Underwood v. O'Reilly Auto Enters.

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ANGELA UNDERWOOD, Plaintiff(s), v. O'REILLY AUTO ENTERPRISES, LLC, et al., Defendant(s).

No. 2:21-cv-01766-GMN-NJK

United States District Court, D. Nevada

September 23, 2022

ORDER

[Docket Nos. 156, 157]

NANCY J. KOPPE UNITED STATES MAGISTRATE JUDGE

Pending before the Court are Plaintiff's motions to add parties and to amend the complaint. Docket No. 156 (motion to add parties); Docket No. 157 (motion to amend complaint); see also Docket No. 156-1 (proposed amended complaint). With respect to the motion to add parties, no response has been filed in opposition. With respect to the motion to amend several defendants filed responses in opposition. Docket Nos 168, 169, 172. Plaintiff filed a reply. Docket No. 174. The Court held a hearing on the motions on September 21, 2022. Docket No. 182.^[1] For the reasons discussed below Plaintiff's motions to add parties and to amend the complaint are GRANTED.^[2]

I. BACKGROUND

Tyler Underwood performed automotive and heavy equipment mechanical work from about 2006 to 2020. Compl. at ¶ 7. In December 2020, Mr. Underwood was diagnosed with Acute Myelogenous Leukemia (AML), as well as related adverse blood and bone marrow effects, cellular abnormalities, anemia, genotoxic effects, and DNA damage. Comp. at ¶ 10. On September 15, 2021, Mr. Underwood brought suit in state court alleging that he was exposed to benzene through his automotive and equipment work. See Compl. at ¶ 7. On September 23, 2021, the case was removed to federal court on diversity grounds. Docket No. 1. On December 15, 2021, the Court entered a scheduling order instructing the parties to engage in prompt discovery efforts given Mr. Underwood's deteriorating health. See Docket No. 65 at 1. From January 3 to January 8, 2022, Mr. Underwood was deposed. See, e.g., Docket No. 168-5. On January 16, 2022, Mr. Underwood passed away. Docket No. 116-1. On April 20, 2022, Angela Underwood (Mr. Underwood's mother) was substituted as Plaintiff. Docket No. 138.^[3]

The parties are currently before the Court on Plaintiff's motions to add defendants and to amend the complaint. Docket Nos. 156, 157.^[4]

II. STANDARDS

Requests for leave to amend the pleadings filed on or before the amendment deadline are governed by Rule 15 of the Federal Rules of Civil Procedure.^[5] Rule 15(a) provides that “[t]he court should freely give leave [to amend] when justice so requires,” and there is a strong public policy in favor of permitting amendment. Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). The Ninth Circuit has made clear that Rule 15(a) is to be applied with “extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (per curiam). Under Rule 15(a), courts consider various factors, including: (1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of the amendment; and (5) whether the plaintiff has previously amended the complaint. See id. at 1052. Not all of these factors carry equal weight and prejudice is the “touchstone.” Id. Absent a showing of prejudice or a strong showing of any of the remaining factors, there is a presumption that leave to amend should be granted. Id. “In exercising this discretion, a court must be guided by the underlying purpose of Rule 15-to facilitate decision on the merits, rather than on the pleadings or technicalities.” Roth v. Garcia Marquez, 942 F.2d 617, 628 (9th Cir. 1991) (quoting United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981)). Generally, the analysis “should be performed with all inferences in favor of granting the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999).

The party opposing the amendment bears the burden of showing why leave should be denied, Desert Protective Council v. U.S. Dept. of the Interior, 927 F.Supp.2d 949, 962 (S.D. Cal. 2013) (citing Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989)), including the burden of establishing prejudice, DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987).

III. ANALYSIS

There is no opposition to Plaintiff's motion to add defendants, but several defendants oppose the motion to amend the complaint. The opposing Defendants raise several arguments in seeking denial of Plaintiff's motion to amend the complaint: prejudice, undue delay, and futility.^[6]The Court will address each factor in turn below.

A. Prejudice

The Court begins its analysis with prejudice, as it is the most important consideration in determining whether to allow amendment. Defendants assert that they would be prejudiced by allowing Plaintiff to amend because they can no longer question Mr. Underwood in light of his death. See, e.g., Docket No. 168 at 9-13; Docket No. 169. Plaintiff counters that sufficient prejudice does not exist from that circumstance to deny her the ability to amend. See, e.g., Docket No. 157 at 15-23; Docket No. 174 at 2-9. Plaintiff has the better argument.

The potential for some prejudice does not suffice to deny leave to amend. The United States Supreme Court has made clear that it is “undue prejudice” that warrants denial of leave to amend. E.g., Forman v. Davis, 371 U.S. 178, 182 (1962) (emphasis added). “The Ninth Circuit has repeatedly stated that the prejudice must be ‘substantial.'” Montes v. Bank of Am., No. 2:13-cv-00660-RCJ-VCF, 2014 WL 1340232, at *3 (D. Nev. Apr. 3, 2014) (collecting cases). Hence, the non-movant must show “substantial prejudice or substantial negative effect” if the amendment is allowed. SAES Getters S.p.A. v. Aeronex, Inc., 219 F.Supp.2d 1081, 1086 (S.D. Cal. 2002).

The existence of prejudice is “generally mitigated where the case is still in the discovery stage, no trial date is pending, and no pretrial conference has occurred.” Pizana v. SanMedica Int'l, LLC, __F.R.D.__, 2022 WL 1241098, at *10 (E.D. Cal. Apr. 27, 2022). Nonetheless, a showing of prejudice sufficient to deny leave to amend may be predicated on the non-movant's inability to obtain pertinent discovery in light of the death of a party or witness of significance. See Boris v. Moore, 253 F.2d 523, 524 (7th Cir. 1958); Nat'lSurety Corp. v. Bozeman, No. 20-cv-1187-WJM-GPG, 2022 WL 462084, at *4 (D. Colo. Feb. 15, 2022); Essani v. Earley, No. 13-cv-3424 (JMA)(SIL), 2018 WL 3785109, at *8 (E.D.N.Y. Aug. 9, 2018), adopted, 2018 WL 4100483 (E.D.N.Y. Aug. 28, 2018); Williams v. Cost-U-Less, Inc., Civil Action No. 2011-025, 2014 WL 2993667, at *6 (D.V.I. July 3, 2014); Powers v. Schneider Nat'l Carriers, Inc., No. 2:08-cv-36-PRC, 2009 WL 10721056, at *4 (N.D. Ind. Apr. 28, 2009); Scott v. San Francisco Police Dept., No. C-89-2781 MHP, 1996 WL 637842, at *2 (N.D. Cal. Oct. 24, 1996); Tiska v. United States, Civ. A. No. 86-5814, 1989 WL 2378, at *2 (E.D. Penn. Jan. 11, 1989).

A finding of undue prejudice does not flow automatically from such a death, however; the assertion of prejudice must be evaluated based on the circumstances of each particular case. The death of a party or witness does not create sufficient prejudice to deny leave to amend when other sources exist from which pertinent information can be discovered. See in re Recombinant DNA Tech. Patent & Contract Litig., 850 F.Supp. 769, 772 (S.D. Ind. 1994); Will v. United Chambers Adm'rs, Inc., No. 86 C 3445, 1988 WL 6910, at *3 (N.D. Ill. 1988); see also Freiberg v. Sentry Ins. Co., Civ. A. No. 88-3104, 1989 WL 101329, at *1 (E.D. Penn. Sept. 1, 1989). The death of a party or witness also does not create sufficient prejudice to deny leave to amend when the proposed amendments do not materially alter the nature of the claims or theories already pled. See in re BernardL. Madoff Inv. Sec. LLC, 560 B.R. 208, 224 (S.D.N.Y. Br. 2016); Geraldv. R.J. Reynolds Tobacco Co., No. ST-10-CV-631, 2016 WL 2354564, at *7-8 (V.I. Super. Apr. 28, 2016).

The Court is not persuaded in the circumstances presented that the proposed amendment following Mr. Underwood's death is sufficiently prejudicial that it should not be allowed. Defendant Calumet argues prejudice in allowing amendment to add its TruFuel 40:1 product into the pleadings.^[7] In particular, it was only Calumet's TruFuel 50:1 product in the pleadings at the time of Mr. Underwood's deposition and subsequent death, so Defendant Calumet urges a finding of prejudice based on an inability to question Mr. Underwood about this other product:

Under these circumstances, it would certainly be prejudicial to permit supposed newfound allegations and claims about a different product when Calumet was never put on notice prior to Mr. Underwood's death. Specifically, Calumet cannot question Mr. Underwood about TruFuel 40:1, including why he used TruFuel 40:1 instead of TruFuel 50:1; how often he used it; on what equipment he used it; where he bought it; if he spilled it, etc. These are all important questions about Mr. Underwood's alleged exposure. Such questions cannot be asked now and Calumet had no reason to believe they should have been asked earlier given Plaintiff's direct and unambiguous testimony that only TruFuel 50:1 was at issue.

Docket No. 168 at 12. As Plaintiff notes in response however, there are other sources from which Defendant Calumet may be able to discern information to the questions it has identified. See Docket No. 157 at 21-22 (identifying numerous potential witnesses).^[8] The potential for other witness testimony on these topics militates against a finding of prejudice. Cf. Recombinant DNA, 850 F.Supp. at 772; Will, 1988 WL 6910, at *3. Moreover, Defendant Calumet acknowledges that Mr. Underwood was in fact questioned during his deposition as to his use of TruFuel 50:1 for the same types of claims now alleged. See Docket No. 168 at 11; see also Docket No. 157 at 1920. While the products may differ in some respects,...