UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
January 19, 2010
SIERRAPINE, A CALIFORNIA LIMITED PARTNERSHIP PLAINTIFF,
REFINER PRODUCTS MANUFACTURING, INC., A NORTH CAROLINA CORPORATION, AND DOES 1-10, INCLUSIVE, DEFENDANT.
The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
MEMORANDUM AND ORDER
Plaintiff Sierrapine ("Plaintiff") moves for Leave to File a Second Amended Complaint. For the reasons set forth below, Plaintiff's motion will be granted*fn1.
Plaintiff commenced the instant civil action on August 4, 2008. This Court issued its initial Pretrial Scheduling Order ("PTSO") on January 13, 2009. Pursuant to the terms of the order, the Court noted that "no joinder of parties or amendments to pleadings is permitted without leave of the court, good cause having been shown." The PTSO further provided a deadline for completion of non-expert discovery. The initial discovery cutoff date, October 23, 2009, was subsequently extended to December 23, 2009. Plaintiff filed a First Amended Complaint on October 16, 2009.
Plaintiff now seeks permission to amend its complaint to add three new causes of action related to newly discovered information.
Once a district court has filed a pretrial scheduling order pursuant to Federal Rule of Civil Procedure 16,*fn2 which establishes a timetable to amend pleadings, that Rule's standards control. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Thus, Plaintiff's ability to amend its complaint is governed by Rule 16(b), not Rule 15(a), as contended by Plaintiff. See Id. at 608.
In addition, prior to the final pretrial conference, a court may modify a status order upon a showing of "good cause." See Fed. R. Civ. P. 16(b). "Unlike Rule 15(a)'s liberal amendment policy which focuses on the bad faith of the party seeking to interpose an amendment and the prejudice to the opposing party, Rule 16(b)'s 'good cause' standard primarily considers the diligence of the party seeking the amendment." Johnson, 975 F.2d at 609. In explaining this standard, the Ninth Circuit has stated:
[a] district court may modify the pretrial schedule 'if it cannot reasonably be met despite the diligence of the party seeking the extension.' Moreover, carelessness is not compatible with a finding of diligence and offers no reason for granting of relief. Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party's reasons for seeking modification. If that party was not diligent, the inquiry should end.
Id. (citations omitted).
To demonstrate diligence under Rule 16's "good cause" standard, courts have required movants to show the following:
(1) that they were diligent in assisting the Court in creating a workable Rule 16 order, see In re San Juan Dupont Plaza Hotel Fire Litig., 111 F.3d 220, 228 (1st Cir. 1997); (2) that, despite their diligent efforts to comply, their noncompliance with a Rule 16 deadline occurred because of the development of matters that could not have been reasonably foreseen or anticipated, see Johnson, 975 F.2d at 609; and (3) that they were diligent in seeking amendment of the Rule 16 order, once it became apparent that they could not comply with the order, see Eckert Cold Storage, Inc. v. Behl, 943 F. Supp. 1230, 1233 (E.D. Cal. 1996). Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D. Cal. 1999).
Plaintiff satisfies this "good cause" standard because Plaintiff was diligent in assisting the Court, noncompliance occurred due to developments that could not have been reasonably foreseen, and Plaintiff was diligent in seeking amendment of the Rule 16 order.
First, Plaintiff was diligent in assisting the Court. "As Rule 16 recognizes, scheduling orders are at the heart of case management" Koplove v. Ford Motor Co., 795 F.2d 15, 18 (3d Cir. 1986) and "good faith compliance with Rule 16 plays an important role in this process." Veranda Beach Club Ltd. Partnership v. Western Sur. Co., 936 F.2d 1364, 1371 (1st Cir. 1991). Plaintiff's First Amended Complaint was filed three months ago, on October 16, 2009. The motion to amend followed only a month later. Between the time of filing the First Amended Complaint and the present motion, Plaintiff made reasonable efforts in responding to Defendant's inquiries in a timely manner and as a result, discovered new information leading to this motion. Plaintiff immediately made the court aware of the new information and as such was diligent in performing those acts required by the Court.
Second, Plaintiff's present motion is the result of matters that could not have been reasonably foreseen or anticipated. In calculating damages for this suit, Plaintiff states that it relied on an employee's knowledge and provided Defendant with the calculations in July 2009. In October 2009, Defendant served Plaintiff with discovery requests that specifically asked Plaintiff to identify the reason for the down time calculations. Plaintiff asserts that it diligently attempted to contact the now former employee but its efforts were thwarted when the employee refused to assist in the lawsuit. Immediately following, Plaintiff requested that another employee attempt these calculations. During this time, the employee discovered the new information that Plaintiff now seeks to add to the complaint. With these facts in mind, it seems clear that the Plaintiff acted in good faith in responding to inquiries and abiding by deadlines. The issue of whether the defective plug screws and throats supplied by RPM caused SierraPine a significant amount of down time could not have reasonably been foreseen by the Plaintiff under the circumstances.
Lastly, Plaintiff acted diligently in seeking to amend the Rule 16 order. Upon discovery of the new information on or around October 2009, Plaintiff wished to amend the complaint. Plaintiff alerted opposing counsel on November 6, 2009 that new information had come to light and requested that the opposing counsel stipulate to an amendment to the complaint. When Defendant denied the request, Plaintiff states that she promptly began drafting this motion. Plaintiff subsequently filed the motion with the court on November 16, 2009.
Therefore, the time between the discovery of the new information and the time of filing this motion was around one month.
Defendant asserts that prejudice would result should the motion be granted. However, as stated supra, "as the existence or degree of prejudice to party opposing modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party's reasons for seeking modification." Johnson, 975 F.2d at 609. Further, the new claim should present a minimal degree of surprise to Defendant since the Defendant supplied this product to Plaintiff and Defendant was notified that a civil suit was underway between the parties regarding their dealings. In addition, the Defendant can cure this prejudice with additional deposition(s) if necessary.
For all the foregoing reasons, Plaintiff's Motion for Leave to File Second Amended Complaint is GRANTED.
IT IS SO ORDERED.