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Greenley v. Avis Budget Group.Inc.

United States District Court, S.D. California

September 16, 2019

DAVID KENT GREENLEY, individually and on behalf of all others similar situated, Plaintiff,
AVIS BUDGET GROUP.INC., a Delaware and New Jersey corporation Defendant.


          Hon. Gonzalo P. Curiel, United States District Judge.

         Plaintiff David Kent Greenley (“Plaintiff”) has moved for leave to amend his second amended complaint against Defendant Avis Budget Group, Inc. (“Defendant” or “Avis”). ECF No. 24. On August 5, 2019, Avis filed a response in opposition the motion. ECF No. 33. Subsequently, Greenley filed a reply in support of the motion to for leave on August 18, 2019. ECF No. 36. Upon review of the moving papers, the Court finds that good cause exists to permit the filing of a Third Amended Class Action Complaint (“TACC”)

         I. Background

         On December 31, 2018, Plaintiff filed his original Class Action Complaint in the California Superior Court for the County of San Diego. ECF No. 1, Notice of Removal at 2. On January 24, 2019, an Amended Class Action Complaint was filed pursuant to California Code of Civil Procedure 47(a) to add Plaintiff Greenley and to remove certain allegations related to former plaintiff Steve Kramer. See id.

         On March 4, 2019, Defendant removed this action to federal court. Shortly afterwards, pursuant to the consent of the parties with the permission of the Court, Plaintiff filed the Second Amended Class Action Complaint on April 8, 2019. ECF No. 14. Defendants responded with a motion to compel arbitration and dismiss or to stay proceedings on April 10, 2019. ECF No. 15. Plaintiff subsequently filed an opposition to this motion on June 10, 2019, ECF No. 19, and the Defendant replied on July 1, 2019. ECF No. 22.

         On July 3, 2019, Greenley filed this instant motion for leave to amend his Second Amended Class Action Complaint. Plaintiff's motion is premised a recent decision issued in Kramer v. Enterprise Holdings, Inc. (“Enterprise”), where the Northern District of California granted a motion to compel arbitration in an action involving rental car privacy issues that, on the merits, appear similar to the issues in this case. Kramer v. Enterprise Holdings, Inc., No. 3:19-cv-00979-VC (N.D. Cal. June 11, 2019), ECF No. 30. In this case, Greenley asserts that the addition of an explicit claim for public injunctive relief would be responsive to Avis' suggestions in its motion to compel arbitration that Plaintiff only seeks private relief, that the a UCL claim would be necessary for Plaintiff to seek public injunctive relief, and that Plaintiff's proposed class is limited.

         Plaintiff now proposes to amend his Third Amended Class Action Complaint to: (1) add a new Third Cause of Action for violation of the “unlawful” and “unfair” prongs of California's Unfair Competition Law; (2) explicitly seek public injunctive relief to the extent that the assertion is required under the recent Enterprise decision; and (3) extend the class the class period by a year, to begin on December 31, 2014, four years prior to the filing of the original pleading, in accordance with the UCL's four year statute of limitations.

         II. Legal Standard

         Rule 15(a) of the Federal Rules of Civil Procedure states that, after the initial period for amendments as of right, pleadings may only be amended by leave of court, which “[t]he court shall freely give when justice so requires.” Fed.R.Civ.P. 15(a)(2). Courts commonly use four factors to determine the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, and futility of amendment. Ditto v. McCurdy, 510 F.3d 1070, 1078-79 (9th Cir. 2007); Loehr v. Ventura Cnty. Cmty. Coll. Dist., 743 F.2d 1310, 1319 (9th Cir. 1984); Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). “When weighing these factors . . . all inferences should be made in favor of granting the motion to amend.” Hofstetter v. Chase Home Fin., LLC, 751 F.Supp.2d 1116, 1122 (N.D. Cal 2010) (citing Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999)). In accordance with the Federal Rules' liberal pleading standards, courts typically apply the policy of free amendment with much liberality. DCD Programs, Ltd. V. Leighton, 833 F.2d 183, 186 (9th Cir. 1987), citing United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981).

         III. Discussion

         Plaintiff argues that this Court should grant its motion for leave to file an amended complaint because such motions are granted liberally - and because the amended Complaint would more clearly assert a new cause of action as well as a plausible defense against the compulsion of arbitration. Defendant counters that Plaintiff's motion should be denied on account of bad faith, undue delay, and futility. Specifically, Defendant contends that Plaintiff's amendment would be made in bad faith - solely in an attempt to plead around a binding contract containing an arbitration provision. In addition, Defendant argues that Plaintiff has caused undue delay by filing two other amended complaints in the six months prior to seeking leave for this amendment. And finally, Defendant proffers that the proposed amendments are futile both because Plaintiff does not have standing to assert them and because the claims would still be subject to arbitration. As such, Avis submits that Plaintiff should not be allowed to file a third amended complaint. The Court will address these arguments in turn.

         a. Bad Faith and Undue Delay

         The Ninth Circuit has previously found that bad faith exists where the moving party intends to harass the non-moving party or otherwise disrupt litigation. Leon v. IDX Sys. Corp., 464 F.3d 951, 961 (9th Cir. 2006). In other words, a party acts in bad faith where, for example, “the plaintiff merely is seeking to prolong the litigation by adding new but baseless legal theories, ” See Griggs v. Pace AM. Grp., Inc., 170 F.3d 877, 881 (9th Cir. 1999) (citations omitted), or when plaintiffs attempt to use the amendment to change the warrantlessly change the nature or venue of the case, see Sorosky v. Burroughs Corp., 826 F.2d 794, 805 (9th Cir. 1987). Courts may also consider the factor of undue delay. However, undue delay, by itself, is insufficient to justify denying a motion to amend. See DCD Programs, Ltd. V. Leighton, 833 F.2d 183, 186 (9th Cir. 1987).

         Defendant postulates that Plaintiff's sole purpose in filing an amended complaint before this Court is to “attempt to plead around a binding contract containing an arbitration agreement.” ECF No. 33 at 2. Moreover, Defendant asserts that Plaintiff delayed this motion for six months - through the filing of two other amended complaints - before seeking to amend this complaint to bring a claim ...

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