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In re Motor Fuel Temperature Sales Practices Litigation

United States District Court, Tenth Circuit

May 6, 2013

IN RE: MOTOR FUEL TEMPERATURE SALES PRACTICES LITIGATION MDL No. 1840
v.
Alon USA, Inc. et al., This Document Relates To: Rushing, et al. D. Kan. Case No. 07-2300-KHV, N.D. Cal. Case No. 06-07621-PJH, Lerner, et al.
v.
Costco Wholesale Corp. et al., D. Kan. Case No. 07-2405-KHV, C.D. Cal. Case No. 07-01216-GHK-FMO and Wyatt, et al.
v.
B.P. Am. Corp., et al., D. Kan. Case No. 07-2507-KHV, S.D. Cal. Case No. 07-01754-BTM-JMA

MEMORANDUM AND ORDER

KATHRYN H. VRATIL, District Judge.

On April 9, 2013, the Court ordered plaintiffs and Chevron to show good cause in writing why the pretrial orders in the above-captioned California cases should not be amended to conform with each other such that the same claims are asserted against Chevron in each of the cases.[1] Order To Show Cause (Doc. #4546). This matter is before the Court on the parties' responses.[2] Plaintiffs ask the Court for permission to amend the pretrial orders and have submitted draft proposed amended pretrial orders. Chevron opposes amending the pretrial orders because the proposed amendments would amount to an improper de facto consolidation and transfer of venue and because they are untimely, unduly prejudicial and inconsistent with the Court's prior orders. Allowing the requested amendments is well within the Court's broad discretion. The Court will allow plaintiffs to conform the pretrial orders to each other as described below.

In these three California cases, the Court has certified four of plaintiffs' claims: (1) breach of the duty of good faith and fair dealing (Lerner), (2) unjust enrichment (Lerner and Wyatt), (3) violation of the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. (Lerner, Rushing and Wyatt), and (4) violation of the California Consumers Legal Remedy Act ("CLRA"), Cal. Civ. Code § 1750 et seq. (Rushing). Although Chevron must defend all four claims in California district courts, no single California case includes all four claims. The Court has severed all claims against Chevron in these cases, and stated that it intends to remand the claims to their respective transferor courts with the thought that the transferor courts would transfer two of the cases to one district under 28 U.S.C. § 1404(a), and consolidate the three cases for trial and any other proceedings.

On further reflection, especially as the prospect of class certification became certain, the Court became concerned that its approach was opening the door to expensive, unnecessary and protracted litigation on procedural issues that might do nothing to advance a disposition on the merits and might yield inconsistent orders in the three transferor districts on remand. Furthermore, the Court became increasingly concerned about the possibility that the cases might not be consolidated for trial and that expensive, unnecessary and protracted litigation would be required to determine any res judicata or collateral estoppel effects of the first judgment. The Court therefore suggested amending the pretrial orders in each of the three cases to include all four of the claims against Chevron in California. The amendment would not change Chevron's exposure in the California cases whatsoever - Chevron will have to defend the same claims by the same plaintiff class whether or not the pretrial orders are amended. The only difference is that Chevron will be allowed (and required) to defend all for claims in a single suit. This seems to be the outcome that Chevron contemplates, except that Chevron wants to achieve this result through expensive, unnecessary and protracted litigation on remand instead of streamlining the cases now.

Legal Standards

The Court asked plaintiffs and Chevron to show cause why the pretrial orders in the above-captioned California cases "should not be amended to conform with each other such that the same claims are asserted against Chevron in each of the cases." Order To Show Cause (Doc. #4546). Under Rule 16, Fed. R. Civ. P., which governs pretrial proceedings, the Court may modify a pretrial order "to prevent manifest injustice." Fed.R.Civ.P. 16(e). In determining whether to permit amendment of a pretrial order, the Court considers (1) prejudice or surprise to the party opposing trial of the issue; (2) the ability of that party to cure any prejudice; (3) disruption to the orderly and efficient trial of the case by inclusion of the new issue; and (4) bad faith by the party seeking to modify the order. Koch v. Koch Indus., Inc. , 203 F.3d 1202, 1222 (10th Cir. 2000). As the party seeking to amend the pretrial order, plaintiffs bear the burden to prove the manifest injustice that would otherwise occur. Davey v. Lockheed Martin Corp. , 301 F.3d 1204, 1208 (10th Cir. 2002).

Where a proposed amendment would add a claim to a pretrial order, the Court evaluates the propriety of the amendment under Rule 15(a), Fed. R. Civ. P, which governs amending pleadings. Minter v. Prime Equip. Co. , 451 F.3d 1196, 1204 (10th Cir. 2006). Where the deadline for amending pleadings has passed, the scheduling order "may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). Although the Tenth Circuit has not yet determined whether Rule 16(b)(4) applies "when motions to amend pleadings would necessitate a corresponding amendment of scheduling orders, " United States ex rel. Ritchie v. Lockheed Martin Corp. , 558 F.3d 1161, 1166 (10th Cir. 2009), the District of Kansas routinely applies a two-step analysis based on Rules 16(b) and 15(a) when deciding a motion to amend a complaint filed past the scheduling order deadline, see, e.g., White v. Union P. R. Co., No. 09-1407-EFM-KGG, 2013 WL 441066, at *2-3 (D. Kan. Feb. 5, 2013).

As the proponent of the untimely amendment, under Rule 16(b) plaintiffs bear the burden of showing "good cause, " i.e. that they could not have met the deadline even if they had acted with due diligence. Denmon v. Runyon , 151 F.R.D. 404, 407 (D. Kan. 1993). Lack of prejudice to the nonmovant does not demonstrate good cause. Monge v. St. Francis Health Ctr., Inc., No. 12-2269-EFM, 2013 WL 328957, at *2 (D. Kan. Jan. 10, 2013). Under Rule 15(a)(2), "a party may amend its pleading only with the opposing party's written consent or the court's leave, " which the Court should freely give when justice so requires. Granting leave to amend under Rule 15(a) is committed to the Court's broad discretion. Minter , 451 F.3d at 1204 (citing Zenith Radio Corp. v. Hazeltine Research, Inc. , 401 U.S. 321, 330 (1971)). The purpose of Rule 15 is to provide litigants the "maximum opportunity for each claim to be decided on its merits rather than on procedural niceties." Hardin v. Manitowoc-Forsythe Corp. , 691 F.2d 449, 456 (10th Cir. 1982).

In the absence of any apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. - the leave sought should, as the rules require, be "freely given."

Foman v. Davis , 371 U.S. 178, 182 (1962).

Lateness does not of itself justify the denial of the amendment. R.E.B., Inc. v. Ralston Purina Co. , 525 F.2d 749, 751 (10th Cir. 1975). The Tenth Circuit focuses primarily on the reasons for the delay. Minter , 451 F.3d at 1206. For example, courts properly deny a motion to amend when it appears that plaintiff is using Rule 15 to make the complaint "a moving target, " Viernow v. Euripides Dev. Corp. , 157 F.3d 785, 800 (10th Cir. 1998), to "salvage a lost case by untimely suggestion of new theories of recovery, " Hayes v. Whitman , 264 F.3d 1017, 1027 (10th Cir. 2001), to present "theories seriatim" in an effort to avoid dismissal, Pallottino v. City of Rio Rancho , 31 F.3d 1023, 1027 (10th Cir. 1994), or to knowingly delay raising an issue until the eve of trial, Walters v. Monarch Life Ins. Co. , 57 F.3d 899, 903 (10th Cir.1995). Minter , 451 F.3d at 1206.

The most important fact in deciding a motion to amend is whether the amendment would prejudice the nonmoving party. Id. at 1208. Typically, an amendment is prejudicial only if it "unfairly affects" defendant in terms of preparing a defense to the amendment. Id . (quoting Patton v. Guyer , 443 F.2d 79, 86 (10th Cir. 1971)). This most often occurs when "the amended claims arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues." Id . (comparing cases).

Analysis

As noted, on April 9, 2013, the Court ordered plaintiffs and Chevron to show cause why the pretrial orders in the above-captioned California cases "should not be amended to conform with each other such that the same claims are asserted against Chevron in each of the cases." Order To Show Cause (Doc. #4546). Plaintiffs responded by asking the Court to let them do just that - amend the pretrial orders in Rushing, Lerner and Wyatt so that each case includes all four of the certified claims against Chevron in those cases. The proposed amendments would not add a claim or party to any case that is not already present in one or more of the other cases. Chevron opposes amending the pretrial orders because based on the Court's prior orders, the proposed amendments are untimely and unduly prejudicial, and ...


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