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Bonny v. Benchmark Brands, Inc.

United States District Court, N.D. Georgia, Atlanta Division

February 27, 2018

TERRI BONNY, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BENCHMARK BRANDS, INC., Defendant.

          OPINION AND ORDER

          WILLIAM S. DUFFEY, JR. UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiffs' Motion to Amend Complaint to Correct Misnomer [7] (“Motion to Amend”), Plaintiffs' Motion for Default Judgment Against Defendant Benchmark Brands, Inc. [8] (“Motion for Default”), and Plaintiffs' Motion for Class Certification [9] (“Motion for Class Cert.).

         I. BACKGROUND

         Plaintiffs are former employees of FootSmart, a division of Benchmark Brands, Inc. (“Defendant”). ([1] at 1). On August 11, 2016, Plaintiffs were informed, for the first time, that Defendant was ceasing all operations and closing all facilities effective immediately and that their employment was terminated as of August 11, 2016. ([1] 6). Plaintiffs were provided with a letter, also dated August 11, 2016, from Defendant stating:

TO ALL EMPLOYEES OF BENCHMARK BRANDS, INC.
Re: WARN Act Notice of Plant Closing Dear Employees:
Pursuant to 20 C.F.R. 639.1(e), BENCHMARK BRANDS, INC. (the “Company”) is providing you with this Notice consistent with the requirements of the federal Worker Adjustment and Retraining Notification Act (the “WARN Act”), 29 U.S.C. § 2101, et seq.
The Company regrets to notify you that as of today, August, 11, 2016, it has ceased all operations and closed all facilities (i.e., all “plants”) . . . . As a result of these closing, as of today, August 11, your employment with the Company has ended and your layoff will be permanent. . . .
Lastly, we want to explain to you why we could not provide this Notice 60 days prior to the closing, or even earlier than we have. Regrettably, the ceasing of business and closing of facilities is happening as the result of the Company's creditor foreclosing on our debt obligation and taking possession of its assets. The finalization of this foreclosure did not occur until today, and upon such finalization, the credit is foreclosing immediately, necessitating termination of employees today. There was no ability to forestall the foreclosure to allow it to provide 60 days prior notice to employees.
[A] large portion of the Company's assets will be sold to The Walking Company, and The Walking Company intends to start a new business through a subsidiary of FootSmart, Inc. (“New FootSmart”). I anticipate that in the near future, representatives from New FootSmart may contact some of you about applying for a job with them.

([1.2] (“August 11, 2016, Letter”) at 1).

         Plaintiffs contend, “on information and belief, ” that, more than 60 days prior to August 11, 2016, Defendant was actively contemplating and/or negotiating the sale of its assets to The Walking Company and discussing a resolution of its indebtedness. (Id. 10). The Complaint concedes that, “[w]hile a small number of employees may have been re-hired by The Walking Company after August 11, 2016, they, along with approximately 200 other employees were terminated on August 11, 2016, and all suffered an ‘employment loss[.]'” (Id. 12). Plaintiffs allege that none of the Plaintiffs or their co-workers received any type of additional, or “severance, ” payment upon their termination. (Id. 13). Plaintiffs received their final wage payments on the date of their termination, and “[t]hese final wage payments did not include any pay above [Plaintiffs] regular wages for time worked” or “any pay in lieu of the required sixty-day notice period.” (Id. 16).

         On August 26, 2016, Plaintiffs, on behalf of themselves and all others similarly situated, filed the Complaint alleging that Defendant violated the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. (“WARN” or “the Act”). Plaintiffs allege that their August 11, 2016, termination of employment at Benchmark constituted a “plant closing” or “mass layoff” under the WARN Act, 29 U.S.C. § 2101. ([1] 18). Plaintiffs contend that, under 29 U.S.C. § 2102(a)(1), Plaintiffs, and all other similarly situated employees, were entitled to receive written notification of their impending layoff sixty (60) days prior to their termination. (Id. 19). Plaintiffs state that they did not receive this required notification. (Id.). Plaintiffs allege that the Notice received by Plaintiffs on August 11, 2016, was ineffective Notice under the provisions of the WARN Act. (Id. 20). Plaintiffs seek to recover back pay, benefits, attorney's fees, and other relief. (Id. ¶¶ 22-24).

         On November 28, 2016, Plaintiffs filed their initial Motion for Default Judgment [4]. On March 10, 2017, the Court-construing the motion as one seeking a clerk's entry of default against Defendant as required by Federal Rule of Civil Procedure 55(a)-granted the motion and directed the clerk to enter default. ([4] at 3-4). The clerk entered default on March 10, 2017.

         On June 16, 2017, Plaintiffs filed the Motion to Amend seeking to correct a misnomer of one the Named Plaintiffs. The same day, Plaintiffs filed their Motion for Default Judgment and Motion for Class Certification. In their Motion for Class Certification, Plaintiffs seek certification of a class consisting of “[a]ny employee of [Defendant] terminated on August 11, 2016 who was not given a minimum of sixty (60) days-notice of termination and whose employment was terminated as a result of a ‘mass layoff' or ‘plant closing' as defined by the WARN Act.” ([9.1] at 2). In their Motion for Default Judgment, Plaintiffs contend that Defendant has not appeared or otherwise responded to the Complaint, the Complaint sufficiently alleges all of the elements of a WARN Act violation, and because Defendant admits to those allegations, default judgment should be entered. ([8.1] at 12).

         II. LEGAL STANDARDS

         A. Motion to Amend

         After the period permitting amendment as a matter of course, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). “The court should freely give leave when justice so requires.” Id. That is, “[i]n the absence of any apparent or declared reason- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.-the leave sought should, as the rules require, be ‘freely given.'” Foman v. Davis, 371 U.S. 178, 182 (1962).

         Where an amendment adds claims or defenses or adds or substitutes parties, a further burden is imposed. Once a court determines that Rule 15(a) of the Federal Rules of Civil Procedure is satisfied, it must then decide whether such amendments “relate back” to the original pleading to be amended, thereby avoiding any potential expiration of the statute of limitations period. Under Rule 15(c) of the Federal Rules of Civil Procedure, amendments that “change[ ] the party or the naming of the party against whom a claim is asserted” relate back to the date of the original pleading if certain requirements are met. Fed.R.Civ.P. 15(c)(1)(C). Those requirements are that the opposing party “(i) received such notice of the action that it will not be prejudiced in defending on the merits; and (ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity.” Fed.R.Civ.P. 15(c)(1)(C)(i)-(ii).

         Rule 15(c) does not, however, specifically address situations where the moving party seeks to amend its own name. The Eleventh Circuit, following other circuits, has held that the “extension of Rule 15(c)(3) to amendments involving plaintiffs rests on solid ground.” Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1132 (11th Cir. 2004). In other words, “[t]hough [Rule 15(c)(1)(C)] technically references amendments that change the parties against whom claims are asserted, [the Eleventh Circuit] have previously applied it to situations in which new plaintiffs were added.” Makro Capital of Am., Inc. v. UBS AG, 543 F.3d 1254, 1259 (11th Cir.2008). The Advisory Committee's Note, which the Eleventh Circuit cites in Cliff, states:

The relation back of amendments changing plaintiffs is not expressly treated in revised Rule 15(c) since the problem is generally easier. Again the chief consideration of policy is that of the statute of limitations, and the attitude taken in revised Rule 15(c) toward change of defendants extends by analogy to amendments changing plaintiffs.

Fed. R. Civ. P. 15 Advisory Committee's Note to the 1996 Amendment. Rule 15(c)(1)(C) notice and knowledge requirements apply where the plaintiff seeks to change the plaintiff's names or otherwise correct a misnomer in the plaintiff's name. Makro Capital, 543 F.3d at 1259-60.

         B. Motion for Class Certification

         “Before a district court may grant a motion for class certification, a plaintiff seeking to represent a proposed class must establish that the proposed class is ‘adequately defined and clearly ascertainable.'” Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1304 (11th Cir. 2012) (quoting DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970))[1].

         If the plaintiff's proposed class is adequately defined and clearly ascertainable, the plaintiff must then meet the requirements listed in Federal Rule of Civil Procedure 23. Fed.R.Civ.P. 23. “A class action may be maintained only when it satisfies all the requirements of Federal Rule of Civil Procedure 23(a) and at least one of the alternative requirements of Rule 23(b).” Jackson v. ...


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