Strand et al v. USANA Health Sciences
Filing
326
MEMORANDUM DECISION AND ORDER granting 291 Motion for Leave to File Second Amended Complaint. Within 5 days of the date of this order, Mrs. Strand may file the second amended complaint. Signed by Magistrate Judge Jared C. Bennett on 7/6/2020. (lnp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
ELIZABETH STRAND and AMARA
ENTERPRISES, INC.,
MEMORANDUM DECISION
AND ORDER
Plaintiffs,
Case No. 2:17-cv-00925-HCN-JCB
v.
District Judge Howard C. Nielson, Jr.
USANA HEALTH SCIENCES, INC.,
Magistrate Judge Jared C. Bennett
Defendant.
This case was referred to Magistrate Judge Paul M. Warner pursuant to 28 U.S.C.
§ 636(b)(1)(A). 1 Due to Judge Warner’s retirement, this case is now referred to Magistrate Judge
Jared C. Bennett. 2 Before the court is Plaintiffs Elizabeth Strand and Amara Enterprises, Inc.’s
(together, “Mrs. Strand”) Motion for Leave to File Second Amended Complaint. 3 Under
DUCivR 7-1(f), the court has concluded that oral argument is unnecessary and therefore decides
the motion on the written memoranda. Having reviewed the parties’ briefs and relevant law, the
court renders the following Memorandum Decision and Order.
BACKGROUND
Mrs. Strand’s motion seeks leave to amend the complaint to replead subject matter
jurisdiction and to add a second breach of contract claim. Mrs. Strand asserts the proposed
second amended complaint would clarify the existing allegations underlying the breach of
1
ECF No. 283.
ECF No. 312.
3
ECF No. 291.
2
contract claim by distinguishing that the termination of distributorship and the refusal to approve
the sale of distributorship are each independent breaches that give rise to two separate claims for
breach of contract. Mrs. Strand’s motion comes in response to the confusion expressed by the
court at the February 20, 2020 hearing.
Defendant USANA Health Sciences, Inc. (“USANA”) does not oppose amendment to the
pleading of subject matter jurisdiction. However, USANA opposes the addition of a second
breach of contract claim because Mrs. Strand purportedly unduly delayed asserting the claim,
which causes USANA to suffer undue prejudice. Because USANA does not oppose amending
the allegations as to subject matter jurisdiction, Mrs. Strand’s motion to amend those allegations
is GRANTED without further discussion. Based on the reasons below, Mrs. Strand’s proposed
addition of a second breach of contract claim is also GRANTED.
ANALYSIS
Under the liberal standard for granting leave to amend pleadings, the court concludes that
Mrs. Strand should be allowed to amend her complaint. Under Fed. R. Civ. P. 15, the court
“should freely give leave [to amend] when justice so requires.” Whether to provide a party leave
to amend its pleadings “is within the discretion of the trial court.” Minter v. Prime Equip. Co.,
451 F.3d 1196, 1204 (10th Cir. 2006) (quotations and citation omitted). The court may deny
leave to amend only where there is a “showing of undue delay, undue prejudice to the opposing
party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously
allowed, or futility of amendment.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009)
(quoting Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993)). Because USANA argues
only undue delay and prejudice, only those two arguments are discussed below.
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I.
Undue Delay
There is no undue delay in bringing this motion. The proposed amendment would clarify
that the breach of contract allegations contemplate two breaches of two independent contractual
provisions, and therefore describes two separate causes of action: (1) termination of the
distributorship agreement and (2) refusal to approve the sale of the distributorship. The motion to
amend is brought one month after the February 20, 2020 hearing whereat the court expressed a
need for clarification on this issue. Thus, there is no undue delay.
USANA highlights the fact that this motion comes two and a half years after the litigation
began. The court is not persuaded by this argument because the mere fact that a party seeks to
amend its pleadings at a late stage of the litigation, without more, is not undue delay. Here, the
motion was brought within the allotted time period for amending pleadings under the Scheduling
Order, fact discovery remains open until September 14, 2020, and no trial date has been
scheduled in this case. Under these circumstances, the court cannot say that Mrs. Strand’s motion
for leave to amend is either untimely or causes undue delay in the final disposition of the case.
Accordingly, USANA’s objection is overruled.
II.
Unfair Prejudice
USANA has not established that it will be unfairly prejudiced if Mrs. Strand is permitted
leave to amend. Prejudice is most often found “when the amended claims arise out of a subject
matter different from what was set forth in the complaint and raise significant new factual
issues.” Minter, 451 F.3d at 1207. That is not the case here. In the proposed amendment, the
underlying allegations remain the same with the only change being increased specificity as to the
contractual provisions that were allegedly violated. Prejudice does not exist simply because an
3
amendment adds a new cause of action for liability. Instead, USANA needs to show that the
amendment would result in some unique difficulty in defending against the new claim, which
USANA fails to do.
To the extent USANA needs to engage in additional discovery, it is free to do so as fact
discovery has not yet closed. If the time allotted in the current Scheduling Order is insufficient to
accommodate USANA’s additional discovery needs, any such hardship can be alleviated through
further adjustments to the schedule.
CONCLUSION
After considering the relevant factors—and given the liberal standard for allowing leave
to amend pleadings—the court concludes that Mrs. Strand should be provided with leave to
amend her complaint.
ORDER
For the foregoing reasons, IT IS HEREBY ORDERED that Mrs. Strand’s Motion for
Leave to File Second Amended Complaint 4 is GRANTED. Within 5 days of the date of this
order, Mrs. Strand may file the second amended complaint.
DATED this 6th day of July, 2020.
BY THE COURT:
JARED C. BENNETT
United States Magistrate Judge
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ECF No. 291.
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