Gilbert v. Lopez
Filing
292
ORDER granting 281 Motion for Leave to File Third Amended Complaint, by Magistrate Judge Michael E. Hegarty on 1/30/2020.(tsher, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 18-cv-00981-CMA-MEH
HEIDI GILBERT,
AMBER MEANS,
MANDY MELOON,
GABRIELA JOSLIN,
KAY POE,
Plaintiffs,
v.
USA TAEKWONDO, INC.,
STEVEN LOPEZ,
Defendants.
ORDER
Michael E. Hegarty, United States Magistrate Judge.
Before the Court is Plaintiffs’ Motion for Leave to File Third Amended Complaint. ECF
281. For the following reasons, the Court grants the motion.
BACKGROUND
Plaintiffs initiated this action on April 25, 2018 (ECF 1) and subsequently amended the
complaint twice, the first time of right under the Federal Rules, ECF 6 (First Amended Class
Action Complaint and Jury Demand, or FAC), and the second time “by agreement of the parties
[ECF 67 at 1],” ECF 68 (Second Amended Class Action Complaint and Jury Demand, or SAC).
In the SAC Plaintiffs generally allege that the Defendants:
inflicted on them and other American female taekwondo athletes forced labor and
services, sex trafficking, and other travesties.” They contend that the Lopez
Defendants, “the primary perpetrators,” “raped numerous female taekwondo
athletes” and that Defendant USOC and Defendant USAT (together, the “Institutional
Defendants”) facilitated the Lopez Defendants’ sex crimes and “protected [the Lopez
brothers] from law enforcement and suspension by Team USA.
Order Affirming and Adopting in Part and Rejecting in Part Magistrate Judge’s March 6, 2019
Recommendation and Granting in Part and Denying in Part Defendants’ Motions to Dismiss (ECF
266), at 3-4 (“Judge Arguello’s Order”). Judge Arguello’s Order dismissed some claims and
dismissed Defendant Jean Lopez. Subsequently, Plaintiffs voluntarily dismissed Defendant United
States Olympic Committee (USOC). ECF 267. In addition, after the motions to dismiss were filed,
but before Judge Arguello’s Order, Plaintiffs voluntarily dismissed Defendant U.S. Center for
SafeSport.
The current motion seeks to have the complaint in this action reflect (1) the prior changes
in parties, (2) the effect of Judge Arguello’s Order concerning the dismissal of certain claims, (3)
Plaintiffs’ voluntary dismissal of Defendant Jean Lopez, (4) Plaintiffs’ abandonment of class
allegations, and (5) Plaintiffs’ re-pleading of the negligence claim (dismissed without prejudice by
Judge Arguello’s Order) against Defendant USA Taekwondo, Inc. (“USAT”) brought by four
Plaintiffs (all except Kay Poe) (i.e., four separate negligence claims, new proposed Counts 9-12).
Defendant USAT opposes the motion based on lack of adequate notice, timeliness, futility, and
undue prejudice. Defendant Lopez does not oppose the motion.
DISCUSSION
Because Plaintiffs seek leave to amend the SAC after the period in which Fed. R. Civ. P.
15(a)(1) permits a party to amend its pleading as a matter of course, the motion implicates Rule
15(a)(2), which states:
In all other cases, a party may amend its pleading only with the opposing party’s
written consent or the court’s leave. The court should freely give leave when justice
so requires.
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“[T]he Rule itself states that ‘leave shall be freely given when justice so requires.’” Minter v.
Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (citing Fed. R. Civ. P. 15(a)). “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.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009)
(quoting Frank v. U.S. W., Inc., 3 F.3d 1357, 1365 (10th Cir. 1993)). “The purpose of the Rule is
to provide litigants ‘the maximum opportunity for each claim to be decided on its merits rather
than on procedural niceties.’” Minter, 451 F.3d at 1204 (quoting Hardin v. Manitowoc–Forsythe
Corp., 691 F.2d 449, 456 (10th Cir. 1982)).
Initially, USAT notes the “moving target” approach of Plaintiffs in this case, pointing out
that this would be the fourth complaint, with the SAC being filed with Defendants’ consent only
after Defendants moved to dismiss it. Defendants assert that the FAC alleged 37 counts while the
SAC alleged 21 but added U.S. Center for SafeSport as a Defendant, as well as adding a RICO
claim and state law claims for negligence, gross negligence, and outrageous conduct. Next, USAT
acknowledges that the legal theory for the four new negligence claims “differs slightly from
previous iterations of the complaint, [but] the allegations that support the theory are substantially
the same and in most cases are repetitiously alleged.” USAT then provides a grid comparing the
overlap of the proposed amended allegations with those in the FAC and the SAC.
USAT’s first basis for opposing the motion is that it does not provide adequate notice and
would prejudice USAT’s defense. USAT correctly argues that the proposed third amended
complaint (TAC) overpleads in many instances, containing dozens of paragraphs about former
Defendant USOC’s knowledge and control, and also two paragraphs about a venture liability
theory between the USOC and the USAT, all of which demonstrate a disconnect between the
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nature of the case that was dismissed and the nature of the case that remains. According to USAT,
this results in an inability to prepare a defense due to the necessity to decide which allegations are
potentially relevant and which are stale.
While USAT’s argument is well taken, and Plaintiffs should submit an additional redlined
proposed TAC that eliminates superfluous or now-irrelevant allegations, I do not agree that USAT
cannot effectively defend based on the proposed TAC. It is the enumerated counts that determine
the claims on which USAT must defend the case, and USAT has not argued that those twelve
proposed counts contain similar deficiencies as the factual allegations.
USAT next argues that the motion should be denied because Plaintiffs have previously
failed to cure deficiencies in their claims through amendment. This argument contains only three
sentences and is not persuasive. Truly at some point enough is enough, but this is the first proposed
amendment for which Court approval has been sought. I do not believe that, on the current record,
justice demands a finding that Plaintiffs have gone too many times to the well.
USAT also asserts the untimeliness of the proposed TAC. Granting the Plaintiffs’ motion
here would require modification of the Scheduling Order’s deadline for amendment of pleadings.
A Scheduling Order may be modified only upon a showing of “good cause” under Fed. R. Civ. P.
16(b). The standard for “good cause” is the diligence demonstrated by the moving party in
attempting to meet the Court’s deadlines. Colorado Visionary Acad. v. Medtronic, Inc., 194 F.R.D.
684, 687 (D. Colo. 2000). “Rule 16 erects a more stringent standard [than Rule 15(a)], requiring
some persuasive reason as to why the amendment could not have been effected within the time
frame established by the court.” Id. To show good cause, Plaintiffs “must provide an adequate
explanation for any delay” in meeting the Scheduling Order’s deadline. Minter, 451 F.3d at 1205
n.4.
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Notably, rigid adherence to the Scheduling Order is not advisable. Sil-Flo, Inc. v. SHFC,
Inc., 917 F.2d 1507, 1519 (10th Cir. 1990). A failure to seek amendment within the deadline may
be excused if due to oversight, inadvertence or excusable neglect. Id. Additionally, learning
information underlying the amendment through discovery that occurs after the deadline set forth
in the Scheduling Order constitutes good cause to justify an extension of that deadline. Pumpco,
Inc. v. Schenker Int’l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001); see also Gorsuch, Ltd., B.C. v.
Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1240 (10th Cir. 2014) (same).
USAT states that the only true, “new” facts in the proposed TAC concern information
learned in the deposition of Donald Alperstein in June 2019, while the current motion was not filed
until December 16, 2019. However, after the Alperstein discovery efforts, Plaintiffs still awaited
Judge Arguello’s Order, my Recommendations having been issued on March 6, 2019 (ECF 217,
218). Plaintiffs should have reasonably believed that, based on the Recommendations, this case
might change substantially and, thus, require amendment of the SAC. Of course, that change did
in fact occur with Judge Arguello’s Order, dated September 27, 2019. From that Order until the
current motion, two and one-half months transpired. That is not an excessive duration given the
length and complexity of the SAC and the proposed TAC (the former containing 191 pages and
966 numbered paragraphs, the latter containing potentially even more pages [exact number
unknown] and 1007 numbered paragraphs). The Court finds Plaintiffs have demonstrated good
cause to modify the Scheduling Order and their proposed amendments are not unduly delayed.
Perhaps most significantly, USAT argues that the new claims in the proposed TAC would
be futile and subject to dismissal. Plaintiffs respond that the proposed TAC contains allegations
that “make clear that the duty element of Plaintiffs’ negligence claim against USAT is based on
USAT’s voluntary assumption of a duty for each Plaintiff, and not based on Plaintiffs’ membership
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status.” Reply at 9. Indeed, in my Recommendation (ECF 218) I recommended that Judge
Arguello find USAT did not owe Plaintiffs a legal duty. This conclusion was based on Plaintiffs’
status as former members of USAT during the statutory claim period. I determined that, based on
the factors of Taco Bell, Inc. v. Lannon, 744 P.2d 43, 46 (Colo. 1987), USAT owed no duty to
investigate claims of former athletes. Judge Arguello’s Order noted that Plaintiffs failed to raise
the voluntary assumption of duty argument in their initial briefing on the motion to dismiss and,
thus, could not raise the argument in their briefing on my Recommendation. The proposed TAC
alleges a voluntary assumption of duty as well as the existence of a “special relationship” between
the USAT and the former athletes (the one “new” theory that USAT believes the proposed TAC
makes).
Because Judge Arguello’s Order dismissed the negligence claim without prejudice, as a
matter of law a proposed amended complaint is tenable. I believe the theories of voluntary
assumption of duty (which will not be barred as a matter of law on any future motion testing the
proposed TAC) and special relationship are sufficiently substantial and tied to the proposed TAC’s
factual allegations to survive USAT’s futility argument. I do not here intend to state that the four
negligence claims would of certainty survive a motion to dismiss or for summary judgment, but
only that the standard for amending the complaint has been met.
All that said, I encourage Plaintiffs to carefully consider the criticisms of specific factual
allegations made by Defendant USAT (as noted above) and to edit the proposed TAC for purposes
of eliminating easily remediable deficiencies that would likely be raised in a dispositive motion by
USAT.
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CONCLUSION
For the foregoing reasons, this Court grants Plaintiffs’ Motion for Leave to File Third
Amended Complaint (filed December 16, 2019; ECF 281) as stated herein. Plaintiffs shall file the
Third Amended Complaint in accordance with this Order and all applicable rules on or before
February 7, 2020. Defendants shall file an answer or other response to the amended pleading in
accordance with Fed. R. Civ. P. 15.
Dated at Denver, Colorado this 30th day of January, 2020.
BY THE COURT:
Michael E. Hegarty
United States Magistrate Judge
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