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Melingonis v. Rapid Capital Funding L.L.C.

United States District Court, S.D. California

May 1, 2017

CHRISTOPHER MELINGONIS, individually and on behalf of all others similarly situated, Plaintiff,
v.
RAPID CAPITAL FUNDING, L.L.C.; and, MERCHANT WORTHY, INC., Defendants.

          ORDER

          WILLIAM Q. HAYES, United States District Judge

         The matters before the Court are the motion to dismiss the first amended complaint filed by Defendant Merchant Worthy, Inc. (“Merchant Worthy”) (ECF No. 26) and the motion for leave to amend the complaint filed by Plaintiff Christopher Melingonis (ECF No. 27).

         I. Background

         On February 24, 2016, Plaintiff initiated this action by filing a complaint against Defendant Rapid Capital Funding L.L.C. (“Rapid Capital”) alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (ECF No. 1). On April 15, 2016, Rapid Capital filed an answer. (ECF No. 4).

         On August 16, 2016, the Magistrate Judge issued a Scheduling Order in this matter requiring that any motion to join other parties, to amend the pleadings or to file additional pleadings be filed on or before September 12, 2016. (ECF No. 17).

         On October 18, 2016, Plaintiff filed a first amended complaint against Defendant Rapid Capital and the newly-added Defendant Merchant Worthy. (ECF No. 18).

         On December 30, 2016, Defendant Merchant Worthy filed a motion to dismiss the first amended complaint. (ECF No. 26). Plaintiff did not file a response in opposition to this motion to dismiss. On January 30, 2017, Defendant Merchant Worthy filed a “Notice of No Opposition Filed in Response to Defendant Merchant Worthy Inc.'s Motion and Motion to Dismiss First Amended Class Action Complaint.” (ECF No. 32).

         On January 9, 2017, Plaintiff filed a motion for leave to file an amended complaint, in which Plaintiff states that he withdraws the first amended complaint. (ECF No. 27). On January 23, 2017, Defendant Merchant Worthy filed a response in opposition to the motion seeking leave to file an amended complaint. (ECF No. 29). On January 30, 2017, Plaintiff filed a reply. (ECF No. 31).

         II. Plaintiff's Motion for Leave to File an Amended Complaint

         Plaintiff states that he “withdraws the First Amended Complaint which was filed on October 19, 2016” and requests leave to amend the original complaint to add Merchant Worthy as a defendant. (ECF No. 27-1 at 2). Plaintiff states that he has no objection to Defendant Merchant Worthy's alternative request to set a new Case Management Conference to restart the deadlines in this action. Id. at 3. Plaintiff further requests that Defendant Merchant Worthy's motion to dismiss be denied as moot. Id. at 4. Plaintiff contends that good cause exists to amend his complaint because he could not have included Defendant Merchant Worthy in the original complaint. Plaintiff contends that he was not aware of the existence of Defendant Merchant Worthy or its relation to the current action until September 30, 2016 following the receipt of written discovery. Id. at 3; ECF No. 31 at 2. Plaintiff contends that during discovery, Defendant Rapid Capital represented that at least one of the phone calls received by Plaintiff was placed by Defendant Merchant Worthy. (ECF No. 27-1 at 3).

         Defendant Merchant Worthy contends that Plaintiff should not be granted leave to amend because Plaintiff failed to obtain leave of Court to file the first amended complaint as required by Federal Rule of Civil Procedure 15(a). (ECF No. 29 at 5). Defendant Merchant Worthy contends that it will be prejudiced if it is added as a defendant at this stage of proceedings because, absent intervention by the Court, it will have “no opportunity to participate in any class discovery or prepare for a class certification motion, and will have no meaningful opportunity to participate in fact discovery in this action.” Id. at 6. Defendant Merchant Worthy contends that Plaintiff failed to obtain leave of Court to add Defendant Merchant Worthy as a defendant as required by Federal Rule of Civil Procedure 21. Id. Defendant Merchant Worthy contends that Plaintiff failed to seek leave of Court to modify the Scheduling Order. Defendant Merchant Worthy contends that Plaintiff has made no showing of good cause to modify the Scheduling Order as required by Federal Rule of Civil Procedure 16(b)(4). Id. at 8.

         A. Legal Standards

         A motion for leave to amend filed after the time period specified in a district court's scheduling order is governed by the “good cause” standard of Federal Rule of Civil Procedure 16(b). Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Federal Rule of Civil Procedure 16 provides that a district court must issue a scheduling order that limits “the time to join other parties, amend the pleadings, complete discovery, and file motions.” Fed.R.Civ.P. 16(b). Federal Rule of Civil Procedure 16(b) also provides that “[a] schedule may be modified only for good cause and with the judge's consent.” Id. “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)). If the court finds that a plaintiff has shown good cause pursuant to Federal Rule of Civil Procedure 16(b), the court must consider whether leave to amend is proper under Federal Rule of Civil Procedure 15. Id. at 608.

         Federal Rule of Civil Procedure 15(a) provides that after the time for amendment “as a matter of course” has passed, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Id. Federal Rule of Civil Procedure 15 mandates that leave to amend “be freely given when justice so requires.” Id. “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation omitted). In Foman v. Davis, 371 U.S. ...


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