Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-01832/USCOURTS-cand-3_16-cv-01832-2/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Fair Labor Standards Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOSE GONZALEZ,

Plaintiff,

v.

FALLANGHINA, LLC, et al.,

Defendants.

Case No. 16-cv-01832-MEJ 

ORDER GRANTING MOTION TO 

DISMISS WITH LEAVE TO AMEND

Re: Dkt. No. 25

INTRODUCTION

Plaintiff Jose Gonzalez (“Plaintiff”) filed this action on behalf of himself and others 

similarly situated against Defendants Fallanghina LLC (“Fallanghina”), Longbranch Berkeley 

LLC (“Longbranch”), Hal Brandel, and Walter Wright (collectively “Defendants”), alleging they 

violated various federal and California labor and employment laws. Pending before the Court is

Defendants‟ Motion to Dismiss Plaintiff‟s First Amended Complaint (“FAC”) under Federal Rule 

of Civil Procedure (“Rule”) 12(b)(6). Dkt. No. 25. Plaintiff filed an Opposition (Dkt. No. 29),

and Defendants filed a Reply (Dkt. No. 30). The Court finds this matter suitable for disposition 

without oral argument and VACATES the July 28, 2016 hearing. See Fed. R. Civ. P. 78(b); Civ.

L.R. 7-1(b). Having considered the parties‟ positions, relevant legal authority, and the record in 

this case, the Court GRANTS Defendants‟ Motion for the following reasons.

BACKGROUND

Plaintiff filed his initial Complaint on April 11, 2016, alleging Defendants (1) did not pay 

him or other non-exempt current and former employees overtime or minimum wages as required 

by federal and California law, and (2) did not give them meal or rest breaks as required under 

California law. Compl., Dkt. No. 1. In doing so, Plaintiff also asserted Fair Labor Standards Act 

(“FLSA”) claims of unpaid overtime and unpaid minimum wage on a collective-action basis. Id. 

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Defendants filed a Motion to Dismiss on May 17, 2016, and subsequently, Plaintiff filed his FAC, 

removing the minimum wage claims and providing other allegations regarding the overtime 

claims. See FAC, Dkt. No. 22. The FAC asserts five causes of action: (1) failure to pay overtime 

under the FLSA, 29 U.S.C. § 207; (2) failure to pay overtime under California Labor Code 

“Section 501, et. al”; (3) failure to provide proper meal and rest breaks under California Labor 

Code §§ 226.7, 512; (4) failure to make payments within the time required after termination under 

California Labor Code §§ 201, 202, 203; and (5) restitution of unpaid overtime wages under 

California‟s Unfair Competition Law (“UCL”), Business and Profession Code §§ 17200, et seq. 

Id. The FAC does not state which Defendant(s) is allegedly liable for which cause(s) of action.

Plaintiff appears to allege Defendants Fallanghina and Longbranch “were joint employers” 

engaged in the “restaurant business.” Id. ¶ 5. Plaintiff worked in some capacity at Paisan Osteria, 

“the restaurant owned and managed by Fallenghina[,]”1as well as Longbranch Saloon, “the 

restaurant owned and managed by Longbranch[.]” Id. Plaintiff alleges “[b]oth restaurant 

operations were housed in the same building, . . . shared employees . . . a common refrigerator . . . 

the same chefs and supervisor, inter alia[.]” Id. Plaintiff does not explain his role at the restaurant 

(i.e., whether he was a waiter, a line cook, a dishwasher, a host, a busser, etc.)2but alleges he 

worked in “shifts” and he “performed . . . non-exempt duties under both California and Federal 

law[.]” Id. ¶ 8. 

He contends “Plaintiffs worked for each joint employer and were subject to a plan, scheme 

and policy of Fallaghina [] and Longbranch [] to deprive them of their lawfully earned overtime 

compensation by issuing separate payroll checks to avoid paying overtime compensation.” Id. ¶ 6. 

Plaintiff explains that “during the pay period October 5, 2015 to October 18, 2015, [he] worked 

78.54 hours at the Paisan Osteria restaurant and 41.81 hours at the Longbranch Saloon, and was 

only paid .65 hours overtime for the Paisan Osteria restaurant.” Id. ¶ 9. He further alleges that 

“[d]uring the pay period December 15, 2014 to December 28, 2014, [he] was denied meal breaks 

 

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Plaintiff‟s FAC in some instances spells Fallanghina as “Fallenghina.”

2 Nor does Plaintiff explain what roles the other proposed members of the class and/or collective 

action have at these companies.

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and rest breaks at both LLCs.” Id. ¶ 10.

Plaintiff also sues Defendants Hal Brandel and Walter Wright, who Plaintiff alleges are 

“the principals and controlling stockholders” in Fallaghina and Longbranch, respectively. Id. ¶ 2. 

According to the FAC, “Plaintiffs are informed and believe and thereon allege that Fallaghina 

LLC and Longbranch Berkeley LLC are the alter egos of the Walter Wright and Hal Brandel, 

respectively, and those LLCs were formed, among other reasons, to defraud workers like Plaintiffs 

by erecting a corporate shield to protect the individual Defendants from liability for their wrongful 

conduct[.]” Id. (errors in original). Plaintiff alleges “monies and assets are comingled between 

the LLC and the individuals, the formalities of corporate structure are disregarded, and the 

corporate separateness is ignored[.]” Id. He contends they are employers under the FLSA 

because they 

acted directly or indirectly in the interest of the LLCs in relation to 

Plaintiff Gonzales and other similarly situated employees by their 

authority over the operations of the LLCs, including authority over 

the daily operations of the LLCs and their managers, authority over 

the financial operations of the LLCs and their payrolls; 

establishment of a payroll system; control over the hiring and firing 

of employees their authority over the managerial staff of the LLCs; 

authority over the method of payment of the LLCs staff; 

participation in the decisions to operate the two LLCs in the same 

physical building and to share employee work among the LLCs[.]

Id. ¶ 3 (errors in original).

Defendants filed their pending Motion to Dismiss on June 21, 2016. Dkt. No. 25. They 

move to dismiss Plaintiffs‟ FAC on two grounds: (1) “[t]o the extent that Plaintiff alleges any 

causes of action against the named individual defendants Hal Brandel and Walter Wright based on 

an alter ego theory, Defendants move to dismiss Hal Brandel and Walter Wright as defendants 

from this action”; and (2) “[t]o the extent that Plaintiff alleges a cause of action for violations of

California Labor Code sections 226.7 and 512 (meal and rest break claims), Defendants move to

dismiss Plaintiff‟s claim on the grounds that Plaintiff has failed to plead any facts supporting that

cause of action.” Mot. at 1. They contend that “[a]lthough the standard for pleading under 

Federal Rule of Civil Procedure Rule 8 is not high, Plaintiff has not met it with respect to his meal 

and rest break claims or his allegations that the corporate veil should be pierced so that Hal 

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Brandel and Walter Wright can be held individually liable.” Id. at 2. They assert that “[w]ith 

respect to these two issues, [Plaintiff] has failed to state any plausible claim for relief because he 

simply has not alleged any non-conclusory facts supporting these claimed legal violations.” Id.

(citations omitted). Defendants thus ask the Court to dismiss Plaintiff‟s alter ego allegations 

against Hal Brandel and Walter Wright and dismiss Plaintiff‟s meal and rest break claim (third 

cause of action) for failure to state a claim on which relief can be granted. Id.

LEGAL STANDARD

Rule 8(a) requires that a complaint contain a “short and plain statement of the claim 

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A complaint must therefore 

provide a defendant with “fair notice” of the claims against it and the grounds for relief. Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citation omitted).

A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough 

facts to state a claim to relief that is plausible on its face. Id. at 570. “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 

678 (2009). “The plausibility standard is not akin to a „probability requirement,‟ but it asks for 

more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 

U.S. at 557). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need 

detailed factual allegations, a plaintiff‟s obligation to provide the „grounds‟ of his „entitle[ment] to 

relief‟ requires more than labels and conclusions, and a formulaic recitation of the elements of a 

cause of action will not do. Factual allegations must be enough to raise a right to relief above the 

speculative level.” Twombly, 550 U.S. at 555 (internal citations and parentheticals omitted).

In considering a motion to dismiss, a court must accept all of the plaintiff‟s allegations as 

true and construe them in the light most favorable to the plaintiff. Id. at 550; Erickson v. Pardus, 

551 U.S. 89, 93-94 (2007); Vasquez v. Los Angeles Cty., 487 F.3d 1246, 1249 (9th Cir. 2007). In 

addition, courts may consider documents attached to the complaint. Parks Sch. of Bus., Inc. v. 

Symington, 51 F.3d 1480, 1484 (9th Cir. 1995) (citation omitted). 

If a Rule 12(b)(6) motion is granted, the “court should grant leave to amend even if no 

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request to amend the pleading was made, unless it determines that the pleading could not possibly 

be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en 

banc) (internal quotations and citations omitted). However, the Court may deny leave to amend 

for a number of reasons, including “undue delay, bad faith or dilatory motive on the part of the 

movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice 

to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” 

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. 

Davis, 371 U.S. 178, 182 (1962)).

DISCUSSION

A. Alter Ego Claims

The alter ego doctrine generally “exists to hold accountable those who misuse the 

corporate form to carry out wrongdoing.” Pac. Bell Tel. Co. v. 88 Connection Corp., 2016 WL 

3257656, at *2-3 (N.D. Cal. June 14, 2016). “In narrow circumstances federal courts will find that 

a corporation is the alter ego of another by „piercing the corporate veil[.]‟” Corcoran v. CVS 

Health Corp., 2016 WL 948880, at *7 (N.D. Cal. Mar. 14, 2016) (quotation and some internal 

marks omitted); see also Sonora Diamond Corp. v. Superior Ct., 83 Cal. App. 4th 523, 539 (2000) 

(“alter ego is an extreme remedy, sparingly used”). “There is no litmus test to determine when the 

corporate veil will be pierced; rather the result will depend on the circumstances of each particular 

case.” Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290, 300 (1985).

“To survive a Rule 12(b)(2) motion on an alter ego theory a plaintiff must make a prima 

facie showing that both: (1) there is a unity of interest and ownership between the corporations 

such that their separate personalities do not actually exist, and (2) treating the corporations as 

separate entities would result in injustice.” Corcoran, 2016 WL 948880, at *7 (citing Ranza v. 

Nike, Inc., 793 F.3d 1059, 1073 (9th Cir. 2015), cert. denied, 136 S. Ct. 915 (2016)); Mesler, 39 

Cal. 3d at 300. Among the factors to be considered in applying this doctrine are:

[c]ommingling of funds and other assets[;] . . . the unauthorized 

diversion of corporate funds or assets to other than corporate uses; . .

. the treatment by an individual of the assets of the corporation as his 

own; . . . ; sole ownership of all of the stock in a corporation by one 

individual . . . [;] the failure to adequately capitalize a corporation; .

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. . the use of a corporation as a mere shell, instrumentality or conduit 

for a single venture or the business of an individual or another 

corporation; . . . the disregard of legal formalities . . . . [;] the 

diversion of assets from a corporation by or to a stockholder or other 

person or entity, to the detriment of creditors . . . [;] the use of a 

corporation as a subterfuge of illegal transactions . . . .

Leek v. Cooper, 194 Cal. App. 4th 399, 417 (2011) (quotation omitted). These factors are “not 

exhaustive.” Id. at 418 (quotation omitted). Others may be considered “under the particular 

circumstances of each case.” Id. (quoting Morrison Knudsen Corp. v. Hancock, Rothert & 

Bunshoft, LLP, 69 Cal. App. 4th 223, 249-50 (1999) and Associated Vendors, Inc. v. Oakland 

Meat Co., 210 Cal. App. 2d 825, 838-40 (1962)). In any event, “[t]he mere fact of sole ownership 

and control does not eviscerate the separate corporate identity that is the foundation of corporate 

law.” Katzir’s Floor & Home Design, Inc. v. M-MLS.com, 394 F.3d 1143, 1149 (9th Cir. 2004) 

(citation omitted).

In challenging the claims against Wright and Handel, Defendants point out that Plaintiff‟s 

allegations in support of his alter ego theory are conclusory and lack factual allegations to back up 

his legal conclusions. See Mot. at 6. As Defendants argue, “merely listing elements of alter ego 

liability, as Plaintiff has done in paragraph 2 of the FAC, is insufficient to state a claim; the party 

asserting such a claim must also allege specifically the facts supporting each element.” Id. They 

further argue Plaintiff appears to have “borrowed key words from the elements of an alter ego 

theory of liability and has attempted to pass them off to Defendants and the Court as factual 

allegations.” Reply at 2. The Court generally agrees.

Overall, Plaintiff‟s FAC fails to tell the story about what happened, when, and how—

instead, he provides legalese and formulaic recitations of the elements supporting alter ego 

liability. This pleading method is insufficient under Twombly/Iqbal. At the risk of being 

redundant, the Court again reiterates that under Iqbal, a claim is facially plausible “when the 

plaintiff pleads factual content that allows the court to draw the reasonable inference that the 

defendant is liable for the misconduct alleged.” 556 U.S. at 678 (emphasis added). A complaint 

“does not need detailed factual allegations” but “a plaintiff‟s obligation to provide the „grounds‟ of 

his „entitle[ment] to relief‟ requires more than labels and conclusions, and a formulaic recitation 

of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (emphasis added). 

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Plaintiff‟s FAC states various legal conclusions—e.g., Plaintiff asserts he is “informed and 

believe[s] that Fallanghina LLC and Longbranch Berkeley LLC are the alter egos of Walter 

Wright and Hal Brandel, respectively, and those LLCs were formed, among other reasons, to 

defraud workers like [Plaintiff] by erecting a corporate shield to protect the individual Defendants 

from liability for their wrongful conduct . . . .”; “[t]he LLCs are not properly capitalized to 

respond in damages to workers‟ wage complaints”; “[t]here is such a unity of interest between the 

LLCs and the individuals that it would be unfair and inequitable to honor the corporate shield in 

the instant case because the result would be to deprive [Plaintiff] in this action of money lawfully 

owing to them due to [his] earnest labors”; and “monies and assets are comingled between the 

LLC and the individuals, the formalities of the corporate structure are disregarded, and the 

corporate separateness is ignored[.]” FAC ¶ 2. The problem is he does not allege specific facts to 

support these conclusions, and thus, Plaintiff‟s FAC does not meet Twombly/Iqbal standards. He 

must allege supporting facts to establish a plausible basis for liability. See Neilson v. Union Bank 

of Cal., N.A., 290 F. Supp. 2d 1101, 1116 (C.D. Cal. 2003) (“Conclusory allegations of „alter ego‟

status are insufficient to state a claim . . . a plaintiff must allege specifically both of the elements 

of alter ego liability, as well as facts supporting each.”). 

As a final note, Defendants also argue that “[b]esides being vague, Plaintiff‟s FAC violates 

the fundamental rule that Federal Rule of Civil Procedure 9(b) forbids pleading on information 

and belief except when the opposing party remains in exclusive possession of the relevant facts.” 

Mot. at 6 (citing Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993)). While Plaintiff‟s 

Opposition potentially intimates that some of this information is not in his control (see Opp‟n at 

5), the Court does not have enough factual information from his FAC or otherwise to be able to 

assess Plaintiff‟s alter ego theory in general, let alone to the extent they are specifically based on 

allegations of fraud.

3

 See Clifton v. Houghton Mifflin Harcourt Publ’g Co., __ F. Supp. 3d__, 

2015 WL 9319402, at *3 (N.D. Cal. Dec. 23, 2015) and United Tactical Sys., LLC v. Real Action 

 

3

See also Pac. Bell Tel. Co., 2016 WL 3257656, at *3 (noting the alter ego doctrine “is not 

limited to fully blown intentional fraud. . . . It is enough (assuming the doctrine is otherwise 

satisfied) that the corporation is used to carry out some misdeed.” (emphasis in original)).

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Paintball, Inc., 143 F. Supp. 3d 982, 1016-17 (N.D. Cal. 2015) (both adopting the plausibility 

analysis from Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010), which held that 

allegations made “upon information and belief” are appropriate where (1) the support for the 

claims turns on information particularly within the control of the defendant, or (2) where there is 

other factual information elsewhere in the complaint upon which the allegations are based). 

In light of the foregoing, the Court dismisses the claims against Wright and Handel. 

However, given that it is unclear whether Plaintiff can allege plausible facts supporting claims 

against these two individuals in some capacity, the Court will grant Plaintiff leave to amend.4

B. Meal and Rest Break Claim

California law requires employers to give their nonexempt employees meal periods and 

rest periods during the workday. Cal. Lab. Code §§ 226.7, 512. Specifically, Labor Code section 

226.7 prohibits an employer from requiring an employee “to work during any meal or rest period 

mandated by an applicable order of the Industrial Welfare Commission.” Cal. Lab. Code §

226.7(a). Section 226.7 and Industrial Welfare Commission (“IWC”) Wage Order No. 5-2001 

(“Wage Order No. 5”)—operating in conjunction—require that an employer must authorize and 

permit all employees to take rest periods for “ten (10) minutes net rest time per four (4) hours” 

worked; “[h]owever, a rest period need not be authorized for employees whose total daily work 

time is less than three and one-half (3 1/2) hours.” Wage Order No. 5, Cal. Code Regs. tit. 8, § 

11140(12). Additionally, Labor Code section 512 prescribes meal periods: an employer must 

“provid[e] the employee with a meal period of not less than 30 minutes” for workdays lasting 

more than five hours, and provide two meal periods for workdays in excess of 10 hours, subject to 

waiver in certain circumstances. Cal. Lab. Code § 512(a); Brinker Rest. Corp. v. Superior Ct., 53 

Cal. 4th 1004, 1041 (2012) (“[A]bsent waiver, section 512 requires a first meal period no later 

 

4

In their Reply, Defendants raise their concern that in his Opposition, Plaintiff indicates “for the 

first time” that he alleges all five causes of actions against Wright and Handel in their individual 

capacities. Reply at 3. Defendants provide a number of arguments as to why Plaintiff cannot 

assert his current claims against Wright and Handel in their individual capacities; however, the 

Court need not address these arguments at this point as it is not actually clear what Plaintiff alleges 

against which Defendant at this point. As described below, in his amended complaint, Plaintiff 

should clarify who he is suing for which claims and in what capacity he sues them.

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than the end of an employee‟s fifth hour of work, and a second meal period no later than the end 

of an employee‟s 10th hour of work.”). An employer satisfies its obligation under section 512 “if 

it relieves its employees of all duty, relinquishes control over their activities and permits them a 

reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or 

discourage them from doing so.” Id. Employers who violate these requirements must pay 

premium wages. Cal. Lab. Code § 226.7(b).

Defendants challenge Plaintiff‟s meal and rest break claims asserted under sections 226.7 

and 512, contending again the allegations in his FAC “do[] not provide Defendants enough facts 

to adequately investigate and defend themselves” against these claims. Mot. at 7. They note 

“Plaintiff has provided bare, minimal details surrounding his meal and rest break claim” and 

instead gives only a “formulaic recitation of a meal and rest break cause of action” with “[n]o 

mention . . . of the factual circumstances or reasons that Plaintiff might have been denied a meal 

and rest break during that time period.” Id.

Again, the Court must agree. While Plaintiff argues he “points to a specific pay period in 

which he was denied meal and rest breaks” (Opp‟n at 7), he does not explain the factual 

circumstances surrounding this alleged denial. Indeed, he alleges that “[d]uring the pay period 

December 15, 2014 to December 28, 2014, Plaintiff Gonzales was denied meal breaks and rest 

breaks at both LLCs” (FAC ¶ 10 (emphasis added)), but he does not say who denied him meal and 

rest breaks. See Powell v. Wells Fargo Home Mortg., 2015 WL 4719660, at *12 (N.D. Cal. Aug. 

7, 2015) (“Plaintiff also often writes in the passive voice so it is unclear who acted on any given 

claim[.]”). While elsewhere Plaintiff alleges “Defendants never offered [him] meal breaks nor 

allowed mandatory ten minute rest breaks, and compelled [him] to work through those meal and 

rest break periods” (FAC ¶ 30), he does not provide any of the factual circumstances of how or 

when that occurred, such as an allegation that Plaintiff‟s manager made Plaintiff fold napkins 

during any break or that Plaintiff‟s supervisor told him he was not allowed to take breaks. 

Without more factual content, the current allegations do not allow the Court “to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at

678; see also Brinker Rest., 53 Cal. 4th at 1040-41 (“[T]he employer is not obligated to police 

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meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the 

relinquishing of control satisfies the employer‟s obligations, and work by a relieved employee 

during a meal break does not thereby place the employer in violation of its obligations and create 

liability . . . .”). 

Again, ultimately Plaintiff needs to allege facts and circumstances that support the 

elements of his claims, rather than simply reciting legal conclusions. See Deleon v. Time Warner 

Cable LLC, 2009 WL 9426145, at *3 (C.D. Cal. July 17, 2009) (“simply parrot[ing] the statutory 

language” for violations of California Labor Code sections 226.7 and 512 was inadequate; “[i]f 

Plaintiff wishes to survive a motion to dismiss, Plaintiff must plead sufficient „factual content‟ to 

allow the Court to make a reasonable inference that Defendants are liable for the claims alleged by 

Plaintiff” (quoting Iqbal, 556 U.S. at 678)). Accordingly, the Court dismisses Plaintiff‟s third 

cause of action for violations of Labor Code sections 226.7 and 512 but with leave to amend.

CONCLUSION

In light of the foregoing analysis, the Court GRANTS Defendants‟ Motion to Dismiss but 

does so WITH LEAVE TO AMEND in the event Plaintiff can plead the factual content 

necessary to support his claims. The Court will not restate what it has already explained above 

regarding the basic factual content Plaintiff must plead to survive a motion to dismiss; however, as 

a final note, the Court cautions Plaintiff to be cognizant of the care required in pleading and 

litigating class action and collective action claims. In particular, Plaintiff needs to be clear about 

which claims he brings on what basis and against which Defendants. 

Plaintiff‟s amended complaint is due by August 19, 2017.

IT IS SO ORDERED.

Dated: July 22, 2016

______________________________________

MARIA-ELENA JAMES

United States Magistrate Judge

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