United States District Court, N.D. California
ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO
AMEND ANSWER AND DENYING DEFENDANT'S MOTIONS TO SEAL RE:
DKT. NOS. 126, 127, 133
HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE
August 16, 2017, Plaintiff Finjan, Inc.
(“Finjan”) filed its complaint against Defendants
Bitdefender Inc., and Bitdefender S.R.L. (collectively,
“Bitdefender”). Dkt. No. 1. Bitdefender filed its
answer and counterclaims on November 22, 2017. Dkt. No. 25.
Bitdefender filed a first amended answer on May 8, 2018. Dkt.
Nos. 78, 79. Finjan filed its answer to Bitdefender's
counterclaims on May 22, 2018. Dkt. Nos. 82, 83. On June 8,
2019, Bitdefender filed this motion for leave to file an
amended answer, to include a counterclaim for breach of
contract. Dkt. No. 127 (“Mot.”). Finjan filed its
opposition to this motion on July 2, 2019, Dkt. No. 132
(“Opp.”), and Bitdefender filed its reply on July
9, 2019, Dkt. No. 134 (“Reply”). Bitdefender also
filed two motions to seal portions of its briefs and
accompanying exhibits. Dkt. Nos. 126, 133.
Amendment of Pleadings
under Rule 15(a)(2), “leave to amend shall be freely
granted ‘when justice so requires.'”
Townsend v. Univ. of Alaska, 543 F.3d 478, 485 (9th
Cir. 2008) (quoting Fed.R.Civ.P. 15(a)(2)). “This
policy is to be applied with extreme liberality.”
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d
1048, 1051 (9th Cir. 2003) (internal quotation marks
omitted). However, “[o]nce the district court ha[s]
filed a pretrial scheduling order pursuant to Federal Rule of
Civil Procedure 16 which established a timetable for amending
pleadings that rule's standards control.”
Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,
607-08 (9th Cir. 1992). Rule 16 provides that the Court
must issue a scheduling order [that] limit[s] the time to
join other parties, amend the pleadings, complete
discovery, and file motions . . . . A schedule may be
modified only for good cause and with the judge's
Civ. P. 16(b). The “good cause” requirement of
Rule 16 “primarily considers the diligence of the party
seeking the amendment.” Johnson, 975 F.2d at
Court finds that the good cause requirement of Rule 16 is
met, the moving party “must then demonstrate that the
motion is also proper under Rule 15.” Rodarte v.
Alameda Cty., No. 14-cv-00468-KAW, 2015 WL 5440788, at
*2 (N.D. Cal. Sept. 15, 2015). The five factors relevant to
determining proper amendment under Rule 15 are (1) bad faith,
(2) undue delay, (3) prejudice to the opposing party, (4)
futility of amendment, and (5) previous amendments. Foman
v. Davis, 371 U.S. 178, 182 (1962); see also Wash.
State Republican Party v. Wash. State Grange, 676 F.3d
784, 797 (9th Cir. 2012) (same factors). The Court weighs
prejudice to the opposing party most heavily. See
Eminence Capital, 316 F.3d at 1052 (9th Cir. 2003).
“Absent prejudice, or a strong showing of any of the
remaining Foman factors, there exists a presumption
under Rule 15(a) in favor of granting leave to amend.”
File Under Seal
generally apply a “compelling reasons” standard
when considering motions to seal documents. Pintos v.
Pac. Creditors Ass'n, 605 F.3d 665, 678 (9th Cir.
2010) (quoting Kamakana v. City & Cty. of
Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)).
“This standard derives from the common law right
‘to inspect and copy public records and documents,
including judicial records and documents.'”
Id. (quoting Kamakana, 447 F.3d at 1178).
“[A] strong presumption in favor of access is the
starting point.” Kamakana, 447 F.3d at 1178
(quotations omitted). To overcome this strong presumption,
the party seeking to seal a judicial record attached to a
dispositive motion must “articulate compelling reasons
supported by specific factual findings that outweigh the
general history of access and the public policies favoring
disclosure, such as the public interest in understanding the
judicial process” and “significant public
events.” Id. at 1178-79 (quotations omitted).
attached to nondispositive motions must meet the lower
“good cause” standard of Rule 26(c) of the
Federal Rules of Civil Procedure, as such records “are
often unrelated, or only tangentially related, to the
underlying cause of action.” Id. at 1179-80
(quotation omitted). This requires a “particularized
showing” that “specific prejudice or harm will
result” if the information is disclosed. Phillips
ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d
1206, 1210-11 (9th Cir. 2002); see also Fed. R. Civ.
P. 26(c). “Broad allegations of harm, unsubstantiated
by specific examples of articulated reasoning” will not
suffice. Beckman Indus., Inc. v. Int'l Ins. Co.,
966 F.2d 470, 476 (9th Cir. 1992) (quotation omitted).
Motion to Amend Answer
argues that Rule 16's “good cause” standard
does not apply because the Court's scheduling order
stipulated only a deadline for amending pleadings without
leave of court, and here it seeks such leave. Reply at 6.
However, it is the Federal Rules of Civil Procedure that
guide the “good cause” standard, not the
Court's order. Still, the Court must look to the
diligence of the moving party in determining whether the good
cause standard under Rule 16(b) has been met, and Bitdefender
meets the standard in this case. Finjan disclosed the alleged
confidential information on April 5, 2019, Dkt. No. 128-3 at
20, well past the February 20, 2018 deadline to amend
pleadings, Dkt. No. 27. Bitdefender then reached out to
Finjan to remove the language. After Finjan refused, on May
29, 2019, Bitdefender filed a discovery motion ...