Cooper v. Charter Commc'ns Entertainments I, LLC

BRUCE M. COOPER et al., Plaintiffs v. CHARTER COMMUNICATIONS ENTERTAINMENTS I,LLC & CHARTER COMMUNICATIONS, INC., Defendants.

Civil Case No. 3:12-10530-MGM

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

April 28, 2015

MEMORANDUM AND ORDER REGARDING PLAINTIFF'S MOTION TO AMEND COMPLAINT (Dkt. No. 93)

ROBERTSON, U.S.M.J.

This matter is before the court on the motion by plaintiffs Bruce M. Cooper, John W. Romito, Roy L. Baker, Whitney Taylor Thompson, Jeffrey O'Connor, John Evans, Noreen Nardi, Mauramy Hernandez, and Jennifer Colon, individually and on behalf of all other persons similarly situated, for leave to amend their complaint ("Plaintiffs' Motion"). The defendants, Charter Communications Entertainments I, LLC and its parent corporation Charter Communications, Inc. (collectively, "Defendant"), oppose Plaintiffs' Motion. The court heard argument from the parties on February 17, 2015, and for the reasons set forth below, GRANTS Plaintiffs' Motion.

I. BACKGROUND

Although Plaintiffs' Motion was filed some thirty-three months after the initial complaint, this litigation remains in its early stages. A sub-set of the existing group of plaintiffs filed their initial complaint in Hampden County Superior Court. The plaintiffs alleged that Defendant had failed to pay refunds or offer credit for interruptions in cable, telephone and internet services as required by statute in Massachusetts and by Defendant's contracts with themunicipalities in which they provided services. See Mass. Gen. Laws, ch. 166A, § 5. They further alleged that this failure by Defendant was in violation of various contractual, statutory and common law duties.

The complaint was removed to this court on March 22, 2012 (Dkt. No. 1). Defendant filed a motion to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) immediately thereafter (Dkt. No. 8). On April 12, 2012, plaintiffs filed a motion to remand the action to state court (Dkt. No. 12). On June 22, 2012, the Honorable Michael Ponsor denied plaintiffs' remand motion. On September 9, 2012, over Defendant's objection, Judge Ponsor allowed plaintiffs' motion for leave to file their second amended complaint (Dkt. No. 35), considered Defendant's motion to dismiss as it applied to the second amended complaint, and, on May 21, 2013, allowed Defendant's motion to dismiss the case in its entirety (Dkt. No. 44). Plaintiffs' appeal from the dismissal was successful: on July 23, 2014, the United States Court of Appeals for the First Circuit affirmed the district court's exercise of jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d), and vacated, in part, the granting of Defendant's motion to dismiss. See Cooper v. Charter Commc'ns Entm'ts I, LLC, 760 F.3d 103 (1st Cir. 2014). In summary, the First Circuit affirmed dismissal of plaintiffs' third-party beneficiary breach of contract claims and related claims based on the implied contractual duty of good faith and fair dealing. The court held, however, "that a failure by Charter to pay a credit in accord with its statutorily-imposed contractual obligation would likely violate Chapter 93A," id. at 111, and allowed plaintiffs' claims under Chapter 93A to stand. The court further held, in view of the allegations in the complaint, that even those plaintiffs who had received refunds from Charter were potentially entitled to declaratory relief concerning Defendant's obligations. Id. at 107.

In light of the First Circuit's ruling, plaintiffs moved for leave to file their third amended complaint, which motion was allowed without opposition (Dkt. Nos. 57, 65, 71). The third amended complaint was filed on October 3, 3014; Defendant's answer thereto was filed on October 22, 2014. Some two and a half years after the filing of the state court complaint, an initial scheduling conference in the case was held on October 24, 2014, at which time the court resolved disputes about, and adopted other provisions of the scheduling order proposed by the parties (Dkt. No. 85). Of note for purposes of this decision, the court's scheduling order provided that motions for leave to amend pleadings and add parties were to be filed by December 19, 2014. Plaintiffs filed the motion presently at issue on December 19, 2014.

The significant differences between the presently operative complaint and the proposed fourth amended complaint ("PFAC") are the following:

• The third amended complaint alleged that on or about October 29, 2011, a snow storm that hit Massachusetts caused extensive damage, including downed power, cable and drop lines, and that at least 95,000 of Defendant's customers lost power for twenty-four or more consecutive hours. Without power to its customers' homes and businesses, Defendant could not provide their customers with the cable television, internet and telephone services for which its customers had already paid (Dkt. No. 78, ¶¶ 20-24). Although Defendant knew or should have known that it had failed to provide the services for which its customers had paid, Defendant failed, in violation of Massachusetts law, to provide all of its customers with a credit, refund or rebate for the services for which the customers had paid (Dkt. No. 78, ¶¶ 26-33).

• Rather than focusing exclusively on the October 2011 snow storm, the PFAC defines the so-called "Relevant Period" as January 1, 2008 through the present (Dkt. No. 93-1 at 2),and alleges that, in addition to the October 2011 snowstorm, other storms and weather events occurred during the Relevant Period, such as a tornado in Springfield, Massachusetts in June 2011 and Hurricane Irene in August 2011, which caused widespread power outages and corresponding losses in services to Defendant's customers for which those customers did not receive credits, refunds or rebates (Dkt. No. 93-1, ¶¶ 26-32).

• The PFAC also adds allegations, not asserted the third amended complaint, that Defendant failed to disclose, or failed adequately to disclose, its refund policy to customers, and had a refund policy inconsistent with Massachusetts law about which conflicting and confusing information was provided to customers (Dkt. No. 93-1, ¶¶ 43-45). The PFAC alleges that Defendant's misrepresentations included telling consumers they were not entitled to a credit or rebate for service interruption unless they asked for one; telling consumers that they were not entitled to a credit or rebate unless the service interruption was caused by Defendant; and telling consumers that they were not entitled to a rebate or credit unless Defendant knew or should have known about the service interruption (Dkt. No. 93-1, ¶ 46). According to the PFAC, Defendant's misrepresentations, its failure clearly to explain its refund policy, and its failure to comply with its refund policy violated regulations of the Massachusetts Attorney General (Dkt. No. 93-1, ¶ 47).

II. DISCUSSION

A motion to amend a complaint will be treated differently depending on its timing and the context in which it is filed. . . . The default rule mandates that leave to amend is to be "freely given when justice so requires" . . . unless the amendment "would be futile, or reward, inter alia, undue or intended delay." As a case progresses, and the issues are joined, the burden on a plaintiff seeking to amend a complaint becomes more exacting. . . . Once a scheduling order is inplace [if leave to amend is sought after the cut-off date established in the order], the liberal default rule is replaced by the more demanding "good cause" standard of Fed. R. Civ. P. 16(b).

Steir v. Girl Scouts of the USA, 383 F.3d 7, 11-12 (internal citations omitted).

"[T]he 'spirit of the rule' dictates a preference for decisions 'on the merits, not because of missteps by counsel in pleading.'" J.S. McCarthy Co. v. Braus Diecutting & Converting, 226 F.R.D. 14, 17 (D. Me. 2005) (quoting Allendale Mut. Ins. Co. v. Rutherford, 178 F.R.D. 1, 3 (D. Me. 1998) (quoting Sweeney v. Keystone Provident Life Ins. Co., 578 F. Supp. 31, 34 (D. Mass. 1983)); see also Torres-Alamo v. Puerto Rico, 502 F.3d 20, 25-25 (1st Cir. 2007) (Rule 15(a) embodies liberal standard for judging motion for leave to file amended complaint). "In considering a motion for leave to amend . . . the trial court must first consider whether the proposed new claims are futile[.] . . . If the claims are not futile, then the trial court must consider whether, given the timing of the motion for leave to amend, such prejudice to the defendant would arise from granting the motion that the motion should be denied on that ground." Smith v. Mitre Corp., 949 F. Supp. 943, 945 (D. Mass. 1997). "In determining whether the plaintiffs unduly delayed in filing their motion to amend, the focus . . . is on whether allowing the amendment would unfairly prejudice the defendants." Bond Opportunity Fund II, LLC v. Heffernan, 340 F. Supp. 2d 146, 155-156 (D.R.I. 2004); Mitre Corp., 949 F. Supp. at 945. "Amendment of pleadings is largely a matter within the discretion of the district court." Guest-Tek Interactive Entm't Inc. v. Pullen, 731 F. Supp. 2d 80, 92 (D. Mass. 2010).

A. Futility

"If leave to amend is sought before discovery is complete and neither party has moved for summary judgment, the accuracy of the 'futility' label is gauged by reference to the liberal criteria of Federal Rule of Civil Procedure 12(b)(6)." Hatch v. Dept. for Children, Youth &Their Families, 274 F.3d 12, 19 (1st Cir. 2001); see Adorno v. Crowley Towing & Transp. Co., 443 F.3d 122, 126 (1st Cir. 2006) ("In assessing futility, the district court must apply the standard which applies to motions to dismiss under Fed. R. Civ. P. 12(b)(6)."). In that context, "[f]utility means that the complaint, as amended, would fail to state a claim upon which relief could be granted." Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996); see also Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 421 (6th Cir. 2000) ("a proposed amendment is futile only if it could not...