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Adams v. Diversicare Leasing Corp.

United States District Court, W.D. Tennessee, Eastern Division

July 10, 2015

ALLISON ADAMS, et al., Plaintiffs,
v.
DIVERSICARE LEASING CORP., et al., Defendants.

ORDER GRANTING PLAINTIFFS' MOTION FOR LEAVE TO FILE AN AMENDED AND SUBSTITUTED COMPLAINT

J. DANIEL BREEN, Chief District Judge.

Before the Court is Plaintiffs' motion for leave to file a second[1] amended and substituted complaint pursuant to Rule 15 of the Federal Rules of Civil Procedure, which has been fully briefed by the parties. (Docket Entries ("D.E.") 26-28.) For the reasons discussed below, the motion is GRANTED.

Background [2]

On December 16, 2014, forty seven[3] Plaintiffs filed this joint action against Defendants, Diversicare Leasing Corp., Diversicare Management Services Co., Advocat, Inc. n/k/a Diversicare Healthcare Services, Inc., and John Does 1-30 ("Defendants"), alleging violations of the Fair Labor Standards Act, 29 U.S.C. ยง 201, et seq. ("FLSA") and Tennessee law. (D.E. 1.) Plaintiffs are current and former hourly, non-exempt employees who held various positions at skilled nursing facilities in Tennessee that are owned and operated by the Defendants. They were typically scheduled to work exactly forty hours per week and were subject to an automatic thirty-minute meal deduction policy even though they often performed compensable work during this break. They were also required to complete work-related tasks before and after their shifts without compensation. These policies caused Plaintiffs to work more than forty hours per week, in violation of the FLSA.

Plaintiffs also claim that Defendants were unjustly enriched by receiving the benefit of the work performed during breaks and off-the-clock without paying for it. Finally, Defendants are liable under a theory of promissory estoppel because they unambiguously promised to pay Plaintiffs, who reasonably relied on this promise and materially changed their position, for the time they worked during their breaks or off-the-clock.

Defendants moved to dismiss the first amended complaint under Rule 12(b)(6), Rule 12(b)(3) and Rule 21 of the Federal Rules of Civil Procedure. (D.E. 20.) Plaintiffs filed this motion, which Defendants oppose, contending that amendment would be futile. (D.E. 26-28.)

Legal Standard

Rule 15 of the Federal Rules of Civil Procedure directs that courts "should freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a)(2). "[D]enying leave is appropriate in instances of 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.'" Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 458 (6th Cir. 2013) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

When a court denies a party leave to amend based on futility, it is determining that the proposed complaint "could not withstand a Rule 12(b)(6) motion to dismiss.'" Williams v. City of Cleveland, 771 F.3d 945, 949 (6th Cir. 2014) (quoting Riverview Health Inst. LLC v. Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010)). On a motion to dismiss under Rule 12(b)(6), courts must construe the proposed complaint "in the light most favorable to the plaintiff and accept all allegations as true." Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005)). Therefore, the dispositive question becomes whether the proposed complaint contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Williams, 771 F.3d at 949 (quoting D'Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014)).

Rule 8 of the Federal Rules of Civil Procedure sets out a liberal pleading standard, requiring only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). However, "[c]onclusory allegations or legal conclusions masquerading as factual allegations will not suffice.'" Bright v. Gallia Cnty., Ohio, 753 F.3d 639, 652 (6th Cir. 2014) (quoting Eidson v. Tenn. Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007)). The proposed complaint "must go beyond labels and conclusions' or a mere formulaic recitation of the elements of a cause of action, '" to survive a motion to dismiss. SFS Check, LLC v. First Bank of Del., 774 F.3d 351, 355 (6th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

Analysis

Defendants present two arguments supporting their contention that amendment would be futile: (1) the proposed complaint is subject to dismissal for misjoinder; and (2) the proposed complaint fails to state a claim for relief under Rule 8.

I. Misjoinder

Rule 20 of the Federal Rules of Civil Procedure allows for the permissive joinder of ...


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