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Kuo v. Winklevoss Consultants, Inc.

United States District Court, D. Connecticut

June 7, 2017

SHU-CHEN KUO
v.
WINKLEVOSS CONSULTANTS, INC.

          RULING ON DEFENDANT'S MOTION FOR LEAVE TO AMEND ANSWER AND AFFIRMATIVE DEFENSES

          Joan Glazer Margolis United States Magistrate Judge.

         On April 17, 2016, plaintiff Shu-Chen Kuo initiated this action against Winklevoss Consultants, Inc., seeking back pay, money damages, and other legal and equitable relief for allegedly unlawful discriminatory actions directed against her on the basis of national origin and race under 42 U.S.C. § 2000e, Title VII (Counts One, Four); 42 U.S.C. § 1981 et seq. (Count Two); Conn. Gen. Stat. § 46a-60(a) et seq. (Counts Three, Six); and for unlawful retaliation under the foregoing statutes (Counts Four-Six). On June 13, 2016, defendant filed its Answer and Affirmative Defenses (Dkt. #13), and on April 4, 2017, defendant filed the pending Motion for Leave to Amend Answer and Affirmative Defenses. (Dkt. #27).[1]Seven days later, plaintiff filed her brief in opposition (Dkt. #29), and on April 20, 2017, defendant filed a reply brief. (Dkt. #30).[2] On May 10, 2017, defendant filed a second reply brief (Dkt. #31), and seven days later, plaintiff filed her sur-reply brief. (Dkt. #36).

         On May 12, 2017, U.S. District Judge Janet Bond Arterton referred the pending motion to this Magistrate Judge. (Dkt. #32). Under the latest Scheduling Order, discovery is scheduled to close on June 15, 2017. (Dkt. #28). For the reasons stated below, defendant's Motion for Leave to Amend its Answer and Affirmative Defenses (Dkt. #27) is granted.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         As stated above, defendant's original Answer and Affirmative Defenses were filed on June 13, 2016. Thereafter, the parties exchanged written discovery.[3] In its initial two-page filing, defendant contends that after filing its Answer and Affirmative Defenses ten months earlier, defendant “acquired evidence subsequent to [p]laintiff's termination which illustrates [p]laintiff engaged in conduct warranting discharge under certain policies or practice of [d]efendant.” (Dkt. #27, at 1-2). Accordingly, in its proposed Amended Answer and Affirmative Defenses, defendant seeks to add a tenth affirmative defense which states: “To the extent [d]efendant has discovered subsequent to [p]laintiff's termination of employment that [p]laintiff engaged in conduct which would have warranted her discharge under [d]efendant's policy or practice, any right of [p]laintiff to recover damages beyond the date of such discovery is cut off.” (Id., Exh. A at 10).

         In response, plaintiff contends that defendant's motion fails because it does not “identify any facts demonstrating good cause to justify its desire to file an additional defense of ‘after-acquired evidence.'” (Dkt. #29, at 1). Additionally, plaintiff argues that if such amendment is permitted, plaintiff will be prejudiced and the case will be delayed as a “new round of written discovery[]” will be necessary, and “[i]t will . . . potentially necessitate additional or delayed/continued depositions[, ]” which, in turn, “will in all probability[, ] require an additional extension of the discovery period.” (Id.at 1-2).

         In its reply brief, defendant asserts that there is no evidence of undue delay, bad faith or dilatory motive as plaintiff “has been aware of the underlying facts giving rise to the defense since July 13, 2016 when [d]efendant served its responses to the Court's Initial Discovery Protocols[, ]” in which defendant provided documents showing that plaintiff shared confidential financial information and documents in violation of her Confidentiality and Non-Compete Agreement, and that “[p]laintiff pled guilty in 2006 to a misdemeanor larceny charge which she never disclosed to [d]efendant.” (Dkt. #30, at 4). Additionally, defendant asserts that there is still time to complete discovery, which does not end until June 15, 2017, and the after-acquired evidence defense is “a legitimate, well-founded defense supported by the facts of the case.” (Id. at 5-6). Following plaintiff's deposition, just taken on May 1, 2017, defendant filed a “sur-reply” brief in which defendant argues that plaintiff's testimony confirms her disclosure of confidential information, and confirms that plaintiff “intentionally and knowingly failed to disclose” misdemeanor convictions that occurred prior to her hire, and did not disclose a misdemeanor conviction that occurred while she was employed by defendant. (Dkt. #31, at 2-4). In response, plaintiff contends that defendant's amendment cannot be legally sustained and is “futile[]” as Howard Winklevoss testified at his deposition that defendant has never terminated anyone for a misdemeanor; plaintiff was “free to share her work with her husband aside from ‘competitive bid' material[]”; and discharge of an employee for not providing arrest or conviction information on an application is against public policy in this State. (Dkt. #36, at 2-3).[4]

         II. DISCUSSION

         Federal Rule of Civil Procedure 15(a) reads:

A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served, or if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. . . .

         "The Supreme Court has emphasized that amendment should normally be permitted and has stated that refusal to grant leave without justification is inconsistent with the spirit of the Federal Rules." Independence Ins. Serv. Corp. v. Hartford Fin. Servs. Group, Inc., No. 04 CV 1512 (JCH), 2005 WL 1038991, at *4 (D. Conn. May 3, 2005)(internal quotation & additional citation omitted). Although it is "well established that leave to amend . . . is liberally granted[, ]" the granting of a motion to amend remains within the sound discretion of the district court. Concerned Citizens of Belle Haven v. Belle Haven Club, No. Civ. 3:99 CV 1467 (AHN), 2002 WL 32124959, at *3 (D. Conn. Oct. 25, 2002); Messier v. Southbury Training School, No. 3:94 CV 1706 (EBB), 1999 WL 20907, at *3 (D. Conn. Jan. 5, 1999)(citations omitted). The court's "exercise [of discretion] depends upon many factors, including undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of [the] amendment." Local 802, Associated Musicians of Greater New York v. Parker Meridien Hotel, 145 F.3d 85, 89 (2d Cir. 1998), citing Foman v. Davis, 371 U.S. 178, 182 (1962). That said, “[t]he Second Circuit has ‘referred to the prejudice to the opposing party resulting from a proposed amendment as among the ‘most important' reasons to deny leave to amend.'” Aguilar v. Conn., No. 3:10 CV 1981 (VLB), 2013 WL 657648, at *8 (D. Conn. Feb. 22, 2013), aff'd sub nom. on other grounds, Doe v. Whidden, 557 F. App'x 71 (2d Cir. 2014), quoting AEP Energy Servs. Gas Holding Co. v. Bank of Am. N.A., 626 F.3d 699, 725 (2d Cir. 2010)(citation omitted).

         A. UNDUE DELAY AND PREJUDICE

         Plaintiff commenced this action on April 27, 2016 (Dkt. #1), and following the Court's grant of an extension of time, defendant filed its Answer and Affirmative Defenses on June 13, 2016. (Dkt. #13; see Dkts. ##11-12). Approximately ten months later, and two and a half months prior to the expiration of the discovery deadline, defendant filed this pending Motion for Leave to Amend. (Dkt. #27). "Mere delay, . . . absent a showing of bad faith or undue prejudice, does not provide a basis for a district court to deny the right to amend[, ]" Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993)(citation & internal quotations omitted), and the Second Circuit has "routinely excused delays of more than two years[.]" Concerned Citizens, 2002 WL 32124959, at *5 (citation omitted). Accordingly, defendant's relatively short delay in seeking leave to amend its answer and affirmative defenses, alone, is not grounds for denying its motion.

         According to defendant, its after-acquired evidence defense was not asserted when it filed its Answer and Affirmative Defenses “because it desired additional discovery to ensure that it had a legitimate and good faith basis for its defense.” (Dkt. #30, at 4). Plaintiff contends that defendant “cannot show good cause for its Motion to Amend as the information regarding arrests is contained in public records that have always been available to defendant[]”; and, “the balance of ...


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