Viper Nurburgring Record LLC v. Robbins Motor Co. LLC et al
Filing
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MEMORANDUM AND ORDER denying 44 Motion for Leave to Amend Complaint. Signed by Magistrate Judge Kenneth G. Gale on 11/21/18. (df)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
VIPER NURBURGRING
RECORD, LLC,
)
)
)
Plaintiff,
)
vs.
)
)
ROBBINS MOTOR CO., LLC,
)
and CLAYTON ROBBINS,
)
)
Defendants.
)
______________________________ )
Case No. 18-4025-HLT-KGG
ORDER DENYING MOTION TO AMEND COMPLAINT
Before the Court is the Motion for Leave to Amend Complaint filed by
Plaintiff Viper Nurburgring Record, LLC (hereinafter “Viper,” “VNR,” or
“Plaintiff”). (Doc. 44.) Having considered the submissions of the parties as well
as the Scheduling Order in this case, Plaintiff’s motion is DENIED.
FACTUAL BACKGROUND
This is a copyright infringement case. Defendants summarized the “nature
of the case” in its Motion to Compel (Doc. 50) currently pending before this
Court.1 Defendants’ summary is as follows:
Plaintiff is an entity formed to set a world record time for
a production or ‘stock’ Viper – that is, a ‘normal’ Viper
1
This Motion to Compel (Doc. 50) will be decided by this Court under separate Order.
The Court is incorporating this factual summation, however, because neither party
summarized the factual background of this case in the context of the present motion. (See
generally Docs. 44, 48, 51.)
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car off the production line or taken from stock, and not
specially modified other than minor things like a safety
cage for the drive – on the Nurburgring track in Nurburg,
Germany. Defendants were a sponsor and contributed
thousands of dollars to help support this world record
attempt.
VNR hired a professional photographer to
document the event. In exchange for Defendants’ support
and sponsorship, VNR gave Defendants an express
license to use at least one photograph, and (Defendants
argue) at the least an implied license to use the others.
Some of the photographs were later offered on the
photographer’s website for license at $99 per photo, and
many were also reproduced on social media with
commentary from Viper owners (there is a Viper Owners
website and online community).
The world record attempt failed (even though, it
now appears, VNR may have surreptitiously made major
and illicit modifications to boost the car’s power). A few
months later, VNR claimed Defendants had to pay more
money for the license for the already promised
photograph, and then in March 2018 asserted that
Defendants had infringed VNR’s purported copyrights by
using a number of other photographs. Defendants
disagreed. This lawsuit ensued.
(Doc. 50, at 2.)2
Plaintiff brings the present motion seeking leave to amend the Complaint out
of time to add Russell Oasis, owner of Plaintiff VNR, as a named Plaintiff and to
add a cause of action for defamation against Defendant Robbins based on allegedly
2
The Court notes that in responding to Defendant’s motion to compel, Plaintiff did not
specifically controvert any portion of this factual summation. (Doc. 53, at 2-3.)
Although Plaintiff may prefer additional facts be included for clarification purposes, the
Court will accept this background as true and sufficient for purposes of the present
motion.
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“false and defamatory statements Mr. Robbins published online about Mr. Oasis.”
(Doc. 44, at 1.)
ANALYSIS
A.
Standard for Consideration of the Motion.
Plaintiff moves the Court for an Order allowing it to amend its Complaint
past the deadline to amend or modify pleadings contained in the Scheduling Order.
As such, the Court’s analysis focuses on Fed.R.Civ.P. 16(b), which governs
modifications to Scheduling Orders.
Rule 16(b)(4) provides that the Scheduling Order “may be modified only for
good cause and with the judge’s consent.” To establish “good cause” the moving
party must show that the scheduling order’s deadline could not have been met with
diligence. Parker v. Central Kansas Medical Center, 178 F.Supp.2d 1205, 1210
(D.Kan.2001); Denmon v. Runyon, 151 F.R.D. 404, 407 (D.Kan.1993). “This rule
gives trial courts ‘wide latitude in entering scheduling orders,’ and modifications to
such orders are reviewed for abuse of discretion.” In re Daviscourt, 353 B.R. 674,
(B.A.P. 10th Cir.2006) (citing Burks v. Okla. Publ’g Co., 81 F.3d 975, 978–79
(10th Cir.1996)).
In support of its motion, Plaintiff contends that it
has been aware of online statements made by Defendants
that are defamatory specifically to Mr. Oasis and his
personal reputation. Discovery in this case has further
supported the claims of Mr. Oasis and also established
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further dissemination of such statements. Initially VNR
was optimistic that the claims between VNR and
Defendants in this case would be resolved and that the
resolution could be expanded upon to also eliminate the
claims of Mr. Oasis. However, the parties conducted
mediation in Kansas City on September 26, and their
efforts were unsuccessful. Although Mr. Oasis could
pursue his personal claim of defamation against
Defendants in Florida, where he resides, principles of
judicial economy suggest that this dispute may be a better
and more efficient route to resolve both the claims of
VNR and those of Mr. Oasis. Accordingly, VNR
believes there is good cause to allow the addition of Mr.
Oasis and his defamation claim to this action.
(Doc. 44, at 2.) Plaintiff argues that “there is no prejudice to Defendants” if the
amendment is allowed because Defendants “have certainly known of the claims of
Mr. Oasis, and the discovery requested and received overlaps with what would be
involved in the separate defamation claim.” (Id.)
Plaintiff continues that the proposed amendment will not impact the timing
of discovery in this case because “the parties have begun scheduling depositions in
this case, but party depositions likely will not occur until after Thanksgiving,
providing plenty of time for the parties to seek further discovery on this claim in
advance of depositions.” (Id.) Finally, Plaintiff argues that requiring Mr. Oasis to
file a separate action in Florida “will require additional party resources by both
sides that may be conserved by bringing the separate claim in this action.” (Id.)
It is well-established that lack of prejudice to the nonmovant does not
establish the requisite good cause to modify a scheduling order. Deghand v. Wal–
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Mart Stores, Inc., 904 F.Supp. 1218, 1220 (D.Kan.1995) (affirming a magistrate’s
order denying a motion to amend complaint that was untimely filed under the
case’s scheduling order). Stated another way, the “good cause” standard of Rule
16(b) “focuses on the diligence of the party seeking to modify the scheduling
order,” not prejudice to the other party. Manuel v. Wichita Hotel Partners, No.
09–1244–WEB–KGG, 2010 WL 3861278, at *2 (D.Kan. Sept. 20, 2010).
Additionally, lack of prejudice to the responding party, on its own, is not enough to
justify modifying a scheduling order under Rule 16. Monge v. St. Francis Health
Ctr., Inc., No. 12–2269–EFM, 2013 WL 328957, at *2 (D.Kan. Jan. 10, 2013).
Defendants respond that Plaintiff was not diligent in seeking to modify the
Scheduling Order. To the contrary, Defendants contend that Plaintiff could have
included these claims at the outset of litigation.
Plaintiff has been aware of its alleged claims for
defamation since the inception of this lawsuit and chose
not to include a cause of action for defamation in the
Complaint. Despite its knowledge of the facts forming
the basis of a defamation claim, Plaintiff failed to amend
the Complaint within the deadlines set out in the
scheduling order.
(Doc. 48, at 1.) Defendant continues that
Plaintiff’s claim that it did not include the defamation
claims at the outset because it thought the matter,
including any concerns with potential defamation, would
settle in early mediation is disingenuous. There was
never any assurance that this matter would settle. In
addition, Plaintiff’s alleged defamation claim was never a
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part of this lawsuit and, therefore, could not rightfully be
considered for mediation, nor was it. Plaintiff now seeks
to bring defamation claims as part of this lawsuit merely
for the purpose of inciting more bad blood between the
parties. It is plain that Plaintiff now seeks to add this
claim only to increase what Plaintiff evidently perceives
will be its additional leverage from doing so. Plaintiff
amends now only because the mediation failed, and
indeed failed immediately since the parties have radically
different assessments of the case’s worth, if any.
(Id., at 2-3.)
In addition, Defendant argues that it would be subject to undue prejudice if
Plaintiff was allowed to amend the Complaint past the deadline.
Defendants have already spent substantial time and
expense preparing for the recent mediation, engaging in
discovery, and preparing for depositions wherein
Defendants relied on the existing Complaint. See
Xiangyuan Zhu v. Countrywide Realty, 160 F.Supp.2d
1210, 1226 (D.Kan. 2001) (amendments that inject new
issues or theories into the case and prolong discovery
may cause substantial prejudice). Defendants are further
prejudiced in having to defend against an additional
claim well into the discovery process that poses the
theoretical possibility of substantial additional liability.
Moreover, Defendants will be subjected to substantially
higher attorneys’ fees and costs if Plaintiff is allowed to
amend at this time.
(Id., at 3.) The Court notes that by the time the present motion was fully briefed,
there were only two months remaining before the discovery deadline in this case –
and those two months would include both the Thanksgiving and Christmas
holidays, further straining the schedule.
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Defendant continues that Plaintiff was “aware of all of the facts and
circumstances that might support a claim for defamation well before this lawsuit
was filed,” but “Plaintiff chose not to include a claim for defamation.” (Doc. 48, at
4.) Plaintiff replies that this is “incorrect.” (Doc. 51, at 2.)
Defendants threatened to defame Mr. Oasis if he dared
file suit (which was known to VNR) but did not follow
through with those threats until after the complaint was
filed and served. Additionally, it was only after
Defendants produced documents two months ago that
VNR received evidence of additional defamatory
statements made by Defendants. At that point mediation
was around the corner, along with the potential to resolve
all of the issues. Only once that mediation opportunity
came and went were VNR and Mr. Oasis faced with the
question of amendment here or a new case in Florida.
(Id.)
The Court finds Plaintiff’s explanation for waiting to file a motion to amend
until after the mediation to be unpersuasive. The deadline to amend was August
31, 2018. (Doc. 24, at 7.) Based on the above-quoted description of when Plaintiff
received documents from Defendant evidencing “additional defamatory statements
by Defendants,” this disclosure would have occurred in August, prior to the
amendment deadline and well before the mediation. If Plaintiff made the strategic
choice to wait to move to amend until after the mediation on September 26, 2018,
there is no explanation by Plaintiff as to why it could not have filed a timely
motion to extend the deadline to move to amend. If anything, this potentially
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would have strengthened Plaintiff’s position at mediation by informing Defendant
of the expanded litigation path Plaintiff intended to take if and when the mediation
was unsuccessful.
The Court finds that Plaintiff has failed to establish that the Scheduling
Order’s deadline to move to amend could not have been met with diligence.
Parker, 178 F.Supp.2d at 1210; Denmon, 151 F.R.D. at 407. The issue of
diligence on the part of Plaintiff is the Court’s focus. Manuel, 2010 WL 3861278,
at *2. Tactical delay does not constitute “good cause” under Rule 16(b)(4).
Further, even assuming Plaintiff was diligent, the Court does not agree with
Plaintiff that there would be a lack of prejudice to Defendant if leave to amend was
granted. Plaintiff’s motion is DENIED.
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Leave to Amend
Complaint (Doc. 44) is DENIED.
IT IS ORDERED.
Dated this 21st day of November, 2018.
S/KENNETH G. GALE
Kenneth G. Gale
United States Magistrate Judge
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