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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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B.R & W.R.,

Case No. 16-cv-04576-MEJ
Plaintiff,

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ORDER RE: MOTION FOR LEAVE TO
FILE AMENDED COMPLAINT

v.
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BEACON HEALTH OPTIONS,

Re: Dkt. No. 16

Defendant.

United States District Court
Northern District of California

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INTRODUCTION

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Pending before the Court is Plaintiff B.R. & W.R.’s Motion for Leave to File a First

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Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a). Mot., Dkt. No. 16.

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Defendant Beacon Health Options (“Beacon”) did not file an Opposition. The Court finds this

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matter suitable for disposition without oral argument and VACATES the March 23, 2017 hearing.

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See Fed. R. Civ. P. 78(b); Civ. L.R. 7-1(b). Having considered the parties’ positions, the relevant

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legal authority, and the record in this case, the Court GRANTS the Motion for the following

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reasons.

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BACKGROUND
On August 11, 2016, Plaintiff filed a complaint for breach of the Employee Retirement

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Income Security Act of 1974 (“ERISA”) against Beacon for failing to provide employee benefits.

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Compl., Dkt. No. 1. On November 4, 2016, Defendant filed its Answer. Dkt. No. 9. During the

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subsequent meet and confer process, Beacon notified Plaintiff that the healthcare plan is “self-

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funded” and Beacon is not correctly named as a defendant. Id. Beacon explained that the Screen

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Actors Guild—Producers Health Plan (“SAG Plan”) should be named as the defendant. Id. On

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January 5, 2017, the parties submitted a Joint Case Management Statement to the Court (Dkt. No.

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11), in which they clarified Plaintiff’s intent to dismiss Beacon and name the SAG Plan as

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defendant (id. at 2). On January 9, 2017, the Court ordered Plaintiff to move for Leave to File a

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First Amended Complaint. Dkt. No. 12.1 That Motion is now pending before the Court. See Mot.

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LEGAL STANDARD
A party may amend its pleading once as a matter of course within (1) 21 days after serving

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the pleading, or (2) 21 days after the earlier of service of a responsive pleading or service of a Rule

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12(b) motion. Fed. R. Civ. P. 15(a)(1). Outside of this timeframe, “a party may amend its

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pleading only with the opposing party’s written consent or the court’s leave,” though the court

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

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should be interpreted with ‘extreme liberality,’ leave to amend is not to be granted automatically.”

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United States District Court
Northern District of California

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Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990) (citation omitted). Because

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Plaintiff seeks to amend its Complaint more than 21 days after Beacon filed its answer, it must

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move for leave to amend.
A court considers five factors in determining whether to grant leave to amend: “(1) bad

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faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5)

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whether plaintiff has previously amended his complaint.” In re W. States Wholesale Nat. Gas

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Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013) (quotation omitted). “Not all of the factors

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merit equal weight. As this circuit and others have held, it is the consideration of prejudice to the

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opposing party that carries the greatest weight. Prejudice is the touchstone of the inquiry under

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Rule 15(a).” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003)

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(citation omitted). “Absent prejudice, or a strong showing of any of the remaining [] factors, there

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exists a presumption under Rule 15(a) in favor of granting leave to amend.” Id. at 1052 (emphasis

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in original).

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Granting or denying leave to amend rests in the sound discretion of the trial court, and will

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be reversed only for abuse of discretion. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir.

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1996). “Denials of motions for leave to amend have been reversed when lacking a

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Several documents filed in connection with the Motion were mis-docketed. The Court already
terminated Dkt. No. 13 and now terminates Dkt. No. 14.
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contemporaneous specific finding by the district court of prejudice to the opposing party, bad faith

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by the moving party, or futility of amendment.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183,

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186-87 (9th Cir. 1987).
DISCUSSION

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Upon consideration of the aforementioned five factors relevant to determining whether to

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grant leave to amend, the Court finds Plaintiff’s request to substitute SAG Plan as a defendant

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instead of Beacon should be granted.

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A.

Bad Faith & Undue Delay
Bad faith may be shown when a party seeks to amend late in the litigation process with

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claims which were, or should have been, apparent early. Bonin v. Calderon, 59 F.3d 815, 846 (9th

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United States District Court
Northern District of California

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Cir. 1995). That is not the case here. Plaintiff filed its original Complaint on August 11, 2016.

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Beacon filed its Answer on November 4, 2016. The parties notified the Court of Plaintiff’s intent

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to substitute SAG Plan in their January 5, 2017 Joint Case Management Conference and Plaintiff

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timely moved to amend. Plaintiff’s Motion does not come late in the litigation process, as the

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action is still in its incipient stage. Plaintiff also does not seek to add any claims. Instead, it is

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simply correcting the defendant’s identity. There is no indication of bad faith or undue delay.

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B.

Prejudice to the Opposing Party

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This factor carries the greatest weight of them all. Eminence Capital, 316 F.3d at 1052.

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“The party opposing amendment bears the burden of showing prejudice.” DCD Programs, 833

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F.2d at 187. Beacon does not oppose amendment. The correct defendant, SAG Plan, has not yet

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been served or appeared in the litigation; therefore amendment would not be prejudicial to SAG

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Plan. See Celetano v. Ams. With Disabilities (ADA) Office, 2012 WL 1207277, at *1 (E.D. Cal.

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Apr. 11, 2012). There appears no prejudice would result from the amendment.

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C.

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Futility of Amendment
“[A] proposed amendment is futile only if no set of facts can be proved under the

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amendment to the pleadings that would constitute a valid and sufficient claim[.]” Miller v. Rykoff-

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Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988) (citations omitted). There is no suggestion at this

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time that after substituting SAG Plan as the defendant, no set of facts can be proved that would
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constitute a valid and sufficient claim.

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D.

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Previous Amendments
As Plaintiff did not previously amend the Complaint, this factor weighs neither against nor

in favor of amendment.

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CONCLUSION

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Based on the foregoing analysis, the Court the relevant factors all weigh in favor of

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granting leave to amend. Pursuant to Rule 15(a), the Court hereby GRANTS Plaintiff’s Motion

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for Leave to File a First Amended Complaint.

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IT IS SO ORDERED.

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United States District Court
Northern District of California

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Dated: March 9, 2017
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

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