1 WO 2 NOT FOR PUBLICATION 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Bill Stokes, et al., No. CV-15-02363-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Total Transit Incorporated, et al.,
13 Defendants. 14 15 This matter is before the Court on Plaintiffs’ Motion to Amend their Complaint and 16 file a Third Amended Complaint (Doc. 256). The matter is fully briefed. 17 I. Background 18 This Motion was filed as a result of a status conference the Court held on June 25, 19 2019, the date originally set aside for the Final Pretrial Conference. The parties filed a 20 Status Report on May 5, 2019, where it became clear to the Court that this case was not 21 ready for trial.1 Plaintiffs filed their Complaint in November 2015. (Doc. 1). Fact 22 discovery closed on December 9, 2016. (Doc. 99). Notwithstanding this case being nearly 23 four years old, Plaintiffs now seek leave to amend their Complaint for three reasons: to add 24 National Express Transit Corporation (“NExT”) as a defendant, to add a request for 25 compensatory damages, and to add class relief pursuant to Rule 23(b)(3. (Doc. 256).
26 1 The Status Report requested (1) referral to a Magistrate Judge for a settlement conference, (2) a request from Plaintiffs to amend their Complaint to add NExT as a Defendant, (3) a 27 request from Defendants to supplement discovery responses, (4) a statement from Plaintiffs that they were seeking Defendants to stipulate to class certification, and (5) a statement 28 from the parties that they wish to stipulate to the facts in this matter and have the Court reconsider its Order on the parties’ Cross-Motions for Summary Judgment. (Doc. 217). 1 Defendants oppose the requests. 2 II. Plaintiffs’ Motion to Amend 3 At the Status Conference, the Court stated that it would allow Plaintiffs to file a 4 Motion for Leave to file an amended complaint with respect to the addition of NExT as a 5 defendant and with respect to their class allegation. (Doc. 255). Plaintiffs did not raise 6 compensatory damages at the hearing. 7 A. Legal Standards 8 Plaintiffs erroneously argue that Rule 15’s liberal amendment procedure applies to 9 the Motion. However, Plaintiffs request leave to amend the Complaint well after the 10 expiration of the Rule 16 Scheduling Order deadline for doing so, and thus Plaintiffs must 11 “satisfy the more stringent ‘good cause’ showing required under Rule 16.” 12 AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 952 (9th Cir. 2006) 13 (emphasis in original); see also Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 14 (9th Cir. 1992) (“Unlike Rule 15(a)’s liberal amendment policy which focuses on the bad 15 faith of the party seeking to interpose an amendment and the prejudice to the opposing 16 party, Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party 17 seeking the amendment.”). Rule 16(b)(4) expressly states that “[a] schedule may be 18 modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). 19 “The district court is given broad discretion in supervising the pretrial phase of litigation, 20 and its decisions regarding the preclusive effect of a pretrial order . . . will not be disturbed 21 unless they evidence a clear abuse of discretion.” C.F. ex rel. Farnan v. Capistrano Unified 22 Sch. Dist., 654 F.3d 975, 984 (9th Cir. 2011), cert. denied sub nom. C.F. v. Corbett, 23 565 U.S. 1200 (2012) (citations and internal quotation marks omitted) (omission in 24 original). Accordingly, the Court will first evaluate Plaintiffs’ Motion under Rule 16, and 25 then, if necessary, under Rule 15(a). See Coleman v. Quaker Oats Co., 232 F.3d 1271, 26 1295 (9th Cir. 2000) (finding plaintiffs’ failure to show diligence should end the inquiry). 27 In the context of a request to modify a scheduling order, “good cause” means the 28 scheduling order’s deadlines cannot be met despite the party’s diligence. Johnson, 975 1 F.2d at 609 (citation omitted). “Although the existence or degree of prejudice to the party 2 opposing the modification might supply additional reasons to deny a motion, the focus of 3 the inquiry is upon the moving party’s reasons for seeking modification.” Id. “If the party 4 seeking the modification was not diligent, the inquiry should end and the motion to modify 5 should not be granted.” Zivkovic v. S. California Edison Co., 302 F.3d 1080, 1087 6 (9th Cir. 2002) (citation and internal quotation marks omitted). 7 Federal courts in Arizona and within the Ninth Circuit “have articulated and 8 undertaken [a] three-step inquiry in resolving the question of diligence in the context of 9 determining good cause under Rule 16[.]” Morgal v. Maricopa County Bd. of Sup’rs, 284 10 F.R.D. 452, 460 (D. Ariz. June 6, 2012). Under this three-step inquiry: 11 [T]o demonstrate diligence under Rule 16’s “good cause” standard, the movant may be required to show the following: (1) that [she] was diligent in 12 assisting the [c]ourt in creating a workable Rule 16 order; (2) that [her] 13 noncompliance with a Rule 16 deadline occurred or will occur, notwithstanding [her] diligent efforts to comply, because of the development 14 of matters which could not have been reasonably foreseen or anticipated at 15 the time of the Rule 16 scheduling conference; and (3) that [she] was diligent in seeking amendment of the Rule 16 order, once it became apparent that 16 [she] could not comply with the order. 17 Morgal, 284 F.R.D. at 460 (quoting Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D. 18 Cal.1999)) (other citations omitted). 19 B. Analysis 20 Plaintiffs seek to amend the Complaint for three distinct reasons. The Court will 21 analyze each in turn. 22 1. Compensatory Damages and Rule 23(b)(3) Relief 23 Plaintiffs argue that their proposed amendments would not prejudice Defendants. 24 Plaintiffs’ arguments miss the point. First, as discussed above, the focus of the Rule 16(b) 25 inquiry is not on the prejudicial effects on the responding party, rather it is on the movant’s 26 diligence in seeking leave to amend. Here, the Court finds that this third attempt to amend 27 the complaint to seek compensatory damages on behalf of the class and to add relief 28 pursuant to Rule 23(b)(3) cannot be shown to have been diligently sought. In fact, 1 Plaintiffs have known all along that the purported class members were adversely affected 2 by the $10 Van Fee. However, Plaintiffs made a strategic choice almost four years ago to 3 only seek declaratory and injunctive relief. They have continued in this fashion throughout 4 the entire case, through the close of discovery two years ago, and through briefing on their 5 dispositive motions. The fact that Plaintiffs amended their complaint on two other 6 occasions and chose not to add compensatory damages or Rule 23(b)(3) relief at those 7 times supports this finding. That Plaintiffs seek to add compensatory damages for the first 8 time after the scheduled Final Pretrial Conference is not diligent. Moreover, Plaintiffs do 9 not provide any evidence of their diligence in attempting to amend the Complaint to include 10 compensatory damages or Rule 23(b)(3) relief.
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1 WO 2 NOT FOR PUBLICATION 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Bill Stokes, et al., No. CV-15-02363-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Total Transit Incorporated, et al.,
13 Defendants. 14 15 This matter is before the Court on Plaintiffs’ Motion to Amend their Complaint and 16 file a Third Amended Complaint (Doc. 256). The matter is fully briefed. 17 I. Background 18 This Motion was filed as a result of a status conference the Court held on June 25, 19 2019, the date originally set aside for the Final Pretrial Conference. The parties filed a 20 Status Report on May 5, 2019, where it became clear to the Court that this case was not 21 ready for trial.1 Plaintiffs filed their Complaint in November 2015. (Doc. 1). Fact 22 discovery closed on December 9, 2016. (Doc. 99). Notwithstanding this case being nearly 23 four years old, Plaintiffs now seek leave to amend their Complaint for three reasons: to add 24 National Express Transit Corporation (“NExT”) as a defendant, to add a request for 25 compensatory damages, and to add class relief pursuant to Rule 23(b)(3. (Doc. 256).
26 1 The Status Report requested (1) referral to a Magistrate Judge for a settlement conference, (2) a request from Plaintiffs to amend their Complaint to add NExT as a Defendant, (3) a 27 request from Defendants to supplement discovery responses, (4) a statement from Plaintiffs that they were seeking Defendants to stipulate to class certification, and (5) a statement 28 from the parties that they wish to stipulate to the facts in this matter and have the Court reconsider its Order on the parties’ Cross-Motions for Summary Judgment. (Doc. 217). 1 Defendants oppose the requests. 2 II. Plaintiffs’ Motion to Amend 3 At the Status Conference, the Court stated that it would allow Plaintiffs to file a 4 Motion for Leave to file an amended complaint with respect to the addition of NExT as a 5 defendant and with respect to their class allegation. (Doc. 255). Plaintiffs did not raise 6 compensatory damages at the hearing. 7 A. Legal Standards 8 Plaintiffs erroneously argue that Rule 15’s liberal amendment procedure applies to 9 the Motion. However, Plaintiffs request leave to amend the Complaint well after the 10 expiration of the Rule 16 Scheduling Order deadline for doing so, and thus Plaintiffs must 11 “satisfy the more stringent ‘good cause’ showing required under Rule 16.” 12 AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 952 (9th Cir. 2006) 13 (emphasis in original); see also Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 14 (9th Cir. 1992) (“Unlike Rule 15(a)’s liberal amendment policy which focuses on the bad 15 faith of the party seeking to interpose an amendment and the prejudice to the opposing 16 party, Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party 17 seeking the amendment.”). Rule 16(b)(4) expressly states that “[a] schedule may be 18 modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). 19 “The district court is given broad discretion in supervising the pretrial phase of litigation, 20 and its decisions regarding the preclusive effect of a pretrial order . . . will not be disturbed 21 unless they evidence a clear abuse of discretion.” C.F. ex rel. Farnan v. Capistrano Unified 22 Sch. Dist., 654 F.3d 975, 984 (9th Cir. 2011), cert. denied sub nom. C.F. v. Corbett, 23 565 U.S. 1200 (2012) (citations and internal quotation marks omitted) (omission in 24 original). Accordingly, the Court will first evaluate Plaintiffs’ Motion under Rule 16, and 25 then, if necessary, under Rule 15(a). See Coleman v. Quaker Oats Co., 232 F.3d 1271, 26 1295 (9th Cir. 2000) (finding plaintiffs’ failure to show diligence should end the inquiry). 27 In the context of a request to modify a scheduling order, “good cause” means the 28 scheduling order’s deadlines cannot be met despite the party’s diligence. Johnson, 975 1 F.2d at 609 (citation omitted). “Although the existence or degree of prejudice to the party 2 opposing the modification might supply additional reasons to deny a motion, the focus of 3 the inquiry is upon the moving party’s reasons for seeking modification.” Id. “If the party 4 seeking the modification was not diligent, the inquiry should end and the motion to modify 5 should not be granted.” Zivkovic v. S. California Edison Co., 302 F.3d 1080, 1087 6 (9th Cir. 2002) (citation and internal quotation marks omitted). 7 Federal courts in Arizona and within the Ninth Circuit “have articulated and 8 undertaken [a] three-step inquiry in resolving the question of diligence in the context of 9 determining good cause under Rule 16[.]” Morgal v. Maricopa County Bd. of Sup’rs, 284 10 F.R.D. 452, 460 (D. Ariz. June 6, 2012). Under this three-step inquiry: 11 [T]o demonstrate diligence under Rule 16’s “good cause” standard, the movant may be required to show the following: (1) that [she] was diligent in 12 assisting the [c]ourt in creating a workable Rule 16 order; (2) that [her] 13 noncompliance with a Rule 16 deadline occurred or will occur, notwithstanding [her] diligent efforts to comply, because of the development 14 of matters which could not have been reasonably foreseen or anticipated at 15 the time of the Rule 16 scheduling conference; and (3) that [she] was diligent in seeking amendment of the Rule 16 order, once it became apparent that 16 [she] could not comply with the order. 17 Morgal, 284 F.R.D. at 460 (quoting Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D. 18 Cal.1999)) (other citations omitted). 19 B. Analysis 20 Plaintiffs seek to amend the Complaint for three distinct reasons. The Court will 21 analyze each in turn. 22 1. Compensatory Damages and Rule 23(b)(3) Relief 23 Plaintiffs argue that their proposed amendments would not prejudice Defendants. 24 Plaintiffs’ arguments miss the point. First, as discussed above, the focus of the Rule 16(b) 25 inquiry is not on the prejudicial effects on the responding party, rather it is on the movant’s 26 diligence in seeking leave to amend. Here, the Court finds that this third attempt to amend 27 the complaint to seek compensatory damages on behalf of the class and to add relief 28 pursuant to Rule 23(b)(3) cannot be shown to have been diligently sought. In fact, 1 Plaintiffs have known all along that the purported class members were adversely affected 2 by the $10 Van Fee. However, Plaintiffs made a strategic choice almost four years ago to 3 only seek declaratory and injunctive relief. They have continued in this fashion throughout 4 the entire case, through the close of discovery two years ago, and through briefing on their 5 dispositive motions. The fact that Plaintiffs amended their complaint on two other 6 occasions and chose not to add compensatory damages or Rule 23(b)(3) relief at those 7 times supports this finding. That Plaintiffs seek to add compensatory damages for the first 8 time after the scheduled Final Pretrial Conference is not diligent. Moreover, Plaintiffs do 9 not provide any evidence of their diligence in attempting to amend the Complaint to include 10 compensatory damages or Rule 23(b)(3) relief. 11 While Plaintiffs attempt to characterize these additions as ones that would not cause 12 delay, not involve prejudice to Defendants, and not result in additional discovery, the Court 13 finds that the delay caused by these additions would be extreme as it would almost certainly 14 involve lengthy additional discovery. The fact that a Final Pretrial Conference was set in 15 this matter for the purposes of setting a jury trial date illustrates the lateness of their request. 16 Plaintiffs have not provided evidence establishing diligence in attempting to amend the 17 Complaint as to compensatory damages or Rule 23(b)(3) relief. The Court finds Plaintiffs 18 have not met their burden of showing good cause to add compensatory damages on behalf 19 of the class under Rule 16 and the inquiry will end here. See Morgal, 284 F.R.D. at 463. 20 However, the Court will allow the remaining originally named Plaintiffs, Bill Stokes 21 and Donna Powers, to seek compensatory damages on behalf of themselves, if any, as 22 identifiable Plaintiffs who have been in this case since its inception. 23 /// 24 /// 25 2. Addition of NExT 26 As to the addition of NExT as a Defendant in this matter, the Court finds that good 27 cause exists, and that Plaintiffs were diligent in seeking to add NExT as a Defendant. 28 Defendants filed a new Corporate Disclosure Statement on April 29, 2019, indicating that 1 NExT was now the 100% owner of Defendant TTE. (Doc. 216). Plaintiffs promptly raised 2 their intent to request leave to add NExT as a Defendant. (Doc. 217). At that time, the 3 parties were contemplating whether to stipulate to the addition of NExT. (Id.) 4 Plaintiffs argue that NExT, as a successor in interest, should be fully prepared to 5 litigate the issues in this case, because the theory and operative facts of the case remain the 6 same. (Doc. 256 at 8). While that may not have been the case if the Court had allowed the 7 amendments desired by Plaintiffs, and although the case law that Plaintiffs cited on this 8 topic were analyzed under Rule 15, the theory and operative facts will remain the same 9 based on the Court’s ruling herein. Because the claims remain unchanged, seeking only 10 declaratory and injunctive relief, the Court finds that neither party needs to complete 11 additional discovery in this matter as it relates to the addition of NExT to the case. 12 Therefore, the Court will grant the Plaintiffs’ Motion to Amend, in part, with respect 13 to adding NExT as a Defendant in this matter. 14 3. Class Certification 15 Plaintiffs state that they “plan to move to certify their proposed Rule (b)(3) class as 16 soon as practicable, no deadline for doing so has been set.” (Doc. 256). Having ruled on 17 the Motion to Amend the Complaint, the Court will allow Plaintiffs until August 30, 2019 18 to file a motion to certify the class in this case, if they wish to do so. Defendants will have 19 the oppourtunity to respond pursuant to the deadlines in the Local Rules. 20 Accordingly, 21 IT IS HEREBY ORDERED that Plaintiffs’ Motion to Amend (Doc. 256) is 22 granted in part as to the addition of NExT and to add compensatory damages claims on 23 behalf of Bill Stokes and Donna Powers individually; and denied in part as to the addition 24 of compensatory damages on behalf of the class and Rule 23(b)(3) relief. 25 IT IS FURTHER ORDERED that Plaintiffs shall file their Third Amended 26 Complaint, as allowed herein, by August 15, 2019. 27 … 28 … 1 IT IS FURTHER ORDERED that if Plaintiffs wish to move to certify the class in || this case, they shall do so by August 30, 2019. 3 Dated this 8th day of August, 2019. 4
6 énorable’Diang/. Hungetewa 7 United States District Judge 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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