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Oushana v. Lowe's Home Centers, LLC

United States District Court, E.D. California

June 5, 2017

NORA OUSHANA, et al., Plaintiffs,
v.
LOWE'S HOME CENTERS, LLC, et al., Defendants.

          ORDER ADOPTING IN PART FINDINGS AND RECOMMENDATIONS (Docs. 12, 13, 14, 15, 16, 18, 19, 20)

         I. Introduction

         Plaintiffs Nora Oushana and Scarlet Karamian filed this action in the Superior Court of California, County of Stanislaus, on August 10, 2016. The action arises from injuries to Plaintiffs Oushana and Karamian caused by a leak in a Frigidaire brand refrigerator manufactured by Defendant Electrolux Home Products, Inc. (“Defendant EHP”) and sold by Defendant Lowe's Home Center, LLC (“Defendant Lowe's”). On November 23, 2016, this action was removed by Defendant Lowe's Home Center, LLC (“Defendant Lowe's”). Plaintiffs filed a motion for leave to file an amended complaint and a request for judicial notice on March 10, 2017. Doc 12. The matter was referred to a United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302.

         On April 7, 2017, the Magistrate Judge filed a findings and recommendations. Doc. 18. The findings and recommendations denied Plaintiffs' request for judicial notice and recommended granting Plaintiffs' motion for leave to file a second amended complaint. The Magistrate Judge recommended that Defendants be permitted to depose Plaintiff Oushana a second time at Plaintiff's expense if Plaintiffs choose to file a second amended complaint adding their new cause of action. The findings and recommendations was served on the parties and contained notice that any objections to the findings and recommendations were to be filed within fourteen days (14) days from the date of service. On April 21, 2017, Defendant EHP filed objections to the findings and recommendations. Doc. 19. On April 21, 2017, Defendant Lowe's filed objections to the findings and recommendations. Doc. 20. Plaintiffs did not file a response to the objections.

         Defendant Lowe's objects to virtually all of the conclusions arrived at by the magistrate judge. Some of those objections are of merit. Defendant EHP seeks clarification on the Magistrate Judge's findings and recommendations. This Court will outline the substance of the proposed amendment and discuss the substance of Lowe's objections below.

         Plaintiffs' original complaint set forth one cause of action for negligence. Doc. 1 at 12. They now seek to allege six (at least partially different) theories of relief-“products liability (negligence liability), products liability (strict liability), actual fraud, negligent misrepresentation, constructive fraud, and breach of the implied warranty of fitness.” Doc. 12-2.

         II. Legal Standard

         Rule 15 directs that leave to amend should be “freely give[n] when justice so requires.” Fed.R.Civ.P. 15(a)(2). Courts read Rule 15 to require “extreme liberality” in granting amendment. Moss v. U.S. Secret Service, 572 F.3d 962, 972 (9th Cir. 2009) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)). Balanced against the preference for granting leave to amend are the factors originally articulated in Foman v. Davis, 371 U.S. 178, 182 (1962): (1) whether the party has previously amended the pleading, (2) undue delay, (3) bad faith, (4) futility of amendment, and (5) prejudice to the opposing party. See Chudacoff v. University Med. Ctr. of Southern Nevada, 649 F.3d 1143, 1152 (9th Cir. 2011); C.F. v. Capistrano Unified Sch. Dist., 654 F.3d 975, 985 (9th Cir. 2011); Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). The factors are not of equal weight. While futility alone is a sufficient reason to deny amendment, Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003), delay, by itself, is not, DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987).

         III. Discussion

         A. Prior Amendment

         As Plaintiff details in her motion to amend, Plaintiff amended her complaint at the state court level to join Defendant EHP. Doc. 12-1 at 4. No additional claims were joined at that time. This factor does not weigh against amendment.

         B. Undue Delay

         Plaintiffs' counsel alleges that she first learned of the facts giving rise to the new claims on or around October 7, 2016, when counsel travelled to Plaintiff Oushana's home. Doc. 12-1 at 5; Declaration of Lori K. Sicard, Doc. 12-2 (“Sicard Decl.”) at ¶¶ 3-4. Specifically, counsel learned of the model of the refrigerator “during [her] in-person interview” of Plaintiff Oushana. Sicard Decl. at ¶ 4. At some unspecified time prior to serving discovery responses, counsel then conducted “research regarding Frigidaire model refrigerators” and discovered the existence of other product liability actions regarding “defective and leaking Frigidaire refrigerators.” Doc. 12-1 at 5; Sicard Decl. at ¶¶ 5-6. It is important to note that Plaintiff appears to have been in possession of the evidence that counsel later viewed and prompted her investigation. Plaintiff knew or should have known the facts that gave rise to the newly asserted theories at the time the original complaint was filed. See Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990) (“Relevant to evaluating the delay issue is whether the moving party knew or should have known the facts and theories raised by the amendment in the original pleading.”); Doe v. County of Kern, 2017 WL 1837280, *3 (E.D. Cal. May 8, 2017). Counsel's failure to conduct an investigation into the relevant underlying facts within Plaintiff's possession does not impact the inquiry. Bonneau v. SAP America, Inc., 2004 WL 2714406, *1 (N.D. Cal. Nov. 29, 2004); see also Bonin, 59 F.3d at 845 (A court does not abuse its 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.”) Despite Plaintiffs knowledge of the facts underlying the new claims in the proposed amended complaint at the time of filing of the original complaint, she did not file an amended complaint until March 10, 2017. By that time, Plaintiff Oushana's deposition had already been taken. The Magistrate Judge found undue delay. This Court agrees.

         C. Prejudice

         Lowe's contends that it will be prejudiced by the amendment because the newly alleged claims will increase discovery burdens. The Court agrees with the Magistrate Judge's determination that Defendants would suffer some prejudice at having to depose Plaintiff Oushana for a second time or at being unable to depose Plaintiff Oushana for a second time if she is, as a result of her ailing condition, unable to be deposed. However, Court also agrees with the Magistrate Judge's determination that such prejudice would be mitigated by permitting Defendants to depose Plaintiff Oushana for a second time at Plaintiff's expense if she is able.[1]However, Lowe's suggestion that it would be prejudiced by having to conduct discovery on a broader range of topics due to the broader range of allegations in support of the new claims is not the kind of prejudice contemplated by Foman. If Plaintiffs' new causes of action state claims, as some do, the fact that Defendants will be required to conduct discovery regarding those claims does not weigh against amendment because such discovery would not require extension of the discovery cutoff. Cf. Solomon v. N. Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (“A need to reopen discovery and therefore delay the proceedings supports a … finding of prejudice….”); Heilman v. Cook, 2017 WL 727672, *2 (S.D. Cal. Feb. 24, 2017) (finding prejudice only where the discovery period would have to be extended to accommodate discovery on newly alleged claims); Weeks v. Union Pacific R.R. Co., 2017 WL 714368, *7 (E.D. Cal. Feb. 22, 2017) (same); Ahmed v. Ringler, 2017 WL 30017, *6 (E.D. Cal. Jan. 4, 2017) (same). Discovery is always costly. The added expense of conducting discovery regarding valid claims is inherent in litigation and not a basis for denial of a motion to amend.

         D. Futility

         The Court may reject a motion for leave to amend if the proposed amendment would be futile. Carrico v. City & Cty. Of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011). A proposed amendment is futile where it would be subject to dismissal if allowed. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir. 1998); see also Jones v. Community Redevelopment Agency of City of Los Angeles, 733 F.2d 646, 650 (9th Cir. 1984) (denying leave to amend complaint where a proposed complaint would continue to fail to state a claim). “In assessing futility, the district court must apply the standard which applies to motions to dismiss under Fed.R.Civ.P. ...


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