Medlock v. Taco Bell Corp., et al., No. 1:2007cv01314 - Document 222 (E.D. Cal. 2011)

Court Description: MEMORANDUM DECISION and ORDER Re Plaintiff's 210 Amended Motion for Leave to File First Amended Consolidated Complaint signed by Judge Oliver W. Wanger on 5/3/2011. ( Proposed Order Consistent with Memorandum Decision Deadline: 5/10/2011)(Figueroa, O)
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1 UNITED STATES DISTRICT COURT 2 FOR THE EASTERN DISTRICT OF CALIFORNIA 3 4 5 IN RE TACO BELL WAGES AND HOUR ACTIONS Master file: 1:07-cv-01314 OWW DLB 8 MEMORANDUM DECISION AND ORDER RE PLAINTIFF S AMENDED MOTION FOR LEAVE TO FILE FIRST AMENDED CONSOLIDATED COMPLAINT. 9 (DOC. 210) 6 7 10 11 I. INTRODUCTION Plaintiffs move for leave to file a First Amended 12 13 14 15 Consolidated Complaint. Doc. 210. Defendants oppose the motion. Doc. 214. The matter was heard on April 11, 2011. II. FACTUAL BACKGROUND 16 This case is a consolidation of six related cases: (1) 17 Medlock v. Taco Bell Corp., Case No. 1:07-cv-01314; (2) Hardiman 18 v. Taco Bell Corp., Case No. 1:08-cv-01081; (3) Leyva v. Taco 19 Bell Corp., et al., Case No. 1:09-cv-00200; (4) Naranjo v. Yum! 20 21 Brands, Inc., Case No. 1:09-cv-00246; (5) Widjaja v. Yum Brands, Inc., Case No. 1:09-cv-01074; and (6) Nave v. Taco Bell Corp., 22 23 Case No. 1:10-cv-02222. 24 The Medlock case was originally filed September 7, 2007. 25 Pursuant to the Original and Amended Scheduling Conference Order, 26 the deadline to file any motions to amend the complaint was March 27 24, 2008. Docs. 38 and 42. On that date, the Medlock Plaintiffs 28 1 1 moved for leave to file a Second Amended Complaint, which was 2 denied. Doc. 61. 3 4 The Medlock, Hardiman, Leyva, and Naranjo cases were consolidated May 19, 2009; the consolidated action was designated 5 6 7 In re Taco Bell Wage and Hour Actions. Docs. 104, 109. A scheduling conference order dated June 29, 2009 (Doc. 117) and an 8 amended scheduling conference dated July 7, 2009 (Doc. 119) set 9 forth the following schedule: (1) June 30, 2009: deadline to file 10 a Consolidated Complaint; (2) June 24, 2010: deadline for class 11 certification discovery; (3) August 26, 2010 (extended to 12 13 December 30, 2010 (Doc. 178)): deadline to file motions regarding class certification; (4) October 26, 2010 (extended to April 22, 14 15 2011 (Doc. 202)): deadline for Defendants opposition to class 16 certification; (5) December 6, 2010 (extended to May 20, 2011 17 (Doc. 202)): deadline for Plaintiffs reply; and (6) January 10, 18 2011 (continued to June 6, 2011 (Doc. 202)): class certification 19 hearing. 20 21 On June 29, 2009, Plaintiffs filed a Consolidated Complaint alleging: (1) unpaid overtime; (2) unpaid minimum wages; (3) 22 23 24 unpaid wages; (4) missed meal periods; (5) missed rest periods; (6) non-compliant wage statements; (7) unreimbursed business 25 expenses; (8) vested accrued vacation wages; (9) non-payment of 26 wages upon termination; and (10) non-payment of wages during 27 employment. The Consolidated Complaint also asserts a claim for 28 2 1 violation of California Business & Professions Code 17200, et 2 seq. and penalties pursuant to California Labor Code sections 3 2698, et seq. ( PAGA ). Doc. 118-1. 4 The Widjaja action was consolidated with In re Taco Bell on 5 6 7 October 22, 2009. Doc. 132. On November 29, 2010, Teresa Nave filed a putative class 8 action against Defendants alleging: (1) missed rest periods, (2) 9 unpaid vested accrued vacation time, (3) non-payment of wages 10 upon termination, and (4) violation of California Business & 11 Professions Code §§ 17200, et seq. Case No. 1:10-cv-2222-OWW-DVB, 12 13 Doc. 1. On December 9, 2010, the Nave complaint was amended, adding Christopher Duggan, Kevin Taylor, and Debra Doyle as named 14 15 16 17 18 19 20 21 Plaintiffs. Id. at Doc. 10. The Nave case was consolidated with In re Taco Bell on December 16, 2010. On December 30, 2010, Plaintiffs filed a motion for class certification. Doc. 185. On March 14, 2011, Plaintiffs filed an amended motion for leave to file the First Amended Consolidated Complaint (Doc. 210). Defendants filed an opposition (Doc. 214), to which 22 23 24 25 Plaintiffs replied (Doc. 215). III. LEGAL STANDARD Because a Rule 16 scheduling order is in place establishing 26 a timetable for amending pleadings and the deadline expired 27 before Plaintiffs moved to amend the Consolidated Complaint, 28 3 1 resolution of the motion to amend is governed by Federal Rule of 2 Civil Procedure 16. Coleman v. Quaker Oats Co., 232 F.3d 1271, 3 1294 (9th Cir. 2000). Rule 16(b) provides that [a] schedule shall 4 be modified only for good cause and with the judge s consent. 5 6 7 Fed. R. Civ. P. 16(b)(4). Rule 16(b)'s good cause standard primarily considers the diligence of the party seeking the 8 amendment. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 9 609 (9th Cir. 1992). 10 [C]arelessness is not compatible with a finding of diligence and offers no reason for relief ... Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party's reasons for seeking modification ... If that party was not diligent, the inquiry should end. 11 12 13 14 15 16 Id. If good cause within the meaning of Rule 16(b) is shown, 17 the party seeking leave to amend must then demonstrate that leave 18 to amend is appropriate under Rule 15, Federal Rules of Civil 19 Procedure. See id. at 608. 20 21 Rule 15(a) of the Federal Rules of Civil Procedure provides that a party may amend its pleadings only with the opposing 22 23 24 party s written consent or the court s leave and that the court should freely give leave when justice so requires. Fed. R. Civ. 25 P. 15(a)(2). This rule should be applied with extreme 26 liberality in favor of allowing amendments in the early stages 27 of a case. See Jones v. Bates, 127 F.3d 839, 847 n.8 (9th Cir. 28 4 1 1997). A court should consider four factors in determining 2 whether to grant leave to amend: (1) undue delay, (2) bad faith, 3 (3) futility of amendment, and (4) prejudice to the opposing 4 5 6 7 party. United States v. Pend Oreille Pub. Util. Dist. No. 1, 926 F.2d 1502, 1511 (9th Cir. 1991). Delay alone is not sufficient grounds for denying leave to amend. Id. The consideration of 8 prejudice to the opposing party is the most important factor. 9 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th 10 Cir. 2003) ( Prejudice is the touchstone of the inquiry under 11 Rule 15(a) ). Absent prejudice, or a strong showing of any of the 12 13 14 15 remaining factors, there is a presumption under Rule 15(a) in favor of granting leave to amend. Id. Where there is a lack of prejudice to the opposing party and the amended complaint is 16 obviously not frivolous, or made as a dilatory maneuver in bad 17 faith, it is an abuse of discretion to deny leave to amend. 18 Pend Oreille, 926 F.2d at 1511-1512 (citing Howey v. U.S., 481 19 F.2d 1187, 1190-91 (9th Cir. 1973)). However, [w]hile 20 Fed.R.Civ.P. 15(a) encourages leave to amend, district courts 21 22 23 24 25 26 27 28 need not accommodate futile amendments. Newland v. Dalton, 81 F.3d 904, 907 (9th Cir. 1996). IV. ANALYSIS 1. Addition of New Nave Named Plaintiff Plaintiffs seek leave to add Hilario Escobar to the original Nave Plaintiffs. Plaintiffs assert that the addition of Mr. 5 1 Escobar is necessary to represent the non-management employee 2 vacation subclass. 3 4 In support of Plaintiffs Motion for Class Certification filed December 30, 2010, only Teresa Nave and Kevin Taylor of the 5 6 7 original Nave Plaintiffs submitted declarations. During Mr. Taylor s January 27, 2011 deposition, his paycheck verification 8 reports were produced, which revealed that Mr. Taylor had worked 9 between 10-15 hours per week and was not eligible for vacation 10 pay. On February 17, 2011, Defendants produced Ms. Nave s 11 employee file, which revealed that Ms. Nave was paid accrued 12 13 vacation on or about the date she was terminated, July 17, 2007. Ms. Nave is in the process of withdrawing as a named 14 15 16 17 Plaintiff. At the hearing, Plaintiffs stated that the Nave Plaintiffs do not have a proper class representative. Plaintiffs assert that once it became apparent that Ms. Nave 18 and Mr. Taylor could not represent the non-management employee 19 vacation subclass, they immediately conducted a diligent search 20 before finding Mr. Escobar. Defendants rejoin that Plaintiffs did 21 not act with diligence: (1) Plaintiffs could have obtained Ms. 22 23 24 Nave and Mr. Taylor s employment records before filing the lawsuit and (2) Ms. Nave and Mr. Taylor authorized the release of 25 their employment records in December 2010 but Plaintiffs did not 26 request their records until late January and February 2011. 27 However, the Nave class was represented by different counsel 28 6 1 2 3 4 before its consolidation with this action. Plaintiffs contend that allowing Plaintiffs to amend their Complaint to add a new named plaintiff to serve as a potential class representative is mandated by case law. Kagan v. Gibraltar 5 6 7 Sav. & Loan Ass n, 35 Cal.3d 582, 596, 200 Cal.Rptr. 38 (1984) ( However, should the trial court conclude that plaintiff cannot 8 suitably represent the class, it should afford her the 9 opportunity to amend [her] complaint, to redefine the class, or 10 to add new individual plaintiffs, or both, in order to establish 11 a suitable representative. (quoting La Sala v. American Sav. & 12 13 Loan Assn., 5 Cal. 3d 864, 872 (1971)), overruled on other grounds, Meyer v. Sprint Spectrum L.P., 45 Cal. 4th 634 (2009). 14 15 The Nave lawsuit was filed November 29, 2010; Plaintiffs 16 discovered that Ms. Nave and Mr. Taylor could not represent the 17 non-management employee vacation subclass on January 27, 2011 and 18 February 17, 2011, respectively; and Plaintiffs motion to amend 19 was filed March 14, 2011. Only two and half months have lapsed 20 since the initiation of the Nave lawsuit on November 29, 2010 and 21 February 17, 2011, when Plaintiffs learned they did not have a 22 23 24 class representative. Because Plaintiffs have been diligent, Plaintiffs motion to add a new named Plaintiff to represent the 25 Nave subclass is supported by good cause. There is no evidence of 26 Plaintiffs bad faith. Plaintiffs believe that Mr. Escobar s 27 claims are typical of the class. It is not explained how the 28 7 1 addition of a new named Plaintiff to represent the Nave 2 Plaintiffs causes prejudice to Defendants. 3 4 Plaintiffs motion to amend the Consolidated Complaint to add Hilario Escobar as a named Plaintiff is GRANTED. 5 6 7 8 9 10 11 12 13 2. Amendment of Plaintiff Subclass Definitions Plaintiffs also seek leave to amend the Plaintiff subclass definitions, as follows: a. Subclass 1 ( Late Meal Break Subclass Taco Bell Unpaid Wages Subclass ): All persons who work or worked as a non-exempt, hourlypaid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit All non-exempt or hourly-paid employees of TACO BELL CORP. and/or TACO BELL OF AMERICA, INC. in the State of California from September 7, 2003 until the resolution of this lawsuit; 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 b. Subclass 2 ( Underpaid Automatic Adjustments Subclass Yum! Unpaid Wages Subclass ): All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit who received at least one 30-minute automatic adjustment on Taco Bell s Time and Attendance System All non-exempt or hourly-paid employees of YUM! BRANDS, INC. in the State of California from November 5, 2004 until the resolution of this lawsuit, excluding any members of Subclass 1; c. Subclass 3 ( On-Duty Meal Period Agreement Subclass Taco Bell Improper Wage Statements Subclass ):All persons who work or worked as a nonexempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit who signed an on-duty meal period agreement All non-exempt or hourly-paid employees of TACO BELL CORP. and/or TACO BELL OF AMERICA, INC. in the State of California who were provided inaccurate wages statements from September 7, 2006 until the resolution of this lawsuit; 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 d. Subclass 4 ( Unpaid On-Duty Meal Period Subclass Yum! Improper Wage Statements Subclass ): All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit who signed an onduty meal period agreement All non-exempt or hourly-paid employees of YUM! BRANDS, INC. in the State of California who were provided inaccurate wages statements from November 5, 2007 until the resolution of this lawsuit, excluding any members of Subclass 3; e. Subclass 5 ( Rest Break Subclass Taco Bell Unreimbursed Business Expenses Subclass ): All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit, and who worked in any non-management employee position, including, without limitation, any of the following job positions: Crew Member, Team Member, Food Champion, Service Champion, Service/Food Champion, Shift Lead, Shift Lead Trainee, Team Member Trainer, and/or Trainee All non-exempt or hourly-paid employees of TACO BELL CORP. and/or TACO BELL OF AMERICA, INC. in the State of California who incurred business-related expenses and costs that were not reimbursed from September 7, 2003 until the resolution of this lawsuit; f. Subclass 6 ( Final Pay Subclass Yum! Unreimbursed Business Expenses Subclass ): All persons who were terminated involuntarily as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2004 until the resolution of this lawsuit who were not timely tendered their wages upon involuntary termination of employment. All nonexempt or hourly-paid employees of YUM! BRANDS, INC. in the State of California who incurred business-related expenses and costs that were not reimbursed from November 5, 2004 until the resolution of this lawsuit, excluding any members of Subclass 5; and g. Subclass 7 ( Vested Accrued Vacation Wages Time Subclass ): All persons who formerly worked as an employee at a corporate-owned Taco Bell restaurant in California from November 5, 2004 until the resolution of this lawsuit who were not paid all vested accrued vacation wages (including, but not limited to, vacation pay, personal day pay, personal holiday pay, and/or floating holiday pay) at the end of their employment; and 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 All non-exempt or hourly-paidpast employees of TACO BELL CORP., TACO BELL OF AMERICA, INC., and/or YUM! BRANDS, INC. in the State of California who were not paid all vested accrued vacation wages (including, but not limited to, vacation pay, personal day pay, personal holiday pay, and/or floating holiday pay) at the end of their employment from November 5, 2004 until the resolution of this lawsuit. h. Subclass 8 ( Non-Management Employee Vacation Subclass Taco Bell Final Pay Subclass ): All persons who formerly worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003 until the resolution of this lawsuit who were not paid all vested accrued vacation wages (including, but not limited to, vacation pay, personal day pay, personal holiday pay, and/or floating holiday pay) at the end of their employment, and who worked in any non-management employee position, including, without limitation, any of the following job positions: Crew Member, Team Member, Food Champion, Service Champion, Service/Food Champion, Shift Lead, Shift Lead Trainee, Team Member Trainer, and/or Trainee. All non-exempt or hourly-paid employees of TACO BELL CORP. and/or TACO BELL OF AMERICA, INC. in the State of California who were not timely tendered their wages upon termination of employment from September 7, 2004 until the resolution of this lawsuit; i. Subclass 9 ( Yum! Final Pay Subclass ): All non-exempt or hourly-paid employees of YUM! BRANDS, INC. in the State of California who were not timely tendered their wages upon termination of employment from November 5, 2005 until the resolution of this lawsuit, excluding any members of Subclass 8; Doc. 210-2, Ex. B, ¶ 23. 22 23 24 Defendant contends that the amendment to Subclass 1 adds a new subclass for late meal breaks that was not, but should have 25 been, included in the original Consolidated Complaint. Plaintiff 26 rejoins that it was included in the Consolidated Complaint, 27 28 10 1 albeit not in the Subclass definitions. The original Consolidated 2 Complaint alleges: 3 4 5 6 7 8 9 10 11 During the relevant time period, Plaintiffs, the other class members, and the other aggrieved employees who were scheduled to work for a period of time in excess of six (6) hours were required to work for periods longer than five (5) hours without a meal period of not less than thirty (30) minutes. Doc. 118-1, ¶ 77. It also alleges: Defendants conduct violates applicable IWC Wage Orders and California Labor Code sections 226.7 and 512(a). Id. Defendant contends that the amendment to Subclass 3 adds a 12 new class for on-duty meal period agreements. Plaintiffs rejoin 13 that the allegations were encompassed in the following allegation 14 in the original Consolidated Complaint: Defendants conduct 15 violates applicable IWC Wage Orders and California Labor Code 16 17 sections 226.7 and 512(a). Doc. 118-1, ¶ 77. Defendant objects that Plaintiffs have expanded the statute 18 19 of limitations for the vacation subclass from November 5, 2004 20 (Doc. 118-1, ¶ 19(g)) to September 7, 2003 (Doc. Doc. 210-2, Ex. 21 A, ¶ 23(h)). Defendant also asserts that the vacation subclass in 22 the Consolidated Complaint consisted only of non-exempt, hourly 23 employees, while the amended subclass encompasses all employees. 24 Plaintiffs rejoin that the amendments conform the Nave vacation 25 26 27 28 class definition prior to consolidation. Plaintiffs have not explained why they have waited to seek leave to amend the Consolidated Complaint, over three years 11 1 after the original Medlock lawsuit was filed, almost two years 2 after the original Consolidated Complaint was filed, after the 3 Motion for Class Certification has already been filed, and 4 shortly before the deadline for Defendant s opposition to the 5 6 7 Motion for Class Certification. The proposed changes to the Subclasses substantively change the scope of the purported class 8 action. Plaintiffs assert that the changes conform to facts 9 revealed in discovery; however, discovery on class certification 10 closed June 24, 2010, nine months before Plaintiffs moved to 11 amend the Consolidated Complaint. Plaintiffs contend that the 12 13 changes conform the vacation subclass to the Nave subclasses; however, the changes expand the statute of limitations and 14 15 broaden the vacation subclass. Plaintiffs have not offered facts 16 to demonstrate good cause for their belated motion to amend the 17 proposed Plaintiff Subclasses from the original Consolidated 18 Complaint. It is likely discovery would have to be reopened. 19 Plaintiffs undue delay and substantive alterations to the class 20 definitions prejudice Defendant on the eve of filing their 21 opposition to the Motion for Class Certification, after 22 23 24 25 26 27 28 Plaintiffs Motion for Class Certification has been filed. Plaintiffs motion to amend the Consolidated Complaint to amend the proposed Plaintiff Subclasses is DENIED. 3. Conforming Complaint to Facts Learned in Discovery Plaintiffs also seek leave to amend the Consolidated 12 1 2 Complaint to make the following changes: (a) 3 in the preamble, paragraphs 9 through 12, and 40 through 43, add allegations concerning Endang Widjaja, 4 Christopher Duggan, Kevin Taylor, and Debra Doyle; 5 6 (b) Brands, Inc.; 7 8 delete all allegations related to defendant Yum! (c) in the Prayer for Relief, modify the Prayer for Relief 9 to specify the proposed appointments of class and/or 10 liaison counsel; 11 (d) 12 13 14 15 in Paragraph 7, amend Plaintiff Miriam Leyva s current residence; and (e) in Paragraphs 36 through 39, amend allegations pertaining to Plaintiffs Sandrika Medlock, Lisa 16 Hardiman, Miriam Leyva and Loraine Naranjo to reflect 17 their positions and approximate dates of employment for 18 Defendants. 19 20 21 Plaintiffs contend that these clean-up amendments reflect changes that have occurred since the filing of the Consolidated Complaint, i.e., dismissal of Yum! Brands, Inc. as a defendant, 22 23 24 consolidation of the Widjaja and Nave lawsuits, and discovery of relevant employment data. The Widjaja lawsuit was consolidated 25 October 22, 2009; Yum! Brands was dismissed from the lawsuit 26 March 31, 2010; class certification discovery ended June 24, 27 2010; and the Nave lawsuit was consolidated November 29, 2010. 28 13 1 Plaintiffs have not explained why they did not seek to amend the 2 Consolidated Complaint earlier to reflect these changes. These 3 amendments result from Plaintiffs lack of diligence. However, 4 Defendant does not claim prejudice from these non-substantive 5 6 7 changes. Plaintiffs motion to amend the Consolidated Complaint to 8 conform it with facts learned in discovery is GRANTED without 9 prejudice. 10 V. 11 12 13 14 15 CONCLUSION For the reasons stated: 1. Plaintiffs motion for leave to file a first amended consolidated complaint is GRANTED in part and DENIED in part, as follows: 16 17 18 19 20 21 22 23 a. Plaintiffs motion to add Mr. Escobar to the Consolidated Complaint is GRANTED; b. Plaintiffs motion to amend the proposed Plaintiff Subclasses is DENIED; and c. Plaintiffs motion to amend the Consolidated Complaint to conform it with facts learned in discovery is GRANTED. 24 25 26 27 28 2. Plaintiffs shall submit a proposed form of order consistent with this memorandum decision within five (5) days of electronic service of this memorandum decision. SO ORDERED. 14 1 2 3 DATED: May 3, 2011. __/s/ Oliver W. Wanger____ _ Oliver W. Wanger United States District Judge 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15