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Hudson v. Bank of America Corp.

United States District Court, S.D. California

November 14, 2017

ABRAHAM HUDSON, individually, Plaintiff,
v.
BANK OF AMERICA CORPORATION, a Delaware Corporation; MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, a Delaware Corporation; DOES 1-50, Inclusive, Defendants.

          ORDER ON MOTION TO REMAND AND MOTION TO AMEND [DOC. NOS. 10, 11.]

          HON. CATHY ANN BENCIVENGO, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiff Abraham Hudson's motion to remand [Doc. No. 11] and motion to amend [Doc. No. 10]. The motions have been fully briefed and the Court finds them suitable for determination on the papers submitted and without oral argument in accordance with Civil Local Rule 7.1(d)(1). For the following reasons, the motion to remand is denied and the motion to amend is granted.

         I. Background

         On June 21, 2017, Plaintiff filed his original complaint in the Superior Court of the State of California against Bank of America Corporation (“BOA”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) (collectively Defendants”) alleging seven causes of action related to his employment by Defendants. [Doc. No. 1-1 at 2-23 (“complaint”).] His factual allegations, accepted as true, are as follows.

         Beginning in October 2015, numerous coworkers of Plaintiff's made defamatory statements about him and subjected him to a hostile work environment. [Complaint at ¶¶ 20, 21.] Plaintiff's supervisors, including Steve Kowalski, ignored the discrimination and harassment occurring or retaliated against him for complaining. [Id. at ¶¶ 28-32, 35.] Mr. Schoenle also retaliated against Plaintiff when he complained about the working conditions. [Id. at ¶¶ 42, 43, 45, 46.] After resigning from his position, Plaintiff became aware that a number of Defendant's employees had made defamatory statements about him to members of his community. [Id. at ¶¶ 53-55.]

         Based on these allegations Plaintiff sued Defendants for breach of oral contract, unlawful discrimination based on race and religion, retaliation, failure to prevent discrimination, constructive discharge and defamation. [Doc. No. 1-1.] Plaintiff seeks general and punitive damages, attorneys' fees, and earnings losses. [Doc. No. 1-1 at 22.]

         On July 21, 2017, Defendants removed this action to this Court pursuant to the provisions of 28 U.S.C. §§ 1332(a), 1441(a) and 1446(b) [Doc. No. 1] and filed answers to the complaint on the same day [Doc. Nos. 2, 2.] On October 5, 2017, Plaintiff filed both his motion to amend [Doc. No. 10] to add Mr. Schoenle as a Defendant and motion to remand [Doc. No. 11] based on lack of complete diversity between the parties. Defendants filed their oppositions to the motions [Doc. Nos. 13, 14] and Plaintiff filed his replies [Doc. No. 15, 16]. In light of the relatedness of the motions, the Court will consider them together.

         II. Discussion

         A. Motion to Amend

         Plaintiff seeks leave to amend his complaint to substitute Mr. Schoenle for Defendant Doe 1. [Doc. No. 10.] Defendants oppose Plaintiff's motion to amend arguing the filing does not comport to the Federal Rules of Civil Procedure and that amendment would be futile. [Doc. No. 13.]

         Rule 15 (a) of the Federal Rule of Civil Procedure states that, after the initial period for amendments as of right, pleadings may only be amended by leave of court, which “[t]he court shall freely give when justice so requires.” Fed.R.Civ.P. 15(a)(2). Courts commonly use four factors to determine the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, and futility of amendment. Ditto v. McCurdy, 510 F.3d 1070, 1078-79 (9th Cir. 2007); Loehr v. Ventura Cnty. Cmty. Coll. Dist., 743 F.2d 1310, 1319 (9th Cir. 1984); Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). “When weighing these factors . . . all inferences should be made in favor of granting the motion to amend.” Hofstetter v. Chase Home Fin., LLC, 751 F.Supp.2d 1116, 1122 (N.D. Cal 2010) (citing Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999)).

         The Ninth Circuit has held that “it is the consideration of prejudice to the opposing party that carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). “Absent 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. Moreover, “once the defendant is in court on a claim arising out of a particular transaction or set of facts, he is not prejudiced if another claim, arising out of the same facts, is added.” Sierra Club v. Penfold, 857 F.2d 1307, 1315 (9th Cir. 1988). While futile amendments should not be permitted, an amendment “is futile only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988); DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 188 (9th Cir. 1987) (citations omitted).

         While Plaintiff failed to comply with the Federal Rules filing requirement, he submitted a draft of the first amended complaint with his reply to the opposition to the motion for leave to amend. Doc. No. 15-1 at 4-25.] The Court has reviewed the proposed amended complaint and finds it substantially similar to the original complaint, it simply adds Mr. Schoenle as an individual defendant and inserts a paragraph which describes his alleged part in this suit. Moreover, Plaintiff asserts that the failure to comply with the rules was simply the result of an oversight and his attorney attests that Defendants had been furnished with a copy of the amended complaint, on September 6, 2017, before leave to amend was sought on October 5, 2017. [Doc. No. 15-1 at ¶ 4]. Therefore, even though the requirements of the rules were not followed to the letter, the Court perceives no prejudice to Defendants in allowing an amendment.

         Additionally, Defendants posit that Plaintiff is seeking to amend in an attempt to destroy diversity, yet they provided no evidence in support of this contention and Plaintiff denies the assertion. As a consequence, the Court is unwilling to conclude that Plaintiff is seeking amendment in bad fad faith. Further, Plaintiff has filed his motion to amend 3 ½ months after filing the original complaint, which weighs in favor of granting leave to amend. Similarly, considering the early stages of this litigation the Court sees no reason to expect that the amendment will unduly delay litigation. See AmericSourceBergen Corp v. Dialysist W., Inc.,465 F.3d 946, 951 (9th Cir. 2006) (“[A] district court need not grant leave to amend where the amendment (1) prejudices the other party; (2) is sought in bad faith; (3) produces an undue delay in litigation; or (4) is futile.”). As to whether amendment would be futile, Defendants assert “the anticipated amendments would be futile as they are barred by the relevant statute of limitations and because Plaintiff failed to timely ...


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