B.R & W.R. et al v. Beacon Health Options

Filing 20

ORDER by Judge Maria-Elena James terminating 14 Motion for Leave to File; granting 16 Motion to Amend/Correct Plaintiff is required to E-FILE the amended complaint. (mejlc3, COURT STAFF) (Filed on 3/9/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 B.R & W.R., Case No. 16-cv-04576-MEJ Plaintiff, 8 ORDER RE: MOTION FOR LEAVE TO FILE AMENDED COMPLAINT v. 9 10 BEACON HEALTH OPTIONS, Re: Dkt. No. 16 Defendant. United States District Court Northern District of California 11 12 13 INTRODUCTION 14 Pending before the Court is Plaintiff B.R. & W.R.’s Motion for Leave to File a First 15 Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a). Mot., Dkt. No. 16. 16 Defendant Beacon Health Options (“Beacon”) did not file an Opposition. The Court finds this 17 matter suitable for disposition without oral argument and VACATES the March 23, 2017 hearing. 18 See Fed. R. Civ. P. 78(b); Civ. L.R. 7-1(b). Having considered the parties’ positions, the relevant 19 legal authority, and the record in this case, the Court GRANTS the Motion for the following 20 reasons. 21 22 BACKGROUND On August 11, 2016, Plaintiff filed a complaint for breach of the Employee Retirement 23 Income Security Act of 1974 (“ERISA”) against Beacon for failing to provide employee benefits. 24 Compl., Dkt. No. 1. On November 4, 2016, Defendant filed its Answer. Dkt. No. 9. During the 25 subsequent meet and confer process, Beacon notified Plaintiff that the healthcare plan is “self- 26 funded” and Beacon is not correctly named as a defendant. Id. Beacon explained that the Screen 27 Actors Guild—Producers Health Plan (“SAG Plan”) should be named as the defendant. Id. On 28 January 5, 2017, the parties submitted a Joint Case Management Statement to the Court (Dkt. No. 1 11), in which they clarified Plaintiff’s intent to dismiss Beacon and name the SAG Plan as 2 defendant (id. at 2). On January 9, 2017, the Court ordered Plaintiff to move for Leave to File a 3 First Amended Complaint. Dkt. No. 12.1 That Motion is now pending before the Court. See Mot. 4 LEGAL STANDARD A party may amend its pleading once as a matter of course within (1) 21 days after serving 6 the pleading, or (2) 21 days after the earlier of service of a responsive pleading or service of a Rule 7 12(b) motion. Fed. R. Civ. P. 15(a)(1). Outside of this timeframe, “a party may amend its 8 pleading only with the opposing party’s written consent or the court’s leave,” though the court 9 “should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). “Although the rule 10 should be interpreted with ‘extreme liberality,’ leave to amend is not to be granted automatically.” 11 United States District Court Northern District of California 5 Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990) (citation omitted). Because 12 Plaintiff seeks to amend its Complaint more than 21 days after Beacon filed its answer, it must 13 move for leave to amend. A court considers five factors in determining whether to grant leave to amend: “(1) bad 14 15 faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) 16 whether plaintiff has previously amended his complaint.” In re W. States Wholesale Nat. Gas 17 Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quotation omitted). “Not all of the factors 18 merit equal weight. As this circuit and others have held, it is the consideration of prejudice to the 19 opposing party that carries the greatest weight. Prejudice is the touchstone of the inquiry under 20 Rule 15(a).” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) 21 (citation omitted). “Absent prejudice, or a strong showing of any of the remaining [] factors, there 22 exists a presumption under Rule 15(a) in favor of granting leave to amend.” Id. at 1052 (emphasis 23 in original). 24 Granting or denying leave to amend rests in the sound discretion of the trial court, and will 25 be reversed only for abuse of discretion. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 26 1996). “Denials of motions for leave to amend have been reversed when lacking a 27 1 28 Several documents filed in connection with the Motion were mis-docketed. The Court already terminated Dkt. No. 13 and now terminates Dkt. No. 14. 2 1 contemporaneous specific finding by the district court of prejudice to the opposing party, bad faith 2 by the moving party, or futility of amendment.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 3 186-87 (9th Cir. 1987). DISCUSSION 4 Upon consideration of the aforementioned five factors relevant to determining whether to 5 6 grant leave to amend, the Court finds Plaintiff’s request to substitute SAG Plan as a defendant 7 instead of Beacon should be granted. 8 A. Bad Faith & Undue Delay Bad faith may be shown when a party seeks to amend late in the litigation process with 9 claims which were, or should have been, apparent early. Bonin v. Calderon, 59 F.3d 815, 846 (9th 11 United States District Court Northern District of California 10 Cir. 1995). That is not the case here. Plaintiff filed its original Complaint on August 11, 2016. 12 Beacon filed its Answer on November 4, 2016. The parties notified the Court of Plaintiff’s intent 13 to substitute SAG Plan in their January 5, 2017 Joint Case Management Conference and Plaintiff 14 timely moved to amend. Plaintiff’s Motion does not come late in the litigation process, as the 15 action is still in its incipient stage. Plaintiff also does not seek to add any claims. Instead, it is 16 simply correcting the defendant’s identity. There is no indication of bad faith or undue delay. 17 B. Prejudice to the Opposing Party 18 This factor carries the greatest weight of them all. Eminence Capital, 316 F.3d at 1052. 19 “The party opposing amendment bears the burden of showing prejudice.” DCD Programs, 833 20 F.2d at 187. Beacon does not oppose amendment. The correct defendant, SAG Plan, has not yet 21 been served or appeared in the litigation; therefore amendment would not be prejudicial to SAG 22 Plan. See Celetano v. Ams. With Disabilities (ADA) Office, 2012 WL 1207277, at *1 (E.D. Cal. 23 Apr. 11, 2012). There appears no prejudice would result from the amendment. 24 C. 25 Futility of Amendment “[A] proposed amendment is futile only if no set of facts can be proved under the 26 amendment to the pleadings that would constitute a valid and sufficient claim[.]” Miller v. Rykoff- 27 Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988) (citations omitted). There is no suggestion at this 28 time that after substituting SAG Plan as the defendant, no set of facts can be proved that would 3 1 constitute a valid and sufficient claim. 2 D. 3 4 Previous Amendments As Plaintiff did not previously amend the Complaint, this factor weighs neither against nor in favor of amendment. 5 CONCLUSION 6 Based on the foregoing analysis, the Court the relevant factors all weigh in favor of 7 granting leave to amend. Pursuant to Rule 15(a), the Court hereby GRANTS Plaintiff’s Motion 8 for Leave to File a First Amended Complaint. 9 IT IS SO ORDERED. 10 United States District Court Northern District of California 11 12 13 Dated: March 9, 2017 ______________________________________ MARIA-ELENA JAMES United States Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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