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Chandler v. Morgan Stanley Smith Barney, LLC

United States District Court, S.D. California

August 4, 2014



ROGER T. BENITEZ, District Judge.

Plaintiff Antoinette Chandler moves for leave to file a first amended complaint to add Morgan Stanley Investment Management ("MSIM") as a defendant. (Docket No. 21.) Defendant Morgan Stanley Smith Barney, LLC ("MSSB") opposes the motion. (Docket No. 23.) Because Plaintiff's request is not untimely, unduly prejudicial to MSSB, or futile, the motion is GRANTED.


Plaintiff brought this action against her former employer, MSSB. (Notice of Removal, Ex. A ("Compl.") ¶¶ 2, 8.) She claims that under the terms of both oral and written contracts she was entitled to commissions for investment referrals made to MSIM and MSSB has failed to pay those commissions. ( Id. at ¶¶ 9-14)

This action was filed in San Diego Superior Court on December 13, 2013. (Compl.) MSSB filed an Answer on January 7, 2014. (Notice of Removal, Ex. C.) MSSB removed the action to this Court on January 8, 2014. (Notice of Removal.) On July 2, 2014, Plaintiff obtained a brief extension of the scheduling order's deadline to file a motion to amend. (Docket No. 18.)


Leave to amend under Rule 15(a)(2) should be "freely give[n]... when justice so requires."[1] The Ninth Circuit "has noted on several occasions... that the Supreme Court has instructed the lower federal courts to heed carefully the command of Rule 15(a), ... by freely granting leave to amend when justice so requires." DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). "This policy is to be applied with extreme liberality.'" Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)).

Courts consider "undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and futility of the proposed amendment" in deciding whether justice requires granting leave to amend under Rule 15. Moore v. Kayport Package Express, Inc., 885 F.2d 531, 538 (9th Cir. 1989) (citing Foman v. Davis, 370 U.S. 178, 182 (1962)). Although each factor may warrant consideration, "prejudice to the opposing party... carries the greatest weight." Eminence Capital, 316 F.3d at 1052. MSSB argues that it will be prejudiced by amendment, that Plaintiff has engaged in undue delay, and that amendment is futile.[2] The Court disagrees.

MSSB has not demonstrated that Plaintiff's amendment is unduly prejudicial to MSSB. MSSB's only claim of prejudice is based on potential delays in the progression of the case. MSSB argues the addition of MSIM might require the extension of discovery deadlines that could delay resolution of Plaintiff's claims against MSSB. However, the deadline to complete discovery is not until October 14, 2014. Assuming an extension is necessary, MSSB has not shown that it would be lengthy enough to unduly prejudice MSSB. See Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (noting an almost two-year delay in seeking leave to amend, alone, would not be enough to deny leave). MSSB has not met its burden in showing prejudice. DCD Programs, 833 F.2d at 187 ("The party opposing amendment bears the burden of showing prejudice.").

Plaintiff has not engaged in undue delay. In June, Plaintiff discovered MSSB was blaming MSIM for its failure to pay Plaintiff's commissions. Deposition testimony taken in late June from MSIM employees suggested that MSIM did not pay MSSB Plaintiff's commissions. Plaintiff promptly sought a brief extension of the deadline to file a motion for leave to amend and filed the instant motion within a few days of the order modifying the scheduling order.

Plaintiff's amendment is also not futile. MSSB argues Plaintiff's addition of MSIM is futile because the claims against MSIM are time-barred and may be invalid for failing to comply with the statute of frauds. However, it is not obvious that the allegations of the proposed amended complaint will be time-barred, or clear that the contracts are invalid under the statute of frauds.[3]


Plaintiff's motion for leave to amend is GRANTED. Plaintiff may file a First Amended Complaint within five days of the filing of this order.


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