Sprint Communications Company L.P. v. Time Warner Cable Inc. et al
Filing
81
ORDER granting 68 motion for leave to file an amended complaint. Signed by Magistrate Judge James P. O'Hara on 12/16/2013. (ah)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
SPRINT COMMUNICATIONS CO., L.P.,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
TIME WARNER CABLE, INC., et al.,
Defendants.
Case No. 11-2686-JWL
ORDER
Sprint Communications Company, L.P., contends that defendants are infringing
twelve patents related to broadband and packet-based telephony products. Sprint has filed
a motion for leave to file an amended complaint that would add a willful infringement claim
against defendant Time Warner Cable, Inc. (ECF doc. 68). Because the court finds good
cause for the late amendment, the motion is granted.
Under Fed. R. Civ. P. 15(a)(2), once a responsive pleading has been filed and 21 days
have passed, “a party may amend its pleading only with the opposing party’s written consent
or the court’s leave.” Rule 15 dictates that the court “should freely give leave when justice
so requires.”1 When the deadline set in the scheduling order for amending pleadings has
passed, however, Fed. R. Civ. P. 16(b)(4) may also be implicated.2 Rule 16(b)(4) provides
1
Fed. R. Civ. P. 15(a)(2).
2
The Tenth Circuit “has not yet considered whether Rule 16(b)(4) must be met when
motions to amend pleadings would necessitate a corresponding amendment of scheduling
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that a scheduling order may be modified “only for good cause.” Thus, courts in the District
of Kansas determine whether the Rule 16(b)(4) “good cause” standard has been established
before proceeding to determine if the more liberal Rule 15(a) standard has been satisfied.3
In this case, the scheduling order, as amended, set a deadline of June 17, 2013, for amending
the pleadings. Because Sprint did not file the instant motion until October 24, 2013, the
court will follow the two-step approach.
To establish good cause under Rule 16(b)(4), Sprint must show that it could not have
met the scheduling-order deadline for amending its complaint even if it had acted with due
diligence.4 As earlier indicated, Sprint seeks to add a claim that Time Warner willfully
infringed certain of the asserted patents. The proposed claim is premised on Time Warner’s
admission that it learned in July 2007 that Sprint asserted those patents in earlier litigation
against Vonage Holdings Corporation.5
In a June 12, 2013 interrogatory response (five days before the deadline to seek to
amend pleadings), Time Warner stated that it “was aware of the complaint in [Vonage], but
orders.” United States ex rel. Ritchie v. Lockheed Martin Corp., 558 F.3d 1161, 1166 (10th
Cir. 2009) (citing Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006)).
3
See, e.g., Five Rivers Ranch Cattle Feeding, LLC v. KLA Env’t Servs., Inc., No. 082185, 2010 WL 2609426, at *2 (D. Kan. June 25, 2010); Miller v. Union Pacific R.R., No.
06-2399, 2008 WL 4271906, at *2 (D. Kan. Sept. 12, 2008); Lipari v. U.S. Bancorp, N.A.,
No. 07-2146, 2008 WL 2944909, at *2 (D. Kan. July 28, 2008).
4
Miller, 2008 WL 4271906, at *2; Denmon v. Runyon, 151 F.R.D. 404, 407 (D. Kan.
1993).
5
See Sprint Commc’ns Co. v. Vonage Holdings Corp., No. 05-cv-2433 (D. Kan.).
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not any specific patents, in July 2007.”6 Time Warner further stated that it became aware of
the asserted patents on or about the date that Sprint filed its complaint in this case.7 Thus,
Time Warner’s stated position at the time that the deadline for amending pleadings passed
was that it had no pre-suit knowledge of Sprint’s asserted patents.
In a July 1, 2013 letter, Sprint asked Time Warner to confirm its position that it was
not aware of the asserted patents before this lawsuit was filed.8 Time Warner responded by
letter dated July 11, 2013, that it would supplement its interrogatory response.9 On
September 16, 2013, Sprint sent an email to Time Warner, noting that Time Warner had not
yet supplemented as promised.10 On October 9, 2013, Time Warner supplemented its
response to the interrogatory, stating that Time Warner “first learned that Sprint claimed to
have patents with the patent numbers that it asserted in the prior Vonage litigation in or about
July, 2007.”11 Sprint then filed its motion for leave to file an amended complaint adding the
willful infringement claim on October 24, 2013.
Sprint has demonstrated good cause for amending the scheduling-order deadline for
6
ECF doc. 68-2 at 12.
7
Id.
8
ECF doc. 69-3.
9
ECF doc. 69-4 at 5.
10
ECF doc. 69-5. Time Warner supplemented responses to other interrogatories on
August 23, 2013, but not to the interrogatory relevant here.
11
ECF doc. 68-4 at 18.
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the filing of an amended pleading. When “the factual basis giving rise to a claim . . .
arguably did not arise until after the scheduling order deadline, [the movant] has shown good
cause to amend the complaint in this regard.”12 Prior to the deadline for Sprint to amend its
complaint, Time Warner directly denied having pre-suit knowledge of Sprint’s asserted
patents. Sprint diligently worked to get Time Warner to confirm or clarify Time Warner’s
position. Time Warner continuously promised to supplement its interrogatory response
addressing this issue, and Sprint was reasonable in awaiting Time Warner’s supplementation.
It is disingenuous for Time Warner to change its position as to when it obtained knowledge
of the asserted patents, but then to object to Sprint’s attempt to amend the complaint based
on the changed position.
Time Warner makes much of the fact that on October 2, 2013, Sprint circulated a
proposed amended complaint, substantially similar to the one attached to the instant motion,
containing a willful infringement claim. The October 2, 2013 proposed amended complaint
obviously was not based on Time Warner’s October 9, 2013 interrogatory supplement
admitting pre-suit knowledge of the patents. Thus, Time Warner argues, Sprint had all of the
information necessary to seek amendment before the date of the scheduling-order deadline
for so doing. Although this argument is appealing on its face, it ignores the behind-thescenes realities in this case. As discussed above, it was not until after the scheduling-order
12
Monge v. St. Francis Health Center, Inc., No. 12-2269, 2013 WL 328957, at *2 (D.
Kan. Jan. 10, 2013).
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deadline passed that Time Warner agreed to supplement its interrogatory response, signaling
the potential that it would amend or reverse its stated position on pre-suit knowledge.
Although one might argue that Sprint should have sought leave to make its requested
amendment upon Time Warner’s agreement to supplement, the court ultimately concludes
that Sprint was reasonable in awaiting Time Warner’s promised supplemental interrogatory
response confirming Time Warner’s changed position, before actually filing Sprint’s motion
for leave to amend.
Finding that Sprint has provided an “adequate explanation for any delay,”13 the court
holds that Rule 16(b)(4)’s “good cause” standard has been satisfied. Thus, the court now
considers whether Sprint has also satisfied the Rule 15(a) standard for amendment of
pleadings. As mentioned above, Rule 15(a) anticipates the liberal amendment of pleadings.
“The court must be ‘mindful of the spirit of the federal rules of civil procedure to encourage
decisions on the merits rather than on mere technicalities.’”14 Nonetheless, a court may deny
leave to amend “upon a showing of undue delay, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or undue prejudice to the opposing party,
or futility of amendment.”15 Time Warner argues that leave to amend should be denied
13
Navegante Grp., Inc. v. Butler Nat’l Serv. Corp., Nos. 09-2554, 09-2466, 2011 WL
1769088, at *5 (D. Kan. May 9, 2011).
14
Monge v. St. Francis Health Ctr., Inc., No. 12-2269, 2013 WL 328957, at *2 (D.
Kan. Jan. 10, 2013) (quoting Koch v. Koch Indus., 127 F.R.D. 206, 209 (D. Kan. 1989)).
15
Castleglen, Inc. v. Resolution Trust Corp., 984 F.2d 1571, 1585 (10th Cir. 1993)
(citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
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because the proposed amendment would prejudice Time Warner and also be futile.
The most important fact in deciding a motion to amend is whether the amendment
would unduly prejudice the nonmoving party.16 Typically, an amendment is prejudicial only
if it “unfairly affects” defendant in terms of preparing a defense to the amendment.17 This
most often occurs when “the amended claims arise out of a subject matter different from
what was set forth in the complaint and raise significant new factual issues.”18 The willful
infringement claim Sprint proposes to add relates to the same subject matter set forth in
Sprint’s original complaint, namely, infringement of certain asserted patents. Although it is
true, as Time Warner points out, that a willfulness claim will require Time Warner to
investigate and pursue discovery into whether Time Warner knew of the patents-in-suit and
either knew or should have known that it was infringing, there is plenty of time for such
investigation and discovery. Discovery is not scheduled to end until July 25, 2014, and
currently pending before the court is defendants’ motion to extend all scheduling order
deadlines by six months. At this point, no party depositions have been noticed or taken.
Given the stage of this case, Time Warner would not be unfairly affected by the proposed
amendment.
Next, Time Warner argues that the amendment would be futile because Sprint’s
16
Minter, 451 F.3d at 1208.
17
Id. (quoting Patton v. Guyer, 443 F.2d 79, 86 (10th Cir.1971)).
18
Id. (comparing cases).
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proposed willful infringement claim could not survive a motion to dismiss. “A proposed
amendment is futile if the amended complaint would be subject to dismissal.”19 In
considering whether a proposed amendment is futile, the court uses the same analysis that
governs a Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure to state a claim.20 Therefore,
the court will only deny an amendment on the basis of futility when, accepting the wellpleaded allegations of the proposed amended complaint as true and construing them in the
light most favorable to the plaintiff, the court determines that plaintiff has not presented
“enough facts to state a claim to relief that is plausible on its face.”21 “The party opposing
the proposed amendment bears the burden of establishing its futility.”22
Time Warner argues that Sprint’s proposed amended complaint fails to plead facts
showing that Time Warner acted despite an objectively high risk, of which Time Warner
knew or should have known, that its actions constituted infringement. Sprint responds that
its allegations stating (1) that Time Warner knew of or was willfully blind to the asserted
patents due to its knowledge of the Vonage litigation and (2) that Time Warner had long
provided VoIP services, were sufficient to meet the pleading requirements. The undersigned
19
Little v. Portfolio Recovery Assocs., LLC, __ F. App’x __, 2013 WL 6153579, at *1
(10th Cir. Nov. 25, 2013) (citing Jefferson Cnty. Sch. Dist. No. R-1 v. Moody’s Investor’s
Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999)).
20
See Pedro v. Armour Swift-Eckrich, 118 F. Supp. 2d 1155, 1158 (D. Kan. 2000).
21
Little, 2013 WL 6153579, at *1.
22
Mars v. Novartis Pharm. Corp., No. 11-2555, 2012 WL 1288729, at *2 (D. Kan.
April 16, 2012).
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U.S. Magistrate Judge, James P. O’Hara, cannot say that Sprint’s proposed willful
infringement claim could not withstand a motion to dismiss. At this relatively early stage in
the case, the undersigned concludes the better course is to permit the amended complaint and
allow the presiding U.S. District Judge, John W. Lungstrum, to address the legal sufficiency
of the claim on a properly filed motion to dismiss.23
The court concludes that both Rule 16(b)(4) and Rule 15(a) have been satisfied. It is
therefore ordered that Sprint’s motion for leave to file an amended complaint is granted.
Sprint shall file its amended complaint as a separate docket entry by December 20, 2013.
IT IS SO ORDERED.
Dated December 16, 2013, at Kansas City, Kansas.
s/ James P. O’Hara
James P. O’Hara
U.S. Magistrate Judge
23
See Monge, 2013 WL 328957, at *3.
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