Wynne v. Audi of America et al

Filing 85

ORDER by Magistrate Judge Donna M. Ryu on Outstanding Motions, denying 70 Motion to Dismiss; 71 Motion to Dismiss; 72 Motion to Stay Discovery; 79 Motion to Strike, 80 Joint Motion to Stay, 81 Discovery Letter Brief, and 83 Joint Motion to Enlarge Time to Respond to Second Amended Complaint. Signed on 9/15/2022. (dmrlc1, COURT STAFF) (Filed on 9/15/2022)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 AMY WYNNE, Plaintiff, 8 9 10 United States District Court Northern District of California 11 v. Case No. 21-cv-08518-DMR ORDER ON OUTSTANDING MOTIONS Re: Dkt. Nos. 70, 71, 72, 79, 80, 81, 83 AUDI OF AMERICA, et al., Defendants. 12 Defendants Sanctus LLC dba Shift Digital (“Shift”) and Audi of America, LLC (“Audi”) 13 and Volkswagen Group of America, Inc. (“Volkswagen”) filed motions to dismiss Plaintiff Amy 14 Wynne’s first amended complaint. [Docket Nos. 70, 71.] They also filed a joint motion to stay 15 discovery until the court rules on the motions to dismiss on the ground that they are potentially 16 dispositive and raise only legal, not factual, issues. [Docket No. 72.] In response to the motions 17 to dismiss, Plaintiff filed a second amended complaint (“SAC”) in which she dropped her claim 18 for relief under the Unfair Competition Law (“UCL”) and amended her California Consumer 19 Privacy Act (“CCPA”) claim which purportedly addressed the deficiencies identified by 20 Defendants in their motions. [Docket Nos. 76 (SAC), 82 (“In the SAC, Plaintiff cured 21 Defendants’ alleged deficiencies with respect to her CCPA cause of action . . .”).] 22 Defendants subsequently filed a joint motion to strike the SAC in which they correctly 23 note that Plaintiffs’ SAC, which was filed without leave of court or Defendants’ consent, was 24 technically improper. [Docket No. 79.] Federal Rule of Civil Procedure 15(a)(1) “gives a plaintiff 25 one opportunity to amend as of right,” Ramirez v. Cnty. of San Bernardino, 806 F.3d 1002, 1007 26 (9th Cir. 2015) (quoting Sanford v. Motts, 258 F.3d 1117, 1120 (9th Cir. 2001)), which Plaintiff 27 exhausted on September 24, 2021 when she filed the amended complaint in state court. See 28 Schnabel v. Lui, 302 F.3d 1023, 1037 (9th Cir. 2002) (“When a state court action is removed to United States District Court Northern District of California 1 federal court, the removed action is treated as if the original action has been commenced in federal 2 court.”); Hosp. Mktg. Concepts, LLC v. Inter-Cont’l Hotels Corp., No. SACV151342JVSDFMX, 3 2015 WL 13284964, at *1 (C.D. Cal. Oct. 21, 2015) (“if a plaintiff files a first amended complaint 4 as of right in state court before removal, a plaintiff may not again amend its complaint without 5 first obtaining either the opposing party’s written consent or leave of court” under Rule 6 15(a)(2)). However, “even when a pleading is improperly filed, the court may choose not to strike 7 the pleading in the interests of judicial economy,” particularly where “leave to amend would have 8 been granted had it been sought and when it does not appear that any of the parties will be 9 prejudiced by allowing the change.” Manzano v. Metlife Bank N.A., No. CIV. 2:11-651 WBS DA, 10 2011 WL 2080249, at *3 (E.D. Cal. May 25, 2011) (collecting cases; quotation marks and citation 11 omitted). 12 As noted, Plaintiff’s SAC eliminated the UCL claim and amended the CCPA claim in a 13 way that may have cured the alleged deficiencies. Under Federal Rule of Civil Procedure 15(a), 14 leave to amend the pleadings before trial should be given “freely . . . when justice so requires.” 15 Fed. R. Civ. P. 15(a)(2). “This policy is to be applied with extreme liberality,” Eminence Capital, 16 LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation omitted), and the Ninth 17 Circuit has instructed that “the court must remain guided by the underlying purpose of Rule 15 . . . 18 to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 19 203 F.3d 1122, 1127 (9th Cir. 2000) (quotation marks and citation omitted, alteration in original). 20 Therefore, in the absence of an “apparent” reason, such as undue delay, bad faith or dilatory 21 motive, prejudice to the opposing party, futility of the amendments, or repeated failure to cure 22 deficiencies in the complaint by prior amendment, it is an abuse of discretion for a district court to 23 refuse to grant leave to amend a complaint. Foman v. Davis, 371 U.S. 178, 182 (1962); Lockheed 24 Martin Corp. v. Network Sols., Inc., 194 F.3d 980, 986 (9th Cir. 1999). None of the factors that 25 weigh against granting leave to amend are present here. Notably, Defendants’ joint reply in 26 support of the motions to dismiss does not identify any prejudice that Defendants would suffer if 27 the court considers the SAC as the operative pleading, and Defendants do not argue that the 28 amended CCPA claim is futile. This case is in its early stages and there has been no undue delay 2 1 by Plaintiff in seeking amendment. Accordingly, the court deems the SAC as the operative 2 complaint. Defendants’ motions to dismiss and to strike are denied, as are the motions to stay 3 discovery pending the resolution of the motions to dismiss and to enlarge time to respond to the 4 SAC. Defendants shall file a responsive pleading to the SAC within 14 days of the date of this 5 order. United States District Court Northern District of California 6 Defendants also filed a joint motion to stay the entire action on the ground that a group of 7 plaintiffs (the “Hajny Plaintiffs”) recently filed a complaint against Defendants in state court 8 alleging claims related to the alleged data breach at issue in this case and that Defendants and the 9 Hajny Plaintiffs executed a formal settlement agreement on September 6, 2022. [Docket No. 80.] 10 According to Defendants, that settlement encompasses the putative class in this action. These 11 arguments are identical to those Defendants raised at the initial case management conference. As 12 the court noted then, “there’s going to be a question for the state court judge about whether the 13 terms of that settlement are fair,” and that “[i]f whatever happens in the state court has some affect 14 on [Wynne’s] case, then we’ll hear about that down the line and have to sort that out.” [Docket 15 No. 67 (Aug. 17, 2022 Hr’g Tr. 4, 5).] Defendants’ arguments about the impact of the settlement 16 at that time were “speculative.” Id. at 9. Very little has changed since then. Even though the 17 Hajny Plaintiffs have filed their complaint in Contra Costa County Superior Court and executed a 18 settlement agreement with Defendants, the state court complaint has not yet been assigned a case 19 number and there is no case management schedule in place. Plaintiffs have not yet filed their 20 motion for preliminary approval and there is no indication about when the state court might rule 21 on such a motion. No stay is warranted, and the motion is denied. 22 Finally, the parties filed a joint discovery letter regarding a dispute about Plaintiff’s Rule 23 30(b)(6) deposition notice to Shift. It is denied without prejudice. There is no reason why the 24 parties cannot meet and confer about the substance of Plaintiff’s Rule 30(b)(6) deposition notice 25 given the court’s resolution of the outstanding motions addressed above. As Shift has 26 acknowledged, discovery is open, see Docket No. 75, and should proceed in a reasonable manner 27 as it would in any other case. Moreover, Defendants are each represented by multiple attorneys, 28 and the court expects the parties to promptly meet and confer in good faith about discovery even 3 1 when one attorney is unavailable. Accordingly, the parties shall immediately meet and confer 2 about the 30(b)(6) deposition notice, including the topics at issue, designation of corporate 3 representatives, and scheduling. If disputes remain after meeting and conferring, the parties shall 4 file a joint letter in accordance with the court’s Standing Order by no later than October 6, 2022. 5 The parties may not incorporate by reference any prior submissions. R NIA Judge D D RDERE H ER 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 LI RT 12 FO ______________________________________ Donna M. Ryu . Ryu United States Magistrate onna MJudge 11 United States District Court Northern District of California OO IT IS S A 10 UNIT ED 9 Dated: September 15, 2022 RT U O 8 IT IS SO ORDERED. ISTRIC ES D TC T TA NO 7 S 6 N F D IS T IC T O R C

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