Federal Deposit Insurance Corporation v. Johnson et al

Filing 120

ORDER Granting 70 Motion to Amend Complaint. Amended Complaint due within 14 days. Signed by Judge Kent J. Dawson on 5/20/2013. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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FEDERAL DEPOSIT INSURANCE
CORPORATION, AS RECEIVER OF
SILVER STATE BANK,

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Plaintiff,

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ORDER

v.

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Case No. 2:12-CV-00209-KJD-PAL

COREY L. JOHNSON, et al.,

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Defendants.

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Before the Court is the Motion for Leave to File First Amended Complaint (#70) filed by

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Plaintiff Federal Deposit Insurance Corporation, as Receiver of Silver State Bank (“FDIC”).

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Defendant Corey L. Johnson subsequently filed an Opposition (#71) to which FDIC replied (#74).

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I. Background

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On July 19, 2012, this Court entered a Scheduling Order permitting the parties to amend the

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pleadings until November 21, 2012 (#58). Plaintiff FDIC filed this Motion for Leave to File First

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Amended Complaint on November 21, 2012. Specifically, FDIC seeks to supplement the factual and

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damages allegations in the Complaint, and does not allege any new causes of action.

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II. Discussion
Because Plaintiff timely filed the Motion for Leave to File First Amended Complaint (#70),

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Fed. R. Civ. Pr. 15 applies, rather than Fed. R. Civ. Pr. 16 as contended by Defendant. The case cited

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by Defendant clarifies that Rule 16 supercedes Rule 15 only when a party moves to amend the

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pleadings after a deadline set in a scheduling order. Crockett & Myers, Ltd. v. Napier, Fitzgerald &

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Kirby, LLP., 430 F. Supp. 2d 1157, 1163 (D. Nev. 2006). Accordingly, because FDIC filed the

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Motion on November 21, 2012, prior to the expiration of the amendment period, Rule 15 applies.

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Rule 15, providing that courts “freely give leave [to amend] when justice so requires,” is

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applied in this Circuit with “extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d

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1074, 1079 (9th Cir. 1990). Accordingly, courts may deny motions to amend “only if there is strong

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evidence of undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to

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cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue

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of allowance of the amendment, [or] futility of amendment, etc.” Sonoma Cnty. Ass'n of Retired

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Employees v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013). Defendant contends only that

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amendment would be prejudicial, result in undue delay, and be futile but fails to make any argument

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regarding undue delay. Further, this Court sees no indicia of concern regarding the un-argued factors.

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Consequently, only undue prejudice and futility will be addressed.

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A. Undue Prejudice

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This factor carries the greatest weight. Sonoma Cnty, 708 F.3d at 1117. Defendant claims that

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permitting Plaintiff to amend the pleadings will deprive Defendant’s experts of the time necessary to

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incorporate these additional facts into their reports. (#71 at 5). However, the Scheduling Order can be

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modified upon a showing of good cause, as emphasized by Defendant. Fed. R. Civ. Pr. 16. The

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magistrate judge will very likely view a recent amendment as good cause, allowing Defendant’s

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experts to incorporate the new allegations. Therefore, Defendant will not be unduly prejudiced.

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B. Futility

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An argument that leave to amend should be denied because of futility is similar to a motion to
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dismiss. “A proposed amendment is futile only if no set of facts can be proved under the amendment

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to the pleadings that would constitute a valid and sufficient claim or defense.” Doe v. Nevada, 356

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F.Supp.2d 1123, 1125 (D.Nev. 2004).

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Defendant argues that the amendment is futile because this Court has already held that

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Plaintiff has pled sufficient factual allegations to survive Defendant’s Motion to Dismiss (#68).

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Plaintiff seeks to amend its pleadings to include facts which allegedly increase the validity and

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sufficiency of its claims; such activity is harmonious with the futility requirement set out above.

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Further, justice and efficiency are ill served by preventing Defendant from addressing all of the

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allegations they will face at trial.

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III. Conclusion
IT IS HEREBY ORDERED THAT Plaintiff’s Motion for Leave to File First Amended
Complaint (#70) is GRANTED.
IT IS FURTHER ORDERED THAT Plaintiff file its First Amended Complaint within
fourteen (14) days of the entry of this order.
DATED this 20th day of May 2013.

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_____________________________
Kent J. Dawson
United States District Judge

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