Bennett v. Forbes et al

Filing 24

ORDER: (1) Denying Plaintiff's 17 Motion to Stay Proceedings; and (2) Granting Plaintiff's 16 Motion for Leave to File Amended Complaint. Signed by Judge Michael M. Anello on 10/12/2017. (ag)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ANDREW BENNETT, Case No.: 17cv464-MMA (KSC) Plaintiff, 12 13 v. 14 ORDER: DARON FORBES; and WE ARE VOLLEYBALL ELITE, 15 16 (1) DENYING PLAINTIFF’S MOTION TO STAY PROCEEDINGS; AND Defendants. (2) GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT 17 18 19 [Doc. Nos. 16, 17] 20 21 On August 25, 2017, Plaintiff Andrew Bennett filed a motion for leave to file an 22 amended complaint [Doc. No. 16-1 (“Mot. Leave”)] and a motion to stay the proceedings 23 pending resolution of a partnership dissolution proceeding in state court [Doc. No. 17-1 24 (“Mot. Stay”)]. Defendants Daron Forbes and We Are Volleyball Elite (“WAVE”), 25 oppose the motions. Doc. Nos. 18 (“Oppo. Leave”), 19 (“Oppo. Stay”). Plaintiff filed 26 timely replies. Doc. Nos. 20 (“Reply Stay”), 21 (“Reply Leave”). The Court, in its 27 discretion, decides the matter on the papers submitted and without oral argument, 28 1 17cv464-MMA (KSC) 1 pursuant to Civil Local Rule 7.1(d)(1). For the reasons set forth below, the Court 2 DENIES Plaintiff’s motion to stay and GRANTS Plaintiff’s motion to amend. 3 BACKGROUND 4 On March 7, 2017, Plaintiff filed this action against Defendants alleging causes of 5 action for intentional interference with contractual relations, intentional interference with 6 prospective economic advantage, negligent interference with prospective economic 7 advantage, defamation, trademark infringement, unfair competition and false designation 8 under federal law, violation of California Business and Professions Code, intentional 9 infliction of emotional distress, negligent infliction of emotional distress, and copyright 10 11 infringement. See Doc. No. 1 (“Compl.”); see also Doc. No. 4 (“FAC”). According to Plaintiff, he founded certain “organizations for the purpose of 12 connecting intercollegiate beach volleyball programs with high school athletes.” See 13 Doc. Nos. 4, 7. Specifically, Plaintiff states he “is the founder of the brands and events” 14 called: Get Noticed Beach Volleyball (“GNBV”), Endless Summer Beach Volleyball 15 Tour (“Endless Summer” or “ESVT”), and Juniors Beach Volleyball League (“JBVL”). 16 See FAC; Doc. No. 7. Plaintiff alleges he then “[brought] in [Forbes] and her 17 organization, [WAVE] to help grow the brands for over two and a half years.” See Doc. 18 No. 7. Plaintiff alleges he met Defendant Forbes in 2013 and at some point thereafter, 19 they entered into a verbal agreement for a “joint venture to put on certain events.” See id. 20 Plaintiff contends the Parties agreed that Plaintiff’s organization, the Tamarack Beach 21 Volleyball Club, and Defendant Forbes’s organization, WAVE, would put on these 22 events jointly, and would share “revenues, costs, and profits” equally. See id. 23 According to Plaintiff, he recently decided it would be best for the Parties to cease 24 working together, but alleges Defendants have attempted to assert control over and claim 25 ownership of GNBV, Endless Summer, and JBVL. Specifically, the Parties began to 26 feud regarding the management of events and on February 20, 2017, “discussions ensued 27 between the parties about a separation and potentially having one party purchase and own 28 certain brands outright,” but the Parties never came to an agreement. See Doc. No. 7. 2 17cv464-MMA (KSC) 1 Plaintiff asserts that Defendants have represented to members of the public that Plaintiff 2 has no right to use the contested brands, and told the Association of Volleyball 3 Professionals that WAVE “owns and operates JBVL, Endless Summer, and GNBV 4 brands.” See Doc. No. 7 (internal quotations omitted). Plaintiff states that Defendant 5 Forbes “has continued to market and attempt to run events” under the disputed brand 6 names, causing confusion to consumers. See Doc. No. 7. 7 According to Defendants, “Plaintiff was simply an independent contractor hired to 8 assist Defendants’ operations” in running “beach volleyball tournaments and showcases . 9 . . to provide a platform for [] youth athletes to get recruited by colleges and universities.” 10 See Doc. No. 8. Defendants contend that Defendant Forbes first met Plaintiff in 2013, 11 and in 2014 Defendant Forbes asked Plaintiff if he would like to work “as an independent 12 contractor to assist with Team WAVE’s beach volleyball events” despite having “been 13 warned by others who had worked with Mr. Bennett that he was not to be trusted.” See 14 Doc. No. 8. Because of Defendant Forbes’s wariness about Plaintiff’s trustworthiness, 15 Defendant Forbes claims she never allowed Plaintiff to hold “a position of title within 16 Team WAVE’s organization” and Defendants “maintained all ownership of all aspects of 17 the GNBV, ESVT, and JBVL brands and events.” See Doc. No. 8. Defendants contend 18 Defendant WAVE “agreed to be financially responsible for all the events, including the 19 permits, insurance coverage, costs, and any losses incurred with the beach volleyball 20 events.” See Doc. No. 8. Defendants state that Defendant WAVE paid Plaintiff half of 21 the net proceeds from each event, but asserts that this does not constitute sharing of 22 profits because many expenses did not factor into his payments. Defendants assert that 23 Plaintiff requested an ownership interest in, or control over, the brands, but Defendant 24 WAVE denied his requests. 25 On April 7, 2017, Defendants filed an Answer. Doc. No. 5 (“Answer”). On April 26 24, 2017, Plaintiff filed a motion for preliminary injunction requesting the Court order 27 Defendants to, pending resolution of this action, refrain from: (1) “running any volleyball 28 events using the GNBV, Endless Summer, and JBVL brands;” (2) “advertising, 3 17cv464-MMA (KSC) 1 promoting, and posting on any social media platforms under the names GNBV, Endless 2 Summer, and JBVL;” (3) “advertising, promoting, and posting on any websites under the 3 names GNBV, Endless Sumer, and JBVL;” and (4) “using the names GNBV, Endless 4 Summer, and JBVL, in any form.” See Doc. No. 7. On June 12, 2017, the Court denied 5 Plaintiff’s motion for a preliminary injunction. Doc. No. 14. 6 During briefing on Plaintiff’s motion for a preliminary injunction, Plaintiff learned 7 that Defendants were claiming there was never a partnership related to any of the events 8 thrown together. Mot. Leave at 2. On June 22, 2017, Plaintiff filed a Complaint for 9 partnership dissolution in state court as a direct result of Defendants’ claim there was no 10 partnership. Id. The state action is based on the same set of facts that are at issue in the 11 instant action. Oppo. Leave at 3. Plaintiff filed an ex parte request for a temporary 12 restraining order in state court to enjoin Defendants from running any volleyball events 13 under the names GNBV, Endless Summer, and JBVL. Mot. Leave at 2-3. Defendants 14 filed an Answer on August 14, 2017 in the state court action, and then filed a Motion to 15 Stay the state court action on August 16, 2017. Id. The Superior Court deferred its 16 rulings until after the hearing in this Court regarding the motion to stay and motion to 17 amend currently pending before this Court. Oppo. Leave at 3. 18 REQUESTS FOR JUDICIAL NOTICE 19 Plaintiff requests the Court take judicial notice of Plaintiff’s First Amended 20 Complaint filed in the Superior Court of California [Doc. Nos. 16-3, 17-4] and 21 Defendants request the Court take judicial notice of several state court documents, 22 including the Superior Court’s docket, the Complaint and First Amended Complaint, the 23 tentative ruling for Plaintiff’s motion for a preliminary injunction and for Defendants’ 24 motion to stay, and the minute order for Plaintiff’s motion for preliminary injunction 25 [Doc. Nos. 19-2; 18-1 at 7-22]. Defendants also request the Court judicially notice 26 documents filed by the United States Patent and Trademark Office, including Plaintiff’s 27 trademark application for Endless Summer Volleyball Tour and GN BV Get Noticed 28 4 17cv464-MMA (KSC) 1 Beach Volleyball. Doc No. 18-1 at 1-6. Defendants obtained the trademark documents 2 from the U.S. Patent and Trademark Electronic Search System. See Doc. No. 18-1 at 2. The Court may take judicial notice of matters that are either “generally known 3 4 within the trial court’s territorial jurisdiction” or “can be accurately and readily 5 determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. 6 Evid. 201(b). Public records, including judgments and other publicly filed documents, 7 are proper subjects of judicial notice. See, e.g., United States v. Black, 482 F.3d 1035, 8 1041 (9th Cir. 2007) (Courts “may take notice of proceedings in other courts, both within 9 and without the federal judicial system, if those proceedings have a direct relation to 10 matters at issue.”). Public records of administrative agencies are also appropriate matters 11 of judicial notice. See Dahon N. Am., Inc. v. Hon, No. 2:11-CV-05835-ODW, 2012 WL 12 1413681, at *8 n.4 (C.D. Cal. Apr. 24, 2012) (taking judicial notice of documents filed on 13 the United States trademark website); see also Clearly Food & Beverage Co. v. Top Shelf 14 Bevs., Inc., 102 F. Supp. 3d 1154, 1161 (W.D. Wash. 2015) (taking judicial notice of 15 trademark applications obtained from the U.S. Patent and Trademark Electronic Search 16 System). However, to the extent that any facts in documents subject to judicial notice are 17 subject to reasonable dispute, the Court will not take judicial notice of those facts. See 18 Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), overruled on other grounds 19 by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). Neither Plaintiff nor 20 Defendants oppose the requests for judicial notice. Accordingly, the Court GRANTS 21 both requests because the state court records are proper subjects of judicial notice. MOTION TO STAY 22 23 Plaintiff moves the Court to stay the proceedings pending resolution of a 24 partnership dissolution and accounting action currently pending in the San Diego 25 Superior Court. Mot. Stay at 2. Defendants oppose the motion. Oppo. Stay. 26 1. Relevant Background 27 On June 22, 2017, Plaintiff filed a Complaint in Bennett v. Forbes, et al., No. 37- 28 2017-00022703-CU-MC-NC, in the San Diego County Superior Court. Mot. Stay at 3; 5 17cv464-MMA (KSC) 1 Doc. No. 17-4. On July 5, 2017, Plaintiff appeared ex parte to request a temporary 2 restraining order. Mot. Stay at 3. Defendant answered Plaintiff’s state court Complaint 3 on August 14, 2017 and filed a motion to stay the state court action on August 16, 2017. 4 Oppo. Stay at 4. The San Diego County Superior Court published tentative rulings 5 denying Plaintiff’s request and continued Defendants’ motion to stay to be heard after 6 this Court’s ruling on the present motions. Id. On September 8, 2017, the San Diego 7 County Superior Court deferred its rulings until after the hearing in this Court regarding 8 the motion to stay. Id. 9 2. 10 Legal Standard Federal courts have a “virtually unflagging obligation . . . to exercise the 11 jurisdiction given them.” Colorado River Water Conservation Dist. v. United States, 424 12 U.S. 800, 817-18 (1976); see also Smith v. Cent. Ariz. Water Conservation Dist., 418 13 F.3d 1028, 1033 (9th Cir. 2005) (stating that circumstances warranting a stay under the 14 Colorado River doctrine are “exceedingly rare”); Holder v. Holder, 305 F.3d 854, 867 15 (9th Cir. 2002) (“the Colorado River doctrine is a narrow exception”). “Generally, as 16 between state and federal courts, the rule is that ‘the pendency of an action in the state 17 court is no bar to proceedings concerning the same matter in the [f]ederal court having 18 jurisdiction . . . .” Colorado River, 424 U.S. at 817 (quoting McClellan v. Carland, 217 19 U.S. 268, 282 (1910)); see also Seneca Ins. Co. v. Strange Land Inc., 862 F.3d 835, 841 20 (9th Cir. 2017). 21 Nonetheless, federal courts are authorized to dismiss or stay an action “due to the 22 presence of a concurrent state proceeding for reasons of wise judicial administration.” 23 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15 (1983) (quoting 24 Colorado River, 424 U.S. at 818). In considering whether to do so, the court is tasked 25 with ascertaining “whether there exist ‘exceptional’ circumstances, the ‘clearest of 26 justifications,’ . . . to justify the surrender of [federal] jurisdiction.” Id. at 25-26 27 (emphasis in original); see also Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 28 912 (9th Cir. 1993) (“Only exceptional circumstances justify such a stay, and whether 6 17cv464-MMA (KSC) 1 these circumstances exist is determined by weighing a complex of factors.”). 2 Accordingly, the court considers the following factors in determining whether to grant 3 such a stay: 4 5 6 7 8 (1) whether the state court first assumed jurisdiction over property; (2) inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which jurisdiction was obtained by the concurrent forums; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state court proceedings are inadequate to protect the federal litigant’s rights; and (7) whether exercising jurisdiction would promote forum shopping. 9 10 Holder, 305 F.3d at 870 (citing Moses H. Cone, 460 U.S. at 15-16, 23, 26; Colorado 11 River, 424 U.S. at 818-19); see also Seneca Ins. Co., 862 F.3d at 842. Regardless, “the 12 decision whether to [stay] a federal action because of a parallel state-court litigation does 13 not rest on a mechanical checklist, but on a careful balancing of the important factors as 14 they apply in a given case, with the balance heavily weighted in favor of the exercise of 15 jurisdiction.” Moses H. Cone, 460 U.S. at 16; see also Seneca Ins. Co., 862 F.3d at 842; 16 Intel Corp., 12 F.3d at 912. 17 In the Ninth Circuit, “the narrow Colorado River doctrine requires that the pending 18 state court proceeding resolve all issues in the federal suit.” Holder, 305 F.3d at 859; see 19 also Seneca Ins. Co., 862 F.3d at 842. Indeed, if “there exists a substantial doubt as to 20 whether the state court proceeding will resolve all of the disputed issues in [the federal] 21 case, it is unnecessary for [the court] to weigh the other factors included in the Colorado 22 River analysis.” Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d at 913 n.7. The 23 Ninth Circuit explained that: 24 25 26 27 28 Under the rules governing the Colorado River doctrine, the existence of a substantial doubt as to whether the state proceeding will resolve the federal action precludes the granting of a stay . . . . “When a district court decides to . . . stay under Colorado River, it presumably concludes that the parallel statecourt litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties. If there is any substantial doubt as to this, it would be a serious abuse of discretion to grant the stay or dismissal 7 17cv464-MMA (KSC) 1 at all . . . . Thus, the decision to invoke Colorado River necessarily contemplates that the federal court will have nothing further to do in resolving any substantive part of the case, whether it stays or dismisses.” 2 3 4 Id. at 913 (internal citations omitted); see also Smith, 418 F.3d at 1033 (9th Cir. 2005). 5 3. 6 Analysis Here, the Court finds there to be substantial doubt as to whether the state 7 proceeding will resolve all the issues presented in this federal action. Plaintiff concedes 8 that “the claims and causes of action are not the same.” Mot. Stay at 5. The instant 9 action includes claims for copyright infringement, trademark infringement, intentional 10 interference with contractual relations, intentional interference with prospective 11 economic advantage, negligent interference with prospective economic advantage, 12 defamation, federal unfair competition and false designation, intentional infliction of 13 emotional distress, and negligent infliction of emotional distress. See FAC. The San 14 Diego Superior Court case includes causes of action for partnership dissolution and 15 accounting. See Doc No. 17-4 at 4-8. Further, the San Diego Superior Court cannot 16 decide all of Plaintiff’s federal claims. 28 U.S.C. § 1338(a) (“No State court shall have 17 jurisdiction over any claim for relief arising under any Act of Congress relating to . . . 18 copyrights.”). Accordingly, “there exists a substantial doubt as to whether the state court 19 proceeding will resolve all of the disputed issues in [the federal] case, [and] it is 20 unnecessary for [the court] to weigh the other factors included in the Colorado River 21 analysis.” Intel Corp., 12 F.3d at 913 n.7. 22 Nonetheless, consideration of the other factors also does not weigh in favor of 23 granting the requested stay. Neither this court nor the state court has assumed 24 jurisdiction over property. Jurisdiction was first obtained in this Court, but state law 25 provides the rule of decision on the merits of many—although not all—of Plaintiff’s 26 claims. However, there has been no showing that this federal forum is inconvenient for 27 the parties or that the exercise of jurisdiction by this court would promote forum 28 8 17cv464-MMA (KSC) 1 shopping.1 As previously discussed, not all the issues in the two actions are the same and 2 there exists a legitimate concern whether the state court proceedings are adequate to 3 protect the rights of the litigants in this action. Further, while avoiding piecemeal 4 litigation is certainly a desirable goal, there has been no showing that it will not be 5 achieved if this Court proceeds in this action. Indeed, the San Diego Superior Court has 6 deferred deciding on whether to stay the state action pending in state court until after this 7 Court rules on the motions pending here. Further, Plaintiff states that the state court’s 8 finding of whether or not a general partnership and/or joint venture existed will only 9 “likely” preclude Plaintiff’s infringement claims. Reply Stay at 7. 10 In short, after considering all of the relevant factors, this Court is not persuaded 11 that exceptional circumstances and the clearest of justifications have been established 12 justifying the granting of a stay. Accordingly, the Court DENIES Plaintiff’s motion to 13 stay proceedings pending resolution of the partnership dissolution proceeding in the San 14 Diego Superior Court. MOTION FOR LEAVE TO FILE AMENDED COMPLAINT 15 16 Plaintiff moves the Court to permit Plaintiff to file a Second Amended Complaint 17 (“SAC”) removing without prejudice the following claims from Plaintiff’s FAC: (1) 18 intentional interference with contractual relations; (2) intentional interference with 19 prospective economic advantage; (3) negligent interference with prospective economic 20 advantage; (4) defamation; (5) violation of California Business and Professions Code 21 17200; (6) intentional infliction of emotional distress; and (7) negligent infliction of 22 emotional distress. Doc. No. 16. This would leave Plaintiff with three claims for relief in 23 the SAC: (1) trademark infringement; (2) unfair competition and false designation under 24 25 26 27 28 1 The Court notes that Plaintiff decided to file the instant federal action in the United States District Court for the Southern District of California and to file the state action in the San Diego Superior Court in Vista, California. See Compl.; see also Doc No. 17-4 at 4-8. As a result, the Court find’s Plaintiff’s allegations of inconvenience with respect to traveling between Vista, CA and San Diego, CA to litigate both cases unpersuasive. 9 17cv464-MMA (KSC) 1 federal law; and (3) copyright infringement. Id. at 4. Defendants oppose Plaintiff’s 2 motion. Oppo. Leave. 3 1. Relevant Background On August 9, 2017, Plaintiff’s counsel and Defendants’ counsel met and conferred 4 5 regarding amendment of the FAC. Mot. Leave at 3. Plaintiff requested that Defendants 6 permit Plaintiff to amend his FAC to remove the state claims because they depend on 7 whether a partnership was formed. Id. Defendants offered to stipulate to Plaintiff 8 amending the FAC to include a claim for dissolution of partnership. Oppo. Leave at 4. 9 The parties could not agree, and so Plaintiff filed the instant motion. 10 2. 11 Legal Standard Rule 15(a) of the Federal Rules of Civil Procedure provides that a party may 12 amend its complaint (i) within 21 days after serving it; (ii) within 21 days after a 13 responsive pleading has been served; or (iii) with the opposing party’s written consent or 14 leave of court. Fed. R. Civ. P. 15(a). The United States Supreme Court has stated: 15 If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason – such as undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. – the leave sought should, as the rules require, be ‘freely given.’ 16 17 18 19 20 21 Foman v. Davis, 371 U.S. 178, 182 (1962); Circle Click Media LLC v. Regus Mgmt. Grp. 22 LLC, No. 12-04000 SC, 2013 WL 1739451, at *3 (N.D. Cal. Apr. 22, 2013) (stating “the 23 Ninth Circuit has stressed Rule 15’s policy of favoring amendments”). 24 3. 25 Analysis Defendants argue that Plaintiff’s motion for leave to amend should be denied 26 because they will be unduly prejudiced, Plaintiff’s motion is unduly delayed, Plaintiff is 27 seeking leave to amend in bad faith, and Plaintiff has already amended his Complaint 28 once. Oppo. Leave at 5-14. Plaintiff contends that “it is only natural and fair that [state 10 17cv464-MMA (KSC) 1 law] claims for relief be dismissed pending the Partnership Dissolution action in state 2 court,” and that “[r]emoving these claims for relief will simplify this case for Plaintiff, 3 Defendants, and this Court and limit it only to the Federal intellectual property issues.” 4 Mot. Leave at 4. 5 a. 6 In the context of a motion to amend, prejudice means “undue difficulty in Prejudice 7 prosecuting a lawsuit as a result of a change of tactics or theories on the part of the other 8 party.” Deakyne v. Commissioners of Lewes, 416 F.2d 290, 300 (3d Cir. 1969). The 9 prejudice inquiry carries the “greatest weight” among the five factors. Eminence Capital, 10 11 LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Defendants argue they will be substantially prejudiced by Plaintiff’s amendment 12 because it will alter the nature of the litigation by allowing disputed claims before this 13 Court to be decided in the San Diego County Superior Court, which will risk potentially 14 conflicting rulings in the two different courts and cause twice the litigation expense. 15 Oppo. Leave at 6-9. Specifically, Defendants note that this Court would have 16 supplemental jurisdiction over the dissolution and accounting claims Plaintiff filed in 17 State court, and eliminating the state law claims would significantly alter the nature of the 18 litigation. Id. at 6-7. Plaintiff counters Defendants will not be prejudiced because 19 granting Plaintiff leave to amend will not require supplemental discovery or require 20 Defendants to consider a new line of legal argument. Reply Leave at 4. Plaintiff 21 explains that amending the complaint will not alter the nature of the litigation, but will 22 “simplify the litigation into one intellectual property based dispute” and leave the state 23 partnership issues to be decided by the San Diego Superior Court. Id. at 5. Further, 24 Plaintiff asserts that splitting the claims between two different courts will not invite 25 potentially conflicting rulings because the two actions involve different claims and 26 remedies, and will not result in twice the litigation expenses because Plaintiff and 27 Defendants could meet and confer to streamline discovery. Id. 28 11 17cv464-MMA (KSC) 1 The Court finds that Defendants have not established undue prejudice. Defendants 2 have not shown how withdrawing Plaintiff’s state law claims would create an undue 3 difficulty in prosecuting this lawsuit. Should Plaintiff’s leave to amend be granted, the 4 state law claims would be eliminated from the instant action, which would simplify the 5 action. As a result, this factor weighs in favor of granting Plaintiff leave to amend. 6 b. 7 Undue delay is delay that prejudices the nonmoving party or imposes unwarranted 8 burdens on the court. See Davis v. Powell, 901 F. Supp. 2d 1196, 1212 (S.D. Cal. 2012). 9 “Considerable delay with no reasonable explanation is relevant where a proposed 10 amendment would cause prejudice to the other party or would significantly delay 11 resolution of the case.” Lockheed Martin Corp. v. Network Solutions, Inc., 175 F.R.D. 12 640, 643 (C.D. Cal. 1997) (citing Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th 13 Cir. 1990)). The Ninth Circuit has noted “late amendments to assert new theories are not 14 reviewed favorably when the facts and theory have been known to the party seeking 15 amendment since the inception of the cause of action.” Acri v. International Ass’n of 16 Machinists & Aerospace Workers, 781 F.2d 1393, 1398 (9th Cir. 1986). Courts have also 17 found undue delay weighing against granting leave to amend where the motion “is filed 18 near or after the close of discovery.” Ewing v. Megrdle, No. CV 12-01334 MWF (AJW), 19 2015 WL 1519088, at *4 (C.D. Cal. March 26, 2015) (summarizing Ninth Circuit cases 20 affirming denials of motions to amend due to undue delay when the motions were filed 21 near or after the close of discovery). 22 Delay Defendants contend that Plaintiff’s motion for leave to amend is unduly delayed 23 because he knew Defendants denied that a partnership existed over five months ago. 24 Oppo. Leave at 9-12. Plaintiff counters that he did not learn of Defendants’ decision 25 until briefing on the motion for preliminary injunction filed in this Court. Reply Leave at 26 7. Plaintiff asserts that he waited to seek leave to amend the FAC until the Court’s ruling 27 on the motion for preliminary injunction because the Court could have rendered an 28 12 17cv464-MMA (KSC) 1 opinion on the partnership issue. Id. Because the Court’s ruling came out on June 12, 2 2017, Plaintiff’s motion “can hardly be considered a delay.” Id. 3 The fact that Plaintiff should have known that Defendants denied that a partnership 4 existed over five months ago is irrelevant to whether Plaintiff should be granted leave to 5 amend to withdraw state law claims. Further, discovery has not begun in this case. 6 Finally, the Court finds that Plaintiff’s proposed withdrawal of state claims from the 7 federal action would not cause prejudice to Defendants and would not significantly delay 8 resolution of the case. Accordingly, the Court finds no undue delay. SAES Getters S.p.A. 9 v. Aeronex, Inc., 219 F. Supp. 2d 1081, 1086 (S.D. Cal. 2002) (“[t]o show undue delay, 10 the opposing party must at least show delay past the point of initiation of discovery”); see 11 also DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987) (no evidence of 12 undue delay when “suit is still in its early stages” and the moving party offers a 13 “satisfactory explanation of their delay”). As a result, this factor weighs in favor of 14 granting Plaintiff leave to amend. 15 c. 16 “In the context of a motion for leave to amend, ‘bad faith’ means acting with the Bad Faith 17 intent to deceive, harass, mislead, delay, or disrupt.” Covert v. City of San Diego, No. 18 15-cv-2097-AJB (WVG), 2016 WL 7117364, at *5 (S.D. Cal. Dec. 6, 2016). As defined 19 in other contexts, bad faith “implies the conscious doing of a wrong because of dishonest 20 purpose or moral obliquity . . . . [I]t contemplates a state of mind of affirmatively 21 operating with furtive design or ill will.” United States v. Manchester Farming P’ship, 22 315 F.3d 1176, 1185 (9th Cir. 2003). 23 Defendants contend that Plaintiff filed this claim and the state court action to 24 harass Defendants. Oppo. Leave at 12. Defendants assert that Plaintiff now seeks to 25 move more claims to state court in an “attempt to evade the federal ruling by forum 26 shopping and harassing Defendants with dueling state and federal claims on identical 27 issues.” Id. at 13. Plaintiff counters that he “believes in good faith that at the bare 28 minimum he was a partner” and is attempting to amend the complaint “to dismiss all of 13 17cv464-MMA (KSC) 1 the state claims so that the Superior Court can expedite this key issue for this Court.” 2 Reply Leave at 7. 3 The Court disagrees with Defendants’ argument. The fact that Plaintiff has filed a 4 complaint in state court and one in federal court arising out of the same facts does not, on 5 its own, support a finding that Plaintiff is attempting to harass Defendants. As a result, 6 this factor weighs in favor of granting Plaintiff leave to amend. 7 d. 8 A court may deny leave to amend if the proposed amendment is futile or would be 9 subject to dismissal. See Carrico v. City & Cnty of San Francisco, 656 F.3d 1002, 1008 Futility 10 (9th Cir. 2011). The test of futility “is identical to the one used when considering the 11 sufficiency of a pleading challenged under Rule 12(b)(6).” Miller v. Rykoff-Sexton, Inc., 12 845 F.2d 209, 214 (9th Cir. 1988). Defendants do not contend withdrawing state claims 13 would be futile. Oppo. Leave at 13. Accordingly, this factor weighs in favor of granting 14 Plaintiff leave to amend. 15 e. 16 A district court’s discretion to deny amendment is especially broad when the court 17 has already given a plaintiff one or more opportunities to amend. Chodos v. West Publ’g 18 Co., 292 F.3d 992, 1003 (9th Cir. 2002). “While not sufficient alone to deny leave to 19 amend, a party’s prior opportunities to amend are relevant to whether the court abused its 20 discretion in denying leave.” In re Circuit Breaker Litig., 175 F.R.D. 547, 552 (C.D. Cal. 21 1997). While Plaintiff has amended his Complaint once, he did so as a matter of course 22 under Federal Rule of Civil Procedure 15(a)(1). This weighs in favor of granting a 23 motion for leave to amend because Plaintiff’s previous amendment was not with leave of 24 court and all the other factors weigh in favor of granting leave to amend. 25 4. 26 Prior Amendment Conclusion On a final note, the Court emphasizes that it is within its discretion to grant 27 Plaintiff’s request for leave to amend. See Swanson v. U.S. Forest Serv., 87 F.3d 339, 28 343 (9th Cir. 1996) (the decision to grant or deny leave to amend is within the district 14 17cv464-MMA (KSC) 1 court’s discretion). While the Court appreciates Defendants’ arguments, Plaintiff is 2 master of his Complaint, and the Court will not require Plaintiff to litigate claims he no 3 longer wishes to litigate in this Court. Accordingly, the Court GRANTS Plaintiff’s 4 motion for leave to file an amended complaint [Doc. No. 16]. 5 CONCLUSION 6 In conclusion, the Court ORDERS as follows: 7 (1) Plaintiff’s Request for Judicial Notice is GRANTED; 8 (2) Defendants’ Request for Judicial Notice is GRANTED; 9 (3) Plaintiff’s Motion to Stay is DENIED; and 10 (4) Plaintiff’s Motion for Leave to File an Amended Complaint is GRANTED. 11 The Clerk of Court is DIRECTED to file Plaintiff’s Second Amended Complaint 12 attached as Exhibit B to Plaintiff’s “Notice of Motion for Leave to File Amended 13 Complaint, FRCP 15(a)(2)” [Doc. No. 16 at 18-25] as a separate docket entry. 14 15 IT IS SO ORDERED. Dated: October 12, 2017 16 17 18 19 20 21 22 23 24 25 26 27 28 15 17cv464-MMA (KSC)

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