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Bakersfield Pipe & Supply, Inc. v. Cornerstone Valve, LLC

United States District Court, E.D. California

May 27, 2015

BAKERSFIELD PIPE & SUPPLY, Inc., Plaintiff,
v.
CORNERSTONE VALVE, LLC, et al., Defendants.

ORDER VACATING THE HEARING DATE OF May 29, 2015. ORDER GRANTING PLAINTIFF'S MOTION TO FILE AN AMENDED COMPLAINT

JENNIFER L. THURSTON, Magistrate Judge.

Plaintiff alleges it entered into agreements to sell pipes, valves, fittings, and industrial supplies to Cornerstone Valve, LLC. When the items were delivered, Plaintiff alleges Cornerstone did not accept the shipment. Plaintiff reports that in the course of discovery, documents were produced that indicated Nitesh Gupta, the owner of Cornerstone, made misrepresentations related to the financial strength of his company, the viability of the project for which the supplies were purchased, and Cornerstone's customers. Therefore, Plaintiff seeks leave to amend the complaint pursuant to Rule 15 of the Federal Rules of Procedure to add a deceit/concealment claim for relief and to name Gupta as a defendant. (Doc. 21.)

Defendant has not filed an opposition. Having reviewed the motion and supporting documents, the Court finds the matter suitable for decision without oral arguments pursuant to Local Rule 230(g). Accordingly, the hearing date of May 29, 2015 is VACATED. For the reasons set forth below, Plaintiff's motion for leave to amend is GRANTED.

I. Legal Standards

Under Fed.R.Civ.P. 15(a), a party may amend a pleading once as a matter of course within 21 days of service, or if the pleading is one to which a response is required, 21 days after service of a motion under Rule 12(b), (e), or (f). "In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave." Fed.R.Civ.P. 15(a)(2). Here, Defendant filed an Answer on September 22, 2014. (Doc. 7.) Therefore, Plaintiff requires either consent of Defendant or leave of the Court to file an amended complaint.

Granting or denying leave to amend a complaint is in the discretion of the Court, Swanson v. United States Forest Service, 87 F.3d 339, 343 (9th Cir. 1996), though leave should be "freely give[n] when justice so requires." Fed.R.Civ.P. 15(a)(2). "In exercising this discretion, a court must be guided by the underlying purpose of Rule 15 to facilitate decision on the merits, rather than on the pleadings or technicalities." United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). Thus, the policy to grant leave to amend is applied with extreme liberality. Id. There is no abuse of discretion "in denying a motion to amend where the movant presents no new facts but only new theories and provides no satisfactory explanation for his failure to fully develop his contentions originally." Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995); see also Allen v. City of Beverly Hills, 911 F.2d 367, 374 (9th Cir. 1990).

II. Discussion and Analysis

In evaluating a motion to amend under Rule 15, the Court may consider (1) whether the plaintiff has previously amended the complaint, (2) undue delay, (3) bad faith, (4) futility of amendment, and (5) prejudice to the opposing party. Foman v. Davis, 371 U.S. 178, 182 (1962); Loehr v. Ventura County Community College Dist., 743 F.2d 1310, 1319 (9th Cir. 1984). These factors are not of equal weight as prejudice to the opposing party has long been held to be the most critical factor to determine whether to grant leave to amend. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003); Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990).

A. Prior amendments

The Court's discretion to deny an amendment is "particularly broad" where a plaintiff has previously amended her complaint. Allen, 911 F.2d at 373; Fidelity Fin. Corp. v. Fed. Home Loan Bank, 79 F.3d 1432, 1438 (9th Cir. 1986). Here, Plaintiff has not previously amended the complaint. Thus, this factor does not weigh against amendment.

B. Undue delay

By itself, undue delay is insufficient to prevent the Court from granting leave to amend pleadings. Howey v. United States, 481 F.2d 1187, 1191(9th Cir. 1973); DCD Programs v. Leighton, 833 F.2d 183, 186 (9th Cir. 1986). Evaluating undue delay, the Court considers "whether the moving party knew or should have known the facts and theories raised by the amendment in the original pleading." Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990); see also Eminence Capital, 316 F.3d at 1052. Further, the Court should examine whether "permitting an amendment would... produce an undue delay in the litigation." Id. at 1387. Here, Plaintiff requested amendment prior to the deadline imposed by the Court. ( See Doc. 20.) Thus, this factor does not weigh against granting Plaintiff's motion to amend.

C. Bad faith

There is no evidence that Plaintiff has acted in bad faith in seeking to file an amended complaint to raise an additional cause of action and identify a new defendant. Thus, ...


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