United States District Court, N.D. California
February 12, 2015
LILLIANA SANCHEZ, et al., Plaintiffs,
CAPITAL CONTRACTORS INC., Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR LEAVE TO AMEND; VACATING HEARING
MAXINE M. CHESNEY, District Judge.
Before the Court is plaintiffs' "Motion for Leave to File Amended Complaint, " filed December 19, 2014. Defendant Capital Contractors Inc. ("Capital") has filed opposition, to which plaintiffs have replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.
Plaintiffs seek leave, pursuant to Rule 15(a) of the Federal Rules of Civil Procedure, to file a proposed First Amended Complaint ("Proposed FAC"),  by which they seek to do the following:
(1) dismiss the existing Twelfth Cause of Action, by which plaintiffs allege a claim for negligent misrepresentation on behalf of the three "Independent Contractor" plaintiffs ("ICs");
(2) remove from the First through Eleventh Causes of Action the existing references to the Private Attorney General Act ("PAGA") (see, e.g., Compl. ¶ 103), and plead, as the Twelfth Cause of Action, a cause of action pursuant to PAGA based on the allegations set forth in the First through Eleventh Causes of Action (see Proposed FAC ¶ 146, 155-163).
(3) add allegations that each of the ICs used fictitious business names when they "worked for Capital" (see Proposed FAC ¶¶ 13-15), and that, at certain times, one of the ICs, specifically, Yolanda Camey, "perform[ed] janitorial services for Capital" through Professional CCS Cleaning Services ("CSS"), a "corporation" (see Proposed FAC ¶ 14);
(4) add CSS as a plaintiff to each cause of action; and
(5) replace allegations that the ICs "employ" or "employed" one or more of the five
"Janitorial Worker" plaintiffs ("JWs") (see, e.g., Compl. ¶¶ 3, 22, 27) with allegations that the ICs "engage" or "engaged" the JWs (see, e.g., Proposed FAC ¶¶ 11, 24, 31), and, additionally, replace an allegation that "Capital was either the employer or the joint employer of the JWs" (see Compl. ¶ 44) with the allegation that "Capital was the JWs employer" (see Proposed FAC ¶ 48).
As set forth below, the Court considers, in turn, Capital's opposition to each of the five proposed amendments.
Capital argues the first through third proposed amendments are unnecessary. Given the early stage of the proceedings and plaintiffs' expressed interest in clarifying the pleadings, however, as well as a lack of prejudice to Capital, the Court finds it appropriate to grant the motion as to the first three proposed amendments. See DCD Programs, Ltd. v. Leighton, F.2d 183, 186 (9th Cir. 1987) (noting Rule 15's "policy of favoring amendments to pleadings should be applied with extreme liberality"; holding, in light thereof, amendment should be afforded in absence of "bad faith, undue delay, prejudice to the opposing party, [and/or] futility of amendment") (internal quotation and citation omitted).
The Court agrees with Capital, however, that the fourth proposed amendment would be futile. As Capital points out, a corporation cannot itself bring claims under the Labor Code provisions on which plaintiffs rely. See, e.g., Cal. Lab. Code § 226.8(a)(1) (providing "[i]t is unlawful for any person or employer to engage in... willful misclassification of an individual as an independent contractor") (emphasis added).
Lastly, Capital opposes the fifth proposed amendment, on the asserted ground it would effectively relieve plaintiffs of a binding judicial admission. The Court is not persuaded that such concern is sufficient to preclude the requested amendment. As currently pleaded in the complaint, the ICs' relationship to the JWs is ambiguous (see, e.g., Compl. ¶¶ 3, 5), and, in any event, any admissions contained therein likely would be admissible in evidence, albeit no longer binding. See Huey v. Honeywell, Inc., 82 F.3d 327, 333 (9th Cir. 1996) (holding "admissions" made in superseded pleading "are still admissible evidence, though not conclusive, like any other extrajudicial admission made by a party or its agent").
Accordingly, plaintiffs' motion for leave to amend will be granted, with the exception that plaintiffs will not be afforded leave to add CSS as a plaintiff.
For the reasons stated above, plaintiffs' motion is hereby GRANTED in part and DENIED in part. Specifically, to the extent plaintiffs seek leave to amend to make the above-referenced first, second, third, and fifth proposed amendments, the motion is hereby GRANTED, and to the extent plaintiffs seek leave to amend to make the above-referenced fourth proposed amendment, the motion is hereby DENIED.
Plaintiffs are hereby DIRECTED to file an FAC in accordance with the above and no later than February 23, 2015.
IT IS SO ORDERED.