Covelli v. Avamere Home Health Care, LLC, 032521 ORDC, 3:19-cv-486-JR

Docket Nº3:19-cv-486-JR
Opinion JudgeMichael H. Simon, United States District Judge
Party NameCASEY COVELLI, Plaintiff, v. AVAMERE HOME HEALTH CARE LLC, et al., Defendants.
AttorneyDavid A. Schuck and Leslie E. Baze, Schuck Law, LLC, Of Attorneys for Plaintiff. William E. Gaar and Jillian Pollock, Buckley Law, P.C., Of Attorneys for Defendants.
Case DateMarch 25, 2021
CourtUnited States District Courts, 9th Circuit, United States District Courts. 9th Circuit. United States District Court (Oregon)




No. 3:19-cv-486-JR

United States District Court, D. Oregon

March 25, 2021

David A. Schuck and Leslie E. Baze, Schuck Law, LLC, Of Attorneys for Plaintiff.

William E. Gaar and Jillian Pollock, Buckley Law, P.C., Of Attorneys for Defendants.


Michael H. Simon, United States District Judge

This Court previously granted in part what the Court construed as Plaintiff's motion for reconsideration and clarified the standard to apply for an “integrated employer” under the Family Medical Leave Act (FMLA). Covelli v. Avamere Home Health Care LLC, 2020 WL 6395448 (D. Or. Nov. 2, 2020) (also referred to as the “Reconsideration Order”). The Court left analysis of Defendants' motion to dismiss under the clarified standard for Magistrate Judge Jolie A. Russo.

Judge Russo issued Findings and Recommendation on November 20, 2020. Judge Russo concluded that the clarified standard did not change her previous findings and recommendation from June 22, 2020, and under the clarified standard Plaintiff's Third Amended Complaint (TAC) still failed to allege that the alleged parent companies1 were integrated employers with Plaintiff's alleged direct employer. Thus, Judge Russo maintained her original recommendation that the Court grant Defendants' motion to dismiss Plaintiff's claims against all named Defendants except Plaintiff's adequately alleged direct employer Northwest Hospital LLC (NWH) and its joint or integrated employer Avamere Home Health Care LLC. Judge Russo recommended, however, that the Court give Plaintiff one final opportunity to allege claims against the parent companies under the clarified standard. This would mean dismissing Plaintiff's claims with prejudice against: (1) Defendant Avamere Family of Companies (an unregistered entity that, to the extent that it is a proper defendant, has already been properly named through other named Defendants); and (2) NP2U LLC, Signature Coastal LLC, and Signature Corvallis LLC (alleged sibling entities who are not potential joint employers); and dismissing Plaintiff's claims without prejudice against: (1) Defendants Avamere Group LLC (Avamere Group), Avamere Health Services LLC (AHS), and Avamere Skilled Advisors LLC (ASA) (the alleged parent entities); and (2) Avamere Bethany Operations LLC, Avamere Lake Oswego Investors LLC, Avamere Sherwood Operations LLC, Avamere Stafford Operations LLC, Avamere St. Helens Operations LLC, Beaverton Rehab & Specialty Care LLC, Clackamas Rehabilitation LLC, Crestview Operations LLC, Genesis Newberg Operations LLC, Keizer Campus Operations LLC, Keizer River Operations LLC, King City Rehab LLC, Laurelhurst Operations LLC, Mountain View Rehab LLC, and Sunnyside Operations LLC (alleged sibling entities who are possible additional joint employers or integrated employers).

Plaintiff objects to the Findings and Recommendation. Plaintiff objects to Judge Russo only considering whether the parent entities were integrated employers under the clarified standard instead of all Defendants. Plaintiff also objects to the findings and recommendation that the TAC does not allege sufficient facts showing integrated employers under the clarified standard. The Court, therefore, reviews the issue de novo.

In the Reconsideration Order, the Court also ordered limited discovery against Defendants. Plaintiff filed a motion to enforce the Court's discovery order. On January 5, 2021, Judge Russo granted Plaintiff's motion to enforce in part and ordered limited discovery under the Court's Reconsideration Order. Plaintiff then filed a second motion to enforce. On February 2, 2021, Judge Russo issued a discovery order denying Plaintiff's second motion. Plaintiff objects to Judge Russo's nondispositive discovery order. The Court, therefore, reviews whether the order is either clearly erroneous or contrary to law. Fed.R.Civ.P. 72(a).


A. Review of Magistrate Judge's Decision

The Federal Magistrates Act grants district courts the authority to delegate certain matters to magistrate judges. See 28 U.S.C. § 636(b)(1). In civil actions, a district court may designate a magistrate judge to determine any pretrial matter, except motions for injunctive relief, for judgment on the pleadings, for summary judgment, to permit or deny maintenance of a class action, to dismiss for failure to state a claim, and to involuntarily dismiss an action. 28 U.S.C. § 636(b)(1)(A). For any of these excluded motions, a district judge may designate a magistrate judge to conduct hearings and submit proposed findings of fact and recommendations for disposition. 28 U.S.C. § 636(b)(1)(B).

Rule 72 of the Federal Rules of Civil procedure implements the authority provided by the Federal Magistrates Act. Under Rule 72(a), a magistrate judge may “hear and decide” all referred pretrial matters that are “not dispositive of a party's claim or defense.” Fed.R.Civ.P. 72(a); see also Mitchell v. Valenzuela, 791 F.3d 1166, 1168 (9th Cir. 2015) (explaining that “magistrate judges may hear and determine nondispositive matters, but not dispositive matters”). For pretrial matters referred to a magistrate judge that are dispositive of a claim or defense, without consent by all parties, Rule 72(b) allows the magistrate judge only to “enter a recommended disposition, including, if appropriate, proposed findings of fact.” Fed.R.Civ.P. 72(b)(1).

The distinction between a dispositive motion and a nondispositive matter is significant for the standard of review. When a party timely objects to a magistrate judge's findings and recommendations concerning a dispositive motion, the district judge must make a de novo determination of those portions of the magistrate judge's proposed findings and recommendations to which an objection has been made. 28 U.S.C. § 636(b)(1)(C); Fed.R.Civ.P. 72(b)(3). When a party timely objects to a magistrate judge's determination of a nondispositive matter, however, the district judge may reject that determination only when it has been shown that the magistrate judge's order is either clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). This means the Court “will evaluate the Magistrate Judge's factual findings to determine if any are clearly erroneous” and “will evaluate the Magistrate Judge's legal conclusions to determine if any are contrary to law, which involves a de novo review of those issues.” Quatama Park Townhomes Owners Ass'n v. RBC Real Est. Fin., Inc., 365 F.Supp.3d 1129, 1133 (D. Or. 2019); see also Id. at 1141-42.

B. Motion to Dismiss

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the Court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The court must draw all reasonable inferences from the factual allegations in favor of the plaintiff. Newcal Indus. v. Ikon Office Sol., 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The Court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “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.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “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.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation marks omitted).


A. Motion to Dismiss-Integrated Employer

The only issue remaining on Defendants' motion to dismiss is their alleged status as integrated employers. The Court previously concluded that Plaintiff sufficiently stated a claim against his direct employer NWH and alleged sibling entity Avamere Home Health Care, LLC, as a joint or integrated employer. Plaintiff argues that under the FMLA all the alleged parent and additional sibling entities of NWH were integrated employers with NWH under the standard the Court identified in the Reconsideration Order.

1. Allegations Relating to The Avamere Family of Companies

First, the Court addresses consideration of the allegations in the TAC relating to The Avamere Family of Companies. Plaintiff alleges that this is an unregistered entity with corporate officers and managers, that it maintains offices, that it maintains a website, that it submits reports, and that it performs other corporate functions. Plaintiff then alleges many more facts...

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