Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00486/USCOURTS-azd-2_09-cv-00486-1/pdf.json

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

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Byron Singleton; Shannon Singleton;

Carlos Velasco; Courtney Velasco, 

Plaintiffs, 

vs.

Michael J. Adick; Mary K. Adick; Elyte

ATM Services, Inc., 

Defendants. 

Michael J. Adick; Mary K. Adick; Elyte

ATM Services, Inc., 

Cross-Claimants,

vs. 

Stanley Benavidez; Elyte Services, LLC;

Clara Benavidez,

Cross-Defendants.

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No. CV 09-486-PHX-JAT

ORDER

Pending before the Court is Plaintiffs Byron and Shannon Singleton and Carlos and

Courtney Velasco’s (collectively “Plaintiffs”) Motion for Leave to File First Amended

Complaint and Joinder (Doc. # 76). Defendants/Cross-Claimants Elyte ATM Services, Inc.,

Michael J. Adick and Mary Kay Adick (collectively “Defendants”) filed a Response to the

Motion for Leave (Doc. # 78) and Plaintiffs have filed a Reply in Support of their Motion for

Leave (Doc. # 79). 

I. PROCEDURAL BACKGROUND

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On March 10, 2009, Plaintiffs commenced this action against Defendants. In the

Complaint (Doc. # 1), Plaintiffs included three causes of action against Defendants: (1)

failure to pay wages as required by the Fair Labor and Standards Act (“FLSA”); (2) failure

to pay wages as required by the Arizona Wage Act; and (3) unjust enrichment. On June 9,

2009, Plaintiffs filed a Motion for Class Certification (Doc. # 13) requesting that the Court

certify a collective class action under FLSA and a class action pursuant to Federal Rules of

Civil Procedure 23 (“Rule 23”). In their Response to the Motion for Class Certification

(Doc. # 23), Defendants opposed both class certifications on the grounds that under Rule 23,

Plaintiffs could not meet the numerosity requirement because joinder would not be

impracticable and under FLSA, class plaintiffs were not similarly situated. On November

11, 2009, the Court issued an Order (Doc. # 42) denying Plaintiffs’ Rule 23 request for class

certification because Plaintiffs could not meet the numerosity requirement required for a Rule

23 class action. The Court conditionally certified Plaintiffs’ collective action under FLSA

with the caveat that the class could be decertified if, through the discovery process, it was

shown that Plaintiffs were not similarly situated to meet the requirements of a FLSA class

certification. 

On December 31, 2009, Plaintiffs and Defendants filed a Joint Proposed Case

Management Plan (Doc. # 69) (the “Plan”). In the Plan, Plaintiffs asserted that due to the

Court’s order denying their Rule 23 class action, they were preparing a joinder motion on

behalf of “remaining potential plaintiffs” who had contacted them. Further, in the Plan’s

section for proposed deadlines, Plaintiffs proposed a deadline of February 7, 2010 to file a

joinder motion and motions to amend pleadings and Defendants proposed a deadline of

March 31, 2010 to file a joinder motion and motions to amend pleadings. In its Rule 16

Scheduling Order (Doc. # 74), the Court did not specifically mention a deadline for joinder,

but did set a March 31, 2010 deadline for filing an amended complaint. 

On February 18, 2010, Plaintiffs filed their Motion for Leave to File First Amended

Complaint and Joinder (Doc. # 76) (“Motion for Leave”). Plaintiffs move to amend pursuant

to Federal Rules of Civil Procedure 15 and 20. Plaintiffs propose to amend their Complaint

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by removing the Rule 23 class action allegations from the original Complaint and by joining

Shelly Walker, Gerald McDonald, Steven M. Davis, Troy Smith, James R. Hininger,

Bernadette Schmidt, Adrian Sanchez, Johnathan Kearney, Timothy Milo, and Dawn Milo

(collectively the “Joinder Plaintiffs”) as Plaintiffs to the suit. Defendants oppose the joinder

and argue that Plaintiffs’ Motion for Leave should be denied because (1) Plaintiffs’ motion

is an attempt to get around the content and spirit of this Court’s November 2, 2009 Order and

(2) Plaintiffs’ motion is untimely and will cause unnecessary delay. Defendants argue,

alternatively, that if the Court grants Plaintiffs’ Motion for Leave, the Court should amend

the Rule 16 Scheduling Order.

II. DISCUSSION

When a party seeks to amend a pleading, Federal Rules of Civil Procedure 15 (“Rule

15") is generally applicable, even where a party seeks to amend to add new parties. Because

Rule 20 also regulates whether parties may be joined, however, it is appropriate for a court

to consider whether the proposed amended pleading to add parties meets the requirements

of both Rules 15 and 20. See Hinson v. Norwest Fin. S. Carolina, Inc., 239 F.3d 611, 618

(4th Cir. 2001) (stating that a “court determining whether to grant a motion to amend to join

additional plaintiffs must consider both the general principles of amendment provided by

Rule 15(a) and also the more specific joinder provisions of Rule 20(a).”) (citing Desert

Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1374 (9th Cir.1980)). “In exercising the

discretion provided by Rules 15 and 20, courts have shown a strong liberality in allowing

parties to amend their pleadings when such amendments have satisfied the explicit

requirements of the rules.” Desert Empire Bank, 623 F.2d at 1375–76. Accordingly, the

Court will determine if Plaintiffs’ Motion for Leave meets the requirements of both Rules

20 and 15. 

A. Rule 20 - Joinder 

Pursuant to Federal Rules of Civil Procedure 20(a):

Persons may join in one action as plaintiffs if they assert any

right to relief jointly, severally, or in the alternative with respect

to or arising out of the same transaction, occurrence, or series of

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transactions or occurrences and if any question of law or fact

common to all these persons will arise in the action.

Regarding Rule 20(a), “permissive joinder is to be construed liberally in order to

promote trial convenience and to expedite the final determination of disputes, thereby

preventing multiple lawsuits.” League to Save Lake Tahoe v. Tahoe Reg’l Planning Agency,

558 F.2d 914, 917 (9th Cir. 1997); see also United Mine Workers of Am. v. Gibbs, 383 U.S.

715, 724 (1966) (“Under the rules, the impulse is toward entertaining the broadest possible

scope of action consistent with fairness to the parties; joinder of claims, parties and remedies

is strongly encouraged.”). “Rule 20(a) imposes two specific requisites for the joinder of

parties: (1) a right to relief must be asserted by, or against, each plaintiff or defendant relating

to or arising out of the same transaction or occurrence [or a series of transactions or

occurrences]; and (2) some question of law or fact common to all the parties will arise in the

action.” League to Save Lake Tahoe, 558 F.2d at 917; see also Coughlin v. Rogers, 130 F.3d

1348, 1350 (9th Cir. 1997).

1. Same Transaction or Occurrence

“The first prong, the ‘same transaction’ requirement, refers to similarity in the factual

background of a claim.” Coughlin, 130 F.3d at 1350. Plaintiffs assert that Defendants

systematically failed to pay Plaintiffs and Joinder Plaintiffs’ respective employment wages

in or around November 2008. In their Response to the Motion for Leave, Defendants do not

dispute that Plaintiffs and Joinder Plaintiffs’ claims arise out of the same transaction or

occurrence. The Court finds that Plaintiffs have asserted a claim that Defendants have

engaged in a systematic behavior for a specific period of time and that this is sufficient to

establish a similarity in the factual background of Plaintiffs and Joinder Plaintiffs’ claims.

Accordingly, the Court finds that the claims asserted by Plaintiffs and Joinder Plaintiffs

constitute the same transaction or occurrence required by Rule 20. 

2. Law or Fact Common to All Parties

The Court also finds that Plaintiffs and Joinder Plaintiffs’ claims share questions of

law common to all parties. Both Plaintiffs and Joinder Plaintiffs’ claims arise out of

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Defendants’ alleged failure to pay its employees wages for a specific period of time. The

resolution of these claims will require the Court to make determinations about whether

Defendants have violated FLSA and the Arizona Wage Act and whether Defendants have

been unjustly enriched through their alleged failure to pay their employees’ wages. These

issues of law and fact are common to both Plaintiffs and Joinder Plaintiffs. 

Although some of the specific facts related to certain employees wages may differ,

joinder is not rendered inappropriate by the fact that Plaintiffs and Joinder Plaintiffs’

individual claims involve some independent factual allegations. Rule 20 specifically provides

that “[n]either a plaintiff nor a defendant need be interested in obtaining or defending against

all the relief demanded. The court may grant judgment to one or more plaintiffs according

to their rights, and against one or more defendants according to their liabilities.” Fed. R. Civ.

P. 20(a)(3). Accordingly, the Court finds that Plaintiffs have met the permissive joinder

requirements of Rule 20 and will now determine whether granting leave to amend is

appropriate under Rule 15. 

B. Rule 15 - Leave to Amend

While the decision to grant or deny a motion to amend is within the discretion of the

district court, it is necessary for the Court to heed Rule 15(a)’s mandate that “leave to amend

‘shall be freely given when justice so requires.’” Foman v. Davis, 371 U.S. 178, 182 (1962)

(internal citation omitted). “In exercising its discretion with regard to the amendment of the

pleadings, ‘a court must be guided by the underlying purpose of Rule 15—to facilitate

decision on the merits rather than on the pleadings or technicalities.’” Eldridge v. Block,

832 F.2d 1132, 1135 (9th Cir. 1987) (quoting United States v. Webb, 655 F.2d 977, 979 (9th

Cir. 1981)). This “‘policy of favoring amendments to pleadings should be applied with

extreme liberality.’” Id. (quoting Webb, 655 F.2d at 979). 

A Court must consider the following factors in determining whether a motion to amend

should be granted: (1) whether the pleading at issue has been previously amended, (2) futility

of the amendment, (3) bad faith, (4) undue delay, and (5) prejudice to the opposing party.

Foman, 371 U.S. at 182; see also Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 798 (9th Cir. 1991);

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1

 In their Response to Plaintiffs’ Motion for Leave, Defendants state that “it is [their]

position that Plaintiffs should be sanctioned for their lack of diligence in joining an additional

ten named plaintiffs . . .” (Doc. # 78 at 7). In response, Plaintiffs assert that they should not

be sanctioned, but state that “[i]f anyone should be sanctioned for creating unnecessary delay

it is Defendants.” (Doc. # 79 at 8). To the extent that these “requests” for sanctions are more

than mere hyperbole, both Plaintiffs’ and Defendants’ Requests for Sanctions are denied. 

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W. Shoshone Nat’l Council v. Molini, 951 F.2d 200, 204 (9th Cir. 1991). “Generally, this

determination should be performed with all inferences in favor of granting the motion.”

Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999) (citing DCD Programs,

Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987)). “Significantly, ‘[t]he party opposing

amendments bears the burden of showing prejudice,’ futility, or one of the other permissible

reasons for denying a motion to amend.” Farina v. Compuware Corp., 256 F.Supp.2d 1033,

1060 (D. Ariz. 2003) (quoting DCD Programs, 833 F.2d at 187).

In this case, Plaintiffs have not previously amended their Complaint and there is no

showing of futility. Thus, the Court will consider whether Plaintiffs have acted in bad faith,

whether there has been undue delay, and whether allowing Plaintiffs to amend their Complaint

would prejudice Defendants. 

1. Bad Faith

Defendants argue that Plaintiffs’ Motion to Amend is merely an attempt to get around

the content and spirit of this Court’s November 2, 2009 Order. This argument relies on

language in the November 2, 2009 Order which states “[n]amed Plaintiffs may proceed on

their state claims individually.” (Doc. # 42 at 6). Although this Court did use that language

to deny the Rule 23 Class certification, that statement by the Court does not prevent Plaintiffs

from seeking joinder when appropriate. Defendants cite no further evidence as to how

Plaintiffs are attempting to circumvent the “content and spirit” of this Court’s November 2,

2009 Order. Accordingly, the Court finds that there has been no showing that Plaintiffs have

engaged in bad faith.1

 

2. Timeliness

Defendants argue that Plaintiffs’ Motion for Leave is untimely because (1) Plaintiffs

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knew that they could join additional Plaintiffs at the time of this Court’s November 2, 2009

Order and yet waited almost four months to file their Motion for Leave; (2) during the process

of preparing the Joint Proposed Case Management Plan and at the Rule 16 Scheduling

Conference, Plaintiffs did not convey any intention to further amend their complaint to join

additional parties; and (3) joinder of ten additional named plaintiffs will derail the timely

litigation of this case pursuant to the existing Rule 16 Scheduling Order. Defendants also

state that “[c]learly, if the Plaintiffs informed opposing counsel and court during the

scheduling conference of their intent to join ten named plaintiffs the resultant schedule would

have been far different, which is precisely why no notice was given before now.” (Doc. # 78

at 6). 

In Response, Plaintiffs argue that Defendants arguments regarding timeliness are

disingenuous because the Joint Proposed Case Management Plan made clear that Plaintiffs

were preparing a Motion for Leave to join additional Plaintiffs. The Court agrees. The Joint

Case Management Plan filed on December 31, 2009 (Doc. # 69) signed by both Plaintiffs’

Counsel and Defendants’ Counsel states “[m]any of the ‘remaining potential plaintiffs’ have

contacted Plaintiffs [sic] counsel and requested Plaintiffs’ counsel to file a joinder motion on

their behalf. A joinder motion is being prepared and will be filed in due course.” (Doc. # 69

at 3). Further, both Plaintiffs and Defendants specifically included a proposed filing deadline

for a joinder motion. Defendants cannot now assert that they were unaware of a possible

joinder motion or that they will incur prejudice if the motion for leave is granted. 

At the time of the Rule 16 Scheduling Conference, Defendants were aware that

Plaintiffs were preparing a joinder motion and did not bring any objections to the Court’s

attention. Further, Defendants knew that Plaintiffs’ intended to file a joinder motion when

they proposed deadlines for the Rule 16 Scheduling Order and thus cannot claim that had they

known about the joinder, they would never have agreed to the dates in that Order.

Accordingly, the Court finds that Plaintiffs’ Motion for Leave is timely, as it was anticipated

at the time the Court issued its Scheduling Order and it complies with the deadlines set forth

in that Order.

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3. Prejudice

Defendants assert that timely litigation of this case will be derailed if the court allows

the joinder of ten additional named plaintiffs. Aside from this general statement, Defendants

fail to state any reason why they will be prejudiced. Accordingly, it is unclear how granting

Plaintiffs’ Motion for Leave will prejudice Defendants. 

III. CONCLUSION

Due to the policies behind Federal Rules of Civil Procedure 15(a) and 20 in favor of

facilitating decisions on the merits and promoting judicial economy and because Defendants

have not carried their burden of demonstrating how they will be prejudiced if the amendment

is allowed, IT IS ORDERED GRANTING Plaintiffs’ Motion for Leave (Doc. # 76). IT IS

FURTHER ORDERED that the Clerk of the Court shall file the Amended Complaint

currently lodged as Docket Number 77. 

Newly joined Plaintiffs are bound by the January 11, 2010 Scheduling Order (Doc. #

74). Although Defendants request extension of all Rule 16 deadlines, on this record, the

Court does not find that cause has been shown. Therefore, this request is DENIED

WITHOUT PREJUDICE subject to the parties stipulating to an extension or either party

moving for an extension consistent with Local Rule 7.3. Due to the fast approaching first

expert disclosure deadline, however, the Court will extend the April 19, 2010 deadline.

Accordingly, IT IS ORDERED that the party with the burden of proof on an issue shall

disclose the identity of any person who may be used at trial to present evidence under Federal

Rules of Evidence 702, 703, 704, or 705 no later than April 30, 2010. All other deadlines in

the January 11, 2010 Scheduling Order (Doc. # 74) are confirmed. 

DATED this 15th day of April, 2010.

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