EMC Corp. v. Pure Storage, Inc.

310 F.R.D. 194, 2015 U.S. Dist. LEXIS 117775, 2015 WL 5163044
CourtDistrict Court, D. Massachusetts
DecidedSeptember 3, 2015
DocketCIVIL ACTION NO. 13-12789-JGD
StatusPublished
Cited by5 cases

This text of 310 F.R.D. 194 (EMC Corp. v. Pure Storage, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
EMC Corp. v. Pure Storage, Inc., 310 F.R.D. 194, 2015 U.S. Dist. LEXIS 117775, 2015 WL 5163044 (D. Mass. 2015).

Opinion

[196]*196MEMORANDUM OF DECISION AND ORDER ON PURE STORAGE’S MOTION FOR LEAVE TO AMEND ITS COUNTERCLAIM

Judith Gail Dein, United States Magistrate Judge

I. INTRODUCTION

This complex and hard fought litigation involves a dispute between two competitors in the data storage industry. The plaintiff, EMC Corporation (“EMC”), alleges that the defendant, Pure Storage, Inc., (“Pure Storage”), engaged in a deliberate, nationwide scheme to lure away EMC’s most talented and knowledgeable employees, and induce them to divulge EMC’s confidential and trade secret information, for the purpose of soliciting business from EMC’s customers and selling competing products. On November 4, 2013, EMC filed a complaint against Pure Storage in which it asserted seven separate causes of action, including claims for misappropriation of confidential information and trade secrets, tortious interference with contractual and advantageous business relationships, aiding and abetting the misappropriation of trade secrets, unjust enrichment, and violation of Mass. Gen. Laws ch. 93A (“Chapter 93A”).

Pure Storage denies any liability to the plaintiff, and contends that EMC’s claims are nothing more than a veiled attempt to maintain an unfair stranglehold on the data storage market by interfering with the success of Pure Storage’s superior Flash Array technology, distracting and harassing the defendant’s employees, and disrupting Pure Storage’s customer relationships. In addition, Pure Storage accuses EMC of misappropriating its confidential and trade secret information, and engaging in a variety of unlawful and unscrupulous business practices. On November 26, 2013, Pure Storage asserted ten separate counterclaims against EMC, which included claims for misappropriation of trade secrets, breach of contract, breach of the implied covenant of good faith and fair dealing, inducing breach of contract, intentional interference with contractual relations, intentional interference with prospective eeo-nomic/business relations, conversion, unfair business practices and unfair competition in violation of the California Business and Professions Code §§ 17200 et seq., declaratory judgment, and violation of Chapter 93A. Approximately one year later, in November 2014, Pure Storage amended its counterclaims in order to add claims for commercial disparagement, defamation, and violations of the Lanham Act, thereby bringing the number of its counterclaims to thirteen.

Fact discovery, which has been substantial and ongoing for more than a year and a half, is scheduled to be completed next month, and expert discovery is scheduled to be completed in early February 2016. In addition, the parties have agreed to file any motions for summary judgment by February 26, 2016, and this court has set a trial date of October 17, 2016. Thus, under the present schedule, this court expects to resolve the case in its entirety by the late fall of 2016, approximately three years after it was commenced.

The matter is presently before the court on “Defendant and Plaintiff-In-Counterclaim Pure Storage Inc.’s Motion for Leave to Amend Its Counterclaims” (Docket No. 160), by which Pure Storage is seeking leave to amend its counterclaims for a second time in order to assert an additional claim against EMC under sections 17043 and 17044 of the California Unfair Practices Act (“UPA”). Those provisions are directed at maintaining fair and honest competition between competitors in the business arena by prohibiting the use of “loss leaders” and other below-cost sales undertaken for the purpose of injuring competitors and destroying competition. Pure Storage contends that during the course of discovery in this ease, it uncovered evidence showing that EMC engaged in the prohibited conduct by selling products and services below cost, using loss leaders, and giving away products for the purpose of injuring the defendant and stifling competition. It further contends that the interests of justice and judicial economy would best be served by allowing it to pursue a UPA claim in the context of the present litigation, and that EMC will suffer no undue prejudice by the addition of such a claim. Thus, while there is no dispute that the present motion was filed nearly eight months after the dead[197]*197line to amend the pleadings had expired, and after considerable discovery had already taken place, Pure Storage maintains that it has shown good cause to amend its counterclaims at this point in the proceedings. Not surprisingly, not only does EMC deny the merits of these claims, but it asserts that the proposed amendment would add complex legal and factual issues, greatly expand the scope of discovery, and delay the case.

Even if Pure Storage had good cause for not filing its present motion sooner, this court finds that the proposed amendment would further complicate and delay the litigation, increase the burdens on the court, and cause prejudice to the plaintiff. In particular, this court finds that Pure Storage’s efforts to introduce new theories of liability at this late stage in the discovery process would prevent the timely completion of fact and expert witness discovery, increase costs, and delay the ultimate resolution of the existing claims on the merits. Therefore, and for all of the reasons detailed below, the defendant’s motion for leave to amend its counterclaims is DENIED.

II. FACTUAL AND PROCEDURAL BACKGROUND1

The plaintiff, EMC, commenced this action on November 4, 2013. (Docket No. 1). By its Complaint, EMC is seeking judgment against Pure Storage on each of seven claims, as well as money damages and injunctive relief. (Id.). On November 26, 2013, Pure Storage filed an Answer and Counterclaims. (Docket No. 14). Therein, the defendant asserted ten counterclaims against the plaintiff, based largely on EMC’s allegedly improper acquisition and testing of Pure Storage’s Flash Array product, as well as its alleged use of the defendant’s confidential and proprietary information to develop a competing product. (See id. at Counterclaims ¶¶ 1-4, 7). However, it did not assert any predatory pricing claims under the UPA or allege any facts relating to EMC’s pricing practices.

Establishment of a Pretrial Schedule

On January 14, 2014, this court adopted the parties’ jointly proposed schedule for the completion of pretrial discovery and the filing of all dispositive motions, and issued a Scheduling Order setting forth the applicable deadlines. (Docket No. 26). Pursuant to the Scheduling Order, the parties were required to file any amendments to the pleadings by November 3, 2014, to complete all fact discovery by March 13, 2015, to complete expert discovery by June 19, 2015, and to file any dispositive motions, including any motions for summary judgment, by July 17, 2015. (Id.). Initially, therefore, this court contemplated that all discovery, including all fact and expert discovery, would be concluded by late June 2015.

The case proceeded in the ordinary course, with the parties engaging in extensive fact discovery and raising unresolved discovery disputes with the court. (See, e.g„ PL Exs. 12 and 13; Docket Nos. 35, 44, 68). On November 3, 2014, the final date for filing proposed amendments to the pleadings, Pure Storage filed a motion for leave to amend it counterclaims in order to add claims against EMC for commercial disparagement, defamation and violations of the Lanham Act. (Docket No. 83 at 1).

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Bluebook (online)
310 F.R.D. 194, 2015 U.S. Dist. LEXIS 117775, 2015 WL 5163044, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emc-corp-v-pure-storage-inc-mad-2015.