Opinion
Case No. 13-cv-06017-JSC
06-23-2015
DOUGLAS F. CARLSON, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.
ORDER DENYING MOTION FOR LEAVE TO SERVE SUPPLEMENTAL COMPLAINT
Re: Dkt. No. 40
Plaintiff Douglas F. Carlson ("Plaintiff"), proceeding pro se, brings this action against Defendant United States Postal Service ("Defendant") pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552- Now pending before the Court is Plaintiff's motion for leave to file a Second Supplemental Complaint ("SSC"), which seeks to add 55 new claims. (Dkt. No. 40.) The Court finds this matter suitable for disposition without oral argument, see Civ. L.R. 7-1(b), and therefore VACATES the hearing set for July 16, 2015. Having considered the parties' submissions, the Court DENIES Plaintiff's motion.
BACKGROUND
Plaintiff, a self-professed "watchdog" of Defendant's practices, filed the initial complaint in December of 2013, bringing ten claims relating to a FOIA request that Plaintiff filed seeking records from Defendant. (Dkt. No. 1.) In August 2014 the parties stipulated that Plaintiff could file a First Supplemental Complaint ("FSC"), which added 9 more claims. (Dkt. No. 22-1.) Of those 19 claims, 6 have been resolved due to the parties' settlement efforts, which spanned several months. (Dkt. No. 30, 32.)
The remaining 13 claims generally pertain to four different subjects. Counts 1, 2, and 11 relate to FOIA requests for documents regarding the Postal Service's Collection Point Management System. Counts 3, 4, 5, 14, 15, 16, and 19 pertain to requests for information regarding retail transaction data, communications with contractors about changes in service standards, First-Class Mail volumes, emails about changes in retail hours at certain Postal Service locations, and a management report on package growth from the Postal Service's Office of the Inspector General. The parties' dispute on these counts hinges on whether the information withheld is commercial in nature such that it is protected from disclosure under good business practices pursuant to 5 U.S.C. § 552(b)(3) and 39 U.S.C. § 410(c)(2). Counts 12 and 13 arise out of FOIA requests for dispatch schedules for a San Francisco postal station and exception to policy requirements on collection times in La Jolla; for these two counts, Plaintiff challenges the Postal Service's redaction of signatures. Finally, in Count 16 Plaintiff seeks emails to or from a Postal Service District Manager that contain the word "Carlson" or "Rincon."
At the case management conference ("CMC") on February 12, 2015, Plaintiff indicated his intent to seek leave to amend the pleadings for a second time. (See Dkt. No. 39.) The Court set a schedule giving the parties two months to negotiate a stipulation as to any or all proposed supplemental claims. (Id.) The Court had intended to set a briefing schedule on motions for summary judgment at that CMC, but put off doing so until resolution of the state of the pleadings. It appears that the parties did not stipulate to any proposed amendments: Plaintiff filed a motion for leave to file the SSC on April 27, 2015 (Dkt. No. 40), and Defendant opposes all proposed additional claims (Dkt. No. 43).
The 55 claims that Plaintiff now seeks to add relate to different FOIA requests, Privacy Act requests, and one claim for breach of contract for violations of the settlement agreement reached in a prior FOIA case. It is undisputed that the facts underlying these new claims—i.e., the FOIA requests, disclosures, and alleged breach—all occurred after the filing of the FSC. The majority of the 55 new claims pertain to FOIA requests to 48 different Postal Service Districts seeking operating plan and closure information for certain holidays. Three of the 55 proposed new claims involve FOIA requests for Postal Service communications or actions relating to Plaintiff. One of the proposed new claims involves a challenge to the Postal Service's determination of the fee required to process Plaintiff's FOIA request.
LEGAL STANDARD
Federal Rule of Civil Procedure 15(d) "permits the filing of a supplemental pleading which introduces a cause of action not alleged in the original complaint and not in existence when the original complaint was filed." Cabrera v. City of Huntington Park, 159 F.3d 374, 382 (9th Cir. 1998) (internal quotation marks and citation omitted). Rule 15(d) provides in relevant part that "[o]n motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented." The purpose of the rule is "to promote the economical and speedy disposition of the controversy." Keith v. Volpe, 858 F.2d 467, 473 (9th Cir. 1988). "While leave to permit supplemental pleading is favored, it cannot be used to introduce a separate, distinct and new cause of action." Planned Parenthood of So. Ariz. v. Neely, 130 F.3d 400, 402 (9th Cir. 1997) (internal quotation marks and citation omitted).
"There is no right to supplement as a matter of course as there is with certain amended pleadings." Blackwell v. Thai Speed, Inc., No. C 07-4629, 2008 WL 782556, at *2 (N.D. Cal. Mar. 24, 2008) (citation omitted). Instead, "[u]nder the Rule, allowance or denial of leave to file a supplemental pleading is addressed to the sound discretion of the District Court." United States v. Reiten, 313 F.2d 673, 675 (9th Cir. 1963); see also Pratt v. Rowland, 769 F. Supp. 1168, 1131 (N.D. Cal. 1991) (noting that Rule 15(d) gives "broad discretion" to permit or deny supplemental pleadings). The legal standard for granting or denying a motion to supplement under Rule 15(d) is the same as the standard for a Rule 15(a) motion to amend. See Yates v. Auto City 76, 299 F.R.D. 611, 614 (N.D. Cal. 2013); Candler v. Santa Rita Cnty. Jail Watch Commander, No. C 11-1992 CW (PR), 2013 WL 5568248, at *1 (N.D. Cal. Oct. 9, 2013) (internal quotation marks and citation omitted); Athena Feminine Techs. Inc. v. Wilkes, at *2 (citation omitted); cf. LaSalvia v. United Dairymen of Ariz., 804 F.2d 1113, 1119 (9th Cir. 1986), cert. denied, 482 U.S. 928 (1987) (noting that Rule 15(d) motions should be granted "[u]nless undue prejudice to the opposing party will result"). These factors, first identified in Foman v. Davis, 371 U.S. 178 (1962), include bad faith, undue delay, prejudice to the opposing party, and futility of amendment. Ditto v. McCurdy, 510 F.3d 1070, 1079 (9th Cir. 2007). In addition, "a supplemental complaint should have some relation to the claim set forth in the original pleading[.]" Candler, 2013 WL 5568248, at *1; see also Keith, 858 F.2d at 473 (same). Lastly, "[j]udicial economy is a primary concern under a Rule 15(d) motion to supplement." Aten Int'l Co. v. Emine Tech. Co., No. CV 09-0843 AG (MLGx), 2010 WL 1462110, at *5 (C.D. Cal. Apr. 12, 2012). Ultimately, leave to file a supplemental pleading will be denied where the supplemental pleading could be the subject of a separate action. Said v. Gonzales, No. C06-986MJP, 2007 WL 2789344, at *6 n.4 (W.D. Wash. Sept. 24, 2007) (citing 6A Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Fed. Practice & Proc.: Civil 2D § 1509 (1990)).
DISCUSSION
Plaintiff seeks to supplement the FSC to add 55 new claims, including many FOIA counts, several Privacy Act counts, and one claim for breach of contract. Plaintiff insists that allowing these amendments comports with judicial efficiency because the proposed supplemental claims involve overlapping legal issues with those alleged in the current operative pleading, including documents withheld pursuant to the 39 U.S.C. § 410(c)(2) exemption and fee issues. Plaintiff further asserts that allowing him to bring the 55 other FOIA claims supports his current allegation that Defendant has a "policy or practice of not complying with FOIA in responding to [his] requests[,]" and therefore allowing the amendments will lead to a better supported claim and therefore "complete relief" to which Rule 15(d) aspires.
As a threshold matter, the Court is satisfied that Plaintiff's proposed new claims have "some relation" to the claims alleged in the operative complaint. See Candler, 2013 WL 5568248, at *1; see also Keith, 858 F.2d at 473. The nexus here is clear: the proposed claims all relate to Defendant's responses to Plaintiff's FOIA requests. Thus, this baseline requirement for a Rule 15(d) supplement is present.
Turning to the Foman factors, the first factor courts consider on a Rule 15 motion is bad faith. See Ditto, 510 F.3d at 1079. There is no indication here that Plaintiff's proposed new claims are brought in such a manner. To the contrary, it appears that Plaintiff is merely attempting to reach a resolution on all pending claims to prevent having to file a new lawsuit. Defendant does not contend that the proposed new claims would be futile. Nor is there evidence of undue delay, at least for the bulk of the claims. A Rule 15(d) motion is meant to allow a plaintiff to include new claims that arose after the filing of the operative compliant. Plaintiff filed the FSC in August 2014, so this is the relevant benchmark date for the purposes of the analysis. The lion's share of the proposed new claims arise out of specific FOIA requests that Plaintiff sent to Defendant between March 2014 and January 2015. (See generally Dkt. No. 40-1.) Although Plaintiffs made some of these initial requests well before the FSC filing date, the allegations in the proposed SSC indicate that for most claims, Defendant's alleged FOIA-violating conduct—i.e., failure to respond or alleged improper withholding following an administrative appeal—post-date the filing of the FSC. Some claims are the exception to that rule, however. For example, proposed FOIA Claim No. 68 was a March 2014 FOIA request, a May 2014 administrative appeal, and failure to comply. (Dkt. No. 40-1 at 23.) Plainly such a claim could have—and should have—been included in the August 2014 FSC, and having failed to do so, weighs against allowing Plaintiff to add that claim now. See Loehr v. Centura Cnty. Comm'y College Dist., 743 F.2d 1310, 1319-20 (9th Cir. 1984) ("[A]lthough delay alone provides an insufficient ground for denying leave to amend or supplement . . . it remains relevant." (citation omitted)).
But it is the next factor—prejudice to Defendant—that weighs most heavily in the analysis. See Eminence Capital, LLA v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (noting that prejudice "carries the greatest weight" in assessing whether to allow amended pleadings). Indeed, this is where Defendant's opposition focuses. Courts often evaluate prejudice in terms of whether relevant deadlines would have to be continued as a result of the supplemental pleading. See Yates, 299 F.R.D. at 614 (noting that "a court evaluates prejudice in terms of whether relevant deadlines would have to be continued as a result of the supplemental pleading). Courts have also found prejudice to the non-moving party where the parties have already engaged in settlement proceedings. See, e.g., Frederick v. Cal. Dep't of Corrs. & Rehabilitation, No. 08-2222 MMC (PR), 2012 WL 2077305, at *2 (N.D. Cal. June 8, 2012). In other circumstances, courts have denied leave to file a supplemental pleading where the new claims would require creation of a separate administrative record. See, e.g., Or. Natural Res. Council, Inc. v. Grossarth, 979 F.2d 1377, 1379-80 (9th Cir. 1992) (affirming dismissal and denying motion to supplement with evidence of subsequent agency action involving matters which "should be considered in the first instance by a district court in separate litigation which can develop an independent record"). On the other hand, other courts have made clear that "[t]he burden of having to defend a new claim alone is not undue prejudice under Rule 15[.]" Dep't of Fair Emp't & Hous. v. Law Sch. Admission Council, Inc., No. 12-cv-1830-EMC, 2013 WL 485830, at *5 (N.D. Cal. Feb. 6, 2013).
This case has been pending for over one and a half years. The parties have engaged in substantial settlement efforts with a magistrate judge that effectively narrowed the claims before the Court. The Court was on the verge of setting a briefing schedule for summary judgment motions when Plaintiff brought up his desire to supplement his claims once more. Plaintiff's breach of contract claim would entitle him to discovery, which necessarily would push back the deadline for dispositive motions. These are exactly the results that a court's prejudice analysis seeks to avoid.
A plaintiff is not normally entitled to discovery on FOIA claims, so there is no risk that prolonged discovery would result from Plaintiffs' proposed new FOIA claims. However, Defendant has submitted the declaration of Matthew J. Connolly, Chief Privacy Officer in the Postal Service's Law Department, who avers that because Plaintiffs' proposed new claims involve FOIA requests made to various different Postal Service district, they require each district to conduct its own search for responsive documents and make a determination on exemptions. (Dkt. No. 43-1 ¶ 8.) From Defendant's perspective, this will require substantial effort, possibly taking months if not years to reach the summary judgment stage that the parties have finally neared regarding the 13 claims in the operative FSC. Defendant's required investigation and response to all of the myriad proposed FOIA claims here likewise weighs against allowing the new claims to proceed, since it essentially requires an entirely new investigation and set of documents. See Oregan Natural Res. Council, Inc., 979 F.2d at 1379-80. And while there is no set deadline for summary judgment motions, any such deadline will be greatly extended if the 55 new claims are added, which is prejudicial. See Yates, 299 F.R.D. at 614. Moreover, given that the parties have already attended three separate settlement proceedings with a magistrate judge, allowing new claims now also generates prejudice. Frederick, 2012 WL 2077305, at *2. In one of Plaintiff's earlier-filed FOIA cases, the court permitted Plaintiff to supplement his complaint to add 8 new FOIA claims, finding no prejudice despite the fact that Defendant would need to conduct separate investigation and analysis into the new claims. See Carlton v. U.S. Postal Serv., No. 06-01578 RMW, Dkt. No. 38 (N.D. Cal. Nov. 6, 2007). But in the earlier case the parties had not yet begun settlement negotiations when Plaintiff sought to amend, and the scope of the proposed supplemental complaint here is much larger: Plaintiff now seeks to add 7 times that number of claims. Thus, the Court finds prejudice arising from the very scope of the request here especially in light of the procedural posture of this case.
Defendant also contends that it will be prejudiced by pushing off the resolution of the already-pending claims because a Postal Service declarant who had been working with counsel on this matter since its inception is planning to retire this month, which stands to cause even further delay. (Dkt. No. 43-1 ¶ 7.) This point appears to be moot, as that employee's retirement this month will be in effect regardless of whether supplement is allowed, since the Court has yet to set a briefing schedule for summary judgment motions on the already-pending claims. --------
Finally, in addition to the Foman factors, requests to supplement under Rule 15(d) consider whether allowing the supplement will settle "the entire controversy between the parties" in the interest of judicial economy. Planned Parenthood, 130 F.3d at 402. On the one hand, denying Plaintiff's request to supplement the FSC and resolving only the currently alleged claims on summary judgment will not settle the entire controversy between the parties. On the other hand, given the number of FOIA requests that Plaintiff has made thus far and his self-described role as advocate for better Postal Service policies, it is unlikely that the entire controversy between these two parties will end even if the listed most recent claims are added.
On balance, the Court concludes that the factors weigh against a supplement of this great volume at this advanced stage of the litigation.
CONCLUSION
For the reasons described above, the Court DENIES Plaintiff's motion for leave to supplement the complaint to add 55 new claims at this late stage of litigation. Accordingly, this action shall proceed to summary judgment solely as to the claims alleged in the FSC. The parties shall appear for a case management conference at 1:30 p.m. on July 16, 2015. The Court will set a briefing schedule for summary judgment motions at that time.
IT IS SO ORDERED. Dated: June 23, 2015
/s/_________
JACQUELINE SCOTT CORLEY
United States Magistrate Judge