Stewart et al v. Atherio Inc et al
Filing
100
MEMORANDUM OPINION AND ORDER: The Court GRANTS in part and DENIES in part Defendants' 82 Motion. Trial reset for 1/7/2019 before Judge Jane J. Boyle. Pretrial Conference reset for 1/4/2019 10:00 AM before Judge Jane J. Boyle. Discovery due by 8/28/2018. Deadline for mediation is on or before 7/27/2018. Motions due by 9/26/2018. Pretrial Materials due by 12/10/2018. Pretrial Order due by 12/10/2018. (Ordered by Judge Jane J. Boyle on 4/19/2018) (sss)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MICHAEL STEWART and TAMMY
O’CONNOR,
Plaintiffs,
v.
ATHERIO INC, et al.,
Defendants.
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CIVIL ACTION NO. 3:16-CV-1731-B
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Joint Motion to Modify the Scheduling Order. Doc. 82. For
the reasons that follow, the Court GRANTS in part and DENIES in part Defendants’ Motion.
I.
BACKGROUND
The Court issued a Scheduling Order in this case on January 19, 2017, which provided the
parties with the following relevant deadlines: (1) December 28, 2017 to amend pleadings, (2) January
26, 2018 for Plaintiffs to designate experts and February 26, 2018 for Defendants to designate
experts, (3) April 27, 2018 for the parties to complete mediation, (4) May 28, 2018 for the parties
to complete discovery, (5) June 26, 2018 for the parties to file dispositive motions,(6) July 26, 2018
for the parties to object to experts, and (7) a trial date of September 24, 2018. Doc. 26, Scheduling
Order, 1. In the parties’ Joint Status Report, they agreed the case is subject to the Private Securities
Litigation Reform Act, which required discovery to be stayed until resolution of Defendants’ thenpending motion to dismiss. Doc. 23, Joint Status Report, 6; 15 U.S.C. § 78u-4(b)(3)(B). Thus,
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discovery was stayed until August 14, 2017, when the Court resolved Defendants’ motion to dismiss.
Doc. 33, Order.
Plaintiffs filed an amended complaint in September 2017. Doc. 37, Am. Compl. In November
2017, then-counsel for Defendant Mark Dinkel filed a motion to withdraw. Doc. 44, Mot. to
Withdraw. On December 7, 2017, while the motion to withdraw was pending, Mr. Dinkel’s counsel
filed an answer to Plaintiffs’ amended complaint. Doc. 48, Answer. The Court granted Mr. Dinkel’s
counsel’s motion to withdraw on January 19, 2018, Doc. 61, Order, at which point Mr. Dinkel
proceeded pro se until he retained new counsel on March 7, 2018. See Docs. 74, 75, Notices of
Appearance.
Defendants now ask the Court to extend the past and future deadlines in the Scheduling
Order by six months. Doc. 82, Mot. to Modify, 1. Plaintiffs object. Doc. 84, Resp. The Court
exercises its discretion to rule on the motion before Defendants’ reply brief is due because it finds a
reply brief unnecessary to resolution of the motion. See N.D. Tex. Civ. R. 7.1(f); Siesta Vill. Mkt.,
LLC v. Perry, No. 3:06-CV0585-D, 2006 WL 1880524, at *1 n.1 (N.D. Tex. July 7, 2006); Soloman
v. Goodwin & Carlton, P.C., 898 F.Supp. 415, 416 n.2 (N.D. Tex. 1995).
II.
LEGAL STANDARD
Motions to modify a court’s scheduling order are governed by Federal Rule of Civil Procedure
16(b)(4). Rule 16(b)(4) instructs that “ [a] Schedule may be modified only for good cause and with
the judge’s consent.” “The good cause standard requires the party seeking relief to show that the
deadlines cannot reasonably be met despite the diligence of the party needing the extension.” S&W
Enters., L.L.C. v. Southtrust Bank of Ala., 315 F.3d 533, 535 (5th Cir. 2003)(internal quotation marks
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omitted). Courts consider four factors in assessing 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.” Id. at
536.
III.
ANALYSIS
Defendants seek to modify the past deadlines for the parties to amend pleadings and
designate experts, and future deadlines for completion of mediation, completion of discovery, and
all other pre-trial deadlines. Doc. 82, Mot. to Modify, 7–8. Defendants explain that good cause exists
for their proposed extensions because the long stay of discovery compressed the Scheduling Order
deadlines into an unworkably short time period and because, as a pro se litigant, Mr. Dinkel could
not meaningfully participate in discovery. Id. at 7. They argue their proposed amendments are
important because modifying earlier deadlines necessitates moving later deadlines to create a
workable schedule, and providing Mr. Dinkel more time to prepare his case “facilitates the effective
and efficient prosecution of the case.” Id. at 9. Finally, they argue that modifying the scheduling order
would not prejudice Plaintiffs because Plaintiffs will also have more time to prepare their case, but
denying modification would prejudice Mr. Dinkel. Id. at 9–10.
Plaintiffs respond that “the absence or change of counsel is an insufficient basis to resurrect
deadlines,” Doc. 84, Resp., 4, and the discovery stay does not explain how the Defendants are unable
to meet future deadlines, id. at 5–6. They argue that allowing the parties more time to develop their
arguments is not an important reason to modify deadlines because that would render scheduling
orders meaningless since “more time always allows greater ability to fully develop the case.” Id. at 9.
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Finally, Plaintiffs argue that they would be prejudiced by extending the deadlines in this case because
that would increase litigation costs, which are covered by defendants’ insurance policy. Id. at 8. And
if the insurance policy is used to cover additional litigation costs, this decreases the amount available
for Plaintiffs’ potential recovery. Id.
The Court will examine the parties’ arguments pertaining to the past and future deadlines
separately.
A.
Past Deadlines to Amend Pleadings and Designate Experts
The Court agrees that Defendants have not shown good cause to amend the past deadlines.
First, Defendants’ explanations for their inability to meet the deadlines are unconvincing. Although
Mr. Dinkel’s counsel’s motion to withdraw was pending, all Defendants were represented by counsel
when the deadline to amend pleadings passed on December 28, 2017. Mr. Dinkel’s counsel filed an
answer to Plaintiff’s amended complaint while their motion to withdraw was pending, so the Court
sees no reason why should they could not have also filed an amended pleading during that time. And
although Mr. Dinkel was pro se when the deadline to designate experts passed on February 26, 2018,
his pro se status does not entitle him to revive missed deadlines. Pro se litigants must abide by the
Federal Rules of Civil Procedure, and the Court warned Mr. Dinkel that as a pro se litigant he would
be responsible for “knowing all the procedural moves and nuances” in the case, Doc. 72, Mot. to
Withdraw Tr., 4:16–20.
Nor does the discovery stay establish good cause to amend the past deadlines. The parties
agreed in January 2017 that discovery would be stayed pending resolution of Defendants’ motion to
dismiss. Doc. 23, Joint Status Report, 6. In the Joint Status Report, the parties requested six months
to complete fact discovery, ten months to complete expert discovery, and thirty days to amend
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pleadings after resolution of the motion to dismiss. Id. at 8. The dates in the Court’s Scheduling
Order gave the parties a little more than nine months to complete discovery and more than four
months to file amended pleadings after the Court resolved the motion to dismiss. Thus, Defendants
cannot rely on an “unexpectedly long stay of discovery,” Doc. 82, Resp., 7, to explain their failure
to meet past deadlines. If Defendants found the Scheduling Order deadlines unworkable once
discovery commenced, they could have moved to amend the deadlines at that time, but they did not.
Further, Plaintiffs met the deadline to amend pleadings and designate experts, and all defendants
except Mr. Dinkel met the deadline to designate experts, which evinces that the Scheduling Order
deadlines were not unworkable.
Second, Defendants have not demonstrated that the proposed amendments to past deadlines
are important. Although the Court agrees that moving earlier deadlines in the Scheduling Order
might necessitate moving later deadlines to maintain a workable schedule, this concern is
inapplicable if earlier deadlines are not amended. Nor does the Court find Mr. Dinkel’s failure to
meet past deadlines an important enough reason to amend those deadlines. As explained above, Mr.
Dinkel does not provide a persuasive reason for failing to timely amend his pleadings or designate
experts.
Finally, the Court finds that Plaintiffs would be prejudiced by reviving past deadlines that
could potentially significantly extend the litigation simply because Mr. Dinkel and his prior counsel
failed to meet those deadlines. And continuing the trial date could not cure this prejudice.
B.
Future Deadlines to Complete Mediation, Discovery, and other Pretrial Deadlines
The Court does not find the discovery stay a persuasive explanation for extending future
deadlines either. And Plaintiffs point out that Defendants do not identify specific discovery that they
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will be unable to obtain by the deadline on May 28. Doc. 84, Resp., 7. But Plaintiffs and Defendants
agree that at least seven depositions still need to be taken in this case. Id. at 6; Doc. 82, Mot. to
Modify, 8. Because of the number of depositions that remain and because Mr. Dinkel’s current
counsel is recently appointed, the Court does not believe discovery could reasonably be completed
by the May 28 deadline or that the parties could be prepared to mediate productively by the April
27 mediation deadline.
Plaintiffs appear to realize these circumstances warrant extension of the deadlines for
mediation and discovery completion but urge the Court to keep the other pretrial deadline even if
it extends mediation and discovery deadlines. See Doc. 84, Resp., 10 (“Plaintiffs believe that the only
possibly necessary extensions are of mediation and discovery.”) But the Court agrees with Defendants
that if it extends the deadlines for mediation and discovery, the remaining deadlines in the
Scheduling Order would become unworkable.1 Thus, because extension of the mediation and
discovery deadlines is warranted, the Court finds that it is necessary to extend the other pretrial
deadlines too.
The Court realizes that extending the future deadlines in this case will likely increase
litigation costs for all parties and that this may prejudice Plaintiffs. Because of the reasons explained
above, however, the Court finds modification of the future deadlines in the Scheduling Order
appropriate. But the Court will extend the Scheduling Order deadlines by only three months, not
six as Defendants request.
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Plaintiffs contend that the June 26 dispositive-motion deadline “is little more than a formality”
because they have already filed a motion for summary judgment on what they believe is the only issue that
could be decided at summary judgment. Doc. 84, Resp., 6 n.4. To determine if this is true, the Court would
need to examine the merits of the parties’ claims, which it declines to do at this time.
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The discovery deadline, trial date, and other critical dates are reset as follows:
Deadline for Dispositive Motions (¶ 3)
October 26, 2018 (but not before Dispositive
Motions deadline)
July 27, 2018
September 26, 2018
Deadline for Completion of Discovery (¶ 5)
August 28, 2018
Deadline for Pretrial Disclosures and
Objections (¶ 7)
November 9, 2018 Objections due 14 days
thereafter
Deadline for Pretrial Materials (pretrial order
etc.)(¶ 8)
December 10, 2018
Exchange of Exhibits (¶ 9)
Two days prior to the pretrial conference
Pretrial Conference (¶ 11)
January 4, 2019 at 10:00 AM
Trial Date (¶ 1)
January 7, 2019
Deadline for Expert Objections (¶ 4 d)
Deadline for Completion of Mediation (¶ 6)
With the exception of the changes noted above, all requirements in the Court’s original
Scheduling Order, Doc. 26, remain in effect. The parties should consult the original Scheduling
Order for any questions about what each of these deadlines and events entails.
SO ORDERED.
Dated: April 19, 2018
_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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