United States District Court, N.D. Iowa, Central Division
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ORDER ON
MOTIONS TO DISMISS, TO CONSOLIDATE AND FOR SUMMARY
Leonard T. Strand, Chief Judge
two closely-related cases are before me on numerous motions.
In Case Number C16-3006, the first case filed by plaintiff
Corey Rasch (Rasch), the parties have filed cross motions for
summary judgment. Doc. Nos. 36, 37. Defendant Tyson Fresh
Meats, Inc., a/k/a Tyson Foods, Inc. (Tyson), filed its
motion for summary judgment on January 31, 2017. Doc. No. 36.
Rasch filed a resistance (Doc. No. 41) and Tyson filed a
reply (Doc. No. 46). Rasch also filed a motion for partial
summary judgment on January 31, 2017. Doc. No. 37. Tyson
filed a resistance (Doc. No. 40) and Rasch filed a reply
(Doc. No. 47).
Number C16-3102, the second case filed by Rasch, all of the
defendantsfiled a motion to dismiss and a motion to
consolidate the two cases. Doc. No. 5. Rasch filed a
resistance (C16-3102, Doc. No. 7), which seemingly only
resisted the motion to dismiss but not the motion to
consolidate. Defendants then filed a reply. C16-3102, Doc.
No. 10. On the same day Tyson filed its motion for summary
judgment in C16-3006, the defendants filed a similar motion
in C16-3102. C16-3102, Doc. No. 15. Rasch filed a resistance
(C16-3102, Doc. No. 16) and defendants filed a reply
(C16-3102, Doc. No. 19).
on May 18, 2017, Rasch filed a renewed motion (Doc. No. 54)
to remand C16-3006 on grounds the requirements for this
court's diversity jurisdiction did not exist at the time
the case was removed.
motions are fully submitted and ready for
of the unique history of these cases, a detailed discussion
of the procedural history is necessary.
First Case (C16-3006). Rasch filed the first
case in the Iowa District Court for Kossuth County on
December 24, 2015. Doc. No. 2-1. In his state court petition,
he alleged in a single count that the then-named defendants -
Tyson and Jack Walker - had breached his contract and
violated Iowa's Wage Payment Collection Act (Iowa Code
chapter 91A). Id. at 4. On January 29, 2016, those
defendants removed the case to federal court based on
diversity jurisdiction. Doc. No. 2. On February 4, 2016,
Rasch filed an amended complaint (Doc. No. 5) in which he
dismissed Walker as a defendant and alleged that Tyson
“discharged the plaintiff effective in October,
2014.” Doc. No. 5 at 1. Tyson filed an answer on
February 18, 2016. Doc. No. 8.
February 5, 2016, Rasch filed a motion to remand the case to
state court, arguing that the amount in controversy did not
exceed $75, 000. Doc. No. 6. On March 11, 2016, I denied that
motion, noting that Rasch's original state court petition
explicitly demanded more than $75, 000 in damages. Doc. No.
30, 2016, Rasch attempted to file a second amended complaint
that would have added new defendants, including Walker
(again), Todd Neff and “other unnamed employees of
Tyson.” Doc. No. 18. Tyson moved to strike the second
amended complaint, arguing that: (1) Rasch already used his
one automatic amendment; (2) the deadline to file additional
amendments had passed; (3) Rasch failed to comply with the
local rules regarding conferring with opposing counsel; and
(4) Rasch filed his second amended complaint without leave of
the court. Doc. No. 20. Rasch resisted the motion to strike
(Doc. No. 21) and filed a motion for leave to file an amended
complaint (Doc. No. 22).
August 30, 2016, Chief United States Magistrate Judge C.J.
Williams granted Tyson's motion to strike. Doc. No. 23.
Contemporaneously, Rasch filed a motion to file the second
amended complaint out of time, which Tyson resisted. Doc. No.
22. In that motion, Rasch requested leave:
to file a Second Amended Complaint “to add Count II and
add additional parties to the claim . . . .” Doc. 22.
Count II of the attached Second Amended Complaint alleges an
unjust enrichment claim against Tyson, two named Tyson
employees (Jack Walker and Todd Neff), and other unnamed
Tyson employees whom plaintiff alleges financially benefited
by receiving bonuses to which plaintiff alleges he was
entitled. Doc. 22-1, at 3-6.
Doc. No. 25 at 1. On October 11, 2016, Judge Williams granted
the motion in part and denied it in part. He found Tyson had
failed to allege any prejudice from the out-of-time
amendment. However, Judge Williams further found that
Rasch's claims against the non-Tyson defendants were
futile. Accordingly, Judge Williams allowed Rasch to add an
unjust enrichment claim against Tyson but not the non-Tyson
defendants. Doc. No. 25 at 8-12. Tyson remains the sole
defendant in the first case.
October 19, 2016, Rasch filed his revised second amended
complaint (Doc. No. 26), consistent with Judge Williams'
order. On December 29, 2016, Tyson filed a motion to amend
its answer to assert an affirmative defense (Doc. No. 29).
Judge Williams granted Tyson's motion as it was
unresisted. Doc. No. 34. On February 6, 2017, Tyson filed a
second motion to amend its answer (Doc. No. 38). In that
motion, Tyson requested that it be allowed to retract a prior
admission as to the date Rasch alleged he was discharged.
Id. Tyson stated that it realized the error after
reviewing Rasch's motion for summary judgment.
Id. Judge Williams granted that motion, finding that
a true mistake had occurred regarding defendant's prior
admission. Doc. No. 43 at 7-11. Specifically, Judge Williams
The Court finds plaintiff will not suffer prejudice as a
result of allowing defendant to correct its mistaken
admission. It is clear from the depositions submitted by the
parties in connection with this motion that the parties have
staked out their positions regarding the dates of
plaintiff's employment. In other words, plaintiff cannot
be surprised by this amendment as it is consistent with the
position defendant has taken throughout the litigation.
Allowing this amendment will also not result in any delay in
Doc. No. 43 at 10.
Second Case (C16-3102). Rasch filed his second
case in the Iowa District Court for Kossuth County on August
30, 2016, more than a month before Judge Williams denied his
motion to add the non-Tyson defendants to the first case.
C16-3102, Doc. No. 2-1. In his second state court petition,
which undisputedly arises out of the same set of facts, he
cited his discharge and requested compensation based on a
theory of unjust enrichment against Tyson, Walker, Neff and
“other unnamed employees of [Tyson].”
Id. at 5. Defendants removed the case to this court
on October 4, 2016. C16-3102, Doc. No. 2. They then filed
their motions to dismiss and to consolidate. C16-3102, Doc.
MOTION TO CONSOLDATE
first issue I will address is the motion to consolidate
(C16-3102, Doc. No. 5).
According to Rule of Civil Procedure 42, “[i]f actions
before the court involve a common question of law or fact,
the court may: (1) join for hearing or trial any or all
matters at issue in the actions; (2) consolidate the actions;
or (3) issue any other orders to avoid unnecessary cost or
delay.” Fed.R.Civ.P. 42. “[C]onsolidation
pursuant to Rule 42(a) is permissive and vests a purely
discretionary power in the district court ... In exercising
that discretion, district courts must weigh the risk of
prejudice and confusion wrought by consolidation against the
risk of inconsistent rulings on common factual and legal
questions, the burden on the parties and the court, the
length of time, and the relative expense of proceeding with
separate lawsuits if they are not consolidated. Pigott v.
Sanibel Dev., LLC, 2007 WL 3245019 (S.D. Ala. 2007).
Matlock v. Smith, No. C12-4086-DEO, 2013 WL 595892,
at *4 (N.D. Iowa 2013); see also Stillmunkes v. Givaudan
Flavors Corp., No. C04-0085-MWB, 2008 WL 7662422, at *4
(N.D. Iowa 2008).
filed a combined motion to consolidate and motion to dismiss.
In the context of the motion to consolidate, defendants
because it makes no sense to have two separate lawsuits
demanding the same payment and because the claims against the
individual defendants remain without basis, Tyson hereby
moves to consolidate the two cases . . .
C16-3102, Doc. No. 5-1 at 2. Rasch filed a resistance to the
motion that is largely nonsensical. Because the defendants
combined their motion to consolidate and motion to dismiss
into one document, Rasch seemingly saw his resistance as an
opportunity to argue why both cases should be remanded to
state court. Specifically, he stated:
The court should deny the motion to dismiss the claims
against Todd Neff, Jack Walker, and other unnamed employees
of Tyson Fresh Meats, Inc., and should consolidate the
removed case caption above with Case No. 3:16-CV-03006. The
court should, sua sponte remand the proceedings to the Iowa
District Court for further proceedings under the claims of
contract rights and unjust enrichment against Tyson Fresh
Meats, Inc. a/k/a Tyson Foods, Inc., Jack Walker, Todd Neff,
and Other Unnamed Defendants, employees of Tyson Fresh Meats,
Inc., who profited from the distribution of the bonus that
was earned by the plaintiff and apparently distributed to
other unnamed employees of the defendant, Tyson Fresh Meats,
C16-3102, Doc. No. 7 at 6.
with both parties that consolidation is appropriate. There is
no doubt these cases arise from the same set of facts, as
plaintiff previously tried to assert identical claims in
C16-3006. Additionally, the parties have seemingly conducted
discovery assuming that these cases will proceed together.
Accordingly, there is no risk of prejudice. Finally, it is in
the interest of both the parties' and the court's
time to consolidate these cases.
the parties do not dispute that these cases should be
consolidated, and because all factors weigh in favor of
consolidation, I will grant the defendants' motion. These
cases will be consolidated and will proceed together under
docket number C16-3006. All issues in the consolidated case
will be controlled by the scheduling orders set out in
C16-3006. Additionally, I decline to sua sponte remand the
case. (See plaintiff's brief, C16-3102, Doc. No.
7-1 at 6, stating, “[o]nce consolidated, it is believed
that the court lacks diversity and subject matter
jurisdiction of claims less than $75, 000 . . . and the
consolidated case should be remanded to the Iowa District
Court …”) Based on my review of the newly
consolidated case, I reaffirm my prior finding (C16-3006,
Doc. No. 11) that this court has subject matter jurisdiction
as the amount in controversy at the time of removal exceeded
$75, 000 and the parties are actually diverse.
MOTION TO DISMISS
will consider defendants' motion to dismiss (C16-3102,
Doc. No. 5). For a number of reasons, not the least of which
are the numerous motions to amend that have been filed, no
party in this case can be accused of excessive precision in
that party's filings. Nowhere is this more clear than in
the context of the motion to dismiss. Defendants'
argument is that Rasch's unjust enrichment claim against
the non-Tyson defendants in the second case is barred by the
doctrine of res judicata because Judge Williams deemed that
claim to be futile in the first case. However, their argument
is not particularly helpful. For example, they state:
Nor may Mr. Rasch now relitigate the same issue. Casciani
v. Town of Webster, 501 Fed. App'x 77, 79-80 (2d
Cir. 2012) (holding that denial of leave to amend
“constitute[d] a final judgment sufficient to preclude
any claims contained in the proposed amended complaint”
where the proposed amendment was denied as futile
“because it ‘could not have withstood a motion
to dismiss for failure to state a claim”‘);
United States ex rel. Pentagen Techs. Int'l Ltd. v.
United States, No. 00-cv-6167 (DAB), 2001 WL 770940, at
*9 (S.D.N.Y. July 10, 2001) (applying claim preclusion based
on the denial of leave to amend where the denial was based on
the proposed amendment's futility); Lozowski v.
Benedicl, No. 271626, 2007 WL 39722I, at *2 (Mich. Ct.
App. Feb. 6, 2007) (“the denial of a motion to amend a
complaint on the ground that the amendment would be futile
constitutes a determination that the claims are without merit
and is entitled to res judicata impact”). Thus, claims
against Neff and Walker should be rejected again and
C16-3102, Doc. No. 5-1 at 3-4.
resistance (C16-3102, Doc. No. 7) takes the confusion to
another level. Instead of addressing any issue raised by the
defendants, he argues about the difference in pleading
standards between state and federal court. For example, he
[T]he standard for review of the pleadings in the above
captioned cause with regards to claims against Jack Walker,
Todd Neff, and other unnamed employees of Tyson Fresh Meats,
Inc., are not subject to the Federal District Court rules for
pleadings. Such a dismiss [sic] would take from the plaintiff
a due process right to litigate his unjust enrichment claims
and the right to proceed with appropriate discovery. It
should be noted that the plaintiff filed a claim against
other unnamed employees of the defendant, Tyson Fresh Meats,
C16-3102, Doc. No. 7-1 at 3. Defendants' reply addresses
only the previously disposed of remand argument. C16-3102,
Doc. No. 10.
past the parties' filings, I turn to the appropriate
standards for applying the doctrine of res judicata, which
were recently set out by United States District Judge Linda
Res judicata, or claim preclusion, “may be raised in a
motion to dismiss when ‘the identity of the two actions
can be determined from the face of the petition
itself.'” C.H. Robinson Worldwide, Inc. v.
Lobrano, 695 F.3d 758, 763 (8th Cir. 2012) (quoting
Potamitis v. Pittsburgh Plate Glass Co., 82 F.3d 472,
473 (8th Cir. 1936)). “[T]he phrase ‘face of the
complaint ... include[s] public records and materials
embraced by the complaint.'” Id. at 764
(quoting Noble Sys. Corp. v. Alorica Cent., LLC, 543
F.3d 978 (8th Cir. 2008)). “The law of the forum that
rendered the first judgment controls the res judicata
analysis.” Id. (quoting Laase v. Cty. of
Isanti, 638 F.3d 853, 856 (8th Cir. 2011)). In the
Eighth Circuit, whether res judicata bars a claim “in a
diversity action is a question of substantive law controlled
by state common law.” Hillary v. Trans World
Airlines, Inc., 123 F.3d 1041, 1043 (8th Cir. 1997)
(quoting Austin v. Super Valu Stores, Inc., 31 F.3d
615, 617 (8th Cir. 1994)). “This rule applies when the
original judgment is that of another federal court sitting in
diversity.” Id. (quoting Follette v.
Wal-Mart Stores, Inc., 41 F.3d 1234, 1237 (8th Cir.
1994)). Therefore, the court will apply Iowa law to the
instant action to determine if res judicata bars JLI's
Under Iowa law, res judicata “applies only when a party
has had a ‘full and fair opportunity' to litigate
in the first trial.'” George v. D.W. Zinser
Co., 762 N.W.2d 865, 868 (Iowa 2009) (quoting Spiker
v. Spiker, 708 N.W.2d 347, 353 (Iowa 2006)). “A
party asserting res judicata must establish the following:
(1) ‘the parties in the first and second action were
the same'; (2) ‘the claim in the second suit could
have been fully and fairly adjudicated in the prior
case'; and (3) ‘there was a final judgment on the
merits in the first action.'” Id.
(quoting Spiker, 708 N.W.2d at 353) (formatting
omitted). Res judicata bars further litigation “not
only to matters actually determined in an earlier action but
to all relevant matters that could have been
determined.” Pavone v. Kirke, 807 N.W.2d 828,
835 (Iowa 2011) (quoting Penn v. Iowa State Bd. of
Regents, 577 N.W.2d 393, 398 (Iowa 1998)). “An
adjudication in a prior action between the same parties on
the same claim is final as to all issues that could have been
presented to the court for determination. Simply put, a party
is not entitled to a ‘second bite' simply by
alleging a new theory of recovery for the same wrong.”
Id. at 836 (quoting Bennett v. MC #619,
Inc., 586 N.W.2d 512, 516-17 (Iowa 1998)).
J. Lloyd Int'l, Inc. v. Super Wings Int'l,
Ltd., No. 15-CV-74-LRR, 2016 WL 498428, at *5-6 (N.D.
Iowa Feb. 8, 2016).
out above, Rasch clearly tried to assert the identical claim
in the first case but Judge Williams rejected it.
See Doc. No. 25, stating:
Plaintiff asserts in his proposed unjust enrichment claim
that Tyson, and named Tyson employees Jack Walker and Todd
Neff, and “other unnamed employees of Tyson . . .
financially benefited from the plaintiff's efforts in
2013 and 2014, without appropriate compensation to the
plaintiff.” Doc. 22-1, at ¶5. Plaintiff continues
to assert in conclusory fashion that “plaintiff by his
actions benefited the defendants who were knowingly enriched
by plaintiff's efforts without full and reasonable
compensation to the plaintiff.” Doc. 22-1, at ¶13
Plaintiff further asserts that defendants “Jack Walker,
Todd Neff, and other unnamed employees of Tyson . . . were
knowingly enriched and financially benefited from
plaintiff's efforts and from the purchases made by the
plaintiff for Tyson . . . and further benefited from
increased company profitability from not compensating
plaintiff for his efforts . . . .” Doc. 22-1, ¶18.
. . . [However, ] plaintiff's mere conclusory assertions
that these employees received a benefit is insufficient.
Doc. No. 25 at 7, 8, 9. Accordingly, Judge Williams granted
the motion to add the unjust enrichment claim but denied
Rasch's request to add the non-Tyson defendants. The
question is now whether that decision was a ruling on the
merits such that res judicata would apply.
three reasons, I decline to find that Rasch's unjust
enrichment claim against the non-Tyson defendants is barred
by res judicata. First, as Judge Williams stated, there is a
question as to whether or not a United States Magistrate
Judge is empowered to dispose of claims or, instead, must
submit a Report and Recommendation to the District Judge.
See Doc. No. 25 at 10-11. I agree with Judge
Williams that he had the authority to reject the proposed
amendment as futile. See E.E.O.C. v. Exel Inc., 259
F.R.D. 652, 652 n.1 (N.D.Ga. 2008) (internal citation
omitted). However, this rebuts defendants' argument that
Judge Williams' ruling was a ruling on the merits.
See Hall v. Norfolk S. Ry. Co., 469 F.3d
590, 595 (7th Cir. 2006):
The magistrate judge was authorized to rule on the motion for
leave to file the Third Amended Complaint pursuant to 28
U.S.C. § 636(b)(1)(A), which provides that the district
court may designate a magistrate judge to hear and determine,
with certain exceptions not relevant here, any
nondispositive pretrial matter.
(emphasis added) (internal citations omitted). In short,
while a magistrate judge may deny proposed amendments on
grounds of futility, a magistrate judge may not make
dispositive rulings (absent, of course, the unanimous consent
of the parties). Thus, it follows that Judge Williams'
denial of Rasch's proposed ...