Opinion
06 Civ. 9952 (JCF) 06 Civ. 15200 (JCF) 07 Civ. 4532 (JCF)
03-24-2011
ANTHONY COULTRIP, ROBERT CHENAULT, DAVID HADLEY, DANA HIGGS, BENAIAS ALBARRAN, on behalf of themselves and others similarly situated, Plaintiffs, v. PFIZER, INC., et al., Defendants. AYISHA JETER, on behalf of herself and all others similarly situated, Plaintiffs, v. PFIZER, INC., Defendant. FERNANDO OBLITAS-RIOS, on behalf of himself and all others similarly situated, Plaintiff, v. PFIZER, INC., Defendant.
(ECF)
MEMORANDUM AND ORDER
JAMES C. FRANCIS IV UNITED STATES MAGISTRATE JUDGE
The plaintiffs in these three actions are current or former pharmaceutical representatives employed by defendant Pfizer, Inc. ("Pfizer"). They bring collective and class action claims pursuant to the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 201 et seq., and various state wage and hour laws, alleging primarily that Pfizer failed to pay them earned overtime wages. The parties have consented to my presiding over all aspects of these cases pursuant to 28 U.S.C. § 636(c). Following the certification of a collective action in Coultrip v. Pfizer, these actions were consolidated for the purpose of discovery. The plaintiffs now move to consolidate the actions for all purposes and for leave to file a consolidated amended complaint. For the following reasons, their motion is granted.
Background
A. Coultrip v. Pfizer
The original plaintiffs in this action -- Anthony Coultrip, Robert Chenault, David Hadley, and Dana Higgs -- filed their class and collective action complaint on October 19, 2006, alleging that Pfizer violated the FLSA and Illinois, Pennsylvania, and Wisconsin wage laws by failing to pay them proper overtime compensation and keep accurate records of the hours the had worked. (Complaint ("Coultrip Compl.")). They filed an amended complaint on November 17, 2006, adding a new named plaintiff, Benaias Albarran, and alleging additional violations of California wage laws, including failure to pay overtime, provide meal and rest breaks, and keep proper time records. (First Amended Complaint). In lieu of an answer to the amended complaint, the defendant filed a motion to dismiss the plaintiffs' state law class action allegations, which the Honorable Alvin K. Hellerstein, U.S.D.J., denied without prejudice, finding that the issue would be better addressed through a motion for class certification. (Defendant's Motion to Dismiss and/or Strike Plaintiffs' Rule 23 Class Allegations; Summary Order dated Feb. 28, 2007 ("2/28/07 Order")). The parties commenced limited discovery, and the plaintiffs filed a motion for class and collective action certification on August 14, 2007. (2/28/07 Order; Notice of Motion dated Aug. 10, 2007). However, that motion was stayed three months later so the parties could argue Pfizer's motion for summary judgment. (Memorandum Endorsement dated Nov. 1, 2007). The plaintiffs then made a cross-motion for summary judgment; both motions were denied, and the stay was lifted on June 19, 2008. (Notice of cross-Motion for Partial Summary Judgment dated April 28, 2008; Order Denying Cross-Motions for Summary Judgment dated June 18, 2008).
The following month, Judge Hellerstein granted the plaintiffs' motion for collective action certification under the FLSA but denied their motion to certify class actions based on their state law claims pursuant to Rule 23 of the Federal Rules of Civil Procedure. (Summary Order dated July 31, 2008 ("7/31/08 Order")). At oral argument, Judge Hellerstein explained that he believed potential class members would be confused if he simultaneously certified of opt-in and opt-out classes; however, he explicitly allowed for the possibility that collective action plaintiffs could file individual state law claims. (Oral Argument Transcript dated July 30, 2008 ("7/30/08 Tr."), attached as Exh. 1 to Pfizer, Inc.'s Opposition to Plaintiffs' Motion to File Consolidated and Amended Complaint ("Def. Opp. Memo."), at 30-31).
Notice was issued to potential collective action members in September of 2008, and the parties continued discovery. (Reply Declaration of Matthew D. Brinckerhoff dated Feb. 11, 2011 ("Brinckerhoff Decl."), ¶¶ 17, 19). Discovery was then stayed on August 28, 2009, pending the Second Circuit's resolution of the appeal in In re Novartis Wage and Hour Litigation, 593 F. Supp. 2d 637 (S.D.N.Y. 2009) which considered whether sales representatives in comparable positions to the plaintiffs in this case held exempt status under the FLSA. (Order dated Aug. 28, 2009). That appeal was decided in July of 2010. In re Novartis Wage and Hour Litigation, 611 F.3d 141 (2d Cir. 2010).
On October 27, 2010, the In re Novartis Wage and Hour Litigation, appeal having been decided, all three cases were consolidated for discovery. (Order dated Oct. 27, 2010).
B. Jeter v. Pfizer
On November 16, 2006, plaintiff Ayisha Jeter filed a class action complaint in New York County Supreme Court, alleging that Pfizer failed to pay her proper overtime and spread-of-hours compensation pursuant to New York Labor Law ("NYLL"). (Class Action Complaint ("Jeter Compl.")). Pfizer filed a notice of removal on December 15, 2006, and the action was removed to this Court and assigned to Judge Hellerstein. (Notice of Removal dated Dec. 15, 2006). The defendant then moved to strike Ms. Jeter's state law class allegations as incompatible with the FLSA, but Judge Hellerstein denied the motion. (Order Denying Motion to Strike Rule 23 State Law Class Allegations dated March 6, 2007). Pfizer subsequently filed an amended answer.
C. Oblitas-Rios v. Pfizer
Fernando Oblitas-Rios filed a class action complaint on November 1, 2006 in California Superior Court, alleging that Pfizer failed to pay him proper minimum and overtime wages, provide appropriate meal and rest breaks, and keep required business records, all in violation of the FLSA and California law. (Class Action Complaint ("Oblitas-Rios Compl.")). The following month, Pfizer removed the action to the Southern District of California and subsequently moved to transfer venue to this Court. (Notice to Federal Court of Removal of Civil Action dated Dec. 8, 2006; Pfizer Inc.'s Notice of Motion and Motion to Transfer Venue dated May 16, 2007). Mr. Oblitas-Rios did not oppose Pfizer's motion to transfer, and the motion was granted on May 21, 2007. (Plaintiff's Statement of Non-opposition to Pfizer, Inc.'s Motion to Transfer Venue dated May 17, 2007; Order Granting Motion to Transfer Venue dated May 21, 2007). Upon transfer to this Court, the case was assigned to Judge Hellerstein, and the defendant filed an amended answer on December 6, 2007. On January 21, 2011, the plaintiffs filed this motion.
Discussion
A. Consolidation
The plaintiffs first seek to consolidate these actions pursuant to Rule 42(a) of the Federal Rules of Civil Procedure, which allows consolidation of cases "involv[ing] a common question of law or fact." Fed. R. Civ. P. 42(a)(2). District courts have "broad discretion" when determining whether to consolidate cases, although a court's "paramount concern [must be] for a fair and impartial trial." Johnson v. Celotex Corp., 899 F.2d 1281, 1284-85 (2d Cir. 1990); accord Seidel v. Noah Education Holdings Ltd., Nos. 08 Civ. 9203, 08 Civ. 9427, 08 Civ. 9509, 08 Civ. 9427, 2009 WL 700782, at *1 (S.D.N.Y. March 9, 2009).
Consolidation is appropriate here given the broadly overlapping factual and legal allegations in the plaintiffs' complaints. See, e.g., In re Orion Securities Litigation, No. 08 Civ. 1328, 2008 WL 2811358, at *3 (S.D.N.Y. July 8, 2008) (consolidating three securities class actions because they asserted claims under same statute on behalf of same class of plaintiffs based on overlapping allegations against same defendants). Each complaint asserts individual and class claims resulting from Pfizer's allegedly improper classification of its pharmaceutical representatives as exempt from overtime regulations. (Coultrip Compl., ¶¶ 1, 21; Jeter Compl., ¶¶ 9-13; Oblitas-Rios Compl., ¶¶ 31-33, 37, 40-41, 43-44). In addition, they all allege that the defendant failed to keep proper records of the hours they worked. (Coultrip Compl., ¶ 16(b); Jeter Compl., ¶ 13; Oblitas-Rios Compl., ¶¶ 52, 55). Pfizer "does not object in theory to the filing of a consolidated complaint," and it makes no argument suggesting that the plaintiffs' legal or factual claims are insufficiently similar or that it would be prejudiced by their consolidation. (Def. Opp. Memo. at 2). Therefore, the plaintiffs' motion to consolidate Coultrip, Jeter, and Oblitas-Rios for all purposes is granted.
B. Proposed Consolidated Complaint
The plaintiffs have submitted a proposed consolidated complaint. (First Consolidated Complaint ("Proposed Compl."), attached as Exh. A to Declaration of Samuel Shapiro dated Jan. 21, 2011). In their motion papers, they identify a list of modifications from the prior complaints, and the defendant objects to four of these: (1) the insertion of a claim for liquidated damages pursuant to NYLL § 663; (2) the addition of two named plaintiffs, Amanda Boal and Angela Cohen; (3) the reassertion of the California and Illinois state law claims initially alleged in Coultrip; and (4) the withdrawal without prejudice of the Pennsylvania and Wisconsin state law claims also alleged in Coultrip. (Def. Opp. Memo. at 5-11, 14-17 & n.5). I will address each of these objections separately.
1. Liquidated Damages
A motion to amend is generally governed by Rule 15(a) of the Federal Rules of Civil Procedure, which states that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). Notwithstanding the liberality of the general rule, "it is within the sound discretion of the court whether to grant leave to amend." John Hancock Mutual Life Insurance Co. v. Amerford International Corp., 22 F.3d 458, 462 (2d Cir. 1994); accord Terra Securities Asa Konkursbo v. Citigroup, Inc., 740 F. Supp. 2d 441, 456 (S.D.N.Y. 2010). Regarding the use of this discretion, the Supreme Court has stated:
In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment,
futility of amendment, etc. -- the leave sought should . . . be freely given.Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted).
In her original complaint, Ms. Jeter asserted claims against Pfizer pursuant to NYLL. (Jeter Compl.). However, she did not seek liquidated damages, purportedly because under the law of the Second Circuit at the time, such damages were not available to her. (Memorandum of Law in Support of Motion to Consolidate and for Leave to File Consolidated and Amended Complaint ("Pl. Memo.") at 8-9). In Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., the District Court for the Eastern District of New York held that § 901(b) of New York's Civil Practice Law and Rules ("CPLR"), which bars class action plaintiffs from seeking "penalties" such as liquidated damages, is substantive and therefore applies to class actions based on New York law, filed in federal court and certified under Rule 23 of the Federal Rules of Civil Procedure. 466 F. Supp. 2d 467, 471-73 (E.D.N.Y. 2006). The Second Circuit affirmed on appeal. 549 F.3d 137 (2d Cir. 2008). However, this holding was reversed by the Supreme Court, which found that CPLR § 901(b) conflicts with Rule 23 of the Federal Rules of Civil Procedure and therefore does not apply to class actions grounded in on New York law that are filed in federal court. ___ U.S. ___, ___, 130 S. Ct. 1431, 1437-44 (2010).
As a result of this change in the law, which occurred while discovery in this action was stayed, the plaintiffs now seek to add a demand for liquidated damages under NYLL to their proposed consolidated complaint. (Proposed Compl., ¶¶ 94, 104; Pl. Memo. at 8-9). The defendant objects to the "last minute" addition of this claim, arguing that the plaintiffs delayed an unduly long time following the issuance of Shady Grove before seeking to amend their pleadings. (Def. Opp. Memo. at 15 n.5). This objection is unavailing. The plaintiffs waited only six months from the lifting of the stay until the filing of this motion, during which time they were engaged in negotiations with opposing counsel regarding the possible consolidation of this action and the filing of an amended complaint. (Brinckerhoff Decl., ¶¶ 31, 35, 39). Furthermore, the defendant has failed to identify any prejudice to it as a result of the plaintiffs' alleged delay. Therefore, the plaintiffs' motion to amend their complaint to include a claim for liquidated damages is granted.
2. Addition of Named Plaintiffs
Where a proposed amendment adds new parties, the propriety of amendment is governed by Rule 21 of the Federal Rules of Civil Procedure. Yves Saint Laurent Parfums, S.A. v. Costco Wholesaler Corp., No. 07 Civ. 3214, 2010 WL 2593671, at *3 (S.D.N.Y. June 24, 2010). That Rule states that a party may be added to an action "at any time, on just terms." Fed. R. Civ. P. 21. In deciding whether to permit joinder, courts apply the "'same standard of liberality afforded to motions to amend pleadings under Rule 15.'" JPMorgan Chase Bank, N.A. v. IDW Group, LLC, No. 08 Civ. 9116, 2009 WL 1357946, at *2 (S.D.N.Y. May 12, 2009) (quoting Momentum Luggage & Leisure Bags v. Jansport, Inc., No. 00 Civ. 7909, 2001 WL 58000, at *2 (S.D.N.Y. Jan. 23, 2001). Thus, joinder will be permitted absent undue delay, bad faith, prejudice, or futility. "'Mere delay, however, absent a showing of bad faith or undue prejudice, does not provide a basis for the district court to deny the right to amend.'" Aktiebolag v. Andrx Pharmaceuticals, Inc., 695 F. Supp. 2d 21, 30 (S.D.N.Y. 2010) (quoting State Teachers Retirement Board v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981)).
The plaintiffs seek to add two named plaintiffs, Amanda Boal and Angela Cohen, as putative class representatives for the California and New York classes, respectively. (Proposed Compl., ¶ 1; Pl. Memo. at 6-8). The defendant objects on the grounds that (1) the plaintiffs unduly delayed filing their motion to amend, thereby (2) cutting short Pfizer's time to take discovery from these individuals and causing it prejudice. (Def. Opp. Memo. at 14-17). These objections are not persuasive. Pfizer argues that the addition of named plaintiffs at this point in the litigation will force the condensing of "months of discovery into weeks," thereby preventing Pfizer from obtaining discovery "in the way it could for the other named plaintiffs." (Def. Opp. Memo. at 16-17). However, although it objects to the pace and style of the discovery that would result from the addition of Ms. Boal and Ms. Cohen, it has not specified any substantive information or types of discovery materials that it would be unable to obtain as a result of the "truncated discovery period." (Def. Opp. Memo. at 16). Furthermore, the plaintiffs' allegedly late addition of Ms. Boal and Ms. Cohen is ameliorated by (1) their having provided notice of their intention to add additional named plaintiffs soon after the lifting of the discovery stay, (2) the fact that the defendant has already received document discovery from both prospective plaintiffs, and (3) the plaintiffs' willingness to make these individuals available for deposition as soon as possible. (Brinckerhoff Decl., ¶¶ 11, 32-33, 37, 40, 41; Def. Opp. Memo. at 17-18 n.7). In the absence of prejudice, the Second Circuit has made clear that delay alone is insufficient to justify denial of a motion seeking to add parties. See Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008); Aktiebolag, 695 F. Supp. at 30. Therefore, the plaintiffs are granted leave to add Ms. Boal and Ms. Cohen as named plaintiffs.
3. Inclusion of California and Illinois Claims
The defendant objects to the inclusion of the plaintiffs' California and Illinois class claims in the consolidated complaint. It argues that Judge Hellerstein's July 2008 decision denying certification of these claims created binding "law of the case" that prevents them from being re-asserted in the consolidated complaint. (Def. Opp. Memo. at 5-11). This contention is incorrect. At a minimum, the plaintiffs are entitled to maintain their class action claims in order to preserve them for appeal. See Newton v. City of New York, No. 07 Civ. 6211, 2010 WL 1328461, at *1 (S.D.N.Y. April 1, 2010). Moreover, Judge Hellerstein's ruling did not dismiss the plaintiffs' California and Illinois class claims; it simply denied certification of them at that time. (7/31/08 Order, ¶ 2; 7/30/08 Tr. at 30). Rule 23(c)(1)(C) of the Federal Rules of Civil Procedure allows courts to "alter[] or amend[]" decisions concerning class action certification at any point during the litigation before the entry of a final judgment. Fed. R. Civ. P. 23(c)(1)(C). The defendant argues that the plaintiffs have not shown the changed factual or legal circumstances necessary to justify the Court's revisiting Judge Hellerstein's decision. (Def. Opp. Memo. at 9-11). However, the defendant is conflating the law applicable to a renewed motion for class certification with that applicable to a motion to amend the complaint. It is irrelevant here whether the plaintiffs would succeed on a renewed motion to certify their California and Illinois class action claims; the sole question is whether those claims have been dismissed. Because they have not, they are properly included in the consolidated complaint.
4. Withdrawal of Pennsylvania and Wisconsin Claims
Finally, the defendant objects to the withdrawal without prejudice of the Pennsylvania and Wisconsin state law claims initially alleged in Coultrip. These claims were asserted by Mr. Chenault, Mr. Hadley, and Ms. Higgs on both an individual and a class basis. (Coultrip Compl., ¶¶ 31, 39). Although the proposed consolidated complaint retains these individuals as named plaintiffs in the FLSA collective action, they ask to withdraw their state law claims without prejudice because they will not be moving to certify them in this lawsuit and wish to preserve the individual plaintiffs' right to prosecution. (Proposed Compl., ¶¶ 11-13; Transcript dated March 8, 2011 ("Tr.") at 3-4).
Under rule 41(a) of the Federal Rules of Civil Procedure, a plaintiff may seek voluntary dismissal of an action "by court order, on terms that the court considers proper." Fed. R. Civ. P. 41(a)(2). Generally, voluntary dismissal is without prejudice. Id.; see also Ruth v. Purdue Pharma Co., 225 F.R.D. 434, 435-36 (S.D.N.Y. 2004).
The defendant does not object to the withdrawal without prejudice of these plaintiffs' individual state law claims; the only objection it makes is to the dismissal without prejudice of their class action allegations on the ground that these claims were already dismissed with prejudice by Judge Hellerstein's July 2008 ruling. (Tr. at 6-7, 8). Therefore, dismissal of the Pennsylvania and Wisconsin state law claims without prejudice pursuant to Rule 41(a) of the Federal Rules of Civil Procedure is appropriate.
As discussed above with respect to the California and Illinois claims, Judge Hellerstein's ruling did not dismiss the state court claims from this action, but rather merely declined to certify them as Rule 23 class actions. (7/31/08 Order; 7/30/03 Tr. at 30).
To the extent that the plaintiffs may again seek to certify these claims for class action treatment, the defendant may renew its objection that such certification would be precluded by Judge Hellerstein's ruling. But, as Pfizer acknowledges, it is not for this Court to determine the preclusive effect of Judge Hellerstein's ruling in another forum -- that determination can only be made by the court in which those claims are untimely filed. (Tr. at 7); see Matsushita Electric Industrial Co. v. Epstein, 516 U.S. 367, 396 (1996) (Ginsburg, J., concurring in part and dissenting in part) ("A court conducting an action cannot predetermine the res judicata effect of the judgment; that effect can be tested only in a subsequent action.").
Conclusion
For the reasons set forth above, the plaintiffs' motion to consolidate these actions and for leave to file an amended consolidated complaint is granted. Accordingly, the actions shall be consolidated under case number 06 Civ. 9952. The plaintiffs shall file their consolidated amended complaint by April 1, 2011, and the defendant shall file its answer by April 15, 2011.
SO ORDERED.
/s/_________
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE Dated: New York, New York
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