Residential Energy Services Network, Inc. v. Building Science Institute, Ltd. Co.

Opinion

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 RESIDENTIAL ENERGY SERVICES Case No.: 22-cv-1641-AGS-MSB NETWORK, INC., 4 ORDER GRANTING MOTION TO Plaintiff, AMEND COMPLAINT (ECF 30) AND 5 v. DENYING MOTION TO DISMISS 6 (ECF 19) BUILDING SCIENCE INSTITUTE, 7 LTD. CO., et al., Defendants. 8

9 The main issue here is whether plaintiff should be allowed to amend the complaint 10 a second time. 11 BACKGROUND 12 Plaintiff Residential Energy Services Network, Inc. (RESNET), sued defendants for 13 trademark violations and various unfair business practices. (See generally ECF 13.) Early 14 in the case, RESNET filed an amended complaint (see id.), and defendant Building Science 15 Institute, Ltd. Co. (BSI), timely moved to dismiss it (ECF 19). At a later preliminary- 16 injunction hearing, the Court “tentatively” ruled that on the then-current record, RESNET 17 was “missing a key element . . . regarding the [state-law] business interference claims.” 18 (ECF 29, at 20.) 19 In “response to the Court’s guidance,” RESNET now moves to amend its complaint 20 a second time “to avoid duplicative consideration of certain” claims and “to remove 21 allegations of other state law claims.” (ECF 30, at 4–5.) BSI objects to any further 22 amendments and urges the Court to rule on its motion to dismiss. (See ECF 32, at 4.) 23 DISCUSSION 24 “After a party has amended a pleading once as a matter of course, it may only amend 25 further after obtaining leave of the court, or by consent of the adverse party.” Eminence 26 Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citing Fed. R. Civ. P. 27 15(a)). Courts should “freely give leave when justice so requires,” Fed. R. Civ. P. 15(a)(2), 28 and should apply this policy “with extreme liberality,” Owens v. Kaiser Found. Health 1 Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (cleaned up). In deciding whether to grant 2 such leave, courts consider five factors: (1) “undue delay,” (2) “bad faith or dilatory motive 3 on the part of the movant,” (3) “repeated failure to cure deficiencies by amendments 4 previously allowed,” (4) “undue prejudice to the opposing party,” and (5) “futility of 5 amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). 6 Of these factors, undue prejudice is the “touchstone of the inquiry” and “carries the 7 greatest weight.” Eminence Cap., 316 F.3d at 1052. “The party opposing amendment bears 8 the burden of showing prejudice.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 9 (9th Cir. 1987). To that end, BSI notes that granting the motion to amend would “further 10 delay . . . this case” and force BSI “to again file a Motion to Dismiss challenging the first 11 four causes of action,” as the proposed amendment leaves intact “the identical first four 12 causes of action.” (ECF 32, at 3–4.) But these concerns hardly rise to the level of “undue” 13 prejudice. This litigation is less than a year old. (See ECF 1.) And BSI would merely need 14 to cut and paste its current arguments on these identical claims into a new motion to 15 dismiss. “That an amended complaint would essentially moot Defendants’ pending Motion 16 to Dismiss . . . does not constitute undue prejudice.” Cuevas v. City of Campbell, No. 5:12- 17 CV-03087-EJD, 2012 WL 5077153, at *1 (N.D. Cal. Oct. 18, 2012). BSI has not carried 18 its burden as to the prejudice factor. 19 “Absent prejudice, or a strong showing of any of the remaining Foman factors, there 20 exists a presumption . . . in favor of granting leave to amend.” Eminence Cap., 316 F.3d 21 at 1052. BSI does not address three of the remaining factors—bad faith, repeated failures 22 to cure deficiencies, and futility of amendment—and with good reason. These all cut in 23 favor of amendment. 24 That leaves only one factor: undue delay. “Undue delay by itself, however, is 25 insufficient to justify denying a motion to amend.” Bowles v. Reade, 198 F.3d 752, 758 26 (9th Cir. 1999). Regardless, BSI has offered no evidence of “movant’s ‘undue delay’” in 27 seeking amendment. See Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 553 (2010) 28 (emphasis added). On the contrary, RESNET promptly moved to delete certain causes of 1 || action that the Court criticized, filing its motion a mere 19 days after the Court’s comments. 2 ECF 29, at 20; ECF 30.) 3 Thus, all five Foman factors favor granting leave to amend. 4 CONCLUSION 5 RESNET’s motion to amend is GRANTED. By September 11, 2023, RESNET 6 ||must file the proposed second amended complaint (ECF 30-1) as its own entry on the 7 |\|docket. BSI’s motion to dismiss is DENIED AS MOOT. 8 ||Dated: September 8, 2023

10 Andrew G. Schopler United States District Judge

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