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Fields v. Wise Media, LLC

United States District Court, Ninth Circuit

September 24, 2013

EDWARD FIELDS, et al., Plaintiffs,
v.
WISE MEDIA, LLC, et al., Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

WILLIAM ALSUP, District Judge.

INTRODUCTION

In this putative class action involving an alleged text message scam, plaintiffs move for leave to file a second amended complaint. To the extent stated below, the motion is GRANTED IN PART AND DENIED IN PART.

STATEMENT

Plaintiffs are consumers who claim to be victims of a text message scam known as "cramming." This is the practice of "placing unauthorized, misleading, or deceptive charges on a consumer's telephone bill." Federal Trade Comm'n v. Inc21.com Corp., 745 F.Supp.2d 975, 996 (N.D. Cal. 2010). Plaintiffs' first amended complaint alleged that plaintiffs received unsolicited text messages from defendant Wise Media, LLC and were subsequently enrolled in a text message subscription plan without their knowledge or consent. It also claimed that aggregators worked with Wise Media to administer the subscription plans and profit from the scam, but it only named defendants mBlox, Inc., Mobile Messenger Americas, Inc. ("Mobile Messenger"), and Motricity, Inc. as aggregators. Wise Media allegedly cannot charge consumers for the subscription plans without the assistance of aggregator defendants (First Amd. Compl. ¶¶ 40-43, 46-49, 51, 60, 82, 103, 110).

A case management order on March 23, 2013, set May 29 as the deadline for seeking leave to add new parties or pleading amendments. Plaintiffs diligently pursued discovery in this action and eventually discovered new documents from the receiver for Wise Media and various government agencies. Based on information contained within the documents, plaintiffs filed the instant motion for leave to file an amended complaint on August 5, 2013. Plaintiffs' proposed pleading alleges that Wise Media did not act alone in operating the cell phone scam but worked in a joint venture with proposed new defendants Mobile Messenger Australia Pty. Ltd. ("Mobile Messenger Australia"), the Winley Group, LLC, M-Qube, and existing defendant Mobile Messenger to operate the scam. Moreover, it asserts that defendants Mobile Messenger, mBlox, Motricity, and proposed new defendant M-Qube sent the unsolicited text messages to plaintiffs using content that was approved by defendants Wise Media and Winley Group (Second Amd. Compl. ¶¶ 1, 4-6, 56-75). Defendant Mobile Messenger opposes. Defendants Motricity and mBlox join Mobile Messenger's opposition.

For the reasons stated below, plaintiffs' motion for leave to file a second amended complaint is GRANTED IN PART AND DENIED IN PART.

ANALYSIS

1. LEGAL STANDARD.

Leave to amend a complaint shall be freely given when justice so requires under Rule 15(a). This standard is applied liberally. "In the absence of any apparent or declared reason - such as undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, etc. - the leave sought should, as the rules require, be freely given.'" Foman v. Davis, 371 U.S. 178, 182 (1962). Rule 15(a) does not apply, however, when a district court has established a deadline for amended pleadings under Rule 16(b). Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Once a court has entered a scheduling order, the liberal policy favoring amendments no longer applies. Subsequent amendments are not allowed without a request to first modify the scheduling order. At that point, any modification must be based on a showing of good cause. Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000).

The inquiry under Rule 16(b)'s good cause standard focuses in part on the diligence of the party seeking the amendment. "The district court may modify the pretrial schedule if it cannot reasonably be met despite the diligence of the party seeking the extension." Johnson, 975 F.2d at 609 (internal quotations omitted).

2. GOOD CAUSE STANDARD UNDER RULE 16(b).

This motion is governed by the good cause standard of Rule 16(b) since the deadline for amendments has passed. Plaintiffs have diligently pursued discovery in this case. Plaintiffs' attorney Jeffery Rosenfeld states in his sworn declaration that despite numerous attempts to solicit documents from defendants, defendant Wise Media never responded to plaintiffs' discovery requests and defendant Mobile Messenger refused to produce any documents because it categorically denies any involvement in any of the alleged transactions (Decl. of Jeffery Rosenfeld ¶¶ 2-8, Exh. E at 12). Thus, plaintiffs were forced to request documents from the court-appointed receiver for Wise Media and filed requests for information with several government agencies under the Freedom of Information Act, 5 U.S.C. 552, and analogous state statutes. Plaintiffs finally received responses to their discovery requests from the receiver and various government agencies in June and July 2013, which is past the deadline for amendments ( Id. ¶¶ 9-10).

Plaintiffs did not know about the proposed new defendants or the facts underlying their new claims for relief until they discovered the documents obtained from the government and Wise Media's receiver. Moreover, defendants do not ...


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