United States District Court, S.D. Indiana, New Albany Division
ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, PLAINTIFF'S RULE 56(D) MOTION, AND PLAINTIFF'S MOTION TO AMEND
SARAH EVANS BARKER, District Judge.
Plaintiff Sherry Ogden filed this lawsuit against Defendants Patriot Municipal Utility and Patriot Municipal Works Board asserting gender and retaliation discrimination under Title VII of the Civil Rights Act of 1964. Defendants seek summary judgment on these claims. Plaintiff requested an opportunity to conduct discovery and amend her complaint to add additional defendants and additional claims.
On April 2, 2014, the Magistrate Judge issued a Report and Recommendation recommending that we: (1) deny Defendants' Motion for Summary Judgment without prejudice; (2) grant Plaintiff's Rule 56(d) Motion for discovery; and (3) grant Plaintiff's Motion to Amend Complaint. [Dkt. No. 29.] On April 16, 2014, Defendants filed their Objections to Report and Recommendation. [Dkt. No. 32.] Plaintiff filed her Response to Defendants' Objections on April 30, 2014. [Dkt. No. 33.] For the following reasons, we adopt the Magistrate Judge's Report and Recommendation.
I. Standard of Review.
Two standards of review apply to our review of the Magistrate Judge's Report and Recommendation. With respect to pretrial matters dispositive of a claim or defense, the district court reviews " de novo any part of the magistrate judge's disposition that has been properly objected to." Fed.R.Civ.P. 72(b)(3). Should a party make objections to the Magistrate Judge's Report and Recommendation, such objections must be "specific" and "written." Id. at 72(b)(2). "The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Id. at 72(b)(3). Thus, we review the Magistrate Judge's recommendation with regard to Defendants' Motion for Summary Judgment under a de novo standard of review.
With respect to our review of a matter that is not dispositive of a party's claim or defense, "[t]he district court judge... must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a). Consequently, we review the Magistrate Judge's Report and Recommendation with respect to the Motion to Amend Complaint and Plaintiff's Rule 56(d) Motion under a clearly erroneous or contrary to law standard.
II. Plaintiff's Motion to Amend Complaint.
Plaintiff filed a motion to amend her Complaint on December 13, 2013. [ See Dkt. No. 22.] Plaintiff's proposed Second Amended Complaint seeks to add the following Defendants: the Town of Patriot, Wayne Turner, Jr., Robert Robinson, Charles Michael Thomas, Kevin Plyman, Joseph Duckworth and Jason Thomas. Plaintiff also seeks to add claims for violation of 42 U.S.C. §§ 1983 and 1985(3). [ See Dkt. No. 22 at Ex. 1.] The Magistrate Judge recommends that Plaintiff's Motion to Amend be granted. [Dkt. No. 29 at 3-4.] The Magistrate Judge concluded that because motions for leave to amend are to be freely granted under Fed.R.Civ.P. 15(a) and he was "hard-pressed to find Plaintiff's amendments futile based solely on the limited briefing, " Plaintiff's motion should be granted. [ Id. at 4.]
Defendants objected to the Magistrate Judge's recommendation on the basis that the "Magistrate Judge gave insufficient consideration to Defendants' arguments that Plaintiff's proposed amendments are futile" and that "the Magistrate Judge failed to analyze the legal viability of Plaintiff's proposed new claims based on the allegations of the proposed amended complaint or the summary judgment record." [Dkt. No. 32 at 14.] In doing so, Defendants urge the Court to consider evidence submitted in support of their Motion for Summary Judgment. [ Id. (citing Peoples v. Sebring Capital Corp. , 209 F.R.D. 428, 430 (N.D. Ill. 2002)).] Although the Court can consider summary judgment evidence in opposition to a motion to amend, Defendants do not stop there. Defendants submitted only two affidavits and payroll records in support of their Motion for Summary Judgment. [ See Dkt. No. 18 (Affidavit of Robert L. Robinson); Dkt. No. 24 (Affidavit of Linda Fisk).] In opposition to Plaintiffs' Motion to Amend, Defendants cite to five additional exhibits, including five additional affidavits. [Dkt. No. 25.] In Sebring Capital Corp. , "the summary judgment record conclusively established that the proposed amendment was futile." 209 F.R.D. at 430. Here Defendants seek to submit evidence outside the summary judgment record and outside the proposed Second Amended Complaint to defeat Plaintiff's Motion to Amend. The Court cannot and will not consider this evidence in ruling on Plaintiff's Motion.
The standard is not whether Plaintiffs' proposed claims can withstand a motion for summary judgment. A proposed amendment is futile only if it could not withstand a Rule 12(b)(6) motion to dismiss. See General Elec. Capital Corp. v. Lease Resolution Corp. , 128 F.3d 1074, 1085 (7th Cir. 1997). "In response to an ordinary 12(b)(6) motion, a court simply examines the allegations in the complaint to determine whether they pass muster." Id. at 1080. "If a district court considers matters outside the pleadings, our procedural rules require that the motion shall be treated as one for summary judgment' under Fed.R.Civ.P. 56." Id. (citing Fed.R.Civ.P. 12(b)). "The consideration of outside matter without converting the motion may result in reversible error." Id. The Court will consider only the proposed Second Amended Complaint on Plaintiffs' Motion to Amend and Defendants' objections thereto.
A. Plaintiff's Proposed § 1985 Conspiracy Claim.
Plaintiff seeks to add a claim pursuant to 42 U.S.C. § 1985(3) for conspiracy. [Dkt. No. 22 at Ex. 1, Count IV.] Defendants argue that Plaintiff's proposed § 1985 conspiracy claim is "untenable" under the intra-corporate conspiracy doctrine. [Dkt. No. 32 at 15.] With respect to this proposed claim, the Magistrate Judge characterized Defendants' arguments with regard to Jason Thomas's employment and affiliation as contradictory. [Dkt. No. 29 at 4.] Defendants object to the Magistrate Judge's alleged "apparent misunderstanding" of this issue. [Dkt. No. 32 at 15.] We need not adopt the Magistrate Judge's analysis as to Defendants' purportedly contradictory handling of Mr. Thomas because the intra-corporate conspiracy doctrine is inapplicable at this time based on the plain language of Plaintiffs' proposed Second Amended Complaint.
Defendants are attempting to have the best of both worlds. When arguing that the Patriot Municipal Utility is not an "employer" for purposes of Title VII, Defendants contend: "Defendants continue to maintain that calculating the total amount of employees for Patriot Municipal Utility during the relevant time period should only be limited to the Utility's payroll." [Dkt. No. 24 at 3.] Yet when arguing that the intra-corporate conspiracy doctrine proves fatal to Plaintiff's § 1985 claims, Defendants argue that "Plaintiff's proposed § 1985 conspiracy claim fails under the intracorporate conspiracy doctrine because all proposed new individual defendants are members of the same entity, the Town of Patriot and a conspiracy cannot exist solely between members of the same entity.'" [Dkt. No. 25 at 18.] Plaintiff's proposed Second Amended Complaint alleges that the individual defendants were members of the Town Council and the Patriot Municipal Works Board and others were employees of Patriot Municipal Utility, and still another was an employee of the Town of Patriot. [Dkt. No. 22 at Ex. 1 at ¶¶ 3-8.] Although Plaintiff argues that the Town of Patriot and the Municipal Utility are not different for purposes of notice of the EEOC/ICRC proceeding [Dkt. No. 27 at 5], the Court cannot foreclose Plaintiff's opportunity to allege a § 1985 claim on the basis of the intra-corporate conspiracy doctrine. To date there has been "limited briefing" and inconsistent positions of the parties on this issue.
Defendants also argue that the Town of Patriot is the relevant entity for Plaintiff's proposed § 1985 claim because the Patriot Municipal Utility and the Patriot Municipal Works Board are not sui juris under § 1985. [Dkt. No. 32 at 15.] The Magistrate Judge properly recommends a rejection of this argument. Defendants only make this argument by submitting evidence of the Audit Reports from the State of Indiana. [ See Dkt. No. 25 at 8-10.] Defendants argue that "Plaintiff cannot proffer any evidence that either Patriot Municipal Utility or the Patriot Municipal Works Board were ever corporations recognized by the Secretary of State for Indiana." [ Id . at 8-9.] Plaintiff need not respond to newly-submitted evidence in response to a Motion to Amend Complaint. The newly-named Defendants will have an opportunity to make arguments that Plaintiff's claims fail, but the Court will not foreclose ...