Fodera, Jr. v. Equinox Holdings, Inc.

District Court, N.D. California·Decided March 26, 2021·No. 3:19-cv-05072·Unknown

Opinion

FRANK J. FODERA, JR., et al., Case No. 19-cv-05072-WHO

Plaintiffs, ORDER DENYING IN PART AND v. GRANTING IN PART MOTION FOR LEAVE TO AMEND EQUINOX HOLDINGS, INC., et al., Re: Dkt. No. 46 Defendants.

This is a putative employment class action brought by plaintiffs Frank J. Fodera, Jr. and Michael M. Bonella against defendant Equinox Holdings, Inc. (“Equinox”) alleging violations of various California wage and hour laws on behalf of proposed classes of personal trainers and group fitness instructors. Plaintiffs Bonella and Fodera move for leave to amend to file a Third Amended Complaint (“TAC”) in order to add a new proposed class of pilates instructors, a proposed class of membership advisors, spa therapists, and estheticians, and a proposed class of all non-exempt employees who received meal period and/or rest period premium pay. They also seek leave to add additional allegations regarding Equinox’s alleged failure to provide accurate wage statements. Equinox opposes the motion. I conclude that Fodera and Bonella do not have standing to represent proposed Classes C and D and their motion to amend to add these classes is DENIED. It is GRANTED with respect to all other proposed amendments. Because I believe plaintiffs may be able to resolve the standing issue with proposed Classes C and D, either by identifying new named plaintiffs to represent these classes or by revising the class definitions so that Fodera and Bonella are members of all classes they seek to represent, plaintiffs’ motion to add Classes C and D is DENIED WITHOUT Plaintiffs first filed this action on April 3, 2019 in Alameda Superior Court. See Dkt. No. 1. They filed a First Amended Complaint on July 16, 2019. Equinox subsequently removed the action to federal court. Id. Plaintiffs filed the operative complaint in this action, the Second Amended Complaint (“SAC”), on May 8, 2020. Dkt. No. 24 (“SAC”). In the SAC, plaintiffs assert eight claims against Equinox: (1) failure to pay minimum wage; (2) failure to pay overtime wages; (3) failure to provide meal periods; (4) failure to provide rest periods; (5) failure to pay for rest and recovery periods; (6) failure to furnish accurate wage statements; (7) failure to pay wages earned at termination under Labor Code §§ 201, 202; and (8) unfair competition under Bus. & Prof. Code §§ 17200. SAC ¶¶ 49-108. They bring each of these eight claims on behalf of the following two putative classes in the SAC: All current and former non-exempt employees employed by any Defendant in California as personal trainers, or in any other similar capacity, at any time during the four-year period preceding the filing of this action through the present. All current and former non-exempt employees employed by any Defendant in California as group fitness instructors, or in any other similar capacity, at any time during the four-year period preceding the filing of this action through the present. SAC ¶ 41. Plaintiffs’ counsel in this action also represent the plaintiffs in a related state court action, Porter, et al. v. Equinox Holdings, Inc., Alameda Superior Court Case No. RG19009052, involving similar alleged wage and hour violations by Equinox. Dkt. No. 46-1 (“Almon Decl.”) ¶ 5. In December 2020, Equinox produced a large number of documents in the Porter action, including compensation plans and sample wage statements for all of Equinox’s non-exempt positions. Id. ¶¶ 5-6. In January 2021, plaintiffs’ counsel deposed Equinox’s Person Most Knowledgeable (“PMK”) regarding Equinox’s California wage statements for non-exempt employees, and the job duties and compensation structure of personal trainers, group fitness had a factual basis to make the amendments proposed in the TAC after reviewing the documents Equinox produced in December 2020 and after completing the PMK deposition in January. Almon Decl. ¶¶ 5-11. Plaintiffs filed their motion for leave to amend on February 3, 2021, one week after the PMK deposition. Dkt. No. 46 (“Mot.”). In their motion, plaintiffs seek leave to add three proposed classes. Plaintiffs describe these classes as follows: Class C: All current and former non-exempt employees employed by any Defendant in California as a pilates instructor, or in any other similar capacity, at any time during the four-year period preceding the filing of this action through the present Class D: All current and former non-exempt employees employed by Defendants as a membership advisor or as a spa therapist/esthetician, or any similar positions, however titled, in California who worked overtime and received any non-discretionary, non-hourly compensation, including without limitation commissions, piece rate pay, or bonus pay, in the same work week at any time during the four-year period preceding the filing of this action through the present. Class E: All current and former non-exempt employees employed by any Defendant in California in a non-exempt position and who received meal period and/or rest period premium pay at any time during the four year periods preceding the filing of this action through the present. TAC ¶ 41. Plaintiffs seek to bring all eight of their claims on behalf of Class C and their sixth claim, regarding inaccurate wage statements, on behalf of Classes D and E. Plaintiffs also seek leave to add additional factual allegations in support of their inaccurate wage statement claim. TAC ¶ 93. Equinox opposes plaintiffs’ motion on multiple grounds including: (1) plaintiffs lack standing to represent proposed Classes C and D; (2) Class E is futile because receiving premium pay is not a freestanding violation of the California Labor Code; (3) portions of plaintiffs’ proposed additions are futile due to res judicata or the first-to-file rule; (4) plaintiffs were not diligent in seeking leave; and (5) amendment would be unduly prejudicial to Equinox. Dkt No. 48 (“Opp.”) at 7. Equinox also seeks a ruling that, if amendment is granted, the amendments will not relate back to the filing of the original complaint. Id. at 17-18. Federal Rule of Civil Procedure 15(a) allows a party to amend its pleading once within: (1) 21 days after serving the pleading or (2) 21 days after the earlier of service of a responsive pleading or service of a Rule 12(b) motion. Fed. R. Civ. P. 15(a). Outside of this timeframe, “a party may amend its pleading only with the opposing party’s written consent or the court’s leave.” Id. A court “should freely give leave when justice so requires.” Id. “Although the rule should be interpreted with ‘extreme liberality,’ leave to amend is not to be granted automatically.” Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990) (citation omitted). A court considers five factors in determining whether to grant leave to amend: “(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) whether plaintiff has previously amended his complaint.” In re Western States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quoting Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). “Prejudice to the opposing party is the most important factor.” Jackson, 902 F.2d at 1387. Equinox argues that amendment is not appropriate because (1) the proposed amendments are futile; (2) plaintiffs did not diligently seek leave to amend; and (3) amendment would unduly prejudice Equinox. As discussed in detail below, I agree with Equinox that plaintiffs’ proposed amendments, as written, are futile with regard to Classes C and D because plaintiffs lack standing to represent these classes. However, I disagree that the proposed

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Fodera, Jr. v. Equinox Holdings, Inc., (N.D. Cal. 2021).

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