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Sodekson v. East Coast Restaurant & Nightclubs, LLC

United States District Court, D. South Carolina, Florence Division

September 6, 2016

Lisa Sodekson, individually and on behalf of all others similarly situated, Plaintiff,
East Coast Restaurant & Nightclubs, LLC d/b/a The Gold Club of Bedford, PML Clubs, Inc., and Michael Rose, Defendants.


          R. Bryan Harwell United States District Judge.

         This matter is before the Court on Plaintiff's motion to amend/correct complaint [ECF #21], Plaintiff's motion for conditional certification of a collective action [ECF #25], Plaintiff's motion to modify scheduling order and extend deadlines to permit additional discovery [ECF #26], and plaintiff's motion to modify scheduling order and extend mediation deadline [ECF #33]. All parties have had the opportunity to extensively brief the issues raised in the motions, and this Court has thoroughly considered all pleadings filed in this case.[1]

         Factual Background and Procedural History

         Plaintiff Lisa Sodekson, a resident of Massachusetts, worked as an exotic dancer at The Gold Club in Bedford, New Hampshire for approximately five months in 2012. [ECF #1, p. 1]. On or about July 8, 2015, Ms. Sodekson filed suit against Defendants alleging violations of the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201, et seq., seeking relief on behalf of herself and others similarly situated.[2] Defendant PML Clubs, Inc. is a Delaware corporation. [ECF # 1, p. 1]. Plaintiff alleges PML Clubs, Inc. (“PML”) operates a strip club known as the “The Gold Club” in locations across the country, including Myrtle Beach (PML's principal place of business), Hilton Head, South Carolina; Bedford, New Hampshire; Las Vegas, Nevada; Greensboro, North Carolina; San Francisco, California; San Jose, California; and Wilmington, Delaware. [ECF #1, p. 2]. Plaintiff also sued East Coast Restaurant & Nightclubs, LLC d/b/a The Gold Club, which Plaintiff alleges is a New Hampshire limited liability company with its principal place of business in New Hampshire. [ECF #1, p. 2]. Finally, Plaintiff sued Michael Rose, a resident of Myrtle Beach, South Carolina, who Plaintiff alleges is the registered agent, owner and officer of the other Defendants. [ECF #1, p. 2]. Plaintiff sued these entities for alleged violations of the FLSA, including minimum wage and compensation violations, liquidated damages, costs and attorney's fees. Specifically, Plaintiff alleges that she and other exotic dancers were misclassified as independent contractors, rather than employees. [ECF #1, p. 3].

         On August 12, 2015, this Court entered a Scheduling Order setting the discovery deadline for March 9, 2016 and amendments to pleadings for November 10, 2015. [ECF #9]. Thereafter, the parties entered into a Consent Amended Scheduling Order on September 22, 2015 resetting the discovery deadline to June 9, 2016 and the time to amend pleadings to December 11, 2015. [ECF #17]. On December 11, 2015, this Court granted a consent motion to extend the time for Plaintiff to amend her complaint to December 24, 2015. [ECF #19]. On December 24, 2015, Plaintiff filed her motion to amend/correct complaint, seeking to add another plaintiff, add two defendants, and add additional South Carolina and New Hampshire state law claims. [ECF #21]. Plaintiff did not move to certify a conditional class at this time. Defendants filed a response in opposition on January 11, 2016 [ECF #23], and plaintiff filed her reply on January 22, 2016. [ECF #24]. Plaintiff filed a motion to certify class [ECF #25] and a motion for extension of time to complete discovery [ECF #26], on June 9, 2016, the discovery deadline date, and nearly a year after the lawsuit was initially filed. Both of these motions are opposed by Defendants. Finally, Plaintiff filed another motion to amend the scheduling order to extend the mediation deadline on August 5, 2016. This motion is also opposed by Defendants.


         A. Motion to Amend/Correct Complaint

         Plaintiff requests leave of court to add Chantel Kaneshige, a South Carolina resident who worked as an exotic dancer, as a named plaintiff in this action. [ECF #21, p. 2]. Plaintiff alleges that Ms. Kaneshige was also classified as an independent contractor, rather than an employee, while working for corporate entities RT Entertainment, LLC and Dunnigan's Restaurant, Inc., companies that Plaintiff alleges are related to the named Defendants. [ECF #21, p. 2]. Therefore, Plaintiff seeks to add are RT Entertainment, LLC and Dunnigan's Restaurant, Inc., based upon her belief that these two entities are associated with the named Defendants. [ECF #21, p. 3]. Finally, Plaintiff seeks to add South Carolina and New Hampshire state law wage and hour claims, which she alleges have been violated by the named Defendants and the defendants she proposes to add to this lawsuit. [ECF #21, p. 2]. In response, Defendants argue that Ms. Kaneshige is subject to an arbitration agreement, and as such, cannot bring any claims in this forum against them or the proposed defendants in this lawsuit. [ECF #23, p. 2].[3]

         Rule 15(a)(2) of the Federal Rules of Civil Procedure governs the amendment of pleadings after a responsive pleading has been served. The Rule provides that a party “may amend its pleadings only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). The rule has been liberally construed and gives effect to the federal policy of resolving cases on their merits. Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006). A district court may deny a motion to amend a complaint when the amendment would be: (1) prejudicial to the opposing party; (2) the moving party has acted in bad faith; or (3) the amendment would be futile. Equal Rights Center v. Niles Bolton Assocs., 602 F.3d 597, 603 (4th Cir. 2010). Defendants argue that allowing the plaintiff to add Ms. Kaneshige as a plaintiff would be futile because her claims are subject to an arbitration agreement, a copy of which Defendants attached to their response to the motion. [ECF #23, p. 3]. Ms. Kaneshige has already filed a Consent to Join Lawsuit pursuant to 29 U.S.C. § 216(b). [ECF #22-1]. At this time, Defendants have not filed a motion to compel Ms. Kaneshige to arbitrate her claims. Without ruling on the applicability of the arbitration agreement, this Court will allow Plaintiff to amend her complaint to add Ms. Kaneshige as a plaintiff to this case.

         Defendants do not otherwise argue that they will be prejudiced by the inclusion of these additional defendants or state law claims, or that the Plaintiff has acted in bad faith in filing her motion to amend/correct the complaint. Based on the limited record before the Court, this Court will allow Plaintiff to amend her complaint to include claims against the two corporate Defendants, RT Entertainment, LLC and Dunnigan's Restaurant, Inc., including the alleged state law claims against Defendants. This Court will allow Plaintiff to file her proposed amended complaint attached to her motion as an exhibit [ECF #21-1].

         B. Motion to Modify Scheduling Order and Extend Deadlines to Permit Additional Discovery

         Plaintiff also seeks to modify the Scheduling Order currently in place to permit discovery in this case. Plaintiff alleges that since the filing of the Scheduling Order on September 22, 2015, until the discovery deadline, June 9, 2016, the parties have been engaged in motions practice, namely the motion to amend complaint, which was filed on December 24, 2015. [ECF #26, p. 1]. Plaintiff also points out that she has recently filed a motion for conditional certification of a collective action. [ECF #26, p. 2]. In response, Defendants argue that for approximately nine months, Plaintiff did not engage in any discovery, in violation of Local Rule 6.01. Further, Defendants argue that extending discovery at this stage in the litigation would expand the scope of the lawsuit from a claim for damages from a plaintiff who worked at one nightclub over a three month period, to a potential class action lawsuit. [ECF #28, p. 2]. Plaintiff filed a reply suggesting that the delay in engaging in any discovery was justified because she was uncertain of the results of a criminal proceeding concerning one of the Defendants was involved in during this time.

         Rule 16 governs scheduling orders and provides that a schedule may be modified only for “good cause” and with the judge's consent. Fed.R.Civ.P. 16(b)(4). “Good cause” is shown when the moving party demonstrates that the scheduling order deadlines cannot be met despite the movant's diligent efforts. Innovative Therapies, Inc. v. Meents, 302 F.R.D. 364, 382 (D. Md. 2014) (citing Potomac Elec. Power Co. v. Elec. Motor Supply, Inc., 190 F.R.D. 372, 375 (D. Md. 1999)); see also Dilmar Oil Co., Inc. v. Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997). Conversely, a lack of diligence and carelessness are the “hallmarks of failure to meet the good cause standard.” Meents, 302 F.R.D. at 382-83 (quoting W.Va. Hous. Dev. Fund v. Ocwen Tech. Xchange, Inc., 200 F.R.D. 564, 567 (S.D. W.Va. 2001)). District courts have broad discretion in the resolution of discovery disputes that arise in pending cases. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390 (4th Cir. 2003). Further, Defendants have cited to this Court's local rule regarding motions for extension of time for completion of discovery. Rule 6.01 states that such motions will be granted in unusual cases and “upon a showing that the parties have diligently pursued discovery during the originally specified period.” Local Civ. Rule 6.01. The showing requires “a specification of the discovery (including depositions by witness and date) that has been completed and the depositions (including witness name) and other discovery that remain to be completed.” In this case, it appears from the record that it is undisputed that the parties have not engaged in any discovery during the original discovery period.

         Here, Plaintiff has requested a four month discovery extension after failing to engage in any discovery during the period of September 2015 until June of 2016. Instead, Plaintiff filed a motion the day of the discovery deadline asserting that the delay in conducting any discovery at all was because Plaintiff was focused on filing two motions, one of which was filed in December of 2015, and because one of the Defendants has an ongoing federal criminal case that created uncertainty with respect to his lawsuit.[4] This Court does not find that Plaintiff has established the requisite good cause to grant a discovery extension on the eve of the discovery deadline. In addition, Plaintiff has not complied with the local rule requiring diligent efforts in conducting discovery, along with a list of depositions scheduled and completed to date. This is likely the case because the parties have not ...

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