Henderson v. Rite Aid Corporation of New York Inc., et al

Filing 56

ORDER denying 47 Motion for Joinder. Signed by Hon. H. Kenneth Schroeder Jr. on 6/18/2018. (KER)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

SUSAN HENDERSON,
Plaintiff,
v.
16-CV-785V(Sr)
RITE AID OF NEW YORK, INC.,
RITE AID CORPORATION,
TIM MATTHEWS, and
DAVID SEELMAN,
Defendants.

DECISION AND ORDER
This case was referred to the undersigned by the Hon. Lawrence J.
Vilardo, pursuant to 28 U.S.C. § 636(b)(1), for all pretrial matters. Dkt. #13.

Plaintiff commenced this action seeking damages for a violation of the
Age Discrimination in Employment Act of 1967, as codified, 29 U.S.C. § 621 et seq.
(”ADEA”), and New York Executive Law § 290 et seq. (“Human Rights Law”), alleging
that she was wrongfully terminated from her employment with defendant Rite Aid of
New York, Inc. Dkt. #1. Rite Aid Corporation is named in the complaint as the “parent
corporation” of Rite Aid of New York, Inc. Dkt. #1.

Currently before the Court is plaintiff’s motion to amend the complaint to
add Rite Aid Hdqrts. Corp. as a defendant in this action. Dkt. #47.

FACTUAL BACKGROUND
On January 25, 2017, plaintiff served Notices of Deposition on Rite Aid
Corporation and Rite Aid of New York, Inc., seeking to depose a representative “with
respect to all matters relevant to the subject matter involved in this action.” Dkt. #26-2,
pp.26 & 29.

By letter dated February 28, 2017, defense counsel advised plaintiff’s
attorney that Rite Aid Corporation had no employees. Dkt. #26-2, p.42.

The Case Management Order set March 3, 2017 as the deadline for
amending the complaint or adding parties. Dkt. #16.

By letter dated March 17, 2017, defense counsel reiterated that Rite Aid
Corporation had no employees. Dkt. #26-2, p.46.

By letter dated April 6, 2017, defense counsel reiterated that
as previously informed, there are no employees of Rite Aid
Corporation (“RAC”), thus there is no one to produce for a
deposition. Moreover, RAC has no involvement with respect
to your client’s employment. I am attaching a copy of an
Affidavit filed in another matter addressing the same issue.
Dkt. #26-2, p.51. The affidavit, from Susan Lowell, Vice President of the Tax
Department of Rite Aid Hdqrts. Corp., affirms that Rite Aid Corporation “is a holding
company organized in the State of Delaware,” which “has no employees in any state.”
Dkt. #26-2, p.53. Defense counsel also advised that the deposition notice of Rite Aid
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New York, Inc.
fails to comply with the Federal Rules in that it does not
specify the following: Rule 30(b)(6) requires that any notice
directed to an organization “must describe with reasonable
particularity the matters for examination.” We are unable to
designate any person to testify on their behalf without this
information. However, as mentioned above, if you would like
the HR representative who recommended termination, Amy
Clark, she is available on May 31st for deposition. If you
would like us to produce Amy Clark to testify about the
termination and human resources policies, please revise
your Notice of [D]eposition accordingly, or confirm in writing
the scope of the deposition. If there are other areas for
which you would like a witness produced, please let us
know.
Dkt. #26-2, p.51.

By letter dated May 11, 2017, defense counsel advised that Ms. Clark
would be made available for deposition subject to correction of plaintiff’s 30(b)(6)
deposition notice of Rite Aid of New York, Inc. Dkt. #26-2, p.58.

By letter dated June 1, 2017, defense counsel reiterated Ms. Clark’s
availability subject to correction of plaintiff’s deposition notice, advising, “[w]e are willing
to produce Ms. Clark as the HR representative; however, you still need to confirm that
she is sufficient as the representative, as well as the subject of her testimony.” Dkt.
#26-2, p.60.

On June 5, 2017, Rite Aid Corporation filed a motion to quash the
deposition notice because “it has no unique personal knowledge that is relevant to
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Plaintiff’s individual claims of discrimination” and plaintiff offered “no specific allegations
in the Complaint against RAC and she fails to describe even the topics for deposition.”
Dkt. #26-4, pp.6-7. In support of the motion, Susan Lowell, Vice President of the Tax
Department of Rite Aid Hdqrts. Corp. affirmed that:
4. Rite Aid Corporation (“RAC”) is incorporated in
Delaware, and maintains its principal place of
business in Harrisburg, Pennsylvania. Rite Aid
Corporation is a holding company for various Rite
Aid-related entities. It has no employees nor does it
promulgate employment policies.
5. Plaintiff was employed by Defendant Rite Aid of New
York, Inc. at all times throughout the course of her
employment.
6. RAC has no employees in any state and is not related
to Plaintiff’s employment in any way. Rite Aid
Corporation does not issue personnel policies nor
does it exercise any domination or control of Rite Aid
of New York, Inc. Further, because RAC has no
employees, it could not exercise any supervisory
responsibility over Plaintiff’s work or any influence
over her terms or conditions of employment.
Dkt. #26-3.

By Decision and Order entered July 10, 2017, the Court quashed the
deposition notices “without prejudice to service of a sufficiently particularized notice of
deposition upon Rite Aid Corporation of New York, Inc.” Dkt. #32, p.6.

By letter dated September 25, 2017, defense counsel advised that Ms.
Clark was available for deposition on October 3rd, provided that plaintiff provided the
revised Rule 30(b)(6) deposition notice. Dkt. #40-2, p.10.
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By letter dated October 4, 2017, defense counsel advised that the
deposition of Amy Clark would not be rescheduled because plaintiff’s counsel declined
to go forward with her deposition on October 3, 2017, despite their agreement and Ms.
Clark’s availability. Dkt. #40-2, pp.17-18. More specifically, defense counsel advised:
Our position is that we had Amy Clark available for her
deposition on Tuesday, October 3rd after our prior
conversations with your office. Additionally, you had
informed us that you would revise your 30(b)(6) notices as
far back as September 15th and we made such
representation to the Court. To date, we have no revised
deposition notice. As we have discussed multiple times, Ms.
Clark is the HR Manager that recommended termination. To
be clear on the issue, we will be serving a revised
interrogatory response on that issue. Despite informing you
that she recommended termination, you advised us that you
did not want to go forward with her scheduled deposition. I
informed you that if you still had questions regarding
corporate structure, you could always issue a supplemental
interrogatory request for us to respond to since, as we
informed the Court, Rite Aid Corporation has no employees.
Dkt. #40-2, pp.17-18.

By letter dated October 17, 2017, defense counsel provided plaintiff with
an amended interrogatory response, noting:
As we have discussed on numerous occasions, Ms. Clark
was the party that recommended termination of Ms.
Henderson. She is employed by Rite Aid Hdqrts. Corp.
As we have discussed many times, Rite Aid Corporation has
no employees and had no involvement with respect to your
client.
Dkt. #40-2, p.30. The amended interrogatory response, verified by Amy Clark, Human
Resources District Manager at Rite Aid Hdqrts Corp., provides that
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Amy Clark made the decision to terminate Ms. Henderson
for a legitimate business reason, namely a violation of the
company’s fraud policy, after a full investigation was
completed. The investigation into the conduct commenced
as a result of an anonymous complaint. As part of routine
company policy, after termination was recommended, that
recommendation was reviewed and approved by Matthew
Cesare, the Senior Associate Advocacy Manager (“SAAM”).
Plaintiff herself drafted and executed a statement wherein
she admitted that she violated policy by instructing an
employee to complete a Computer Based Program on her
behalf. . . .
Amy Clark is, and Matthew Cesare, [sic] was employed by
Rite Aid Hdqrts Corp.
Dkt. #42-4, pp.3 & 5.

The Amended Case Management Order set October 26, 2017 as the
deadline for completing fact depositions. Dkt. #33.

By Order entered January 23, 2018, the Court denied plaintiff’s motion for
reconsideration of the determination to quash plaintiff’s Notice of Deposition of Rite Aid
of New York, Inc. and grant Rite Aid Corporation a protective order, stating:
To the extent that plaintiff disbelieves defendants’
affirmation that Rite Aid Corporation has no employees to
submit to deposition, the Court afforded plaintiff the ability to
serve a sufficiently particularized deposition notice upon Rite
Aid Corporation of New York, Inc. to depose someone with
knowledge of the corporate structure of the Rite Aid entities.
Dkt. #32, p.6. Moreover, defendants repeatedly offered the
deposition testimony of Amy Clark, Human Resources
District Manager at Rite Aid Hdqrts. Corp., who
recommended plaintiff’s termination. Dkt. #26-2, pp. 51, 58
& 60.
Dkt. #45, p.3.
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Plaintiff moved to amend the complaint to add Rite Aid Hdqrts. Corp. as a
defendant in this action on March 29, 2018. Dkt. #47. Plaintiff’s proposed amended
complaint adds Rite Aid Hdqrts. Corp., as a defendant and identifies Rite Aid Hdqrts.
Corp. as a Delaware Corporation with a principal place of business in Pennsylvania.
Dkt. #47-12, ¶ 6. Aside from these two references, the proposed amended complaint
makes no specific factual assertions regarding Rite Aid Hdqrts. Corp.

DISCUSSION AND ANALYSIS
Timing
Defendants argue that the deadline to amend the complaint expired on
March 3, 2017 and plaintiff has not demonstrated good cause to permit this late
amendment. Dkt. #51, pp.14-15. Defendants note that plaintiff was provided with the
affidavit of Susan Lowell in April of 2017. Dkt. #51, p.16.

Fed.R.Civ.P 16(b) requires that the district court enter a scheduling order
setting deadlines for, inter alia, amendment of pleadings and completion of discovery.
The scheduling order cannot not be modified except by leave of the district court upon a
showing of good cause. Fed.R.Civ.P 16(b). “[T]he rule is designed to offer a measure
of certainty in pretrial proceedings, ensuring that at some point both the parties and the
pleadings will be fixed.” Parker v. Columbia Pictures Indus, 204 F.3d 326, 339-340 (2d
Cir. 2000) (internal citation omitted). Accordingly, “a person seeking to amend a
pleading after the date specified in a scheduling order must first show ‘good cause’ for
the amendment under Rule 16(b).” Tschantz v. McCann, 160 F.R.D. 568, 571 (N.D.
Ind. 1995).
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“‘Good cause’ means that scheduling deadlines cannot be met despite a
party’s diligence.” Carnrite v. Granada Hosp. Group, Inc., 175 F.R.D. 439, 446
(W.D.N.Y. 1997); see Parker, 204 F.3d at 340 (“finding of ‘good cause’ depends on the
diligence of the moving party.”); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,
609 (9th Cir. 1992) (“Rule 16(b)’s ‘good cause’ standard primarily considers the diligence
of the party seeking the amendment.”). Good cause can be established when a party
does not discover a basis to amend the pleadings or add parties until the scheduling
order’s deadline to do so has passed. See Deghand v. Wal-Mart Stores, 904 F.Supp
1218 (D. Kansas 1995) (good cause established where defendant did not supplement
its disclosure under Rule 26 to reveal letter suggesting defamation of plaintiff until the
deadline for moving to amend the pleadings or add parties had passed).

Disclosure of the fact that the employee who recommended plaintiff’s
termination was employed by Rite Aid Hdqrts. Corp. after the deadline for amending the
complaint would excuse compliance with that deadline. However, plaintiff has not
provided any explanation, let alone demonstrated good cause for waiting more than five
months from discovery of this information to file the motion to amend the complaint.

Standard for Amendment
Fed. R. Civ. P. 21 provides that “the court may at any time, on just terms,
add . . . a party.” Fed. R. Civ. P. 15(a) provides that a party may amend a pleading with
the opposing party’s written consent or the court’s leave, which is to be given freely
when justice so requires. Leave to amend should be granted unless the party seeking
leave has acted in bad faith, there has been an undue delay in seeking leave, there will
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be unfair prejudice to the opposing party if leave is granted, or the proposed
amendment would be futile. Foman v. Davis, 371 U.S. 178, 182 (1962); State
Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981); Fed. R. Civ.
P.15(a). An amendment is futile if it cannot survive a motion to dismiss for failure to
state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Parker v.
Columbia Pictures Indus., 204 F.3d 326, 339 (2d Cir. 2000).

To survive a motion to dismiss pursuant Rule 12(b)(6) of the Federal
Rules of Civil Procedure, “a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009), quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007). “A
claim has facial plausibility when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. Application of this standard is “a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Id. at 679.

“The single employer doctrine is an exception to the doctrine of limited
liability, which allows corporations to organize so as to isolate liabilities among separate
entities.” Murray v. Miner, 74 F.3d 402, 405 (2d Cir. 1996). “Under the single employer
doctrine, four factors determine whether two entities will be regarded as a single
employer subject to joint liability for employment-related acts . . . (1) interrelated
operations; (2) common management; (3) centralized control of labor relations; and (4)
common ownership.” Id.; See also Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235,
1240-41 (2d Cir. 1995) No one factor is determinative and all four factors are not
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required, but control of labor relations is the central concern. Id. “The rationale for the
exception is the fairness of imposing responsibility on an entity that shares
decisionmaking authority with the employing entity.” Id.

Defendants argue that the proposed amended complaint fails to state any
factual allegations against Rite Aid Hdqrts. Corp. Dkt. #51, p.16.

Despite the information provided by defendants during discovery,
plaintiff’s proposed amended complaint does not make any factual allegation of
involvement by Rite Aid Hdqrts. Corp. in the affairs of Rite Aid of New York, Inc.
generally or the decision to terminate plaintiff specifically. Dkt. #47-12. As a result, the
Court finds plaintiff’s proposed amended complaint fails to plausibly allege sufficient
facts to state a claim for relief against Rite Aid Hdqrts. Corp. The Court notes that
despite her employment by Rite Aid Hdqrts. Corp., Ms. Clark was proffered as a
30(b)(6) representative of plaintiff’s employer, defendant Rite Aid of New York, Inc.

Plaintiff’s motion to amend the complaint (Dkt. #47), is denied.

SO ORDERED.

DATED:

Buffalo, New York
June 18, 2018

s/ H. Kenneth Schroeder, Jr.
H. KENNETH SCHROEDER, JR.
United States Magistrate Judge

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