In Re: MacBook Keyboard Litigation

Filing 218

ORDER GRANTING #208 MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT. Signed by Judge Edward J. Davila on 7/2/2020. (ejdlc1S, COURT STAFF) (Filed on 7/2/2020)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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ZIXUAN RAO, et al.,

Case No. 5:18-cv-02813-EJD

Plaintiffs,
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ORDER GRANTING MOTION FOR
LEAVE TO FILE SECOND AMENDED
COMPLAINT

v.
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APPLE INC.,

Re: Dkt. No. 208

United States District Court
Northern District of California

Defendant.
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Plaintiffs Kyle Barbaro, Joseph Baruch, Steve Eakin, Lorenzo Ferguson, Benjamin Gulker,

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Michael Hopkins, Adam Lee, Kevin Melkowski, and Zixuan Rao (“Plaintiffs”) move this Court

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for leave to file a Second Amended Consolidated Class Action Complaint (“SAC”) pursuant to

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Federal Rule of Civil Procedure 15(a)(2). Dkt. No. 208. The Court took the matter under

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submission for decision without oral argument pursuant to Civil Local Rule 7-1(b). Having

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considered the arguments of the parties, the Court GRANTS Plaintiffs’ motion.

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I.

Background

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Plaintiffs bring this proposed class action against Defendant Apple, Inc. (“Apple” or

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“Defendant”) on behalf of purchasers of allegedly defective MacBook laptops with butterfly

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keyboards. After the Court consolidated several related actions, Plaintiffs filed a Consolidated

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Class Action Complaint on October 11, 2018, asserting claims on behalf of a nationwide class and

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proposed subclasses under California law and six other states’ laws. Dkt. No. 66.

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On April 22, 2019, the Court granted in part Apple’s motion to dismiss. Dkt. No. 110.

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Plaintiffs then filed a First Amended Consolidated Class Action Complaint (“FAC”) asserting ten

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causes of action and adding additional allegations concerning Apple’s Keyboard Service Program.

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Case No.: 5:18-cv-02813-EJD
ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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Dkt. No. 117. The FAC named nine plaintiffs, including Joseph Baruch and Zixuan Rao from

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California. Id. On December 2, 2019, the Court denied Apple’s motion to dismiss the FAC. Dkt

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No. 168. The parties have been actively engaged in discovery since early 2019.

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On January 14, 2020, the Court entered a scheduling order setting forth deadlines

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concerning Plaintiffs’ motion for class certification and discovery. Dkt. No. 178. On March 20,

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the Court granted the parties’ stipulation to modify the class certification and discovery deadlines.

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Dkt. No. 203. The deadline for Plaintiffs to move for class certification is August 14, 2020, with

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Apple’s response due on September 28, 2020 and Plaintiffs’ reply due on October 28, 2020. Id.

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The fact discovery cutoff is January 11, 2021. Id. The Court has not set a deadline for amending

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United States District Court
Northern District of California

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the pleadings or adding parties.
On May 8, 2020, Plaintiffs filed the present Motion For Leave To File Second Amended

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Complaint. Dkt. No. 208 (“Motion”). Plaintiffs state that due to the ongoing COVID-19

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pandemic, the two existing plaintiffs from California, Mr. Baruch and Mr. Rao, may not be able to

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participate in these proceedings moving forward. Plaintiff Baruch is a small business owner who

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has been significantly affected by the emergency conditions resulting from the ongoing COVID-

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19 pandemic. Dkt. No. 208-1, Declaration of Adam E. Polk, ¶ 8. Plaintiff Rao, a student at

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University of California, San Diego, is in the United States on an F1 student visa. Id. ¶ 9.

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Plaintiffs seek to add two new California plaintiffs, Bo Laurent and Ashley Marin, in order to

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“ensure that the interests of the proposed nationwide and California classes are protected.”

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Motion, p. 1. Plaintiffs further seek to modify the proposed class definition to specify the models

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of MacBook laptops included in the definition of Class Laptops. Id. Apple opposes the motion,

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arguing that Plaintiffs unduly delayed in seeking amendment and that Apple would be prejudiced

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by the need to conduct and respond to additional discovery related to the proposed additional

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plaintiffs. See Dkt. No. 213, Apple Opposition, p. 2. Apple further requests that if leave is

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granted, the Court continue the case management deadlines for 90 days.

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II.

Discussion

The parties agree that the Motion is governed by Rule 15 of the Federal Rules of Civil
Case No.: 5:18-cv-02813-EJD
ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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Procedure. Leave to amend under Rule 15 is generally granted liberally. Fed. R. Civ. P. 15(a)(2)

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(“The court should freely give leave when justice so requires.”); Morongo Band of Mission

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Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (leave should be granted with “extreme

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liberality”). Leave need not be granted, however, where the amendment of the complaint would

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cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility,

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or creates undue delay. Foman v. Davis, 371 U.S. 178, 182 (1962); Janicki Logging Co. v.

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Mateer, 42 F.3d 561, 566 (9th Cir. 1994). “[I]n light of Rule 15’s mandate, the examination of

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these factors is generally performed ‘with all inferences in favor of granting the motion.’” In re

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Intuitive Surgical Sec. Litig., No. 5:13-CV-01920-EJD, 2017 WL 363269, at *2 (N.D. Cal. Jan.

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United States District Court
Northern District of California

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25, 2017) (quoting Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999)).
A. Prejudice
“Prejudice is the touchstone of the inquiry under rule 15(a).” Eminence Capital, LLC v.

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Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citation and quotation omitted). “Absent

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prejudice, or a strong showing of any of the remaining Foman factors, there exists a presumption

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under Rule 15(a) in favor of granting leave to amend.” Id. (citation and quotation omitted). “The

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party opposing amendment bears the burden of showing prejudice.” WeRide Corp. v. Kun Huang,

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No. 5:18-CV-07233-EJD, 2019 WL 3555343, at *1 (N.D. Cal. Aug. 5, 2019).

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Apple argues that it will be prejudiced if Plaintiffs are granted leave to add the two

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proposed plaintiffs because doing so will result in additional discovery in an already “highly

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inefficient discovery process.” Opp., p. 7. Although true that it has undertaken significant

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discovery efforts thus far, Apple fails to explain how it will be prejudiced by the additional

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discovery associated with the proposed plaintiffs. The parties have not yet taken any depositions,

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and the cutoff for fact discovery is not until January 11, 2021. Cf. PNY Techs., Inc. v. SanDisk

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Corp., No. 11-CV-04689-WHO, 2014 WL 294855, at *5 (N.D. Cal. Jan. 27, 2014) (finding no

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prejudice when there were four months remaining for discovery). Moreover, according to the

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Plaintiffs’ Reply in support of their Motion, Plaintiffs already served discovery responses on

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behalf of the new plaintiffs and produced their relevant documents. Reply, p. 8. The new

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ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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plaintiffs are also reportedly available for depositions as early as this month. Id. Thus, Apple has

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not explained how the additional discovery necessary will require undue effort or expense or cause

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prejudice. Considering that Apple will have ample time to complete additional discovery of the

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proposed plaintiffs, the Court finds that such discovery does not demonstrate prejudice to Apple.

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Finjan, Inc. v. Check Point Software Techs., Inc., No. 18-CV-02621-WHO, 2019 WL 1455333, at

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*4 (N.D. Cal. Apr. 2, 2019) (“To the extent that some additional discovery may be required, that

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alone is not enough to constitute prejudice.”); Palana v. Mission Bay Inc., No. 13-CV-05235-SI,

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2016 WL 107487, at *3 (N.D. Cal. Jan. 11, 2016) (no prejudice from adding plaintiffs where

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discovery had not yet closed); James ex rel. James Ambrose Johnson, Jr., 1999 Tr. v. UMG
Recordings, Inc., No. C 11-1613 SI, 2012 WL 4859069, at *2 (N.D. Cal. Oct. 11, 2012)

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United States District Court
Northern District of California

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(“Although it may incur additional time and expense, UMGR will not have to radically change its

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litigation strategy in order to defend against . . . the three new plaintiffs.”).

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Apple further argues that Plaintiffs “failed to show why an amended complaint is

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warranted.” because both of the existing California-based plaintiffs remain in the case. Opp., p. 7.

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Apple argues that Plaintiffs have not provided any reason why the new California plaintiffs are

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necessary as long as the original parties continue to participate. In support, Apple cites to a

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number of cases in which courts have denied leave to add new or additional plaintiffs for failure to

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show good cause. See, e.g., Osakan v. Apple American Group, No. C 08-4722-SBA, 2010 WL

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1838701, at *2 (N.D. Cal. May 5, 2010) (denying leave to amend to add four new class

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representatives and new allegations two weeks before discovery cutoff because amendment would

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unduly prejudice defendants); Wilson v. Frito-Lay North America, Inc., Case No. 12-cv-01586-

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JST, 2017 WL 3478776 (N.D. Cal. Aug. 14, 2017) (denying motion to substitute party two years

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after the deadline for substitution, where plaintiffs did not diligently pursue amendment and where

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amendment would require defendant to “start its discovery efforts from scratch.”). Both Osakan

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and Wilson were decided under the more stringent standards of Rule 16 of the Federal Rules of

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Civil Procedure, which requires the party seeking amendment to show good cause. Under the

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more lenient standards of Rule 15, Plaintiffs need not show good cause. Santa Clara Valley Water

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Case No.: 5:18-cv-02813-EJD
ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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Dist. v. Olin Corp., No. C-07-03756 RMW, 2009 WL 667429, at *4 (N.D. Cal. Mar. 13, 2009)

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(“Because the court’s case scheduling orders imposed no deadline for amending the pleadings,

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Olin is not required to show good cause for its desire to amend its counterclaim.”). Rather, it is

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Apple’s burden to show that the addition of the proposed plaintiffs would cause Apple prejudice.

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While the Court acknowledges that the proposed plaintiffs may be duplicative of the

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existing plaintiffs, Apple will not be required to start its discovery efforts from scratch, nor is the

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discovery deadline so soon as to cause prejudice. Thus, Apple has failed to show that it will be

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prejudiced by the addition of the proposed plaintiffs.

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B. Undue Delay
Apple argues that Plaintiffs unduly delayed in seeking leave to amend because the

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United States District Court
Northern District of California

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allegations related to the two new plaintiffs’ arose years ago. Specifically, Ms. Marin alleges that

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she purchased her MacBook in February 2017 and alleges that she got repairs in June 2017, two

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years before Plaintiffs first amended their complaint. SAC ¶¶ 49, 52-53. Ms. Laurent alleges that

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she purchased her MacBook Pro in November 2018, and alleges that she had repairs in June and

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December of 2019, plus additional repairs in February 2020. Id. ¶¶ 39, 41-47. Plaintiffs do not

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argue that they recently discovered these allegations; rather, they argue that they recently

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discovered the need to amend. Plaintiffs argue that they only learned of the impact of COVID-19

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on Mr. Baruch and Mr. Rao in early April and that they diligently sought amendment thereafter.

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The Court acknowledges that Ms. Marin’s and Ms. Laurent’s claims could theoretically

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have been brought sooner, however, there was simply no need to do so. The COVID-19 pandemic

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has had far-reaching and unprecedented consequences globally, and the Court finds that Plaintiffs

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diligently sought leave to amend after it became apparent that the participation of existing

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plaintiffs might be limited by the pandemic. See McConnell v. Red Robin Int’l, Inc., No. C 11-

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03026 WHA, 2012 WL 1357616, at *2 (N.D. Cal. Apr. 17, 2012) (“Until a few weeks ago,

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plaintiff had no reason not to rely on Mr. McConnell as the sole class representative . . . it would

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be inequitable to find the motion the result of undue delay or bad faith when, from the facts readily

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available, [the court] can discern no reason for plaintiff to have sought amendment earlier.”).

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ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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Furthermore, as discussed above, Apple will have ample time to complete discovery before

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the cutoff date and to take account of the new allegations before their briefing on class

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certification is due. The Court, therefore, finds that any delay in amendment does not prejudice

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Apple nor warrant denying leave to amend. Stovall v. Align Tech., Inc., No. 5:18-CV-07540-EJD,

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2019 WL 3945104, at *1-2 (N.D. Cal. Aug. 21, 2019) (“delay alone is insufficient to justify

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denying Plaintiff leave to amend.”); Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999) (denial of

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leave to amend based on undue delay is improper without a “contemporaneous specific finding of

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prejudice to the opposing party, bad faith by the moving party, or futility of the amendment.”).
C. Futility and Bad Faith

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Apple does not contend that the Motion was brought in bad faith or that amendment would

United States District Court
Northern District of California

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be futile. Indeed, this court recently denied Apple’s motion to dismiss the FAC, which was

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substantially similar to the SAC. McGowan v. Cty. of Kern, No. 115-CV-01365-DAD-SKO, 2018

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WL 2734970, at *4 (E.D. Cal. June 7, 2018) (“The test for whether amendment of a complaint is

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futile is the same as whether a proposed amendment would survive a challenge under Rule

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12(b)(6).”). Taking the proposed new allegations as true, the Court finds that the SAC would

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withstand a motion to dismiss and therefore amendment is not futile. The Court also finds that

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there is no indication that Plaintiffs seek amendment in bad faith.

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III.

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Based on the foregoing, Plaintiffs’ motion for leave to file the SAC is GRANTED.

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Plaintiff shall promptly file the proposed SAC as its own entry on the docket. Apple’s request to

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continue the case management deadlines is DENIED. If additional time is needed to complete

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discovery in advance of the motion for class certification, the parties may file a joint stipulation or

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Apple may make an appropriate motion to continue the deadlines.

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Conclusion

IT IS SO ORDERED.
Dated: July 2, 2020
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EDWARD J. DAVILA
United States District Judge
Case No.: 5:18-cv-02813-EJD
ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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