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Acosta v. Holland Acquisitions, Inc.

United States District Court, W.D. Pennsylvania

October 18, 2017

HOLLAND ACQUISITIONS, INC., d/b/a HOLLAND SERVICES, a Corporation; and BRYAN GAUDIN, Individually, and as a Corporate Officer of HOLLAND ACQUISITIONS, INC., d/b/a HOLLAND SERVICES, Defendants.


          Mark R. Hornak United States District Judge

         Pending before the Court is Plaintiffs Motion to Amend/Correct Schedule A. (ECF No. 105 ("Motion").) For the reasons that follow, the Motion is granted.

         I. Background

         On August 20, 2015, the Secretary of Labor ("Plaintiff) initiated this enforcement action against Defendants Holland Acquisitions, Inc., and Bryan Gaudin ("Defendants") alleging violations of the Fair Labor Standards Act ("FLSA"). (Compl., ECF No. 1 ("Initial Complaint").) Put simply, the allegations from the Initial Complaint center around Defendants' alleged improper classification of abstractors, title examiners, and landmen as independent contractors and Defendants' resulting failure to properly compensate such individuals for overtime worked. Plaintiff is seeking back pay, liquidated damages, and a permanent injunction under § 16(c) and § 17 of the FLSA. (Id. ¶¶ IX-XI.) The parties began exchanging information about possibly affected employees before this case was filed. Defendants contend that they provided Plaintiff with a list of 410 individuals who each may have been relevant to Plaintiffs investigation well before Plaintiff filed his Initial Complaint. (ECF No. 114-2.) Plaintiff included in his Initial Complaint a list of 89 named individuals, intended to represent, albeit not exclusively, a list of Defendants' current and former employees to whom the Defendants allegedly owe money on account of the pled FLSA violations. (ECF No. 1, ¶ X ("As a result of the violations alleged in paragraphs VI and VIII above, amounts are owing for Defendants' current and former employees including the persons specifically listed in the attached Schedule A to the Secretary's Complaint.").) That list is referred to as Schedule A. (ECF No. 1-1.)

         Schedule A, when filed with the Initial Complaint, was not exhaustive, and it was not conveyed as such. Rather, the Initial Complaint specifically stated that Plaintiff was seeking damages not only for those listed in Schedule A but also for unknown employees. (ECF No. 1, ¶ XI ("Additional back wages and liquidated damages also may be owed to certain present and former employees presently unknown to the Secretary for the period covered by this Complaint.").) The Initial Complaint stated that it covered any individuals involved in the alleged violations from May 2012 to the present. (Id.) The notion that more names could be added to Schedule A was also mentioned in an early status conference with the Court held three months after the Initial Complaint was filed. (Tr. of Telephonic Proceedings, Nov. 18, 2015, at 5-6, ECF No. 28.)

         Plaintiff amended the Initial Complaint to add additional allegations. (First Am. Compl., ECF No. 21.) Schedule A was not amended. (Id.) On July 15, 2016, the Court granted Plaintiffs Motion for Leave to File a Second Amended Complaint following full briefing and oral argument by the parties. (See ECF Nos. 44, 46, 51, 54, 55.) The Second Amended Complaint, filed July 18, 2016, further left the door open for an expanded Schedule A, stating, "Plaintiffs claims seek relief for all employees working as Title Abstractors, Title Examiners, and Landmen who were misclassified." (ECF No. 57, ¶ II (emphasis added).) The Second Amended Complaint, as well as the First Amended Complaint, both incorporated Schedule A from the Initial Complaint. (ECF No. 57, ¶ X; see also ECF No. 21, ¶ X.) A Supplemental Case Management Order was entered on August 31, 2016, which directed Plaintiff to file an amended Schedule A by November 30, 2016. (ECF No. 68, ¶ 3 ("S-CMO").)

         As discovery progressed, more names of possibly relevant "employees"[1] came to light. On October 28, 2016, Plaintiff had reportedly identified 556 additional individuals based on documents provided by Defendants. (ECF No. 106, at 4; ECF No. 114, at 4.) On December 8, 2016, Defendants provided their own list of names totaling 422 individuals. (ECF No. 105-3.) Pending possible resolution by mediation, the case was stayed from January 27, 2017, to June 5, 2017, during which time the parties were not required to engage in further discovery. (ECF Nos. 93, 103.) After the stay was lifted, the parties once again re-visited the ever-evolving list of potentially impacted individuals, which brings us to the motion at hand, filed July 7, 2017, in which Plaintiff seeks to amend Schedule A to include an additional 800 named individuals.

         II. Legal Standard

         Fed. R. Civ. P. 15(a)

         Federal Rule of Civil Procedure 15(a) "allows a party to amend a complaint upon leave of court and states that leave 'shall be freely given when justice so requires.'" Arthur v. Maersk, Inc., 434 F.3d 196, 202 (3d Cir. 2006). "When justice so requires" is a standard that incorporates a number of equitable factors, such as the moving party's delay in seeking leave to amend, prejudice to opposing parties, bad faith, and futility. Id. at 203; see also Foman v. Davis, 371 U.S. 178, 182 (1962); Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993). A court should only deny leave "when these factors suggest that amendment would be 'unjust.'" Arthur, 434 F.3d at 203. Most notable, "prejudice to the non-moving party is the touchstone for the denial of an amendment," and "[d]elay alone is not sufficient to justify denial of leave to amend." Arthur, 434 F.3d at 204 (quoting Cornell & Co. v. Occupational Safety & Health Review Comm 'n, 573 F.2d 820, 823 (3d Cir. 1978), and Adams v. Gould Inc., 739 F.2d 858, 868 (3d Cir. 1984)).

         III. Discussion

         In their opposition to the Motion, Defendants claim amending Schedule A from 89 names to 889 names is a product of Plaintiff s repeated violations of scheduling orders, stems from Plaintiffs undue delay, and results in prejudice to the Defendants. Plaintiff contends that his counsel has been diligently reviewing thousands of discovery documents that have brought to light new information, that Defendants were on notice that many more names would eventually be added, and that Defendants will suffer no prejudice from an amended Schedule A. The Court concludes that Plaintiff will be granted leave to amend Schedule A.

         A. Motion to Amend Under Rule 16(b)

         As a threshold matter, Defendants argue that Plaintiffs Motion must not only comply with Federal Rule of Civil Procedure 15(a) but also Rule 16(b), which controls when a case management order may be modified. "Only after the moving party demonstrates good cause under Rule 16(b)(4) may the Court consider its Motion to Amend under Rule 15's standard." Greygor v. Wexford Health Sources, Inc.,No. 2:14-CV-1254, 2016 WL 772740, at *2 (W.D. Pa. Feb. 27, 2016) (citing Walker v. Centocor Ortho Biotech, Inc., 558 F. App'x 216, 221-22 (3d Cir. 2014)). Defendants point to the August 31, 2016, S-CMO that ...

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