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Act Group, Inc. v. Hamlin

United States District Court, D. Arizona

March 28, 2014

The ACT Group, Inc., Plaintiff,
v.
James Hamlin, et al., Defendants. And Related Counterclaim.

ORDER

STEPHEN M. McNAMEE, District Judge.

Pending before the Court is Defendant James Hamlin's ("Hamlin") motion for summary judgment. (Doc. 89.) The motion is fully briefed. (Docs. 90, 99-102.) Also pending is Plaintiff The Act Group Inc.'s ("ACT") motion to modify the case management order and for leave to file a second amended complaint. (Doc. 97.) This motion is also fully briefed. (Docs. 103, 105.) After review and consideration, [1] the Court will deny Hamlin's motion for summary judgment and deny ACT's motion to modify the case management order and for leave to file a second amended complaint.

BACKGROUND

ACT provides training and education services to Heating, Ventilation and Air Conditioning ("HVAC") distributors, dealers and their representatives nationwide. (Doc. 47.) In the course of its business, ACT developed copyrighted sales training materials, which it labeled " The Works, " containing both sales training materials and written hand-outs. (Docs. 100-4 at 1-6, 90-1, 90-2.) The Works comprises the titles "No Pressure Selling" and "Trane Boot Camp: A Comprehensive Study Guide to In-Home Sales." (Id.) Defendant James Hamlin, a one-time provider of sales training for ACT, left ACT to go to work for Defendant WaterFurnace ("WaterFurnace") as a national sales trainer. (Doc. 47.) WaterFurnace is a geothermal manufacturer and distributor of HVAC systems, which also provides sales training to HVAC dealers and representatives. (Id.)

Mr. Hamlin had access to The Works while working as a sales trainer for ACT. (Id.) ACT alleges that Mr. Hamlin utilized ACT Group's proprietary sales training concepts and materials to perform sales training services for WaterFurnace. (Id.) Further, ACT alleges that Mr. Hamlin copied ACT's copyrighted materials and now uses materials that are, as a whole substantially similar to The Works, and that some of the materials used by Mr. Hamlin are identical to some of The Works. (Id.) Hamlin's sales training presentation is entitled to " Smarter Sales Training. " (Doc. 90-3.) ACT's first amended complaint alleges copyright infringement, breach of duty of loyalty, aiding and abetting breach of duty of loyalty, and unfair competition. (Doc. 47.)

STANDARD OF REVIEW

I. Summary Judgment

A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986); Jesinger v. Nevada Fed. Credit Union , 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby , 477 U.S. 242, 248 (1986); see also Jesinger , 24 F.3d at 1130. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson , 477 U.S. at 248. The dispute must also be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id .; see Jesinger , 24 F.3d at 1130.

A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex , 477 U.S. at 323-24. Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Citadel Holding Corp. v. Roven , 26 F.3d 960, 964 (9th Cir. 1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. See Celotex , 477 U.S. at 323. The party opposing summary judgment may not rest upon the mere allegations or denials of the party's pleadings, but must set forth specific facts showing that there is a genuine issue for trial. See Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio , 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint Venture , 53 F.3d 1044, 1049 (9th Cir. 1995).

II. Motion to Amend

After the district court has filed a pretrial case management order pursuant to Federal Rule of Civil Procedure 16 that establishes a timetable for amending pleadings, Rule 16 standards control any modification. See Johnson v. Mammoth Recreations, Inc. , 975 F.2d 604, 607-08 (9th Cir. 1992). The case management schedule shall not be modified except by leave of court upon a showing of good cause. Fed.R.Civ.P. 16(b)(4). The good cause standard primarily considers the diligence of the party seeking the amendment. See Johnson , 975 F.2d at 609. The district court may modify the pretrial schedule if amendment cannot reasonably be sought despite the diligence of the party seeking the modification. Id.

If the party is able to establish good cause for amendment, the party must also demonstrate that amendment is proper under Rule 15. See id. at 608. Under Rule 15, although leave to amend "shall be freely given when justice so requires, " it "is not to be granted automatically." Zivkovic v. Southern California Edison Co. , 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Jackson v. Bank of Hawaii , 902 F.2d 1385, 1387 (9th Cir. 1990). The district court may deny a motion for leave to amend if permitting an amendment would, among other things, cause an undue delay in the litigation or prejudice the opposing party. See Jackson , 902 F.2d at 1387; see also Solomon v. North Am. Life & Cas. Ins. Co. , 151 F.3d 1132, 1139 (9th Cir. 1998) (affirming the district court's denial of motion to amend pleadings filed on the eve of the discovery deadline). The Court's discretion to deny leave to amend is particularly broad where Plaintiff has previously been permitted to amend their complaint. Sisseton-Wahpeton Sioux Tribe v. United States , 90 F.3d 351, 355 (9th Cir. 1996). Repeated failure to cure deficiencies is one of the factors to be considered in deciding whether justice requires granting leave to amend. See Moore v. Kayport Package Express, Inc. , 885 F.2d 531, 538 (9th Cir. 1989).

DISCUSSION

I. Hamlin's Motion for ...


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