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Brez v. Fougera Pharmaceuticals Inc.

United States District Court, D. Kansas

August 1, 2017

LISA BREZ, Plaintiff,


          GWYNNE E. BIRZER United States Magistrate Judge

         This matter is before the Court on Plaintiff's Motion for Leave to File her Second Amended Complaint (ECF No. 55). For the reasons set forth below, Plaintiff's motion is GRANTED.

         I. Background[1]

         A. Nature of the Case

         Plaintiff, a Kansas resident, filed this employment action seeking damages for her wrongful termination by Defendants, who she contends acted as her joint employers during her one-year employment. Defendant Fougera Pharmaceuticals, Inc., (“Fougera”) is a New York manufacturer of topical pharmaceutical products, and it claims to have been Plaintiff's sole employer, although it admits it is a subsidiary of defendant Sandoz, Inc. (“Sandoz”) and that it hired Plaintiff as a District Manager in its PharmaDerm division to work remotely from Kansas. From her hiring in February 2015 until her termination in February 2016, Plaintiff was responsible for supervising pharmaceutical sales representatives in Kansas, Indiana, Nebraska, Missouri, Kentucky and parts of Illinois. Plaintiff contends the medical, dental, and prescription benefits through her employment were provided by defendant Novartis Pharmaceuticals Corporation.

         Plaintiff believes problems with her employment began in the spring of 2015, when she began questioning the validity of certain expense reports and documents submitted by sales representatives under her direction. She reported the suspected falsifications to her Regional Director and the Human Resources department. But instead of taking action against the sales representatives involved in what Plaintiff perceived as fraud, she claims Defendants began retaliating against her.

         Plaintiff asserts she was paid less than her male counterparts, and she was not allowed to hire a qualified female sale representative candidate but forced to hire a male with no relevant experience. In addition to her gender claims, she contends during a flight to a mandatory Managers' Meeting in December 2016, her inner eardrum ruptured. She sought medical treatment immediately, and the doctor recommended she not take a return flight home due to the uncertainty about additional damage to her ear from a subsequent flight. However, her boss-who was with her on the trip-told her to “suck it up, ” and she returned home by plane, which worsened her injury, resulting in permanent hearing loss and accompanying health issues.

         Plaintiff reported her injury to Human Resources and pursued a workers' compensation claim. She also sought to discuss her disability and possible accommodations, including a possible permanent position in Kansas City so she would not be required to travel. She claims she was terminated soon after seeking this accommodation. Although Defendants claim her termination was based upon her inappropriate use of the company credit card, Plaintiff maintains personal use of the card was a common practice among employees. She contends she repaid all amounts, her similar credit card reports had previously been approved, and other employees charged personal expenses to their company cards without termination.

         Defendants deny they were Plaintiff's joint employers and contend Fougera was her sole employer. Fougera claims it terminated Plaintiff after discovering she charged thousands of dollars in personal expenses to her corporate credit card in violation of company policy, a reason entirely unrelated to Plaintiff's gender or claimed disability. Additionally, prior to her ear injury, Plaintiff had expressed interest in a District Manager position in the Northwest District-which would require her to relocate to that part of the country. Fougera offered the Northwest District position to Plaintiff, and claims it paid her a $70, 000 relocation payment on November 20, 2015. This relocation payment was contingent upon Plaintiff's relocation to the Northwest, which never occurred, and Fougera contends Plaintiff has not repaid the relocation funds as required.

         Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) on or about February 29, 2016 and received a Notice of Right to Sue on or about June 30, 2016. She filed this case on August 18, 2016, seeking damages for gender discrimination under Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq. (“Title VII”); disability discrimination under the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”), and for wrongful termination in violation of Kansas public policy for pursuing her workers' compensation claim and for reporting the fraudulent conduct of the sales representatives (ECF No. 1).

         Both Fougera and Sandoz filed Counterclaims for breach of contract and unjust enrichment, based upon Plaintiff's failure to repay the relocation bonus, her failure to repay certain quarterly incentive payments, and her failure to reimburse Fougera for personal expenses charged to her corporate credit card (ECF No. 15).

         After defendants Fougera and Sandoz filed their Counterclaims, Plaintiff filed another charge of discrimination with the EEOC, alleging retaliation by Defendants in violation of Title VII. Plaintiff received her Notice of Right to Sue on the retaliation claim on February 6, 2017.

         B. Procedural Posture

         Plaintiff initially filed her lawsuit against four defendants: Fougera; Sandoz; PharmaDerm, LLC; and Novartis Pharmaceuticals, Inc. (ECF No. 1). Plaintiff later voluntarily dismissed PharmaDerm (ECF No. 13), and defendants Sandoz and Fougera filed their Answer and asserted Counterclaims (ECF No. 15). Plaintiff filed her First Amended Complaint (ECF No. 23) on October 31, 2016, which replaced former defendant Novartis Pharmaceuticals, Inc. with present defendant Novartis Pharmaceuticals Corporation (“Novartis”). On December 7, 2016, the Court entered a Scheduling Order setting deadlines for mediation, fact discovery, and motion practice, and established a January 30, 2017 deadline for motions to amend the pleadings (ECF No. 35). All three defendants answered the Amended Complaint (ECF Nos. 37, 38), and the case progressed to active discovery. After the parties jointly requested extensions of the existing deadlines (ECF No. 57), the Court issued a Revised Scheduling Order (ECF No. 58). The parties recently requested a Second Revised Scheduling Order (Joint Motion, ECF No. 66; Order, ECF No. 67), which extended the fact discovery deadline to August 25, 2017, and the dispositive motion deadline to September 30, 2017.

         Just before the first revision to the schedule, Plaintiff filed her Motion for Leave to File Second Amended Complaint (ECF No. 55), seeking to add her claim for retaliation, claiming Defendants filed their counterclaims against her in retaliation for her complaints of discrimination. All Defendants oppose the amendment (ECF No. 59), all related briefing is complete, and the issue of amendment is ripe for decision.

         II. Motion to Amend (ECF No. 55)

         A. Legal Standards

         Fed. R. Civ. P. 15 establishes the standard for amending pleadings, while Rule 16 provides the general framework for pretrial management. Both rules are implicated by Plaintiff's motion, with Rule 15 providing the starting point.

         1. Fed.R.Civ.P. 15

         The standard for permitting a party to amend his or her complaint is well established. A party may amend its pleading as a matter of course under Fed.R.Civ.P. 15(a)(1), either before the responding party answers or within 21 days after service of a responsive pleading. However, in cases such as this, where the time to amend as a matter of course has passed, without the opposing party's consent a party may amend her pleading only by leave of the court under Rule 15(a)(2).

         Rule 15(a)(2) provides leave “shall be freely given when justice so requires, ” and the decision to allow an amendment is within the sound discretion of the court.[2] The court considers a number of factors in deciding whether to allow an amendment, including timeliness, prejudice to the other party, bad faith, and futility of amendment.[3]In exercising its discretion, the court must be “mindful of the spirit of the federal rules of civil procedure to encourage decisions on the merits rather than on mere technicalities.”[4]The Tenth Circuit acknowledged that Rule 15 is intended “to provide litigants ‘the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties, '”[5] especially in the absence of bad faith by an offending party or prejudice to a non-moving party.[6]

         2. Fed.R.Civ.P. 16

         When a proposed amendment is offered after the deadline to amend pleadings has passed, as in this case, Fed.R.Civ.P. 16(b)(4) comes into play. This rule provides that a “schedule may be modified only for good cause and with the judge's consent.” When considering a motion to amend the pleadings filed past the scheduling order deadline, “judges in this District have consistently applied a two-step analysis based on both Rule 16(b) and Rule 15(a).”[7] In such cases, the court “first determines whether the moving party has established good cause within the meaning of Rule 16(b)(4) so as to justify allowing the untimely motion.”[8] Only after finding good cause has been shown will the court proceed to the second step and evaluate whether the broader Rule 15(a) standard for amendment has been satisfied.

         “Good cause” under Rule 16(b)(4) requires the moving party to “show that the amendment deadline could not have been met even if it had acted with due diligence.”[9]“Carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief.”[10] The party requesting an untimely amendment “is normally expected to show good faith on its part and some reasonable basis for not meeting the deadline.”[11]The district court has discretion to decide whether the movant has established good cause sufficient to modify the scheduling order deadlines, and such a decision is reviewed only for abuse of discretion.[12] With these standards in mind, the Court evaluates Plaintiff's motion.

         B. Discussion

         Plaintiff's proposed Second Amended Complaint does not significantly differ from her previous pleading. She seeks only to amend her complaint to add a retaliation claim, because in addition to the retaliation she claims to have experienced during her employment, she asserts Defendants filed their counterclaims in retaliation for her complaints of discrimination. She claims she did not unjustly delay in seeking the amendment, and because depositions had not yet been held when she filed her motion, she argues Defendants will have adequate opportunity to examine her and conduct any discovery on the new retaliation claim. Defendants oppose the amendment because they believe the retaliation claim is futile. The arguments of the parties are addressed in turn.

         1. ...

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