Calcaterra v. Garrabrants et al

Filing 62

ORDER Granting Leave to Amend 41 . The Court grants Plaintiffs leave to amend the CSC. Any amended complaint shall be filed on or before Friday, April 14, 2017. Signed by Judge Gonzalo P. Curiel on 4/10/17.(dlg)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

IN RE:

Case No.: 3:15-cv-02722-GPC-KSC

12
13
14

ORDER GRANTING LEAVE TO
AMEND

BofI HOLDING, INC. SHAREHOLDER
LITIGATION

[Dkt. No. 41]

15
16
17

On March 1, 2017, the Court granted Defendants’ motion to dismiss Plaintiffs’

18

Consolidated Verified Shareholder Derivative Complaint (“CSC”) for failing to plead

19

demand futility with the requisite particularity. See generally Dkt. No. 54. The Court did

20

not, however, rule on whether the motion would be granted with or without prejudice at

21

that time. See id. Instead, it issued an Order to Show Cause (“OSC”) why Plaintiffs’

22

complaint should not be dismissed with prejudice due to the futility of future demand

23

allegations. Id.

24

Plaintiffs responded to the Court’s OSC on March 17, 2017 by filing an amended

25

complaint, attached as an exhibit to a memorandum of law explaining how the amended

26

complaint would cure the deficiencies identified in the Court’s March 1, 2017 order. See

27

Dkt. No. 60. Defendants, in turn, responded by arguing that the amended complaint

28

would not, in fact, cure the pleading deficiencies. See Dkt. No. 61.
1
3:15-cv-02722-GPC-KSC

1

In light of the parties’ responses to the OSC, the Court concludes that it would not

2

be futile to allow Plaintiffs leave to amend their complaint. Rule 15 provides that leave

3

to amend should be freely granted when justice so requires. Fed. R. Civ. P. 15(a)(2).

4

Accordingly, when a court dismisses a complaint for failure to state a claim, “leave to

5

amend should be granted unless the court determines that the allegation of other facts

6

consistent with the challenged pleading could not possibly cure the deficiency.” DeSoto

7

v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (internal citations omitted).

8

Here, given that Plaintiffs have demonstrated that the composition of BofI’s Board of

9

Directors has changed, the Court concludes that an amended pleading has the potential to

10

cure the deficiencies in the CSC. See Braddock v. Zimmerman, 906 A.2d 776, 785-86

11

(Del. 2006) (concluding that courts should assess an amended complaint’s demand

12

futility allegations “with regard to the board that was in place at the time that amendment

13

was filed”). Accordingly, the Court GRANTS Plaintiffs leave to amend the CSC. Any

14

amended complaint shall be filed on or before Friday, April 14, 2017.

15

IT IS SO ORDERED.

16
17

Dated: April 10, 2017

18
19
20
21
22
23
24
25
26
27
28
2
3:15-cv-02722-GPC-KSC