NEWMAN v. AMBRY GENETICS CORPORATION et al
Filing
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OPINION and ORDER denying 24 MOTION for Reconsideration and Leave to File Second Amended Complaint File filed by WAYNE NEWMAN. The Court denies Plaintiff's motion for reconsideration and for leave to amend his complaint. (ECF No. 24.) Accordingly, this case remains stayed pending completion of arbitration. IT IS SO ORDERED. Signed by Honorable Bruce Howe Hendricks on 10/23/2024.(rhei, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Wayne Newman,
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Plaintiff, )
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v.
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)
Ambry Genetics Corporation, Joe
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Bedell, and Jack Shandley,
)
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Defendants. )
________________________________ )
Civil Action No. 2:24-cv-00887-BHH
Opinion and Order
On September 1, 2023, Plaintiff Wayne Newman (“Plaintiff”) filed a complaint in
state court against his former employer, Ambry Genetics Corporation (“Ambry”), Ambry’s
parent company, Konica Minolta Healthcare Americans Inc. (“Konica”), Joe Bedell
(“Bedell”), and Jack Shandley (“Shandley”). On September 18, 2023, Plaintiff filed a first
amended complaint in state court dismissing Konica from the action. (ECF No. 25 at Ex.
B.) The parties then filed a consent motion to strike and file a correct amended complaint
due to clerical errors. (ECF No. 25 at 2.) The state court granted the consent motion, and
Plaintiff filed a corrected first amended complaint on January 19, 2024. (ECF No. 1-1).
On February 21, 2024, Defendants Ambry, Bedell, and Shandley (collectively,
“Defendants”) removed the case to this Court. (ECF No. 1.) The first amended complaint
asserts six causes of action against Defendants: (1) retaliation in violation of Title VII of
the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5 et seq.; (2) defamation (implied malice);
(3) defamation (actual malice, common law malice); (4) negligent supervision; (5) tortious
interference with contract; and (6) civil conspiracy. (ECF No. 1-1 at 15-21.)
On February 28, 2024, Defendants moved to compel arbitration. (ECF No. 7.) The
parties submitted briefs in support of and against arbitration, and the Magistrate Judge
also granted Plaintiff’s motion for leave to file a sur-reply in opposition to Defendants’
motion to compel. (ECF No. 7-12.) On April 26, 2024, Magistrate Judge Mary Gordon
Baker filed her Report and Recommendation (“Report”), recommending that this Court
grant Defendants’ motion to compel arbitration and dismiss the action without prejudice.
(ECF No. 13.)
Plaintiff filed timely objections to the Report, (ECF No. 14), Defendants filed a reply
to Plaintiff’s objections, (ECF No. 15), and Plaintiff filed a response in support of his
objections. (ECF No. 17.) This Court thoroughly examined the entire record before it and,
on August 14, 2024, it issued an Opinion and Order granting Defendants’ motion to
compel and staying the case. (ECF No. 21.)
Plaintiff now moves for reconsideration pursuant to Rule 54(b), Fed. R. Civ. P. (ECF
No. 24.) Plaintiff asserts one ground in support of reconsideration – that “[r]econsideration
is warranted in light of the Second Circuit’s recent holding in Olivieri v. Stifel, Nicolaus &
Co., Inc., 112 F.4th 74, 78 (2d Cir. 2024). Plaintiff also seeks leave to amend his first
amended complaint, to add new allegations that Plaintiff, himself, reported alleged sexual
harassment of others by Bedell to managers and area directors, among other allegations.
(Id.) Defendants filed a response in opposition, (ECF No. 25), and Plaintiff filed a reply.
(ECF No. 26.) This matter is now ripe.
Motion for Reconsideration
A motion for reconsideration of an interlocutory order under Rule 54(b) is “not
subject to the strict standards applicable to motions for reconsideration of a final
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judgment,” because “a district court retains the power to reconsider and modify its
interlocutory judgments . . . at any time prior to final judgment when such is warranted.”
Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th Cir. 2003). “Although
Rule 54(b) does not specify grounds for seeking reconsideration, the Fourth Circuit has
recognized three grounds for amending an earlier judgment: (1) to accommodate an
intervening change in controlling law; (2) to account for new evidence not available at
trial; or (3) to correct a clear error of law or prevent manifest injustice.” Howard v. W.
Virginia Div. of Corr., No. 2:13-CV-11006, 2016 WL 1173152, at *5 (S.D.W. Va. Mar. 22,
2016) (Johnston, J.). Motions for reconsideration generally “may not be used to relitigate
old matters, or to raise arguments or present evidence that could have been raised prior
to the entry of judgment.” 11 Wright, et al., Federal Practice & Procedure § 2810.1 (3d.
ed.) (discussing Rule 59(e)); Ruffin v. Entm’t of the E. Panhandle, No. 3:11-CV-19, 2012
WL 1435674, at *5 (N.D.W. Va. Apr. 25, 2012) (applying rule to Rule 54(b) motions);
Carrero v. Farrelly, 310 F. Supp. 3d 581, 584 (D. Md. 2018) (same).
As noted, Plaintiff’s sole argument in support of reconsideration is that
reconsideration is warranted in light of the Second Circuit’s recent holding in holding in
Olivieri v. Stifel, Nicolaus & Co., Inc., 112 F.4th 74, 78 (2d Cir. 2024). (ECF No. 24 at 1,
7-11.) As an initial matter, the Court notes that Olivieri is not binding on this Court. But,
even if it were, after review, the Court finds that Olivieri is similar to cases that both the
Magistrate Judge and the undersigned have already assessed and distinguished from the
instant matter. (See, e.g., ECF No. 13 at 10, ECF No. 21 at 4-6.)
Similar to previously addressed cases and unlike the instant matter, the plaintiff in
Olivieri alleged that she was sexually assaulted and harassed and that her employer
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retaliated against her after she complained about being subjected to a hostile work
environment. 112 F.4th at 77-82. The issue on appeal was one of accrual – whether
plaintiff’s retaliation-based hostile work environment claims accrued “on or after” the
effective date (March 3, 2022) of the Ending Forced Arbitration Act (“EFAA”). Id. at 85. In
finding that the EFAA applied to plaintiff’s retaliation-based hostile work environment
claims, the Second Circuit held that plaintiff’s hostile work environment claims were
subject to the continuing violation doctrine; that plaintiff had alleged defendants engaged
in acts after the EFAA’s effective date “that [were] part of the same course of conduct”
underlying her hostile work environment claims; and that Congress did not tie “the
effective date of the EFAA to when a claim first accrues.” Id. at 85-90 (emphasis in
original).
In support of reconsideration, Plaintiff asserts that the Second Circuit in Olivieri
explained “that a retaliation claim standing alone would be covered by the EFAA.” (ECF
No. 26 at 3 (emphasis in original). See also id. at 4 (arguing that “Olivieri clarifies that a
retaliation claim unaccompanied by a sexual harassment claim can be a sexual
harassment dispute under the EFAA”).) The Court disagrees. Rather, the Second Circuit
held that if plaintiff has alleged, after the EFAA was in effect, that defendants engaged in
acts “that are part of the same course of conduct underlying her hostile work environment
claims,” then her “retaliation-based hostile work environment claims” have accrued after
the EFAA’s effective date. 112 F.4th at 91-92. And, in rejecting defendants’ argument that
plaintiff’s retaliation claims fall outside the EFAA’ s definition of “sexual harassment
dispute,” the Second Circuit noted that it has recognized retaliation for reporting
discrimination or harassment to be related to conduct that is alleged to constitute the
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underlying discrimination or sexual harassment. Id. at 92. Thus, the Second Circuit was
not evaluating a retaliation claim unaccompanied by a sexual harassment claim, nor did
it hold – or come anywhere close to holding – that the EFAA applies in the absence of
facts supporting a plausible sexual harassment claim. Rather, in stark contrast to instant
case, there was no dispute that the plaintiff in Olivieri had pled a plausible sexual
harassment claim. As such, the Court declines to reconsider its prior Order and Opinion
based on an argument that has been previously briefed between the parties, fully
considered, and rejected by both judges assigned to this matter.
Accordingly, because the Court finds that Plaintiff has failed to identify “an
intervening change in controlling law” or establish any other grounds supporting
reconsideration, it denies Plaintiff’s motion for reconsideration.
Motion for Leave to Amend
Plaintiff moves for leave to amend his first amended complaint on the ground that
amending serves the interests of justice. (ECF No. 24 at 11-15. See also ECF No. 24-1
(proposed second amended complaint).) Plaintiff states that this is the first time he has
sought leave to amend to add additional factual allegations; that he should be afforded
the opportunity to amend to address the issues this Court raised in its Order and Opinion;
and that he should be allowed to amend even though he moved to amend after this Court
issued its Order and Opinion. (ECF No. 24 at 11-13.)
Under Federal Rule of Civil Procedure 15(a), a party may amend its pleading with
the court’s leave, which should be “freely give[n] ... when justice so requires.” Fed. R. Civ.
P. 15(a)(2).” That said, a court may deny leave to amend where there are grounds such
as “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to
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cure deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, futility of amendment, etc.” Foman v.
Davis, 371 U.S. 178, 182 (1962). “[A] district court may not deny . . . a motion [to amend]
simply because it has entered judgment against the plaintiff.” Laber v. Harvey, 438 F.3d
404, 427 (4th Cir. 2006) (en banc). “The court need only ask whether the amendment
should be granted, just as it would on a prejudgment motion to amend pursuant to [Rule]
15(a). In other words[,] a court should evaluate a postjudgment motion to amend the
complaint ‘under the same legal standard as a similar motion filed before judgment was
entered—for prejudice, bad faith, or futility.’” Katyle v. Penn Nat’l Gaming, Inc., 637 F.3d
462, 470–71 (4th Cir. 2011) (quoting Laber, 438 F.3d at 427). Here, Defendants contend
that Plaintiff’s motion to amend should be denied on the basis of undue delay, bad faith,
and futility. (ECF No. 25 at 7-14.)
Undue Delay
Plaintiff’s second amended complaint is undoubtedly delayed. “[A] motion to
amend should be made as soon as the necessity for altering the pleading becomes
apparent.” Deasy v. Hill, 833 F.2d 38, 41 (4th Cir. 1987.) Courts have found undue delay
when “a party has filed a motion for leave to amend long after it should have become
aware of the information that underlies the motion.” IXYS Corp. v. Advanced Power Tech.,
Inc., No. 02-3942, 2004 WL 135861, at *4 (N.D. Cal. Jan. 22, 2004) (citing Jackson v.
Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990)). What constitutes “long after” lies in
the discretion of the Court and depends, in part, on the moving party’s ability to provide a
reasonable explanation for the delay.
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Plaintiff contends that he promptly filed his motion for leave to amend following this
Court’s articulation of its reasoning for compelling arbitration. (ECF No. 24 at 11-12.) He
contends that the proposed second amended complaint cures the issues the Court raised
in support of compelling arbitration – namely, that Plaintiff did not sufficiently assert a
sexual harassment claim nor allege that he complained about Bedell’s conduct toward
other women. (Id. at 12-13.) However, Plaintiff provides no satisfactory explanation as to
why he did not plead this new factual information at an earlier stage. This is not a case
where the original complaint was a bare-bones complaint; indeed, the original complaint
and first amended complaint contained over seventy paragraphs of factual allegations in
support of Plaintiff’s claims. Moreover, the factual allegations Plaintiff now seeks to add
are not newly discovered but have been known to Plaintiff since the filing of his initial
complaint over one year ago.
Furthermore, even assuming arguendo that Plaintiff’s explanation for the delay is
that he did not believe he was required to allege that he personally complained about
Defendant Bedell’s conduct to be covered by the EFAA, the Court finds that, even under
the most generous interpretation of the record, Plaintiff should have filed his motion to
amend shortly after April 26, 2024, when the Magistrate Judge issued her Report. (See
ECF No. 13 at 10 (finding that “[t]he conclusion that the EFAA does not encompass claims
brought by a plaintiff who did not personally experience or report sexual assault or
harassment is further supported by the stated purpose of the statute”; concluding that
“[w]here, as here, a plaintiff brings claims that are based on a witness statement he
provided—rather than a grievance he personally filed or sexual assault or harassment he
personally experienced—that plaintiff is not a “sexual harassment claimant” and the
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EFAA’s purpose is not served by allowing his case to be excused from arbitration and
litigated in court”).) Yet, rather than moving to amend at that point, Plaintiff filed detailed
objections and a detailed response in support of his objections, both further emphasizing
his legal theory that witnesses of sexual harassment who corroborate and support a
sexual harassment claim filed by someone else should be afforded protection under the
EFAA. (See ECF No. 14 at 11-12; No. 17 at 9-12.)
At no point during the more than three months between the filing of the Report and
this Court’s Order and Opinion did Plaintiff move for leave to amend. Instead, Plaintiff
allowed the Court to undertake the work of reaching a decision on Defendants’ motion to
compel. Plaintiff has not provided a reason for this three-month delay. See Naden v. Saga
Software, Inc., 11 F. App’x 381, 383 (4th Cir. 2001) (“[U]ndue delay can be inferred from
the absence of explanation for the delay.” (citing Nat’l Bank of Wash. v. Pearson, 863 F.2d
322, 328 (4th Cir. 1988))); Daulatzai v. Maryland, 606 F. Supp. 3d 252, 261 (D. Md. 2022)
(finding a motion to amend filed three months after the necessity for altering became
apparent was unduly delayed), aff’d, 97 F.4th 166 (4th Cir. 2024); Umanzor-Lazo v. U.S.
I.N.S., 178 F.3d 1286, 1999 WL 274075, at *3 (Table) (4th Cir. 1999) (finding that motion
to amend filed two months after “the event triggering the motion to amend, [was] unduly
delayed”). In sum, the Court finds that Plaintiff was put on notice of the deficiencies in the
first amended complaint by, at least, the filing of the Report. If he had something relevant
to add, he should have moved to add it then. This unexplained delay can only be
described as undue.
Of course, “delay alone is an insufficient reason to deny [a] plaintiff’s motion to
amend.” Laber, 438 F.3d at 427. Rather, delay has generally been considered a factor in
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determining whether a proposed amendment would be prejudicial or is sought in bad faith.
Id. at 427 (“Whether an amendment is prejudicial will often be determined by the nature
of the amendment and its timing.”); Wright & Miller § 1487 (“When the court inquires into
the good faith of the moving party, it typically will take account of the movant’s delay in
seeking the amendment.”). Thus, the conclusion that Plaintiff’s motion is unduly delayed
informs, but is not dispositive of, the Court’s analysis of the grounds for denying leave to
amend.
Bad Faith
Defendants contend that Plaintiff seeks to amend his complaint in bad faith. (ECF
No. 25 at 7-12.) Bad faith generally involves changing legal theories and the belated
presentation of facts which the pleader was already aware of in an effort to delay ultimate
resolution. See Streambend Props. II, LLC v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003,
1015 (8th Cir. 2015); Wright & Miller § 1488 (“By failing to introduce the matter contained
in the proposed amendment at as early a stage in the litigation as possible, the pleader
has demonstrated bad faith in not apprising the opponent of its true position in the
action.”). Bad faith is established “when it appears that the plaintiff is using Rule 15 to
make the complaint a moving target, to salvage a lost case by untimely suggestion of new
theories of recovery, [and] to present theories seriatim in an effort to avoid dismissal[.]”
Minter v. Prime Equip., 451 F.3d 1196, 1206 (10th Cir. 2006) (internal citations and
quotation marks omitted).
After the Court ordered the parties to arbitrate and stayed the case, Plaintiff filed a
motion to amend. Upon review, it is evident that the new factual allegations in Plaintiff’s
proposed second amended complaint change his legal theory. For the first time, Plaintiff
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alleges that he complained to managers about Bedell allegedly sexually harassing female
employees. (See, e.g., ECF No. 24-1 at ¶ 60, 77.) This allegation is at odds with the prior
record in this case. Indeed, the first amended complaint alleges that Plaintiff was a
corroborating witness in a sexual harassment investigation arising out of a female
employee’s complaint to human resources that she was sexually harassed by Bedell.
(ECF No. 1-1.) Based on this allegation, Defendants raised doubts as to the applicability
of the EFAA to Plaintiff’s retaliation claim in its reply briefing in support of its motion to
compel. Certainly, if this new factual allegation – of which Plaintiff was certainly aware at
the outset of the case – was simply a good-faith effort to clarify his claims, Plaintiff would
have sought leave to amend shortly after Defendant filed its reply brief in support of
compelling arbitration. Yet, Plaintiff sought leave to file a sur-reply, wherein he argued that
the EFAA extends to witnesses in sexual harassment disputes. At a minimum, as
discussed above, Plaintiff should have sought leave to amend shortly after the Magistrate
Judge filed her Report, rejecting Plaintiff’s claim that he is protected under the EFAA
based on being a corroborating witness and explicitly noting that Plaintiff did not
personally report sexual harassment. Plaintiff alternatively continued to press his luck by
filing detailed objections and a response in support of his objections, wherein he
continued to advance his theory that he should be afforded protection under the EFAA
because he was retaliated against for providing a witness statement corroborating
another’s person’s report of a single incident of alleged sexual harassment.
In Logar v. W. Va. Univ. Bd. Of Governors, plaintiffs moved to amend their
complaint after entry of judgment against them. No. 1:10cv201, 2012 WL 243692, at *1
(N.D. W. Va. Jan. 25, 2012), aff'd, 493 F. App'x 460 (4th Cir. 2012). The court noted that,
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although the Fourth Circuit rule treating delay alone as an insufficient reason to deny
leave to amend applies even in post-judgment situations, “the post-judgment climate is a
major factor in the consideration of the other factors relevant to the inquiry, most
especially those of bad faith and prejudice to the opposing party. Id. at *4 (citing Laber,
438 F.3d at 427, and Adams v. Gould, 739 F.2d 858, 864 (3d Cir.1984)). The court further
pointed out that
unexcused delay in filing a motion for leave to amend [is] a sufficient basis
for post-judgment denial of such a motion because, “much of the value of
summary judgment procedure . . . would be dissipated” if a movant were
allowed to rely on one theory until the district court finds that theory
“unsound,” then to return with another theory after unfavorable judgment is
entered.
Id. at *5 (emphasis added) (quoting Vielma v. Eureka Co., 218 F.3d 458, 469 (5th Cir.
2000)). The court cited “undue, unexcused delay, as well as prejudice to the opposing
parties” in finding that the interests of justice “weigh[ ] in favor of the finality of the
judgment” and denial of leave to amend. Id. at *10. Notably, like the instant case, plaintiff’s
case had not progressed into discovery, nor had a period of many years elapsed between
the filing of the complaint and plaintiffs’ request to amend. Id. at *8. After noting that
arbitrary restrictions cannot be placed upon when a motion to amend can be deemed
untimely, the court emphasized that plaintiffs were aware of the claims they sought to add
two months before the court entered judgment and three months prior to the time they
filed their motion to amend. Id. Further, the court noted that “for months beforehand,
[plaintiffs] were also aware of the possibility that this Court would find that their original
complaint” is subject to dismissal, yet “they chose to stand behind their original complaint,
and only when that complaint was dismissed, did they elect to move to amend.” Id.
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Taking the facts in Logar one step further, here, Plaintiff is attempting to change
the legal theory on which his retaliation claim is based by asserting new factual allegations
that were known to him when he filed his initial complaint in September 2023, in an
attempt to escape arbitration. Thus, unlike the plaintiff in Laber v. Harvey, who sought and
was granted leave to amend after his complaint failed because the Fourth Circuit, en
banc, chose to overturn a line of previously binding precedent upon which he had based
his complaint, here, we do have a “run-of-the-mill case where the plaintiff’s first theory of
recovery is based on his own reading of [] cases and it turns out that he misinterpreted
how that theory would apply to the fact of his case.” 438 F.3d at 428 (emphasis in original).
Further, in contrast to the plaintiff in Laber, Plaintiff did not timely seek leave to amend,
as discussed above. See Hensley v. City of Charlotte, No. 320CV00482KDBDSC, 2021
WL 4929491, at *5 (W.D.N.C. Oct. 21, 2021) (denying motion to amend based on
unexcused delay/bad faith, among other grounds, and noting that “unlike the pro se
plaintiff in Laber, this case appears to be wholly driven by experienced counsel who
plainly made a strategic choice to try to prevail on Plaintiff’s original claims before
changing course after the Court’s ruling. Such conduct is the antithesis of the ‘interests
of justice’ that underlie the ability of a party to amend a pleading”).
Rule 15(a) is designed to allow parties the opportunity to amend pleadings “to
assert matters which were overlooked or were unknown at the time the party interposed
the original complaint.” Wright, et al. § 1472. “Bad faith will result when a party has
delayed in seeking an amendment after the basis for the amendment becomes known.”
Flame S.A. v. Indus. Carriers, Inc., No. 2:13-CV-658, 2014 WL 4202470, at *2 (E.D. Va.
Aug. 22, 2014). See also Pine Mountain Oil & Gas, Inc. v. Equitable Prod. Co., 446 F.
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Supp. 2d 643, 650 (W.D. Va. 2006) (noting that plaintiff’s new theory was available to it
from the outset of the case and finding plaintiff’s motion to amend “impermissibly
accompanied by bad faith” because it “could have asserted the proposed amendments
earlier in the case, rendering a more efficient expenditure of judicial resources”).
Accordingly, after close review, given the facts and posture 1 of this case, the Court finds
that because of undue, unexcused delay, as well as bad faith, Plaintiff’s motion for leave
to file a proposed second amended complaint should be, and is denied. 2
For the foregoing reasons, the Court denies Plaintiff’s motion for reconsideration
and for leave to amend his complaint. (ECF No. 24.) Accordingly, this case remains stayed
pending completion of arbitration.
IT IS SO ORDERED.
/s/ Bruce Howe Hendricks
United States District Judge
October 23, 2024
Charleston, South Carolina
To be clear, Plaintiff’s motion was not filed post-judgment. However, as examined in this Order, the
procedural posture of this case is akin to a post-judgment climate.
2 Because this is a dispositive ground for denying leave to amend, the Court does not address Defendants’
alternative argument that futility should preclude amendment.
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