Jose Fernandez et al v. Bank of America, N.A. et alNOTICE OF MOTION AND MOTION to Add Karen Lambrose and Warda Ruhin as a Putative Class RepresentativesC.D. Cal.March 20, 2019 Plaintiffs’ Motion For Leave to Add Putative Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Joshua H. Haffner, Cal. Bar No. 188652 (jhh@haffnerlawyers.com) Graham G. Lambert, Cal. Bar No. 303056 (gl@haffnerlawyers.com) HAFFNER LAW PC 445 South Figueroa St., Suite 2625 Los Angeles, California 90071 Telephone: (213) 514-5681 Facsimile: (213) 514-5682 Mark R. Thierman, Cal. Bar No. 72913 (mark@thiermanbuck.com) Joshua D. Buck, Cal. Bar No. 258325 (josh@thiermanbuck.com) Leah L. Jones, Cal. Bar No. 276448 leah@thiermanbuck.com THIERMAN BUCK LLP 7287 Lakeside Drive Reno, NV 89511 Paul D. Stevens, Cal. Bar No. 207107 (pstevens@stevenslc.com) STEVENS, LC 700 S. Flower Street, Suite 660 Los Angeles, California 90017 Telephone: (213) 270-1211 Facsimile: (213) 270-1223 Attorneys for Plaintiffs JOSE FERNANDEZ, ET. AL. Tel. (775) 284-1500 Fax. (775) 703-5027 Attorneys for Plaintiffs JOSHUA B. BOSWELL, ET. AL. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JOSE FERNANDEZ, ET AL, Plaintiffs, v. BANK OF AMERICA, N.A.; and DOES 1 through 10, inclusive, Defendant. Case No. 2:17-cv-06104-MWF-JC (consolidated with Case No.: 2:17-cv- 06120-GW-RAO) PLAINTIFFS’ NOTICE OF MOTION AND MOTION FOR LEAVE TO ADD KAREN LAMBROSE AND WARDA RUHIN AS A PUTATIVE CLASS REPRESENTATIVES JOSHUA B. BOSWELL, ET. AL., Plaintiffs, v. BANK OF AMERICA CORPORATION, ET. AL.; Defendant. Hearing Date: April 22, 2019 Hearing Time: 10:00 a.m. Courtroom: 5A (Assigned to Hon. Michael W. Fitzgerald) Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 1 of 9 Page ID #:1736 1 Plaintiffs’ Motion for Leave Add Putative Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO THE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT on April 22, 2019, at 10:00 a.m., or as soon thereafter as counsel may be heard, before the Honorable Michael W. Fitzgerald, United States District Court Judge, in Courtroom 5A of the United States District Court, Central District of California, located at 350 W. 1st Street, Los Angeles, CA 90012, Plaintiffs Jose Fernandez, Alex Yong, and Joshua Boswell (“Plaintiffs”), who are the named plaintiffs in the consolidated actions entitled Fernandez/Yong v. Bank of America, N.A., et al., USDC Case No. 2:17-cv- 06104-MWF-JC (“Fernandez/Yong” Action) and Boswell v. Bank of America, et al., USDC Case No. 2:17-cv-06120-GW-RAO (“Boswell” Action) will and hereby do move for leave to add Karen Lambrose and Warda Ruhin as a putative class representatives pursuant to FRCP Rules 15 and 21. This Motion is based on this Notice of Motion, the Memorandum of Points and Authorities set forth herein, the declaration of Plaintiffs’ counsel, all concurrently filed and attached exhibits, all pleadings and documents on file in these matters, and upon such evidence and arguments as may properly come before the Court at the time of the hearing. This motion is made following the conference of counsel pursuant to USDC, Central District of California, Local Rules 7.3 which took place on March 12, 2019. Dated: March 20, 2019 HAFFNER LAW PC STEVENS LC THIERMAN BUCK By: /s/ Joshua H. Haffner Joshua H. Haffner Attorneys for Plaintiffs-Petitioners Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 2 of 9 Page ID #:1737 2 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION On November 27, 2018, the Court denied Plaintiffs’ motion for Rule 23 certification of a California class of mortgage loan officers employed by Defendant and also denied an FLSA conditional certification. Dkt. #46 (“Order”). In so ruling, the Court concluded that individual issues associated with the applicability of the outside salesman exemption to a portion of the proposed class period prevented class certification. Defendant classified class members who were employed before November 2016 as “exempt”, then changed the status to non- exempt after November 2016 period Defendant classified employees as non- exempt). The Order cited to the fact that the named Plaintiffs were classified as exempt, and concluded this created individual issues and they were not typical of the post November 2016. As set forth in other papers, it has recently been disclosed that at the same time Defendant was opposing class certification in this case on the basis that the proposed class period encompassed employees who were classified as both exempt and non-exempt and thus, named Plaintiffs were not typical of all class members, it was secretly negotiating a pre-filed, sham class settlement of the identical class (e.g. pre and post November 2016) for a bargain basement fraction of the potential damages. That matter is entitled Flanagan, et al. v. Bank of America Corp., et al., index No. 613647/2018, Supreme Court of the State New York, County of Suffolk (hereinafter referred to as the “Flanagan Action”). The proposed settlement has yet to be considered or approved by the Court, and much less a class certified. That notwithstanding, roughly 3 months following the Court’s Order Re: Class Certification, Plaintiffs’ counsel was recently retained (in March 2019) by Karen Lambrose and Warda Ruhin, both a non-exempt mortgage loan officers who worked at Defendant’s financial centers both before and after November 2016. Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 3 of 9 Page ID #:1738 3 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Court’s basis for its denial would not apply to Ms. Lambrose or Ms. Ruhin, both of whom were classified as non-exempt and worked for Defendant after November 2016. Therefore, good cause exists to amend Plaintiffs’ complaint by adding Ms. Lambrose and Ms. Ruhin as a named plaintiffs. The underlying claims at issue will not change as a result of adding Ms. Lambrose or Ms. Ruhin to the case and there is no undue prejudice to Defendant. Accordingly, this Court should grant Plaintiffs’ motion for leave to add Ms. Lambrose and Ms. Ruhin as class representative plaintiffs. II. ARGUMENT A. Good Cause Exists To Allow Amendment of the Complaint To Add Ms. Lambrose and Ms. Ruhin as Class Representative Plaintiffs Rule 15(a)(2) allows amendment of pleadings “with the opposing party’s written consent or the court’s leave” and instructs that “the court should freely give leave when justice so requires.” Fed. Rule Civ. Proc. 15(a)(2). This policy is “to be applied with extreme liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)). The district court has the discretion to decide whether to grant Plaintiffs leave to amend. See Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996); Jordan v. County of Los Angeles, 669 F.2d 1311, 1324 (9th Cir.1982), vacated on other grounds, 459 U.S. 810 (1982). In its exercise of this discretion, the court applies Rule 15 to “facilitate [a] decision on the merits, rather than on the pleadings or technicalities.” U.S. v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). Furthermore, all inferences should be drawn “in favor of granting the motion,” Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir.1999), and “the nonmoving party bears the burden of demonstrating why leave to amend should not be granted,” Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530–31 (N.D.Cal.1989). Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 4 of 9 Page ID #:1739 4 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 When deciding whether to grant leave to amend, a court must consider: (1) whether the amendment was filed with undue delay; (2) whether the movant has requested the amendment in bad faith or as a dilatory tactic; (3) whether movant was allowed to make previous amendments which failed to correct deficiencies of the complaint; (4) whether the amendment will unduly prejudice the opposing party and; (5) whether the amendment is futile. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. Davis, 371 US 178, 182 (1962)). The five factors are not considered equally. Prejudice is the most important factor and is given the most weight. Eminence, 316 F.3d at 1052. Therefore, “[a]bsent prejudice, or a strong showing of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend.” Id. See also Talwar v. Creative Labs, Inc., No. CV 05-3375, 2007 WL 1723609 (C.D. Cal. June 14, 2006) (finding the plaintiffs should be granted leave to amend because additional discovery would not unduly prejudice the defendant and the defendant did not make a strong enough showing of bad faith on the part of the plaintiffs or that the plaintiffs requested leave to amend as a dilatory tactic, despite the suspect timing of the filing). The Ninth Circuit has also held that one of the five Foman factors alone is not sufficient to justify the denial of a request for leave to amend. The Ninth Circuit has found that undue delay alone “is insufficient to justify denying a motion to amend” and has “reversed the denial of a motion for leave to amend where the district court did not provide a contemporaneous specific finding of prejudice to the opposing party, bad faith by the moving party, or futility of the amendment.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). In this case, Plaintiffs’ amendment will not unduly prejudice Defendant and is not futile because the issue of class certification is not final. Rule 23(c)(1)(C) Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 5 of 9 Page ID #:1740 5 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provides that “an order that grants or denies class certification may be altered or amended before final judgment.” See English v. Apple, Inc., 2016 WL 1108929, *5 (N.D.Cal. 2016) (citing Newberg on Class Actions §7:35 (5th ed. 2015)); and Andren v. Alere, Inc., 2018 WL 1920179, *2 (S.D.Cal. 2018) (“[b]ecause the Court has discretion to modify an order on class certification prior to judgment, the Court considers Plaintiffs’ motion under Rule 23 and not under the parameters of a motion for reconsideration”). Furthermore, Defendant is currently contemplating settling the same class at issue in this case in the Flanagan action pending in Suffolk County in New York. A party settling a class action prior to class certification must meet the requirement of subsections (a) and (b) of Rule 23. Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (holding that, in settling a class action prior to certification, “the safeguards provided by the Rule 23(a) and (b) class” must be met”). Defendant and its counsel are not permitted to represent that class treatment of the Class is appropriate for settlement purposes unless it has a good faith belief that the Class complies with Rule 23 requirements, including subsections a and b. See Pacific Harbor Capital, Inc. v. Carnival Airlines, Inc., 210 F.3d 1112, 1119 (9th Cir. 2000) (finding that arguments made in “bad faith” breached the “duty of candor to the court”). Therefore, the propriety of class certification is still at issue. Also, courts routinely allow for the addition and substitution of class representatives. See e.g., Pitre v. Wal-Mart Stores, Inc., 2019 WL 365897, *3 (C.D. Cal. 2019) (granting leave to add two class representatives pursuant to Rule15(a)(2)); Tait v. BSH Home Appliances Corp., 289 F.R.D. 466, 476-477 (C.D. Cal 2012) (as an alternative to denying certification on typicality grounds, the court granted leave to amend to substitute another class representative who can represent the class); Carlson v. Anka Behavioral Health, Inc., 2012 WL 2196337, *3 (N.D. Cal. 2012)(no undue prejudice where amendment merely added a Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 6 of 9 Page ID #:1741 6 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 proposed class representative asserting the same claims); In re: Facebook Privacy Litig., 2015 WL 2453734, *6 (N.D. Cal. 2015); Johnson v. Aljian, No. 2008 WL 11338773, at *5 (C.D. 2008). Plaintiffs did not seek the amendment with undue delay. Ms. Lambrose retained Plaintiffs’ counsel on February 28, 2019, and Ms. Ruhin retained Plaintiffs’ counsel on March 11, 2019. Haffner Decl. ¶3. Plaintiffs immediately thereafter made efforts to seek this amendment. Therefore, Plaintiffs did not delay in seeking the proposed amendment. Plaintiffs do not request leave to amend in bad faith or for dilatory reasons. Rather, Plaintiffs request leave to address this Court’s concern with the typicality of named representatives in the Order. The Order cited to the fact that the named Plaintiffs were classified as exempt, and concluded this created individual issues. The Court’s basis for its denial would not apply to Ms. Lambrose or Ms. Ruhin, who were classified as non-exempt and worked for Defendant after November 2016. Therefore, Plaintiffs’ motion for leave is made in the absence of bad faith. Lastly, Plaintiffs have not sought any previous amendments in this case. Therefore, all of the factors weigh in favor of granting Plaintiffs’ motion to amend to add Karen Lambrose and Warda Ruhin as a putative class representatives. B. This Court Has Authority Pursuant to Rule 21 to Add Putative Class Representatives Rule 21 authorizes this Court “[o]n motion or on its own, the court may at any time, on just terms, add or drop a party.” Fed Rule Civ. Proc. 21. “Rule 21 grants the Court “broad discretion” to determine whether to add parties.” Iontchev v. AAA Cab Serv., Inc., No. CV-12-00256-PHX-ROS, 2014 WL 12768158, at *2 (D. Ariz. Mar. 26, 2014). Motions under Rule 21 “are afforded the “same standard of liberality afforded to motions to amend pleadings under Rule 15.” Nastasi v. Lari, No. 15-CV-06066 (SIL), 2017 WL 943935, at *2 (E.D.N.Y. Mar. 9, 2017). Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 7 of 9 Page ID #:1742 7 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Also, courts have a duty to protect the interest of absent putative class members. Gulf Oil v. Bernard, 452 U.S. 89, 100 (1981). For the same reasons stated above, this Court should grant Plaintiffs’ motion to add Karen Lambrose and Warda Ruhin as Plaintiffs. C. Defendant’s Answer to the Original Complaint in Fernandez Should be Deemed the Responsive Pleading to the Amended Complaint In the interest of judicial economy, Defendant’s Answer (Dkt. # 12) to the original Complaint can, and should, be deemed the responsive pleading to the First Amended Complaint. Such a discretionary order is permitted and appropriate under the Federal Rules. See Fed. R. Civ. P. 15(a)(3) (stating that a responsive pleading to a complaint is required “[u]nless the court orders otherwise”); Rutter Cal. Prac. Guide Fed. Civ. Pro. Before Trial, ¶ 8:1558 (“The court has discretion to order that no response need be filed [to an amended or supplemented complaint]”); LaGorga v. Kroger Co., 407 F.2d 671, 673 (3d Cir. 1969) (holding that the district court acted within its discretion in finding that an answer to the original complaint would be deemed an answer to the amended complaint); Chabot v. Chabot, No. 4:11-CV- 217-BLW, 2011 WL 5520927, at *2 (D. Idaho Nov. 14, 2011) (holding that motions to dismiss the original complaint would be considered responsive pleadings to the amended complaint). Karen Lambrose’s and Warda Ruhin’s claims in the proposed First Amended Complaint are identical to Plaintiff’s claims in the original Complaint. There are no new allegations regarding Defendant’s conduct with respect to the class. The defenses and arguments raised in Defendant’s Answer to the original Complaint would be no different to the First Amended Complaint. Thus, the Court should deem Defendants’ Answer to the original Complaint the responsive pleading to the First Amended Complaint. Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 8 of 9 Page ID #:1743 8 Plaintiffs’ Motion to Add Class Representatives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. Conclusion. For the reasons set forth herein, Plaintiffs respectfully request that the Court grant Plaintiffs’ motion for leave to add Karen Lambrose and Warda Ruhin as named plaintiffs in an amended complaint. Dated: March 20, 2019 HAFFNER LAW PC STEVENS LC THIERMAN BUCK By: /s/ Joshua H. Haffner Joshua H. Haffner Attorneys for Plaintiffs-Petitioners Case 2:17-cv-06104-MWF-JC Document 67 Filed 03/20/19 Page 9 of 9 Page ID #:1744