Lifestyle Ventures, LLC v. County of Clackamas et al

Filing 56

ORDER: The Court ADOPTS Magistrate Judge Beckerman's Findings and Recommendation 51 and, accordingly, DENIES Plaintiff's Motion 30 for Leave to File Amended Complaint to add new claims relating to Lot 4400. Consistent with this Court's Order 46 issued August 4, 2016, adopting the Magistrate Judge's Findings and Recommendation 34 issued May 18, 2016; the Court allows Plaintiff to amend its original negligence claim as to those parts that do not relate to Lot 4400 or due-process claims. IT IS SO ORDERED. Signed on 1/26/2017 by Judge Anna J. Brown. (gw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

LIFESTYLE VENTURES, LLC,
an Oregon Limited Liability
Company,

3:15-CV-01291-SB
ORDER

Plaintiff,
v.
COUNTY OF CLACKAMAS; MICHAEL
MCALLISTER, and REBECCA CENIGA,
individually and in their capacity
as employees of the Clackamas
County Planning Division,
Defendants.

BROWN, Judge.
Magistrate Judge Stacie Beckerman issued Findings and
Recommendation (#51) on October 24, 2016, in which she recommends
the Court deny Plaintiff's Motion (#30)

for Leave to File Amended

Complaint to add new claims relating to lot 4400 and allow
Plaintiff to amend only its original negligence claim consistent
with the Magistrate Judge's Findings and Recommendation issued

l - ORDER

May 18, 2016.
Objections.
U.S.C.

§

On November 6, 2016, Plaintiff filed timely
The matter is now before this Court pursuant to 28

636(b)(l) and Federal Rule of Civil Procedure 72(a).

STANDARDS

In accordance with Rule 72(a), "[w]hen a pretrial matter not
dispositive of a party's claim or defense is referred to a
magistrate judge to hear and decide, the magistrate judge must
promptly conduct the required proceedings and, when appropriate,
issue a written order stating the decision.''

A motion for leave

to amend is a nondispositive motion that a magistrate judge may
properly decide.
Cir. 2013).

Seto v. Thielen, 519 F. App'x 966,

969 (9th

If a ruling on a motion is not determinative of "a

party's claim or defense," it is not dispositive and, therefore,
is not subject to the de nova review that is required for
proposed findings and recommendations that address dispositive
motions.

28 U.S.C.

§

636(b) (1) (B).

Under Rule 72(a) the standard of review of a nondispositive
order with objections is "clearly erroneous'' or "contrary to
law."

See also 28 U.S.C.

§

636(b) (1) (A) (provides for the

"clearly erroneous or contrary to law" standard of review for
nondispositive motions).

"A decision is 'contrary to law' if it

applies an incorrect legal standard or fails to consider an
element of the applicable standard."
2 - ORDER

Na Pali Haweo Community

Ass'n v. Grande, 252 F.R.D. 672,

674

(D. Haw. 2008).

The magistrate judge's factual findings must be accepted
unless "on the entire record" the court is "left with the
definite and firm conviction that a mistake has been committed."
In re Optical Di.sk Drive Antitrust Litig., 801 F. 3d 1072, 1076

(9th Cir. 2015) (citing Easley v. Cromartie, 532 U.S. 234, 242
(2001)).

"The reviewing court may not simply substitute its

judgment for that of the deciding court."
County of San Francisco,

951 F.2d 236, 241

Grimes v. City and

(9th Cir. 1991).

DISCUSSION

Plaintiff moves for leave to amend its Complaint to add
equal-protection and negligence claims relating to Defendants'
refusal to allow development of Lot 4400 in the Liberty Lodge
Subdivision in Rhododenron, Oregon.

In its original Complaint

Plaintiff alleged claims for violation of due process and equal
protection under 41 U.S.C.

§

1983 and common-law negligence

against Defendants for their refusal to allow development of Lot
4200 in the same subdivision.

Although the Court previously

dismissed the original due-process and equal-protection claims,
the Court granted Plaintiff leave to amend its negligence claim.
See Order #46 (issued Aug. 4, 2016).

The Magistrate Judge recommends this Court deny Plaintiff's
Motion on the grounds that "issue preclusion bars [Plaintiff's]
3 - ORDER

new Lot 4400 claims" and "amending the [C]omplaint to add the Lot
4400 claims is futile."

The Magistrate Judge concludes the

proposed claims relating to Lot 4400 have been fully litigated or
could have been litigated in a prior action entitled O'Connor v.
City of Clackamas, No. 3:11-cv-01297-SI, 2013 WL 3818143 (D. Or.
July 22, 2013), aff'd, 627 F. App'x 670 (9th Cir. 2015), because
Plaintiff stands in privity with the plaintiffs in O'Connor, and,
therefore, Plaintif.f' .s claims are barred by issue preclusion.
Plaintiff, however, contends (1) Defendants have not
properly raised the affirmative defense of issue preclusion and
(2) issue preclusion does not apply to these claims.
I.

Defendants have properly raised the affirmative defense of
issue preclusion.

Plaintiff contends in its Objections to the Findings and
Recommendations, without citation to any supporting authority,
that Defendants did not properly raise the affirmative defense of
issue preclusion and may not assert it for the first time in
their Response to Plaintiff's Motion for Leave to Amend.

This

issue was not before the Magistrate Judge.
Issue preclusion is an affirmative defense pursuant to
Federal Rule of Civil Procedure S(c) (1) that must be pled and
proved by a defendant.

In Simmons v. Navaho County, Arizona,

however, the Ninth Circuit held even though Rule 8 requires
affirmative defenses to be included in a responsive pleading, the
district court has discretion to allow a defendant to plead an
4 - ORDER

affirmative defense in a subsequent motion.

609 F.3d 1011, 1023

(9th Cir. 2010) (citing Rivera v. Anaya, 726 F.2d 564, 566 (9th
Cir. 1984) ("Our circuit liberalized the requirement that
affirmative defenses be raised in a defendant's initial pleading
in Healy Tibbitts Construction Co. v. Insurance Company of North
America, 679 F.2d 803, 804

(9th Cir. 1982) .) ."

As noted, on April 25, 2016, Plaintiff filed its Motion for
Leave to File Amended Complaint and attached the proposed Amended
Complaint in which Plaintiff raised claims related. to Lot 4400
for the first time.

In their Response to Plaintiff.' s Motion

Defendants assert such claims are barred by issue preclusion
because they were fully litigated in the prior O'Connor
litigation, and, therefore, those claims are subject to dismissal
pursuant to Federal Rule of Civil Procedure 12(b) (6).
On this record the Court concludes Defendants properly
raised issue preclusion in response to Plaintiff's Motion for
Leave to Amend inasmuch as this was the first opportunity
Defendants had to assert such a defense against the new claims
raised in Plaintiff's proposed Amended Complaint.
II.

The Magistrate Judge applied the proper legal standard to
determine Plaintiff's proposed cl·aims were barred by issue
preclusion and that amendment would be futile.

Plaintiff contends the Magistrate Judge improperly found
issue preclusion applies to Plaintiff's proposed Amended
Complaint and, therefore, that Plaintiff's proposed amendments to
5 - ORDER

its Complaint would be futile.
A.

Issue Preclusion

Issue preclusion bars successive litigation of an issue
of fact or law actually litigated and resolved in prior
litigation

"even if the issue recurs in the context of a

different claim."

Taylor v. Sturgell,

Issue preclusion exists if:

533 U.S. 880, 892

(2008).

"(1) the issue at stake was

identical in both proceedings;

(2) the issue was actually

litigated and decided in the prior proceedings;

(3) there was a

full and fair opportunity to litigate the issue; and (4) the
issue was necessary to decide the merits."

Oyeniran v. Holder,

672 F.3d 800, 806 (9th Cir. 2012).
The Magistrate Judge determined Plaintiff's proposed
claims related to Lot 4400 are identical to the issues determined
in the O'Connor litigation, and, therefore, Plaintiff is barred
from litigating the same issue in this case.
B.

Amendment of Complaint

Whether to grant leave to amend is at the sound
discretion of the court.

United Brotherhood of Carpenters and

Joiners of Am. v. Bldg. and Constr. Dep't, AFL-CIO, 770 F.3d 834,

845 (9th Cir. 2014).

In making such a determination the court

considers several factors, including the futility of the
amendment.

United States v. Corinthian Coll.,

(9th Cir. 2011).
6 - ORDER

655 F.3d 984,

995

The "proper test to be applied when determining

the legal sufficiency of a proposed amendment is identical to the
one used when considering the sufficiency of a pleading
challenged under Rule 12 (b) ( 6) . "
845 F.2d 209, 214

Miller v. Rykoff-Sexton, Inc.,

(9th Cir. 1988) (citation omitted).

See also

Gandhi v. Sitara Capital Mgmt., LLC., 721 F.3d 865, 869 (7th Cir.
2013) ("District courts may refuse to entertain a proposed
amendment on futility grounds when the new pleading would not
survive a motion to dismiss.").
Because the Magistrate Judge concluded issue preclusion
bars Plaintiff's proposed amendments, the Magistrate Judge
properly found Plaintiff's proposed amendments to its Complaint
would be futile.
As noted, the Magistrate Judge's determination of a
nondispositive motion should be disturbed only if it is "clearly
erroneous" or ''contrary to law.''

A decision is "contrary to law"

if it applies an incorrect legal standard or fails to consider an
element of the applicable standard.

This Court finds the

Magistrate Judge properly considered the applicable standards.
In summary, this Court has carefully considered Plaintiff's
Objections and concludes the Magistrate Judge's Findings and
Recommendation are not clearly erroneous or contrary to law.
Thus, Plaintiff's Objections do not provide a basis to modify the
Findings and Recommendation.

The Court also has reviewed the

pertinent portions of the record and does not find any error in

7 - ORDER

the Magistrate Judge's Findings and Recommendation.

CONCLUSION

The Court ADOPTS Magistrate Judge Beckerman's Findings and
Recommendation (#51) and, accordingly, DENIES Plaintiff's Motion
(#30) for Leave to File Amended Complaint to add new claims
relating to Lot 4400.

Consistent with this Court's Order (#46)

issued August 4, 2016, adopting the Magistrate Judge's Findings
and Recommendation (#34) issued May 18, 2016; the Court allows
Plaintiff to amend its original negligence claim as to those
parts that do not relate to Lot 4400 or due-process claims.
IT IS SO ORDERED.
DATED this

~ay

of January, 2017.

ANN~~

United States District Judge

8 - ORDER