Perez v. KDE Equine, LLC et al

Filing 41

MEMORANDUM OPINION signed by Senior Judge Charles R. Simpson, III on 12/31/2016, re Plaintiff's 37 MOTION for Leave to File Amended Complaint. An order will be tendered in accordance with this Memorandum Opinion. cc: Counsel (RLK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
THOMAS E. PEREZ, Secretary of Labor
United States Department of Labor

PLAINTIFF
CIVIL ACTION NO. 3:15-CV-00562-CRS

v.
KDE EQUINE, LLC, d/b/a
STEVE ASMUSSEN STABLES, and
STEVE ASMUSSEN

DEFENDANTS

Memorandum Opinion
I.

Introduction
This matter is before the Court on the motion of Plaintiff Thomas E. Perez, the Secretary

of Labor for the United States Department of Labor (“The Secretary”), for leave to file an
amended complaint, ECF No. 37. The Secretary tendered a proposed amended complaint, ECF
No. 37-1. Defendants KDE Equine, LLC, Steve Asmussen Stables, and Steve Asmussen
(collectively, “Defendants”) objected, ECF No. 38. For the reasons stated below, the Court will
grant the Secretary’s motion for leave to file an amended complaint.
II.

Background
The Secretary filed this lawsuit under the Fair Labor Standards Act of 1938 (FSLA or

“the Act”), 29 U.S.C. § 201, et seq., pursuant to his authority granted by § 211(a) and § 216(c) of
the Act. Compl. 1, ECF No. 1. The Secretary alleges in the original complaint that Defendants
violated sections 7 and 15(a)(2) of the FSLA, §§ 207 and 215(a)(2), by employing employees for
workweeks longer than 40 hours per week without compensating them in excess of such hours at
rates not less than one and one-half times the regular rates at which they are employed. Id. at 4.
He also asserts that Defendants violated sections 11(c) and 15(a)(5) of the Act, §§ 211(c) and
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215(a)(5), and 29 C.F.R. § 516 by failing to keep and maintain adequate and accurate
employment records. Id. at 5. The Secretary seeks (1) a permanent injunction restraining
Defendants from violating the FSLA and from withholding wages under the FSLA, (2) an award
of back wages for the previous three years, and (3) an additional liquidated damages amount
and/or interest on such back wages. Id. at 6–7.
On September 15, 2015, Defendants filed an answer and their affirmative defenses.
Answer, ECF No. 10. On October 3, 2016, the Secretary moved for leave to amend the
complaint. Mot. Amend, ECF No. 37. The Secretary attempts to modify the original complaint in
five ways.


First, he adds an allegation that Defendants have violated the minimum wage rules
contained in section 6 of the FSLA, § 206, since June of 2012. Proposed Am. Compl.
4, ECF No. 37-1.



Second, he seeks to clarify that he seeks back wages for all employees who he asserts
were misclassified as exempt employees under Part 541 of the regulations, including
employees working at locations other than Churchill Downs. Id. at 5.



Third, the Secretary attempts to specify the alleged types of record-keeping
violations, such as a failure to maintain records of employees’ gender and
occupations. Id. at 5–6.



Fourth, he seeks to explain that he is seeking back wages and liquidated damages
and/or interest between June 2012 and the date on which Defendants’ compliance
with the FSLA is established. Id. at 7–8.



Fifth, the Secretary attempts to expand the number of employees from 100 listed in
the original complaint to 163 listed in the amended complaint who he claims are

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entitled to back wages and liquidated damages and/or interest. Compl. Ex. B., ECF
No. 1-3; Am. Compl. Ex. B, ECF No. 37-2.
III.

Discussion
The Secretary argues that the Court should grant leave to amend the complaint because

the amendments will “more properly frame and place before the Court all appropriate and
legitimate issues in this cause.” Mot. Leave Am. 4, ECF No. 37. He additionally contends that
Defendants will not be prejudiced by the amendment because “[a]ny new matters to be asserted
in the proposed Amended Complaint arose out of the conduct, transactions or occurrences set
forth in the original Complaint, and therefore relate back to the date of its filing.” Id. at 4–5.
Defendants argue, however, that the amendments seek to change and expand the claims that have
been litigated for over a year. Obj. Mot. Am. 2, ECF No. 38. They assert that the “proposed
amendments would serve only to prolong the litigation, permit [the Secretary] to further harass
[them] with yet further discovery, ultimately to the prejudice of the Defendants.” Id. at 6.
Federal Rule of Civil Procedure 15 governs amendments. Rule 15 “reject[s] the approach
that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and
accept[s] the principle that the purpose of pleading is to facilitate a proper decision on the merits.”
Foman v. Davis, 371 U.S. 178, 182 (1962). Under Rule 15, “[a] party may amend its pleading once
as a matter of course within . . . 21 days after service of a motion under Rule 12(b).” Fed. R. Civ. P.
15(a)(1)(B). “In all other cases, a party may amend its pleading only with the opposing party’s
written consent or the court’s leave. The court should freely give leave when justice so requires.”
Fed. R. Civ. P. 15(a)(2).
Although the court should generally grant an amendment to a complaint, it should deny such
a request when the amendment would cause “undue prejudice to the opposing party.” Foman, 371
U.S. at 182; see also Moore v. Paducah, 790 F.2d 557, 562 (6th Cir. 1986) (explaining that to deny a

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motion to amend, the court must find “least some significant showing of prejudice to the opponent”).
One example of significant prejudice that justifies the court’s denying leave to amend a complaint is
if an amendment involves new theories of recovery. Cook v. Field Packing Co., No. 4:05CV-83-M,
2006 U.S. Dist. LEXIS 37364, at *7 (W.D. Ky. May 31, 2006) (citing Bell v. Allstate Life Ins. Co.,
160 F.3d 452, 454 (8th Cir. 1998)). A defendant would also be significantly prejudiced if the plaintiff
sought to amend the complaint after the close of discovery and the filing of dispositive motions. See
Duggins v. Steak 'n Shake, Inc., 195 F.3d 828, 834 (6th Cir. 1999).

In reviewing the pleadings and the record in this case, this Court concludes that the
amendments to the complaint would not severely prejudice Defendants. Although the case has
now been litigated for over a year, the amendments to the claims—including the addition of a
claim under section 6 of the FSLA—arise from the same facts and transactions that are alleged in
the original complaint. And while the proposed amendments likely will require additional
discovery, the discovery period continues until April 4, 2017, whereas the period for filing
dispositive motions continues until May 30, 2017. Am. Scheduling Order 1, ECF No. 40.
Finally, the Court finds that the amendments do not change or unduly expand the claims that
have already been asserted in the action. Given that the proposed amendments would not
severely prejudice Defendants, and recognizing that amendments should generally be granted to
ensure that cases are decided on their merits, the Court will grant the Secretary’s motion for
leave to file an amended complaint.

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IV.

Conclusion
The Court will grant the Secretary’s motion for leave to file an amended complaint. An

order will be tendered in accordance with this memorandum opinion.

December 31, 2016

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