Mallory v. Lease Supervisors, LLC

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER SENIOR JUDGE.

         In this collective action seeking unpaid overtime pay pursuant to the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201 et seq., plaintiffs Don Mallory (“Mallory”) and Ty Farrell (“Farrell”), individually, and on behalf of all others similarly situated under 29 U.S.C. § 216(b), move for leave to file first and second amended complaints to add two defendants after the deadline for moving for leave to amend. For the reasons that follow, the court denies both motions.

         I

         In November 2017 Mallory and Farrell brought this putative collective action against defendant Lease Supervisors, LLC (“Lease Supervisors”) seeking unpaid overtime pay under 29 U.S.C. § 216(b). Mallory and Farrell formerly worked as “plant operators/managers” for Lease Supervisors. They contend that they and the other putative class members were paid a “guaranteed payment” for the work they performed for Lease Supervisors; that although they and the other class members regularly worked between 60 and 80 hours per week, they did not receive overtime pay for hours worked in excess of 40 hours per week; that they and the other class members did not qualify for any applicable overtime exemptions under the FLSA; and, therefore, that they and the other class members are owed unpaid overtime wages under the FLSA. Lease Supervisors answered plaintiffs' complaint on January 26, 2018, and, shortly thereafter, Mallory and Farrell moved to conditionally certify this suit as a collective action. On July 10, 2018 the court denied the motion for conditional certification.

         On August 27, 2018 the court issued its Phase Two Scheduling Order that set February 19, 2019 as the deadline for a party to move for leave to amend the pleadings. On May 10, 2019 Mallory and Farrell filed the instant motion for leave to file first amended complaint in which they seek to add Ryan Hoerauf (“Hoerauf”) as a defendant. Ten days later, on May 20, 2019, Mallory and Farrell filed the instant motion for leave to file second amended complaint in which they seek to add Ryan C. Hoerauf, Inc. dba O'Ryan Oil & Gas (“O'Ryan”) as a defendant. Lease Supervisors opposes both motions, contending that Mallory and Farrell have not shown good cause for the relief they seek. Both of plaintiffs' motions were filed after the February 19, 2019 deadline for a party to move for leave to amend the pleadings.

         II

         When, as here, a motion for leave to amend the pleadings is filed after the deadline for seeking leave to amend has expired, the court must first determine whether to modify the scheduling order under the good cause standard of Fed.R.Civ.P. 16(b)(4). See S&W Enters., L.L.C. v. SouthTrust Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003); Valcho v. Dall. Cty. Hosp. Dist., 658 F.Supp.2d 802, 814 (N.D. Tex. 2009) (Fitzwater, C.J.). “The ‘good cause' standard focuses on the diligence of the party seeking to modify the scheduling order.” Cut-Heal Animal Care Prods., Inc. v. Agri-Sales Assocs., Inc., 2009 WL 305994, at *1 (N.D. Tex. Feb. 9, 2009) (Fitzwater, C.J.). Mere inadvertence on the part of the movant, and the absence of prejudice to the nonmovant, are insufficient to establish “good cause.” Id.; Price v. United Guar. Residential Ins. Co., 2005 WL 265164, at *4 (N.D. Tex. Feb. 2, 2005) (Fish, C.J.) (citing Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990)). Instead, the movant must show that, despite his diligence, he could not reasonably have met the scheduling deadline. See S&W Enters., 315 F.3d at 535; Am. Tourmaline Fields v. Int'l Paper Co., 1998 WL 874825, at *1 (N.D. Tex. Dec. 7, 1998) (citing 6A Charles Alan Wright, et al., Federal Practice & Procedure, § 1522.1 at 231 (2d ed. 1990)); Sw. Bell Tel. Co. v. City of El Paso, 346 F.3d 541, 546 (5th Cir. 2003) (citing S&W Enters., 315 F.3d at 535).

         The court assesses four factors when deciding whether to grant an untimely motion for leave to amend under Rule 16(b)(4): “(1) the explanation for the failure to timely move for leave to amend; (2) the importance of the amendment; (3) potential prejudice in allowing the amendment; and (4) the availability of a continuance to cure such prejudice.” S&W Enters., 315 F.3d at 536 (internal quotation marks and brackets omitted). Only if the movant first satisfies the requirements of Rule 16(b)(4) must the court next determine whether to grant leave to amend under the more liberal standard of Rule 15(a)(2), which provides that “[t]he court should freely give leave when justice so requires.” Rule 15(a)(2); see id.; Valcho, 658 F.Supp.2d at 814.

         III

         The court considers first whether Mallory and Farrell have satisfied the Rule 16(b)(4) good cause standard for their first motion for leave to amend.

         Mallory and Farrell have not addressed the Rule 16(b)(4) good cause standard in their first motion for leave to amend. They have not filed a reply to Lease Supervisors' opposition response and therefore have not replied to its assertions that they have not satisfied the Rule 16(b)(4) standard.^[1] “When a party . . . does not address the good cause standard under Rule 16(b)(4), this court typically denies the motion for that reason alone.” Wachovia Bank, Nat'l Ass'n v. Schlegel, 2010 WL 2671316, at *3 (N.D. Tex. June 30, 2010) (Fitzwater, C.J.) (citing EEOC v. Serv. Temps, Inc., 2009 WL 3294863, at *1 (N.D. Tex. Oct. 13, 2009) (Fitzwater, C.J.), aff'd, 679 F.3d 323 (5th Cir. 2012)). It has made exceptions to this practice in cases where the movants have not addressed the Rule 16(b)(4) good cause standard, but the grounds on which they rely to establish good cause are relatively clear. See, e.g., Nieves v. John Bean Techs. Corp., 2014 WL 2587577, at *2 (N.D. Tex. June 10, 2014) (Fitzwater, C.J.); Cartier v. Egana of Switz. (Am.) Corp., 2009 WL 614820, at *2 (N.D. Tex. Mar. 11, 2009) (Fitzwater, C.J.). But even if the court were to make an exception in this case and not summarily deny plaintiffs' motion, it would conclude that they have failed to satisfy the Rule 16(b)(4) good cause standard. Mallory and Farrell provide no explanation for why they were unable to seek leave to amend before the deadline. Their motion alleges that Hoerauf is in the process of selling Lease Supervisors' assets and shutting down operations, in part to avoid liability in this case; however, this does not explain why they could not have sought to join Hoerauf as a defendant before the deadline. Furthermore, Mallory and Farrell do not refute Lease Supervisors' assertion that at the time plaintiffs filed their complaint, they were aware of the facts on which they now rely to support their motion to amend: Hoerauf's “‘substantial control over the terms and conditions'” of plaintiffs' work. Ps. May 10, 2019 App. 4. Therefore, because Mallory and Farrell make no attempt to address the good cause standard or the pertinent four-factor test, and the grounds on which they rely to establish good cause are insufficient to enable the court to conduct the required analysis of the pertinent factors, the court denies the first motion for leave to amend.

         IV

         The court next addresses whether Mallory and Farrell have satisfied the Rule 16(b)(4) good cause standard with regard ...