United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CANDIDA PALEGA, on Behalf of Herself

and on Behalf of All Others Similarly Situated,

Plaintiff,

 v.

THE PROPERTY SCIENCES GROUP,

INCORPORATED,

Defendant. /

No. C 17-00855 WHA

ORDER GRANTING MOTION

FOR LEAVE TO AMEND

COMPLAINT AND REQUIRING

NOTICE

INTRODUCTION

In this putative employment class action, plaintiff moves to amend her complaint to

remove the class and collective claims and proceed only on her individual claims. Defendant

opposes. For the reasons stated below, the motion is GRANTED.

STATEMENT

The following facts are taken from the complaint. Defendant Property Sciences Group,

Inc., is a national residential and commercial real estate valuation and appraisal management

company headquartered in Pleasant Hill, California. To complete its appraisals, defendant hired

appraisers who worked remotely and were paid on a salary basis with a bonus structure that

awarded extra compensation if an appraiser completed a certain number of appraisals per week. 

Plaintiff Candida Palega worked for defendant as such an appraiser from November 2011 to

February 2015.
United States District Court

For the Northern District of California

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During her employment, plaintiff frequently worked eleven to twelve hour days, often

including weekends. Despite working more than eight hours per day, defendant did not pay

plaintiff for any of her overtime.

In February 2017, plaintiff brought the instant action against defendant for violations of

the Federal Labor Standards Act, the California Labor Code, and the California Unfair

Competition Law. Plaintiff sought to represent a class comprised of all people who were

employed by Defendant as appraisers within the class period. In April 2017, defendant

answered the complaint.

After the snail-like advance of discovery and one continuance, the undersigned judge set

a final deadline of December 28, 2017, for plaintiff to file her motion for class certification. 

That deadline came and went without any motion. On January 18, 2018, defendant filed a

notice of non-receipt and asked that plaintiff’s class and collective action allegations and claims

be dismissed in light of her failure to file the motion by the deadline. Plaintiff responded that

she was “surprised” to receive such a notice, as defendant had been informed in advance of the

deadline that plaintiff did not intend to seek class certification and would proceed with her

individual claims only. 

An order set a deadline of February 16 for plaintiff to file the instant motion seeking

leave to amend her complaint to remove the class and collective action allegations and claims. 

This order follows full briefing and oral argument.

ANALYSIS

1. REMOVAL OF CLASS AND COLLECTIVE CLAIMS.

Federal Rule of Civil Procedure 15(a)(2) provides that a court should “freely give leave

when justice so requires.” In the absence of undue delay, bad faith, dilatory motive, repeated

failure to cure deficiencies, undue prejudice, or futility of the amendment, “the leave sought

should, as the rules require, be ‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962). 

Rule 15(a) does not apply where, as here, a district court has established a deadline for amended

pleadings under Rule 16(b). See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607–08

(9th Cir. 1992). A party seeking leave to amend after a deadline has been set must show that
United States District Court

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“good cause” exists for such an amendment. Id. at 608; FRCP 16(b)(4). In the order setting the

deadline to seek leave to amend complaint, this Court also stated that the motion should “clearly

explain why plaintiff wishes to pursue this case in her individual capacity” (Dkt. No. 52). 

Plaintiff contends that the removal of the class and collective action claims will allow

her to move forward with her original claims in an individual capacity, which will streamline

and simplify the case overall. Plaintiff states that she no longer wants to serve as a class

representative for “personal reasons,” including the fear of being “shunned by the industry in

which she still earns a living due to the public nature of a class action lawsuit” (Dkt. No. 54 at

7). Plaintiff also states that defendant is “unopposed” to the motion and that defendant will not

be prejudiced. Although defendant has reservations as to alleged misdeeds and gamesmanship

on the part of plaintiff and her counsel — discussed further below — ultimately defendant is not

opposed to an amendment removing the class and collective claims.

This order finds that enough cause has been shown for plaintiff to amend for this

purpose, as removing the class and collective claims will simplify the present litigation and will

not prejudice defendant. Leave to amend is therefore GRANTED, subject to the conditions

stated herein.

2. NOTICE TO PUTATIVE CLASS.

Notice of pre-certification dismissal serves to protect the interests of both the defendant

and the putative class. Diaz v. Tr. Territory of the Pac. Islands, 876 F.2d 1401, 1409 (9th Cir.

1989). Relevant here is that “notice of dismissal protects the class from prejudice it would

otherwise suffer if class members have refrained from filing suit because of knowledge of the

pending class action.” Ibid.

Plaintiff argues that notice is not warranted because no notice has been sent alerting

putative class members of the action, nor has the action garnered any media attention. This

order disagrees. Given that this case involves a class of colleagues who all work for the same

employer, and the fact that this action has been litigated for over a year allegedly on their

behalf, a distinct possibility exists that potential class members have learned of the lawsuit and

have not brought their own individual claims in reliance on this action. Once the class and
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collective claims are dismissed, absent class members can no longer rely on this action and the

usual tolling of the limitations period. If they want their claims addressed, they now must bring

their own actions, else the statute of limitations will run.

Plaintiff argues that there is no prejudice to the absent class because their claims were

tolled up to the point of dismissal. This is true, but the prejudice facing potential class members

is that now they must bring their own claims before the expiration of the statute of limitations

which, because of the instant dismissal, will no longer be tolled. Without notice, absent class

members may discover this fact too late and find their claims time-barred.

This order therefore requires that NOTICE shall be sent as follows. Electronic notice

shall be given by defendant to all potential class members for whom it has an email address. 

First-class mail notice shall be given at plaintiff’s counsel expense to all former employees who

are members of the potential class. The notice shall inform the putative class that this action

had been pending as a potential class and collective action and describe the nature of the claims

asserted on their behalf, but that plaintiff elected not to seek class certification. The notice shall

further inform the potential class that their claims, to the extent asserted in the complaint, have

been tolled up to the date of the dismissal, but that the statute of limitations has now resumed

running and that they should act promptly should they wish to bring a claim. Parties shall agree

and file a proposed draft of the notice by MARCH 30 AT NOON, and shall provide notice by

APRIL 13.

3. OPPOSITION TO LEAVE TO AMEND.

Though made out to be an “unopposed” motion, plaintiff’s representation proved to be

mistaken. Defendant is opposed to the motion to any extent beyond the removal of the class

and collective action claims. Additionally, defendant complains that plaintiff includes

amendments not addressed in her motion, plans to file a second action in an attempt to forum

and judge shop, and refuses to return or destroy documents produced related to the class and

collective action claims. Defendant’s concerns — and the relief warranted — are now

addressed.
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 Paragraphs 6 and 75 of the proposed amended complaint correspond with paragraphs 8 and 107 of

the original complaint.

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A. Addition of Language Not Pertaining to Class or Collective Claims.

Defendant opposes the addition of language in the proposed first amended complaint not

addressed by plaintiff in her motion seeking leave. Defendant argues that plaintiff’s motion was

written as if it only removed the class and collective claims, and that the surreptitious

augmentation of paragraphs 6 and 75 will cause it prejudice. It requests that these additions be

struck from the proposed amended complaint, or that it be granted the opportunity to further

depose plaintiff on the additional matters.

The additions to paragraphs 6 and 75 are underlined below:1

6. Plaintiff seeks unpaid wages and restitution for her work beyond 8

hours in a day or 40 in a week pursuant to California law, and for

unpaid meal periods and rest breaks, reimbursement of business

expenses and mileage, as well as additional liquidated damages,

statutory damages, and penalties.

75. At all times material to this Complaint, Plaintiff was required to

drive her personal vehicles on behalf of Defendant in the course

and scope of her employment with the Defendant, to visit assigned

properties and conduct inspections. Plaintiff was not reimbursed

for mileage and other expenses related to the use of her personal

vehicles. Likewise, Defendant failed to reimburse Plaintiff for use

of her cell phone, software, license, computer, high speed internet

connection, and other expenses that benefited Defendant, all of

which were required to perform her jobs.

These changes were not addressed in the motion for leave to amend, but in reply

plaintiff argues that such claims were already included in the original complaint. Plaintiff’s

attempt to bolster her remaining claims with more specific examples of expenses not

reimbursed should have been addressed in her opening brief. Nonetheless, this order

determines that the changes will not prejudice defendant. The additions made are not new

legal arguments, but rather obvious subsets of the expenses originally alleged.

Because these changes are immaterial and will not prejudice defendant, its request to

strike the additional language is DENIED. Defendant may take one additional 2-hour

deposition of plaintiff on these topics (and anything directly related to them) if it so wishes.
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 Plaintiff’s administrative motion to substitute an attached exhibit (Dkt. No. 59) is GRANTED.

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B. Possible Future Class Action.

After more than a year of litigation, plaintiff has concluded that she no longer wishes

to serve as a class representative. Plaintiff’s counsel, however, has been retained by another

former employee of defendant and plans to pursue a similar action with a new class

representative, this time in California state court.2

Defendant argues that it will suffer undue prejudice should plantiff’s counsel dismiss

and then re-file similar claims in another court, as it would be subject to duplicative

litigation in two fora and the expense of new discovery. This order recognizes the potential

prejudice, but will not require that a future plaintiff — who is not a party here — bring a

lawsuit in a particular forum. This is especially true should a future plaintiff bring an action

over which this Court has no subject matter jurisdiction.

Defendant’s request for an order to show cause is DENIED. Plaintiff’s counsel is free

to bring any subsequent action in any Superior Court of California or in any federal court in

California (but nowhere else). To the extent there is subject-matter jurisdiction, defendant

may of course seek removal and transfer to this district.

C. Materials Produced in Discovery.

Defendant requests that all class-related material be immediately destroyed or

returned should this order dismiss plaintiff’s class and collective action claims. Plaintiff

responds that she will gladly do so in accordance with the protective order on file, which

directs parties to destroy or return all protected material within 60 days after the final

disposition of this action (Dkt. No. 43).

This order need not deviate from the stipulated protective order, thus the materials

produced by defendant during discovery shall be returned at the conclusion of this action. 

Any documents or information derived therefrom may be used by plaintiff for her individual

claims only, and may not be used in any future action.
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CONCLUSION

To the extent stated above, plaintiff’s motion for leave to amend is GRANTED. 

Plaintiff’s proposed first amended complaint is ADOPTED as the operative complaint. 

Plaintiff must provide NOTICE to the putative class as stated above.

IT IS SO ORDERED.

Dated: March 23, 2018 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE