In re Gulf States Long Term Acute Care of Covington, L.L.C.
Filing
482
ORDER AND REASONS denying Sodexo Operations, L.L.C.'s 481 Request for Leave to File an Amended Complaint. Plaintiff in Intervention, Sodexo Operations, LLC, may not file any further amended pleadings. Signed by Judge Jane Triche Milazzo on 1/8/14.(Reference: 11-1659)(ecm, ) Modified document type on 1/9/2014 (ecm, ).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
IN RE GULF STATES LONG TERM
ACUTE CARE OF COVINGTON, L.L.C.
NO: 11‐1659 c/w 13‐508
SECTION: “H”(5)
ORDER AND REASONS
Before the Court is a Request for Leave to File an Amended Complaint (R. Doc. 481). For
the following reasons, the Request is DENIED. Plaintiff in Intervention Sodexo Operations, LLC,
("Sodexo") may not file any further amended pleadings.
BACKGROUND
This case is connected to an underlying bankruptcy proceeding. On November 23, 2011,
Sodexo filed a complaint in intervention against most of the named defendants in the bankruptcy
proceeding. Sodexo also added as defendants Gregory Frost and Brezeale, Sachse & Wilson, LLP
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(collectively "Frost & BSW"). Sodexo asserted claims against Frost & BSW for fraud and intentional
interference with contract. Sodexo also alleged other instances of misconduct.1
On October 3, 2012, the Court granted Frost & BSW's motion to dismiss Sodexo's first
amended complaint and dismissed Sodexo's claims without prejudice. Sodexo filed its second
amended complaint on October 23, 2012. Frost & BSW responded with a second motion to dismiss
on November 6, 2012. The Court held multiple status conferences while the second motion was
pending. Although the Court's previous scheduling order was ultimately vacated, the Court set a
firm deadline of March 21, 2013, for the amendment of pleadings. On the last possible date for
filing, Sodexo filed its third amended complaint, which added additional allegations of fraud and
misconduct against Frost & BSW. Accordingly, the Court denied the second motion to dismiss as
moot. On April 2, 2013, Frost & BSW filed yet another motion to dismiss, this one directed at
Sodexo's third amended complaint. The motion was set for submission and fully briefed on April
24, 2013.
On June 20, 2013, Sodexo informed the Court that settlement negotiations were ongoing,
which, if successful, would resolve Sodexo's claims. Sodexo requested the Court not take any
action on, inter alia, Frost & BSW's third motion to dismiss.2 Accordingly, on August 5, 2013, the
1
Given the rather prolix nature of Sodexo's pleadings, it is difficult to ascertain exactly which claims
Sodexo asserts against each Defendant in Intervention.
2
Frost & BSW did not oppose this request.
2
Court denied the motion without prejudice, to be re‐urged should settlement negotiations prove
unsuccessful. Settlement was not achieved to Sodexo's satisfaction. Thus, on November 5, 2013,
Frost & BSW re‐urged their third motion to dismiss. Sodexo opposed the motion and
contemporaneously sought leave to file a fourth amended complaint. The latter was referred to
the magistrate judge assigned to this case, who denied the motion without prejudice on December
18, 2013. The magistrate judge instructed Sodexo to raise the issue of amendment by filing a
supplemental opposition to Frost & BSW's third motion to dismiss.3 Sodexo filed the supplemental
opposition on January 5, 2014.
LEGAL STANDARD
Amendment of pleadings is generally assessed under the liberal standard of Rule 15(a),
which provides that "[t]he court should freely give leave [to amend] when justice so requires." The
Fifth Circuit has held, however, that "a party seeking to amend its pleadings after a deadline has
passed must demonstrate good cause for needing an extension."4 E.E.O.C. v. Service Temps Inc.,
679 F.3d 323, 333–34 (5th Cir. 2012) (citing Fed. R. Civ. P. 16(b)(4)). Thus, with respect to an
3
The net effect of this ruling was to re‐refer the motion for leave to amend to the undersigned.
4
Sodexo contends Rule 16(b)(4) does not apply, because the amendment deadline was not set forth
in a formal Rule 16 scheduling order. The Court disagrees. Sodexo cites no authority in support of its
position, nor can the Court find any. Rather, the Court finds that Rule 16's "good cause" standard is the
appropriate measure for assessing a post‐deadline motion to amend, irrespective of the source of that
deadline.
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untimely motion to amend, a party must show good cause before the trial court will apply the more
liberal standard set forth in Rule 15(a). Fahim v. Marriott Hotel Servs., Inc., 551 F.3d 344, 348 (5th
Cir. 2008). Four factors are relevant to a showing of good cause: (1) the explanation for the failure
to timely move for leave to amend; (2) the importance of the amendment; (3) potential prejudice
in allowing the amendment; and (4) the availability of a continuance to cure such prejudice.
Marathon Fin. Ins., Inc., RRG v. Ford Motor Co., 591 F.3d 458, 470 (5th Cir. 2009). "The grant or
denial of an opportunity to amend is within the discretion of the District Court." Foman v. Davis,
371 U.S. 178, 182 (1962). Because the deadline for amending pleadings is well past, the Court
analyzes the instant Request under Rule 16(b)(4).
LAW AND ANALYSIS
The balance of factors relevant to a Rule 16 determination weighs heavily against
permitting the requested amendment. Sodexo appears to contend it could not file its amended
complaint on time, because the facts which form the basis of the amendment—depositions of Frost
and Greg Maurin that occurred during the week of March 25, 2013—were discovered after the
Court's March 21 pleading deadline. Yet the law in the Fifth Circuit is clear that "the who, what,
when, and where [of a fraud claim] must be laid out before access to the discovery process is
granted." Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir. 1997) (emphasis in original).
It follows that information obtained during discovery generally cannot provide the good cause
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necessary to amend a complaint, at least when a motion to dismiss is already pending. A ruling to
the contrary would encourage frivolous actions for fraud with the hope that the plaintiff could later
supplement its complaint with information learned during discovery. The Court cannot
countenance such fishing expeditions without thwarting the purpose of Rule 9(b). See U.S. ex rel.
Grubbs v. Kanneganti, 565 F.3d 180, 191 (5th Cir. 2009) ("Rule 9(b) . . . prevents nuisance suits and
the filing of baseless claims as a pretext to gain access to a 'fishing expedition.'"). Thus, any fish
caught during this expedition must be returned, no matter how big nor tempting. Finally, the Court
notes at least one district court in the Fifth Circuit has rejected an untimely attempt to amend a
fraud complaint based on facts learned during discovery. See USA for the Use and Benefit of
Siemens Bldg. Techs., Inc. v. Grot, Inc., No. 4:05CV77, 2005 WL 2012263, at **2–3 (E.D. Tex. Aug.
19, 2005).5
As to the second factor—the importance of the amendment—Sodexo contends amendment
is necessary because Frost & BSW's third motion to dismiss repeatedly references and
misrepresents discovery material. Sodexo contends it should be allowed to respond to those
misrepresentations in an amended complaint. This argument fails for two reasons. First, the third
motion to dismiss makes only limited reference to evidence outside of the pleadings. Moreover,
these references occur in three footnotes. In two of those footnotes, Frost & BSW specifically note
5
But see Mobius Risk Grp., LLC v. Global Clean Energy Holdings, LLC, No. H–10–1708, 2011 WL
2193294, at *5 (S.D. Tex. June 6, 2011) ("New information learned during discovery is good cause to amend
under Rule 16.").
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the evidence cited therein cannot be considered by the Court on a motion to dismiss. Second, to
the extent Frost & BSW's motion presents matters outside the pleadings, the Court exercises its
discretion under Rule 12(d) to exclude those matters from consideration. See Isquith v. Middle S.
Utils., Inc., 847 F.2d 186, 193 n.3 (5th Cir. 1988).
Any argument that the requested amendment is important is also belied by the length of
time that elapsed between the depositions of Frost and Maurin, and the instant Request. As
discussed supra, the depositions occurred the week of March 25, 2013. Frost and BSW filed their
third motion to dismiss on April 2, 2013. Rather than seek leave to amend its complaint with the
newly discovered information, Sodexo opposed the motion on the merits. It was not until
approximately five months later—after the third motion to dismiss had been denied without
prejudice and subsequently re‐urged—that Sodexo sought leave to amend.
The third and fourth factors also militate in favor of denying leave to amend. Another
continuance would clearly prejudice Frost & BSW. Sodexo's claims against them have been
pending for more than two years. The third motion to dismiss (re‐urged) represents Frost & BSW's
fourth attempt to challenge the legal sufficiency of Sodexo's claims. Rather than respond to the
later motions on the merits, Sodexo's practice has been to seek leave to retroactively bolster its
allegations with a new complaint. Given the unique posture of this case, the Court has largely
indulged this tactic but will do so no longer. Another continuance would necessarily "result[] in
additional delay and increase[] the expense of defending the lawsuit." Geiserman v. Macdonald,
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893 F.2d 787, 792 (5th Cir. 1990).
CONCLUSION
For the reasons previously stated, Sodexo has failed to demonstrate the good cause
necessary to permit the untimely filing of an amended complaint. The Court will adjudicate Frost
and BSW's third motion to dismiss on the basis of the allegations set forth in Sodexo's third
amended complaint.
New Orleans, Louisiana, this 8th day of January, 2014.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
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