Opinion
3:18-cv-02219-AR
01-31-2024
JULIANNE HUNTER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. LEGACY HEALTH, and LEGACY EMANUEL HOSPITAL & HEALTH CENTER, Defendants.
FINDINGS AND RECOMMENDATION
JEFF ARMISTEAD, UNITED STATES MAGISTRATE JUDGE
Plaintiff Julianne Hunter brings this collective and putative class action against defendants Legacy Health and Legacy Emanuel Hospital and Health Center (together, Legacy) seeking unpaid wages, overtime wages, and penalty wages for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq, and Oregon law, ORS §§ 652.140, 652.610, 653.261, OAR §§ 839-020-0030, 839-020-0050. Hunter alleges that policies and practices at Legacy's Oregon and Washington facilities required nursing staff to remain available for patient care during their meal and rest breaks, and that Legacy would automatically deduct 30-minute meal periods from their shifts, regardless of whether an uninterrupted meal break occurred. Legacy's policies and practices, Hunter alleges, also required nursing staff to perform work before clocking in and after clocking out for which they were not compensated. Before the court is Hunter's motion to amend the complaint to add similar claims under Washington state law, RCW §§ 49.12.020, 49.46.130, 49.48.010, 49.52.050, WAC § 296-126-092, and to add Mya Blum as a named representative for putative Washington class members. As explained below, Hunter's motion should be GRANTED.
PROCEDURAL AND FACTUAL BACKGROUND
Hunter filed her complaint on December 26, 2018. (Compl., ECF No. 1.) She asserts that Legacy, “including all of the Oregon and Washington hospital facilities and clinics” under Legacy's control, violated the FLSA and Oregon law. (Id. ¶ 4.) On April 9, 2019, the parties participated in a Rule 16 conference, and at their request, the court declined to set a case management schedule at that time. (Minutes of Proceedings, ECF No. 35.) In September, the court issued an Opinion and Order that granted Hunter's motion to compel and denied Legacy's motion for a protective order. (Op. & Order, ECF No. 52.)
This case originally was assigned to Magistrate Judge John V. Acosta. On March 23, 2022, it was reassigned to Magistrate Judge Jeff Armistead. (Notice of Reassignment, ECF No. 180.)
On October 29, 2019, the court granted the parties' stipulated proposed case management schedule, setting a January 31, 2020 deadline for Hunter to move for conditional certification of an FLSA collective action, and a May 15, 2020 deadline for discovery related to certification of a Rule 23 class and decertification of any conditionally certified FLSA collective action. The court deferred setting any discovery deadline related to liability or expert discovery until after resolution of the class and collective treatment questions. (Order, ECF No. 55.)
After two joint extensions of time (ECF Nos. 58, 65), Hunter moved for conditional certification of an FLSA collective action on May 26, 2020 (Mot., ECF No. 78), which the court granted on January 4, 2021 (Op. & Order, ECF No. 115). Legacy moved to stay FLSA-related discovery while it moved for an interlocutory appeal of the court's January 4, 2021 conditional certification order to the Ninth Circuit. (Mot. to Certify, ECF No. 121.) After a February 11, 2021 hearing, the court tolled the statute of limitations for current and potential class members' claims beginning December 2, 2020 until further order of the court. (Minutes of Proceedings, ECF No. 127.) On April 13, 2021, the court denied the motion to certify an interlocutory appeal. (Op. & Order, ECF No. 133.) Subsequently, the court granted the parties' joint motion approving FLSA notice by mail, email, and text message, and tolling the statute of limitations from December to June 14, 2021. (Order, ECF No. 135.)
The FLSA notice period closed on October 27, 2021, and 920 individuals opted-in to the collective action. Mya Blum filed her consent to join the FLSA collective action on July 6, 2021. (Consent to Join, ECF No. 141.) Blum worked at several Legacy facilities, including Legacy Salmon Creek Medical Center in Washington. On April 15, 2022, Legacy propounded discovery on a subset of opt-in plaintiffs, including Blum. (Cruz Decl. ¶ 3, ECF No. 227-1.) Blum responded to those discovery requests on January 1, 2023. (Id. ¶ 4 & Ex. A.) On July 6, 2023, Hunter moved to amend the complaint proposing to add four claims under Washington state law for overtime and meal and rest break violations, and to add Blum as class representative. (Pls.' Mot. to Am. (attaching proposed First Am. Compl. (FAC)), ECF No. 225-1.)
In sum, the court has extended the deadline for discovery related to liability and expert discovery until after resolution of class and collective treatment eight times. (ECF Nos. 58, 65, 111, 124, 156, 188, 203, 220.) Each extension was granted in accordance with a joint motion to modify the schedule. Further delaying litigation, the case was stayed from May 18, 2022, to November 2, 2022, while the parties engaged in alternative dispute resolution. (ECF Nos. 196, 205.)
Discovery related to the questions of class and collective treatment is ongoing, with a current deadline of March 28, 2024. (ECF No. 234.) No deadline for discovery on liability or expert discovery has been set. Briefing on the issues of class certification or decertification of the collective action is currently due March 28, 2024. (ECF Nos. 115, 234.)
LEGAL STANDARD
After a brief period in which a party may amend as of right, a party may amend its pleadings only with the court's permission, and the “court should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a). A district court should apply Rule 15's policy of favoring amendments with extreme liberality to facilitate a decision on the merits, instead of on the pleadings or technicalities. Novak v. United States, 795 F.3d 1012, 1020 (9th Cir. 2015); Robillard v. Opal Labs, Inc., 337 F.Supp.3d 962, 967 (D. Or. 2018). A motion to amend is not automatically granted, however. In re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013). The court may deny a motion to amend if: (1) amendment prejudices the opposing party; (2) the motion is made in bad faith; (3) amendment causes undue delay in the litigation; or (4) the proposed amendment is futile for lack of merit. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 951 (9th Cir. 2006); Foman v. Davis, 371 U.S. 178, 182 (1962).
Those factors are not weighted equally. Undue delay, without more, is generally not enough to justify denying a motion to amend. Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). Prejudice to the opposing party carries the greatest weight and the party opposing amendment bears the burden of showing prejudice. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). And “futility of amendment alone can justify the denial of a motion [to amend].” Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051, 1055 (9th Cir. 2009).
Legacy does not assert that Hunter seeks amendment in bad faith, so the court focuses on the remaining prongs of undue delay, undue prejudice, and futility. Because futility alone can justify the denial of a motion to amend, the court examines that factor first.
DISCUSSION
A. Futility
An amendment is futile “only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense.” Barahona v. Union Pac. R.R. Co., 881 F.3d 1122, 1134 (9th Cir. 2018) (quoting Sweaney v. Ada County, Idaho, 119 F.3d 1385, 1393 (9th Cir. 1997)); Nordyke v. King, 644 F.3d 776, 788 n.12 (9th Cir. 2011) (“A proposed amended complaint is futile if it would be immediately subject to dismissal.” (quotation marks omitted)), aff'd on reh'g en banc on other grounds, 681 F.3d 1041 (9th Cir. 2012). If the facts or circumstances possibly could “be a proper subject of relief, [a plaintiff] ought to be afforded an opportunity to test his claim on the merits.” Foman, 371 U.S. at 182. The standard to be applied for futility is whether the amendment can survive a motion to dismiss under Rule 12(b)(6). Nordyke, 644 F.3d at 788 n.12; Barber v. Select Rehab., LLC, Case No. 3:19-cv-1235-SB, 2019 WL 2028519, at *1 (D. Or. May 8, 2019) (stating that district court should view futility of amendment “through the lens of the requirement that courts freely give leave to amend when justice so requires”).
Legacy contends that amendment is futile because Blum's claims are time-barred under Washington's three-year statute of limitations, RCW § 4.16.080(3). According to Legacy, because it did not have adequate notice of Blum's alleged Washington claims, they do not relate back to the original complaint. Under Legacy's theory, the statute of limitations on Blum's claims was not tolled until the motion for leave was filed on July 6, 2023. Because Blum's employment with Legacy ended in 2019, Legacy reasons that Blum needed to file her claims in 2022, and thus her proposed claims are untimely, and amendment is futile.
The court is unconvinced. As Hunter argues, Blum opted into the FLSA collective action on July 6, 2021, at which time she became an opt-in FLSA plaintiff. It is undisputed that Blum's FLSA claims relate back to the date of the original complaint filed on December 26, 2018. The relevant question, therefore, is whether Blum's Washington state-law claims also relate back to the original complaint and are timely.
Under Rule 15(c), an amendment to a pleading relates back to the date of the original pleading when “the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out-or attempted to be set out-in the original pleading[.]” Fed.R.Civ.P. 15(c)(1)(B). “Claims arise out of the same conduct, transaction, or occurrence if they ‘share a common core of operative facts' such that the plaintiff will rely on the same evidence to prove each claim.” Williams v. Boeing Co., 517 F.3d 1120, 1133 (9th Cir. 2008) (quoting Martell v. Trilogy Ltd., 872 F.2d 322, 325 (9th Cir. 1989)).
The Ninth Circuit uses a three-part test to determine whether opt-in plaintiffs' new claims relate back to the date of the original pleading:
1) the original complaint gave the defendant adequate notice of the claims of the newly proposed plaintiff; 2) the relation back does not unfairly prejudice the defendant; and 3) there is an identity of interests between the original and newly proposed plaintiff.Rosenbaum v. Syntex Corp. (In re Syntex Corp. Secs. Litig.), 95 F.3d 922, 935 (9th Cir. 1996); see also Zinman v. Wal-Mart Stores, Inc., Case No. 09-02045 CW, 2010 WL 2230449, at *2 (N.D. Cal. June 1, 2010) (applying three-part Rosenbaum test to analyze whether proposed new wage claims in class action related back to date of original complaint); Arch Chems., Inc. v. Radiator Specialty Co., 727 F.Supp.2d 997, 1004 (D. Or. 2010) (“[a]n amendment adding a party plaintiff relates back to the date of the original pleading” when these factors are satisfied). Notice to the opposing party of the existence of the claim is the critical element. Avila v. I.N.S., 731 F.2d 616, 620 (9th Cir. 1984).
Legacy had adequate notice of the Washington state-law claims. Hunter's complaint states that Legacy's “Oregon and Washington hospital facilities and clinics under [Legacy's] ownership, management and control, violated the FLSA and state law[.]” (Compl. ¶¶ 4, 29.) The complaint alleges that various Legacy policies and practices caused nurses to miss meal breaks, required them to remain on duty when taking a meal, and expected them to perform some duties while “off-the-clock.” (Id. ¶¶ 29-32, 45.) Hunter alleges that from December 26, 2012 to June 13, 2015, Legacy automatically deducted 30 minutes from nurses' shifts to account for a meal period, despite that most nurses remained on duty and their meal breaks were interrupted. (Id. ¶ 2.) Contrary to Legacy's contention, Hunter's complaint is not premised exclusively on the “auto-deduction” policy that ended in 2015. (Defs.' Opp'n at 7, ECF No. 227.) After that specific policy ended, Hunter asserts that Legacy's policies and practices continued to require that nurses be responsible for patient care even while on meal breaks and that Legacy denied them pay for those on-duty meal breaks, violating the FLSA and Oregon law. (Compl. ¶¶ 2-3.)
To the extent that Legacy contends that it lacks adequate notice of Blum as a party, that argument is not well-taken. Because Blum is a member of the FLSA opt-in class, Legacy has always known that Blum was a potential class member. Allen v. Similasan Corp., 96 F.Supp.3d 1063, 1069 (S.D. Cal. 2015) (“Where the new plaintiffs had always been a part of the putative class, notice is satisfied because Defendants had always known that all putative class members were potential plaintiffs.” (simplified)).
At oral argument, Legacy argued that the proposed new claims are unlike the existing FLSA and Oregon claims, suggesting that Washington law governing meal and rest breaks is different from Oregon law and carries different penalties. Even if true, the proposed Washington state-law claims are premised on the same Legacy policies and practices in place at Oregon and Washington facilities as those alleged in the original complaint. (Compare FAC ¶¶ 3, 4, 33-36, 51-57, 58-74 with Compl. ¶¶ 3, 4, 29-34, 44-47, 48-64.) And the same evidence will be used to prove the FLSA claims as the proposed Washington state-law claims. Consistent with Rule 15(c), the proposed Washington state-law claims share a common core of facts. Accordingly, the court finds that Legacy was put on notice that its conduct at its Oregon and Washington hospitals and facilities violated the FLSA and state law when the complaint was filed. Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S. 147, 149 n.3 (1984) (“The rationale of Rule 15(c) is that a party who has been notified of litigation concerning a particular occurrence has been given all the notice that statutes of limitations were intended to provide.”).
The identity-of-interests requirement of the Rosenbaum test is met when the original plaintiff and newly added plaintiffs are “similarly situated.” Immigrant Assistance Project of L.A. Cnty. AFL-CIO v. I.N.S., 306 F.3d 842, 858 (9th Cir. 2002). Plaintiffs are similarly situated when “[t]he circumstances giving rise to the claims remained the same as under the original complaint.” Raynor Bros. v. Am. Cyanimid Co., 695 F.2d 383, 385 (9th Cir. 1982). The relation back of an amendment is not prejudicial to the defendant when “the original plaintiff and the substituted plaintiff have sufficient identity of interests.” Id.
Legacy argues that Hunter and Blum do not have identity of interests because “each seeks to vindicate rights to which the other is not entitled”; that is, Hunter is pursuing Oregon claims and Blum is pursuing Washington claims. This does not mean Hunter and Blum are not similarly situated. Hunter's Oregon claims and Blum's Washington claims share a common core of facts. In Hunter's original complaint, she alleges that Legacy's practices violated federal and state law. The circumstances giving rise to Blum's claims in the proposed FAC are based on the same conduct alleged to have violated the FLSA and Washington state-law occurring at Legacy's Washington facilities. The claims are not antagonistic - they hinge on the same core wage violations. See Willner v. Manpower Inc., Case No. 11-cv-02846-JST, 2014 WL 2939732, at *5 (N.D. Cal. June 30, 2014) (finding identity of interest in wage claims and permitting relation back); Edwards v. PJ Ops Idaho, LLC, Case No. 1:17-cv-00283-DCN, 2022 WL 2065043, at *6 (D. Idaho June 7, 2022) (concluding new claims alleging specific state law violations related back where original complaint alleged federal and state law wage claims). Hunter and Blum are similarly situated and there is an identity of interests.
Legacy has not shown it will be unfairly prejudiced. Legacy advances two primary arguments. First, Legacy maintains that the Washington state-law claims “dramatically expand its potential liability” and expands the action's scope. A defendant's potentially increased liability, however, does not warrant denying the relation back of an amendment. Willner, 2014 WL 2939732, at *5; In re Glacier Bay, 746 F.Supp. 1379, 1391 (D. Alaska 1990) (“Increased liability is not sufficient prejudice to deny the relation back of [new] plaintiffs.”).
Second, Legacy argues that the proposed amendments deal with a new plaintiff, an entirely different employee population, different medical facilities, and a new legal scheme. Legacy is not unfairly prejudiced by the inclusion of Blum - she opted into the FLSA action in 2021. Although the Washington state-law claims may require some additional discovery and differ slightly, those claims assert the same basic legal scheme - wage and overtime violations - as those asserted in the original complaint. And proving and defending the proposed Washington state-law claims will rest on the same evidence as the existing FLSA claims. As noted above, Hunter alleged at the outset that Legacy's meal and rest break policies across all Legacy facilities in Oregon and Washington violated federal and state law. Thus, Legacy has been on notice about the potential for Washington state-law claims since this action's inception. Accordingly, because Hunter has shown notice, an identity of interests, and that Legacy will not be unfairly prejudiced, the proposed claims in the FAC relate back to the date of the original complaint under Rosenbaum and Rule 15(c).
Nevertheless, Legacy argues that even if the proposed claims relate back, they are time-barred because the Washington state-law claims all hinge on the automatic deduction policy that was terminated in June 2015, which is more than three years before the filing of the original complaint in November 2018. Because the Washington claims turn on that policy, according to Legacy, they are barred by the three-year statute of limitations, adding them is futile, and amendment should be denied.
Legacy's argument begins from an erroneous premise and thus fails. Hunter's complaint - and the proposed FAC - allege a variety of meal, rest, and overtime wage violations that did not end with the automatic deduction policy in 2015, including that Legacy's policies and practices did not completely relieve nurses of their duties during meal periods, that they were denied pay for those on-duty meal periods, and that they performed other off-the-clock work. (Compl. ¶¶ 3-4; FAC ¶¶ 3-4.) Because those practices are alleged to have continued after 2015, they are not clearly outside the statute of limitations. Accordingly, the Washington state-law claims are not time-barred, and amendment is not futile.
Finally, Legacy submits that the proposed Washington state-law claims fail to state plausible wage and hour claims under Rule 12(b)(6), citing Landers v. Quality Commc'ns, 771 F.3d 638, 646 (9th Cir. 2014) (holding that plaintiffs' allegations lacked details regarding having to work more than 40 hours in a given week without receiving overtime, and that plausibility is context specific). In Legacy's view, the allegations that Blum “routinely performed work during her entire shift, was subject to interruptions during attempted meal and rest breaks,” and performed off-the-clock work lack the necessary factual detail to sustain plausible causes of action. The proposed Rule 23 class claims also are premised on the automatic deduction policy that ended in 2015, and according to Legacy, assert time-barred claims and fail to state viable claims. The court disagrees.
Legacy did not move to dismiss the original complaint under Rule 12(b)(6) and Blum's proposed Washington state-law claims mirror those alleged by Hunter. And, as Hunter correctly highlights, even if Legacy were correct that the proposed claims are factually deficient, that does not render them futile or provide a basis for denying amendment. Rather, the proper remedy would be to require Hunter to plead additional facts, challenge certification, or bring a dispositive motion. See Estrada v. Avalon Health Care Hearthstone LLC, Case No. 1:21-cv-00688-CL, 2023 WL 3144466, at *2 (D. Or. Apr. 28, 2023) (granting motion to amend, stating challenge to sufficiency of FLSA claim did not render it futile). Furthermore, any asserted deficiencies with the proposed Rule 23 class definitions also may be resolved during class certification and do not render them futile.
In short, the court is not persuaded by Legacy's futility arguments, and they do not provide a basis for denying amendment.
B. Prejudice
When assessing whether to grant leave to amend a complaint, the “crucial factor” is unfair prejudice to the opposing party. See United States v. Pend Oreille Pub. Util. Dist. No. 1, 926 F.2d 1502, 1511-12 (9th Cir. 1991) (“Where there is a lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny leave to amend.” (simplified)); Adidas Am. v. TRB Acquisitions LLC, Case No. 3:15-cv-02113-SI, 2016 WL 11673273, at *3 (D. Or. July 26, 2016). Advancing different legal theories that require proof of different facts late in the litigation is unfairly prejudicial for Rule 15 purposes. AmerisourceBergen, 465 F.3d at 953-54; Portland Eng'g, Inc. v. ATG Pharma Inc., Case No. 3:19-cv-02010-AC, 2020 WL 5437731, at *5 (D. Or. Sept. 10, 2020). Moving to amend is not prejudicial when discovery has not closed, there is no pending trial date, no pretrial conference has been set, and the case as a whole remains in its early stages. DCD Programs, LTD v. Leighton, 833 F.2d 183, 187-88 (9th Cir. 1987).
Legacy argues it would suffer undue prejudice because the proposed amendments would require the parties to “restart discovery from scratch,” contending that the proposed Washington state-law claims involve different managers, systems, and practices. Discovery has been ongoing for four years, and Legacy suggests that discovery has been limited to just Legacy Emmanuel and Randall Children's Hospital. (Defs.' Mem. at 2.) In contrast, Hunter argues that despite the age of this case, the class certification process has not yet been briefed or resolved, the merits portion has not yet begun, and the case remains in its early stages.
The proposed Washington state-law claims track those under the FLSA and Oregon law in the original complaint and thus the proposed claims do not represent a change in tactics or theories. AmerisourceBergen, 465 F.3d at 953; see also Bolding v. Banner Bank, Case No. C17-0601 RSL, 2018 WL 4908260, at *5 (W.D. Wash. Oct. 10, 2018) (granting motion to certify class action, nothing that the differences between Washington and Oregon overtime wage claims are not “particularly complicated”). As argued by Hunter, the same evidence, albeit from additional facilities, will be used to prove the Washington claims and is largely in Legacy's hands. The parties have not yet briefed class certification, merits discovery has not closed, and no trial date has been set. Adding the Washington state-law claims will cause a delay, however, Legacy will not suffer undue prejudice. See Estrada, 2023 WL 3144466, at *2 (finding defendant not unduly prejudiced by amendment when the parties had not yet briefed class certification or conducted discovery on merits, and additional time could be provided if necessary).
C. Undue Delay
When evaluating undue delay, courts also consider if “the moving party knew or should have known the facts and theories raised by the amendment” when the original complaint was filed. AmerisourceBergen, 465 F.3d at 953. Although it cannot be the sole reason for denying leave to amend, a long, unjustified delay in seeking leave to amend supports denying amendment. See Hurn v. Ret. Fund Tr., 648 F.2d 1252, 1254 (9th Cir. 1981) (“[d]elay alone does not provide sufficient grounds for denying leave to amend”); Miller v. United Parcel Serv., Inc., No. 3:14-CV-872-PK, 2016 WL 8710006, at *2 (D. Or. May 13, 2016). Courts consider the delay between the time the party knew or should have known about the facts or theories underlying the proposed amendment and the date the motion was filed. AmerisourceBergen, 465 F.3d at 953.
Legacy argues that waiting to allege the Washington state-law claims for two years after Blum opted into the action, nearly five years after the original complaint was filed, and eight months after the stay was lifted weighs heavily against grating leave to amend. Hunter responds that it would have been counterproductive to seek amendment while the parties were engaged in settlement discussions from May to November 2022, and that she filed the motion to amend long before discovery related to Rule 23 class certification closed.
The court agrees with Legacy that waiting from November 2, 2022 to July 6, 2023 - eight months - to add the Washington state claims is unreasonable. During that eight-month stretch, however, Hunter appears to have brought new counsel on board and the court granted two joint motions to extend the case management deadlines. And as Hunter argues, the motion to amend was filed well before the discovery and class certification deadlines. As discussed above, amendment is not futile and Legacy will not be unfairly prejudiced. Therefore, in this case, the court finds that delay alone does not justify denying leave to amend.
The court acknowledges that its heavy caseload has prevented it from moving with appropriate speed in resolving this motion and further contributed to the delay.
CONCLUSION
For the above reasons, plaintiffs Motion to Amend (ECF No. 225) should be GRANTED.
SCHEDULING ORDER
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due within 14 days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within 14 days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.