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Franco v. Ideal Mortgage Bankers

September 28, 2009


The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge



Plaintiff Bienvenido Franco, proceeding individually and on behalf of all others similarly situated ("Plaintiff") has made two motions which are presently pending before the Court: (1) a motion for leave to file a Second Amended Complaint [DE 112], and (2) a motion to consolidate this action with Fraser, et al. v. Ideal Mortgage Bankers, Ltd., et al., which is currently proceeding under Civil Docket Number 09 CV 664 [DE 121].

Although Judge Seybert initially referred these motions to me to issue a Report and Recommendation [see DE 117, 125], she subsequently found that "since neither the motion to amend or the motion to consolidate are dispositive motions, Judge Tomlinson has the authority to rule on both motions under 28 U.S.C. § 636(b)(1)(A)" [DE 127]. For the reasons set forth more fully below, both motions are GRANTED.


Plaintiff filed the original Complaint on September 21, 2007 [DE 1] alleging that Defendant Ideal Mortgage Bankers, Ltd. (then-captioned as Lend America, Inc.) had violated the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"), by failing to pay him and other similarly-situated employee loan officers minimum wages and overtime pay. On March 4, 2008, Plaintiff filed a motion to amend the Complaint to (1) correct Defendant's corporate name, (2) add claims under the New York State Labor Law, and (3) add four named corporate officers of Defendant as individual defendants [DE 23]. While Defendant did not oppose Plaintiff's request to amend the Complaint to correct its corporate name, Defendant did object to Plaintiff's proposed addition of state law claims and four individual defendants [see DE 26]. Subsequently, Plaintiff filed a motion for conditional certification as a collective action and to facilitate notice under the FLSA [DE 38], which motion was also opposed by Defendant [see DE 47].

After both motions were fully briefed, the parties entered into a Stipulation dated July 10, 2009 [DE 53] (the "Stipulation") in which they agreed to a proposed Notice and Opt-In Consent Form [DE 53, Exs. A & B]. Defendant agreed to identify a list of employees who were similarly situated to Plaintiff and the parties requested that the Court issue an Order (1) conditionally certifying the case as a collective action under Section 216(b) of the FLSA, and, (2) authorizing Plaintiff's counsel to distribute notice to potential collective action members [DE 53]. Plaintiff Franco agreed to voluntarily withdraw his pending motion to amend the Complaint, and the parties stipulated that an Amended Complaint would be filed which contained Defendant's correct corporate name [see DE 53, Ex. C]. Judge Seybert granted the parties' requests and "so ordered" the Stipulation on August 13, 2009 [DE 56].


A. The Parties' Contentions

Plaintiff again seeks to add four of Defendant's executives as individually-named Defendants.*fn1 Plaintiff contends that Defendant's initial document production, which began on a rolling basis in early 2008, demonstrated that these four executives*fn2 "are individually responsible for Defendant's violations of the FLSA." Pl.'s Mem. of Law in Supp. of Mot. for Leave to File an Am. Compl ("Pl. Mem. to Am.") at 2. As such, Plaintiff filed its March 4, 2008 motion to amend the Complaint to add these individuals as defendants, although that motion was subsequently withdrawn as part of the Stipulation. Id.

Plaintiff claims that its proposed addition of Defendant's executives as named defendants would not be futile. Id. at 4. Specifically, Plaintiff asserts that these executives are "corporate officers with operational control of a covered enterprise" and, as such, are considered "employers" within the meaning of the FLSA. Id. at 4-5. According to Plaintiff, therefore, these executives are "jointly and severally liable under the FLSA for unpaid wages." Id. at 5. Plaintiff contends that the proposed Second Amended Complaint contains identical claims against the individual executives and "will not cause the parties to conduct any discovery they otherwise would not." Pl.'s Reply in Supp. of Mot. to Am. Compl. (Reply Am. Compl.) at 3. Specifically, Plaintiff maintains that he would depose these four executives "regardless of whether they are named as defendants." Id. According to Plaintiff, Defendant would not be seeking "depositions or documents from its own executives," because "the corporate defendant already has full access to all the information it could possibly need to mount its defense." Id.

Plaintiff states that his original motion to amend was filed in March 2008 "immediately upon discovering their potential liability based on documents produced by Lend America" in early 2008. Id. at 4. Moreover, Plaintiff asserts that based upon confidential information learned during the parties' mediation session (which took place in January 2009), "Plaintiffs have concluded, in the interests of protecting their clients, that it is even more vital to name these persons now." Id. at 5.

In opposition, Defendant argues that allowing Plaintiff to add four additional defendants would cause Defendant to suffer undue prejudice. Def. Opp'n to Pl.'s Mot. To Am. Compl. ("Def. Opp'n to Am.") at 1. First, Defendant contends that permitting the amendment would result in Defendant's "costs in defending the matter and preparing for trial [to] increase exponentially." Id. at 7. Defendant asserts that the parties have already exchanged a first set of discovery requests and Defendant has reviewed and produced tens of thousands of documents.

Id. According to Defendant, if Plaintiff is allowed to add four new individual defendants, Defendant would be subjected to additional depositions, discovery requests, and motion practice. Id.

Second, Defendant states that "Franco has not provided the requisite reasoning for his initial omission of the individuals he now seeks to add as defendants." Id. at 8. Finally, Defendant claims that the addition of four new defendants will result in a significant delay in the form of "more motion practice and additional discovery." Id.

B. Legal Standard

Rule 15(a) of the Federal Rules of Civil Procedure ...

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