United States District Court, S.D. California
WILLIAM Q. HAYES, District Judge.
The matter before the Court is the Motion to Modify Case Management Order and to Amend Answer Based on Newly Discovered Evidence filed by Defendant and Counterclaimant 101 Domain, Inc. (ECF No. 43).
On April 15, 2014, Plaintiff BB Online UK Limited commenced this action by filing a Complaint in this Court. (ECF No. 1). The Complaint seeks review of a final decision of the Trademark Trial and Appeal Board ("TTAB") to dismiss Plaintiff's opposition to Defendant's registration of the 101DOMAINS and 101DOMAINS.COM trademarks. On May 30, 2014, Defendant 101 Domain, Inc. filed an Answer, Affirmative Defenses and Counterclaims. (ECF No. 1). On September 15, 2014, U.S. Magistrate Judge Jill L. Burkhardt issued a Case Management Conference Order, setting an October 31, 2014 deadline to join parties and amend the pleadings. (ECF No. 22).
On January 26, 2015, Defendant Domain, Inc. filed the Motion to Modify Case Management Order and to Amend Answer Based on Newly Discovered Evidence (ECF No. 43), accompanied by a lodged proposed first amended answer and counterclaims (ECF No. 44). On February 17, 2015, Plaintiff filed an opposition. (ECF No. 50). On February 23, 2015, Defendant filed a reply. (ECF No. 52).
II. Contentions of the Parties
Defendant contends that good cause exists to modify the Case Management Conference Order to allow it to file an amended answer adding the affirmative defense of unclean hands. Defendant asserts that on November 18, 2014, Plaintiff produced "purported screen shots of what BB Online represented were webpages from its 101domains.com website from 1998 to 2012." (ECF No. 43-1 at 7). Defendant asserts that BB Online's counsel disclosed for the first time that the "purported 1998 web page was a supposed reconstruction'" after Defendant moved to compel production of the original website files. Id. at 8. Defendant asserts that Plaintiff's corporate designee, Robert Fox, admitted in his January 15, 2015 deposition that he used a screen shot of the 1999 web page to create the purported screen shoot of the 1998 web page.
Defendant contends that it could not have anticipated that Plaintiff would "completely fabricate a document." Id. at 13. Defendant contends that Plaintiff will not be prejudiced by Defendant adding a single affirmative defense that will not require a responsive pleading. Defendant asserts that amendment will not alter the schedule in this case.
Plaintiff asserts that Defendant was a party to the TTAB proceeding. Plaintiff asserts that Robert Fox testified three times during the TTAB proceeding that he did not have written records of the 1998 website, that he did have written records of the 1999 website, and that the website was the same in 1998 as it was in 1999. Plaintiff contends that Defendant's proposed amendment is for the purpose of causing undue delay. Plaintiff contends that Defendant knew as early as 2010 that Robert Fox was relying on 1999 documents to reflect his memory of the website as it existed in 1998. Plaintiff contends that Defendant's motion is made in bad faith because Robert Fox made the website reconstruction in good faith in response to discovery requests, and not to deceive Defendant. Plaintiff contends that amendment would be futile because the reconstruction of the 1998 website is consistent with Robert Fox's prior testimony; therefore, an unclean hands theory would be subject to dismissal.
III. Legal Standard
When, as here, a party moves to amend the pleadings after the deadline to amend pleadings has past, the party must first demonstrate "good cause" to amend the scheduling order pursuant to Federal Rule of Civil Procedure 16(b)(4) and then demonstrate that amendment is proper under Federal Rule of Civil Procedure 15. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992).
A. Modification of Scheduling Order
Federal Rule of Civil Procedure 16(b)(4) provides that "[a] schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). "Rule 16(b)'s good cause' standard primarily considers the diligence of the party seeking 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 (citing Fed.R.Civ.P. 16 Advisory Committee's Notes (1983 Amendment)). "Although the existence or degree of prejudice to the party opposing modification might supply additional reasons to deny a motion, the ...