United States District Court, D. Arizona
A. Teilborg, Senior United States District Judge.
before the Court is Defendants Best Roast Coffee LLC and
Jason Roe's (“Defendants”) Motion to Dismiss
for Lack of Jurisdiction. (Doc. 65). Plaintiff SFM, LLC d/b/a
Sprouts Farmers Market (“Plaintiff”) has
responded, (Doc. 69), and Defendants have replied, (Doc. 74).
Also pending before the Court is defense counsel's motion
to withdraw. (Doc. 58). The clients have been notified and
have not opposed withdrawal. Plaintiff has opposed withdrawal
on the grounds that Best Roast Coffee LLC cannot proceed pro
se. (Doc. 66). The Court now rules on the motions.
Court explained in its prior order, (Doc. 29), this case
concerns Plaintiff's allegations that Defendants have
infringed its trademarks and disseminated a false narrative
about the parties' business relationship. Plaintiff has
since filed a First Amended Complaint (“FAC”)
changing a Jane Doe defendant to Julia Yim-Jason Roe's
wife. (Doc. 52). Defendants now move to dismiss this case,
alleging that the FAC fails to comply with Federal Rule of
Civil Procedure (“Rule”) 15, that the Court lacks
personal jurisdiction over Defendants, and that the Court
lacks subject-matter jurisdiction over this action based on
(“Terms”) on Plaintiff's website.
Compliance with Rule 15
initial matter, the Court must address Defendants'
request to dismiss the FAC because Plaintiff filed it outside
the time period in which amendments are permitted as a matter
of course and did not otherwise obtain this Court's
approval. Plaintiff acknowledges its failure to timely file
this amendment but asks the Court to excuse its error because
the FAC “was filed solely to change the case caption
from Jane Doe to Julia Yim (Mr. Roe's wife's
name).” (Doc. 69 at 4).
leave to amend is permitted as a matter of course, “a
party may amend its pleading only with the opposing
party's written consent or the court's leave. The
court should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a)(2). Although the policy
favoring amendments “should be applied with
‘extreme liberality, '” courts may deny a
motion to amend if it would result in undue delay, is
motivated by bad faith or dilatory motive, would be futile,
or would prejudice the opposing party. United States v.
Webb, 655 F.2d 977, 979-80 (9th Cir. 1981) (citation
omitted). “Prejudice to the opposing party is the most
important factor.” Jackson v. Bank of Hawaii,
902 F.2d 1385, 1387 (9th Cir. 1990).
although Plaintiff technically failed to comply with the
letter of Rule 15(a), such a minor amendment at this early
stage of the litigation will not prejudice Defendants. Thus,
had Plaintiff filed a proper motion to amend, it would have
been granted. Accordingly, in consideration of the factors
outlined in Webb, the Court accepts the FAC as the
operative pleading in this case. See Narramore v. HSBC
Bank USA, N.A., No. 09-cv-635-TUC-CKJ, 2010 WL 2732815,
at *2 (D. Ariz. July 7, 2010).
first seek dismissal on the grounds that the Court lacks
personal jurisdiction over them. (Doc. 65 at 2-8). As
Plaintiff points out, however, Defendants previously filed a
Rule 12(b) motion, (Doc. 20), that did not raise lack of
personal jurisdiction as a defense. (Doc. 69 at 2-3). Thus,
Plaintiff argues, Defendants have waived this defense.
(Id. at 2-3).
is well-recognized that personal jurisdiction-unlike
subject-matter jurisdiction-may be waived.” Smith
v. Idaho, 392 F.3d 350, 355 (9th Cir. 2004). A defendant
waives a personal jurisdiction defense by not raising it in a
responsive pleading or in a motion to dismiss that precedes a
responsive pleading. Fed.R.Civ.P. 12(h)(1). Because
Defendants filed a prior motion to dismiss under Rule
12(b)(6), (Doc. 20 at 1, 8), and did not raise lack of
personal jurisdiction as a defense, they have waived their
ability to do so now.
Claims Subject to Arbitration
next argue that this Court lacks subject-matter jurisdiction
because this case is subject to the arbitration provision
found in the Terms. (Doc. 65 at 8). In response, Plaintiff
asserts that the Terms do not apply because “Defendants
have done much more than use a Sprouts' trademark[, ]
Defendants have purposefully disseminated false
statements.” (Doc. 69 at 12). Plaintiff argues in the
alternative that if the Terms do apply “the only effect