Gilmore v. L.D. Drilling, Inc. et al

Filing 50

MEMORANDUM AND ORDER granting 36 Plaintiff Gilmore's Motion for Leave to File Second Amended Complaint. Plaintiff shall file and serve his Second Amended Complaint on existing Defendants within ten (10) days of the date of this order, and shall serve summons and Second Amended Complaint on newly added Defendants within thirty (30) days of filing the Second Amended Complaint. Signed by Magistrate Judge Teresa J. James on 5/2/2017. (ts)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

JEFFREY T. GILMORE,
Plaintiff,
v.
L.D. DRILLING, INC., et al.,
Defendants.

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Case No. 16-cv-2416-JAR-TJJ

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff Gilmore’s Motion for Leave to File Second
Amended Complaint (ECF No. 36). Defendants oppose the motion. For the reasons set forth
below, the Court will grant Plaintiff’s motion.
Background Information
Plaintiff filed this action against Defendants L.D. Drilling, Inc. and Mark Davis, alleging a
violation of the Fair Labor Standards Act (FLSA) in Count I and defamation in Count II. During
the initial Scheduling Conference, Plaintiff’s counsel advised the Court that he had filed a charge
of discrimination with the Equal Employment Opportunity Commission (EEOC) against
Defendant L.D. Drilling, Inc. alleging age and disability discrimination, but had not yet received a
notice of right to sue from the EEOC. Upon receiving the notice, Plaintiff’s counsel intended to
amend the complaint. When the Scheduling Order deadline to amend pleadings was fast
approaching and counsel had not received a notice of right to sue, he contacted the EEOC and
learned the notice would likely issue within 30 days. Plaintiff then sought and the Court granted
an extension of the deadline to amend pleadings to December 19, 2016.1 Before the new
1

ECF Nos. 17 (Plaintiff Gilmore’s Unopposed Motion for Extension of Time to File Amended Complaint) and 18
(order granting motion).

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deadline, however, the parties reached agreement to settle Plaintiff’s FLSA claim,2 District Judge
Julie A. Robinson approved the settlement,3 and Plaintiff voluntarily dismissed Count I of the
complaint.4 On December 19, 2016, Plaintiff timely filed his motion to amend his complaint to
add counts alleging age and disability discrimination.5 The undersigned Magistrate Judge
granted the unopposed motion,6 and on December 20 Plaintiff filed his First Amended
Complaint.7
The undersigned Magistrate Judge held a Status Conference with the parties on January 5,
2017, and after discussing the changes in the case, entered an Amended Scheduling Order which
includes a January 20, 2017 deadline to amend pleadings or add parties.8 Plaintiff represents that
at the time of the Status Conference, he had no reason to believe further amendment would be
necessary.9 Since then, however, Plaintiff has obtained evidence through discovery which he
believes supports adding two Defendants (Rashell Patten and Susan Schneweis) to his defamation
claim, and his proposed Second Amended Complaint includes those individuals in what is now
Count III.
Defendants jointly oppose the motion on the basis of futility. Defendants argue the
alleged defamatory statements Plaintiff identifies are absolutely privileged under Kansas law and
2

ECF No. 19 (The Parties’ Joint Motion to Approve Settlement of Plaintiff’s FLSA Claims).

3

ECF No. 20 (Memorandum and Order granting joint motion to approve settlement).

4

ECF No. 22 (Plaintiff Gilmore’s Voluntary Dismissal With Prejudice of Count I of his Complaint). The parties
later filed a Stipulation of Voluntary Dismissal With Prejudice of Count I of Plaintiff’s Original Complaint (ECF No.
26).
5

ECF No. 23.

6

ECF No. 24.

7

ECF No. 25.

8

ECF No. 29.

9

ECF No. 36 at 2.

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cannot form the basis of a defamation claim, and that the proposed amended complaint fails to
include facts showing a plausible claim for damages.
Standard for Ruling on a Motion to Amend
Rule 15 of the Federal Rules of Civil Procedure allows a party to amend the party’s
pleading once as a matter of course within 21 days after serving it or before a responsive pleading
is served.10 Subsequent amendments are allowed only by leave of court or by written consent of
the adverse party.11 The court should “freely give leave [to amend] when justice so requires,”12
and the Supreme Court has emphasized that “this mandate is to be heeded.”13 A district court
should refuse leave to amend only 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.14 A proposed amendment is futile if the amended complaint
would be subject to dismissal.15 The purpose of Rule 15(a) “is to provide litigants the maximum
opportunity for each claim to be decided on its merits rather than on procedural niceties.”16
When the deadline for amending pleadings set in the scheduling order has passed, as is the
case here, Federal Rule of Civil Procedure 16(b)(4) is implicated. Rule 16(b)(4) provides that a
scheduling order “may be modified only for good cause and with the judge’s consent.”17

10

Fed. R. Civ. P. 15(a)(1).

11

Fed. R. Civ. P. 15(a)(2).

12

Id.

13

Foman v. Davis, 371 U.S. 178, 182 (1962).

14

Wilkerson v. Shinseki, 606 F.3d 1256, 1267 (10th Cir. 2010).

15

Anderson v. Suiters, 499 F.3d 1228, 1238 (10th Cir. 2007).

16

Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (internal citation omitted).

17

Fed. R. Civ. P. 16(b)(4). In addition, the Scheduling Order in this case states that the schedule “will not be
modified except by leave of court upon a showing of good cause.” ECF No. 20 at 12.

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The Court will apply a two-step analysis based on both Rule 16(b) and Rule 15(a) when
faced with a request to amend a complaint past the scheduling order deadline.18 In other words,
the Court will first determine whether the moving party has established “good cause” within the
meaning of Rule 16(b)(4) so as to justify allowing the untimely motion. Only after determining
that good cause has been established will the Court proceed to determine if movant has satisfied
the more lenient Rule 15(a) standard.19
To establish good cause under Rule 16(b)(4), the moving party must show that the deadline
could not have been met even if it had acted with due diligence.20 The lack of prejudice to the
nonmovant does not show good cause.21 A district court’s determination as to whether a party has
established good cause sufficient to modify a scheduling order amendment deadline is within the
court’s discretion, and will be reviewed only for the abuse of discretion.22
Analysis
The Court begins by examining whether Plaintiff has met the good cause burden to amend
the Scheduling Order in this case.
A.

Rule 16(b)(4)

Plaintiff asserts good cause exists to allow his untimely motion because he did not learn of
the information which gives rise to allegations of defamation against additional parties until March
14, 2017, when Defendants served their responses to Plaintiff’s discovery requests. According to

18

See, e.g., Lone Star Steakhouse and Saloon, Inc. v. Liberty Mut. Ins. Group, No. 12-1185-WEB, 2003 WL
21659663, at *2 (D. Kan. March 13, 2003).

19

See Boatright v. Larned State Hosp., No. 05-3183-JAR, 2007 WL 2693674, at *6 (D. Kan. Sept. 10, 2007
(recognizing the Rule 15(a) standard as more lenient than the “good cause” standard of Rule 16(b)).

20

Id. at *5.

21

Lone Star Steakhouse, 2003 WL 21659663, at *2.

22

Ingle v. Dryer, No. 07-cv-00438-LTB-CBS, 2008 WL 1744337, at *2 (D. Colo. April 11, 2008).

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Plaintiff, before he received the discovery responses he believed the allegedly defamatory
statements were attributable only to L.D. Drilling and Mark Davis. Defendants do not dispute the
facts Plaintiff sets forth regarding timing, nor do they contest Plaintiff’s showing of good cause.
The Court finds Plaintiff has shown good cause for seeking to amend his complaint after the
Scheduling Order deadline to do so expired, and now turns to analysis of the more lenient Rule
15(a) standard.
B.

Rule 15(a)

Defendants argue that Plaintiff’s allegations are based on statements “made in the process
of L.D. Drilling’s response to Gilmore’s unemployment claim.”23 Defendants contend the
statements are categorically absolutely privileged because they were made in a quasi-judicial
proceeding. Defendants rely on Clear Water Truck Company v. M. Bruenger & Company, 519 P.
2d 682, 686 (Kan. 1974), in support of their argument. Plaintiff contends absolute privilege does
not apply because the subject matter of the statements is not relevant to an unemployment benefits
claim proceeding before the Kansas Department of Labor. Plaintiff further argues that Ms. Patten
and Susan Schneweis likely made similar statements about him outside of the unemployment
claim process, thereby stripping the statements of any potential privilege.
Absolute privilege attaches to administrative proceedings just as to judicial proceedings.24
However, as the Kansas Supreme Court held in Clear Water, “[i]n this jurisdiction, if a statement
or communication, given in the course of a judicial proceeding, is relevant to the issue involved
therein it is privileged whether it be the testimony of a party or an affidavit filed in the

23

ECF No. 39 at 4.

24

Clear Water Truck Co., Inc. v. M. Bruenger & Co., Inc., 519 P.2d at 685 (“In addition to regular judicial
proceedings, an absolute privilege attaches also to administrative proceedings which are quasi-judicial in nature.”)
(quoting William L. Prosser, Law of Torts 86(4th ed. 1971).

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proceedings.”25 The Court must therefore examine whether the three allegedly defamatory
statements are relevant to the Department of Labor’s determination regarding Plaintiff’s
unemployment benefits claim. The statements are as follows: (1) Plaintiff had been drinking on
the job; (2) Plaintiff would lose his commercial driving license because he refused to take diabetic
medication; and (3) Plaintiff was “close to being a diabetic – couldn’t do duty.” Plaintiff alleges
Ms. Patten made the first two statements to Ms. Schneweis, who in turn made the third statement to
the Kansas Department of Labor.26
Defendants do not discuss the relevance of the statements, but instead summarily state that
absolute privilege applies because the statements were made in connection with L.D. Drilling’s
response to Plaintiff’s unemployment claim. Plaintiff argues the point in more detail, noting that
in the Notice of Determination awarding him unemployment insurance benefits, the Kansas
Department of Labor found “[t]he evidence is insufficient to establish the claimant’s conduct was
a violation of a duty or obligation reasonably owed the employer as a condition of employment.”27
The Department concluded the statutory disqualification for an employee who has been
discharged or suspended for misconduct connected with the individual’s work does not apply
because “misconduct has not been established.”28 L.D. Drilling initially appealed the decision
but withdrew its appeal.29

25

Clear Water, 519 P.2d at 685.

26

Plaintiff’s proposed Second Amended Complaint (ECF No. 36-1) ¶¶ 63-65.

27

ECF No. 37-2 at 1.

28

Id. See K.S.A. 44-704(b) (unemployment benefits applicant disqualified for misconduct, defined as “a violation of
a duty or obligation reasonably owed the employer as a condition of employment including, but not limited to, a
violation of a company rule, including a safety rule, . . . [and] violation of the employer’s reasonable attendance
expectations”).

29

ECF No. 37-2 at 4. In its position statement to the EEOC in connection with Plaintiff’s charge of discrimination,
L.D. Drilling erroneously reported that (1) “Mr. Gilmore appealed the denial of unemployment benefits” (when in fact
the Department approved the application), (2) “Mr. Gilmore appealed the denial of unemployment benefits” (L.D.

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The Court is not persuaded that the Department of Labor’s findings render the allegedly
defamatory statements irrelevant to a decision on unemployment benefits. It is possible the
statements were relevant but the Department did not find them credible, meaning the basis for the
decision was that L.D. Drilling did not meet its burden of proof regarding misconduct. But in its
discovery responses in this case, L.D. Drilling disavows the statements that Plaintiff was “close to
being diabetic” and “couldn’t do [his] duty,” labeling those statements “inaccurate.”30 The Court
finds this retraction dispositive; regardless of the subject matter, the Court will not allow
admittedly false statements the protection of absolute immunity. As Plaintiff points out, the
purpose of absolute privilege is for the promotion of the public welfare.31 Granting immunity to
statements later retracted as inaccurate would not promote the public welfare.
Moreover, Plaintiff states he has cause to believe that Ms. Schneweis and Ms. Patten made
similar statements about him to other people, which also caused damage. The proposed Second
Amended Complaint alleges on information and belief that Ms. Schneweis, Ms. Patten and others
published comments to “third parties” explicitly stating or otherwise implying that Plaintiff had
consumed alcohol while at work.32 This allegation does not limit the recipient to the Kansas
Department of Labor. The Court finds that Plaintiff is entitled to assert a defamation claim
against Ms. Schneweis and Ms. Patten and to conduct discovery on facts related to the elements of
Drilling actually appealed the award), and (3) “L.D. Drilling decided not to oppose his appeal” (instead, the company
withdrew its appeal).
30

Defendant L.D. Drilling, Inc.’s Response to Plaintiff Jeffrey T. Gilmore’s First Request for Production of
Documents to Defendant L.D. Drilling, Inc. (ECF No. 37-3) at 2. The RFP asked about those statements only, and
did not include any reference to drinking on the job. But because L.D. Drilling responded that Susan Schneweis’s
inaccurate statement was based on a conversation she had with Rashell Patten, the Court is inclined to view all three
statements similarly.
31

Polson v. Davis, 635 F. Supp. 1130, 1147-48 (D. Kan. 1986) (Absolute privilege serves its purpose “in cases where
the public service or the administration of justice requires complete immunity, as in legislative, executive, or judicial
proceedings, the occasion for the immunity being not so much for those engaged as for the promotion of the public
welfare.”).

32

ECF No. 36-1 at 9-10.

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defamation. The statements which form the basis of Plaintiff’s proposed Second Amended
Complaint are not protected by an absolute privilege, and Plaintiff is entitled to include them in his
pleading.
C.

Notice Pleading Burden

Defendants also argue the proposed Second Amended Complaint is futile because Plaintiff
has not stated facts showing it plausible that he was damaged by the statements, thereby failing to
state a claim upon which relief can be granted. Plaintiff disagrees, asserting he has met the
notice-pleading requirement. The Court rejects Defendants’ argument. Plaintiff includes the
same language in the Second Amended Complaint as in the original and First Amended
Complaints, i.e. that the allegedly defamatory statements “resulted in harm to Mr. Gilmore’s
reputation and other damages to Mr. Gilmore.”33 The only difference is that Plaintiff seeks to add
two Defendants to the defamation claim in this iteration of his complaint, which he previously
asserted only as to L. D. Drilling and Mark Davis. Defendants did not seek dismissal of the
defamation claim pursuant to Fed. R. Civ. P. 12(b)(6) within the time allotted for such motion,34
nor did they file a motion seeking a more definite statement of Plaintiff’s alleged damages.
In defamation claims, courts in this district find the rule for pleading damages is “a
relatively liberal standard which may be satisfied if a complaint’s allegations are definite enough
to enable the opposing party to prepare his or her responsive pleading and a defense to the
claim.”35 Clearly, Plaintiff has sufficiently alleged damages to apprise Defendants of its claim, as
Defendants twice filed answers. Nothing suggests that the new Defendants, who allegedly spoke
33

Complaint (ECF No. 1) at 9; First Amended Complaint (ECF No. 25) at 9.

34

See Scheduling Order (ECF No. 15) at 2 (November 2, 2016 deadline for motion to dismiss). Although the Court
gave no such deadline following the First Amended Complaint, Defendants filed an answer and did not file a motion to
dismiss.

35

Energy Consumption Auditing Servs., LLC v. Brightergy, LLC, 49 F. Supp. 3d 890, 905 (D. Kan. 2014) (internal
quotations omitted).

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the words at issue, will find the allegations so indefinite as to prevent them from preparing a
responsive pleading and a defense to the defamation claim.
Plaintiffs’ proposed Second Amended Complaint is not futile for failure to sufficiently
state a claim for defamation.
Conclusion
For the reasons discussed above, the Court finds no basis to deny Plaintiff leave to file his
Second Amended Complaint, and further finds justice requires that Plaintiff be afforded the
opportunity to do so.
IT IS THEREFORE ORDERED that Plaintiff Gilmore’s Motion for Leave to File Second
Amended Complaint (ECF No. 36) is GRANTED.
IT IS FURTHER ORDERED that pursuant to D. Kan. Rule 15.1(b), Plaintiff shall file and
serve his Second Amended Complaint on Defendants L.D. Drilling, Inc. and Mark Davis within
ten (10) days of the date of this Memorandum and Order, and shall serve summons and Second
Amended Complaint on newly added Defendants within thirty (30) days of filing the Second
Amended Complaint.
IT IS SO ORDERED.
Dated this 2nd day of May, 2017 at Kansas City, Kansas.
s/ Teresa J. James
Teresa J. James
U.S. Magistrate Judge

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