Gregg v. Bohemian Club

Background

The plaintiffs brought this putative class action alleging wage-and-hour violations by three entity defendants. The court had granted motions to dismiss filed by Bohemian Club and Pomella LLC. In that earlier order, the court stated that no new claims or defendants could be added without the court’s permission or Monastery Camp’s agreement.

The plaintiffs then moved under Federal Rule of Civil Procedure 15 for permission to amend their complaint and add three individual defendants: William “Bill” Dawson, Richard “Dick” Dewey, and Michael LaHorgue. The opinion states that all three proposed individual defendants are members of Monastery Camp, which is an unincorporated association.

Legal standard

Rule 15 generally provides that leave to amend should be freely given when justice requires. Courts may deny leave based on undue prejudice, bad faith, undue delay, repeated failure to correct deficiencies, or futility. Prejudice to the opposing party carries the greatest weight. An amendment is futile when no set of facts under the proposed pleading could establish a valid claim.

Analysis

Monastery Camp argued that the proposed individual defendants would be prejudiced by being added nearly a year after the lawsuit began. The court concluded that the prejudice was not undue because the case remained at the pleading stage and discovery had not started. This factor favored allowing the amendment.

Monastery Camp also argued that adding the individuals would be futile as to the plaintiffs’ claim under the California Private Attorneys General Act, or PAGA. It contended that the plaintiffs’ notice to the California Labor and Workforce Development Agency did not identify the proposed individual defendants. The court found that Monastery Camp provided no authority establishing that the notice had to include the causes of action in the proposed amended complaint. The court therefore found that Monastery Camp had not established futility. It also stated that it preferred to decide later, on fuller briefing, whether exhaustion of the PAGA claim against the individual defendants was necessary.

Finally, Monastery Camp argued that the plaintiffs acted in bad faith because they had not identified new facts explaining why the individuals were omitted from earlier versions of the complaint. The court found that Monastery Camp offered no supporting legal authority and was not persuaded that adding defendants, by itself, showed bad faith.

Disposition

The court granted the plaintiffs’ motion for leave to amend to add the three individual defendants. It ordered the plaintiffs to file their second amended complaint as a standalone docket entry on or before May 23, 2024. The order did not resolve the merits of the wage-and-hour or PAGA claims, and it did not decide whether PAGA exhaustion was required as to the individual defendants.