The opinion of the court was delivered by: JAMES WARE, District Judge
ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO FILE AMENDED
Lead Plaintiff, Raymond Abels ("Plaintiff" or "Abels"), brings
this case as a class action against Defendant JBC Legal Group,
RC. ("JBC"), a corporation, and Jack Boyajian, an individual
(collectively "Defendants") for violations of the Federal Fair
Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq.
("FDCPA"), California Civil Code § 1788 et. seq. ("CA FDCPA" or
"Rosenthal Act"), and the California Business and Professional
Code §§ 17200 et. seq ("17200").
Plaintiff now moves for leave to file an amended complaint.
Plaintiff seeks to add Outsource Recovery Management, Inc.
("Outsource") as a party defendant because Plaintiff has
discovered Outsource is the client and agent of JBC, and the true
owner of the debt giving rise to the complaint. In the same
motion, Plaintiff is voluntarily withdrawing its 17200 claim.
A hearing was held on June 13, 2005. For the reasons set forth below,
Plaintiff's Motion for Leave to File Amended Complaint is GRANTED. II. BACKGROUND
Plaintiff brings this case as a class action alleging
violations of: Federal Fair Debt Collection Practices Act,
15 U.S.C. § 1692, California Civil Code § 1788, and California
Business and Professional Code § 17200 et. seq. The FDCPA
regulates the behavior of collection agencies attempting to
collect a debt on behalf of another. The CA FDCPA regulates
collection agencies and original creditors attempting to collect
debts on behalf of another or on their own behalf. Section 17200
prohibits debt collectors from using false or misleading
communications in an attempt to collect a debt. Plaintiff and the
purported class seek actual damages, statutory damages,
attorney's fees, costs, and equitable relief pursuant to FDCPA,
CA FDCPA, and § 17200. (Complaint ¶¶ 1-2.)
The alleged violations stem from Defendants' written
communications attempting to collect an alleged debt from
Plaintiff, and all others similarly situated in California. Abels
allegedly owed a consumer debt for a check that was returned in
1993, some 11 years ago. On April 24, 2004, Defendants sent two
collection letters to Plaintiff. (Complaint ¶ 3.) Plaintiff
contends these letters were false, deceptive and misleading,
threatened to take action that cannot be or was not intended to
be taken, and attempted to collect amounts not authorized by
contract or law. (Motion ¶¶ 2-3.)
Plaintiff's suit was filed on June 15, 2004, identifying JBC
and Jack Boyajian as Defendants. (Complaint ¶ 1.) This Court set
forth an initial Scheduling Order on November 11, 2004, setting
deadlines for disclosure of expert witnesses, discovery, and
pre-trial report. (Opp'n at 2.) In March of 2005, counsel for
Plaintiff and Defendants discussed an interrogatory involving the
procedure Defendants use when sending letters attempting to
collect on alleged debts. (Coleman Decl. ¶ 2.) Counsel for
Defendants, informally, identified Outsource as Abels' creditor,
"even though it was not the subject of a discovery request."
(Id.) Unable to reach a stipulation to amend the complaint,
Plaintiff filed this Motion for Leave to File Amended Complaint
on April 22, 2005. (Motion at 2.)
Federal Rule of Civil Procedure 15(a) provides that "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 Ninth Circuit has instructed that the
policy favoring amendments "is to be applied with extreme
liberality." Morongo Band of Mission Indians v. Rose,
893 F.2d 1074, 1079 (9th Cir. 1990); DCD Programs, Ltd. v. Leighton,
833 F.2d 183, 186 (9th Cir. 1987) (citations omitted). But amendments
"seeking to add claims are to be granted more freely than
amendments adding parties." Union Pac. R.R. Co. v. Nevada Power
Co., 950 F.2d 1429, 1432. The four factors commonly used to
determine the propriety of a motion for leave to amend are bad
faith, undue delay, prejudice to the opposing party, and futility
of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); DCD
Programs, 833 F.2d at 186. An amendment may relate back to the
time of the filing of the original complaint under the standards
set out in Federal Rule of Civil Procedure 15(c).
The Court applies a policy of "extreme liberality" in favor of
Rule 15 amendments and determines the propriety of Plaintiff's
motion under the four commonly used conditions to grant leave to
amend. In addition, the Court follows Rule 15(c) "relation back"
requirement with respect to amendments that are filed after the
running of the statute of limitations.
A. Plaintiff's Amendment Is Not In Bad Faith.
Leave to amend may be denied if the amendment is introduced
solely for delay or improper purpose. Foman, 371 U.S. at 182.
Here, Plaintiff's amendment is introduced to add the true owner
of the underlying debt, Outsource. Plaintiff claims that
Defendant JBC was acting as both the agent and client of
Outsource. (Motion at 3.) Outsource is clearly a relevant party
to the litigation, since any litigation outcome would affect its
ownership interests over the alleged underlying debt. Plaintiff
did not appear to know of Outsource until March of 2005 (Opp'n at
9), leaving unreasonable the assumption that Plaintiff acted with
a dilatory motive. See DCD Programs, 833 F.2d at 187 (finding
no bad faith when satisfactory explanation for delay). Defendants
do not dispute Plaintiff's motive. Thus, the Court finds no
reason to believe that Plaintiff's amendment is brought in bad
B. Plaintiff Did Not Unduly Delay In Filing This Amendment.
In the Ninth Circuit, delay alone is insufficient to provide
grounds for leave to amend, though it is a relevant factor.
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th
Cir. 2003) (footnotes omitted). Plaintiff's motion for amendment
to add Outsource as a defendant comes over ten months after the original complaint was filed. (Opp'n at 10.)
However, the Court notes that the discovery deadline, August 8,
2005, has not yet passed. See Solomon v. N. Am. Life & Cas.
Ins. Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (leave to amend
sought on eve of discovery deadline properly denied). Moreover,
it appears that Plaintiff did not know of Outsource until
Defendants' counsel identified the company in March of 2005.
(Opp'n at 9.) On April 22, ...