De Souza v. Dawson Technical, Inc.

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 LYAN FRANCIS DE SOUZA, Case No.: 21-CV-1103 JLS (MSB) an individual, 11 ORDER (1) GRANTING Plaintiff, 12 PLAINTIFF’S MOTION FOR v. LEAVE TO FILE A SECOND 13 AMENDED COMPLAINT, DAWSON TECHNICAL, INC., 14 AND (2) DENYING AS MOOT a Hawaiian Corporation; and DEFENDANT’S MOTION TO 15 DOES 1–50, inclusive, DISMISS AND REQUEST FOR 16 Defendants. JUDICIAL NOTICE

17 (ECF Nos. 27, 27-2 & 30) 18

19 Presently before the Court is Defendant Dawson Technical, Inc.’s (“Defendant”) 20 Motion to Dismiss the First and Third Causes of Action of Plaintiff’s First Amended 21 Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9 (“MTD,” ECF No. 22 27), as well as Defendant’s Request for Judicial Notice in support of the same (“RJN,” 23 ECF No. 27-2). Also before the Court is Plaintiff Lyan Francis De Souza’s (“Plaintiff”) 24 Ex Parte Motion for Leave to File a Second Amended Complaint (“Mot. to Amend,” ECF 25 No. 30). Defendant has filed an Opposition to (“Opp’n,” ECF No. 32), and Plaintiff has 26 filed a Reply in support of (“Reply,” ECF No. 33), the Motion to Amend. The Court took 27 the Motion to Amend under submission without oral argument and vacated the briefing 28 schedule and hearing on the Motion to Dismiss pending a decision on the Motion to 1 Amend. See ECF No. 31. For the reasons set forth below, the Court GRANTS Plaintiff’s 2 Motion to Amend and DENIES AS MOOT Defendant’s Motion to Dismiss and 3 supporting Request for Judicial Notice. 4 BACKGROUND 5 The Parties and the Court are familiar with the facts of this case; accordingly, the 6 Court incorporates the facts and background as set forth in the Court’s February 1, 2022 7 Order (the “Order,” ECF No. 21), in which the Court granted in part and denied in part 8 Defendant’s motion to dismiss Plaintiff’s original Complaint. As relevant to the instant 9 Motions, the Court dismissed without prejudice Plaintiff’s first cause of action, which 10 alleged a whistleblower retaliation claim under California Labor Code § 1102.5, for failure 11 to state a specific rule, regulation, or statute allegedly violated by Defendant. See Order at 12 7–10. 13 On March 1, 2022, Plaintiff filed a timely First Amended Complaint (“FAC,” ECF 14 No. 23) enumerating thirteen state and federal statutes Defendant allegedly violated by 15 terminating Plaintiff’s employment. See FAC ¶¶ 21–36. On March 15, 2022, Defendant 16 filed a Motion to Extend Defendant’s Time to File a Responsive Pleading, see ECF No. 17 24, which Plaintiff did not oppose, see ECF No. 25. Accordingly, the Court granted the 18 requested extension. See ECF No. 26. 19 On April 15, 2022, Defendant filed the instant Motion to Dismiss. See generally 20 MTD. On April 29, 2022, the Parties filed a Joint Motion to Continue the Hearing on 21 Motion to Dismiss for Two Weeks. See ECF No. 28 (“Joint Mot.”). The Joint Motion 22 indicated that Plaintiff believed the issues raised in the Motion to Dismiss could be resolved 23 via amendment, and that the Parties had agreed to meet and confer regarding the filing of 24 a proposed Second Amended Complaint (“SAC”) in lieu of proceeding with the Motion to 25 Dismiss. Id. at 2. Plaintiff sent Defendant the proposed SAC, but Defendant refused to 26 stipulate to the filing of the proposed SAC or indicate what additional specificity was 27 required. Id. Accordingly, in advance of his deadline to oppose the Motion to Dismiss, 28 Plaintiff filed the present Motion to Amend on an ex parte basis. Id. 1 REQUEST FOR JUDICIAL NOTICE 2 In support of its Motion to Dismiss, Defendant requests judicial notice of Plaintiff’s 3 Complaint originally filed in the Superior Court of California on May 21, 2021. See 4 generally RJN. The Court has previously granted Defendant’s request that the Court 5 judicially notice Plaintiff’s Complaint. See Order at 3–4. Furthermore, Plaintiff’s 6 Complaint is already a part of the record in this matter. See ECF No. 1-2 Ex. A. 7 Accordingly, the Court DENIES AS MOOT Defendant’s Request for Judicial Notice. 8 MOTION TO AMEND 9 I. Legal Standard 10 Motions to amend are governed by Federal Rule of Civil Procedure 15, which, as 11 relevant here, provides that a party may amend its pleading once as a matter of course 12 within twenty-one days of service of a motion under Rule 12(b) but otherwise must obtain 13 either leave of the court or the written consent of the adverse party in order to amend.1 Fed. 14 R. Civ. P. 15(a); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 15 2003) (citing Fed. R. Civ. P. 15(a)). 16 The general policy provided by Rule 15(a)(2) that “[t]he court should freely give 17 leave when justice so requires” is “to be applied with extreme liberality.” Eminence 18 Capital, LLC, 316 F.3d at 1051 (citing Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 19 708, 712 (9th Cir. 2001)). Accordingly, leave should be “freely given” absent “undue 20 delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 21 deficiencies by amendments previously allowed, undue prejudice to the opposing party by 22 virtue of allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 23 U.S. 178, 182 (1962); see also Yakama Indian Nation v. State of Wash. Dept. of Revenue, 24 176 F.3d 1241, 1246 (9th Cir. 1999) (“Amendment under the Federal Rules of Civil 25 Procedure should be granted unless amendment would cause prejudice to the opposing 26

27 1 Here, Plaintiff has not exercised his right to amend as a matter of course; however, Plaintiff’s Motion to 28 Amend was filed more than twenty-one days after service of Defendant’s Motion to Dismiss, and 1 party, is sought in bad faith, is futile, or creates undue delay.”) (internal quotation omitted). 2 Of these factors, prejudice is the most important. Eminence Capital, LLC, 316 F.3d at 3 1052. “The party opposing amendment bears the burden of showing prejudice.” DCD 4 Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). 5 In deciding whether to grant leave to amend, a trial court “should be guided by the 6 underlying purpose of Rule 15(a) . . . to facilitate decisions on the merits, rather than on 7 technicalities or pleadings.” James v. Pliler, 269 F.3d 1124, 1126 (9th Cir. 2001) (citing 8 United States v. Webb, 655 F.2d 977, 979–80 (9th Cir. 1981)). Absent prejudice or a strong 9 showing of the other Foman factors, there is a presumption in favor of granting leave to 10 amend. Eminence Capital, LLC, 316 F.3d at 1052 (internal citation omitted). 11 II. Analysis 12 Defendant’s Motion to Dismiss argues that both the first and third causes of action 13 in Plaintiff’s FAC should be dismissed for failure to satisfy the heightened pleading 14 standard of Federal Rule of Civil Procedure 9(b). See generally MTD. To remedy this 15 alleged deficiency, Plaintiff’s proposed SAC adds several new facts that are not in 16 Plaintiff’s currently operative FAC. See generally Mot. to Amend Ex. 5 (redline of 17 proposed SAC vs. FAC). Defendant argues that the Court should not allow Plaintiff to file 18 the SAC, relying principally on alleged prejudice and undue delay. See generally Opp’n. 19 To determine whether Plaintiff’s Motion to Amend should be granted, the Court now 20 considers each of the five Foman factors in turn. 21 A. Prejudice 22 Because Plaintiff filed the present Motion to Amend in lieu of opposing Defendant’s 23 Motion to Dismiss, Defendant claims it has suffered undue prejudice by having to raise 24 arguments “prematurely” in opposition to Plaintiff’s Motion to Amend. Opp’n at 10. 25 Defendant contends that prejudice exists as the arguments made in its Opposition could 26 have been used in its reply in support of its Motion to Dismiss had Plaintiff instead opposed 27 the Motion to Dismiss. See id. Defendant also argues that Plaintiff will not be prejudiced 28 by the denial of the Motion to Amend. Opp’n at 4. 1 However, the proper focus is prejudice to Defendant “by virtue of allowance of 2 amendment,” not prejudice faced as a result of opposing Plaintiff’s Motion to Amend or 3 prejudice to Plaintiff. See Foman, 371 U.S. at 182. “In considering the potential prejudice 4 of the amendment, the Court considers whether the amended complaint would ‘greatly 5 change the parties’ positions in the action, and require the assertion of new defenses.’” 6 Kohler v. Flava Enterprises, Inc., No. 10-CV-730-IEG NLS, 2011 WL 666899, at *2 (S.D. 7 Cal. Feb. 17, 2011) (quoting Phoenix Solutions, Inc. v. Sony Elec., Inc., 637 F. Supp. 2d 8 683, 690 (N.D. Cal. 2009)). Relevant considerations include, for example, whether the 9 proposed amendment adds additional claims or defenses, see id.; whether the proposed 10 amendment is being sought after the cutoff date for such motions, see Dep’t of Fair Emp. 11 & Hous. v. L. Sch. Admission Council, Inc., No. C-12-1830 EMC, 2013 WL 485830, at *5 12 (N.D. Cal. Feb. 6, 2013) (citations omitted); and whether discovery already has closed or 13 will imminently close, see id. (citations omitted). 14 Defendant advances no such arguments here. See generally Opp’n. Plaintiff’s 15 “proposed amended complaint does not add additional claims or defendants but, rather, 16 additional facts to support existing claims against the existing Defendant.” Kohler, 2011 17 WL 666899, at *2. “Thus, the initial complaint made Defendant sufficiently aware of the 18 nature of Plaintiff’s claims so that the modified pleadings in the proposed amended 19 complaint will not prejudice Defendant.” Id. Further, this case is in its infancy, and the 20 Court has not yet set the cutoff dates for discovery and amending the pleadings. See 21 generally Docket.2 Because the burden is on Defendant to demonstrate prejudice, and 22 23 24 2 Regarding the prejudice Defendant does assert, Plaintiff is correct that it is improper to raise arguments for the first time on reply. Reply at 7; see Autotel v. Nev. Bell Tel. Co., 697 F.3d 846, 852 n.3 (9th Cir. 25 2012) (“[A]rguments raised for the first time in a reply brief are waived.”) (alteration in original) (quoting Turtle Island Restoration Network v. U.S. Dep’t of Commerce, 672 F.3d 1160, 1166 n.8 (9th Cir. 2012)); 26 United States v. Boyce, 148 F. Supp. 2d 1069, 1085 (S.D. Cal.), as amended (Apr. 27, 2001) (collecting cases declining to consider arguments first raised in reply briefs and “noting that considering arguments 27 raised for first time in [a] reply brief deprives [the] opposing party of adequate opportunity to respond”) 28 (citations omitted), aff’d, 36 F. App’x 612 (9th Cir. 2002). Because Defendant only would have been able 1 Defendant has not done so, the Court finds that Defendant has failed to show that this factor 2 weighs in favor of denying Plaintiff’s Motion to Amend. DCD Programs, Ltd., 833 F.2d 3 at 187. 4 B. Undue Delay 5 Defendant also contends that Plaintiff’s Motion to Amend should be denied because 6 of undue delay. Opp’n at 7. Defendant argues that Plaintiff knew or should have known 7 the facts asserted in Plaintiff’s proposed SAC at the time of the original pleading. Id. 8 Because Plaintiff provided no explanation as to why the newly asserted facts were not 9 included in earlier pleadings, Defendant argues that Plaintiff has unduly delayed the 10 litigation as a result. Id. 11 Plaintiff argues “there was no delay here,” given that “the issue on Defendant’s first 12 motion to dismiss was whether Plaintiff was required to set forth ‘the specific rule, 13 regulation, or statute they reasonabl[y] believed was violated.’” Reply at 6 (citation 14 omitted). After the Court concluded Plaintiff was required to do so, “Plaintiff timely filed 15 his First Amended Complaint which included all of the statutes Defendant [allegedly] 16 violated.” Id. (citation omitted). After Defendant sought an extension of time and filed its 17 successive Motion to Dismiss, Plaintiff “immediately engaged with Defendant[]” to cure 18 the alleged deficiencies. Id. at 6–7 (citations omitted). At any rate, “[t]his case is still in 19 its earliest stages,” “[n]o scheduling order has issued and discovery has not even 20 commenced.” Id. at 7. Accordingly, Plaintiff differentiates the present case from the 21 authorities Defendant cites for the proposition that leave to amend should be denied when 22 a plaintiff has failed to explain why added specificity was not included in earlier pleadings. 23 See Reply at 2–7 (distinguishing AmerisourceBergen Corp. v. Diaslysist West, Inc., 465 24 F.3d 946, 953 (9th Cir. 2006); Jackson v. Bank of Haw., 902 F.2d 1385 (9th Cir. 1990); 25 Kittle v. City of Oxnard, 2018 WL6004522 (C.D. Cal. July 9, 2018)). 26 27 28 opposition in its potential reply, Defendant was not forced to raise arguments “prematurely” by opposing 1 While the Court acknowledges the authority Defendant has cited, the Court agrees 2 with Plaintiff that Defendant’s arguments lack necessary context that differentiate the case 3 at bar. Plaintiff appears to have attempted to timely and appropriately address pleading 4 deficiencies raised by both the Court and Defendant. The present case is still in the earliest 5 stages, and the Court is mindful of the Ninth Circuit’s liberal policy in favor of granting 6 leave to amend. Accordingly, the Court finds that Plaintiff has not unduly delayed in 7 seeking leave to amend.3 8 C. Remaining Foman Factors and Balancing 9 Defendant does not argue in its Opposition that Plaintiff has acted in bad faith, nor 10 does the Court believe there is any indication of bad faith on the record before it. See 11 generally Opp’n. And, although Defendant claimed in its Motion to Dismiss that “[i]t is 12 apparent that Plaintiff cannot cure these defects through amendment, particularly since this 13 is already Plaintiff’s second attempt at asserting a viable complaint,” ECF No. 27-1 at 13, 14 it is notable that Defendant does not advance these claims in opposing the Motion to 15 Amend, see generally Opp’n. 16 Absent a showing of any Foman factors, there is a presumption in favor of granting 17 leave to amend under Rule 15(a). Eminence Capital, LLC, 316 F.3d at 1052. Further, the 18 Court finds that permitting the proposed amendment promotes judicial economy and 19 conserves both the Parties’ and Court’s resources by avoiding briefing and deciding a 20 Motion to Dismiss that is potentially obviated by the proposed SAC. Accordingly, the 21 Court GRANTS Plaintiff’s Motion to Amend. Because the SAC will supersede the FAC, 22 the Court DENIES AS MOOT Defendant’s Motion to Dismiss. See, e.g., Giddens v. 23 Solano Cnty., No. 219CV0019KJMEFBPS, 2019 WL 3731527, at *2 (E.D. Cal. Aug. 8, 24 2019) (citations omitted) (denying as moot motion to dismiss after permitting amendment). 25 / / / 26

27 3 Even had Plaintiff unduly delayed, however, undue delay alone does not warrant denial of Plaintiff’s 28 Motion to Amend. Owens, 244 F.3d at 713 (citing Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999) 1 CONCLUSION 2 Based on the foregoing, the Court DENIES AS MOOT Defendant’s Request for 3 || Judicial Notice (ECF No. 27), GRANTS Plaintiff's Motion to Amend (ECF No. 30), and 4 || DENIES AS MOOT Defendant’s Motion to Dismiss (ECF No. 27). Plaintiff SHALL 5 || FILE AND SERVE his Second Amended Complaint, previously docketed as ECF No. 6 30-4, within three (3) days of the date on which this Order is electronically docketed. 7 IT IS SO ORDERED. 8 Dated: July 28, 2022 . tt f te 9 on. Janis L. Sammartino 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28