Opinion
CASE NO. 14CV0060 BEN (RBB)
08-04-2014
ANTOINETTE CHANDLER, Plaintiff, v. MORGAN STANLEY SMITH BARNEY, LLC, Defendant.
ORDER GRANTING MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
[Docket No. 21]
Plaintiff Antoinette Chandler moves for leave to file a first amended complaint to add Morgan Stanley Investment Management ("MSIM") as a defendant. (Docket No. 21.) Defendant Morgan Stanley Smith Barney, LLC ("MSSB") opposes the motion. (Docket No. 23.) Because Plaintiff's request is not untimely, unduly prejudicial to MSSB, or futile, the motion is GRANTED.
BACKGROUND
Plaintiff brought this action against her former employer, MSSB. (Notice of Removal, Ex. A ("Compl.") ¶¶ 2, 8.) She claims that under the terms of both oral and written contracts she was entitled to commissions for investment referrals made to MSIM and MSSB has failed to pay those commissions. (Id. at ¶¶ 9-14)
This action was filed in San Diego Superior Court on December 13, 2013. (Compl.) MSSB filed an Answer on January 7, 2014. (Notice of Removal, Ex. C.) MSSB removed the action to this Court on January 8, 2014. (Notice of Removal.) On July 2, 2014, Plaintiff obtained a brief extension of the scheduling order's deadline to file a motion to amend. (Docket No. 18.)
DISCUSSION
Leave to amend under Rule 15(a)(2) should be "freely give[n] . . . when justice so requires." The Ninth Circuit "has noted on several occasions . . . that the Supreme Court has instructed the lower federal courts to heed carefully the command of Rule 15(a), . . . by freely granting leave to amend when justice so requires." DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). "This policy is 'to be applied with extreme liberality.'" Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)).
Plaintiff's motion is subject to Rule 15(a), rather than Federal Rule of Civil Procedure 16, because the motion was filed in compliance with the Court's scheduling order. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 952 (9th Cir. 2006) (finding that filing "a motion for leave to amend within the deadline set by the district court . . . is subject to the limited constraints placed on motions for leave to amend under Rule 15(a)" rather than the Rule 16 standard).
Courts consider "undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and futility of the proposed amendment" in deciding whether justice requires granting leave to amend under Rule 15. Moore v. Kayport Package Express, Inc., 885 F.2d 531, 538 (9th Cir. 1989) (citing Foman v. Davis, 370 U.S. 178, 182 (1962)). Although each factor may warrant consideration, "prejudice to the opposing party . . . carries the greatest weight." Eminence Capital, 316 F.3d at 1052. MSSB argues that it will be prejudiced by amendment, that Plaintiff has engaged in undue delay, and that amendment is futile. The Court disagrees.
Although the Court only analyzes the factors challenged by MSSB, the Court notes that the other factors weigh in favor of granting leave to amend. There are no allegations that Plaintiff has acted in bad faith or with dilatory motive, and this is Plaintiff's first attempt to amend her Complaint.
MSSB has not demonstrated that Plaintiff's amendment is unduly prejudicial to MSSB. MSSB's only claim of prejudice is based on potential delays in the progression of the case. MSSB argues the addition of MSIM might require the extension of discovery deadlines that could delay resolution of Plaintiff's claims against MSSB. However, the deadline to complete discovery is not until October 14, 2014. Assuming an extension is necessary, MSSB has not shown that it would be lengthy enough to unduly prejudice MSSB. See Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (noting an almost two-year delay in seeking leave to amend, alone, would not be enough to deny leave). MSSB has not met its burden in showing prejudice. DCD Programs, 833 F.2d at 187 ("The party opposing amendment bears the burden of showing prejudice.").
Plaintiff has not engaged in undue delay. In June, Plaintiff discovered MSSB was blaming MSIM for its failure to pay Plaintiff's commissions. Deposition testimony taken in late June from MSIM employees suggested that MSIM did not pay MSSB Plaintiff's commissions. Plaintiff promptly sought a brief extension of the deadline to file a motion for leave to amend and filed the instant motion within a few days of the order modifying the scheduling order.
Plaintiff's amendment is also not futile. MSSB argues Plaintiff's addition of MSIM is futile because the claims against MSIM are time-barred and may be invalid for failing to comply with the statute of frauds. However, it is not obvious that the allegations of the proposed amended complaint will be time-barred, or clear that the contracts are invalid under the statute of frauds.
The Court's conclusion that the amendment is not clearly futile does not preclude an appropriate challenge to the amended pleading under Federal Rule of Civil rocedure 12. Nelson v. Adams USA, Inc., 529 U.S. 460, 467 (2000) (noting a newly added defendant's right to respond to an amended complaint under FED. R. CIV. P. 12).
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CONCLUSION
Plaintiff's motion for leave to amend is GRANTED. Plaintiff may file a First Amended Complaint within five days of the filing of this order.
IT IS SO ORDERED. DATED: August 4, 2014
/s/_________
Hon. Roger T. Benitez
United States District Judge