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Gerawan Farming, Inc v. Rehrig Pacific Company

April 12, 2013

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



The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge

ORDER DENYING PLAINTIFF‟S MOTION FOR RECONSIDERATION (Doc. 96)

Now pending before the Court is Plaintiff Gerawan Farming, Inc.‟s ("Plaintiff‟s") motion for reconsideration. Plaintiff requests reconsideration of the assigned Magistrate Judge‟s order filed on March 25, 2013, in which the Magistrate Judge denied Plaintiff‟s motion to amend its first amended complaint. Having carefully considered the parties‟ submissions filed in connection with this matter and the record in this case, the Court DENIES the motion for reconsideration.

I. BACKGROUND

This case concerns a dispute over three types of containers used in the harvesting and storage of various fruit: (1) the Grape Lug; (2) the Harvest Tote; and (3) the Second Generation Harvest Tote. Plaintiff avers that Defendant Rehrig Pacific Company ("Defendant") breached an agreement wherein it promised to share with Plaintiff the patent and ownership interests in the three containers. Based on such allegations, Plaintiff asserted the following claims in its first amended complaint: (1) correction 2 of inventorship pursuant to 35 U.S.C. § 256; (2) false promise under California tort law; and (3) unfair 3 competition in violation of California‟s Unfair Competition Law ("the UCL"), Cal. Bus. & Prof. Code 4 § 17200, et seq. and California common law.*fn1

On February 8, 2013, the date on which discovery closed in this case, Plaintiff filed a motion to 6 amend its first amended complaint. (Doc. 60.) Plaintiff sought to amend its pleadings by (1) adding a 7 claim for false marking pursuant to 35 U.S.C. § 292; (2) adding "key facts" in support of its "existing" 8 claims; and (3) correcting "typographical and grammatical errors to clarify the claims at issue." (Id. at 9 1.) Plaintiff emphasized that the bases for its amendments only became apparent during the course of the parties‟ recent discovery.

On March 7, 2013, the Magistrate Judge issued an order denying Plaintiff‟s motion to amend. (Doc. 89.) The Magistrate Judge first determined that Federal Rule of Civil Procedure 15(a), and not Federal Rule of Civil Procedure 16(b), provided the appropriate standard for whether Plaintiff should be permitted to amend its pleadings. (Id. at 7.) The Magistrate Judge then proceeded to consider the five factors relevant under Rule 15(a): bad faith, undue delay, prejudice to the opposing party, futility of the amendment, and the existence of prior amendments. The Magistrate Judge found no evidence of bad faith and viewed the issues of futility and prior amendments as inconclusive or neutral factors. (Id. at 8, 14.) However, with respect to undue delay and prejudice, the Magistrate Judge found that Plaintiff was not diligent in seeking its amendment and that Defendant would be prejudiced because discovery would need to be reopened so that Defendant could adequately defend against the new and expanded scope of Plaintiff‟s claims. (See id. at 8-14.) The Magistrate Judge concluded that these were sufficient bases for denying Plaintiff‟s motion.

On March 25, 2013, Plaintiff filed the instant motion seeking reconsideration of the Magistrate Judge‟s decision. (Doc. 96.) Defendant filed an opposition to the motion on April 1, 2013. (Doc. 97.) Upon the Court‟s request, the parties also filed supplemental briefing on the discrete issue of prejudice with respect to one of Plaintiff‟s proposed amendments. (Docs. 99, 101, & 103.)

II. LEGAL STANDARDS

A. Rule 72(a) -- Reconsideration

A party may serve and file objections to a non-dispositive pretrial order issued by a magistrate 4 judge within fourteen days after being served with a copy of the order. Fed. R. Civ. P. 72(a). Timely 5 objections must be considered by the district judge in the case, and any part of the order that is "clearly 6 erroneous or . . . contrary to law" must be modified or set aside. Id. See 28 U.S.C. § 636(b)(1)(A) ("A 7 judge of the court may reconsider any pretrial matter . . . where it has been shown that the [magistrate 8 judge‟s] order is clearly erroneous or contrary to law."). 9

A magistrate judge‟s purely legal determinations are reviewed de novo under the "contrary to law" standard. See Computer Econ., Inc., v. Gartner Group, Inc., 50 F. Supp. 2d 980, 983 (S.D. Cal. 1999). As for a magistrate judge‟s factual determinations, the "clearly erroneous" standard applies, and the magistrate judge‟s findings are entitled to "great deference." Phoenix Engineering & Supply v. Universal Electric, 104 F.3d 1137, 1141 (9th Cir. 1997). Under this standard, the district court may not simply substitute its own judgment for that of the magistrate judge. See Grimes v. City & County of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991); Avalos v. Foster Poultry Farms, 798 F. Supp. 2d 1156, 1160 (E.D. Cal. 2011). Instead, "the district court can overturn the magistrate judge‟s ruling only if the district court is left with the definite and firm conviction that a mistake has been made." Computer Econ., 50 F. Supp. 2d at 983. If the magistrate judge‟s view is at least plausible in light of the entire record, it cannot be deemed clearly erroneous. See Anderson v. Bessemer City, 470 U.S. 564, 573 (1985).

B. Rule 15(a)(2) -- Leave to Amend

A court should give leave to amend "when justice so requires." Fed. R. Civ. P. 15(a)(2). In making this determination, a court should consider five factors: (1) the presence of undue delay; (2) bad faith or dilatory motive; (3) prior amendments; (4) prejudice to the opposing party; and (5) futility of the amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004). "Not all of the factors merit equal weight[,]" however. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Prejudice to the party opposing the amendment is the critical factor that "carries the greatest weight." Id. (citation omitted). Futility may also justify the denial of a motion to amend. Bonin v. ...


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