Musial v. Telesteps Incorporated et al

Filing 192

REDACTED ORDER denying 172 MOTION to Amend Complaint. Signed by Judge John J Tuchi on 7/25/16. (MAP)

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NOT FOR PUBLICATION

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Jon Musial,
Plaintiff,

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No. CV-14-01999-PHX-JJT

v.

ORDER
(REDACTED)

Telesteps Incorporated, et al.,
Defendants.

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At issue is Plaintiff Jon Musial’s Motion for Leave to Amend the Complaint (Doc.

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172, Mot. filed under seal), to which Defendants Regal Aluminum Products, Inc.

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(“Regal”), Dial Industrial Sales, Inc., and Telesteps, Inc. filed a Response (Doc. 176,

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Resp.) and Plaintiff filed a Reply (Doc. 183, Reply filed under seal). The Court has

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reviewed the parties’ briefs and finds this matter appropriate for decision without oral

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argument. See LRCiv 7.2(f). For the reasons that follow, the Court finds that Plaintiff’s

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proposed amendment is untimely and therefore denies Plaintiff’s Motion.

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The Court granted Plaintiff’s Motion to Seal his Motion and Reply because they

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contained certain confidential information. (Docs. 171, 182); see Ctr. for Auto Safety v.

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Chrysler Grp., LLC, 809 F.3d 1092, 1097 (9th Cir. 2016). Because the Court had to

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explicitly address these facts in this Order the Court enters the Order under seal. The

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Court is entering this Order on the public docket with the sealed portions redacted.

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I.

BACKGROUND

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Plaintiff sued Defendants after he sustained severe injuries when a ladder

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manufactured by Regal collapsed beneath him. (Doc. 1.) The original deadline for

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Plaintiff to amend his Complaint in the Court’s Scheduling Order was December 30,

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2014. (Doc. 32, Sch. Order.) Plaintiff filed a Motion to Amend Complaint to add a claim

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of punitive damages against Defendants Costco Wholesale Membership, Inc. and Costco

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Wholesale Corporation, Inc. (collectively “Costco”) on December 19, 2014. (Doc. 39.)

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After the parties requested an extension of time for further briefing, the Court extended

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the time for Plaintiff to file an Amended Complaint to February 20, 2015. (Doc. 50.) On

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that day, Plaintiff filed an Amended Motion to Amend Complaint, (Doc. 61), which the

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Court denied as futile because Plaintiff failed to state a basis for punitive damages against

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Costco. (Doc. 78.) The Court permitted Plaintiff to file another Motion to Amend and set

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a deadline of April 29, 2015. (Doc. 78.) Plaintiff then filed his Second Amended Motion

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to Amend Complaint on April 28, 2015, (Doc. 90), which the Court denied for the same

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reasons. (Doc. 101, June 2015 Order.) In its Order, the Court granted Plaintiff yet one

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more chance to amend his Complaint against Costco and instructed Plaintiff that if he

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wished to amend his Complaint beyond that scope, he must comply with Federal Rules of

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Civil Procedure 15 and 16. (June 2015 Order at 4.) Plaintiff settled his claims against

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Costco and now seeks to amend his Complaint again—this time against Regal—to add

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claims of punitive damages and consumer fraud. (Mot. at 1–2.)

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II.

ANALYSIS

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A.

Leave to Amend

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Plaintiff requests leave of Court to amend his Complaint 14 months past the

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Court’s imposed deadline. (Mot. at 1, 10.) Rule 16(b)(4) provides that the deadlines in the

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Scheduling Order “may be modified only for good cause and with the judge’s consent.”

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Fed. R. Civ. P. 16(b)(4). The Ninth Circuit Court of Appeals has stated, “A scheduling

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conference order is not a frivolous piece of paper, idly entered, which can be cavalierly

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disregarded without peril.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609

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(9th Cir. 1992) (internal quotation omitted). As to why the Court must enforce the Rule

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16 deadlines, the Ninth Circuit has explained:

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In these days of heavy caseloads, trial courts in both the federal and state
systems routinely set schedules and establish deadlines to foster the
efficient treatment and resolution of cases. Those efforts will be successful
only if the deadlines are taken seriously by the parties, and the best way to
encourage that is to enforce the deadlines. Parties must understand that they
will pay a price for failure to comply strictly with scheduling and other
orders, and that failure to do so may properly support severe sanctions and
exclusions of evidence.
Wong v. Regents of Univ. of Cal., 410 F.3d 1052, 1060 (9th Cir. 2005). Underlying all of
these concerns is Federal Rule of Civil Procedure 1, which states, “These rules . . . should
be construed and administered to secure the just, speedy, and inexpensive determination
of every action and proceeding.”
At the request of the parties, the Court has adjusted the original Scheduling Order
numerous times to this point, and Plaintiff has attempted to amend his Complaint on three
occasions. As the Court instructed Plaintiff in its Order denying his Second Motion to
Amend Complaint, he must comply with Rule 16 in any future attempt to amend his
Complaint. (June 2015 Order at 4.) And as the Court cautioned the parties in its original
Scheduling Order, deadlines are strictly enforced. (Sch. Order at 1.) Plaintiff’s deadline
for filing an amended Complaint was April 29, 2015. (Doc. 78.) Absent extraordinary
circumstances, and a showing of good cause, the Court will not consider another
amendment. See Rule 16(b)(4).
B.

Good Cause

Plaintiff alleges he has been diligent in discovery and has good cause to amend his
Complaint after the Scheduling Order deadline. (Mot. at 11.) “Rule 16(b)’s ‘good cause’
standard primarily considers the diligence of the party seeking the amendment.” Johnson,
975 F.2d at 609. “Good cause means scheduling deadlines cannot be met despite [a]
party’s diligence.” Id. (internal quotation omitted).
Plaintiff claims his Motion is based on new information obtained in discovery that
was not previously available. (Mot. at 2.) His alleged new information is from six
depositions taken during arbitration between Costco and Regal that he only received as a
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result of his recent settlement with Costco. (Mot. at 2.) According to Plaintiff, the

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information in the depositions confirms that Regal provided a “super ladder”

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manufactured with higher quality manufacturing methods and materials instead of the

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actual stock ladder to Costco’s testing lab. (Mot. at 2.) Plaintiff alleges the secret

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substitution of the super ladder led Costco to approve the sale of ladders that never

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actually passed the safety test. (Mot. at 15.) Plaintiff now claims this intentional

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substitution, as well as Regal’s continued misrepresentations and omissions of facts,

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support his new claims for punitive damages and consumer fraud. (Mot. at 19.)

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Plaintiff states he received the following new information as a result of his recent

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settlement with Costco: (1) Costco confirmed that it did not know of the substantive

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differences between the ladders submitted for testing versus the ladders for sale; (2)

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Costco’s testing company confirmed that substantive differences became obvious at the

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third test; (3) Regal stated it only manufactured one ladder and made no changes to the

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ladder’s specifications; (4) Regal provided only a partial explanation for the ladder

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differences; (5) Regal confirmed the factory could not have changed any ladder

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specifications on its own; and (6) Regal labeled the ladder as Canadian Standards

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Association compliant without producing evidence in support of actual compliance.

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(Reply at 4–5.)

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Upon review of the evidence, the Court does not see how any of the depositions

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Plaintiff cites offer new information or support claims for punitive damages or consumer

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fraud any more than Plaintiff’s previously discovered evidence. Plaintiff alleges that the

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new depositions “confirm” the ladder was substantively different. The testimony Plaintiff

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cites, however, only mentions extra rivets as a physical or substantive difference between

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the normal and alleged super ladder, and Plaintiff already had photos suggesting that

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difference.1 Waiting for a deposition to confirm what a picture already clearly shows is

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not good cause for failing to comply with the Court’s Scheduling Order.

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Exhibit M: photos showing the differences between the two ladders tested and an
internal Costco email stating this “speaks for itself.” (Mot., Ex. M.)
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Plaintiff’s other alleged new evidence is equally unpersuasive. Deposition

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testimony that only provided a partial explanation for the ladder differences or asserted

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that all ladders were made to the same specifications is nothing new. An email previously

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disclosed to Plaintiff contained these same statements.2 Plaintiff’s allegations that Regal

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withheld pertinent information or misrepresented material facts about the ladder was

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supported by evidence he already held. Similarly, the labeling issue Plaintiff cites was

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well-known.3 Moreover, Plaintiff’s new claims against Regal parallel his previous claims

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against Costco. He previously noted the possibility that Regal supplied a “super sample”

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for the quality test that was different from the ladders shipped to Costco for sale to the

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public. (Doc. 90 at 6.) Plaintiff also alleged that labels misrepresented the ladder’s

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compliance with safety standards and he relied on those labels in making his purchase.

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(Doc. 90 at 5.)

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Plaintiff argues that the delay in amending his Complaint was justified because he

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needed confirmation in order to have a factually sound basis for his claims, as Federal

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Rule of Civil Procedure 11 requires. (Reply at 5.) Plaintiff overstates Rule 11’s

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requirements. Rule 11 requires an attorney to seek credible information rather than

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proceed on mere suspicions. See Cal. Architectural Bldg. Prods., Inc. v. Franciscan

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Ceramics, Inc., 818 F.2d 1466, 1472 (9th Cir. 1987). Credible information may consist of

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either direct evidence or reasonable inferences from other evidence. Id.

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Here, Plaintiff had all of the information and direct evidence he needed long ago.

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Plaintiff could have alleged consumer fraud and sought punitive damages against Regal

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based on the evidence he possessed as of February 12, 2015.4 From that evidence,

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Exhibit K: Regal email to Costco claims the same product was tested each time,
and the rivets were simply to cover holes drilled to add non-corrosive rings. (Mot. Ex. K.)
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(See Mot. Ex. J (Regal states they test to American National Standards Institute
(“ANSI”), Occupational Safety & Health Administration (“OSHA”), and Canadian
Standards Association (“CSA”) standards and indicate this on the label); Mot. Ex. C
(Costco’s testing agency says there is no ANSI standard for this type of ladder); Doc. 90
at 4 (Plaintiff alleges the ladder’s labeling is misleading to consumers).)
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(See Mot., Ex. v (received via Plaintiff’s Second Supplemental Disclosure
Statement (Doc. 51)); Mot., Exs. c, e, f, g, j, k, m, o, p, q, r, s, t, w (received from
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Plaintiff could have made a reasonable inference that Regal submitted two different

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ladders to Costco in order to circumvent the safety test and receive authorization to sell

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its ladders in stores. Plaintiff’s new theory that Regal secretly submitted a super ladder to

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serve its own interests and consciously disregarded a substantial risk of injury to others,

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(Mot. at 10), would have been plausibly supported by the circumstantial evidence he

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previously possessed. Further, Plaintiff’s previous proposed Complaint against Costco for

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punitive damages and consumer fraud undermines his current assertion that he needed to

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wait for confirmation to proceed against Regal. Further corroboration of his theory was

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not necessary under Rule 11, and waiting for confirmation is not a basis for failure to file

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a timely amended Complaint.

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III.

CONCLUSION

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Plaintiff has failed to show good cause for failing to amend the Complaint within

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the time period specified in the Scheduling Order. (Sch. Order at 1.) Accordingly, the

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Court, in its discretion, denies Plaintiff’s request to amend the Complaint to add a claim

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for punitive damages and consumer fraud 14 months after the deadline set forth in the

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Scheduling Order.
IT IS THEREFORE ORDERED denying Plaintiff’s Motion for Leave to

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Amend the Complaint (Doc. 172).
Dated this 25th day of July, 2016.

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Honorable John J. Tuchi
United States District Judge

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Cc:

Charles Paul Franklin, Counsel for Plaintiff Mr. Musial
Colby Ryan Kanouse, Counsel for Plaintiff Mr. Musial
John Michael DeStefano, III, Counsel for Plaintiff Mr. Musial
Leonard W Aragon, Counsel for Plaintiff Mr. Musial
Robert B Carey, Counsel for Plaintiff Mr. Musial
Adam B Campbell, Counsel for Defendant Telesteps, Inc., Dial Industrial
Sales, Inc., and Regal Aluminum Products, Inc.

Plaintiff’s Third Supplemental Disclosure Statement according to Defendants and which
Plaintiff does not contest).)
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Teague Richard Lashnits Counsel for Defendant Telesteps, Inc., Dial Industrial
Sales, Inc., and Regal Aluminum Products, Inc.
Cassandra Victoria Meyer, Counsel for Defendant Costco Wholesale
Membership Inc. and Costco Wholesale Corporation Inc.
Richard Wayne Mear, Counsel for Defendant Costco Wholesale
Membership Inc. and Costco Wholesale Corporation Inc.

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