Stonecypher v. Iasco Flight Training, Inc.

          MEMORANDUM AND ORDER

          MORRISON C. ENGLAND, JR., UNITED STATES DISTRICT JUDGE

         In this action, Plaintiff Matthew Stonecypher (“Plaintiff”) seeks damages from his former employer, Defendant IASCO Flight Training, Inc. (“Defendant” or “IASCO”), for alleged violations of various wage and hour laws, wrongful termination, and retaliation. Presently before the Court are two motions: Defendant's Motion to Dismiss (ECF No. 22-1) pursuant to Federal Rule of Civil Procedure 41(b) for failure to prosecute, and Plaintiff's Motion to Amend the Pretrial Scheduling Order (ECF No. 24), which would allow discovery and, accordingly, permit the adjudication of this case to proceed. For the reasons set forth below, Plaintiff's Motion to Amend the Pretrial Scheduling Order is GRANTED, and Defendant's Motion to Dismiss is DENIED.^[1]

         BACKGROUND

         Plaintiff was employed by Defendant IASCO, a flight training school in Redding, California, as a Certified Flight Instructor for about six months before he was terminated on or about August 22, 2017. Pl.'s Opp'n to Def.'s Mot. to Dismiss, ECF No. 27 at 1:6-7. While Plaintiff was employed by Defendant, he witnessed several alleged violations of the Federal Aviation Administration regulations and the California Labor Code, including, but not limited to, improper classification as an exempt employee. Id. at 1:7-17. As a result, Plaintiff filed the instant lawsuit on November 15, 2017. Id. at 2:7-9. On that same day, this Court issued an Initial Pretrial Scheduling Order (“IPTSO”) which stated that discovery was to be completed within 365 days from the date of filing. Def.'s Mem. Supp. Mot. to Dismiss, ECF No. 22-1 at 3:26-4:14. In addition to commencing the present action, Plaintiff also filed an administrative complaint just under a month later, on November 14, 2017, with the California Occupational Safety and Health Administration. That complaint was subsequently referred to the U.S. Department of Labor (“DOL”) for federal investigation. Pl.'s Mot. to Amend, ECF No. 24 at 7:22-24.

         On January 5, 2018, Defendant filed a Motion to Dismiss the Complaint for lack of subject matter jurisdiction and Motion to Strike (the “first Motion to Dismiss”). Id. 8:11-12. Shortly thereafter, on January 11, 2018, Defendant's counsel informed Plaintiff that Defendant did not want to expend unnecessary resources in discovery, but instead wanted to explore alternative dispute resolution (“ADR”). Id. at 8:18-20. The parties agreed to ADR through the DOL and subsequently agreed to participate in mediation in mid-June 2018. Id. at 8:21-28. On June 8, 2018, Plaintiff's counsel was informed that Joseph Breen, Esq. (“Breen”) would be substituting in as new counsel for Defendant, and that mediation would be postponed for Breen to get up to speed with the case. Id. at 9:3-12.

         On September 17, 2018, this Court issued an order granting Defendant's Motion to Dismiss with leave to amend. Id. at 9:16-18. On October 5, 2018, Plaintiff filed his First Amended Complaint. Id. at 9:18-19. Additionally, on or about October 10, 2018, Plaintiff requested that the DOL resume its investigation. Id. at 9:19-21. Shortly thereafter, and once Plaintiff was informed a new federal investigator was assigned to the administrative complaint, Breen informed Plaintiff that Defendant did not wish to expend any resources in discovery and instead wanted to resume settlement negotiations. Id. at 9:21-26. Beginning in approximately November of 2018, the parties began to exchange settlement demands for a global settlement. Id. at 10:7-10. On or about December 19, 2018, Plaintiff learned that yet another new federal investigator would take over the investigation. Id. at 10:10-13.

         In early January 2019, Breen informed Plaintiff that Defendant wanted to explore private mediation. The parties then began to meet and confer regarding proposed mediators and suspended the federal investigation to allow the parties to conserve resources toward a fruitful mediation. Id. at 10:14-18. Ultimately, the parties agreed to mediator Michelle Reinglass and scheduled mediation to occur on April 25, 2019. Id. at 10:18-20. On March 11, 2019, Defendant reneged on the parties' agreement to Michelle Reinglass, and the federal investigator informed the parties that in the interest of justice, he would be resuming the federal investigation. Id. at 10:25-27.

         Defendant subsequently provided a list of alternative mediators, but as of April 2019, the parties were unable to reach any agreement. Id. at 10:24-28. On April 9, 2019, in a telephonic discovery conference, Plaintiff explained to Defendant that the parties needed to jointly stipulate to extend discovery deadlines that had passed. Id. at 11:4-6. Defendant then requested that Plaintiff prepare the initial draft for a joint Rule 26 report. Id. at 11:7-8. On April 15, 2019, Plaintiff emailed both of the documents to Defendant. Id. at 11:8-10. Defendant nonetheless rejected Plaintiff's request to engage in a joint discovery conference, and on May 3, 2019 reiterated its prior proposal the parties seek informal resolution in lieu of expending costs in discovery and litigation. Id. at 11:13-15.

         On or about May 16, 2019, the parties agreed to explore the Court's Voluntary Dispute Resolution (“VDR”) program but were apparently unable to coordinate a time to further discuss that process. Id. at 11:16-18. Then, approximately two months later, on August 15, 2019, Defendant filed the Motion to Dismiss for failure to prosecute currently before this Court. Pl.'s Opp'n to Def.'s Mot. To Dismiss, ECF No. 27 at 6:19-21. Significantly, on September 5, 2019, Plaintiff learned that the DOL adopted the federal investigator's recommendation of a merit finding against Defendant. Id. at 6:24-26.

         STANDARD

         A. Dismissal under Federal Rule of Civil Procedure 41(b)

         Under Federal Rule of Civil Procedure 41(b), “[if] the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it.” Rule 41(b) requires that plaintiffs prosecute their claims with “reasonable diligence” to avoid dismissal.^[2] Anderson v. Air West, Inc., 542 F.2d 522, 524 (9th Cir. 1976). “A Rule 41(b) dismissal ‘must be supported by a showing of unreasonable delay.'” Omstead v. Dell, Inc., 594 F.3d 1081, 1084 (9th Cir. 2010) (quoting Henderson v Duncan, 779 F.2d 1421, 1423 (9th Cir. 1986). “The pertinent question . . . is not simply whether there has been any, but rather whether there has been sufficient delay or prejudice to justify a dismissal of the plaintiff's case.” Id. Moreover, to the extent that delay has been occasioned by “what appears to be a good faith error rather than any willful failure to prosecute, ” dismissal for delay in prosecution is not indicated. Cox v. Cnty. of Yuba, No. 2:09-cv-01894-MCE-JFM, 2011 WL 590733, *1, *5 (E.D. Cal. Feb. 10, 2011).

         Rule 41(b) has been deemed “so harsh a penalty it should be imposed as a sanction only in extreme circumstances.” Lal v. California, 610 F.3d 518, 525 (9th Cir. 2010) (quoting Dahl v. City of Huntington Beach, 84 F.3d 363, 366 (9th Cir. 1996)). In determining whether to dismiss a claim for failure to prosecute in particular, a court should consider: “(1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to defendants/respondents; (4) the availability of less drastic alternatives; and (5) the public policy favoring disposition of cases on their merits.” Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th Cir. 2002) (citing Ferdik v. Benzelet, 963 F.3d 1258, 1260-61 (9th Cir. 1992)). The burden of establishing the propriety of dismissal upon consideration of these factors rests with the defendant. Johnson v. Pluralsight, LLC, No. 2-16-CV-01148-MCE-CKD, 2019 WL 2184954, *1, *3 (E.D. Cal. May 21, 2019). Whether to dismiss an action under Rule 41(b) is a matter soundly within the Court's discretion. See Ash v. Cvetkov, 739 F.2d 493, 495 (9th Cir. 1984).

         B. Amendment to ...