Chen v. Hunan Manor Enterprise, Inc.

Background

The plaintiffs, former employees of the defendants’ restaurant chain, brought claims for unpaid wages under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). They moved to file an amended complaint for four purposes: removing defendants against whom all claims had been dismissed; adding individuals who had filed forms consenting to join the lawsuit and adding factual allegations about them; correcting defendant names or adding aliases; and adding 200 CPS Investment Corp. and five individual defendants.

A May 2017 scheduling order set August 1, 2017, as the deadline for adding parties and amending pleadings. The court later extended the discovery deadline to June 17, 2019, but did not extend the deadlines for adding parties or amending pleadings. Plaintiffs filed their motion to amend on November 4, 2019. The court had allowed certain depositions after the discovery deadline but expressly stated that discovery was not otherwise reopened.

Legal standard

Federal Rule of Civil Procedure 15 generally directs courts to freely allow amendments when justice requires, but courts may deny amendment for reasons such as undue delay, bad faith, futility, or unfair prejudice. Because a scheduling order had been entered, Rule 16 also required good cause to modify the amendment deadline. The court explained that good cause depends on the moving party’s diligence, but it also recognized that it had discretion to apply Rule 15’s more liberal standard.

Rulings on the requested amendments

The court granted the request to remove Hunan Manor LLC (a New Jersey domestic limited liability company), Xiang Yun Ni, Wensheng Zhang, Zhi Ba Li, Nancy Zhou, Jimmy Cheung, Danny Wing Lok Cheun, and John Doe. The defendants did not expressly object, and the court found no prejudice to the remaining defendants.

The court also granted the request to add Zhi Ba Li as an alias of Zhi Da Li, to add Nancy Zhou and Nancy Xiao as aliases of Zhenqi Xiao, and to change the name of “Hunan Manor LLC (a NY Domestic Liability Company)” to “Hunan Manor LLC.” The defendants did not specifically object, and the court found no resulting prejudice.

The court granted the request to include the names of individuals who had filed forms consenting to join the lawsuit and to add allegations concerning them. It noted that these individuals were already plaintiffs for purposes of the FLSA because they had filed consent forms and were listed on the docket. The court nevertheless allowed the amendment because the plaintiffs appeared to seek NYLL relief as well, and the court found no prejudice to defendants.

The court denied the request to add 200 CPS Investment Corp., Qiang Wu Wang, Rong Fang Xiao, Ben Shuai Pang, Man Shen Zhang, and Jeff Li as new defendants. Plaintiffs acknowledged that they learned of these proposed defendants during a deposition on April 1, 2019, but took no action before discovery closed on June 17, 2019, and did not file the amendment motion until November 2019. The court found that plaintiffs gave no explanation for the delay. It also found that adding the new defendants could require renewed discovery because they would be entitled to seek discovery from the plaintiffs and potentially from existing defendants.

Disposition

The court concluded that the plaintiffs’ motion to amend was granted except that the request to add the six specified defendants was denied. Plaintiffs were directed to file an amended complaint consistent with the decision by February 7, 2020.