DW Volbleu, LLC v. Honda Aircraft Co.

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DW VOLBLEU, LLC, ET AL. v. HONDA AIRCRAFT COMPANY, LLC

CIVIL No. 4:21-CV-637-SDJ

United States District Court, E.D. Texas, Sherman Division

January 16, 2024

MEMORANDUM OPINION AND ORDER

SEAN D. JORDAN, UNITED STATES DISTRICT JUDGE.

This case presents relatively narrow issues that could possibly be resolved through dispositive motions without the need for protracted litigation and trial. That is why the Court stayed proceedings pending a ruling on Defendant Honda Aircraft Company, LLC's (“Honda”) Motion to Dismiss (which the Court converted to a motion for summary judgment) and authorized targeted discovery and briefing on the claims presented in Plaintiff's Second Amended Complaint. Plaintiffs now seek leave to amend their complaint for a third time to introduce entirely new claims and parties. Because the proposed amended complaint is sought after an undue delay, includes futile claims, would cause undue prejudice, and is presented in bad faith or with a dilatory motive, the Court will deny the motion.

I. Background

The COVID-19 pandemic disrupted the private jet industry as it did many others. Some private jets were grounded for weeks or even months at a time, languishing in hangars and airstrips instead of taking to the skies. For owners of HondaJet aircraft, these prolonged groundings required an additional maintenance step to ensure that the engines remained airworthy: every ninety days, the engines had to be run for at least fifteen minutes.

Plaintiffs DW Volbleu, LLC, and Silverleaf V, LLC, did not follow this engine run requirement. As a result, their HondaJets became unairworthy. They could restore the jets to flying condition only through an expensive procedure that involved removing the engines and shipping them to a Honda facility for an inspection and possible repairs.

The core issue presented in this case is which party is responsible for the condition of these engines: Plaintiffs for neglecting to follow the engine run requirement, or Honda for failing to adequately inform Plaintiffs of it. Plaintiffs assert that, as the company that manufactures, designs, and sells HondaJets, Honda should have done more to alert them of the requirement and the consequences of failing to comply with it. Honda's perspective, however, is that it adequately informed Plaintiffs of the requirement in at least two ways: (1) by providing access at the time of purchase to two Federal Aviation Administration-approved manuals, the Aircraft Maintenance Manual and the Line Maintenance Manual and (2) by reminding Plaintiffs of the engine run requirement in Service Letters in April 2020 and May 2021.

Honda moved to dismiss Plaintiff's claims, which were asserted on a class basis, advancing these arguments. (Dkt. #32). Recognizing that the case turned on relatively narrow issues-namely, whether Honda provided Plaintiffs and the other class members adequate notice of the engine run requirement-the Court stayed proceedings pending a ruling on the motion to dismiss. (Dkt. #56). The Court then converted the motion to dismiss to a motion for summary judgment, (Dkt #57, #58), and authorized limited discovery on Plaintiff's access to, and Honda's delivery of, the two maintenance manuals. (Dkt. #61). The Court ordered each party to file a supplemental summary judgment brief-Plaintiffs by August 5, 2022, and Honda by August 29, 2022. (Dkt. #57).

The parties did not meet these deadlines. After the parties encountered a discovery dispute, the Court instructed them to file a joint status report advising on the progress of discovery and proposing new deadlines for supplemental summary judgment by September 20, 2022. (Dkt. #73). Because the parties had not resolved the discovery disputes by that date, the Court instructed them to file an additional advisory by October 20, 2022. (Dkt. #77).

At the end of October, instead of proposing new deadlines for supplemental summary judgment briefing, Plaintiffs sought leave to file a Third Amended Complaint introducing new claims and parties into this dispute. (Dkt. #78). Broadly speaking, the new claims and allegations fall into four categories: (1) new factual allegations clarifying the existing claims against Honda; (2) two new claims against Honda (for negligence and negligent misrepresentation) based on nearly identical facts to those supporting the existing claims; (3) claims against the manufacturer of Plaintiffs' jet engines, GE Honda Aero Engines, LLC (“HAE”), as a new party; and (4) claims against several Honda authorized service providers as new parties: Cutter Aviation Dallas, Inc., Cutter Aviation Phoenix, Inc., and Tower Industries, LLC d/b/a HondaJet Southwest (the “ASP Defendants”). (Dkt. #79). Against HAE and the ASP Defendants, Plaintiffs allege that they, like Honda, failed to adequately warn Plaintiffs of the engine run requirement and are therefore liable for negligence and negligent misrepresentation.

Honda opposes the motion for leave to amend. The motion is fully briefed and ripe for the Court's consideration. (Dkt. #82, #87).

II. Legal Standard

Under Federal Rule of Civil Procedure 15, the Court grants leave to amend pleadings “freely . . . when justice so requires.” FED. R. CIV. P. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). While that standard is generous, it is not automatic. Guijarro v. Enter. Holdings, Inc., 39 F.4th 309, 315 (5th Cir. 2022); Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993). In evaluating a motion for leave to amend, the Court considers factors such as whether the amendment is futile; whether it would cause undue prejudice; and whether it is sought after repeated attempts to cure deficiencies, after an undue delay, or with a bad faith or dilatory motive. Wimm, 3 F.3d at 139. Rule 15's liberal pleading standard is “tempered by the necessary power of a district court to manage a case.” Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003).

III. Discussion

The Court finds that Plaintiffs' motion for leave to amend should be denied. The proposed negligence and negligent misrepresentation claims against Honda were filed after a significant and undue delay. The proposed claims against HAE as a new party are futile. And all of the proposed claims and allegations were filed with a bad faith or dilatory motive and would cause undue prejudice to Honda.

A. Undue Delay

As an initial matter, Plaintiffs unduly delayed in filing the proposed negligence and negligent misrepresentation claims against Honda. To be sure, an undue delay involves more than untimeliness: the delay must cause prejudice or “impose unwarranted burdens on the court.” Mayeaux v. La. Health Serv. & Indem. Co., 376 F.3d 420, 427 (5th Cir. 2004). But that standard does not require a trial date to have been set, discovery to have been completed, or dispositive motions to have been ruled on. In re Southmark Corp., 88 F.3d 311, 315-16 (5th Cir. 1996). Indeed, the Court may consider factors such as the moving party's explanation for the delay and whether it knew of the facts underlying the amendment when the original complaint was filed. Id. at 316.

Here, the proposed negligence and negligent misrepresentation claims against Honda are founded on nearly identical facts to those supporting the claims asserted in the original complaint in August 2021. (Dkt. #1). Where the original complaint sought to recover under fraud, deceptive trade practice, and warranty theories over Honda's alleged failure to inform Plaintiffs of the 15-minute/90-day engine run requirement, the proposed third amended complaint seeks to recover under the negligence and negligent misrepresentation theories for the same conduct. No explanation has been provided for Plaintiffs' failure to assert these claims before now.

Admittedly, federal courts will often allow amendments when they merely assert new theories based on the same underlying facts. Mayeaux, 376 F.3d at 427 (observing that under Rule 15, amendments “generally should be permitted” when they “merely propos[e] alternative legal theories on the same underlying facts”). But that is not always the case. In Southmark, the Fifth Circuit upheld denial of leave to amend when the moving party sought to assert a new cause of action based on the same facts as those alleged in original complaint, which had been filed thirteen months earlier. 88 F.3d at 316. In Barrett, the court upheld denial of leave to amend to assert claims that could have been “raised initially” but instead were not raised until ten months after the original complaint. Barrett v. Indep. Order of Foresters, 625 F.2d 73, 75 (5th Cir. 1980). And in Mitsubishi, a case involving an aircraft manufacturer, the court upheld denial of leave to amend to assert a claim that should have been “apparent at the outset of the case”-noting that the failure to assert the claim originally smacked of either a “lack of diligence” or a “lack of sincerity.” Mitsubishi Aircraft Int'l, Inc. v. Brady, 780 F.2d 1199, 1203 (5th Cir. 1986).^[1]

The Court finds that here, as in Mitsubishi, Plaintiffs should not be granted leave to pursue claims that could have easily been asserted at the beginning of the case. Plaintiffs waited fourteen months after filing the original complaint before asserting the proposed negligence and negligent misrepresentation claims. And they did not propose these new claims until after the Court converted Honda's motion to dismiss into a motion for summary judgment and the parties completed four months of discovery directed toward the issues presented in that motion. Under the circumstances, it would impose unwarranted burden on the Court to allow Plaintiffs to file these new claims against Honda, essentially unraveling the Court's efforts...