Edwards v. Zenimax Media, Inc., et al

Filing 48

ORDER. ORDERED that Plaintiff's Motion for Leave to File Amended Class Action Complaint and Incorporated Memorandum of Law 37 Is DENIED by Judge Wiley Y. Daniel on 05/28/13.(jjhsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Wiley Y. Daniel
Civil Action No. 12-cv-00411-WYD-KLM
LANDIS EDWARDS, individually and on behalf of all others similarly situated,
Plaintiff,
v.
ZENIMAX MEDIA INC., a Delaware Corporation, and BETHESDA SOFTWORKS LLC,
a Delaware Limited Liability Company,
Defendant.

ORDER

I.

INTRODUCTION
THIS MATTER is before the Court on Plaintiff’s Motion for Leave to File

Amended Class Action Complaint and Incorporated Memorandum of Law filed
November 2, 2012. Plaintiff seeks leave to file an Amended Class Action that
purportedly remedies the deficiencies I found in my Order of September 25, 2012, which
struck the class allegations in the original complaint. A response in opposition to
Plaintiff’s motion was filed on November 19, 2012, and a reply was filed on December 3,
2012. For the reasons discussed below, Plaintiff’s motion is denied.
By way of background, Plaintiff alleges in this case that a uniform design defect,
present in each and every new copy of Defendant’s video game, The Elder Scrolls IV:
Oblivion (“Oblivion”), has diminished the value of the game and caused injury to millions
of consumers. In the original Complaint, Plaintiff sought to certify a class of “[a]ll

persons or entities residing in the State of Colorado who purchased any version of the
Elder Scrolls IV: Oblivion video game”, subject to certain exclusions which are not
relevant to my analysis.
By Order of September 25, 2012, I struck the class allegations, finding that
Plaintiff failed to define an ascertainable class and that the class was overbroad. As
noted in my Order, the class:
includes Colorado residents who presumably purchased Oblivion from
anyone, anywhere, at any time regardless of whether he or she was ever
injured by or even experienced the alleged Defect. Further, it is not limited
to those persons or entities who purchased Oblivion from the Defendants and
therefore includes people who purchased a copy of the game—new or
used—from anyone else. . . . [E]ven if a class of purchaser presently was
ascertainable, sales of Oblivion will continue, rendering an alleged class of
“all purchasers” further unascertainable because membership in the class
would be in constant flux.
(Sept. 25, 2012, Order at 9, ECF No. 32.)
I further found under principles of comity that decisions involving a similar class
allegation in another case against Zenimax Media, Inc were “highly persuasive and
relevant to the resolution” of the motion to strike. (September 25, 2012 Order at 7)
(citing Walewski v. Zenimax Media Inc. 2012 WL 847236 (M.D. Fla. Mar. 13, 2012)
(Order Adopting Magistrate Judge’s Report and Recommendation); Walewski v.
Zenimax Media, Inc. 2012 WL 834125 (M.D. Fla. Jan. 30, 2012) (Recommendation of
Magistrate Judge)). I “agree[d] with the Walewski court that ‘even if the parties were
able to identify all purchasers of the game from all sources, the popularity of the game,
as described by the parties, makes it especially difficult to cull appropriate class

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members from the ‘millions’ of game owners, without extensive fact finding.’” (Id. at 9)
(quoting Walewski, 2012 WL 834125, at *5).
Plaintiff now seeks to file an amended class action complaint solely in order to
refine the class definition in accordance with the Court’s Order. The new class
definition includes “[a]ll natural persons residing in the state of Colorado who purchased
any new version of The Elder Scrolls IV: Oblivion video game from March 20, 2006, until
January 5, 2012”, again with certain exceptions not relevant to the instant motion.
(Proposed Pl.’s First Am. Class Action Compl., ¶ 52, Ex. A to Pl.’s Mot. for Leave to File
Am. Class Action Compl.)
II.

ANALYSIS
Federal Rule of Civil Procedure 15(a) provides that “leave [to amend] shall be

freely given when justice so requires.” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204
(10th Cir. 2006) (quoting Fed. R. Civ. P. 15(a)(2)). “The liberal granting of motions for
leave to amend reflects the basic policy that pleadings should enable a claim to be
heard on its merits.” Calderon v. Kansas Dep’t of Social And Rehabilitation Servs., 181
F.3d 1180, 1186 (10th Cir. 1999). Refusing leave to amend is generally only justified
upon a showing of undue delay, undue prejudice to the opposing party, bad faith or
dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility
of amendment.” Frank v. U.S. West, 3 F.3d 1357, 1365 (10th Cir. 1993).
Plaintiff argues that his motion to amend should be granted because he has met
the requirements for amending under Rule 15 and because the newly proposed class
definition addresses each of the Court’s concerns identified in the September 2012
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Order. In that regard, he contends that the amendment to the class definition is
narrowly tailored to include only those objectively identifiable consumers who were
harmed by Defendants’ alleged unlawful conduct. Specifically, the amended class
definition now: (I) limits purchasers to only “natural persons” instead of “all persons and
entities,” (ii) ensures that the class members are only purchasers of new games—rather
than any version, and (iii) sets explicit time parameters for class membership, so that
the class is not in “constant flux.” Plaintiff asserts that the amended class definition
limits membership to the discernible set of consumers who overpaid for new versions of
Oblivion during a precise time period prior to the commencement of this action. Thus,
he argues that the primary concern of the Court—that the proposed class definition
would include all individuals who purchased Oblivion from “anyone, anywhere, at any
time”—is addressed by the proposed amendment.
Defendants argue that Plaintiff’s proposed amendment is futile. They assert that
the proposed class definition again sets forth a putative class that is both overbroad and
unascertainable. They further assert that the Court’s September 2012 Order rejected
Plaintiff’s argument that injury results regardless of whether the alleged Defect
manifests–a decision in accord with established precedent from around the country
holding that where an alleged defect does not manifest, a purchaser/putative class
member does not have a cognizable cause of action and cannot be a member of a
class. Far from correcting the fundamental inadequacies of the stricken class definition,
Defendants contend that Plaintiff’s proposed class definition offers only three changes
that are inconsequential, wholly fail to render the class ascertainable, and raise new
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individualized inquiries that further preclude certification of any class. Finally,
Defendants argue that Plaintiff has not shown good faith for seeking leave to amend
after the deadline for amendment of pleadings.
Turning to my analysis, I first address whether the proposed amendment is futile.
“A proposed amendment is futile if the complaint, as amended, would be subject to
dismissal.” Gohier v. Enright, 186 F.3d 1216, 1218 (10th Cir. 1999). “The futility
question is functionally equivalent to the question whether a complaint may be
dismissed for failure to state a claim. . . .” Id.
Defendants focus primarily on the fact that Plaintiff’s proposed amendment to the
class definition does not correct the concern articulated in my September 2012 Order
that the class definition is inadequate because it is overbroad and includes persons who
purchased Oblivion regardless of whether they were ever injured by or even
experienced the alleged Defect. (September 25, 2012 Order at 9.) I found that a
person may never experience the Defect and/or suffer from Oblivion’s alleged
decreased secondary market, and thus would not suffer any loss. (Id. at 10-11.)
Plaintiff has now cited cases that better support his theory of damages—that
class members suffered economic injury at the time of the purchase of the product
when they purchased the product because the Defect was not revealed, meaning that
they did not receive the benefit of the bargain. See, e.g., Cole v. General Motors Corp.,
484 F.3d 717, 722-23 (5th Cir. 2007); Coghlan v. Wellcraft Marine Corp., 240 F.3d 449
(5th Cir. 2001). The Fifth Circuit in Coghlan distinguished this type of claim from a
typical products liability cases, stating that “[t]he key distinction . . . is that the Coghlans'
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claims are rooted in basic contract law rather than the law of product liability: the
Coghlans assert they were promised one thing but were given a different, less valuable
thing.” 240 F.3d at 455 n. 4. It further explained:
The wrongful act in a no-injury products suit is thus the placing of a
dangerous/defective product in the stream of commerce. In contrast, the
wrongful act alleged by the Coghlans is Wellcraft's failure to uphold its end
of their bargain and to deliver what was promised. The striking feature of a
typical no-injury class is that the plaintiffs have either not yet experienced a
malfunction because of the alleged defect or have experienced a malfunction
but not been harmed by it. Therefore, the plaintiffs in a no-injury products
liability case have not suffered any physical harm or out-of-pocket economic
loss. Here, the damages sought by the Coghlans are not rooted in the
alleged defect of the product as such, but in the fact that they did not receive
the benefit of their bargain. . . .
Id.
I first note that Plaintiff has not cited, and I have not found, any authority in this
Circuit accepting this theory. I am not convinced that the Tenth Circuit would adopt the
holding of Coughlin or the cases relied on by Plaintiff as it does not appear that the
class members suffered an actual injury. For example, as noted in my September 2012
Order, under the proposed amended class definition, every purchaser of a new copy of
the game “is a class member even if he has no complaints about the game, but if his
brother gives him the same game as a gift, he is not a class member, even if he
experiences the Alleged Defect.” (September 25, 2012 Order at 10) (quoting Walewski,
2012 WL 834125 at *5 (emphasis in original)). Every purchaser of a new copy of the
game under the proposed class definition who “after having played it (whether or not he
experienced the Defect)[,] gifts it to a friend, [also] is a member of the class even though
he did not suffer from the effects of the Video Game’s decreased value on the
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secondary market.” (Id.) “In this same example, if the [purchaser] had not played the
Video Game before gifting it to his friend, he would neither have experienced the Defect
nor suffered from a decreased secondary market value but would still be included in the
class.” (Id.)
Moreover, even if Plaintiff’s theory of recovery is cognizable, there are other
problems with the class definition. The proposed amended class definition continues to
include people who purchased the game from anyone, and is not limited to purchases
from the Defendants. (See September 25, 2012 Order at 9.) As noted in the Walewski
case, there is a strong secondary market for video games that allows consumers to sell
both new and used games to others. Walewski, 2012 WL 834125, at *4. As further
noted in that case, “it is likely that an untold number of games were purchased through
third parties in completely private transactions through various informal means and
without any direct involvement (and thus outside the knowledge or control) of
Defendants.” Id. As in that case, Plaintiff “does not propose any method of identifying
these secondary market purchasers sufficient to determine who is entitled to notice of
the suit and who will be bound by any resulting judgment.” Id.
I also found in my September Order that Plaintiff’s class allegations were
unascertainable because “‘even if the parties were able to identify all purchasers of the
game from all sources, the popularity of the game, as described by the parties, makes it
especially difficult to cull appropriate class members from the ‘millions’ of game owners,
without extensive fact finding.’” (September 25, 2012 Order at 9) (quoting Walewski,
2012 WL 834125 at *5.) This problem remains in Plaintiff’s proposed class definition.
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The amended class definition thus remains overbroad and unascertainable. See, e.g.,
Jaramillo v. Garda, Inc., No. 12 Civ. 662, 2012 WL 4955832, at *6 (N.D. Ill. Oct. 17,
2012) (denying motion for leave to amend where the court found “that even if it granted
Plaintiffs leave to amend their class definition, the class would still suffer the same flaws
as the current class definition”).
Finally, while not dispositive of my ruling, I note that Plaintiff’s motion was filed
two months after the deadline for amendment of pleadings set by the Court’s
Scheduling Order. Plaintiff failed to properly move for leave to amend in response to
Defendants’ Motion to Strike Plaintiff’s Class Allegations. A request for leave to amend
in response to a motion is not sufficient. See D.C.COLO.LCivR 7.1.C; Grigs v.
Jornayvaz, No. 09 Civ. 629, 2010 WL 4932674, at *12 (D. Colo. Nov. 29, 2010)
(denying request for leave to amend complaint made “[i]n a single sentence at the
conclusion of [plaintiff’s] brief” because “[t]he Local Rules in this District state that a
‘motion shall not be included in a response or reply to the original motion,’ but rather
‘shall be made in a separate paper’”). Plaintiff further failed to move to extend or stay
the Scheduling Order before the deadlines lapsed for amendment of pleadings and for
class certification.1 This does not demonstrate good cause. See Allen v. Allen, No. 10
Civ. 2207, 2011 WL 4018029, *3 (D. Colo. July 13, 2011) (denying motion for leave to
amend complaint where “Plaintiff could have readily included this proposed claim in his
original pleading or at the very least before the deadline for amendment of pleading” but

1

I reject Plaintiff’s argument that the stay of discovery effectively postponed the scheduling

deadlines.

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did not do so); Squires v. Goodwin, No. 10 Civ. 309, 2012 WL 37508, *6 (D. Colo. Jan.
9, 2012) (denying motion for leave to amend filed after expiration of deadline in
scheduling order because “[t]he Federal Rules of Civil Procedure will not necessarily
protect a party from the unforeseen consequences of their own litigation strategy”); see
also Lewis v. Wells Fargo Bank N.A., No. 11 Civ. 3387, 2012 WL 4097709, *11 n. 4
(D. Colo. Aug. 21, 2012) (Mix, M.J.) (“it this Court's practice, and indeed the practice of
other judges in this District, to resolve untimely motions to amend first by considering
the Rule 16(b)(4) good cause standard as a threshold issue . . . .if good cause is not
shown, the Court is not required to consider whether Rule 15(a) excuses that failure”).
Based on the foregoing, it is
ORDERED that Plaintiff’s Motion for Leave to File Amended Class Action
Complaint and Incorporated Memorandum of Law filed November 2, 2012 (ECF No. 37)
Is DENIED.
Dated: May 28, 2013
BY THE COURT:
s/ Wiley Y. Daniel
Wiley Y. Daniel
Senior United States District Judge

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