history and alleged lies by Plaintiff at her deposition about
her criminal history.
On July 12, 2019, Plaintiff filed her Motion for Leave to
Substitute Class Representative and for Leave to File an Amended
Class Action Complaint in Accordance with the Substitution at
issue herein. Plaintiff originally sought to substitute two class
representatives for Plaintiff. However, after Defendant filed its
objections to the Motion for Leave, Plaintiff now only seeks to
substitute Lynn McGlenn for Plaintiff Shirley Lavender.

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The Court directed Plaintiff to file her proposed amended
complaint for the Court’s review pending a ruling on the Motion for
Leave. The proposed amended complaint (d/e 39) reflects that
Plaintiff seeks only to substitute Lynn McGlenn as a plaintiff and
include specific information regarding McGlenn, such as her
citizenship (¶ 1) and specific facts regarding the alleged harm she
suffered following the disclosure of her personally identifiable
information by Defendant (¶¶ 17, 18). This alleged harm includes
that she was alerted that someone used her personally identifiable
information to open a new credit card account with Capital One.
II. JURISDICTION
Plaintiff invokes jurisdiction under the Class Action Fairness
Act, 28 U.S.C. § 1332(d) (CAFA). The CAFA provides federal courts
with jurisdiction over certain class actions if the class has more
than 100 members, the parties are minimally diverse, and the
amount in controversy exceeds $5 million, exclusive of interest and
costs. 28 U.S.C. § 1332(d)(2), (5)(B); Standard Fire Ins. Co. v.
Knowles, 568 U.S. 588, 592 (2013). The claims of the individual
class members are aggregated to determine whether the amount in
controversy threshold is met. 28 U.S.C. § 1332(d)(6).
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Plaintiff alleges that the aggregate amount in controversy
exceeds $5 million, exclusive of interest and costs, that there are
more than 100 class members, and that at least one class member
is a citizen of a state different from Defendant. Compl. ¶ 3. Plaintiff
is a citizen of Georgia. Id. Defendant has indicated that Defendant
is a citizen of New Jersey and Texas because Defendant is
incorporated in New Jersey and has its principal place of business
in Texas. See Defendant Driveline Merchandising, Inc.’s
Declaration of State of Incorporation and Principal Place of
Business (d/e 42). Therefore, this Court has jurisdiction.
III. LEGAL STANDARD
Generally, Federal Rule of Civil Procedure 15(a)(2) governs a
request for leave to amend a pleading. Rule 15(a)(2) provides that
the court “should freely give leave when justice so requires.” Fed.
R.Civ.P. 15(a)(2). A court should allow amendment unless the
Court finds undue delay, bad faith, or dilatory motive on the part of
the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue
of allowing the amendment, or the amendment would be futile. See
Foman v. Davis, 371 U.S. 178, 182 (1962).
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Where, however, the deadline to amend the pleadings in the
scheduling order has expired, Rule 16(b)(4) governs and requires a
showing of good cause to justify modifying the scheduling order.
See Adams v. City of Indianapolis, 742 F.3d 720, 734 (7th Cir.
2014). The primary consideration when determining whether good
cause exists is the diligence of the party seeking amendment. Alioto
v. Town of Lisbon, 651 F.3d 715, 720 (7th Cir. 2011).
But Defendant does not mention Rule 16. Therefore, any
argument that Rule 16 should apply in this case is forfeited. See
Milligan v. Bd. of Trs. of S. Ill. Univ., 686 F.3d 378, 386 (7th Cir.
2012) (“holding that “the forfeiture doctrine applies not only to a
litigant’s failure to raise a general argument . . . but also to a
litigant’s failure to advance a specific point in support of a general
argument”). The Court will limit its analysis, as the parties do, to
Rule 15(a).1

The parties do not discuss Randall v. Rolls-Royce Corp., 637 F.3d 818, 821
(7th Cir. 2011), where class certification was denied because the plaintiff’s
claims were not typical of the claims or defenses of the class. The Randall
court held that substitution of a plaintiff after the denial of class certification
was possible via permissive intervention, Rule 24(b). Id. Even if a motion to
intervene were the appropriate vehicle here, the standard is the same, as the
court must consider the undue delay or prejudice to the parties. Id. (citing
Rule 24(b)(3)).
1

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IV. ANALYSIS
Defendant objects to Plaintiff’s Motion for Leave, asserting that
Defendant will be unfairly prejudiced and the Motion was filed with
undue delay.2 Alternatively, Defendant argues that, if the Motion is
granted, the Court should (1) enter a new scheduling order; (2) deny
the new plaintiff the opportunity to identify and/or produce expert
reports on class certification and the merits; (3) grant Defendant 60
days from the date of the new scheduling order to identify and
produce expert reports on class certification; (4) grant Defendant
120 days from the date of the new scheduling order to identify and
produce expert reports on the merits, and (5) grant Defendant 25
additional interrogatories.
With regard to the alleged undue delay, Defendant argues that
Plaintiff filed the Motion for Leave over a month past her deadline to
produce expert reports and within a month of the discovery cutoff.
According to Defendant, Plaintiff filed the Motion as a “last-ditch
effort to save this case” after Defendant identified issues that

Originally, Defendant also objected on the grounds that one of the proposed
plaintiffs, Dayne Merrell, did not have her personally identifiable information
disclosed, and Plaintiff failed to attach her proposed amended complaint to the
Motion. Plaintiff has withdrawn Merrell as a proposed plaintiff and has since
filed the proposed amended complaint.
2

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establish that Plaintiff was not an adequate class representative.
Defendant asserts that none of the matters Defendant raised were
unknown to Plaintiff and should not have been a surprise to
counsel.
Plaintiff asserts that her Motion for Leave was not filed with
undue delay. Plaintiff asserts that the Motion was filed after
Defendant challenged Plaintiff’s credibility. Plaintiff’s counsel
needed time to review the allegations, discuss the issue with
Plaintiff, identify potential substitute class representatives, and
prepare the motion. Specifically, on June 10, 2019, after receiving
Defendant’s opposition to Plaintiff’s Motion for Class Certification,
Plaintiff contacted defense counsel to discuss the timing of a motion
to substitute. Defendant would not consent to the substitution.
On June 20, 2019, Plaintiff filed a Notice of Intent to file a motion to
substitute. On July 12, 2019, Plaintiff filed the Motion.
Plaintiff stresses that the Motion for Leave was filed now out of
an abundance of caution to act in the best interests of the class.
Plaintiff asserts there was no basis to seek substitution after the
deposition because the deposition evidenced that Plaintiff had a
satisfactory knowledge of the claims. The issues raised by
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Defendant now have nothing to do with the factual substance of the
case. Plaintiff also denies that she lied about her criminal history
and asserts that she answered the questions asked during the
deposition. Plaintiff also disputes that she is not an adequate
representative.
In general, motions for leave to amend are denied when they
are filed well into the litigation and after extensive litigation. See
Hoenig v. Karl Knauz Motors, Inc., 983 F.Supp.2d 952 (N.D. Ill.
2013). Here, although the case was filed in April 2018 and
significant discovery has been conducted, the case is still in the
early stages, as the Court has not yet ruled on class certification or
any dispositive motions. In addition, Plaintiff filed the motion for
leave to amend a little over a month after learning that Defendant
was going to challenge Plaintiff’s credibility. Under the particular
facts of this case, the Court finds no undue delay.
Defendant also argues that allowing Plaintiff to substitute the
class representative and amend the complaint would cause
Defendant to be unduly prejudiced. Defendant asserts that the
parties have engaged in litigation for nearly 15 months, Defendant
has engaged in substantial discovery efforts on Plaintiff’s claims,
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and Defendant has developed its litigation strategy based on
Plaintiff’s position as class representative and the specific facts
pertaining to Plaintiff. Moreover, because Plaintiff was not the
victim of identity theft, Defendant did not retain an identity theft
expert. However, the new putative plaintiff will apparently allege
identity theft.
Plaintiff responds that the prejudice Defendant claims does
not exist. The only issue here is the adequacy of a single class
representative versus another. The fact that the substitute
representative suffered a data breach is not a surprise to
Defendant. Plaintiff contends that there is no “new need” for an
identity theft expert. Defendant’s own Data Breach Notice focused
on the potential consequences of data breach and identified identity
theft as a likely consequence. Plaintiff asserts that she seeks to
substitute a class representative to address the alleged credibility
issues, not change litigation strategy.
The Court finds Defendant would not be unduly prejudiced by
the amendment. The only changes to the complaint are the
substitution of a new plaintiff and information pertaining
specifically to that plaintiff. All other allegations remain the same.
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Plaintiff is not adding any new claims. Therefore, the majority of
the discovery that has occurred to date will still be relevant to the
amended complaint.
Additional discovery is necessary regarding the new plaintiff.
The Court will allow Defendant time to conduct that discovery,
which will alleviate some of the prejudice. The Court refers this
matter to the Magistrate Judge to enter a new scheduling order and
address the issues Defendant raised about expert reports and
additional interrogatories.
V. CONCLUSION
For the reasons stated, Plaintiff’s Motion for Leave to
Substitute Class Representative and for Leave to File an Amended
Class Action Complaint in Accordance with the Substitution (d/e
34) is GRANTED. Plaintiff shall file the Amended Class Action
Complaint on or before September 11, 2019. The pending Motion
for Class Certification (d/e 17) is DENIED AS MOOT with leave to
refile. This matter is referred to Magistrate Judge Tom SchanzleHaskins for the entry of a new scheduling order and to address the
issues Defendant raised about expert reports and additional
interrogatories.
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ENTERED: September 5, 2019
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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