Withrow v. Sedgwick Claims Management Services, Inc.
Filing
140
MEMORANDUM OPINION & ORDER granting plaintiff's 129 Motion to File Second Amended Complaint; directing the Clerk to docket the proposed amendment [129-1] as the "Second Amended Complaint"; directing defendant Sedgwick to respond to t he Second Amended Complaint within 14 days, as provided by Rule 15(a)(3) of the Federal Rules of Civil Procedure; denying defendant's 103 MOTION for Summary Judgment; further directing the parties to provide the court with any proposed changes to the 8 Scheduling Order by 8/16/2011. Signed by Judge Joseph R. Goodwin on 7/29/2011. (cc: attys; any unrepresented party) (tmh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
KIM WITHROW, et al.,
Plaintiff,
v.
CIVIL ACTION NO. 2:10-cv-00993
SEDGWICK CLAIMS MANAGEMENT SERVICE, INC.,
Defendant.
MEMORANDUM OPINION & ORDER
Pending before the court are the defendant’s Motion for Summary Judgment [Docket 103]
and the plaintiffs’ Motion for Leave to Amend Complaint [Docket 129]. For the following reasons,
the plaintiffs’ motion to amend is GRANTED and the defendant’s Motion for Summary Judgment
is DENIED as premature. The court hereby ORDERS the defendant to respond to the Second
Amended Complaint [Docket 129-1] within fourteen days.
I.
Background
Each of the plaintiffs in the above-styled case has worked for the defendant, Sedgwick
Claims Management Services, Inc. (“Sedgwick”). The plaintiffs assert that while employed by
Sedgwick they frequently worked more than forty (40) hours per week. Despite allegedly
performing duties that required overtime wages, the plaintiffs aver that they never received the
requisite overtime compensation.
On July 9, 2010, plaintiff Kim Withrow filed a complaint in the Circuit Court of Kanawha
County, West Virginia, alleging that Sedgwick violated the West Virginia Wage Payment and
Collection Act (“WPCA”), W Va. Code § 21-5-1 et seq., and the West Virginia Minimum Wage and
Maximum Hours Standards for Employees Act (“West Virginia Overtime Act”), W. Va. Code § 215C-1, et. seq. On August 6, 2010, Sedgwick removed the case to this court on the grounds of
diversity of citizenship, pursuant to 28 U.S.C. § 1332(a). In its notice of removal [Docket 1],
Sedgwick also asserted that this court has original federal question jurisdiction, pursuant to 28
U.S.C. § 1331. According to Sedgwick, more than 80 percent of its employees are subject to the
Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et. seq., and, therefore, FLSA applies to the
plaintiffs’ claims rather than the West Virginia Overtime Act. Thereafter, on October 28, 2010, the
original plaintiff, Kim Withrow, amended her original Complaint by adding additional named
plaintiffs; she did not substantively alter any of the claims at that time.
On June 7, 2011, Sedgwick filed the pending Motion for Summary Judgment arguing that
the Amended Complaint fails to state a claim upon which relief can be granted because: (1) the
plaintiffs’ claims for overtime are not recoverable under the WPCA, and (2) Sedgwick is not subject
to the West Virginia Overtime Act. Rather than responding to the summary judgment motion, on
June 30, 2011, the plaintiffs filed the pending Motion for Leave to Amend. The plaintiffs’ proposed
Second Amended Complaint seeks to allege the following: (1) an individual claim for Sedgwick’s
violation of the FLSA (Count I); (2) a collective action claim for Sedgwick’s violation of the FLSA
(Count II), and (3) violations of the WPCA (Count III).
The plaintiffs have supported their Motion for Leave to Amend with the text of the proposed
Second Amended Complaint. Sedgwick has filed a response arguing that this court should not grant
the plaintiffs leave to amend. The plaintiffs did not file a reply. The matter is now ripe for review.
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II.
Standard of Review
Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that, after time for
amendment as a matter of course has passed, leave of the court must be obtained to amend a
pleading. The Rule provides that a court should freely give leave to amend “when justice so
requires.” Fed.R.Civ.P. 15(a)(2). “The Supreme Court has declared that this mandate is to be
heeded.” Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (internal quotation marks
omitted). “The law is well settled that leave to amend a pleading should be denied only when the
amendment would be prejudicial to the opposing party, there has been bad faith on the part of the
moving party, or the amendment would be futile . . . . Delay alone is an insufficient reason to deny
leave to amend. Rather, the delay must be accompanied by prejudice, bad faith, or futility.” Id.
(internal quotation marks omitted).
Rule 16(b), on the other hand, provides that “[a] schedule may be modified only for good
cause and with the judge’s consent.” The Fourth Circuit, addressing the “tension” between the
liberal amendment standard of Rule 15 and the more stringent modification standard of Rule 16, has
held that
Given their heavy case loads, district courts require the effective case management
tools provided by Rule 16. Therefore, after the deadlines provided by a scheduling
order have passed, the good cause standard must be satisfied to justify leave to
amend the pleadings.
Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008). Accordingly, the party seeking
amendment after the deadlines set forth in the scheduling order must satisfy the “good cause”
standard of Rule 16.
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III.
Discussion
In the instant action the deadline in the Scheduling Order for “Amendment of pleadings and
joinder of parties” is not until December 10, 2011. There is no doubt that the December 10, 2011
date to amend pleadings is a typographical error that should have read December 10, 2010.1
Nevertheless, the court cannot assume the intended deadline was clear and unambiguous to both
parties and, accordingly, must abide by the errant Scheduling Order deadline. The court thus finds
that the plaintiffs filed their motion to amend the pleadings within the time frame provided by the
Scheduling Order and, accordingly, they need only satisfy the liberal Rule 15(a) “when justice so
requires” standard to amend rather than the Rule 16(b) good cause standard.
The court FINDS that the plaintiffs have satisfied the “when justice so requires” standard
in this case. The plaintiffs’ proposed Second Amended Complaint does not alter the underlying
claim that the defendant failed to pay the requisite overtime wages to the plaintiffs, it simply seeks
to add causes of action under federal law. Although it is undoubtedly always the case that plaintiffs
could have come forward earlier with these amendments, delay alone is an insufficient reason to
deny leave to amend. See Edwards, 178 F.3d at 242. The court is unwilling to find, at this time, that
bad faith or futility accompanied the plaintiffs’ allegedly dilatory actions in not asserting earlier the
FLSA claims set forth in their proposed amendment. Id. Moreover, the court is unconvinced that
Sedgwick will be prejudiced by granting leave to amend, as the deadline for summary judgment
motions has not yet arrived; the court FINDS that Sedgwick is not substantially prejudiced.
Accordingly, the court GRANTS the plaintiffs’ Motion for Leave to Amend. Nevertheless, the
court has been advised by Sedgwick of the possibility of gamesmanship and bad faith and will
1
The trial itself is scheduled for December 6, 2011.
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consider appropriate sanctions if the plaintiffs’ claims are as meritless and invalid as the defendant
suggests.
Lastly, because Sedgwick’s Motion for Summary Judgment concerns a version of the
complaint that the plaintiffs will now be given leave to amend, the court DENIES the motion as
premature. Sedgwick, of course, is not prevented from renewing any of the arguments set forth
therein in response to the Second Amended Complaint.
IV.
Conclusion
Pursuant to the foregoing, the plaintiffs’ Motion for Leave to Amend Complaint [Docket
129] is GRANTED. The court DIRECTS the Clerk to docket the proposed amendment [Docket
129-1] as the “Second Amended Complaint.” The court further ORDERS Sedgwick to respond to
the Second Amended Complaint within fourteen days, as provided by Rule 15(a)(3) of the Federal
Rules of Civil Procedure. The court DENIES as premature Sedgwick’s Motion for Summary
Judgment [Docket 103].
In addition, the court ORDERS the parties to provide the court with any proposed changes
to the Scheduling Order [Docket 8] by no later than August 16, 2011.
The court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:
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July 29, 2011
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