Road Sprinkler Fitters Local Union No. 669, U.A., AFL-CIO v. CCR Fire Protection, LLC et al

Filing 53

RULING AND ORDER granting in part 37 Motion for Leave of Court to File Plaintiffs First Amended Complaint. Plaintiff shall substitute an Amended Complaint for the proposed First Amended Complaint that removes any allegations with regard to Earl Bar nett that are revised from those allegations against Barnett contained in the original Complaint. Further leave of court is not necessary for Plaintiff to file a substituted First Amended Complaint. The 20 Motion to Dismiss, filed by defendants Rose al Rodriguez and Theresa Rodriguez, and the 21 Motion to Dismiss Pursuant to 12(b)(6) of Defendants Quick Response Fire Protection, LLC, and Earl Barnett are TERMINATED without prejudice to any party re-filing a Motion to Dismiss that addresses the allegations contained in the First Amended Complaint. Signed by Magistrate Judge Erin Wilder-Doomes on 1/23/2017. (SGO) Modified to edit text on 1/23/2017 (SGO).

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669, U.A., AFL-CIO

CIVIL ACTION
NO.: 16-448-JWD-EWD

VERSUS
CCR FIRE PROTECTION, LLC, et al.

RULING AND ORDER
Before the Court is Plaintiff’s Motion for Leave to File First Amended Complaint (the
“Motion”).1 Defendants Quick Response Fire Protection, LLC (“Quick Response”) and Earl
Barnett (“Barnett”) filed an opposition to the Motion on November 3, 2016.2 Defendant Roseal
Rodriguez, Jr. (“J.R.”) and Theresa Rodriguez (collectively the “Rodriguez Defendants”) also filed
an opposition to the Motion on November 4, 2016.3 Plaintiff filed a reply memorandum.4 For the
reasons that follow, the Motion is GRANTED IN PART.5
I.

Factual Background
In its original Complaint, Plaintiff, a national labor organization, alleges that Defendant

CCR Fire Protection, LLC (“CCR”) entered into an oral settlement agreement with Plaintiff before

1

R. Doc. 37.
R. Doc. 42.
3
R. Doc. 43.
4
R. Doc. 46.
5
“Generally, a motion for leave to amend the pleadings is a nondispositive matter that may be ruled on by a magistrate
judge pursuant to 28 U.S.C. § 636(b)(1).” Cazares v. Morris, 2011 WL 2414543, at *2 (D.Ariz. June 16, 2011) (citing,
inter alia, JJCO, Inc. v. Isuzu Motors America, Inc., 2009 WL 3818247, at *2 (D.Haw. Nov. 12, 2009) (magistrate
judge’s denial of a motion for leave to amend complaint is not a dispositive ruling)) (citing, in turn, U.S. Dominator,
Inc. v. Factory Ship Robert E. Resoff, 768 F.2d 1099, 1102 n.1 (9th Cir. 1985), superseded by statute on other grounds
as recognized in Simpson v. Lear Astronics Corp., 77 F.3d 1170 (9th Cir. 1996) (noting that the plaintiff’s motion for
leave to amend its Complaint was properly treated as a nondispositive motion when the magistrate judge granted the
plaintiff’s motion)). The Fifth Circuit has similarly recognized that a motion to amend a complaint is a nondispositive
motion. PYCA Indus., Inc. v. Harrison Cty. Waste Water Mgmt. Dist., 81 F.3d 1412, 1421 (5th Cir. 1996).
2

the administrative law judge for the National Labor Relations Board (“NLRB”) to resolve
Plaintiff’s unfair labor practice charge against CCR that was pending before the NLRB.6 Plaintiff
further alleges that, despite the oral agreement, CCR failed to sign a written agreement
memorializing the terms of the settlement and never made the payments required under the
settlement agreement.7 In addition to naming CCR as a defendant, the original Complaint also
names Quick Response, the Rodriguez Defendants, Nilesh Patel, Rajendra Bhakta, and Barnett.8
Quick Response is alleged to be an alter ego of, and successor to, CCR, such that Quick Response
is also obligated under the settlement agreement.9 The original Complaint contains limited factual
allegations against the individual defendants. There, Plaintiff alleges that J.R. Rodriguez was the
owner and agent of CCR; that Theresa Rodriguez was the office manager and agent of CCR; and
that Barnett was the salesperson and designer of CCR, as well as an owner of Quick Response.10
The original Complaint alleges that Patel and Bhakta were also owners of CCR.11 All individual
defendant are alleged to be “employers” in the original Complaint within the meaning of Section
2(2) of the Labor Management Relations Act, as amended, 29 U.S.C. § 152(2).12
On September 2, 2016, the Rodriguez Defendants filed a Motion to Dismiss the original
Complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a cause of action.13 Similarly,
Quick Response and Barnett also filed a Rule 12(b)(6) motion. 14 Both motions are currently

6

R. Doc. 1, ¶¶ 17 & 20.
Id., ¶ 22.
8
Id., ¶¶ 5-10.
9
Id., ¶32.
10
Id., ¶13.
11
Id., ¶¶ 8 & 9.
12
Id., ¶¶ 6-10.
13
R. Doc. 20.
14
R. Doc. 21.
7

2

pending. The thrust of these motions is that the allegations contained in the original Complaint
are insufficient to state a claim upon which relief can be granted against these defendants.15
Plaintiff filed the instant Motion to “enhance and amplify its claims, including as to
individual liability of Roseal Rodriguez, Theresa Rodriguez, Nilesh Patel, Rajandra Bhakta, and
Earl Barnett …” and to “include additional specific allegations regarding Plaintiff’s standing to
sue Defendant Bhakta in this Court.”16 The primary focus of the oppositions to the Motion is that
the amendment would be futile.17
II.

Law and Analysis
Under Rule 15(a)(2), “a party may amend its pleading only with the opposing party’s

written consent or the court’s leave” and a “court should freely give leave when justice so
requires.”

Fed. R. Civ. P. 15(a)(2). The court liberally construes Rule 15(a) in favor of

amendment. See Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir. 1981) (“[T]he
liberal position of the federal rules on granting amendments . . . evinces a bias in favor of granting
leave to amend”). Although leave to amend should not be automatically granted, “[a] district court
must possess a substantial reason to deny a request for leave to amend.” Jones v. Robinson Prop.
Grp., L.P., 427 F.3d 987, 994 (5th Cir. 2005) (quotations omitted). In determining whether to
grant leave, a court may consider several factors, including among other things, the movant’s “bad
faith or dilatory motive” and the “futility” of the amendment. Rhodes v. Amarillo Hosp. Dist., 654

See, R. Doc. 20, ¶3 (“There are no allegations as to why a member of CCR [Roseal Rodriguez] and his wife, who
is not a member, are liable for an alleged breach of a settlement agreement between the plaintiff and CCR.”). See
also, R. Doc. 21, p. 2 (“Plaintiff’s claims should be dismissed as Plaintiff simply has failed to allege any facts which
would give rise to its claims or any liability as to Quick Response and/or Barnett.”)
16
R. Doc. 37, p. 2. Bhakta has a Motion to Dismiss for Lack of Personal Jurisdiction pending. R. Doc. 24.
17
See, R. Doc. 42, ¶ 1 (“[T]he proposed amended complaint fails to cure the defects raised in Defendants’ Motion to
Dismiss, and therefore, Plaintiff’s motion is futile and should be denied by the Court.”). See also, R. Doc. 43, p. 1,
adopting the argument in the opposition filed by Quick Response and Barnett, but also including an argument that the
amendment is sought in bad faith because “[t]he plaintiff’s claims against Mr. and Mrs. Rodriguez as originally
pleaded are so specious and unsupported by law that they infer bad faith.”)
15

3

F.2d 1148, 1153 (5th Cir. 1981) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230,
9 L.Ed.2d 222 (1962)).
As the primary focus of the oppositions to the Motion is that the amendments would be
futile, the Court focuses on that argument. An amendment is futile if it would fail to survive a
Rule 12(b)(6) motion. Briggs v. Miss., 331 F.3d 499, 508 (5th Cir. 2003). A review of the
proposed amended complaint is, therefore conducted under “the same standard of legal sufficiency
as applies under Rule 12(b)(6).”

Marucci Sports, L.L.C. v. National Collegiate Athletic

Association, 751 F.3d 368, 378 (5th Cir. 2014) citing Stripling v. Jordan Prod. Co., LLC, 234 F.3d
863, 873 (5th Cir. 2000).
We accept “all well-pleaded facts as true, viewing them in the light most favorable to the
plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007). In order to
survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007). “Factual allegations must be enough to raise a right to relief above
the speculative level on the assumption that all the allegations in the complaint are true (even if
doubtful in fact).” Id. at 555, 127 S.Ct. 1955 (citation omitted).
A. Allegations as to the Rodriguez Defendants
The factual allegations in the original Complaint against the Rodriguez Defendants are that:
1) they are “employers” within the meaning of Section 2(2) of the Labor Management Relations
Act, as amended, 29 U.S.C. § 152(2); 2) J.R. Rodriguez was the owner and agent of CCR; 3)
Theresa Rodriguez was the office manager and agent of CCR; and 4) that J.R. Rodriguez was a
party to the settlement agreement at issue.18

18

R. Doc. 1, ¶ 34.

4

In contrast, the proposed Amended Complaint expands the allegations against the
Rodriguez Defendants to include the following non-exhaustive recitation of additional facts:
[Plaintiff] and Defendant CCR through Defendants J.R. Rodriguez
and Theresa Rodriguez engaged in settlement negotiations at the
outset of the NLRB trial and entered into a settlement of the NLRB
allegations . . . .19
Defendant CCR affirmed on the record through Defendant Theresa
Rodriguez that it agreed to the terms of the settlement agreement . .
. .20
Defendant CCR through Defendants J.R. and Theresa Rodriguez
thereafter refused to sign the written agreement and reneged on their
agreement to make payments . . . .21
[Plaintiff] … was informed by Defendant Theresa Rodriguez on two
separate occasions that CCR would not sign because they were
‘shutting their doors.’ Defendant Theresa Rodriguez gave no
indication at the settlement conference on February 17, 2016, that
CCR had imminent plans to terminate the business within the month
and reopen as Quick Response.22
Defendants J.R. Rodriguez, Theresa Rodriguez …purported to enter
into the NLRB settlement with the fraudulent intent to evade their
obligations under the settlement and the collective bargaining
agreement with [Plaintiff] in order to induce [Plaintiff] to withdraw
the pending NLRB unfair labor practice charges.23
Allegations as to Quick Response and Barnett
1. Allegations against Quick Response
Quick Response is alleged to be an “employer” within the meaning of Section 2(2) of the
LMRA.24 Quick Response is not alleged to be a signatory to the collective bargaining agreement
between Plaintiff and CCR, nor is Quick Response alleged to a be a signatory to the settlement

19

R. Doc. 37-1, ¶21.
Id., ¶22.
21
Id., ¶23
22
Id., ¶24.
23
Id., ¶25.
24
R. Doc. 1., ¶5.
20

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agreement, but Plaintiff seeks to impose liability upon Quick Response as an alter ego and
successor of CCR.25 Quick Response is alleged to be located in the same offices occupied by
CCR26 and has the same business purpose as CCR—the installation, maintenance, and repair of
fire sprinkler systems in Louisiana, Arkansas and Mississippi.27 Quick Response is also alleged
to have the same employees, substantially identical management, and the same customers and
equipment as CCR.28 Quick Response is also alleged to be performing “collective bargaining
agreement-covered work on jobs covered by the collective bargaining agreement” between CCR
and [Plaintiff].29
2. Allegations against Barnett
The allegations against Barnett in the original Complaint are that he is an “employer”
within the meaning of Section 2(2) of the LMRA,30 that he was at all material times a salesperson
and designer for Defendant CCR;31 and that he became an owner of Quick Response in January
2016.32 The original Complaint also claims Plaintiff is entitled to specific performance from
Barnett of the settlement agreement obligations as he is an alter ego of CCR.33
The amended Complaint contains the same factual allegations with regard to Quick
Response and Barnett as those in the original Complaint, but expands the allegations against them
to include the following:
[E]arl Barnett are individually liable by acting with intent to evade
their legal and contractual obligations to [Plaintiff] including, inter
alia, by purporting to approve and enter into the settlement
agreement before the NLRB with no intention of honoring it and
25

Id., ¶32.
R. Doc. 37-1, ¶26
27
Id., ¶17.
28
Id., ¶27.
29
Id., ¶26.
30
R. Doc. 1, ¶10.
31
Id., ¶13.
32
Id., ¶15.
33
Id., ¶38.
26

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thereafter by ‘closing’ Defendant CCR while continuing to operate
the business under the disguised continuance of Defendant Quick
Response thereby abusing corporate formalities in an attempt to
evade their remedial and contractual obligations to Plaintiff ….34
A. The Proposed Amendment is Not Futile as to Quick Response or the Rodriguez
Defendants but is Futile as to Barnett
Quick Response and Barnett allege that successor liability and/or an alter ego theory of
recovery cannot be maintained because Plaintiff has only made conclusory allegations. Quick
Response and Barnett rely on a Decision and Order from the NLRB in R. L. Reisinger Co., 312
NLRB 915 (1993), enf. 43 F.3d 1472 (6th Cir. 1994). The Court notes at the outset that the
Reisinger decision was not decided on a preliminary procedural motion, but was instead decided
by an administrative law judge after a hearing and the presentation of evidence. One of the issues
in that case was whether respondent Reisinger Co., Inc., was a “disguised continuance” of Mr.
Reisinger’s sole proprietorship that had entered into the collective bargaining agreement (“CBA”)
at issue, such that the company could be bound by the CBA originally entered into by the sole
proprietorship. In conducting that analysis, the ALJ concluded:
The record also provides ample support for a finding that
Respondent Reisinger Co., Inc. is a disguised continuance of Ron
Reisinger’s sole proprietorship. Other than the incorporation and
granting a 51-percent interest in the corporation to wife Bernadine
Reisinger, R.L. Reisinger Co., Inc., remained the same entity as the
sole proprietorship and the change to an incorporated status was
clearly motivated principally by the desire to obtain business by
qualifying as a ‘minority female enterprise.’
After the date that Respondent was incorporated in 1981, the
Company retained the same office at the same address and the
Company paid debts or financial obligations accrued by the sole
proprietorship and continued to use the same station wagon that Ron
Reisinger had used when he was the sole proprietor until the
corporation subsequently purchased a van. After incorporation,
Respondent used the same wholesale suppliers to obtain its supplies.
Both before and after incorporation, Ron Reisinger prepared
34

R. Doc. 37-1, ¶30.

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estimates to bid on jobs, did electrical work in this field and held the
electrical license necessary to get Columbus job permits in his own
name, while Bernadine Reisinger took over banking, bookkeeping,
and office work. Ron Reisinger retained a 49-percent ownership
interest and official company positions as both vice president and
secretary and I find that under these circumstances the Respondent
Company is bound under the National Labor Relations Act to the
labor obligations entered into by the predecessor sole proprietorship.
Quick Response and Barnett also rely on 3750 Orange Place Ltd. Partnership v. NLRB,
333 F.3d 646 (6th Cir. 2003), a decision on appeal from an NLRB ruling affirming the ALJ’s
decision that Petitioners had committed unfair labor practices. In 3750 Orange Place, the Court
characterized the successorship analysis as follows:
The threshold inquiry for ascertaining the existence of such
‘substantial continuity’ is whether the majority of the new
employer’s workforce was previously employed by the predecessor.
If so, the Board then must examine a number of additional factors to
determine whether ‘substantial continuity’ exists, including: (1)
whether the business of the two entities remains unchanged; (2)
whether the employees continue to perform the same job functions
under unchanged working conditions; (3) whether the production
processes remain the same; and (4) whether the new entity provides
the same customers with the same product.35
Here, the court finds that the allegations in the proposed Amended Complaint are sufficient
to meet this test for purposes of a 12(b)(6) analysis with regard to Quick Response. Quick
Response is alleged to have the same employees as CCR. Further, it is alleged that Quick Response
is located in the same offices occupied by CCR; has the same business purpose as CCR—the
installation, maintenance, and repair of fire sprinkler systems in Louisiana, Arkansas and
Mississippi; has substantially identical management; has the same customers and equipment as
CCR; and continued to work on jobs that would be covered under the collective bargaining

35

3750 Orange Place, 333 F.3d at 655 citing Straight Creek Mining Inc. v. NLRB, 164 F.3d 292, 295 (6th Cir. 1998).

8

agreement between Plaintiff and CCR that were started by CCR. This is more than a conclusory
statement that Quick Response is an alter ego and/or successor of CCR.
Similarly, the Court does not agree that the amendments sought are futile with regard to
the Rodriguez Defendants. The proposed Amended Complaint explains that the Rodriguez
Defendants actively participated in the negotiation of the settlement agreement at issue and the
breach of that agreement; and that they permitted approval of the settlement agreement before the
NLRB ALJ with no intention of honoring it. The proposed Amended Complaint also further
explains that, although Theresa Rodriguez is not an owner of CCR, she acted as an agent of CCR,
participated in the negotiation of the settlement agreement and allegedly misrepresented
information by omission when she failed to disclose that CCR would be “shutting its doors,” just
a month after entering into the negotiated settlement agreement. Based on these allegations, the
court cannot say at this juncture that there is no basis for claims of individual liability against the
Rodriguez Defendants.
The result is different with respect to Barnett. Neither the original Complaint, nor the
proposed Amended Complaint set forth sufficient facts to establish how Barnett could be held
individually liable. Unlike the allegations against the Rodriguez Defendants, where factual
information regarding their role in the negotiation and breach of the settlement agreement has been
set forth, there is no similar factual information with regard to Barnett’s alleged role in this alleged
scheme. Further, although Plaintiff states that it seeks to pierce the corporate veil as to Barnett,
there are no facts alleged that would support such a claim. The mere fact that Barnett is said to be
an owner of Quick Response and that he was a designer and salesperson for CCR, without more,
is insufficient to state a claim for relief against him individually and the court agrees that there is

9

insufficient factual information alleged to maintain any claim that the corporate veil could be
pierced to impose personal liability on Barnett.36
The Court also rejects the additional arguments raised by the Rodriguez Defendants with
regard to bad faith and/or undue delay. The argument that the amendments with regard to the
Rodriguez Defendants were sought in bad faith is based on the claim that the allegations are
specious and insufficient to state a claim. As set forth above, the court disagrees and finds that the
allegations are sufficient to state a claim against the Rodriguez Defendants. The Rodriguez
Defendants also make a passing argument that the amendment should be denied because the facts
that are sought to be added should have been included sooner. As this matter is in the very early
stages and no Scheduling Order has even been issued by the court, this argument is also without
merit.
For the foregoing reasons, IT IS HEREBY ORDERED that the Motion for Leave of Court
to File Plaintiffs’ First Amended Complaint37 is GRANTED IN PART. Plaintiff shall substitute
an Amended Complaint for the proposed First Amended Complaint38 that removes any allegations
with regard to Earl Barnett that are revised from those allegations against Barnett contained in the
original Complaint. Further leave of court is not necessary for Plaintiff to file a substituted First
Amended Complaint.
As the court was required to undertake a Rule 12(b)(6) analysis in deciding the Motion for
Leave, IT IS FURTHER ORDERED that the Motion to Dismiss, filed by defendants Roseal

36

In deciding whether to pierce the corporate veil, Louisiana courts often look to the following factors: a) commingling
of corporate and shareholder funds; b) failure to follow statutory formalities for incorporation and the transaction of
corporate affairs; c) undercapitalization; d) failure to provide separate bank accounts and bookkeeping records; and e)
failure to hold regular shareholder or directors’ meetings. Dowling v. UHS of Delaware, Inc., 1992 WL 37698, *3
(E.D. La. Feb. 18, 1992). No such facts are alleged in either the original Complaint or in the proposed Amended
Complaint.
37 R. Doc. 37.
38 R. Doc. 37-1.

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Rodriguez and Theresa Rodriguez,39 and the Motion to Dismiss Pursuant to 12(b)(6) of Defendants
Quick Response Fire Protection, LLC, and Earl Barnett40 are TERMINATED without prejudice
to any party re-filing a Motion to Dismiss that addresses the allegations contained in the First
Amended Complaint.
Signed in Baton Rouge, Louisiana, on January 23, 2017.

S
ERIN WILDER-DOOMES
UNITED STATES MAGISTRATE JUDGE

39
40

R. Doc. 20.
R. Doc. 21.

11