Ader v. SimonMed Imaging Inc.

          ORDER

          HONORABLE JOHN J. TUCHI UNITED STATES DISTRICT JUDGE.

         At issue is Plaintiffs Keith Ader and Jeffrey Cochran's Motion to Modify Scheduling Order and for Leave to File a Fourth Amended Complaint (Doc. 63, Mot.), to which Defendants SMI Imaging, Howard John Simon, and SimonMed Imaging Inc. filed a Response (Doc. 69, Resp.), and Plaintiffs filed a Reply (Doc. 70, Reply). The Court resolves Plaintiffs' Motion without oral argument. See LRCiv 7.2(f).

         I. BACKGROUND

         Plaintiffs filed the original Complaint on June 29, 2017. (Doc. 1.) There have been three amendments to the Complaint since the initial filing. Plaintiffs filed the First Amended Complaint on July 13, 2017, adding a claim for unlawful retaliation in violation of the Fair Labor Standards Act (FLSA). (Doc. 9.) Defendants filed an Answer to the First Amended Complaint on September 15, 2017. (Doc. 16.) Additionally, Defendants filed a motion to dismiss on the same date, but the motion was filed before both parties had conferred. (Doc. 17.) After conferring, the parties agreed that Plaintiffs would file a Second Amended Complaint to address concerns raised in Defendants' motion and that the motion would be withdrawn. (Doc. 22.) Pursuant to stipulation and order, Defendant withdrew its motion to dismiss and Plaintiffs filed their Second Amended Complaint on October 2, 2017. (Docs. 19, 22, & 25.)

         The Court held a case management conference on October 31, 2017, and issued the Scheduling Order on the same day. (Doc. 32.) On or about February 2, 2018, Defendants terminated Plaintiff Cochran's employment. (Doc. 49.) The parties then stipulated and jointly moved the Court to allow the filing of the Third Amended Complaint to add a claim for unlawful retaliation committed against Cochran and to amend the Rule 16 Scheduling Order. (Doc. 49.) On April 13, 2018, the Court granted the parties' joint motion for leave to file the Third Amended Complaint and to amend the Scheduling Order. (Doc. 55.)

         Plaintiffs now move to amend the Scheduling Order under Fed.R.Civ.P. 16(b)(4) and request leave to file a Fourth Amended Complaint adding a claim for violations of the California Labor Code under Fed.R.Civ.P. 15(a)(2). (Mot. at 2) Plaintiffs request leave to add these claims for failure to pay overtime in amounts required by Cal. Lab. Code § 510, which calculates overtime hours differently than the FLSA and requires (in certain circumstances) that employees be compensated for overtime hours worked in amounts above those required by the FLSA.

         II. LEGAL STANDARD

         A party may amend a pleading once as a matter of course within 21 days after serving it, or within 21 days of service of, among others, a Rule 12(b)(6) motion. Fed.R.Civ.P. 15(a). In all other circumstances, absent the opposing party's written consent, a party must seek leave to amend from the court. Fed.R.Civ.P. 15(a)(2). Where a court has entered a scheduling order under Rule 16 and set a deadline for amending the pleadings, the Court “should address the issue under [Rule] 16.” Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000). Under Rule 16(b)(4), a party must show “good cause for not having amended their complaint before the time specified in the scheduling order expired.” Id. “This standard ‘primarily considers the diligence of the party seeking the amendment.'” Id. (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992)).

         Once a party has shown good cause under Rule 16, it must demonstrate that amendment is also proper under Rule 15. Johnson, 975 F.2d at 608. Although the decision to grant or deny a motion to amend is within the trial court's discretion, “Rule 15(a) declares that leave to amend shall be freely given when justice so requires.” Foman v. Davis, 371 U.S. 178, 182 (1962) (citation and internal quotation marks omitted). “In exercising its discretion with regard to the amendment of pleadings, a court must be guided by the underlying purpose of Rule 15-to facilitate a decision on the merits rather than on the pleadings or technicalities.” Eldridge v. Block, 832 F.2d 1132, 1135 (9th Cir. 1987) (citation and internal quotation marks omitted).

         However, the policy in favor of allowing amendments is subject to limitations. Madeja v. Olympic Packers, 310 F.3d 628, 636 (9th Cir. 2002) (holding that after a defendant files a responsive pleading, leave to amend is not appropriate if the “amendment would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay.”). “A proposed amended complaint is futile if it would be immediately subject to dismissal. Thus, the proper test to be applied when determining the legal sufficiency of a proposed amendment is identical to the one used when considering the sufficiency of a pleading challenged under Rule 12(b)(6).” Nordyke v. King, 644 F.3d 776, 788 (9th Cir. 2011). To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. ANALYSIS

         A. Leave to Amend the Scheduling Order under Fed.R.Civ.P. 16(b)(4)

         Because Plaintiffs seek to modify the Rule 16 Scheduling Order to add a claim for failure to pay overtime wages under California state law, Plaintiffs must show they have good cause to make such an amendment. When determining whether a party has shown good cause, the standard “primarily considers the diligence of the party seeking amendment.” See Johnson, 975 F.2d at 607-609. To determine if a party has acted diligently, a court may look to: (1) whether the party was diligent in assisting the court in creating a workable Rule 16 order; (2) whether the party's noncompliance with the Rule 16 deadline occurred because of the development of matters that could not have been reasonably foreseen or anticipated at the time of the Rule 16 scheduling conference; and (3) whether the party was diligent in seeking amendment of the Rule 16 order after it became apparent they could not comply with it. Morgal v. Maricopa Cty. Bd. of Sup'rs, 284 F.R.D. 452, 460 (D. Ariz. 2012).

         In this case, the Court recognizes that Plaintiffs were diligent both in assisting in the creation of the Rule 16 Scheduling Order and in seeking this amendment of the Rule 16 Scheduling Order, and Defendants have provided no argument to the contrary. The question here is whether Plaintiff's request to amend the Rule 16 deadline is ...