Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_17-cv-02606/USCOURTS-cand-4_17-cv-02606-9/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1446 Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ADRIANA GUZMAN, et al.,

Plaintiffs,

v.

CHIPOTLE MEXICAN GRILL, INC., et 

al.,

Defendants.

Case No. 17-cv-02606-HSG 

ORDER GRANTING MOTIONS FOR 

LEAVE TO FILE SECOND AMENDED 

COMPLAINT AND TO MODIFY CASE 

MANAGEMENT SCHEDULE

Re: Dkt. Nos. 53, 68

Pending before the Court are Plaintiffs’ (1) motion for leave to file a second amended 

complaint, see Dkt. No. 53 (“Mot.”); and (2) motion to modify the case management schedule, see 

Dkt. No. 68.1 For the following reasons, the Court GRANTS both motions.

I. BACKGROUND

In this putative class action, Plaintiffs Adriana Guzman, Juan Pablo, Aldana Lira, and 

Jonathon Poot allege that their employers, Defendants Chipotle Mexican Grill, Inc. (“CMGI”) and 

Chipotle Services, LLC (“CSL”), “systematically discriminate” against them and other proposed 

class members “on the basis of their Hispanic race and/or Mexican national origin[]” in violation 

of California’s Fair Employment and Housing Act. See First Amended Complaint, Dkt. No. 39 at 

¶ 1. Plaintiffs now “seek leave to amend to add allegations of alter-ego liability” (i.e., a veilpiercing theory) against the two existing Defendants. See Mot. at 1.

Plaintiffs filed their initial putative class action complaint in state court on February 17, 

2017. See Dkt. No. 1-1. Defendant CMGI removed the case on May 5. See Dkt. No. 1. On April 

12, 2018, the Court granted Plaintiffs’ motion to file an amended complaint adding CMGI’s 

subsidiary CSL as a defendant, see Dkt. No. 38, and issued a scheduling order setting June 12, 

 

1 The Court finds this matter appropriate for disposition without oral argument and the matter is 

deemed submitted. See Civil L.R. 7-1(b). 

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2018 as the deadline for amendment of pleadings, see Dkt. No. 37. Plaintiffs filed the first 

amended complaint on April 13, 2018. See Dkt. No. 39.

Plaintiffs filed a motion for leave to file a second amended complaint on August 24, 2018. 

See Dkt. No. 53. Defendants opposed on September 7, see Dkt. No. 56 (“Opp.”), and Plaintiffs 

replied on September 14, see Dkt. No. 57 (“Reply”).

Plaintiffs filed a motion to modify the case management schedule on December 3, 2018,

see Dkt. No. 68, along with an application to shorten the time for hearing, see Dkt. No. 69. The 

Court granted Plaintiffs’ motion to shorten time on the briefing schedule but denied the request for 

hearing. See Dkt. No. 70. Defendants responded on December 4. See Dkt. No. 72.

II. LEGAL STANDARD

Under the Federal Rules of Civil Procedure, a case management schedule “may be 

modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). Likewise, 

the party seeking to amend a pleading after the deadline set by the pretrial scheduling order

expires “must satisfy the ‘good cause’ standard of [Rule] 16(b)(4) . . . rather than the liberal 

standard of [Rule] 15(a).” In re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 737 

(9th Cir. 2013) (brackets in original), aff’d sub nom. Oneok, Inc. v. Learjet, Inc., 135 S. Ct. 1591 

(2015). As the Ninth Circuit has explained,

Rule 16(b)’s “good cause” standard primarily considers the diligence 

of the party seeking the amendment. The district court may modify 

the pretrial schedule if it cannot reasonably be met despite the 

diligence of the party seeking the extension. . . . Although the 

existence or degree of prejudice to the party opposing the 

modification might supply additional reasons to deny a motion, the 

focus of the inquiry is upon the moving party’s reasons for seeking 

modification. If that party was not diligent, the inquiry should end.

Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (citation and quotation 

marks omitted). If “good cause” for amendment is found under Rule 16(b), then the Court should 

deny leave to amend “only if such amendment would be futile.” Heath v. Google Inc., No. 15-cv01824-BLF, 2016 WL 4070135, at *2 (N.D. Cal. July 29, 2016); see also Kisaka v. Univ. of S. 

Cal., No. CV 11-01942 BRO (MANx), 2013 WL 12203018, at *2–3 (C.D. Cal. Nov. 20, 2013) 

(assessing motion for leave to amend under Rule 16(b) and holding that even if the Court were to 

find diligence and lack of prejudice, amendment would nonetheless be futile).

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III. DISCUSSION

A. Motion for Leave to File Second Amended Complaint

Plaintiffs seek leave to file a second amended complaint “to add allegations of alter-ego 

liability” (i.e., a veil-piercing theory) against CMGI and CSI, in addition to the joint-employer 

theory they alleged in the first amended complaint. Mot. at 1. Because the Court’s scheduling 

order set June 12, 2018 as the deadline for amendment of pleadings, see Dkt. No. 37, Plaintiffs 

must meet the “good cause” standard of Federal Rule of Civil Procedure 16(b)(4) and must 

demonstrate that amendment would not be futile. Plaintiffs do so here and thus the Court 

GRANTS their motion for leave to file a second amended complaint.

i. Good Cause

Plaintiffs contend that they have met the good cause standard because they did not learn of 

facts supporting their alter-ego theory of liability until a July 17, 2018 deposition in a separate 

case. Mot. at 10. Furthermore, Plaintiffs assert that Defendants had exclusive possession of the 

underlying facts and did not disclose them in initial disclosures or discovery responses. Reply at 

1–2.

Defendants respond that Plaintiffs’ November 2017 motion for leave to file an amended 

complaint demonstrates that “Plaintiffs knew that they potentially had alter ego claims against 

Defendants” because they “kn[ew] of the connection between CSL and CMG[I].” Opp. at 6–7. 

Defendants rely primarily on Ginger Root Office Assocs., LLC v. Advanced Packaging & Prod. 

Co., in which the court denied the plaintiff’s motion for leave to add additional defendants under 

an alter ego theory, finding that the plaintiff “was not entitled to wait until its proof was complete 

before seeking to add these parties as defendants.” See No. CV0705568MMMJTLX, 2008 WL 

11338229, at *4 (C.D. Cal. Dec. 9, 2008).

Plaintiffs have acted with sufficient diligence to satisfy the good cause standard. In the 

first amended complaint, Plaintiffs named the same two Defendants, but alleged a theory of joint 

liability. See Dkt. No. 39 ¶ 10. There is nothing in the record to suggest that Plaintiffs had facts 

supporting an alter ego theory prior to the July 17 deposition. Though Defendants claim that 

amendment would be prejudicial, they are unable to support this claim with anything other than a 

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generic recital that it would “cause undue delay and prejudice.” Opp. at 10. And unlike in Ginger 

Root, the Plaintiffs are not adding any new defendants but are merely alleging a new theory of 

liability against the existing Defendants. Plaintiffs have established good cause to amend their 

Complaint.

ii. Futility

“[L]eave to amend should be denied as futile only if no set of facts can be proved under the 

amendment to the pleadings that would constitute a valid and sufficient claim or defense.” 

Barahona v. Union Pac. R.R. Co., 881 F.3d 1122, 1134 (9th Cir. 2018) (internal quotations 

omitted); see also Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). If it is “not 

clear that amendment of [a] complaint would be futile” a district court should permit a party to 

amend its complaint rather than deny leave to amend on the ground of futility. See Center for 

Biological Diversity v. Veneman, 394 F.3d 1108, 1114–15 (9th Cir. 2005).

The alter ego doctrine allows “the court [to] disregard the corporate entity and . . . hold the 

individual shareholders liable for the actions of the corporation.” Mesler v. Bragg Mgmt. Co., 39 

Cal. 3d 290, 300 (1985). Under this doctrine, “[a] corporate identity may be disregarded—the 

‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the [owner] 

of a corporation liable for the acts of the corporation.” Sonora Diamond Corp. v. Super. Ct., 83 

Cal. App. 4th 523, 538 (2000). There are two basic requirements: “(1) that there be such unity of 

interest and ownership that the separate personalities of the corporation and the individual no 

longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable 

result will follow.” Mesler, 39 Cal.3d at 300 (quoting Automotriz Del Golfo De California S. A. 

De C. V. v. Resnick, 47 Cal.2d 792, 796 (1957)).

The Court cannot say that Plaintiffs’ proposed amendment is futile. In their proposed 

second amended complaint, Plaintiffs have pled facts to support their allegations that CMGI and 

CSL share a unity of interest and that respecting the corporate formality would lead to an injustice. 

See Dkt. No. 53-4 ¶¶ 11–20. Plaintiffs’ proposed amendment is not clearly futile.

B. Motion to Modify Case Management Schedule 

Plaintiffs move to modify the case management schedule, contending that they have been 

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diligent but that Defendants have “systematically ignored their discovery obligations.” See Dkt. 

No. 68-1 at 1. Defendants “do not take a position” on whether the schedule should be modified, 

but dispute that Plaintiffs were diligent or that Defendants have engaged in any improper conduct. 

See Dkt. No. 72.

The Court need not wade into the parties’ discovery disputes here. The Court finds that 

Plaintiffs have shown good cause to modify the case management schedule, particularly given that 

Defendants do not oppose the proposed extensions and the Court has just granted Plaintiff’s 

motion for leave to amend the Complaint.

Accordingly, the Court GRANTS the proposed case management schedule as set out 

below:

1. The Parties’ fact discovery cut-off previously set for December 3, 2018, is CONTINUED 

to January 18, 2019;

2. The deadline for the Parties’ designation of experts currently set for December 17, 2018, is 

CONTINUED to February 1, 2019;

3. The deadline for the Parties’ designation of rebuttal experts currently set for January 11, 

2019, is CONTINUED to March 1, 2019;

4. The Parties’ expert discovery cut-off currently set for January 20, 2019, is CONTINUED 

to March 15, 2019;

5. The Parties’ dispositive motion filing deadline, including the deadline for filing Plaintiffs’ 

class certification motion, currently set for January 30, 2019, is CONTINUED to April 1, 

2019;

6. The Parties’ deadline to file oppositions to dispositive motions, including the deadline for 

filing any opposition to Plaintiffs’ class certification motion, currently set for March 1, 

2019, is CONTINUED to May 1, 2019;

7. The Parties’ deadline to file replies to dispositive motions, including the deadline for filing 

any reply pertaining to Plaintiffs’ class certification motion, currently set for March 6, 

2019, is CONTINUED to May 7, 2019;

8. The Parties’ hearing date regarding dispositive motions, including the deadline for the 

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hearing for Plaintiffs’ class certification motion, currently set for April 4, 2019, is 

CONTINUED to June 6, 2019 at 2:00 p.m.

IV. CONCLUSION

The Court GRANTS Plaintiffs’ motion for leave to file a second amended complaint and 

GRANTS Plaintiffs’ motion to modify the case management schedule. Plaintiffs shall file their 

second amended complaint by the close of business today, December 17, 2018.

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

12/17/2018

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