1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 SOUTHERN DISTRICT OF CALIFORNIA 13 14 L1 TECHNOLOGIES, INC.; Case No.: 20-cv-00259-H-JLB SYNCWISE, LLC; and PIXELS 15 MATTER, LLC, ORDER GRANTING PLAINTIFFS’ 16 MOTION FOR LEAVE TO AMEND Plaintiffs, THE COMPLAINT 17 v. 18 SERHII CHEKANOV; DMITRY [Doc. No. 18.] 19 FATEEV; ROMAN KOLESNIKOV; and VEBERFOC, INC., 20 Defendants. 21
22 On February 11, 2020, Plaintiffs L1 Technologies, Inc., Syncwise, LLC, and Pixels 23 Matter, LLC (collectively, “Plaintiffs”) filed a complaint against Defendants Serhii 24 Chekanov, Dmitry Fateev,1 Roman Kolesnikov, and VeberFOC, Inc. (collectively, 25 “Defendants”). (Doc. No. 1.) On September 15, 2020, Plaintiffs filed a motion for leave 26
27 1 On June 16, 2020, Fateev filed a motion to dismiss the complaint. (Doc. No. 6.) Shortly thereafter, 28 Plaintiffs and Fateev settled, with both agreeing to release all claims they had against one another. (Doc. 1 to amend their complaint, seeking leave to add causes of action for defamation and trade 2 libel. (Doc. No. 18 at 1; see also Doc. No. 19, Proposed Amended Compl. ¶¶ 31-33, 90- 3 95.) Defendant filed a response in opposition to Plaintiffs’ motion on September 22, 2020. 4 (Doc. No. 21.) Plaintiffs did not file a reply. For the following reasons, the Court grants 5 Plaintiffs’ motion for leave to amend their complaint. 6 BACKGROUND 7 On February 11, 2020, Plaintiffs filed a complaint against Defendants. (Doc. No. 8 1.) In the complaint, Plaintiffs alleged claims against Chekanov for: (1) breach of contract; 9 (2) breach of the covenant of good faith and fair dealing; (3) fraud and concealment; (4) 10 negligent misrepresentation; and (5) breach of fiduciary duty. (Id.) Plaintiffs also alleged 11 claims against Defendants for: (6) conspiracy; (7) conversion; (8) misappropriation by 12 acquisition; (9) unjust enrichment; (10) unfair and deceptive trade practices; (11) unfair 13 competition in violation of California Business and Professions Code § 17200 et seq.; and 14 (12) intentional interference with contracts. (Id.) 15 According to Plaintiffs, since the filing of their complaint, Defendants have 16 repeatedly commented false statements on Plaintiffs’ customers’ social media platforms. 17 (Doc. No. 19, Proposed Amended Compl. ¶¶ 31-32.) Plaintiffs provide several examples 18 of these activities in Exhibit 6 of their proposed amended complaint. (Id. Ex. 6.) For 19 example, Plaintiffs allege that Defendants commented the following message on one of 20 Plaintiffs’ customer’s LinkedIn posts: 21 The level of specialists L1 Technologies [sic] is very low . . . . Developers are engaged in theft and copying of branded electrical and GPS devices while 22 presenting the development as their own. Also, the main boss turns out to be 23 violates for women [sic] as evidenced by several lawsuits from women against him in the USA! I will not advise this disgusting company. 24 25 (Id.) Plaintiffs’ customers have contacted them about these comments, complaining that it 26 is a nuisance to continuously monitor and delete these false statements. (Id. ¶ 32.) 27 Also, Defendants allegedly made false statements about Plaintiffs’ business 28 operations to the Internal Revenue Service (“IRS”). (Id. ¶ 33.) Plaintiffs’ proposed 1 amended complaint attaches an IRS information referral form (Form 3949-A), allegedly 2 filed by Chekanov, in which Chekanov reported Plaintiffs for suspected tax law violations.2 3 (Id. Ex. 7.) According to the exhibit, Chekanov reported t that Plaintiffs were hiding their 4 income by and through their various affiliate businesses and overseas operations. (Id.) 5 Based on these new allegations, Plaintiffs now seek to amend their complaint to add 6 claims for defamation and trade libel against Defendants. (Doc. No. 18 at 1.) Chekanov’s 7 response in opposition to Plaintiffs motion was largely nonresponsive. (See Doc. No. 21 8 at 1-2.) Chekanov did state, however, that he had “no relationship” to the alleged 9 correspondence with Plaintiffs’ customers on social media3 and that “it is not worth 10 connecting” these activities with his statements to the IRS. (See id. at 1.) 11 DISCUSSION 12 Under Federal Rule of Civil Procedure 15(a)(2), “a party may amend its pleading 13 only with the opposing party’s written consent or the court’s leave.” The “court should 14 freely give leave when justice so requires.” Id. “[T]his policy is to be applied with extreme 15 liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) 16 (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)). 17 “Generally, this determination should be performed with all inferences in favor of granting 18 the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999). 19 Courts may not decline to grant leave to amend absent a strong showing of “undue 20 delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 21 deficiencies by amendments previously allowed, undue prejudice to the opposing party by 22 virtue of allowance of the amendment, [or] futility of amendment, etc.” Sonoma Cnty. 23 Ass'n of Retired Emples. v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (alteration 24
25 2 The form was signed by “Chekanov S.P.” (Id. Ex. 7.) In his response, Chekanov did not dispute 26 that he filed this form with the IRS. (Doc. No. 21 at 1.) Rather, he referred to the form as “my information [sic] to the US IRS.” (Id. (emphasis added).) 27 3 None of the comments Plaintiffs attached in Exhibit 6 were made by profiles bearing the names of 28 Defendants. (See Doc. No. 19, Ex. 6.) Nonetheless, Plaintiffs contend that these posts were made by 1 in original) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). “[T]he consideration of 2 prejudice to the opposing party carries the greatest weight.” Id. (alteration in original) 3 (quoting Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.2003)). 4 Absent prejudice, “or a strong showing of any of the remaining . . . factors, there exists a 5 presumption under Rule 15(a) in favor of granting leave to amend.” Eminence Capital, 6 316 F.3d at 1052 7 The circumstances of this case favor granting Plaintiffs leave to amend. This is 8 Plaintiffs’ first request for leave to amend. There is no evidence before the Court that 9 would suggest that Plaintiffs delayed bringing its new claims or brought them in bad faith; 10 to the contrary, Plaintiffs seek to amend their complaint to add claims based on the 11 activities Defendants engaged in after the filing of the initial complaint. (Doc. No. 18 at 1; 12 Doc. No. 19 ¶ 31-33.) Additionally, there are no facts indicating that Defendants would be 13 prejudiced by the proposed amendments or that the amendments would unduly delay the 14 proceeding. The action is in its early stages, and the new claims neither “radically shift the 15 nature of the case” nor do they require Defendants “to engage in substantial new 16 discovery.” Lockheed Martin Corp. v. Network Sols., Inc., 175 F.R.D. 640, 644 (C.D. Cal. 17 1997) (citing Morongo Band of Mission Indians v. Rose, 893 F.2d 1074 (9th Cir.1990)).
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1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 SOUTHERN DISTRICT OF CALIFORNIA 13 14 L1 TECHNOLOGIES, INC.; Case No.: 20-cv-00259-H-JLB SYNCWISE, LLC; and PIXELS 15 MATTER, LLC, ORDER GRANTING PLAINTIFFS’ 16 MOTION FOR LEAVE TO AMEND Plaintiffs, THE COMPLAINT 17 v. 18 SERHII CHEKANOV; DMITRY [Doc. No. 18.] 19 FATEEV; ROMAN KOLESNIKOV; and VEBERFOC, INC., 20 Defendants. 21
22 On February 11, 2020, Plaintiffs L1 Technologies, Inc., Syncwise, LLC, and Pixels 23 Matter, LLC (collectively, “Plaintiffs”) filed a complaint against Defendants Serhii 24 Chekanov, Dmitry Fateev,1 Roman Kolesnikov, and VeberFOC, Inc. (collectively, 25 “Defendants”). (Doc. No. 1.) On September 15, 2020, Plaintiffs filed a motion for leave 26
27 1 On June 16, 2020, Fateev filed a motion to dismiss the complaint. (Doc. No. 6.) Shortly thereafter, 28 Plaintiffs and Fateev settled, with both agreeing to release all claims they had against one another. (Doc. 1 to amend their complaint, seeking leave to add causes of action for defamation and trade 2 libel. (Doc. No. 18 at 1; see also Doc. No. 19, Proposed Amended Compl. ¶¶ 31-33, 90- 3 95.) Defendant filed a response in opposition to Plaintiffs’ motion on September 22, 2020. 4 (Doc. No. 21.) Plaintiffs did not file a reply. For the following reasons, the Court grants 5 Plaintiffs’ motion for leave to amend their complaint. 6 BACKGROUND 7 On February 11, 2020, Plaintiffs filed a complaint against Defendants. (Doc. No. 8 1.) In the complaint, Plaintiffs alleged claims against Chekanov for: (1) breach of contract; 9 (2) breach of the covenant of good faith and fair dealing; (3) fraud and concealment; (4) 10 negligent misrepresentation; and (5) breach of fiduciary duty. (Id.) Plaintiffs also alleged 11 claims against Defendants for: (6) conspiracy; (7) conversion; (8) misappropriation by 12 acquisition; (9) unjust enrichment; (10) unfair and deceptive trade practices; (11) unfair 13 competition in violation of California Business and Professions Code § 17200 et seq.; and 14 (12) intentional interference with contracts. (Id.) 15 According to Plaintiffs, since the filing of their complaint, Defendants have 16 repeatedly commented false statements on Plaintiffs’ customers’ social media platforms. 17 (Doc. No. 19, Proposed Amended Compl. ¶¶ 31-32.) Plaintiffs provide several examples 18 of these activities in Exhibit 6 of their proposed amended complaint. (Id. Ex. 6.) For 19 example, Plaintiffs allege that Defendants commented the following message on one of 20 Plaintiffs’ customer’s LinkedIn posts: 21 The level of specialists L1 Technologies [sic] is very low . . . . Developers are engaged in theft and copying of branded electrical and GPS devices while 22 presenting the development as their own. Also, the main boss turns out to be 23 violates for women [sic] as evidenced by several lawsuits from women against him in the USA! I will not advise this disgusting company. 24 25 (Id.) Plaintiffs’ customers have contacted them about these comments, complaining that it 26 is a nuisance to continuously monitor and delete these false statements. (Id. ¶ 32.) 27 Also, Defendants allegedly made false statements about Plaintiffs’ business 28 operations to the Internal Revenue Service (“IRS”). (Id. ¶ 33.) Plaintiffs’ proposed 1 amended complaint attaches an IRS information referral form (Form 3949-A), allegedly 2 filed by Chekanov, in which Chekanov reported Plaintiffs for suspected tax law violations.2 3 (Id. Ex. 7.) According to the exhibit, Chekanov reported t that Plaintiffs were hiding their 4 income by and through their various affiliate businesses and overseas operations. (Id.) 5 Based on these new allegations, Plaintiffs now seek to amend their complaint to add 6 claims for defamation and trade libel against Defendants. (Doc. No. 18 at 1.) Chekanov’s 7 response in opposition to Plaintiffs motion was largely nonresponsive. (See Doc. No. 21 8 at 1-2.) Chekanov did state, however, that he had “no relationship” to the alleged 9 correspondence with Plaintiffs’ customers on social media3 and that “it is not worth 10 connecting” these activities with his statements to the IRS. (See id. at 1.) 11 DISCUSSION 12 Under Federal Rule of Civil Procedure 15(a)(2), “a party may amend its pleading 13 only with the opposing party’s written consent or the court’s leave.” The “court should 14 freely give leave when justice so requires.” Id. “[T]his policy is to be applied with extreme 15 liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) 16 (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)). 17 “Generally, this determination should be performed with all inferences in favor of granting 18 the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999). 19 Courts may not decline to grant leave to amend absent a strong showing of “undue 20 delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 21 deficiencies by amendments previously allowed, undue prejudice to the opposing party by 22 virtue of allowance of the amendment, [or] futility of amendment, etc.” Sonoma Cnty. 23 Ass'n of Retired Emples. v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (alteration 24
25 2 The form was signed by “Chekanov S.P.” (Id. Ex. 7.) In his response, Chekanov did not dispute 26 that he filed this form with the IRS. (Doc. No. 21 at 1.) Rather, he referred to the form as “my information [sic] to the US IRS.” (Id. (emphasis added).) 27 3 None of the comments Plaintiffs attached in Exhibit 6 were made by profiles bearing the names of 28 Defendants. (See Doc. No. 19, Ex. 6.) Nonetheless, Plaintiffs contend that these posts were made by 1 in original) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). “[T]he consideration of 2 prejudice to the opposing party carries the greatest weight.” Id. (alteration in original) 3 (quoting Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.2003)). 4 Absent prejudice, “or a strong showing of any of the remaining . . . factors, there exists a 5 presumption under Rule 15(a) in favor of granting leave to amend.” Eminence Capital, 6 316 F.3d at 1052 7 The circumstances of this case favor granting Plaintiffs leave to amend. This is 8 Plaintiffs’ first request for leave to amend. There is no evidence before the Court that 9 would suggest that Plaintiffs delayed bringing its new claims or brought them in bad faith; 10 to the contrary, Plaintiffs seek to amend their complaint to add claims based on the 11 activities Defendants engaged in after the filing of the initial complaint. (Doc. No. 18 at 1; 12 Doc. No. 19 ¶ 31-33.) Additionally, there are no facts indicating that Defendants would be 13 prejudiced by the proposed amendments or that the amendments would unduly delay the 14 proceeding. The action is in its early stages, and the new claims neither “radically shift the 15 nature of the case” nor do they require Defendants “to engage in substantial new 16 discovery.” Lockheed Martin Corp. v. Network Sols., Inc., 175 F.R.D. 640, 644 (C.D. Cal. 17 1997) (citing Morongo Band of Mission Indians v. Rose, 893 F.2d 1074 (9th Cir.1990)). 18 Finally, Chekanov’s contentions that (1) he has “no relationship” to the alleged social 19 media messages described in the Plaintiff’s proposed amended complaint and (2) these 20 messages should not be connected to his statements to the IRS are not enough to outweigh 21 the strong presumption in favor of granting leave to amend.4 See Eminence Capital, 316 22 F.3d at 1052; see also Griggs, 170 F.3d at 880 (explaining all inferences should made in 23 24 25 4 To the extent that Chekanov is challenging the futility of Plaintiffs’ new claims, he is free to challenge the sufficiency of Plaintiffs new allegations in a subsequent motion. “Denial of leave to amend 26 on [futility grounds] is rare. Ordinarily, courts will defer consideration of challenges to the merits of a proposed amended pleading until after leave to amend is granted and the amended pleading is filed.” 27 Netbula, LLC v. Distinct Corp., 212 F.R.D. 534, 539 (N.D. Cal. 2003); see also SAES Getters S.p.A. v. 28 Aeronex, Inc., 219 F. Supp. 2d 1081, 1086 (S.D. Cal. 2002) (“[Futility] issues are often more appropriately 1 || favor of granting leave); Hinrichsen v. Quality Loan Serv. Corp., No. 16-CV-0690 DMS 2 ||(NLS), 2017 WL 56258, at *3 (S.D. Cal. Jan. 5, 2017) (“Relevance . . . is not a factor in 3 || determining whether to grant leave to amend.”). Accordingly, the Court grants Plaintiffs’ 4 || motion for leave to amend the complaint. 5 CONCLUSION 6 For the foregoing reasons, the Court grants Plaintiffs’ motion for leave to amend the 7 ||complaint. Plaintiffs must file their amended complaint on or before October 23, 2020. 8 || Defendants who have been served and responded to the original complaint have 30 days 9 || from the date of the filing of the amended complaint to respond. Defendants who have not 10 || been served must be served with the amended complaint in accordance with the applicable 11 and treaties. 12 IT IS SO ORDERED. 13 ||} DATED: October 15, 2020 ~
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