Stotesbery v. Muy Pizza-Tejas, LLC

Background

John Stotesbery brought this Fair Labor Standards Act (FLSA) action on behalf of himself and a proposed nationwide collective of Pizza Hut delivery drivers. He alleged that the defendants required drivers to use personal vehicles for deliveries without adequately reimbursing their resulting expenses.

After the defendants moved to dismiss, the court ruled that it lacked personal jurisdiction over FLSA claims that had no connection to Minnesota. It allowed the case to proceed as to Minnesota drivers. The court later denied Stotesbery’s request to reconsider that ruling, concluding that the Supreme Court’s decision in Mallory v. Norfolk Southern Railway Co. addressed a different jurisdictional question.

Stotesbery then filed a second motion for permission to file a third amended complaint. Most of the proposed amendments sought to revive nationwide claims against the Ayvaz Defendants by alleging that their registration to do business in Minnesota constituted consent to general personal jurisdiction there. The proposed complaint also included allegations concerning drivers outside Minnesota and claims under the laws of several other states.

The Muy Defendants had settled the relevant cases, and Stotesbery acknowledged that the amendment motion was moot as to those defendants. The motion therefore affected only the Ayvaz Defendants.

Legal standard

Federal Rule of Civil Procedure 15 generally directs courts to freely allow amendments when justice requires, but a party has no absolute right to amend. Courts may deny leave because of undue delay, bad faith, repeated failure to correct deficiencies, undue prejudice, or futile amendments. Because the motion was filed after the scheduling-order deadline, Rule 16’s stricter good-cause standard might also have applied. The court applied Rule 15 and assumed, without deciding, that the motion would also fail under Rule 16.

Reasons for denial

The court concluded that the proposed amendment was largely another attempt to obtain reconsideration of its earlier personal-jurisdiction ruling through a different procedural device. Stotesbery had already sought reconsideration, and the court found that the consent theory could have been raised earlier.

The court also found undue delay. Stotesbery had chosen other litigation strategies after the 2022 jurisdiction ruling, including settlement discussions, a separate nationwide FLSA case against the Muy Defendants in Georgia, and the unsuccessful reconsideration request. The court found no valid reason for waiting until 2024 to propose allegations based on consent to jurisdiction under Minnesota law. It noted that Stotesbery did not claim that discovery had revealed new facts or that the legal theory had previously been unavailable.

Finally, the court found prejudice to the Ayvaz Defendants. A separate nationwide FLSA action against them in Texas had settled, apparently covering a similar period and allowing non-Minnesota drivers to opt in. The court concluded that the Ayvaz Defendants had made litigation and settlement decisions based on the understanding that this case would remain limited to Minnesota drivers. Reviving nationwide claims in this case after that settlement would therefore be highly prejudicial. The court also found that potential harm to non-Minnesota drivers was reduced by their ability to opt into the Texas settlement.

Disposition

The court ordered that Stotesbery’s Second Motion to File a Third Amended Complaint, ECF 249, was DENIED. The order did not decide whether the proposed consent theory would ultimately establish personal jurisdiction or whether the proposed nationwide FLSA claims would succeed on their merits. It decided only that Stotesbery could not add those allegations through the requested amendment.