S.S. v. Peloton Interactive, Inc.

Opinion

7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 S.S., a minor, by and through his Guardian ) Case No.: 3:21-cv-01367-BEN-MMP ad Litem Eunjin Stern; EUNJIN STERN, ) 12 an individual; WILLIAM STERN, an ) ORDER DENYING PLAINTIFFS’ 13 individual,, ) MOTION FOR LEAVE TO AMEND ) COMPLAINT Plaintiffs, 14 ) 15 v. ) ) [ECF No. 109] 16 PELOTON INTERACTIVE, INC., a ) Delaware corporation; DOES 1 through 17 50, inclusive, ) ) 18 Defendant. ) 19

20 21 I. INTRODUCTION 22 Plaintiff S.S., a minor, by and through his Guardian ad Litem Eunjin Stern (“S.S.”) 23 and Eunjin Stern, an individual (“Mrs. Stern”), bring this action against Defendant Peloton 24 Interactive, Inc., a Delaware corporation (“Peloton”) for injuries allegedly sustained in 25 connection with Defendant’s Tread+ treadmill (the “Tread+”). Before the Court is 26 Plaintiffs’ Motion for Leave to Amend their Complaint. See ECF No. 109. The briefing 27 was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) 28 and Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 116. After considering 1 the papers submitted, supporting documentation, and applicable law, the Court DENIES 2 Plaintiffs’ Motion for Leave to Amend their Complaint.1 3 II. BACKGROUND 4 The facts of this case have been summarized repeatedly in this Court’s prior Orders 5 and will not be reiterated here. See ECF Nos. 15, 87, 107. 6 On May 7, 2021, Plaintiffs filed suit against Peloton in state court, alleging six 7 causes of action for: (1) negligence; (2) negligent infliction of emotional distress by S.S. 8 as a direct victim; (3) negligent infliction of emotional distress by Mr. and Mrs. Stern as 9 bystanders; (4) intentional misrepresentation; (5) negligent misrepresentation; and (6) 10 intentional concealment. See Compl. Defendant removed the case to this Court. 11 In August 2021, Peloton filed a Motion to Compel Arbitration, see ECF No. 11, 12 which this Court granted-in-part, compelling Mr. Stern and Peloton to arbitration to 13 determine the question of arbitrability—Mrs. Stern and S.S., however, are not bound by 14 the arbitration agreement. See generally ECF No. 15. The parties engaged in discovery 15 and on January 18, 2023, Peloton filed a Motion to Exclude Expert Testimony, see ECF 16 No. 65, which this Court denied, see ECF No. 87. 17 On October 27, 2023, the Court ruled on the parties’ Pretrial Briefs regarding 18 requests to exclude various evidence and claims at trial. ECF No. 107. In that Order, the 19 Court found that Plaintiffs’ negligence per se theory could not be set forth at trial because 20 allegations of such were not included in the Complaint. Id. On November 3, 2023, 21 Plaintiffs filed the instant Motion for Leave to Amend their Complaint Pursuant to Rule 15 22 of the Federal Rules of Civil Procedure. ECF No. 109. Peloton opposed. ECF No. 114. 23 Plaintiffs replied. ECF No. 115. 24 III. LEGAL STANDARD 25 Once a responsive pleading is filed, a plaintiff can amend a complaint “only with the 26 opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). Courts 27 1 Plaintiffs requested oral argument on the matter but after review of the briefing and 28 1 have broad discretion to grant leave to amend a complaint. Cf. Nguyen v. Endologix, Inc., 2 962 F.3d 405, 420 (9th Cir. 2020); see also Morongo Band of Mission Indians v. Rose, 893 3 F.2d 1074, 1079 (9th Cir. 1990) (stating that leave to amend is to be granted with “extreme 4 liberality”). “A district court need not grant leave to amend where the amendment: (1) 5 prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay in 6 litigation; or (4) is futile.” See Sonner v. Premier Nutrition Corp., 971 F.3d 834, 845 (9th 7 Cir. 2020) (holding that “the district court did not abuse its ‘particularly broad’ discretion 8 in denying leave to amend”) (citing AmerisourceBergen Corp. v. Dialysist W., Inc., 465 9 F.3d 946, 951 (9th Cir. 2006)). 10 IV. DISCUSSION 11 Plaintiffs seek leave to amend their Complaint to add a negligence per se theory of 12 liability. Peloton argues that it would be prejudiced by the amendment because Plaintiffs 13 unduly delayed their request. As set forth below the Court agrees with Peloton and 14 DENIES Plaintiffs’ Motion for Leave to Amend their Complaint. 15 A. Undue Delay 16 Plaintiffs contend they did not delay their request for amendment because “the civil 17 penalty and statutory findings [giving rise to the negligence per se claim] were only 18 released to the public on January 5, 2023,” which Plaintiffs learned of later. ECF No. 109- 19 1 at 5. Plaintiffs assert that Peloton, however, “knew of the CPSC proceeding and 20 investigation since 2021 . . . .” Id. Plaintiffs further argue that they “do not seek leave for 21 any improper purpose (e.g., bad faith, dilatory aspirations or otherwise) as Plaintiffs simply 22 seek leave for the purpose of asserting facts that are pertinent to negligence per se and to 23 ensure Plaintiffs are able to put on their case and chief at trial.” ECF No. 109-1 at 5. 24 Finally, Plaintiffs argue that the amendment is not futile, because “negligence per se is 25 central to Plaintiffs’ case in chief and will necessarily expedite the jury trial in this case . . 26 . .” Id. 27 Plaintiffs do not explain why they waited nearly eight months after learning of the 28 documents that gave rise to the negligence per se theory—from March 2023 to November 1 2023—to file their Motion for Leave to Amend. The law is clear in that negligence per se 2 allegations must be sufficiently pled. Plaintiffs only sought leave to amend after the Court 3 clarified that the allegations of negligence per se were untimely and not included in the 4 Complaint. Plaintiffs provide no explanation in their briefing as to why they did not seek 5 leave to amend in March 2023, when they learned of the documents. Plaintiffs were not 6 diligent in seeking leave to amend and provide no reason justifying the delay between 7 March and November 2023.2 See Chodos v. W. Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 8 2002) (finding undue delay in seeking amendment where the facts at issue were available 9 to the moving party well before the amendment was sought). 10 Undue delay is not a dispositive factor but is relevant to the analysis. Lockheed 11 Martin Corp. v. Network Sols., Inc., 194 F.3d 980, 986 (9th Cir. 1999) (citing Morongo 12 Band of Mission Indians, 893 F.2d at 1079). Here, the delay at issue weighs in favor of 13 denying Plaintiffs’ Motion for Leave to Amend the Complaint. Lockheed Martin Corp., 14 194 F.3d at 986 (finding the district court did not abuse its discretion in denying leave to 15 amend in part because of the moving party’s delay in seeking amendment, as well as its 16 failure to explain the delay). 17 B. Prejudice 18 Plaintiffs argue that any amendment to the Complaint will not unduly prejudice 19 Peloton. Plaintiffs explain that since the start of litigation, they maintained “a cause of 20 action for negligence, and [] [the] addition of negligence per se (an evidentiary doctrine) is 21 based on the same facts referenced in . . . [the] current/operative Complaint, and those 22 disclosed” during discovery. ECF No. 109-1 at 5. Plaintiffs further argue that no trial has 23 been set and “the inclusion of negligence per se will not alter any of [Peloton’s] purported 24 defenses.” Id. 25

26 2 The Court finds unpersuasive Plaintiffs’ argument that their negligence per se theory 27 is central to their case in chief, given that they did not plan to include this theory before becoming aware of the CPSC documents in March 2023 (after one year and eight months 28 1 Peloton responds that it “would be significantly prejudiced by Plaintiffs’ proposed 2 amendment,” because “[f]act and expert discovery have been closed for more than one 3 year, the parties have already submitted pretrial disclosures, and the pretrial conference is 4 now scheduled for next month.” ECF No. 114 at 17. Peloton asserts that it should not be 5 prejudiced this late in litigation for Plaintiffs’ lack of diligence. Id. Peloton further argues 6 that the negligence per se amendment “would require the preparation of additional defenses 7 just before trial and potentially reopen discovery, including expert discovery.” Id. at 18. 8 Peloton explains that “[t]o date, Plaintiffs’ proposed theory of negligence had been limited 9 to the particular incident that purportedly caused Plaintiffs’ injuries.” Id. Adding 10 negligence per se “premised on purported violations of a federal statute regulated by a 11 government agency would require Peloton to support and put forward additional defenses.” 12 Id. 13 The Court tends to agree with Peloton on this point. Although negligence per se 14 constitutes an evidentiary doctrine, as detailed in this Court’s prior Order, it must be 15 sufficiently pled like all other theories of liability. See ECF No. 107. Plaintiffs did not 16 include negligence per se allegations in their Complaint and waited until after the Court 17 pointed this out to file the instant Motion for Leave to Amend.3 As Peloton notes, the 18 Pretrial Conference will occur next month. Although the negligence per se claim relates 19 to Plaintiffs’ general negligence claim, it also involves application of federal statutory and 20 agency law versus state common law, which would require Peloton to prepare new 21 defenses at this late stage in litigation. The Court further agrees with Peloton that the new 22 allegations would likely require additional discovery, which has been closed for over a 23 year, while the case as a whole has been in litigation for almost two and a half years. See 24 Lockheed Martin Corp., 194 F.3d at 986 (citing Solomon v. North Am. Life & Cas. Ins. 25

26 3 Plaintiffs argue the Court invited them to seek leave to amend their Complaint in its 27 Order on the parties’ pretrial briefing. That is not the case. Instead, the Court pointed out that Plaintiffs did not seek leave to amend their Complaint before attempting to assert their 28 1 Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (“A need to reopen discovery and therefore delay 2 the proceedings supports a district court’s finding of prejudice from a delayed motion to 3 amend the complaint.”)). 4 Despite Peloton’s knowledge of the CPSC investigation, the operative Complaint 5 never provided Peloton notice of Plaintiffs’ negligence per se allegations. As such, the 6 Court finds that new allegations of negligence per se are likely to prejudice Peloton at this 7 late stage in litigation, especially considering that Plaintiffs waited nearly eight months to 8 seek leave to amend from the time they became aware of the documents. See Morongo 9 Band of Mission Indians, 893 F.2d at 1079 (affirming a trial court’s denial of leave to 10 amend in part because “[t]he new claims set forth in the amended complaint would have 11 greatly altered the nature of the litigation and would have required defendants to have 12 undertaken, at a late hour, an entirely new course of defense.”). 13 C. Discovery Related Arguments/Accusations 14 Plaintiffs argue that denying their “request would not only constitute a deviation 15 from well-settled legal authority but would reward [Peloton], who has withheld 16 information and documents pertinent to Plaintiffs’ negligence and negligence per se 17 contention since the inception of this litigation.” ECF No. 109-1 at 5. Plaintiffs further 18 contend that denying the request would also “reward [Peloton] for its flagrant disregard of 19 its duty to supplement its discovery responses and disclosures under Federal Rule of Civil 20 Procedure 26.” ECF No. 109-1 at 5. 21 The Court will not grant Plaintiffs’ Motion for Leave to Amend the Complaint based 22 on these arguments. The above issues should have been dealt with during discovery or set 23 forth in other motions. Here, Plaintiffs are asking the Court to grant leave to amend the 24 Complaint—not to compel the production of documents or issue sanctions. To be clear, 25 the Court does not condone any withholding of documents or violation of discovery 26 procedures, but that is not the issue briefed before the Court. The question is whether 27 Plaintiffs should be permitted leave to amend their Complaint based on documents that 28 came to light between January and March 2023. As noted above, the law is clear in that 1 negligence per se allegations must be set forth in a complaint if the theory is to be pursued. 2 As such, even if Peloton did withhold documents—though the Court makes no such 3 finding—that does not explain why Plaintiffs did not seek leave to amend their Complaint 4 upon learning of the documents in March 2023. Furthermore, as noted in this Court’s prior 5 Order, the CPSC documents are not necessarily excluded outright. Any admissible CPSC 6 documents relevant to Plaintiffs’ general negligence claim can be introduced at trial. 7 The factors analyzed weigh in favor of denying Plaintiffs’ Motion for Leave to 8 Amend their Complaint, primarily because of the likely prejudice to Peloton given the late 9 stage of this litigation, coupled with Plaintiffs lack of explanation for its eight-month delay 10 in seeking leave to amend. Accordingly, the Court exercises its broad discretion and 11 DENIES Plaintiffs’ Motion for Leave to Amend their Complaint. 12 V. CONCLUSION 13 For the reasons set forth above, Plaintiffs’ Motion for Leave to Amend their 14 Complaint is DENIED. 15 IT IS SO ORDERED. 16 DATED: December 19, 2023 HON. ROGER T. BENITEZ 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28