Bean et al v. Pearson Education Incorporated

Filing 125

ORDER granting Plaintiffs' 110 Motion for Leave to File Third Amended Complaint. Signed by Senior Judge Paul G Rosenblatt on 5/15/12.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Tom Bean, et al.,
Plaintiffs,

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v.

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Pearson Education, Inc.,

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Defendant.

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CV 11-8030-PCT-PGR
ORDER

Before the Court is Plaintiffs’ Motion for Leave to File Third Amended Complaint.
(Doc. 110.)

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Plaintiffs filed a complaint on February 25, 2011, alleging copyright infringement and

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fraud. (Doc. 1.) The Court granted in part Pearson’s motion to dismiss. (Doc. 46.) Plaintiffs

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filed an amended complaint on June 14, 2011, and a second amended complaint with the

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Court’s leave on August 16, 2011 (Docs. 84, 85).

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Plaintiffs seek permission to file a third amended complaint to add registration

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information for two images that were recently assigned registration numbers and to add 47

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new fraud claims based on information produced during discovery. Pearson opposes the

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motion to the extent Plaintiffs seek to raise additional fraud claims. (Doc. 115.)

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“The court should freely give leave when justice so requires.” Eminence Capital, LLC

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v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). This policy is applied with “extreme

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liberality.” Id. A court considers five factors to determine whether to grant leave to amend:

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bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether

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the plaintiff previously amended his complaint. See Nunes v. Ashcroft, 375 F.3d 805, 808

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(9th Cir. 2004). Prejudice to the opposing party is the “touchstone of the inquiry under rule

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15(a)” and “carries the greatest weight.” See Eminence Capital, 316 F.3d at 1052. Absent

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prejudice or a strong showing on other factors, a presumption exists under Rule 15(a) in

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favor of granting leave to amend. Id. Delay alone is insufficient to justify denial of leave to

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amend. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987).

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Pearson contends that Plaintiffs unreasonably delayed in seeking leave to file a third

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amended complaint and that it would suffer prejudice if leave were granted. These arguments

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are not persuasive.

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With respect to delay, Pearson argues that the additional facts on which Plaintiffs base

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their new fraud claims were available “months before they sought leave to amend.” (Doc.

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115 at 5.) Plaintiffs note, however, that although they possessed Pearson’s request letters and

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invoices and were given access to Pearson’s license files, they did not possess the forecasting

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documents necessary to support their claims that Pearson falsely represented its intended uses

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of Plaintiffs’ photographs. Pearson has provided these documents on a rolling basis from

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January 2012 to the present; according to Plaintiffs, Pearson’s disclosure of the forecasting

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documents is incomplete and ongoing. (See Doc. 110, Ex. A.) The Court therefore finds that

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Plaintiffs timely raised the new fraud claims upon receiving this recent discovery.

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Pearson also asserts that it will be unduly prejudiced by the filing of a third amended

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complaint because it will be denied an opportunity to conduct discovery on Plaintiffs’ new

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claims. The party opposing amendment bears the burden of showing prejudice. DCD

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Programs, 833 F.2d at 187. Pearson has not met this burden.

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Plaintiffs’ new claims will not alter the nature of the litigation or force Pearson to

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undertake a new defense. See Morongo Band of Mission Indians v. Rose, 893 F.2d 1074,

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1079 (9th Cir. 1990). Here, the nature of the litigation is not altered because Plaintiffs’ new

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fraud claims are substantially similar to the issues already in the suit; i.e., allegations that

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Pearson made false representations regarding the scope of its intended uses of Plaintiffs’

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photographs. See Robert Half Intern. Inc. v. Murray, No. 1:07-cv-00799-LJO-SMS, 2008
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WL 2610793, at *6 (E.D.Cal. 2008). Also, as Plaintiffs note, Pearson will not be overly

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burdened with respect to discovery because the information on which the new claims are

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based is contained in materials—request letters, license agreements, and forecasting

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documents—already in Pearson’s possession and which Pearson has disclosed or is in the

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process of disclosing.

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The remaining factors also favor leave to amend. Pearson does not argue, and the

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Court does not find, that leave is sought in bad faith or that amendment would be futile.

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Although Plaintiffs previously filed an amended complaint, the second amended complaint

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simply corrected an inadvertent drafting error. (See Doc. 84.)

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If Plaintiffs are granted leave to file a third amended complaint, Pearson requests a

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three-month extension of the discovery deadline, which had been set for April 24, 2012. (See

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Doc. 106.) On April 18, the Court held a telephone conference on the parties’ discovery

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disputes, and on May 10, Plaintiffs filed a motion to compel. (Doc. 118.) The Court will

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address these discovery issues in a forthcoming order.

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Accordingly,

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IT IS HEREBY ORDERED granting Plaintiffs’ Motion for Leave to File Third

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Amended Complaint (Doc. 110).
DATED this 15th day of May, 2012.

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