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Gerawan Farming, Inc v. Rehrig Pacific Company

March 7, 2013

GERAWAN FARMING, INC.,
PLAINTIFF,
v.
REHRIG PACIFIC COMPANY,
DEFENDANT.



The opinion of the court was delivered by: Barbara A. McAuliffe United States Magistrate Judge

ORDER DENYING PLAINTIFF'S MOTION TO AMEND THE FIRST AMENDED COMPLAINT

I. INTRODUCTION

Currently before the Court is the motion of Gerawan Farming, Inc. ("Gerawan") to amend its First Amended Complaint ("Gerawan's Motion"). (Doc. 60.) Rehrig Pacific Company ("Rehrig") filed its opposition on February 25, 2013. (Doc. 74.) Gerawan filed its reply brief on February 27, 2013. (Doc. 75.) The Court deemed the matter suitable for decision without oral argument pursuant to Local Rule 230(g), and vacated the hearing scheduled for March 8, 2013. (Doc. 72.) Having considered the moving, opposition and reply papers, the declarations and exhibits attached thereto, as well as the Court's file, Gerawan's Motion is DENIED.

II. BACKGROUND

A. Factual Background

Gerawan is in the business of producing and distributing fresh produce. In the summer of 1994, Gerawan and Rehrig, a manufacturer of plastic-molded containers for industrial use, reached an agreement to patent, manufacture, and sell the "Original Harvest Tote," a container for holding stone fruits such as peaches during harvesting. During the Parties' collaboration on the Harvest Tote in 1993, Rehrig unilaterally filed a patent application for U.S. Patent No. 5,415,293, entitled the "Grape Lug" (the "293 Patent"). The 293 Patent, while conceptually similar to the Harvest Tote, relates to a container used for harvesting, storing, and transporting grapes. Gerawan claims Rehig's 293 Patent includes one or more claims to which Gerawan made an innovative contribution. However, Gerawan was not listed as a joint inventor and did not receive any royalties from sales of the Grape Lug.

Both parties operated under the Harvest Tote Agreement, and Rehrig paid Gerawan for sales of the Harvest Tote from 1995 through 2002, with the last royalty check being made to Gerawan in February 2003. Sometime in 2001-2002, Rehig began manufacturing and selling a "Second Generation Harvest Tote," without Gerawan, which was allegedly derived from the design of the original Harvest Tote. The parties dispute whether Gerawan was intended to be involved in the Second Generation Harvest Tote.

B. Procedural Background

Gerawan initiated this action on July 29, 2011. (Doc. 1.) Gerawan asserted eight causes of action: (1) correction of inventorship under 35 U.S.C. § 256; (2) conversion; (3) unfair competition in violation of California Business and Professional Code Section 17200 et seq.; (4) unjust enrichment; (5) concealment; (6) false promise; (7) unfair competition in violation of 15 U.S.C. § 1125(a); and (8) accounting. (Doc. 1.)

On December 9, 2011, Rehrig filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 11.) On March 2, 2012, the Court dismissed all of Gerawan's claims,*fn1 except for Gerawan's first cause of action for correction of inventorship under 35 U.S.C. § 256.*fn2 (Doc. 25.)

Gerawan filed an amended complaint on March 23, 2012. (Doc. 26.) Gerawan's first claim seeks correction of inventorship of the '293 Patent to include Ray Gerawan, the founder of Gerawan. Rehrig disputes that Gerawan or Ray Gerawan contributed anything to the invention of the '293 Patent. Gerawan's second claim is for false promise, alleging that Rehrig promised Gerawan in 1993 that: (1) the parties would co-own any patents resulting from the Harvest Tote;

(2) Rehrig would not use any proprietary materials provided by Gerawan for any purpose other than making the Harvest Tote for Gerawan, and (3) Rehrig supposedly used that proprietary information to make the Second Generation Harvest tote. Rehrig disputes any such promise was made. Gerawan's third claim is for a violation of California Business and Professions Code § 17200 et seq., which is a cause of action for unfair business practices. This claim is derivative of the other two, and is based on the same facts.

On April 16, 2012, the Parties participated in an Initial Scheduling Conference. (Doc. 34.) Prior to the Initial Scheduling conference, the Parties submitted an Amended Joint Scheduling Report, where the Parties proposed that all discovery (expert and non-expert) would be completed by January 18, 2013. (Doc. 33, 10: 24-28; 11: 1-2.) The Parties also represented they did not contemplate any further amendments to the pleadings. (Doc. 33, 4: 11-12.) The Court accepted the Parties' joint recommendations, and on May 1, 2012, entered a Scheduling Order requiring all discovery (expert and non-expert) be completed by January 18, 2013. (Doc. 37, 2: 21-23.) Also relevant to the instant motion, the Court set a February 15, 2013 deadline to file pretrial motions. Id.

On November 21, 2012, the Court held an Informal Telephonic Discovery Conference. (Doc. 38.) Gerawan requested an extension of the expert disclosure deadline, as well as the expert and non-expert discovery cutoff.*fn3 (Doc. 39.) At this time, the Parties had just begun to propound written discovery -- six months after discovery opened. The Court held that "[Gerawan] ha[d] failed to demonstrate good cause to modify the Scheduling Order . . . . However, in the interest of permitting meaningful case preparation," the Court continued the expert and non-expert discovery cutoff to February 8, 2013. (Doc. 39.) The Court further cautioned that "[n]o further modifications to the Scheduling Order w[ould] be permitted." Id.

On January 18, 2013, both Parties filed motions to compel further discovery, noticing the motions for hearing on the discovery cutoff date (February 8, 2013). (Doc. 43, 44.) On February 8, 2013, the Court denied the Parties' motions to compel further discovery for the following reasons: (1) the Parties' motions to compel discovery would require the Court to amend the Scheduling Order, and neither party had filed a motion to amend the Scheduling Order; (2) the Parties' motions were not timely because the Court could not grant any effective relief within the time-frame permitted under the terms of the Scheduling Order; and (3) even if the parties had requested modification of the Scheduling Order, there was no good cause to amend the Scheduling Order. (Doc. 59.)

On February 8, 2013, Gerawan filed a motion to amend the Scheduling Order.*fn4 (Doc. 65.) On February 11, 2013, the Court vacated the hearing on Gerawan's Motion and requested supplemental briefing. (Doc. 67.) Specifically, the Court stated that "the time for broad discovery has long since past. The Court expects a distilled, narrow focused presentation of what Plaintiff absolutely needs to prove its case." (Doc. 67) (emphasis in original.) Gerawan's supplemental briefing requested documentation and deposition testimony that were irrelevant or otherwise unnecessary to prove its claims, and the Court denied the motion is its entirety. See generally, Order Denying Gerawan's Motion to Amend the Scheduling Order, Doc. 73.

C. Gerawan's Motion to Amend Its First Amended Complaint

On February 8, 2013, Gerawan filed this Motion to amend its First Amended Complaint, proposing the following amendments to its First Amended Complaint: (1) the addition of facts purportedly discovered during discovery in support of its existing claims against Rehrig; (2) the addition of a claim for false marking pursuant to 35 U.S.C. ยง 292; (3) to "make clear that its operative complaint includes a claim for common law unfair competition as well as unfair competition pursuant to Cal. Bus. ...


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