WINSLOW et al v. LEARNING DISABILITIES ASSOCIATION OF MAINE
Filing
33
AMENDED ORDER granting in part 14 Motion for Leave to File; terminating 14 Motion for TRO; terminating 14 Motion for Preliminary Injunction. Amendment only corrects a typographical error. By MAGISTRATE JUDGE MARGARET J. KRAVCHUK. (CWP)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
DENA WINSLOW, et al.,
Plaintiffs
v.
LEARNING DISABILITIES
ASSOCIATION OF MAINE,
Defendant
)
)
)
)
) 1:13-cv-00032-DBH
)
)
)
)
)
AMENDED1 ORDER
On May 24, 2013, the defendant in this employment discrimination lawsuit filed a motion
for leave to amend its answer and a motion for a temporary restraining order/preliminary
injunction. The genesis of the current motion practice arose shortly after May 13, 2013, when
counsel for the plaintiffs, two former employees of the defendant, produced over 3000
documents in response to a discovery request. In short order the defendant’s counsel discovered
that many of the documents were what are alleged to be the property of the defendant that the
plaintiffs were not authorized to remove from the defendant’s premises or to copy. Some of the
documents include confidential personnel records of third parties. I scheduled a discovery
conference with the parties and obtained an agreement that the documents would be treated as
confidential for purposes of discovery and that eventually the dispute might be narrowed to a
limited number of documents and might only involve one of the plaintiffs. Based upon the
consent confidentiality order being put in place, counsel for the defendant agreed to withdraw his
request for an immediate temporary restraining order and to allow the discovery process to
unfold. The parties have now briefed the motion for leave to amend the answer and the motion
1
This amendment corrects a typographical error on Page 6, Line 12: commiserate has been changed to
commensurate.
for a preliminary injunction. I grant the motion to amend in part and terminate the motion for a
preliminary injunction until further discovery has occurred and the universe of documents in
dispute has been substantially narrowed.
Motion to Amend Answer
The defendant seeks to amend its answer by adding a counterclaim consisting of four
substantive counts and a count which seeks injunctive relief. The four substantive counts
originally proposed by the defendant consisted of the following: (1) count I – breach of common
law and statutory fiduciary duty against Dena Winslow, former executive director; (2) count II –
conversion against Dena Winslow and Yolanda Vaugh; (3) count III – unjust enrichment against
Winslow and Vaughn; (4) count IV – invasion of privacy against Winslow and Vaughn. In its
reply memorandum the defendant concedes that count IV would be deemed futile on its merits,
given the defendant’s status as a corporate entity, and agrees to withdraw that proposed count.
(Reply at 4, ECF No. 29.) The defendant also concedes that it currently has no evidence that
either plaintiff/proposed counterclaim defendant was unjustly enriched as a result of the retention
or use of these records, but it maintains nevertheless that its third count does state a claim for
unjust enrichment sufficient to pass the legal standard of “futility.” (Id. at 7.)
Pursuant to Rule 15 of the Federal Rules of Civil Procedure, prior to trial a party may
amend his pleading once, as a matter of course at the outset of litigation, but may only amend the
pleading further with the opposing party’s consent or with leave of court. Fed. R. Civ. P. 15(a).
When leave of court is called for, the court “should freely give leave when justice so requires.”
Fed. R. Civ. P. 15(a)(2). See also Foman v. Davis, 371 U.S. 178, 182 (1962) (“In the absence of
any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of
the movant, repeated failure to cure deficiencies by amendments previously allowed, undue
2
prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment,
etc.—the leave sought should, as the rules require, be ‘freely given.’”). Among the instances
when leave to amend need not be allowed is when the proposed amendment would be futile.
Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 59 (1st Cir. 1990) (“Where an amendment
would be futile or would serve no legitimate purpose, the district court should not needlessly
prolong matters.”). This standard is not difficult to meet, but it “becomes compounded with a
higher standard” after the court’s scheduling order deadline for amendment of the pleadings has
expired. El-Hajj v. Fortis Benefits Ins. Co., 156 F. Supp. 2d 27, 34 (D. Me. 2001).
Under Rule 16: “A schedule may be modified only for good cause and with the judge’s
consent.” Fed. R. Civ. P. 16(b)(4). Rule 16’s good cause requirement is designed to ensure that
the pleadings become fixed at some point in time. Trans-Spec Truck Serv. v. Caterpillar Inc.,
524 F.3d 315, 327 (1st Cir. 2008). “[L]iberally granting motions to amend the pleadings—filed
after a party has disregarded the scheduling order deadline—would effectively ‘nullify the
purpose of Rule 16(b)(1).’” O’Connell v. Hyatt Hotels, 357 F.3d 152, 155 (1st Cir. 2004)
(quoting Riofrio Anda v. Ralston Purina Co., 959 F.2d 1149, 1155 (1st Cir. 1992)).
The good cause standard “focuses on the diligence (or lack thereof) of the moving party
more than it does on any prejudice to the party-opponent.” Steir v. Girl Scouts of the USA, 383
F.3d 7, 12 (1st Cir. 2004). “Prejudice to the opposing party remains relevant but is not the
dominant criterion.” O’Connell, 357 F.3d at 155. “Regardless of the context, the longer a
plaintiff delays, the more likely the motion to amend will be denied[.]” Steir, 383 F.3d at 12.
In the present case, even though the scheduling order fixed April 30, 2013, as the date for
amendment of pleadings the defendant has met the good cause standard. Although the parties
were experiencing discovery issues prior to the production of the 3000 documents in early May,
3
they had never approached the court to obtain any resolution. Once the defendant received the
documents, it acted promptly to try to resolve the dispute informally and then forthwith filed the
motion to amend. Contrary to the plaintiff’s suggestion, and of decidedly lesser significance, is
the reality that discovery has recently been extended already and any further delay occasioned by
this amendment can be addressed if the need arises. Given the plaintiffs’ relative inaction during
the initial phase of discovery, there is little to no actual prejudice in granting the amendment.
The proposed amendments should be allowed, provided they are not futile.
Count I of the revised proposed amended counterclaim would delete any reference to the
alleged breach of a statutory duty as defendant concedes that Winslow, the only individual
against whom the count was brought, was an employee and not a director and thus would not fall
within the statutory prohibition found at 13-B M.R.S. § 717. I can ascertain no impediment to
allowing this count to go forward as an alleged breach of a common law duty owed by the
executive director to her employer. If, as Winslow contends, such an action cannot be
maintained against a mere employee, the count may ultimately be dismissed on a summary
judgment record, but at this juncture, without a factual record, I am unable to make that
determination.
According to plaintiffs/proposed counterclaim defendants, the revised proposed
counterclaim count II, alleging conversion against both Winslow and Vaughn, fails because
documents are not property in the sense of chattels and thus the claim cannot arise for taking
documents. Additionally, Winslow and Vaughn argue that they only took copies, though the
proposed counterclaim alleges property including copies and confidential documents. (ECF No.
29-6, ¶ 25.) Maine law supports Winslow and Vaughn. Northeast Coating Techs., Inc. v.
Vacuum Metallurgical Co., 684 A.2d 1322, 1324 (1996) (affirming entry of summary judgment
4
against claim that unauthorized distribution and use of information in a stock prospectus
amounted to a conversion); Residential Mortg. Servs., Inc. v. Dauphine, No. CV-07-359, 2009
Me. Super. Lexis 43 (Me. Super. Ct., Cum. Cty., Mar. 23, 2009) (Warren, J.) (entering summary
judgment against claim that retention of customer lists and other documents amounted to
conversion). Proposed counterclaim count II is futile and the amendment should not be allowed
on the ground of futility.
Count III is a claim for unjust enrichment against Winslow and Vaughn. I am hard
pressed to comprehend how either plaintiff was unjustly enriched by these copies and
documents. There is no factual, nonconclusory allegation that these documents conferred any
pecuniary benefit on either of them nor is it easy to imagine how they might have pecuniary
worth to either Winslow or Vaughn, even if the documents have considerable intrinsic value to
the Learning Disabilities Association. The defendant speculates that discovery might unearth a
manner and means by which one or both of the original plaintiffs were unjustly enriched by these
documents. In my view that speculation is too slender a reed to support a viable complaint under
the Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-57 (2007), pleading standard.
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements do not suffice.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). If indeed an as yet
unimagined basis for a claim of unjust enrichment arises during discovery, the defendant could
renew a motion to amend with some factual predicate attached and a reasoned determination
about whether a claim is stated could then be made.
Proposed Count IV has been withdrawn.
5
The entry will be: Motion to Amend Answer/Counterclaim is granted in part. An
amended answer/counterclaim, consisting of a revised count I only and a modified request for
injunctive relief, conforming to this order shall be filed forthwith by the defendant.
Motion for a Preliminary Injunction
I am not issuing any recommendation in regard to the preliminary injunction motion at
this time because I am satisfied that the entry of the consent confidentiality order insures that
neither party is about to suffer irreparable injury as a result of this contretemps over the
documents. I am further satisfied that without additional discovery and clarification of the
issues, the defendant/proposed counterclaim plaintiff is unable to establish a likelihood of
success on the merits against Winslow on the one substantive count which I have allowed to
proceed on the counterclaim. This claim, based on the information currently available, would
not support the issuance of an injunction requiring the “return” of all copies of all documents,
some of which might legitimately be in either Winslow or Vaughn’s possession for the purposes
of this litigation. Therefore the entry will be that the motion for a preliminary injunction is
terminated, subject to the defendant/proposed counterclaim plaintiff’s right to proceed with a
counterclaim that requests permanent injunctive relief commensurate with the claim and the right
to refile a new motion for a preliminary injunction after further discovery, if it is able to show
that such preliminary relief is necessary even in light of the consent confidentiality order.
Hopefully the destruction or return of those specific irrelevant and/or privileged documents
which have been identified by the defendant will be accomplished in short order pursuant to the
discovery orders I have already entered. In the event the defendant/proposed counterclaim
plaintiff believes an earlier hearing on a motion for preliminary injunction is needed after it has
completed preliminary discovery, it may refile such a motion, narrowly targeted to the claims
6
raised in its amended answer/counterclaim and accordingly directed at the appropriate
defendant(s). I note however that much of the injunctive relief requested in the prayer for relief
attached to the counterclaim has either been addressed in my previous discovery orders or can be
addressed in the context of specific discovery disputes concerning the documents.
The entry will be: Motion for Preliminary Injunction terminated without prejudice to
defendant’s right to refile that motion if the factual predicates necessitating injunctive relief arise
prior to the final resolution of the case.
CERTIFICATE
Any objections to this Order shall be filed in accordance with Federal Rule of Civil
Procedure 72.
So Ordered.
June 20, 2013
/s/ Margaret J. Kravchuk
U.S. Magistrate Judge
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?