Mathiason v. Shutterfly, Inc.

Filing 42

ORDER DECLINING TO ADOPT REPORT AND RECOMMENDATIONS for 40 Report and Recommendation (Written Opinion) Signed by Judge David S. Doty on 2/17/2023.(JRC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
CIVIL NO. 22-1203(DSD/DJF)
Rita Mathiason,
Plaintiff,
ORDER

v.
Shutterfly, Inc.,
Defendant.

This matter is before the court on the objection by plaintiff
Rita Mathiason to the January 30, 2023, order of Magistrate Judge
Dulce J. Foster denying Mathiason’s motion for leave to amend her
complaint to include a claim for punitive damages. 1
Mathiason

alleges

that

Shutterfly

violated

the

Minnesota

Human Right Act (MHRA), the Fair Labor Standards Act (FLSA), and
the

Minnesota

Whistleblower

Act

(MWA),

by

terminating

her

employment after she complained that Shutterfly misclassified her
as an independent contractor.

See Am. Compl., ECF No. 11.

On

December 16, 2022, Mathiason moved to amend her complaint to
include a claim for punitive damages relating to her MWA claim.
ECF No. 30.

After full briefing and oral argument, the magistrate

judge concluded that the motion to amend should be denied because
The order is styled as a report and recommendation, but
will be construed as an order as the issue presented is nondispositive.
1

Mathiason

failed

to

adequately

plead

that

her

complaints

to

Shutterfly constituted statutorily protected conduct, as required
by

the

MWA.

ECF

No.

40,

at

8-9.

Mathiason

appeals

the

magistrate’s judge’s determination, arguing that she erred in
failing to address whether Mathiason’s proposed amended complaint
adequately states a claim for punitive damages.
Where a motion to amend is opposed on the basis of futility,
the court will review the magistrate judge’s determination de novo.
D. Minn. L.R. 72.2(a)(3)(B).

Based on its do novo review of the

record and applicable caselaw, the court determines that the
magistrate judge erred in failing to assess whether Mathiason’s
proposed amended complaint and related documents adequately plead
a claim for punitive damages.
Under Minnesota law, punitive damages may be recovered only
on clear and convincing evidence that the acts of the defendant
show

deliberate

others.

Minn.

disregard
Stat.

§

for

549.20,

the

rights

subdiv.

1(a).

or

safety

“Deliberate

disregard” may be found when a defendant:
(b)...has knowledge of facts or intentionally
disregards facts that create a high probability of
injury to the rights or safety of others; and
(1) deliberately proceeds to act in conscious or
intentional disregard of the high degree of
probability of injury to the rights or safety of
others; or
2

of

(2)
deliberately
proceeds
to
act
with
indifference to the high probability of injury to
the rights or safety of others.
Id. § 549.20, subdiv. 1(b).
In the context of a motion to amend, futility may serve as a
basis for denial where “claims created by the amendment would not
withstand a Motion to Dismiss for failure to state a claim upon
which relief can be granted.”

DeRoche v. All Am. Bottling Corp.,

38 F. Supp. 2d 1102, 1106 (D. Minn. 1998).

Here, then, the “first

question” is whether Mathiason has pleaded sufficient facts to
support her theory that Shutterfly acted with deliberate disregard
for her rights.

Ramirez v. AMPS Staffing, Inc., No. 17-5107, 2018

WL 1990031, at 7 (D. Minn. Apr. 27, 2018).

The magistrate judge

determined that Mathiason’s MWA claim may be untenable for failing
to identify statutorily protected activity under the MWA, 2 but she
did not address the threshold question of whether Mathiason’s
proposed amended complaint plausibly alleges a claim for punitive
damages.

See ECF No. 40, at 7-9.

For that reason, the court must

The magistrate judge determined that although Mathiason’s
complaint alleges that her complaints to Shutterfly “implicated
both federal state and federal income laws” including 29 U.S.C.
§ 215(a)(3) and Minn. Stat. § 177.23, neither of those statutes
applies given the facts alleged. ECF No. 40, at 8-9. The court
is unsure as to whether this determination, if reached on remand,
is sufficient to bar Mathiason’s punitive damages claim at this
stage of the proceedings.
2

3

respectfully sustain Mathiason’s objection and remand the matter
for renewed disposition by the magistrate judge.
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.

The objection [ECF No. 41] to the magistrate judge’s

order is sustained; and
2.

The matter is remanded.

Dated: February 17, 2023
s/David S. Doty
David S. Doty, Judge
United States District Court

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