United States District Court, S.D. California
AJ REYES, on behalf of himself and all others similarly situated, Plaintiff,
v.
EDUCATION CREDIT MANAGEMENT CORPORATION, Defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO
AMEND THE PLEADINGS ECF NO. 147
Cynthia Bashant United District Judge
Before
the Court is Plaintiff's Motion for Leave to Amend the
Pleadings (“Motion”), seeking to add Beheshta
Mahboob as a putative class representative in this action.
(Mot. to Am. Pleadings (“Mot.”), ECF No. 147.)
Defendant opposes the Motion. (Opp'n to Mot. to Amend
Pleadings (“Opp'n”), ECF No. 149.) For the
reasons stated below, the Court GRANTS the
Motion.
I.
RELEVANT BACKGROUND
Plaintiff
filed a class action complaint on March 20, 2015 alleging
that Defendant violated the Telephone Consumer Protection Act
(“TCPA”) and California Invasion of Privacy Act
(“CIPA”) by recording phone calls with its
customers without their consent. (Compl., ECF No. 1.)
Plaintiff alleges that Defendant failed to include a
prerecorded advisement (the “Recording
Disclosure”) to inform Plaintiff and the putative class
that the calls would be recorded because Defendant improperly
set the advisement as a non-mandatory message for certain
inbound lines. (See Id. ¶ 29; Mot. at 2.)
On
November 30, 2015, Defendant filed a Motion for Summary
Judgment. (Mot. for Summ. J., ECF No. 25.) The Court granted
summary judgment as to the TCPA claim and denied it as to the
CIPA claim. (Order re Mot. for Summ. J., ECF No. 50.)
On
February 24, 2017, Plaintiff moved to certify the class. (ECF
No. 76.) Plaintiff then requested an extension of time to
amend the pleadings in June 20, 2017. (ECF No. 98.) Plaintiff
attached to his request a declaration by Beheshta Mahboob,
stating that she did not learn that she was recorded by
Defendant during a phone call until June 14, 2017 and
intended to be added to Plaintiff's litigation as a class
representative. (Dec. of Beheshta Mahboob (“Mahboob
Dec.”) ¶¶ 4-5, ECF No. 98-4.) The Court
subsequently granted the motion and extended the deadline to
amend until October 11, 2017. (ECF No. 118.)
The
Court certified the class on September 20, 2017. (ECF No.
113.) Defendant appealed the order on October 4, 2017. (ECF
No. 117.) On October 11, 2017, Plaintiff moved to amend the
pleadings to add Ms. Mahboob as a putative class
representative and to amend the class certification order to
reflect this change. (Mot. for Leave to File Amendment, ECF
No. 125.) Defendant then filed a Motion to Stay the case in
this Court pending appeal of the class certification order,
which the Court granted on March 13, 2018. (Mot. to Stay, ECF
No. 137; Order Granting Mot. to Stay (“Stay
Order”), ECF No. 143.) In light of the stay, the Court
denied Plaintiff's motion to amend to add Ms. Mahboob as
a class representative but permitted Plaintiff to refile the
motion within two weeks of the Ninth Circuit's ruling on
the appeal. (Order Granting Mot. to Stay at 3.)
On July
23, 2019, the Ninth Circuit vacated the class certification
order and remanded the action. (Reyes v. Educ. Credit
Mgmt. Corp., No. 17-56930 at 3 (9th Cir. July 23, 2019),
Ex. A to Joint Notice of Ninth Circuit Ruling and Request to
Lift the Stay, ECF No. 146-1.) In its order, the Ninth
Circuit stated the following:
We therefore vacate and remand so the district court may
determine whether Reyes has met his burden of proving that he
did not hear the recording warning. If he did hear the
warning, he cannot be a member of the class as currently
defined and the lawsuit should be dismissed.
(Id.)
On
August 6, 2019, Plaintiff filed the instant Motion seeking to
add Ms. Mahboob as a putative class representative. Plaintiff
alleges that Ms. Mahboob “experienced a hold time of 0
seconds before being transferred to an agent, ” she
could not have heard the Recording Disclosure even assuming,
as Defendant alleges, the disclosure would have been heard by
all in-bound callers on hold for four seconds or more before
transfer to an agent. (Mem. of P. & A. in support of Mot.
at 2-3, ECF No. 147-1.) Plaintiff states that, in the event
Reyes does not meet his burden that he did not hear the
Recording Disclosure and the four-second “hold
time” defense by Defendant proves persuasive, “it
will be necessary for Ms. Mahboob to represent the narrower
subclass” of callers who were on hold for less than
four seconds. (Id. at 4.) Defendant opposes the
Motion on several grounds, including on the basis that adding
Ms. Mahboob would purportedly violate the Ninth Circuit's
mandate in its order remanding the class certification issue.
(Opp'n at 5-6.)
II.
LEGAL STANDARD
As a
general matter, “[a] party may amend its pleading once
as a matter of course within 21 days after serving it.”
Fed.R.Civ.P. 15(a)(1)(A). Plaintiff's present motion to
amend comes long after the expiration of the deadline to
amend as a matter of course. When a party can no longer amend
as a matter of course, “a party may amend its pleading
only with the opposing party's written consent or the
court's leave, ” which “[t]he court should
freely give . . . when justice so requires.”
Fed.R.Civ.P. 15(a)(2). Defendant does not consent to
amendment and thus Plaintiff seeks leave of court.
Granting
or denying leave to amend rests in the trial court's
sound discretion. Swanson v. U.S. Forest Serv., 87
F.3d 339, 343 (9th Cir. 1996); Int'l Ass'n of
Machinists & Aerospace Workers v. Republic Airlines,
761 F.2d 1386, 1390 (9th Cir. 1985). Five factors guide a
court's discretion: (1) any bad faith of the moving
party, (2) any prejudice to the opposing party, (3) futility
of the proposed amendment, (4) any undue delay by the moving
party, and (5) whether the moving party has previously
amended. Western Shoshone Nat. Council v. Molini,
951 F.2d 200, 204 (9th Cir. 1991). “Futility of
amendment can, by itself, justify the denial of a motion for
leave to amend.” Bonin v. Calderon, 59 F.3d
815, 845 (9th Cir. 1995). “A proposed amended complaint
is ...