United States District Court, D. Arizona
ORDER
Honorable John J. Tuchi, United States District Judge.
At
issue is Defendant Taylor Made Golf Company Inc.'s
(“Taylor Made”) Motion for Leave to File Amended
Counterclaim (Doc. 87, Mot.), to which Plaintiff Parson's
Xtreme Golf LLC (“PXG”) filed a Response (Doc.
94, Resp.), and to which Taylor Made filed a Reply (Doc. 97,
Reply). Upon a showing of good cause, the Court grants Taylor
Made's Motion.
I.
BACKGROUND
In the
January 9, 2018 Scheduling Order, the Court set February 2,
2018, as the deadline for motions to amend the Complaint and
to join additional parties. (Doc. 61, Scheduling Order at 2.)
At the February 2 deadline, PXG filed its Second Amended
Complaint with the consent of Taylor Made. On February 15,
shortly before Taylor Made's Answer to the Second Amended
Complaint was due, PXG delivered a letter to Taylor Made
identifying alleged deficiencies with four
patents[1] asserted as the basis for a number of
Taylor Made's counterclaims. (Resp. Ex. A.) In that
letter, PXG demanded that Taylor Made pull the Withdrawn
Patents from its Counterclaim. (Resp. Ex. A at 3- 4.) The
following day, in conjunction with its Amended Answer, Taylor
Made filed its Motion for Leave to File an Amended
Counterclaim. In its proposed Amended Counterclaim, Taylor
Made seeks to remove the Withdrawn Patents identified in
PXG's letter in favor of two patents[2] that it had not
asserted in its prior Counterclaim. (Mot. At 2.) Although the
New Patents contain different claim limitations, the
substance of Taylor Made's proposed Amended Counterclaim
remains largely the same, as Taylor Made continues to allege
infringement by the same set of PXG drivers, fairway woods,
and hybrids. (Mot. at 3.)
II.
LEGAL STANDARD
A party
may amend a pleading once as a matter of course within 21
days after service, or within 21 days of service of, among
others, a Rule 12(b)(6) motion. Fed. R. Civ.
P. 15(a). In all other
circumstances, absent the opposing party's written
consent, a party must seek leave to amend from the court.
Fed.R.Civ.P. 15(a)(2). Although the decision to grant or deny
a motion to amend is within the trial court's discretion,
“Rule 15(a) declares that leave to amend shall be
freely given when justice so requires.” Foman v.
Davis, 371 U.S. 178, 182 (1962) (citation and internal
quotation marks omitted). “In exercising its discretion
with regard to the amendment of pleadings, a court must be
guided by the underlying purpose of Rule 15-to facilitate a
decision on the merits rather than on the pleadings or
technicalities.” Eldridge v. Block, 832 F.2d
1132, 1135 (9th Cir. 1987) (citation and internal quotation
marks omitted).
However,
the policy in favor of allowing amendments is subject to
limitations. Madeja v. Olympic Packers, 310 F.3d
628, 636 (9th Cir. 2002) (holding that after a defendant
files a responsive pleading, leave to amend is not
appropriate if the “amendment would cause prejudice to
the opposing party, is sought in bad faith, is futile, or
creates undue delay”). Moreover, where a court has
entered a scheduling order under Rule 16 and set a deadline
for amending the pleadings, a request to amend a pleading
after the deadline is in effect a request to modify the case
schedule and must be evaluated under Rule 16. Coleman v.
Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000).
Under Rule 16, a party must show “good cause for not
having amended their complaint before the time specified in
the scheduling order expired.” Id. “This
standard ‘primarily considers the diligence of the
party seeking the amendment.'” Id. (citing
Johnson v. Mammoth Recreations, Inc., 975 F.2d 604,
607 (9th Cir. 1992)).
III.
ANALYSIS
Because
Taylor Made's request comes after the Court's
deadline for amendment, it must demonstrate that “good
cause” exists to grant to the Motion. Coleman,
232 F.3d at 1294. Thus, the Court must consider whether
Taylor Made acted diligently in seeking leave to amend.
See Id. In support of its Motion, Taylor Made argues
that it acted diligently because it moved to amend within a
day of PXG's letter, which brought to light purported
deficiencies with the Withdrawn Patents in Taylor Made's
prior Counterclaim. (Mot. at 3.) In response, PXG argues that
Taylor Made focuses on the wrong date in determining whether
good cause exists and that, as the holder of the patents,
Taylor Made should have been aware of any facial defects at
the time it initially filed its Counterclaim. (Resp. at 4.)
Thus, PXG concludes that Taylor Made's diligence should
be measured from November 2017, when the Counterclaim at
issue was first filed.
The
Court finds good cause sufficient to permit modification of
the Scheduling Order and the filing of an Amended
Counterclaim regardless of the date that it looks to. Taylor
Made filed its Motion the day after receiving PXG's
letter and, at worst, the Motion comes less than three months
after Taylor Made first filed its Answer and Counterclaim.
(See Doc. 40.) As such, the Court does not find any
lack of diligence on Taylor Made's behalf. Thus, good
cause exists to modify the Scheduling Order and to grant the
Motion.
In
addition to a showing of good faith under Rule 16, Taylor
Made must also satisfy the requirements for amendment under
Rule 15. Thus, the Court shall freely permit amendment unless
“it would cause prejudice to the opposing party, is
sought in bad faith, is futile, or creates undue
delay.” Madeja, 310 F.3d at 636. PXG does not
contend, nor does the Court find, that Taylor Made has acted
in bad faith or that the amendment is futile. And, because
the Court determines that Taylor Made acted with sufficient
diligence, PXG fails to demonstrate any undue delay by Taylor
Made. Thus, the Court must only assess PXG's argument
that allowing Taylor Made to amend its Complaint is
“entirely unfair to PXG.” (Resp. at 5.)
PXG's
assertion of prejudice fails to convince the Court. Although
PXG points to case law in support of its argument, the cited
cases involve a party seeking amendment either after summary
judgment or after the close of discovery. (Resp. at 5 (citing
Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387-88
(9th Cir. 1990) (finding amendment after summary judgment
briefing unduly prejudicial) and Safety Dynamics Inc. v.
Gen. Star Indem. Co., No. CV-09-00695-TUC-CKJ, 2014 WL
11281291, at *7 (D. Ariz. Mar. 5, 2014) (finding amendment
after the close of discovery prejudicial)).) These cases do
not apply here because the case at hand is still in its
infancy. Moreover, PXG's rationale is troubling in light
of the amendment of its own Complaint-which also added a new
patent-two weeks prior to Taylor Made's Motion.
(See Doc. 77.) Although amendment of the
Counterclaim may require the adjustment of additional
deadlines in the Scheduling Order, PXG fails to demonstrate
that it would suffer prejudice as a result of Taylor
Made's proposed amendment.
IT IS
THEREFORE ORDERED granting Taylor Made's Motion for Leave
to ...