United Tactical Systems, LLC v. Real Action Paintball, Inc. et al

Filing 444

ORDER by Judge Maria-Elena James denying 410 Motion for Leave to File. (mejlc2S, COURT STAFF) (Filed on 6/26/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 UNITED TACTICAL SYSTEMS, LLC, 7 Case No. 14-cv-04050-MEJ Plaintiff, 8 v. 9 REAL ACTION PAINTBALL, INC., et al., 10 Defendants. ORDER RE: RENEWED MOTION FOR LEAVE TO FILE FIRST AMENDED ANSWER AND AFFIRMATIVE DEFENSES Re: Dkt. No. 410 United States District Court Northern District of California 11 12 INTRODUCTION 13 14 The Court has twice denied Defendants and Counterclaimants Real Action Paintball, Inc. 15 and K.T. Tran‟s (together, “Real Action”) requests to file a first amended answer and affirmative 16 defenses. First First Am. Answer (“FAA”) Order (“First FAA Order”), Dkt. No. 277; Second 17 FAA Order, Dkt. No. 396. Real Action has filed a second Renewed Motion for Leave to File a 18 First Amended Answer and Affirmative Defenses pursuant to Federal Rules of Civil Procedure 19 15(a) and 16. Mot., Dkt. No. 410. Plaintiff United Tactical Systems, LLC (“UTS”) and related 20 Counter-Defendants1 (together with UTS, “Counter-Defendants”) filed an Opposition (Dkt. No. 21 422) and Real Action filed a Reply (Dkt. No. 439). Having considered the parties‟ positions, the 22 relevant legal authority, and the record in this case, the Court DENIES the Motion for the 23 following reasons.2 24 25 26 27 28 1 Counter-Defendants are Advanced Tactical Ordnance Systems, LLC; Gary Gibson; Perfect Circle Projectiles LLC; Tactical Air Games, Inc.; Tyler Tiberius; United Tactical Systems Holdings, LLC; and United Tactical Systems Intermediate Holdings, LLC. 2 Although Real Action‟s Motion lists a hearing date of June 29, 2017, Real Action did not properly calendar the hearing. In any event, the Court finds this matter suitable for disposition without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7-1(b). BACKGROUND 1 2 3 4 The Court‟s prior Orders set forth a detailed factual and procedural history of this action. See Order re: Mots. for Summ. J. (“MSJ Order”), Dkt. No. 348; Second FAA Order. As is relevant to this Motion, on August 26, 2016, the Court denied Real Action‟s first 5 Motion for Leave to File a First Amended Answer. See First FAA Order at 8-9; First FAA Mot., 6 Dkt. No. 247. Real Action sought to assert two new affirmative defenses based on “release” and 7 on statute of limitations grounds. Id. at 8; First Proposed FAA at 34-35, Dkt. No. 247-1. The 8 Court found Real Action failed to provide an adequate factual basis for its defenses, which 9 precluded the Court from “weigh[ing] the factors associated with determining whether leave should be granted.” See First FAA Order at 8-9. In addition, the Court found Real Action failed 11 United States District Court Northern District of California 10 to provide a basis for why justice required the amendment. Id. at 9. The Court accordingly denied 12 Real Action‟s Motion without prejudice. Id. 13 Five months later, Real Action again moved for leave to amend its Answer to assert 14 affirmative defenses based on a release and on statute of limitations grounds. Second FAA Mot., 15 Dkt. No. 335; see Second Proposed FAA at 34-35, Dkt. No. 355-1. The Court denied this Motion 16 as well. See Second FAA Order. The Court found Real Action had unduly delayed in seeking 17 amendment and that UTS would be prejudiced if Real Action were permitted to amend its 18 Answer. Id. at 4-8. The Court also noted Real Action had filed its Motion long after the July 14, 19 2016 deadline to amend the pleadings. Id. at 9 (“Whereas Real Action first moved to amend prior 20 to the amended pleadings deadline, it filed the [second] Motion approximately six months after the 21 deadline.”); see Case Management Order, Dkt. No. 218. Real Action had not, however, complied 22 with Civil Local Rule 16-2(d) which, along with Federal Rule of Civil Procedure 16, sets forth the 23 requirements for seeking relief from a case management order. Second FAA Order at 9-10. The 24 Court found that this, coupled with the undue delay and prejudice, warranted denial of the Motion. 25 Id. at 10. 26 27 Now for a third time, Real Action seeks leave to amend its Answer to assert two affirmative defenses: 28 2 1 2 3 4 5 6 7 8 SIXTEENTH AFFIRMATIVE DEFENSE Plaintiff‟s claims are barred because Plaintiff‟s predecessor-ininterest, Advanced Tactical Ordnance Systems, LLC released Real Action Paintball, Inc. from all claims it had against it by operation of a certain Confidential Settlement Agreement and Mutual General Release (“Settlement Agreement”) that released a partner of Real Action, Conrad Sun. Because Plaintiff is asserting claims that it alleges to have acquired from Advanced Tactical Ordnance Systems, LLC, those claims do not exist because Advanced Tactical Ordnance Systems, LLC released Real Action. Because Plaintiff‟s claims against defendant K.T. Tran are predicated on him being vicariously liable for claims against Real Action Paintball, Inc. those claims are also subject to this defense of release. 11 SEVENTEENTH AFFIRMATIVE DEFENSE One or more of Plaintiff‟s claims is barred by the applicable statute of limitations, including the two-year statute of limitations for claims under the Lanham Act, because the operative facts pleaded in the Complaint occurred more than two years before ATO and UTS filed their complaints against Real Action Paintball, Inc. and K.T. Tran. 12 Third Proposed FAA at 34-35, Dkt. No. 410-1 (emphasis in original). These proposed affirmative 13 defenses are largely the same as the affirmative defenses Real Action sought to assert twice 14 before. See First Proposed FAA at 34-35; Second Proposed FAA at 34-35. 9 United States District Court Northern District of California 10 15 16 DISCUSSION UTS characterizes Real Action‟s Motion as “simply a restatement of the evidence and 17 arguments that formed the basis of its previous „renewed‟ motion, with some additional arguments 18 asserted for the first time in response to the Court‟s recent ruling denying its motion to amend.” 19 Opp‟n at 7. UTS argues the Motion is in fact a motion for reconsideration, which should be 20 denied for Real Action‟s failure to abide by Civil Local Rule 7-9‟s requirement that Real Action 21 seek leave of Court to file the motion. Id.; see Civ. L.R. 79-(a) (“No party may notice a motion 22 for reconsideration without first obtaining leave of Court to file the motion.”). Real Action 23 disputes the characterization of its Motion as one for reconsideration because “Real Action has 24 never argued granting leave is supported by Rule 16, so the [C]ourt has never considered these 25 arguments.” Reply at 4. As such, Real Action argues “[t]here has not been a ruling on these 26 arguments, so there is no such ruling to be „reconsidered.‟” Id. 27 Real Action offers no credible argument as to why it did not discuss Federal Rule of Civil 28 Procedure 16 in its Second FAA Motion. Real Action explains it “mistakenly believed the Court 3 1 had authorized the filing of a renewed motion for leave to amend that need only comply with the 2 relatively low threshold of Rule 15(a)(2)[.]” Mot. at 7. Real Action‟s counsel thus “mistakenly 3 concluded” that the Court‟s First FAA Order “trumped an obligation to comply with Rule 16.” Id. This assertion is unsupported by declaration. Nor is it plausible. While the Court denied 4 5 the First FAA Motion without prejudice, the Court gave no indication that “only” Federal Rule of 6 Civil Procedure 15 would apply to any future motion for leave to file an amended answer. See 7 First FAA Order. Given that Real Action was aware of the amended pleadings deadline and 8 because it filed its Second FAA Motion after it had expired, it should have known that Federal 9 Rule of Civil Procedure 16 would apply. See Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000) (“Generally, Federal Rule of Civil Procedure 15(a) liberally allows for 11 United States District Court Northern District of California 10 amendments to pleadings. In this case, however, the district court correctly found that it should 12 address the issue under Federal Rule of Civil Procedure 16 because it had filed a pretrial 13 scheduling order that established a timetable for amending the pleadings, and the deadline had 14 expired before [the plaintiffs] moved to amend.”). 15 Real Action offers no other explanation as to why it did not address Federal Rule of Civil 16 Procedure 16 in its Second FAA Motion, or why the Court should consider its Rule 16 arguments 17 now. The Court finds the instant Motion is simply an attempt for Real Action to raise an argument 18 that was previously available to it, but which it failed to address in a timely fashion. To the extent 19 the Court could construe it as a motion for reconsideration, it does not fall under one of the 20 grounds set forth in Civil Local Rule 7-9(b).3 21 3 22 23 24 25 26 27 28 Civil Local Rule 7-9(b) provides that The moving party must specifically show reasonable diligence in bringing the motion, and one of the following: (1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or (2) The emergence of new material facts or a change of law occurring after the time of such order; or (3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order. 4 1 Accordingly, the Court DENIES the Motion.4 2 IT IS SO ORDERED. 3 4 Dated: June 26, 2017 ______________________________________ MARIA-ELENA JAMES United States Magistrate Judge 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 4 24 25 26 27 28 This Order does not preclude Real Action from raising the statute of limitations in its Motions for Summary Judgment. See Camarillo v. McCarthy, 998 F.2d 638, 639 (9th Cir. 1993) (“In the absence of a showing of prejudice, however, an affirmative defense may be raised for the first time at summary judgment.” (citing Rivera v. Anaya, 726 F.2d 564, 566 (9th Cir. 1984)); see also Donell v. Keppers, 835 F. Supp. 2d 871, 877 (S.D. Cal. 2011) (“Although the statute of limitations is ordinarily an affirmative defense that the defendant must raise at the pleadings stage and that is subject to rules of forfeiture and waiver, district courts may dismiss an action sua sponte on limitations grounds in certain circumstances where the facts supporting the statute of limitations defense are set forth in the papers plaintiff himself submitted.” (quoting Walters v. Indus. & Commercial Bank of China, Ltd., 651 F.3d 280, 293 (2d Cir. 2011)). 5

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