Tan v. Quick Box, LLC

District Court, S.D. California·Decided June 14, 2023·No. 3:20-cv-01082·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LEANNE TAN, Case No.: 20cv1082-LL-DDL

12 Plaintiff, ORDER: 13 v. (1) GRANTING IN PART AND 14 QUICK BOX, LLC, et al., DENYING IN PART 15 Defendants. PLAINTIFF’S MOTION FOR LEAVE TO AMEND THE FIRST 16 AMENDED COMPLAINT [ECF 17 CHAD BIGGINS, No. 240]; AND

18 Cross Claimant, (2) DENYING PLAINTIFF’S 19 v. MOTION TO SEAL [ECF No. 241]

20 LA PURA DEFENDANTS and JOHN [ECF Nos. 240, 241] DOES 1-10, as defined in Plaintiff’s First 21 Amended Complaint,

22 Cross Defendants. 23 24 Before the Court is Plaintiff Leanne Tan’s (“Plaintiff”) Motion for Leave to Amend 25 the First Amended Complaint (“Motion to Amend”) and Motion for Leave to File 26 Documents Under Seal (“Motion to Seal”). ECF Nos. 240 (“Mot. to Amend”), 241 (“Mot. 27 to Seal”). For the reasons stated below, Plaintiff’s Motion to Amend is GRANTED IN 28 PART and DENIED IN PART and the Motion to Seal is DENIED. 1 I. BACKGROUND 2 A. Factual Background 3 On June 12, 2020, Plaintiff filed a putative consumer fraud class action against 4 alleged operators of an online “free trial” scam. See ECF No. 1. Plaintiff alleges Defendants 5 fraudulently lured her, and other consumers like her, into purchasing a monthly installment 6 of La Pura skin care products by offering “free samples” of the products. See ECF No. 89, 7 First Amended Complaint (“FAC”) ¶¶ 8–12. Despite assurances Plaintiff would only have 8 to pay the nominal costs of shipping the sample, Plaintiff alleges that Defendants charged 9 her the full price for the product, along with ongoing installment payments. See id. ¶¶ 110– 10 121. 11 Plaintiff filed the action against the La Pura Defendants (except for Rocket 12 Management Group, LLC (“Rocket”) and Kiet Lieu (“Lieu”)), who allegedly operated the 13 deceptive offer; Quick Box, LLC, Quick Holdings, LLC, Stephen Adele, Chad Biggins, 14 and James Martel (the “Quick Box Defendants”), who allegedly facilitated the offer 15 through fulfillment services and other services; and Konnektive Corporation, Martorano 16 Holdings, LLC, Konnektive Rewards, LLC, Matthew Martorano, and Katheryn Martorano 17 (the “Konnektive Defendants”), who allegedly facilitated the offer through the provision 18 of software and other services. See id. ¶¶ 14–89. 19 B. Procedural Background 20 On January 7, 2021, Plaintiff filed the FAC. See FAC. Each of the defendants moved 21 to dismiss the FAC, and on April 7, 2021, the Court denied each of their motions in 22 significant part. See ECF Nos. 94, 98, 99, 130. The La Pura Defendants (except Rocket and 23 Lieu), Quick Box Defendants, and Konnektive Defendants filed answers to the FAC. ECF 24 Nos. 131, 137–141, 145, 147–149. The Quick Box Defendants and the Konnektive 25 Defendants also asserted crossclaims and third-party claims against the La Pura Defendants 26 (including Rocket and Lieu). ECF Nos. 136–142, 145, 147–149. The La Pura Defendants 27 filed answers to the crossclaims and third-party claims. ECF Nos. 170–171, 175–184. 28 1 On June 30, 2021, Magistrate Judge Daniel E. Butcher issued a scheduling order, 2 setting a deadline of August 30, 2021 to amend pleadings or join other parties. See ECF 3 No. 177. The scheduling order also set deadlines for class certification and fact discovery. 4 See id. Per a joint stipulation by the parties, the deadline to file any motion to amend 5 pleadings or join other parties was extended to November 1, 2021. ECF No. 188. The 6 Parties then entered discovery.1 7 On October 29, 2021, the case was stayed pending relief of an automatic stay 8 imposed in a related bankruptcy action. ECF No. 194. On March 21, 2022, the stay was 9 lifted. ECF No. 200. Shortly thereafter, Magistrate Judge Daniel E. Butcher issued a new 10 scheduling order resetting the date for all discovery related to the motion for class 11 certification to be completed by September 16, 2022, and for the motion for class 12 certification to be filed by October 14, 2022. See ECF No. 213. The scheduling order, 13 however, did not reset the deadline to amend pleadings or join other parties. See id. 14 Discovery resumed, and the Court observes that the discovery phase of this litigation 15 has been somewhat contentious with both sides filing several discovery-related motions.2 16 See Mot. to Amend at 7–19 (Plaintiff details several discovery disputes between the 17 parties); see generally Oppo. 18 On October 14, 2022, Plaintiff filed a motion for class certification. ECF No. 229. 19 On November 4, 2022, Plaintiff filed the instant Motion to Amend, including the proposed 20

21 1 During this time, Plaintiff first issued a notice for the deposition of Lieu on July 16, 2021. 22 See ECF No. 249-1, Ex. 1. Lieu’s deposition ultimately commenced on May 31, 2022 and 23 continued on July 14, 2022. See id. at Exs. 2, 3.

24 2 Plaintiff filed a motion to compel production of confidentiality agreements or non- 25 disclosure agreements on November 25, 2022. ECF No. 250. In addition, on January 4, 2023, the Konnektive Defendants moved for evidentiary sanctions against Plaintiff, 26 reporting that Plaintiff had spoliated her cell phone. See ECF No. 254. The Quick Box 27 Defendants joined the Konnektive Defendants’ motion. ECF No. 255. Plaintiff also recently moved for terminating sanctions against the Quick Box Defendants and moved to 28 1 and red-lined Second Amended Complaint (“SAC”), seeking permission to add additional 2 parties Lieu, Phong Ngo (“Ngo”), Marc Evans (“Evans”), and Rocket as defendants, and 3 “reflect a post-suit name change by Konnektive Corporation to Converging Resources 4 Corporation.” See Mot. to Amend at 5. 5 In response to the filing of the Motion to Amend, the Quick Box Defendants and 6 Konnective Defendants (collectively “Defendants”) filed an ex parte application to extend 7 the Court’s class certification briefing schedule pending the resolution of the Plaintiff’s 8 Motion to Amend. See ECF No. 244. On November 23, 2022, the Court granted the ex 9 parte application to set the class certification briefing schedule after the Court rules on 10 Plaintiff’s pending Motion to Amend. See ECF No. 248. On the same day, Defendants filed 11 an Opposition (“Opposition”) to the Motion to Amend. ECF No. 249. Plaintiff filed a Reply 12 (“Reply”) to the Motion to Amend on December 1, 2022. ECF No. 251. 13 II. LEGAL STANDARD 14 If a scheduling order's deadline for amendment to the pleadings has passed, a party 15 seeking leave to amend must first satisfy the “good cause” standard of Federal Rule of 16 Civil Procedure 16(b)(4), which states that “[a] schedule may be modified only for good 17 cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4). “Good cause” is a non- 18 rigorous standard that has been construed broadly. Ahanchian v. Xenon Pictures, Inc., 624 19 F.3d 1253, 1259 (9th Cir. 2010). Rule 16(b) “primarily considers the diligence of the party 20 seeking the amendment.” In re Western States Wholesale Natural Gas Antitrust Litig., 715 21 F.3d 716, 737 (9th Cir. 2013) (citation omitted). “[T]he focus of the Rule 16(b) inquiry is 22 upon the moving party's reasons for seeking modification . . . if that party was not diligent, 23 the inquiry should end.” Id. (internal quotation marks and citation omitted). 24 If the moving party successfully shows good cause exists under Rule 16, the moving 25 party must next demonstrate the amendment is proper under Rule 15(a). Under Rule 15(a), 26 when the time has passed for amendment as a matter of course, “a party may amend its 27 pleading only with the opposing party's written consent or the court's leave.” Fed. R. Civ. 28 P. 15(a). “The court should freely give leave when justice so requires.” Id.

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