Federation of State Massage Therapy Boards v. Mendez Master Training Center, Inc. et al
Filing
96
MEMORANDUM AND ORDER DENIED 85 MOTION for Leave to File Counterclaim MOTION for Extension of Time filing Counterclaim (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)
United States District Court
Southern District of Texas
ENTERED
November 20, 2018
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
FEDERATION OF STATE
MASSAGE THERAPY BOARDS,
Plaintiff,
v.
MENDEZ MASTER TRAINING
CENTER, INC., MMTC TEXAS,
INC., TESLA SHEN MENDEZ,
JORGE MENDEZ, and JOHN DOES
1-5,
Defendants.
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David J. Bradley, Clerk
CIVIL ACTION NO. 4:17-02936
MEMORANDUM AND ORDER
Before the Court is a “Notice of Motion and Motion to Modify Counterclaim
Filing Deadline; Motion for Leave to File a Counterclaim; Memorandum of Points
and Authorities Thereon” [Doc. # 85] (“Motion for Extension” or “Motion”) filed
by Defendants Mendez Master Training Center, Inc. (“MMTC”), MMTC Texas,
Inc. (“MMTC Texas”), Tesla Shen Mendez, and Jorge Mendez (collectively, the
“Mendez Defendants”). The Court ordered an expedited response to the Mendez
Defendants’ Motion. Hearing Minutes & Order [Doc. # 90].1 Plaintiff Federation
1
See United States District Court for the Southern District of Texas Local Rule 7.8
(“The Court may in its discretion, on its own motion or upon application, entertain
(continued…)
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of State Massage Therapy Boards (the “Federation”) originally opposed the
Motion. The Court held oral argument.2 Thereafter, the Federation withdrew its
opposition.3
The Court nevertheless retains discretion to grant or deny the
Motion,4 which now is ripe for decision. Having considered the parties’ briefing,
counsel’s presentations at oral argument, applicable legal authorities, and all
pertinent matters of record, the Court concludes that the Motion should be denied.5
(continued…)
and decide any motion, shorten or extend time periods, and request or permit
additional authority or supporting material.”).
2
See Transcript of November 7, 2018, Discovery Hearing [Doc. # 91] (“November
7 Hearing Transcript”), at 39.
3
Plaintiff’s Response to Defendants’ Motion to Modify Counterclaim Filing
Deadline; Motion for Leave to File a Counterclaim [Doc. # 93] (“Response”).
4
See McCarty v. Thaler, 376 F. App’x 442, 443 (5th Cir. 2010) (per curiam) (“Even
if good cause and excusable neglect are shown, it nonetheless remains a question
of the court’s discretion whether to grant any motion to extend time under Rule
6(b).”). See also id. (“[A]ny grant of an extension that is filed after the time for a
response has expired may only be granted upon a finding of excusable neglect.”
(emphasis added)); Rashid v. Delta State Univ., 306 F.R.D. 530, 533 (N.D. Miss.
2015) (“A private agreement between parties neither relieves a movant seeking an
out-of-time extension from demonstrating excusable neglect, nor strips this Court
of its duty to find the same.”).
5
While the Mendez Defendants’ Answer to Corrected First Amended Complaint
[Doc. # 75] (“Answer”), is also untimely, the Court’s ruling is limited to the
Mendez Defendants’ Counterclaims. The Federation has not moved to strike the
Mendez Defendants’ Answer. And the Fifth Circuit’s “policy in favor of
resolving cases on their merits and against the use of default judgments” militates
against striking the Answer. See Rogers v. Hartford Life & Accident Ins. Co., 167
F.3d 933, 936 (5th Cir. 1999).
2
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I.
BACKGROUND
On September 29, 2017, Plaintiff Federation of State Massage Therapy
Boards (the “Federation”) filed this copyright infringement lawsuit.6
On
November 22, 2017, the Mendez Defendants moved to dismiss for failure to state a
claim and for lack of personal jurisdiction.7 In a Memorandum and Order dated
January 24, 2018 [Doc. # 31], the Court denied the Mendez Defendants’ motions,
ordered the Federation to file an amended complaint, and directed the parties to
engage in limited jurisdictional discovery.
On May 21, 2018, the Federation filed a First Amended Complaint
[Doc. # 58]. On July 3, 2018, the Mendez Defendants moved to dismiss the new
complaint for failure to state a claim.8 The Federation, with the Mendez
Defendants’ agreement, filed a Corrected First Amended Complaint [Doc. # 71],
essentially adding an exhibit. The Court relied on the corrected pleading in
deciding the Second Motion to Dismiss. In a Memorandum and Order dated
6
Original Complaint [Doc. # 1].
7
MMTCF Texas, Inc. and Tesla Mendez’s Motion to Dismiss and Supporting
Authorities [Doc. # 13]; Defendants Jorge Mendez and Mendez Master Training
Center Inc.’s Motion to Dismiss and Brief in Support [Doc. # 14].
8
Mendez Master Training Center, Inc., MMTCF Texas, Inc., Tesla Mendez, and
Jorge Mendez’s Motion to Dismiss the First Amended Complaint and Supporting
Authorities [Doc. # 66] (“Second Motion to Dismiss”).
3
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August 14, 2018 [Doc. # 73] (the “August 14 Order”), the Court denied in
substantial part and granted in part the Mendez Defendants’ Motion to Dismiss the
First Amended Complaint.
On September 10, 2018, the Mendez Defendants’ filed their Answer
[Doc. # 75]9 and Counterclaims [Doc. # 76].10 These pleadings were filed 27 days
after the Court issued the August 14 Order. In an Order dated November 1, 2018
[Doc. # 84], the Court struck the Mendez Defendants’ Counterclaims as untimely
under Federal Rules of Civil Procedure 12(a)(4) and 6(b)(1).
The Mendez
Defendants filed the Motion for Extension on November 2, 2018, citing solely
Federal Rule of Civil Procedure 15, requesting an extension of time to file the
counterclaims.
II.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(a)(4), “if the court denies [a Rule
12] motion . . . , [a] responsive pleading must be served within 14 days after notice
9
Answer [Doc. # 75].
10
The Mendez Defendants seek to assert claims for: (1) “Negligence,” (2) “Violation
of Federal Civil Rights Act, 42 USC Section 1983, for Violation of Equal
Protection and Due Process Clauses of the Fourteenth Amendment,” and (3)
“Unlawful Conspiracy in Restraint of Trade, Violation of Sherman Act Section 1
[15 USC section 1].” See Doc. # 76 (“Counterclaims”).
4
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of the court’s action.” To extend this 14-day deadline, a party must satisfy the
standard set forth under Rule 6(b)(1).11
Under Rule 6(b)(1)(B), the Court may grant a post-deadline motion for an
extension if it finds “good cause” and only “if the party failed to act because of
excusable neglect.” See FED. R. CIV. P. 6(b)(1)(B).12 “Even if good cause and
11
See iFLY Holdings LLC v. Indoor Skydiving Ger. Gmbh, No. 2:14-cv-01080-JRGRSP, 2016 WL 3675135, at *1 (E.D. Tex. Mar. 14, 2016) (Payne, M.J.) (applying
Rule 6(b)(1) to determine whether to extend Rule 12(a)(4)’s 14-day counterclaim
filing deadline). See also Robin v. City of Frisco, No. 4:16-CV-00576, 2017 WL
2986315, at *1 (E.D. Tex. July 13, 2017) (Mazzant, J.) (holding that Rule
6(b)(1)(B) “provides the standard that controls the granting of an extension to file
a responsive pleading after” Rule 12(a)(4)’s 14-day deadline has expired);
Mattress Giant Corp. v. Motor Advert. & Design Inc., No. 3:07-CV-1728-D, 2008
WL 898772, at *1 (N.D. Tex. Mar. 31, 2008) (Fitzwater, C.J.) (“Rule 6(b)(1)(B)
... provides the standard that controls the granting of an extension to file a
responsive pleading after the deadline to answer has already expired.”).
12
Federal Rule of Civil Procedure 6(b) provides:
(b) Extending Time.
(1) In General. When an act may or must be done within a specified
time, the court may, for good cause, extend the time:
(A) with or without motion or notice if the court acts, or if a
request is made, before the original time or its extension
expires; or
(B) on motion made after the time has expired if the party
failed to act because of excusable neglect.
(2) Exceptions. A court must not extend the time to act under Rules
50(b) and (d), 52(b), 59(b), (d), and (e), and 60(b).
FED. R. CIV. P. 6(b).
5
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excusable neglect are shown, it nonetheless remains a question of the court’s
discretion whether to grant any motion to extend time under Rule 6(b).” McCarty
v. Thaler, 376 F. App’x 442, 443-44 (5th Cir. 2010) (per curiam) (citing Lujan v.
Nat’l Wildlife Fed’n, 497 U.S. 871, 894-98 (1990)).
The determination of whether a party’s neglect was “excusable” is “at
bottom an equitable one, taking account of all relevant circumstances surrounding
the party’s omission.” See Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P’ship, 507 U.S. 380, 395 (1993).13 Four factors identified in Pioneer guide the
excusable neglect inquiry: (1) “the danger of prejudice to the [non-movant],”
(2) “the length of the delay and its potential impact on the judicial proceedings,”
(3) “the reason for the delay, including whether it was within the reasonable
control of the movant,” and (4) “whether the movant acted in good faith.” Adams
v. Travelers Indem. Co. of Conn., 465 F.3d 156, 161 n.8 (5th Cir. 2006)
(alternation in original) (quoting Pioneer, 507 U.S. at 395). Courts “focus[]” on
the third Pioneer factor, “the reason for the delay.” See Silivanch v. Celebrity
Cruises, Inc., 333 F.3d 355, 366 (2d Cir. 2003). See also Hosp. del Maestro v.
13
In Pioneer, the Supreme Court construed the bankruptcy counterpart of Rule
6(b)(1)(B). See 507 U.S. at 395. Courts draw on Pioneer when considering
motions for extensions under Rule 6(b)(1)(B). See, e.g., McCarty, 376 F. App’x at
443.
6
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NLRB, 263 F.3d 173, 175 (1st Cir. 2001) (“The four Pioneer factors do not carry
equal weight; the excuse given for the late filing must have the greatest import.”
(quoting Lowry v. McDonnell Douglas Corp., 211 F.3d 457, 463 (8th Cir. 2000))).
The movant has the burden to show “excusable neglect.” Tex. Hous. Agency v.
Verex Assur., Inc., 176 F.R.D. 534, 536 (N.D. Tex. 1998), aff’d sub nom. Tex.
Dep’t Hous. & Cmty. Affairs v. Verex Assur., Inc., 158 F.3d 585 (5th Cir. 1998).
III.
DISCUSSION
After considering the four Pioneer factors and “all relevant circumstances,”
see 507 U.S. at 395, the Court concludes that the Mendez Defendants have not met
their burden to establish their delay in filing the Counterclaims was attributable to
“excusable neglect” under Rule 6(b)(1)(B). See Tex. Hous. Agency, 176 F.R.D. at
536. Consequently, the Mendez Defendants’ Motion to Extend is denied.
It first must be noted that Defendants cite only Federal Rule of Civil
Procedure 15(a) in support of their motion for additional time.
That rule is
inapplicable to the present circumstances. Rule 15(a) governs amendments to
pleadings already on file. The Mendez Defendants, however, seek instead a postdeadline extension of time to file a pleading in the first instance. As noted, in the
Court’s November 1 Order, and again in the summary above of the applicable law,
evaluation of this request is governed by Rule 6(b)(1)(B), which requires movant
to show the deadline was missed as a result of excusable neglect. See iFLY
7
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Holdings LLC v. Indoor Skydiving Ger. Gmbh, No. 2:14-cv-01080-JRG-RSP, 2016
WL 3675135, at *1 (E.D. Tex. Mar. 14, 2016); Robin v. City of Frisco, No. 4:16CV-00576, 2017 WL 2986315, at *1 (E.D. Tex. July 13, 2017); Mattress Giant
Corp. v. Motor Advert. & Design Inc., No. 3:07-CV-1728-D, 2008 WL 898772, at
*1 (N.D. Tex. Mar. 31, 2008). The Mendez Defendants’ Motion fails to address
the Pioneer factors,” and their argument fails to satisfy the Rule 6(b)(1)(B) burden.
See Tex. Hous. Agency, 176 F.R.D. at 536.
In the interests of justice, the Court evaluates the record under the four
Pioneer factors. The Court finds that no extension is warranted under this analysis.
The Court turns first to the most “critical” factor, the reason for the delay. See
Hosp. del Maestro, 263 F.3d at 175 (quoting Lowry, 211 F.3d at 463). Herman
Franck, Esq., new counsel for the Mendez Defendants formally appeared in this
case on June 21, 2018,14 and the Second Motion to Dismiss was filed on July 3,
2018.15
Counsel’s stated reason for delay in filing his clients’ Answer and
Counterclaims was that he was not “fully enrolled” in the Case Management and
Electronic Case Files (“CM/ECF”) when the Court issued its August 14 Order
14
Motion & Order for Admission Pro Hac Vice [Doc. # 64].
15
See Second Motion to Dismiss [Doc. # 66], at 1, 20; “Statement of Counsel for
Defendants Re Need to Manually File Motion to Dismiss First Amended
Complaint Papers” [Doc. # 68], filed July 11, 2018.
8
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ruling denying on the Mendez Defendants’ Second Motion to Dismiss.16 Mr.
Franck explained at oral argument that he and his firm had submitted the
enrollment information prior to August 14, but that their account had not yet been
set up by the Southern District of Texas Clerk’s Office. Counsel reported that the
firm learned of the August 14 Order on August 27, one day before expiration of the
Rule 12(a)(4) 14-day deadline for filing counterclaims. Counsel acknowledged the
firm periodically checked the District’s Public Access to Court Electronic Records
(“PACER”) system for case developments and had access to the PACER system as
needed. Counsel also acknowledged he was aware the Motion to Dismiss was sub
judice.
The Mendez Defendants’ reason for failing to meet the counterclaim
deadline simply does not meet the excusable neglect standard. Counsel did not
frequently check the Court’s docket despite the knowledge that the Second Motion
to Dismiss was pending and that he and his firm were not enrolled in the Court’s
CM/ECF system. Difficulties with ECF or complying with local procedures are
generally not an acceptable reason for delay. Cf. Dimmitt v. Ockenfels, 407 F.3d
21, 23-24 (1st Cir. 2005) (upholding a denial of an extension when counsel’s
reason for delay was, among other things, “inexperience with the requirements of
16
Motion to Extend [Doc # 85], at 9, 11.
9
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the District Court,” “unfamiliarity with the local rules,” and “extreme difficulties
with . . . perfecting his ECF participation”).
Moreover, Defendants offer no reason why they did not immediately seek an
extension of the imminent 14-day deadline for counterclaims, once counsel learned
the Court had denied the Second Motion to Dismiss.17 The “critical” Pioneer
factor accordingly weighs strongly against granting the Defendants an extension.
See Hosp. del Maestro, 263 F.3d at 175 (quoting Lowry, 211 F.3d at 463).18
The other Pioneer factors—prejudice to Counter-Defendant Federation, the
length of the delay, and counsel’s good faith—are mitigating but do not alter the
outcome. See Adams, 465 F.3d at 161 n.8. First, the Court has no reason to
17
Indeed, an additional two weeks passed before Defendants filed their putative
counterclaims and, even then, gave no justification for the delay. Cf. Wilson v.
David, No. 9:08-CV-618, 2010 WL 610714, at *4 (N.D.N.Y. Feb. 17, 2010)
(denying extension when counsel failed to contact the court to request relief when
he became aware of his office’s “technological problems,” but instead “waited
until after the deadline passed, filed the papers, and did not make a motion
pursuant to” Rule 6(b)(1)(B)). Counsel’s explanation for the two-week delay in
filing the Counterclaims was that they were busy. See November 7 Hearing
Transcript [Doc. # 91], at 10. “[A] busy practice does not establish ‘excusable
neglect.’” See Geiserman v. MacDonald, 893 F.2d 787, 793 (5th Cir. 1990)
(quoting McLaughlin v. City of LaGrange, 662 F.2d 1385, 1387 (11th Cir. 1981)).
18
The Mendez Defendants appear to argue that the fact that their Counterclaims are
compulsory should alter the Court’s analysis. Defendants cite no authority for this
proposition. Defendants also do not explain why the proposed counterclaims
could not have been asserted earlier in this case or in a separate lawsuit.
Accordingly, this argument is unavailing.
10
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believe that counsel has not acted in good faith. Second, the Federation’s decision
not to oppose the deadline extension suggests that the Federation believes it would
not be prejudiced by addition of the proposed Counterclaims.
A “lack of
prejudice,” however, is not “sufficient to demonstrate excusable neglect.” See
Rashid v. Delta State Univ., 306 F.R.D. 530, 534 (N.D. Miss. 2015). “The word
‘excusable’ would be read out of the rule if inexcusable neglect were transmuted
into excusable neglect by a mere absence of harm.” Halicki v. La. Casino Cruises,
Inc., 151 F.3d 465, 469 n.4 (5th Cir. 1998) (quoting Prizevoits v. Ind. Bell Tel. Co.,
76 F.3d 132, 134 (7th Cir. 1996)). It is noted that the proposed Counterclaims
were filed only 13 days late. Nevertheless, this case was pending 11 months
before an answer was filed or any suggestion of counterclaims was expressed.
Courts have denied extensions for even shorter delays when the reason for delay is
inadequate. Cf. Midwest Emp’rs Cas. Co. v. Williams, 161 F.3d 877, 879-80 (5th
Cir. 1998) (upholding a denial of an extension when the counsel’s excuse was that
he misread a rule, even though the motion was only two days late and the opposing
party did not show undue prejudice). Cf. also Hawks v. J.P. Morgan Chase Bank,
591 F.3d 1043, 1047-48 (8th Cir. 2010) (upholding a denial of extension when the
motion for extension was nine days late and counsel’s excuse was that they were
busy).
11
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In light of the entire record and the reason for the failure to meet the 14-day
deadline, the Court concludes that the Pioneer factors do not support the Mendez
Defendants’ request to extend the deadline to file counterclaims.19 The request is
denied.
19
The Court also concludes the Mendez Defendants’ have failed to show “good
cause,” which also is required under Rule 6(b)(1). The Court therefore would
exercise its discretion to decline an extension of the counterclaims’ deadline even
if the delay was attributable to excusable neglect. See McCarty, 376 F. App’x at
443. The Mendez Defendants’ counsel at oral argument committed to rest on the
current pleadings. November 7 Hearing Transcript [Doc. # 91], at 31 (“I’m just
going to agree that we’ll sink or swim on the current version of the pleadings.”).
Having studied the proposed Counterclaims, the Court concludes that they do not
meet Rule 12(b)(6) standards. The proposed counterclaims each lack factual
allegations to state a basis for relief “plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). First, the proposed negligence counterclaim identifies no duty owed by
the Federation to the Defendants, let alone factual allegations showing a breach of
an applicable duty. See Zenith Star Ins. Co. v. Wilkerson, 150 S.W.3d 525, 530
(Tex. App.—Austin 2004, no pet.) (“To recover on a negligence claim, the
plaintiff must prove four elements: (1) that there is a duty owed to him by the
defendant, (2) a breach of that duty, (3) that the breach proximately caused the
plaintiff injury, and (4) that damages occurred.”). Second, the Section 1983 claim
identifies no constitutional right possessed by Defendants that was infringed.
Also, Defendants do not allege they have third-party standing to assert any
constitutional rights of others. See Kowalski v. Tesmer, 543 U.S. 125, 130 (2004)
(holding that a party may assert the constitutional rights of another where the
parties have “a ‘close’ relationship” and “there is a ‘hinderance’ to the possessor’s
ability to protect his own interest” (quoting Powers v. Ohio, 499 U.S. 400, 411
(1991))). Finally, regarding the putative antitrust claim, Defendants do not define
the relevant market in which the Federation allegedly engaged in an unreasonable
restraint of trade, see Apani Sw., Inc. v. Coca-Cola Enters., Inc., 300 F.3d 620,
628 (5th Cir. 2002) (affirming dismissal of antitrust claims for failure to define the
relevant market), and thus the antitrust claim is deficient on its face.
12
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IV.
CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that Defendants’ Motion [Doc. # 85] is DENIED.
SIGNED at Houston, Texas, this 20th day of November, 2018.
NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE
13
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