Ousley v. CG Consulting, LLC

ALICIA OUSLEY, Plaintiff, v. CG CONSULTING, LLC, et al., Defendants.

Civil Action No. 2:19-cv-1744

United States District Court, S.D. Ohio, Eastern Division

July 1, 2021

Sarah D. Morrison, Judge.

REPORT AND RECOMMENDATION AND ORDER

KIMBERLY A. JOLSON, UNITED STATES MAGISTRATE JUDGE.

This matter is before the Court on Plaintiff's Motion for Leave to File Third Amended Complaint. (Doc. 74). For the following reasons, it is RECOMMENDED that Plaintiff's Motion be GRANTED in part and DENIED in part. Should the District Judge adopt this Report and Recommendation (“R&R”), it is ORDERED that Plaintiff file a Third Amended Complaint seven (7) days from the date of adoption, omitting Counts XI, XII—or any claim arising under O.R.C. §§ 4113.15, 4111.03. Further, if this R&R is adopted, the parties are ORDERED to submit a revised case schedule within fourteen (14) days from the date of adoption, setting forth revised deadlines relating to discovery, Rule 23 Class Certification, and dispositive motions. While this R&R pends, discovery shall proceed.

I. BACKGROUND

Plaintiff a former employee at Defendant CG Consulting, LLC, d/b/a Scores Columbus (“Scores”), filed the instant action on May 2, 2019, alleging a number of claims relating to the conditions of her employment. (See generally Doc. 1). The first complaint named two Defendants: Scores and Jose Canseco, the general manager at Scores during the relevant time period. (Id.). While Scores was properly served (see Doc. 2), Jose Canseco was not. So the Court directed Plaintiff to show cause why this action should not be dismissed as to Defendant Canseco and why an extension of time to effect service should be allowed. (Doc 7). Plaintiff responded to the show cause order on September 18, 2019, and the Court granted her an extension of time to serve Defendant Canseco. (Docs. 10, 11, 16). In the interim, the parties filed their Rule 26(f) Report and agreed that “any motion to amend the pleadings or to join additional parties shall be filed by November 15, 2019.” (Doc. 8). The Court adopted the proposed deadlines and issued a scheduling order. (Doc. 9). In December 2019, Plaintiff successfully served Defendant Canseco, and he later answered. (Docs. 21, 23). In the months that followed, Scores retained new counsel, and the January 2020 mediation deadline was vacated. (See Docs. 25-27). Given the time elapsed, the parties moved to vacate the existing case schedule and proposed amended case deadlines, which the Court adopted. (Docs. 30, 31). Notably, the amended case schedule did not change the previously set amendment deadline. (See generally id.).

On August 17, 2021, Plaintiff moved to amend her Complaint to add new factual allegations, two new Defendants, and more claims on behalf of herself and similarly situated hourly tipped employees from the two years preceding the filing of her original complaint. (See Doc. 38). The Court granted the unopposed Motion. (Docs. 40, 41). Several months later, Plaintiff again moved to amend after determining that her “claims related to unpaid minimum wages and other compensation under the Fair Labor Standards Act (“FLSA”) . . . were appropriate for collective action proceedings pursuant to 29 U.S.C. § 216(b) . . . .” (Doc. 48 at 3). Additionally, Plaintiff sought to clarify several of her FLSA claims and add a state-law claim for minimum wage violations. (Id.). Again, Defendants did not oppose Plaintiff's Motion, and the Court granted her leave to amend a second time. (See Docs. 50, 51).

Plaintiff then moved for conditional class certification (Doc. 54), which the Court granted, taking into account that Defendants' only opposition was to remove the word “dancer” from Plaintiff's proposed Notice. (See Doc. 58 at 1). The next month, Plaintiff filed a Motion for an Order to Show Cause for Defendants' failure to provide an FLSA Class List as prescribed by the Court's previous Order. (Doc. 63 (relying on Doc. 58)). After a status conference with the Court, Plaintiff's Motion was granted in part, and Defendants were ordered to produce the complete FLSA Class List. (Doc. 65). With the dispute resolved, the parties progressed with discovery.

Now Plaintiff requests leave to file a Third Amended Complaint. She seeks to add Michael Starkey and Josh Votaw, two security guards formally employed by Defendants, as Named Plaintiffs. (See generally Doc. 74-4). She also aims to add additional claims related to the conditions of Starkey's and Votaw's employment with Defendants. (Id.). She argues that “good cause exists under Rule 16(b) and Rule 15(a) based on information exchanged in discovery, . . . further development of the claims based on that information, [and] further consultation with [the] Named and [] Opt-In Plaintiffs . . . ” (Doc. 74 at 9). Similarly, Plaintiff argues that this Third Amended Complaint should relate back to the date of the original complaint as the claims asserted “arise out of the same conduct, transaction, or occurrence set out or attempted to be set out in the Complaint, pursuant to Fed.R.Civ. P. 15(c)(1)(B)-(C).” (Doc. 77 at 1). Defendants oppose, arguing that Plaintiffs “have failed to act in a diligent manner, in good faith, and the proposed amendments would be futile . . . ” (Doc. 76 at 1). The Court expedited briefing on Plaintiff's Motion, which is now ripe for consideration. (See Docs. 75-77).

II. STANDARD

Two federal rules govern Plaintiff's Motion. Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that when a party seeks leave of court to file an amended pleading, “[t]he court should freely give leave when justice so requires.” This rule, which allows a liberal policy in favor of granting amendments, “reinforce[s] the principle that cases ‘should be tried on their merits rather than the technicalities of pleadings.'” Inge v. Rock Fin. Corp., 388 F.3d 930, 936 (6th Cir. 2004) (quoting Moore v. City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986)). Thus, the trial court enjoys broad discretion in deciding motions for leave to amend. See Gen. Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990). In exercising its discretion, the trial court may consider such factors as “undue delay, bad faith or dilatory motive on the part of a movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of the amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962).

But because Plaintiff moved to amend after the Court's November 15, 2019, amendment deadline, she “must meet the higher threshold for modifying a scheduling order found in Rule 16(b).” Shane v. Bunzl Distrib. USA, Inc., 275 Fed.Appx. 535, 536 (6th Cir. 2008). This means Plaintiff must “show good cause under Rule 16(b) for the failure to seek leave to amend prior to the expiration of the deadline before [the Court] will consider whether the amendment is proper under Rule 15(a).” Hill v. Banks, 85 Fed.Appx. 432, 433 (6th Cir. 2003). “[T]he touchstone of the good cause inquiry under Rule 16(b) is whether the moving party acted diligently in attempting to meet the deadline set forth in the pretrial order.” Permasteelisa CS Corp. v. Airolite Co., LLC, No. 2:06-cv-0569, 2007 WL 1683668, at *2 (S.D. Ohio June 8, 2007).

III. DISCUSSION

As noted, the Court must first decide whether Plaintiff has shown good cause under Rule 16(b) before turning to Rule 15(a)'s more generous standard.

A. Rule 16(b)

In evaluating good cause under Rule 16(b), Plaintiff's diligence is key. Cooke v. AT&T Corp., No. 2:05-cv-374, 2007 WL 188568, at *2 (S.D. Ohio Jan. 22, 2007); see also E.E.O.C. v. U-Haul Int'l, Inc., 286 F.R.D. 322, 325 (W.D. Tenn. 2012) (noting that whether movant was “diligen[t] in attempting to meet the requirements of the scheduling order is the primary measure of Rule 16(b)'s ‘good cause' standard”). The moving party may still be deemed to have acted diligently when the factual basis supporting an amendment is not disclosed until after the deadline set in the scheduling order. Cooke, 2007 WL 188568, at *2. Plaintiff has shown good cause here.

Plaintiff contends that she has demonstrated “good cause” under Rule 16(b) because the factual basis supporting her proposed amendment was not disclosed until after the deadline to amend. (Doc. 74 at 12). Plaintiff represents that the proposed amendment is “entirely based” on the payroll summary produced in discovery in late December 2020. (Id.). Once Defendants disclosed this document, Plaintiff identified the opt-in Plaintiffs—specifically Votaw and Starkey—who then filed their Notices of Consent to Join on January 25, 2021, and March 15, 2021, respectively. (See id. (citing Docs. 66, 71)). After conferring with Votaw and Starkey— which Plaintiff's counsel was not permitted to do until they had opted-in—Plaintiff determined that they needed to be added as Named Plaintiffs in order to ensure other similarly situated individuals could have their rights adjudicated. (Id.).

Defendants contend that Plaintiff waited too long. They say that Plaintiff should have moved to amend as soon as the Proposed Named Plaintiffs opted in, and that waiting until they consented to be Named Plaintiffs shows a lack of diligence. (Doc. 76 at 4). Yet, in a collective (or class) action under the FLSA, a plaintiff who opts-in is not automatically joined as a Named Plaintiff. Salazar v. Brown, No. G87-961 1996 WL 302673, at *9 (W.D. Mich. Apr. 9, 1996) (“The distinction between individual and collective actions is critical in addressing the statute of limitations defense[.]”); see also Becker v. S. Soils, Turf Mgmt., Inc., 2006 WL 3359687 (M.D. Fla. Nov. 20, 2006) (“The filing of a consent to join in the litigation does not operate as an...