Opinion
3:18-cv-01716-YY
09-21-2021
TAMARA CAMPANILE, an individual, and LAWRENCE CAMPANILE, an individual, Plaintiffs, v. DAIMLER NORTH AMERICA CORPORATION, DAIMLER TRUCKS NORTH AMERICA LLC, dba FREIGHTLINER LLC, AND JMR GROUP, LLC, dba MCCOY FREIGHTLINER, Defendants.
OPINION AND ORDER
Youlee Yim You United States Magistrate Judge
In this products liability action, Tamara and Lawrence Campanile (“plaintiffs”) seek leave to amend their complaint to include, among other proposed amendments, two defect-based allegations related to the absence of (1) airbags and (2) collision mitigation software in the truck involved in their collision. For the reasons set forth in this Opinion and Order, plaintiffs' Motion for Leave to File Second Amended Complaint (ECF 45) is granted.
A “magistrate judge's decision to grant a motion to amend is not generally dispositive; whether the denial of a motion to amend is dispositive is a different question entirely.” Bastidas v. Chappell, 791 F.3d 1155, 1164 (9th Cir. 2015) (emphasis in original). Because the court is granting plaintiff's motion to amend, the decision is set out in an Opinion and Order.
This motion is suitable for decision without oral argument pursuant to LR 7-1(d)(1).
I. Proposed Amendments
Plaintiffs seek to amend the complaint in three respects: (1) refine allegations relating to defective component parts within the vehicle itself, (2) allege three new liability specifications relating to the absence of: airbags, available collision mitigation software to brake the vehicle in the presence of stationary objects, and automated systems to stop the truck when the brake pedal was engaged, and (3) update costs and figures in light of these proposed amendments, raising the relief sought from eight million dollars to twenty million dollars. Mot. 2, ECF 45. Defendants do not object to the first or the third categories of amendments. See generally Opp., ECF 50. However, they argue that allowing plaintiffs to allege two new claims relating to the absence of vehicle components-specifically airbags and collision mitigation software-should be barred due to undue delay, prior amendment, futility (of the collision mitigation software claim only), and prejudice. Id.
II. Legal Standard
“Rule 15(a) declares that leave to amend shall be freely given when justice so requires; this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted). A ruling on a requested amendment is reviewed for an abuse of discretion. Ariz. Students' Ass'n v. Ariz. Bd. of Regents, 824 F.3d 858, 871 (9th Cir. 2016) (citations omitted). When exercising its discretion on a motion to amend, the court should be guided by the underlying purpose of Rule 15(a), which is “to facilitate decisions on merits, rather than on the pleadings or technicalities.” Novak v. United States, 795 F.3d 1012, 1020 (9th Cir. 2015) (citation omitted). Thus, leave to amend is to be granted with “extreme liberality.” Desertrain v. City of Los Angeles, 754 F.3d 1147, 1154 (9th Cir. 2014); see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citation omitted).
The court may consider factors “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” and deny leave to amend on those or similar grounds. Foman, 371 U.S. at 182. However, “outright refusal to grant leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.” Id.
Absent prejudice, there is a strong presumption in favor of granting leave to amend. Eminence Capital, LLC, 316 F.3d at 1052 (citation omitted). Nevertheless, futility may support denial of a motion to amend if it is clear that the pleading, as amended, is subject to dismissal and cannot be cured by amendment. United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011) (citations omitted). “Leave to amend is warranted if the deficiencies can be cured with additional allegations that are consistent with the challenged pleading and that do not contradict the allegations in the original complaint.” Id. (citation and internal quotation marks omitted).
A. Undue Delay
Defendants first argue that the contested amendments stem from facts that were available to the plaintiffs well before May 2021, when the present motion was filed. With respect to the proposed amendment on airbags, defendants contend that plaintiffs “have obviously known since at least September 2017”-the time of the crash-that no airbags deployed, and note that during a May 2020 deposition, a plaintiff admitted knowing that there were no airbags in the vehicle. Opp. 8, ECF 50. With respect to the collision mitigation software amendment, defendants allege that plaintiffs were provided with a driver's manual and a build sheet that identified the absence of collision mitigation software in December 2018, well before the date this amendment was proposed. Id. at 8-9. In response, plaintiffs concede that the delay in asserting these specifications was lengthy, but argue that the complexity of the subject matter, piecemeal document production from defendants, and the relatively tight timeframe between document production and key depositions contributed to their delay in proposing these amendments. Reply 2-4, ECF 52.
Plaintiffs specify that defendants “have produced documents in rolling sets throughout the pendency of this case” and specifically note that “most” of the information was produced “through a production set that totaled nearly 10, 000 pages” on July 1, 2020. Reply 3, ECF 52; see also Mot. 8, ECF 45 (noting that “the parties have been exchanging discovery in rolling sets of production”). Defendants acknowledge that they have provided documents “on a rolling basis, ” but counter that the facts underlying the proposed airbag and collision monitoring software claims were known to plaintiffs prior to the filing of their Amended Complaint. Opp. 8, ECF 50.
Plaintiffs further allege that their review of defendants' massive production set, which was delivered on July 1, 2020, was further delayed by the proximity of the production to a long-anticipated deposition of one of defendants' representatives. Reply 3, ECF 52.
“Although not dispositive, undue delay is a relevant factor in deciding whether to exercise discretion to allow amendment.” DropZoneMS, LLC v. Cockayne, No. 3:16-CV-02348-YY, 2019 WL 2070417, at *7 (D. Or. Feb. 27, 2019), report and recommendation adopted, 2019 WL 2357361 (D. Or. May 31, 2019) (citing Lockheed Martin Corp. v. Network Sols., Inc., 194 F.3d 980, 986 (9th Cir. 1999)). In particular, “late amendments to assert new theories are not reviewed favorably when the facts and the theory have been known to the party seeking amendment since the inception of the cause of action.” Acri v. Int'l Ass'n of Machinists & Aerospace Workers, 781 F.2d 1393, 1398 (9th Cir. 1986) (internal citation omitted, emphasis added).
After reviewing the record, the court is persuaded that the delay in asserting these claims was not undue in nature. The subject matter in this dispute involves incredibly technical claims pertaining to vehicle operations and potential defects. While a layperson may immediately identify the absence of airbags or collision mitigation software as a problem, the legal and technical significance of the absence of these features within a complex litigation matter-and thus, the legal theories, as highlighted in Acri-would understandably take longer to develop and evaluate. This inherent complexity, combined with the staggered production of documents, the closeness of important depositions in relation to document production, and the difficulties brought forth by the ongoing pandemic, persuade the court that plaintiffs' delay in asserting these contested amendments was not undue.
This conclusion is consistent with the court's order regarding plaintiffs' Motion to Compel. See ECF 44 (finding good cause to grant plaintiffs an additional Rule 30(b)(6) deposition because, in part, “plaintiff's counsel received 9, 500 pages of discovery two weeks before the previously-conducted Rule 30(b)(6) depositions . . . and he did not have a meaningful opportunity to confer with his expert before the deposition.”).
B. Prior Amendment
Next, defendants allege that plaintiffs previously amended their complaint without asserting the contested amendments despite having underlying facts supporting the claim. Opp. 10, ECF 50. Plaintiffs filed their first Amended Complaint in January 2019. ECF 8. Applying the facts that defendants have presented, defendants' best argument is that plaintiffs “obviously [knew]” from experiencing the crash that the truck lacked airbags. Opp. 8, ECF 50. Defendants additionally identify December 2018 as the time when plaintiffs were on notice of facts that suggested the absence collision mitigation software in the vehicle. Id. at 8-9.
Defendants identify a statement made by a plaintiff in a May 2020 deposition indicating knowledge that the truck lacked airbags. Opp. 8, ECF 50. Plaintiffs' Amended Complaint, however, was filed in January 2019, over a year earlier. See ECF 8. Thus, plaintiffs did not possess information relating to this specific statement at the time they filed their Amended Complaint.
These arguments do not justify excluding the contested amendments on the basis that plaintiffs had knowledge of these underlying facts when they filed their Amended Complaint. Plaintiffs may have noticed at the crash scene that no airbags deployed, but the legal and technical significance of this missing feature was not established until discovery, which occurred after plaintiffs filed their Amended Complaint. Similarly, while plaintiffs may have received documents in December 2018 that suggested the absence of collision mitigation software, expecting them to piece together the technical aspects of the case in less than two months and assert this claim at the time of the Amended Complaint, especially without the benefit of discovery, is unreasonable. In short, the reasons underlying this court's holding that no undue delay occurred also apply to this factor, and plaintiffs' prior amendment does not preclude them from alleging the contested amendments.
C. Futility
Next, defendants allege that the collision mitigation software amendment is futile based on plaintiffs' recollection of events. Specifically, defendants note plaintiffs' testimony that in the moments preceding the crash, they manually applied brakes to stop the vehicle, which, if true, would have disengaged any automatic collision mitigation software if it was present. Opp. 10-11, ECF 50. Defendants do not argue that the proposed amendment relating to airbags is futile.
The test for futility is identical to the standard used for a motion to dismiss under Rule 12(b)(6). Fulton v. Advantage Sales & Mktg., LLC, No. 3:11-CV-01050-MO, 2012 WL 5182805, at *2 (D. Or. Oct. 18, 2012). “A proposed amended complaint is futile if it would be immediately “subject to dismissal.” Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir. 1998). Thus, to “survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570 (2007)).
Plaintiffs make two arguments in response to defendants' futility claim, both of which are persuasive. First, plaintiffs point out that whether the brakes were applied is in dispute, as defendants have denied the factual allegation in the Amended Complaint that plaintiffs were braking prior to the crash. Reply 5, ECF 52. If a jury finds that the plaintiffs did not manually apply any brakes, then a proposed allegation asserting a defect from the absence of collision mitigation software would hardly be futile. Second, assuming that plaintiffs' version of events is correct, and the brakes were manually applied, the fact that the vehicle failed to slow down may indicate that something malfunctioned in the vehicle. Id. Consequently, there is a possibility that collision mitigation software would have been beneficial in preventing the collision, and accordingly, the amendment in question is not futile.
D. Undue Prejudice
Finally, defendants allege that allowing plaintiffs to amend at this stage would be deeply prejudicial. In support of this allegation, defendants highlight several issues: (1) the temporal impacts these amendments would have on litigation, (2) the burdens of extra discovery, and (3) the nature of the allegations (“dramatically alter[ing] the character of this case by introducing claims related to systems that were indisputably not installed on the [t]ruck” after previous allegations focusing on items installed on the truck), and including additional expert consultations and depositions. Opp. 11-13, ECF 50. They add that the truck involved in the accident has already been sold, salvaged, or broken into pieces, although the parties disagree on who should be at fault for the failure to sufficiently document evidence from the vehicle prior to its destruction. Id. at 14 n.3; Reply 6 n.1, ECF 52.
Defendants indicate that the truck involved in the collision had already been “sold, salvaged, and broken into pieces before [Daimler Trucks North America LLC] was ever alerted to the fact there had even been an accident involving” one of their trucks. Opp. 13 n.3, ECF 50. In response, plaintiffs note that they did not own the vehicle, that defendant McCoy performed an inspection on September 14, 2017, and that defendant McCoy failed to preserve certain “electronic data from the truck” despite being asked to do so. Reply 6 n.1, ECF 52. Ultimately, the arguments suggest that the truck was destroyed prior to the beginning of discovery, and so no undue prejudice to defendants would be created by the continuance of discovery that has already lacked the truck in question.
“Prejudice to the opposing party is the most important factor” in the Foman analysis. Jackson, 902 F.2d at 1387 (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31 (1971)). However, cases in this district have recognized that it is insufficient to merely argue that a proposed amendment is unduly prejudicial solely because additional discovery and investigation is required. See, e.g., Knight v. Curry Health Dist., No. 1:15-cv-01851-CL, 2016 WL 5719686, at *2 (D. Or. Sept. 29, 2016) (“The fact that amending might require Defendant to conduct additional depositions, beyond those anticipated, or might necessitate additional written discovery to and from additional parties, does not constitute undue prejudice, warranting denial of Plaintiff's amendment.”); Robillard v. Opal Labs, Inc., 337 F.Supp.3d 962, 971 (D. Or. 2018) (similar discussion). While prejudice can also be extrapolated from the pursuit of new arguments that would dramatically change the entire character of the case, reaching such a determination requires an examination that is unique to the facts of each dispute.
First, allowing plaintiffs to amend does not pose a legally prejudicial burden upon defendants in terms of the timing of this case. No trial date has been set yet, expert discovery is open until April 4, 2022, and dispositive motions are not due until May 11, 2022. ECF 55.
There exists sufficient time for both parties to further investigate these contested claims, engage in extra discovery, and file dispositive motions. Second, while the court understands additional discovery can be logistically and financially burdensome, such inconveniences cannot, on their own, justify a finding of “undue prejudice.” See Foman, 371 U.S. at 182; Knight, 2016 WL 5719686 at *2; Robillard, 337 F.Supp.3d at 971.
That leaves defendants' assertion that allowing the contested amendments would “dramatically alter the character of this case” and be unduly prejudicial. Opp. 15, ECF 50. In support of this argument, defendants cite to DropZoneMS, a prior decision of this court. 2019 WL 2070417 at *8. However, DropZoneMS is readily distinguishable on the facts: there, the plaintiff initially alleged claims related to copyright infringement and trade-secret misappropriation under federal and state law, and then, three months after expert discovery had closed and a full year after the deadline to amend pleadings had elapsed, sought to add five amendments that were completely distinct from their original claims. Id. at *1.
The five additional claims sought by the plaintiff in DropZoneMS were: “copyright management information removal under 17 USC §§ 1202-03, breach of software use and license agreement, breach of withdrawal of partner agreement, breach of fiduciary duty, and interference with economic relations.” 2019 WL 2070417, at *1.
The nature of the contested amendments in this case does not come anywhere close to those sought by the DropZoneMS plaintiff. First, the proposed collision mitigation software amendment is quite similar to existing claims surrounding possible issues with the truck's braking systems. See Am. Compl. ¶¶ 11(f)-(g), ECF 8 (alleging that defendants failed to “provide adequate warnings regarding the Truck's . . . automated braking system” and “equip the Truck with adequate warnings to alert the driver as to a defect and/or inoperability in the braking system”). Second, even if defects with specific items were not previously alleged-as plaintiffs concede for their proposed airbag amendment-the amendments sought are well within the realm of potential vehicular defects, and do not significantly alter the character of the present case. Reply 6, ECF 52. Given that discovery will still be ongoing for at least six more months, a trial date has not been set, and plaintiffs' proposed amendments are not substantially different from their prior claims, granting the motion to amend would not substantially prejudice defendants.
The court acknowledges that fact discovery is to be completed within a week of this Opinion and Order. See ECF 55. However, plaintiff timely filed this Motion for Leave to Amend in May 2021, and full briefing was completed on June 11, 2011. ECF 45, 53. Due to the workload of the court, this Opinion and Order was not issued until the date below.
Defendants cite this court's denial of a motion to amend based on undue delay and prejudice in Jones v. Rojas, 2:18-cv-00815, 2021 WL 711471, at *2 (D. Or. Feb. 23, 2021), findings and recommendations adopted, 2021 WL 1270456 (D. Or. Apr. 6, 2021). Opp. 9, ECF 50. There, the plaintiff sought to add an equal protection claim very late in the case, but admitted he had not researched such a claim for more than two years after filing the initial complaint. Id. Also relevant was the fact that the plaintiff was “a seasoned and accomplished litigator” who had “filed some 25 civil rights cases in this district over the past three decades, ” and had asserted an equal protection claim in at least one of his previous cases. Every motion to amend turns on its facts, and the facts in that case are distinguishable from those here.
E. Remaining Foman Factors
Defendants do not allege any bad faith or dilatory motive from plaintiffs, and the court has no information suggesting the existence of such. Based on the arguments presented and the discussion above, the court finds that granting plaintiffs' motion to amend, including the contested amendments, is proper in light of the factors articulated in Foman.
To be clear, the court shares defendants' frustration that after nearly three years of litigation and multiple extensions to discovery, granting plaintiffs' motion would allow the inclusion of arguments that require even more discovery and expand the scope of potential liability. However, given the technical complexity of the dispute, the fact that discovery has not yet been completed, the sufficiency of both plaintiffs' proposed amendments and explanations for the delay in their assertion, and the “extreme liberality” of the Foman factors, this court must grant plaintiffs' request to amend their complaint. Desertrain, 754 F.3d at 1154.
ORDER
For the foregoing reasons, plaintiffs' motion for leave to amend the complaint (ECF 45) is granted.
IT IS SO ORDERED.