Donovan v. Gillmor, C 79-163.
| Decision Date | 19 March 1982 |
| Docket Number | No. C 79-163.,C 79-163. |
| Citation | 535 F. Supp. 154 |
| Parties | Raymond J. DONOVAN, etc., Plaintiff, v. Ernest GILLMOR, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
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Benjamin T. Chinni, U. S. Dept. of Labor, Cleveland, Ohio, for plaintiff.
John P. Rice, Jr., Cleveland, Ohio, for defendants.
This matter is before the Court on plaintiff's motion to amend complaint and defendants' response thereto, the Motion of ABLE to intervene as amicus curiae and defendants' response thereto, and cross motions for summary judgment. The Court retains jurisdiction pursuant to the Fair Labor Standards Act of 1938, (hereinafter FLSA) as amended, 29 U.S.C. § 201 et seq.
The facts of this lawsuit involve the operation of a farm by defendants, in which migrant farm labor is employed by defendants in the functioning of their farm. Plaintiff claims that defendants, in operating their business, have violated the child labor provisions of the FLSA, and seeks to permanently enjoin any and all future violations of said Act. Defendants have denied any coverage under the FLSA, as well as all violations alleged thereunder.
The first motion to be addressed by this Court is plaintiff's motion for leave to amend the complaint. In seeking to amend its complaint, plaintiff proposes to add a third partner of the named defendants as a party defendant, in addition to adding a corporation which was formed after the start of this lawsuit and is currently running the farm in question. Other new violations, concerning recordkeeping provisions of the FLSA are sought to be included in the amended complaint, in addition to a second basis for asserting the FLSA's coverage over the defendants' business. The information upon which plaintiff bases these new allegations and seeks to join new parties was not acquired until interrogatories were answered on October 31, 1980, and updated on February 5, 1981, with supplemental material submitted on February 11, 1981. The remaining source of information was constituted by the deposition of defendant Peter Gillmor, partially completed on February 5, 1981 and not signed until April 3, 1981.
Rule 15(a) of the Federal Rules of Civil Procedure provides that a party may amend a complaint only by leave of Court when a responsive pleading has been filed in the case. In the case sub judice, with a responsive pleading having been filed by defendant, Rule 15(a) comes into play. Rule 15(a) further provides that "leave shall be freely given when justice so provides." This mandate was strongly reaffirmed by the Supreme Court in Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). The general practice of the Federal Courts is to liberally allow amendments of the pleadings. 3 Moore's Federal Practice ¶ 15.082. In accordance with these principles, a Court should allow a party to amend its pleading, unless there is evidence of bad faith, undue delay, dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment, or futility of the amendment. Foman v. Davis, supra, at 182, 83 S.Ct. at 230.
Plaintiff asserts that there was no undue delay involved, as the new information was not received until two months prior to the filing of the motion for leave to amend. It is further stressed by plaintiff that this is not an attempt at delay, but merely a desire that the case be fully and completely litigated on its merits. Lastly, plaintiff argues that although defendants will have to file an answer to the amended complaint and respond to additional discovery, that such facts do not rise to the level of undue prejudice.
Defendants oppose plaintiff's motion for leave to amend on a number of grounds. First, they claim that it would be highly prejudicial to defendants to permit plaintiff to amend its pleadings two years after the action was filed to assert a new cause of action which could previously have been presented based on plaintiff's investigation of defendants' farm in 1978. Defendants additionally claim that they will be prejudiced by the joinder of the corporate defendant, an entity that was not formed at the start of this lawsuit. Lastly, it is argued that any allegation against the corporate defendant would be barred by the two year statute of limitations period delineated in § 6 of the Portal-to-Portal Act of 1947. For the reasons to follow, the Court disagrees with defendants' assertions and will grant plaintiff leave to amend its complaint.
In considering the reasons enumerated by plaintiff for its motion for leave to amend, it is evident that to deny plaintiff's motion would not be in the interest of justice. See: Foman v. Davis, supra. Based on plaintiff's assertions that the new information was obtained through the discovery process, leave to amend could be granted. However, the Court must examine any objections propounded by defendants and determine their validity, if any.
Defendants submit that they would be prejudiced if the Court allows plaintiff to amend its pleadings. This contention is grounded in the fact that the motion for leave to amend was filed two years after the institution of the lawsuit, and that the newly asserted allegations could have been ascertained by plaintiff during its July, 1978, investigation of plaintiff's farm.
In examining this contention, it is evident that the mere fact that a party seeks to amend its pleading at a late stage of the litigation is not enough to bar such amendment, without a specific showing that the other party is prejudiced. Howey v. United States, 481 F.2d 1187 (9th Cir. 1973). The original trial date for this case was vacated, and a new date has not yet been scheduled. Therefore, defendants cannot argue that the amendment was untimely filed in light of an impending trial. With no time pressure in existence, defendants' claim of prejudice is doubtful. Prejudice to defendants, if any, would be minimal at this stage of the proceedings, with no trial date having been set.
Defendants further assert that the new allegations should have been discovered during plaintiff's investigation of defendants' farm in July, 1978. Plaintiff has stated that such information did not come to light until it conducted discovery. Defendants have not demonstrated how and why this information might have been uncovered in the July, 1978, investigation other than merely making this assertion. In addition, they have not specifically demonstrated how they will be prejudiced, especially considering that no firm trial date has been set.
To bar a party from filing an amendment to his pleadings, some specificity of prejudice must be demonstrated. The rule allowing for the liberal amendment of pleadings must overcome defendants' claims of prejudice, where defendants have failed to demonstrate their prejudice, and have made no showing of plaintiff's misconduct or fault other than broadly asserting that the information obtained by plaintiff should have been discovered earlier.
It is also contended by defendants that plaintiff's addition of the corporation as party defendant, a corporation formed after the start of the lawsuit, would prejudice defendants. It is asserted that plaintiff conducted an investigation of defendants' farm in July, 1978, and that the records of the Ohio Secretary of State reveal that a corporation composed of the Gillmor family was incorporated under the laws of Ohio on March 14, 1979. Defendants claim that plaintiff should have been aware of this relationship and cannot now join this corporate party at this late date.
Plaintiff claims that all the information that it bases the allegations on was acquired through discovery in early 1981. Defendants have no proof to the contrary, other than their unsupported assertion that "plaintiff was aware or should have been aware of this relationship ..." A close look at the chronological sequence involved shows that the corporation was formed only six days prior to the filing of the complaint, and a full nine months after plaintiff's investigation. To claim that plaintiff, under this time sequence, should have known of the existence of the corporation is a bit severe. In addition, there is absolutely no evidence that plaintiff should have known of the corporation when it conducted its investigation, nine months prior to the formation of the corporation. Consequently, the Court finds no prejudice to exist.
Lastly, defendants contend that any allegations made against the new party corporation for injunctive relief would be barred by the two year statute of limitations period in § 6 of the Portal-to-Portal Act of 1947. Assuming arguendo, that the limitations period did apply to the corporation, allegations against the corporation would still not be time barred.
Rule 15(c) states in relevant part:
Whenever the claim of defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom the claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
The analysis of the Court will proceed as to whether the provisions of Rule 15(c) have been met as to the corporation.
The first requirement in Rule 15(c) is that the corporation have received such notice of the institution of the suit that it would not be prejudiced in maintaining its defense on the merits. According to defendants' assertion, the corporation was formed on March...
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