Nutrition Distribution, LLC v. Enhanced Athlete, Inc.

Filing 98

ORDER signed by District Judge Troy L. Nunley on 3/28/2019 GRANTING 72 Motion to Amend the Complaint; DENYING as MOOT 37 Motion to Dismiss ; DENYING as MOOT 38 Motion to Strike. (Washington, S)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NUTRITION DISTRIBUTION, LLC,

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Plaintiff,

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No. 2:17-cv-01491-TLN-KJN

v.
ENHANCED ATHLETE, INC.; SCOTTS
SUPPLEMENTS, LLC; SCOTT E.
CAVELL; CHARLES ANTHONY
HUGHES; ENHANCED RX;
ENHANCED CHEMICALS,

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ORDER GRANTING PLAINTIFF’S
MOTION FOR LEAVE TO AMEND FIRST
AMENDED COMPLAINT

Defendants.

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This matter is before the Court on Plaintiff Nutrition Distribution, LLC’s Motion for

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Leave to Amend First Amended Complaint. (ECF No. 72.) Defendants Enhanced Athlete, Inc.;

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Scotts Supplements, LLC; Scott E. Cavell; Charles Anthony Hughes; Enhanced RX; and

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Enhanced Chemicals (collectively, “Defendants”) express no opposition to the motion. (ECF No.

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78.) For the reasons set forth below, the Court GRANTS Plaintiff’s request for leave to file a

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Second Amended Complaint (ECF No. 72).

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I.

FACTUAL AND PROCEDURAL BACKGROUND

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Plaintiff filed a First Amended Complaint on January 8, 2018, bringing a single cause of

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action for false advertising pursuant to section 43 of the Lanham Act, codified at 15 U.S.C. §

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1125. (ECF No. 34.) On January 22, 2018, Defendant Enhanced Athlete, Inc. filed a motion to

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dismiss the First Amended Complaint (ECF No. 37), as well as a Motion to Strike Allegations on

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and Prayer For Injunctive Relief (ECF No. 38).

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Following a series of discovery disputes (see, e.g., ECF No. 41; ECF No. 63), Plaintiff

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filed the instant motion on April 26, 2018 (ECF No. 72). Plaintiff’s motion requests leave of the

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Court to file a Second Amended Complaint naming BHG Fit and AndroSARMs as defendants.

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(ECF No. 72 at 2.) On May 31, 2018, Defendant Enhanced Athlete, Inc. filed a Statement of

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Non-Opposition to Plaintiff’s Motion to File Second Amended Complaint (ECF No. 78).

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II.

STANDARD OF LAW

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Granting or denying leave to amend a complaint rests in the sound discretion of the

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district court. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996) (citing Rhoden v.

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United States, 55 F.3d 428, 432 (9th Cir. 1995)). It is well established that “a party may amend

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its pleading only with the opposing party’s written consent or the court’s leave,” and the “court

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should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2).

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“Courts may decline to grant leave to amend only if there is strong evidence of ‘undue

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delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies

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by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance

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of the amendment, [or] futility of amendment, etc.’” Sonoma Cty. Ass’n of Retired Emps. v.

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Sonoma Cty., 708 F.3d 1109, 1117 (9th Cir. 2013) (alteration in original) (quoting Foman v.

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Davis, 371 U.S. 178, 182 (1962)). When weighing these factors to determine whether to grant

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leave to amend, a district court must draw “all inferences in favor of granting the motion.”

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Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999) (citing DCD Programs, Ltd. v.

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Leighton, 833 F.2d 183, 186 (9th Cir. 1987)).

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Indeed, “[a]bsent prejudice, or a strong showing of any of the remaining Foman factors,
there exists a presumption under Rule 15(a) in favor of granting leave to amend.” Eminence
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Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (per curiam) (citing Lowrey v.

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Tex. A & M Univ. Sys., 117 F.3d 242, 245 (5th Cir. 1997)). The Ninth Circuit has “repeatedly

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stressed that the court must remain guided by ‘the underlying purpose of Rule 15 . . . to facilitate

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decision on the merits, rather than on the pleadings or technicalities.’” Lopez v. Smith, 203 F.3d

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1122, 1127 (9th Cir. 2000) (en banc) (ellipsis in original) (quoting Noll v. Carlson, 809 F.2d

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1446, 1448 (9th Cir. 1987)); see also Morongo Band of Mission Indians v. Rose, 893 F.2d 1074,

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1079 (9th Cir. 1990) (stating that granting leave to amend represents a policy that “is to be

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applied with extreme liberality”).

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III.

ANALYSIS
A.

Bad Faith

A motion to amend is made in bad faith where there is “evidence in the record which

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would indicate a wrongful motive” on the part of the litigant requesting leave to amend. DCD

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Programs, 833 F.2d at 187; see also Wizards of the Coast LLC v. Cryptozoic Entm’t LLC, 309

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F.R.D. 645, 651 (W.D. Wash. 2015) (“In the context of a motion for leave to amend, ‘bad faith’

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means acting with intent to deceive, harass, mislead, delay, or disrupt.” (citing Leon v. IDX Sys.

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Corp., 464 F.3d 951, 961 (9th Cir. 2006))). For instance, courts have found bad faith where leave

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to amend was sought as a ploy to destroy a federal district court’s diversity jurisdiction, see

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Sorosky v. Burroughs Corp., 826 F.2d 794, 805 (9th Cir. 1987), or where the same claims for

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which leave to amend was sought had recently been denied in a related action, see Bonin v.

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Vasquez, 807 F. Supp. 586, 587 (C.D. Cal. 1992).

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Here, Defendants have declined to bring to the Court’s attention any evidence of bad faith

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on Plaintiff’s part. (See ECF No. 78.) Accordingly, this factor weighs in favor of granting leave

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to amend. See Eminence Capital, 316 F.3d at 1052 (holding that, absent a “strong showing of any

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of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of granting

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leave to amend”).

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B.

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Undue Delay

In evaluating undue delay, the Court inquires “whether the moving party knew or should
have known the facts and theories raised by the amendment in the original pleading.”
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AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 953 (9th Cir. 2006) (quoting

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Jackson v. Bank of Haw., 902 F.2d 1385, 1388 (9th Cir. 1990)). “Undue delay by itself . . . is

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insufficient to justify denying a motion to amend.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir.

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1999). Indeed, denying leave to amend is reversible error “where the district court d[oes] not

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provide a contemporaneous specific finding of prejudice to the opposing party, bad faith by the

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moving party, or futility of the amendment.” Id.

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Here, Defendants have declined to bring to the Court’s attention any evidence of undue

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delay on Plaintiff’s part. (See ECF No. 78; ECF No. 72 at 6 (stating that Plaintiff discovered the

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existence of the defendants it wishes to add only six days prior to requesting leave to amend).)

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Accordingly, this factor weighs in favor of granting leave to amend. See Eminence Capital, 316

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F.3d at 1052.

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C.

Prejudice

Prejudice is the factor that weighs most heavily in the Court’s analysis of whether to grant

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leave to amend. Eminence Capital, 316 F.3d at 1052. “Prejudice results when an amendment

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would unnecessarily increase costs or would diminish the opposing party’s ability to respond to

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the amended pleading.” BNSF Ry. Co. v. San Joaquin Valley R.R. Co., No. 1:08-CV-01086-

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AWI, 2011 WL 3328398, at *2 (E.D. Cal. Aug. 2, 2011) (citing Morongo Band of Mission

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Indians, 893 F.2d at 1079). Courts have found proposed amendments prejudicial where leave to

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amend is requested as a relevant discovery deadline nears or has already passed. E.g., Zivkovic v.

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S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (“The additional causes of action [in the

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proposed amended complaint] would have required further discovery, which was to close five

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days after the motion to amend was filed.”); Lockheed Martin Corp. v. Network Sols., Inc., 194

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F.3d 980, 986 (9th Cir. 1999) (“A need to reopen discovery and therefore delay the proceedings

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supports a district court’s finding of prejudice from a delayed motion to amend the complaint.”).

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Prejudice to the non-moving party can also exist where leave to amend is requested shortly before

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trial. Singh v. City of Oakland, Cal., 295 F. App’x 118, 122 (9th Cir. 2008) (finding no abuse of

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discretion in denial by district court of plaintiff’s request to file Third Amended Complaint one

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month before trial).
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Here, Defendants have declined to bring to the Court’s attention any evidence of undue

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prejudice that would befall them if leave to amend is granted. (See ECF No. 78.) While

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discovery has begun (see, e.g., ECF No. 89; ECF No. 92; ECF No. 97), there is no evidence that

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Plaintiff’s request to add two new defendants is calculated to gain an unfair advantage related to

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the timeline of discovery, see Zivkovic, 302 F.3d at 1087 (holding that district court did not abuse

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its discretion in denying leave to amend five days prior to close of discovery). Accordingly, this

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factor weighs in favor of granting leave to amend. See Eminence Capital, 316 F.3d at 1052.

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D.

Futility

A proposed amendment is futile where “the pleading could not possibly be cured by the

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allegation of other facts.” Watison v. Carter, 668 F.3d 1108, 1117 (9th Cir. 2012) (quoting Doe

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v. United States, 58 F.3d 494, 497 (9th Cir. 1995)).

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Here, Defendants raise no argument that the proposed Second Amended Complaint is

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legally or factually insufficient to state a cause of action for relief under the Lanham Act. (See

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ECF No. 78.) Nor do Defendants attack the First Amended Complaint as a “pleading [that] could

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not possibly be cured by the allegation of other facts” to support its Lanham Act claim. Watison,

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668 F.3d at 1117. Indeed, Defendant Enhanced Athlete, Inc.’s motion to dismiss the First

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Amended Complaint focuses its fire on that pleading’s insufficient specificity rather than on any

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supposedly incurable substantive problem. (See ECF No. 37 at 2 (arguing that the First Amended

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Complaint should be dismissed because it “fail[s] to state with the required particularity which

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defendants made the alleged false advertising statements, or when, how or through what means

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the ‘defendants’ made the false statements”).) Accordingly, this factor weighs in favor of

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granting leave to amend. See Eminence Capital, 316 F.3d at 1052.

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IV.

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For the reasons set forth above, and because Defendants raise no opposition to granting

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Plaintiff’s request for leave to amend (see ECF No. 78), Plaintiff’s Motion for Leave to Amend

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First Amended Complaint (ECF No. 72) is GRANTED. Accordingly, Defendant Enhanced

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Athlete, Inc.’s motion to dismiss (ECF No. 37) and motion to strike (ECF No. 38) are DENIED

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as moot.

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CONCLUSION

IT IS SO ORDERED.
Dated: March 28, 2019

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Troy L. Nunley
United States District Judge

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