Robillard v. Opal Labs, Inc.

337 F.Supp.3d 962

Greg ROBILLARD, Plaintiff,

v.OPAL LABS, INC., Defendant.

Case No. 3:16-cv-0780-AC

United States District Court, D. Oregon.

Signed June 6, 2018

Courtney Angeli and Angela Ferrer, Buchanan Angeli Altschul & Sullivan LLP, 921 SW Washington Street, Suite 516, Portland, OR 97205; Edward Piper, Angeli Law Group LLC, 121 SW Morrison Street, Suite 400, Portland, OR 97204. Of Attorneys for Plaintiff.

Damien T. Munsinger and Jose A. Klein, Klein Munsinger LLC, 600 NW Naito Parkway, Suite G, Portland OR 97209. Of Attorneys for Defendant.

OPINION AND ORDER

Michael H. Simon, United States District JudgeUnited States Magistrate Judge John V. Acosta issued Findings and Recommendation ("F & R") in this case on March 14, 2018. ECF 84. Judge Acosta recommended denying Plaintiff's motion to amend his complaint. Plaintiff objects to a portion of the F & R. For the reasons that follow, the F & R is adopted in part.

STANDARDS

A. Review of a Magistrate's Findings and Recommendation

Under the Federal Magistrates Act ("Act"), the Court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1). If a party files objections to a magistrate's findings and recommendations, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id. ; Fed. R. Civ. P. 72(b)(3).

For those portions of a magistrate's findings and recommendations to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn , 474 U.S. 140, 152, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) ("There is no indication that Congress, in enacting [the Act], intended to require a district judge to review a magistrate's report to which no objections are filed."); United States. v. Reyna–Tapia , 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the court must review de novo magistrate's findings and recommendations if objection is made, "but not otherwise"). Although in the absence of objections no review is required, the Act "does not preclude further review by the district judge[ ] sua sponte ... under a de novo or any other standard." Thomas , 474 U.S. at 154, 106 S.Ct. 466. Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that "[w]hen no timely objection is filed," the Court review the magistrate's recommendations for "clear error on the face of the record."

B. Motion to Amend

1. Rule 15 of the Federal Rules of Civil Procedure

Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that the "court should freely give leave [to amend a pleading] when justice so requires." A district court should apply Rule 15's "policy of favoring amendments ... with extreme liberality." Price v. Kramer , 200 F.3d 1237, 1250 (9th Cir. 2000) (quotation marks omitted). The purpose of the rule "is ‘to facilitate decision on the merits, rather than on the pleadings or technicalities.’ " Novak v. United States , 795 F.3d 1012, 1020 (9th Cir. 2015) (quoting Chudacoff v. Univ. Med. Ctr. , 649 F.3d 1143, 1152 (9th Cir. 2011) ). A district court, however, may, within its discretion, deny a motion to amend " ‘due to 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, [and] futility of the amendment.’ " Zucco Partners, LLC v. Digimarc Corp. , 552 F.3d 981, 1007 (9th Cir. 2009) (alteration in original) (quoting Leadsinger, Inc. v. BMG Music Publ'g , 512 F.3d 522, 532 (9th Cir. 2008) ). "Not all of the factors merit equal weight. As this circuit and others have held, it is the consideration of prejudice to the opposing party that carries the greatest weight."

Eminence Capital, LLC v. Aspeon, Inc. , 316 F.3d 1048, 1052 (9th Cir. 2003). "The party opposing amendment bears the burden of showing prejudice." DCD Programs, Ltd. v. Leighton , 833 F.2d 183, 187 (9th Cir. 1987). Futility of amendment, however, "can, by itself, justify the denial of a motion for leave to amend." Bonin v. Calderon , 59 F.3d 815, 845 (9th Cir. 1995).

2. Rule 16 of the Federal Rules of Civil Procedure

When a court has entered a case scheduling order pursuant to Rule 16 of the Federal Rules of Civil Procedure and a party requests to amend a pleading after the expiration of the deadline set by the court, the party's request is controlled by Rule 16(b), not by Rule 15(a). See AmerisourceBergen Corp. v. Dialysist W., Inc. , 465 F.3d 946, 952 (9th Cir. 2006) ; Johnson v. Mammoth Recreations, Inc. , 975 F.2d 604, 607–08 (9th Cir. 1992). Thus, the party requesting an amendment must first show "good cause" under Rule 16(b) and then show that its proposed amendment is proper under Rule 15(a). Johnson , 975 F.2d at 608.

The Ninth Circuit has explained good cause under Rule 16(b) as follows:

"A court's evaluation of good cause is not coextensive with an inquiry into the propriety of the amendment under ... Rule 15." Unlike Rule 15(a)'s liberal amendment policy which focuses on the bad faith of the party seeking to interpose an amendment and the prejudice to the opposing party, Rule 16(b)'s "good cause" standard primarily considers the diligence of the party seeking the amendment. The district court may modify the pretrial schedule "if it cannot reasonably be met despite the diligence of the party seeking the extension." Moreover, carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief. Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party's reasons for seeking modification. If that party was not diligent, the inquiry should end.

Id. at 609 (citations omitted); see also In re W. States Wholesale Nat. Gas Antitrust Litig. , 715 F.3d 716, 737 (9th Cir. 2013), aff'd sub nom. Oneok, Inc. v. Learjet, Inc. , ––– U.S. ––––, 135 S.Ct. 1591, 191 L.Ed.2d 511 (2015) (" "While a court may take into account any prejudice to the party opposing modification of the scheduling order, ‘the focus of the [ Rule 16(b) ] inquiry is upon the moving party's reasons for seeking modification ... [i]f that party was not diligent, the inquiry should end.’ " (quoting Johnson , 975 F.2d at 609 ) ).

DISCUSSION

Plaintiff timely filed an objection (ECF 88) to which Defendant responded (ECF 91). Plaintiff objects to the portion of the F & R recommending that Plaintiff's motion to amend be denied with respect to Plaintiff's proposed additional claims for defamation per se , invasion of privacy, and retaliation under the Fair Labor Standards Act ("FLSA") and Oregon law. Plaintiff also objects that Judge Acosta failed to consider Plaintiff's motion under Rules 16 of the Federal Rules of Civil Procedure. Plaintiff does not object to the F & R's recommendation that Plaintiff's motion be denied with respect to asserting claims against new defendants, adding a second count of age discrimination against Defendant, or adding additional factual allegations supporting a "cat's paw" theory of discrimination.

For those portions of the F & R to which neither party has objected, the Court follows the recommendation of the Advisory Committee and reviews those matters for clear error on the face of the record. No such error is apparent. Accordingly, the Court adopts those portions of the F & R. The Court reviews de novo the portions of the F & R to which Plaintiff objected.

A. Rule 16 Analysis

Plaintiff asserts that he was not aware of the underlying facts supporting his invasion of privacy and defamation claims until after he took the deposition of two witnesses, which occurred on May 18 and 23, 2017. Defendant does not dispute this fact.

With respect to Plaintiff's retaliation claim, Defendant filed its counterclaim, which is the subject of Plaintiff's retaliation claim, on March 29, 2017. Defendant alleges that Plaintiff breached his employment contract by misappropriating Defendant's confidential information—specifically, Defendant's software code. Defendant argues that Plaintiff did not timely or diligently challenge Defendant's counterclaim because Plaintiff did not move to dismiss Defendant's counterclaim and because Plaintiff knew at least by December 2016, when Plaintiff's counsel sent a letter in response to Defendant's cease-and-desist letter sent to Plaintiff, that Defendant's employee Daniel Barrett had "forked the code" from Plaintiff's personal GitHub account. Plaintiff asserts that although Plaintiff knew as of at least December 2016 of that fact, Plaintiff did not have sufficient knowledge as to whether Barrett reviewed the code, informed anyone else at Defendant about Plaintiff's treatment of the code, or sufficient other facts that would support the high bar of plausibly alleging that Defendant's counterclaim is retaliatory.

Plaintiff contends that he did not have sufficient information on which to make a Rule 11–compliant claim of retaliation until after completing additional discovery. This discovery included deposing several witness, including Barrett, whose deposition was taken on June 13, 2017. Plaintiff attempted to take Barrett's deposition in May, but Barrett was unavailable due to unexpected paternity leave. On June 30, 2017, Plaintiff obtained additional new information from witness Derek Miller regarding Defendant's use and treatment of purportedly confidential information, which Plaintiff obtained to support Plaintiff's theory that Defendant's counterclaim is retaliatory and not genuine.

On June 16, 2017, three days after Barrett's deposition, Plaintiff's counsel sent an email to Defendant's counsel, providing notice of Plaintiff's intent to file a motion to amend the schedule and file an amended complaint, and requesting conferral. A few days later Defendant's counsel responded, asking...