United States District Court, E.D. California
ORDER ADOPTING IN PART FINDINGS AND RECOMMENDATIONS
(Docs. 12, 13, 14, 15, 16, 18, 19, 20)
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.
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.
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.
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.
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).
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.
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.
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.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
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.