MENDEZ v. AVIS BUDGET GROUP, INC. et al
Filing
279
OPINION AND ORDER that the Order of the Magistrate Judge, entered on 8/15/2018 (ECF No. 269) from which the appeal has been filed (ECF No. 273) is affirmed; and it is further Ordered that the Clerk of the Court will designated the 273 Appeal Magistrate Judge Decision to District Court as terminated. Signed by Chief Judge Jose L. Linares on 9/28/2018. (JB, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JOSE MENDEZ, individually and on behalf :
of all others similarly situated,
Plaintiff,
CIVIL ACTION NO. 1 1-6537 (JLL)
OPINION & ORDER
V.
AVIS BUDGET GROUP, INC., et at.,
Defendants.
LINARES, Chief District Judge
IT APPEARING THAT:
1.
Before this Court is the defendants’ timely appeal pursuant to Federal Rule
of Civil Procedure (hereinafter, “Rule”) 72(a) and Local Civil Rule 72.1(c)(l) from an
Order of the Magistrate Judge, entered on August 15, 2018 (hereinafter, “August 2018
Order”). (ECF No. 273.) In the August 2018 Order, the Magistrate Judge denied the
defendants’ motion pursuant to Rule 15(a)(2) for leave to amend their answer to assert a
late statute-of-limitations defense and a late voluntary-payment-doctrine defense. (ECF
No. 269.)
2.
This Court has reviewed: (a) the complaint (ECF No. 1); (b) all of the
papers underlying the August 2018 Order (ECF No. 248 through ECF No. 248-3, ECF
No. 250, ECF No. 250-1, ECF No. 251, and ECF No. 252); and (c) the papers filed in
support of and in opposition to the instant appeal. (ECF No. 273 through No. 273-2, ECF
No. 274, and ECF No. 278.) This Court will resolve the appeal upon a review of the
papers and without oral argument. See L. Civ. R. 78. 1(b). For the following reasons, the
August 201$ Order is affirmed.
3.
This Court presumes that the parties are familiar with the factual context
and the extensive procedural history of this seven-year-old action, and thus this Court
will only provide a brief overview here. This action has been brought on behalf of those
who allegedly were wrongfully charged for non-discounted tolls and for convenience fees
when they rented vehicles equipped with an electronic system to pay tolls known as “e
Toll.”
4.
The complaint was filed on November 7, 2011, and it asserted in four
separate paragraphs that the “e-Toll” systems at issue were installed in the rented vehicles
beginning in 2006. (ECF No. 1
2, 3, 14, 20.) The defendants filed their initial answer
on April 27, 2012, and asserted an estoppel defense therein. (ECF No. 38 at 14.) The fact
discovery period in this action closed on June 5, 2014, and the expert discovery period
closed on January 30, 2016. (ECF No. 269 at 2.)
5.
On November 17, 2017, this Court granted the plaintiffs motion to certify
the action as a class action for a class period beginning on April 1, 2007 and ending on
December 3 1, 2015 for a nationwide class, a Florida subclass, and a New Jersey subclass.
(ECF No. 242 through ECF No. 245.)
6.
On January 12, 2018, the defendants moved before the Magistrate Judge to
amend their answer to assert a statute-of-limitations defense and a voluntary-paymentdoctrine defense for the first time in this litigation, and they argued that those “defenses
were not applicable until class claims were certified.” (ECF No. 248-1 at 5.) As to the
statute of limitations, the defendants argued that “the District Court did not.
guidance on what state’s law
—
and hence, ‘hat state’s statute of limitations
.
.
provide
—
would
apply to the nationwide class members’ causes of action.” (Id.) As to the voluntary
payment doctrine, which the defendants argue is a form of estoppel, the defendants assert
that there may be many class members who were aware of the charges at issue and paid
them voluntarily, and thus those class members should be estopped from now claiming
otherwise. (Id. at 6.)
7.
The Magistrate Judge denied the defendants’ motion for leave to amend the
answer. (ECF No. 269.) In so doing, the Magistrate Judge noted that the defendants had
unduly delayed in filing their motion until: (a) more than 5 1/2 years after they filed their
initial answer; (b) 3 1/2 years after the deadline for the completion of fact discovery; and
(c) almost 2 years after the deadline for the completion of expert discovery. (Id. at 9.)
8.
The Magistrate Judge also pointed out that in a related action in the United
States District Court for the Southern District of New York, these same defendants
asserted in a brief filed therein that was dated on October 17, 2013, which was more than
4 years before they moved to amend their answer in the instant action, that they were
aware that the class period in the instant action could extend back as early as April 2006.
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(Id. at 9—10.) As a result, the Magistrate Judge concluded that the defendants had a basis
for asserting a statute-of-limitations defense for more than 4 years before they moved to
amend their answer in this Court. (Id. at 10 (pointing to Readick v. Avis Budget Group,
Inc., S.D.N.Y. No. 12-3988, ECF No. 36 at 6—7, which is the defendants’ brief filed
therein on October 17, 2013).) In addition, the Magistrate Judge pointed out that “at the
outset of this litigation, Defendants were theoretically the only parties with access to
complete information on when and where their customers rented vehicles equipped with
c-toll equipment,” and that the defendants should have asserted the statute-of-limitations
defense at that time because they were well aware of any claims that could potentially be
barred by same. (ECF No. 269 at 10.)
9.
The Magistrate Judge also found that the defendants engaged in undue
delay in asserting the voluntary-payment-doctrine defense, as they were well aware of the
evidence that justified the assertion of that defense when fact discovery concluded in
June 2014, which was 3 1/2 years before they finally moved to amend. (Id. at 11.)
10.
The August 2018 Order did not address matters that were dispositive, and
thus such an Order could be entered by the Magistrate Judge. See 28 U.S.C.
§
636(b)(l)(A). The Third Circuit Court of Appeals has previously held that a
determination by a Magistrate Judge on a motion for leave to amend a pleading is not
dispositive. See Continental Cas. Co. v. DominickD ‘Andrea, Inc., 150 F.3d 245, 251 (3d
Cir. 1998) (holding the same). This Court, in reviewing an order of the Magistrate Judge
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in a non-dispositive matter, may modify, vacate, or reverse the Order only if it was
“clearly erroneous or contrary to law.” CipolIol?e
i.
Liggett Grp., Inc., 785 F.2d 1108,
1113 (3d Cir. 1986); see also Jackson v. Chitbb Coip., 45 F. App’x 163, 166 n.7 (3d Cir.
2002) (holding the same).
11.
A finding by the Magistrate Judge is clearly erroneous when although there
is evidence to support it, the reviewing district court is left with the definite and flim
conviction that a mistake has been committed. See Schering Coip. v. My/cm Pharins.,
Inc., No. 09-6383, 2011 WL 3651343, at *2 (D.N.J. Aug. 18, 2011); Marks v. Strimble,
347 F. Supp. 2d 136, 149 (D.N.J. 2004). In addition, a ruling is contrary to law if the
Magistrate Judge has misinterpreted or misapplied applicable law. See Gunter v.
Ridgewood Energy Corp., 32 F. Supp. 2d 162, 164 (D.N.J. 1998); see also Koune/is v.
Sherrer, 529 F. Supp. 2d 503, 517 (D.NJ. 2008). Pursuant to “the clearly erroneous
standard of review, the reviewing court will not reverse the magistrate judge’s
determination even if the court might have decided the matter differently.” Wortman v.
Beg/in, No. 03-495, 2007 WL 2375057, at *2 (D.N.J. Aug. 16, 2007) (internal quotes and
citation omitted).
12.
This Court finds that the determinations of the Magistrate Judge in the
August 2018 Order were not clearly erroneous, and they were not the result of either a
mistake or the misapplication of applicable law. It is well-settled that an affirmative
defense “should, if not pleaded in the answer, be raised at the earliest practicable, or
5
possible, or feasible, moment thereafter.” Long v. Wilson, 393 F.3d 390, 398 (3d Cir.
2004); see also Bjorgung v. Whitetail Resort, LP, 550 f.3d 263, 266 (3d Cir 2008)
(holding that a party’s delay in amending a pleading becomes undue when it places an
unwarranted burden on the court or when the party had previous opportunities to amend).
Here, the Magistrate Judge did not abuse his discretion in denying leave to amend the
answer based on the defendants’ undue delay in asserting the two aforementioned
defenses at this late juncture in the litigation. See D & D Assocs., Inc.
1V
Bd. of Ethtc. of
Fictinfleld, No. 03-1026, 2007 WL 1234933,at *1 (D.N.J. Apr. 26, 2007) (affirming a
Magistrate Judge’s denial of a defendant’s motion to amend an answer because the
deadline to do so had expired two years prior).
13.
Although not noted by the Magistrate Judge in the August 2018 Order, this
Court points out that the complaint, which was filed in 2011, asserts in four separate
paragraphs that the allegedly offending electronic system for paying tolls was put into use
in the rented vehicles by the defendants as of 2006. (ECF No. 1
JI 2, 3,
14, 20.)
Furthermore, even though the claims that applied to the named plaintiff in this action may
not have been baiTed by the relevant statute of limitations, a plain reading of the
complaint itself reveals that the named plaintiff was attempting to bring a class action on
behalf of all affected class members. (See generally ECF No. 1.) Thus, the defendants
were on notice as of 2011 that the statute-of-limitations defense might indeed apply in
this action, as the contours of the class period and the potential class members could
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possibly extend as far back as 2006. In addition, the defendants should have been on
notice that the voluntary payment doctrine could apply based on any complaints that they
had received about unwanted charges in fees over the five years preceding the filing of
the complaint in 2011. As a result, these defenses were not merely hypothetical, and it
would have been reasonable for the defendants to assert them in their initial answer in
2012 or soon thereafter.
14.
In conclusion, this Court holds that the Magistrate Judge committed neither
an abuse of discretion nor an error of law in making the determinations set forth in the
August 2018 Order. See Gunter, 32 F. Supp. 2d at 164; Wortman, 2007 WL 2375057, at
*2. The August 2018 Order will, therefore, be affirmed. For good cause shown:
IT IS THEREFORE on this
day of September. 2018, ORDERED
that the Order of the Magistrate Judge, entered on August 15, 2018 (ECF No. 269),
from
which the appeal has been filed (ECF No. 273), is affirmed; and it is further
ORDERED that the Clerk of the Court will designate the appeal (ECF No. 273)
as terminated.
hief Judge, United States District Court
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