Prue v. Bio-Medical Applications of Kansas, Inc. et al

Filing 26

MEMORANDUM AND ORDER granting 19 Motion to Amend Complaint. Within five (5) business days from the date of this order, plaintiff shall file her Second Amended Complaint (ECF No. 19-6) as separate docket entry in this case. Signed by Magistrate Judge K. Gary Sebelius on 3/27/17. (bh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
APRIL PRUE,
Plaintiff,
v.
BIO-MEDICAL APPLICATIONS
OF KANSAS, INC., et al.,
Defendants.

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Case No. 16-4151-DDC

MEMORANDUM AND ORDER
This matter comes before the court upon Plaintiff’s Motion and Memorandum for Leave
to File a Second Amended Complaint (ECF No. 19). Defendants oppose the motion. For the
reasons stated below, the motion is granted.
I.

Background
In her first complaint, April Prue asserts Bio-Medical Applications of Kansas, Inc. and

Fresenius Medical Care Garden City, LLC discriminated against her and retaliated against her in
violation of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101, et seq.1 Plaintiff
later learned that Fresenius Medical Care was a real-estate holding company with no employees.
She amended as a matter of right, omitting Fresenius Medical Care and naming additional
defendants that she believed were employers under the ADA and were necessary to her case.2
Those defendants include: Bio-Medical Applications Management Company, Inc., National
Medical Care, Inc., Fresenius Medical Care Holdings, Inc., Fresenius Medical Care North
American Holdings Limited Partnership, Fresenius Kidney Care DS Topeka, and Dialysis

1

See Compl., ECF No. 1.

2

See Am. Compl., ECF. No. 10.

Specialists of Topeka, Inc. In response to plaintiff’s First Amended Complaint, Bio-Medical
Applications of Kansas, Inc. answered, and the other named defendants moved to dismiss,
arguing that they were not plaintiff’s “employers” within the meaning of the ADA.3 In response
to the motion to dismiss, plaintiff has moved to amend to omit Defendants Bio-Medical
Applications Management Company, National Medical Care, and Fresenius Kidney Care.
Plaintiff asserts that the remaining defendants—Bio Medical Applications, Fresenius Medical
Care Holdings, Fresenius Medical Care North America, and Dialysis Specialists of Topeka—
would be liable under joint- and single-employer theories. Defendants oppose the motion,
arguing that plaintiff has failed to plead sufficient facts to show these entities were plaintiff’s
employers under the ADA.
II.

Discussion
When leave of the court is required to amend under Rule 15(a), the court may refuse

leave “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.”4 “The court should freely give leave when justice so requires.”5 In this case,
defendants oppose the motion to amend on the ground of futility. As the party opposing
amendment, defendants bear the burden of establishing its futility.6

3

See Mem. in Supp. of Defs.’ Mot. to Dismiss for Failure to State a Claim, ECF No. 15.

4

Wilkerson v. Shinseki, 606 F.3d 1256, 1267 (10th Cir. 2010) (quoting Duncan v. Manager, Dep’t of Safety, City &
Cty. of Denver, 397 F.3d 1300, 1315 (10th Cir. 2005)).
5

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

6

Mackley v. Telecom Holdings, Inc., 296 F.R.D. 655, 660 (D. Kan. 2014).

2

“A proposed amendment is futile if the complaint, as amended, would be subject to
dismissal.”7 Typically, the court analyzes the proposed pleading using the same standard as a
motion to dismiss under Fed. R. Civ. P. 12(b)(6).8 “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’”9 The court accepts as true “all well-pleaded factual allegations in the complaint and
view[s] them in the light most favorable to the plaintiff.”10 A formulaic recitation of elements
does not satisfy the plausibility standard.11 Rather, plaintiff must offer sufficient factual
allegations to support each claim12 “Determining whether a complaint states a plausible claim for
relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.”13 “While the 12(b)(6) standard does not require that [a plaintiff]
establish a prima facie case in her complaint, the elements of each alleged cause of action help to
determine whether [p]laintiff has set forth a plausible claim.”14
In this case, defendants attack only the element of whether plaintiff has properly pled that
defendants are employers under the ADA. Plaintiff alleges that all of the defendants “are joint

7

Farmers Bank & Trust, N.A. v. Witthuhn, No. 11-2011-JAR, 2011 WL 5920941, at *2 (D. Kan. Nov. 28, 2011)
(citing Jefferson Cnty. Sch. Dist. No. R–1 v. Moody’s Investors’s Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999)).

8

Lane Christensen Co. v. Bro-Tech Corp., No. 09-2381-JWL-GLR, 2011 WL 3847076, at *5 (D. Kan. Aug. 29,
2011).
9

Burnett v. Mort. Elec. Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013) (quoting Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007))).
10

Burnett, 706 F.3d at 1235.

11

Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (Sept. 1, 2011) (citing Twombly, 550 U.S. at 555).

12

Id.

13

Id. (quoting Iqbal, 556 U.S. at 679).

14

Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012).

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employers and/or an integrated enterprise.”15 The ADA applies to “covered entities,” including
those defined as employers under the ADA.16 When a plaintiff alleges that she has more than one
employer, the court will apply the single-employer test or the joint-employer test to determine
whether a defendant may be considered plaintiff’s employer under the ADA.17
The single-employer test allows “a plaintiff who is the employee of one entity . . . to hold
another entity liable by arguing that the two entities constitute a single employer.”18 Courts
generally weigh four factors in evaluating whether codefendants constitute single employers:
“(1) interrelations of operation; (2) common management; (3) centralized control of labor
relations; and (4) common ownership and financial control.”19 In contrast, under “the joint
employer test, two entities are considered joint employers if they ‘share or co-determine those
matters governing the essential terms and conditions of employment.’”20 When evaluating
whether codefendants are joint employers, courts generally consider the right to terminate, which
the Tenth Circuit has stated is the most important factor.21 Other factors include “the ability to
promulgate work rules and assignments, and set conditions of employment, including
compensation benefits, and hours; . . . day-to-day supervision of employees, including employee

15

Proposed Second Am. Compl. at ¶ 8, ECF No. 19-8.

16

42 U.S.C. § 1211(5)(A).

17

Bristol v. Bd. of Cty. Comm’rs of Cnty. Of Clear Creek, 312 F.3d 1213, 1217-18 (10th Cir. 2002); see also Knitter
v. Corvias Military Living, LLC, 758 F.3d 1214, 1226-27 (10th Cir. 2014) (applying the same tests in a Title VII
case).
18

Knitter, 758 F.3d at 1226 (quoting Bristol, 312 F.3d at 1218).

19

Id. (quoting Bristol, 312 F.3d at 1220).

20

Id. (quoting Bristol, 312 F.3d at 1218).

21

Id.

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discipline; and . . . control of employee records, including payroll, insurance taxes and the
like.”22
Plaintiff alleges that she worked at several of defendants’ facilities throughout Kansas
and that each is her employer under the ADA.23 She alleges that all defendants are joint
employers and/or an integrated enterprise.24 However, the factual allegations contained in the
proposed pleading focus mostly on the joint-employer test. She alleges that Bio-Medical
Applications of Kansas is a joint employer because it has conceded that it is, because it provides
day-to-day supervision of employees, sets and enforces policy, controls employee records, and
has the right to discipline employees and to terminate employment.25 She alleges that Dialysis
Specialists of Topeka is a joint employer because it had significant control over her employment,
has the ability to enforce work rules, has day-to-day supervision of employees, has control over
employee benefits and hours and records, and has the right to discipline employees and to
terminate employment.26 Plaintiff alleges Fresenius Medical Care North America Holdings is a
joint employer because it has conceded that it is, because it controls employee records and
payroll, determines benefits and conditions of employment, makes and enforces policy rules, and
provides day-to-day employee supervision, including the right to discipline employees.27 Finally,
plaintiff contends Fresenius Medical Care Holdings is a joint employer because it enacts and

22

Id. (internal quotations omitted) (quoting Butterbaugh v. Chertoff, 479 F. Supp. 2d 485, 491 (W.D. Pa. 2007)).

23

Proposed Second Am. Compl. at ¶ 4, 9, ECF No. 19-4.

24

Id. at ¶ 8.

25

Id. at ¶ 12.

26

Id. at ¶ 17.

27

Id. at ¶ 20.

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enforces work rules, provides day-to-day supervision of employees, including discipline, has
control over employee compensation and benefits and hours, controls employee records, and has
the right to terminate employment.28
Defendants argue that plaintiff’s proposed second amended complaint is void of specific
factual allegations supporting a joint- or single-employer theory of liability. Rather, defendant
contend plaintiff’s proposed factual allegations merely mirror the factors the court considers
when determining whether codefendants may be considered joint employers. Magistrate Judge
Gwynne E. Birzer recently addressed similar arguments in Creech v. P.J. Wichita, LLC.29 In
Creech, plaintiff sought to amend her complaint to assert Fair Labor Standards Act claims
against additional defendants that she alleged constituted an integrated enterprise and/or acted as
joint employers. Defendant opposed the motion on futility grounds, making similar arguments as
to those asserted by defendants in this case. Judge Birzer allowed the amendment, reasoning that
defendant’s “contentions and authority seem to apply a heightened standard to the amended
pleading.”30 She noted that defendant’s cited authority concerned cases dismissed at the
summary-judgment stage or later.31 Indeed, this court has previously observed that these tests are
more often considered at the summary-judgment stage rather than the pleadings stage.32
Plaintiff’s factual allegations supporting her contention that defendants are joint
employers give defendants fair notice. Although some of the allegations are relatively general
28

Id. at ¶ 23.

29

No. 16-2312-JAR-GEB, 2016 WL 4702376, at *5 (D. Kan. Sept. 8, 2016).

30

Id. at *5.

31

Id.

32

Collins v. Wal-Mart, Inc., 245 F.R.D. 503, 512 (D. Kan. 2007) (noting that issues concerning whether a
codefendant was an integrated entity or a joint employer were “issues best resolved on motion for summary
judgment”).

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and mirror the factors the court would consider when applying the joint-employer test, the
plausibility standard does not require plaintiff to articulate more, particularly at the amendments
stage with no discovery having taken place.
In plaintiff’s motion for leave to amend, she explains that she received documents
provided by the Kansas Department of Labor that clarified and supported her allegation that the
defendants named in her proposed second amended complaint shared significant control over the
same employees and would constitute her employers under the ADA. Defendants contend these
documents do not support this conclusion and reveal routine parent-subsidiary relationships.
Defendants cite GFF Corporation v. Associated Wholesale Grocers, Inc.,33 a 1997 Tenth Circuit
opinion, in support of defendants’ position that the court should evaluate the documents plaintiff
cites in her motion to amend. GFF Corporation involved review of the district court’s dismissal
of a breach-of-contract claim pursuant to Rule 12(b)(6). The court found that the district court
did not err by failing to convert the Rule 12(b)(6) motion into one for summary judgment even
though the district court considered material outside of the pleadings. The court held that, “if a
plaintiff does not incorporate by reference or attach a document to its complaint, but the
document is referred to in the complaint and is central to the plaintiff’s claim, a defendant may
submit an indisputably authentic copy to the court to be considered on a motion to dismiss.”34
In this case, plaintiff’s proposed pleading does not refer to these documents, and they are
not central to her claims. Plaintiff’s motion to amend references these documents as an
explanation regarding the timing of the motion to amend, and they serve as support that the
amendments are taken in good faith—that she has obtained information leading her to conclude

33

130 F.3d 1381 (10th Cir. 1997).

34

Id. at 1384.

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that defendants constitute her employers under the ADA. With limited exceptions, the court
generally does not consider documents other than the proposed pleading when ruling on a motion
to amend.35 Because defendants have not shown that plaintiff’s proposed second amended
complaint is futile, the court grants plaintiff’s motion to amend.
Accordingly,
IT IS THEREFORE ORDERED that Plaintiff’s Motion and Memorandum for Leave to
File a Second Amended Complaint (ECF No. 19) is granted. Within five (5) business days from
the date of this order, plaintiff shall file her Second Amended Complaint (ECF No. 19-6) as
separate docket entry in this case.
IT IS SO ORDERED.
Dated March 27, 2017, at Topeka, Kansas.
s/ K. Gary Sebelius
K. Gary Sebelius
U.S. Magistrate Judge

35

See United States v. Sturdevant, No. 07-2233-KHV-DJW, 2008 WL 4198598, at *8 (D. Kan. Sept. 11, 2008)
(declining to rule on the merits of a proposed amended complaint regarding a disputed issue of fact and stating that
the court would not consider matters outside of the proposed amended complaint).

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