TMJ Group LLC v. IMCMV Holdings Inc. et al

Filing 45

ORDER AND REASONS: the 39 Motion for Leave to Amend Complaint is GRANTED; the Amended Complaint shall be entered into the record. Signed by Magistrate Judge Janis van Meerveld on 3/7/2018. (jls)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TMJ GROUP, LLC

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VERSUS
IMCMV HOLDINGS, INC., ET AL.

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CIVIL ACTION NO. 17-4677
SECTION: “E”(1)
JUDGE
NANNETTE JOLIVETTE BROWN
MAGISTRATE JUDGE
JANIS VAN MEERVELD

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ORDER AND REASONS
Before the Court is the Motion for Leave to Amend Complaint filed by TMJ Group, LLC.
For the following reasons, the Motion is GRANTED.
Background
Plaintiff TMJ Group, LLC, (“TMJ”) filed this lawsuit on May 3, 2017, alleging that it had
been fraudulently induced to invest in two Margaritaville restaurants by defendants IMCMV
Holdings, Inc. (“IMC Holdings”), IMCMV Management, LLC (“IMC Management”, and with
IMC Holdings, the “IMC Defendants”). Trial is set to begin May 14, 2018. Pursuant to the
Scheduling Order issued by the District Court, the deadline to amend pleadings was August 14,
2017. The deadline to complete discovery is March 14, 2018.
TMJ now seeks leave to amend its Complaint to add facts regarding the purported
fraudulent misrepresentations, to assert new causes of action arising from the same operative facts,
to demand a jury, and to add TMJ Developer, LLC (“TMJ Developer”) as a plaintiff. Plaintiffs
explain that the new allegations arise out of facts elicited during discovery. The IMC Defendants
oppose.

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Law and Analysis
Under Federal Rule of Civil Procedure 15(a)(2), when the time period for amending a
pleading as a matter of course has passed, a party may amend its pleadings by consent of the
parties or by leave of court. “The court should freely give leave when justice so requires.” Fed.
R. Civ. Proc. 15(a)(2). Thus, the United States Court of Appeals for the Fifth Circuit instructs
that the “district court must possess a ‘substantial reason’ to deny a request for leave to amend.”
Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004). Nonetheless, “that generous standard is
tempered by the necessary power of a district court to manage a case.” Yumilicious Franchise,
L.L.C. v. Barrie, 819 F.3d 170, 177 (5th Cir. 2016) (quoting Schiller v. Physicians Res. Grp.
Inc., 342 F.3d 563, 566 (5th Cir. 2003)).
Where the court ordered deadline for amending pleadings has passed, that schedule “may
be modified” to allow for additional amendments “only for good cause and with the judge’s
consent.” Fed. R. Civ. Proc. 16(b)(2); see S&W Enterprises, L.L.C. v. SouthTrust Bank of
Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2003) (“We take this opportunity to make clear that
Rule 16(b) governs amendment of pleadings after a scheduling order deadline has expired.”).
When determining whether the movant has shown good cause, the Court considers “(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.’ ” S&W Enterprises, 315 F.3d at 536 (quoting Reliance Ins.
Co. v. Louisiana Land & Expl. Co., 110 F.3d 253, 257 (5th Cir. 1997)) (alterations in original).
Here, the Court finds good cause to allow TMJ to amend its Complaint. TMJ’s explanation
for its delay in filing is that new facts were learned in discovery. As TMJ notes, the IMC

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Defendants have not yet filed an answer so TMJ has not been made aware of Defendants’
affirmative defenses. The amendment is important because, where possible, it is preferable to have
all the claims decided together. Plaintiff insists no new discovery will be required because the new
party is comprised of the same individual members as plaintiff TMJ, and because the new causes
of action arise out of the same facts as asserted in the original Complaint. Even if additional
discovery is required, a continuance of the discovery deadline, expert report deadline, and, if
necessary, the trial, could cure any prejudice. Similarly, a continuance could cure the other
prejudice that the IMC Defendants cite. Although the District Court determined that a continuance
would not be granted in December when the discovery deadline was still three months away and
the trial five months away, the IMC Defendants have presented no reason why a continuance would
not be possible if required now. Accordingly, the Court finds there is good cause to allow TMJ’s
proposed amendment.
Conclusion
For the foregoing reasons, the Motion for Leave to Amend Complaint is GRANTED; the
Amended Complaint shall be entered into the record.
New Orleans, Louisiana, this 7th day of March, 2018.

Janis van Meerveld
United States Magistrate Judge

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