KRISTI K. DuBOSE, Chief District Judge.
This matter is before the Court on Plaintiff's motion to amend the complaint and a proposed second amended complaint (Docs. 31, 32), Defendant Taylor-Wharton Cryogenics, LLC (Taylor)'s renewed Rule 12(b)(6) motion to dismiss the claims against it in first amended complaint and opposition to the second amended complaint (Docs. 35, 36), Defendant Worthington Industries, Inc. (Worthington)'s objection to the second amended complaint (Doc. 37), Plaintiff's responses (Docs. 40, 43) and Defendant Taylor's Reply (Doc. 44).
This case stems from Plaintiff Sheila Zimmerman (Plaintiff)'s employment with Taylor-Wharton Cryogenics, LLC (Taylor) from 1994 through 2016. (Doc. 24). Specifically, on October 7, 2015, while Plaintiff was employed, Taylor filed a voluntary Chapter 11 Bankruptcy Petition in the United States Bankruptcy Court for the District Delaware, 15-12075-BLS. In December 2015, Worthington purchased Taylor's assets, and Plaintiff was employed as a temporary worker for Worthington as part of the transition. Thereafter, Zinnerman submitted an application for full employment with Worthington, but was not hired. Per Plaintiff, after considering a recommendation from Taylor, Worthington hired white males "over the Plaintiff despite them not having any to little in sales experience." Taylor was "laid off" on March 30, 2016. (Doc. 15-1 (EEOC Charge)).
On May 5, 2016, Plaintiff filed a proof of claim in the Taylor Chapter 11 bankruptcy case, asserting a general unsecured claim for alleged race, sex and age discrimination claiming $300,000 in damages and lost wages (yet to be determined), based on her April 14, 2016 EEOC Charge of Discrimination. (Doc. 15-1 (EEOC Charge); Doc. 35-1 (Proof of Claim)). On September 20, 2016, the Bankruptcy Court issued a Confirmation Order, confirming the joint plan for liquidation of Taylor. (Docs. 35-2).
On March 17, 2017, Plaintiff Sheila Zimmerman (Plaintiff) initiated the current race and age discrimination case — pursuant to Title VII, 42 U.S.C. § 2000e (Civil Rights Act of 1964) and 29 U.S.C. § 621
That result left pending Plaintiff's motion to amend the complaint with a second amended complaint (Docs. 31, 32), which was filed outside the timeframe for filing an amended complaint "as a matter of course" under Rule 15, such that any amendment could be effected only with the opposing party's "written consent or the court's leave" per Fed. R. Civ. P. 15(a)(2). (
Plaintiff seeks to amend her complaint a second time, "as her matter of right" under Rule 15 "with no new substantive allegations" but to "clearly and separately allege the counts: Counts One and Two against Worthington, and Counts Three and Four against Taylor." (Doc. 31 at 1). Plaintiff asserts that the counts against defendant Taylor should not be dismissed due to Taylor's bankruptcy, and stipulates to limit her recovery against Taylor to the insurance proceeds for any settlement, verdict or judgment in this case, adding that "insurance proceeds, under these circumstances, are not part of a debtor's bankruptcy estate." (
In response, Worthington objects to Plaintiff's motion to file a second amended complaint "to address the bankruptcy" of Taylor because this "was one of the stated purposes of the First Amended Complaint" and Taylor's bankruptcy "certainly was well known" to her at the time she filed this case. (Doc. 37 at 1). In the alternative, Worthington requests that if Plaintiff is allowed to amend a second time, the Court condition this leave on her reimbursement of Worthington's attorneys' fees (in being required to respond to the Second Amended Complaint, as "the amendments have not been directly related to the claims against it, yet it is being forced to incur unnecessary expense due to" her dilatory efforts to correctly plead her claims). (
In response, Taylor opposes the second amended complaint, arguing that it is futile because the complaint, even as amended a second time, will still be subject to dismissal as to the claims against Taylor. (Doc. 36). In support, Taylor asserts that: 1) the proposed second amended complaint is "substantively identical" the first amended complaint; and 2) Plaintiff's claims against Taylor "are subject to the Bankruptcy Court's jurisdiction" and her claims "violate the Bankruptcy Court's plan injunction." (
At the outset, Plaintiff incorrectly asserts that she is amending her complaint a second time "as a matter of right." As explained in the Court's prior order (Doc. 33 at 3), as Plaintiff already amended her complaint once "as a matter of course," the proposed second amended complaint is a filing outside the Rule 15 timeframe for such amendments (but within the deadline to amend pleadings). Plaintiff may thus only amend the complaint with the opposing party's consent or the court's leave. Fed.R.Civ.P. 15(a)(2). As there is no indication of consent in the filing (and current briefing indicates that neither party consents), the Court is left to consider whether "justice so requires" that leave should be given under the circumstances.
Rule 15(a)(2) instructs the Court that it "should freely give leave" to amend a pleading "when justice so requires." Fed.R.Civ.P. 15(a)(2). "[U]nless a substantial reason exists to deny leave to amend, the discretion of the district court is not broad enough to permit denial[.]"
Plaintiff explains that she seeks to amend because the first amended complaint, as "plead. . . . could be interpreted, although incorrectly" to allege claims against Worthington and Taylor as "one and the same[.]" (Doc. 40 at 1). For Plaintiff, the second amended complaint is necessary to separate the claims against Worthington and Taylor "in case Taylor's motion to dismiss due to bankruptcy was granted; then the case could proceed subject to court approval against Worthington." (Doc. 40 at 1). The Court has compared the first amended complaint with the proposed second amended complaint and agrees with Plaintiff that the first amended complaint does not specifically differentiate the claims against each defendant. In contrast, the proposed second amended complaint clearly specifies which claims are alleged against which defendant: Counts One and Two against Worthington; and Counts Three and Four against Taylor. As to Worthington, this clarifies the claims against it. As to Taylor, this clarifies the claims against it, but returns the Court back to the futility argument — i.e., if Plaintiff's claims against Taylor are impermissible in this Court due to the bankruptcy case, it would be futile to grant her leave to file the second amended complaint, at least as to Taylor.
For futility, Taylor contends that granting Plaintiff's amendment will result in "the merits of Plaintiff's claims" against it being "pending simultaneously in this Court and in the United States Bankruptcy Court[]" and that Plaintiff's filing of this action violates the bankruptcy court's Confirmation Order (and injunction provision). (Doc. 35 at 6 (and citing Paragraph 22 (Injunction), Doc. 35-2, p. 29)). Taylor relies on Paragraph 22 of the Plan, which provides that "all entities who have held, hold, or may hold Claims against or Interest in the Debtors or the Estate that arose prior to the Effective Date are permanently enjoined" from commencing any action or proceeding against the Liquidating Trust, Trustee or any property of the Debtors "with respect to any such Claim or Interest. . . . ." (Doc. 35-2, p. 29). Bankruptcy Code 11 U.S.C. § 101(15) defines "[t]he term `entity' includes [a] person[,]" such as Plaintiff. From this, Taylor contends that Plaintiff was enjoined from having commenced this lawsuit against it.
Per the U.S. Supreme Court in
There is no dispute that Plaintiff filed a Proof of Claim in the bankruptcy case. There is also no dispute that Plaintiff's May 2016 Proof of Claim is based on discriminatory acts alleged to have occurred before the issuance of the Confirmation Plan order (she was no longer employed as of March 2016 while the Plan/Order issued September 20, 2016). By filing the proof of claim she submitted herself to the jurisdiction of the Bankruptcy Court. Thus, the Bankruptcy Court's injunction appears to apply to plaintiff's complaint in this case. Plaintiff has given this court no basis for determining otherwise. Accordingly, the motion to amend is
Further, Worthington opposes the amendment to the extent it is incurring attorneys' fees and expenses to litigate Plaintiff's re-alleging of claims against the other defendant. Despite Worthington's position, this is part of the litigation process and Worthington has not established that any fees/expenses are being incurred unnecessarily. As such, it is