Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-00149/USCOURTS-caed-2_04-cv-00149-11/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 28:1331 Federal Question: Bivens Act

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1 The parties agreed at the hearing that New Verde Mines LLC and

Newmont North America LLC are the same entity. New Verde Mines LLC

changed its name to Newmont North America LLC.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

CITY OF GRASS VALLEY, )

) 2:04-cv-149-GEB-DAD

Plaintiff, )

)

v. ) ORDER

)

NEWMONT MINING CORPORATION, a )

corporation; NEWMONT USA LIMITED, )

a corporation; NEWMONT NORTH )

AMERICA EXPLORATION LIMITED, a )

corporation; NEWMONT GOLD COMPANY, )

a corporation; NEWMONT NORTH )

AMERICA LIMITED, a corporation; )

NEWMONT EXPLORATION LIMITED, a )

corporation, )

)

Defendants. )

)

Plaintiff moves to amend the Scheduling Order and moves to

amend its complaint to add the following additional Defendants: New

Verde Mines LLC, Newmont North America LLC,1 Newmont International

Services Limited, Newmont Realty Company, and Newmont Capital Limited

Case 2:04-cv-00149-DAD Document 286 Filed 05/10/07 Page 1 of 9
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(collectively “Related Newmont Entities”). Defendants oppose

Plaintiff’s motions.

BACKGROUND

 A Scheduling Order issued on May 12, 2006, which contains a

provision prohibiting further joinder of parties or amendment of

pleadings “except with leave of Court, good cause having been shown.” 

(Order, May 12, 2006, at 1.) Plaintiff argues it has demonstrated

“good cause” justifying the amendments it seeks. (Pl.’s Mot. to Amend

at 6:16-17.) Defendants disclosed in July 2004, as part of their

initial discovery, a chain of title guarantee listing New Verde Mines

LLC as the holder of mineral rights under Plaintiff’s Wastewater

Treatment Plant. (Aff. of Thayer, Ex. 3 at 3.) The parties

subsequently conducted settlement negotiations and agreed to stay the

action for the purpose of trying to reach a settlement from February

1, 2005 through August 1, 2005 and again from December 5, 2005 through

April 5, 2006. (Order, Dec. 6, 2005, at 1-2.) 

Beginning in August 2006, Plaintiff asked several deponents

about New Verde Mines LLC and its relationship to Defendant Newmont

Mining Company’s involvement in Grass Valley, but the deponents were

unable to explain the relationship. (Bardwick Decl., Ex. G at 2, Ex.

I at 2.) In December 2006, Plaintiff notified the current Defendants

of its intention to move to amend its complaint to add New Verde Mines

LLC and Newmont North America LLC as Defendants. (Id., Ex. J at 1.) 

Plaintiff then deposed Defendants’ “person most knowledgeable”

regarding corporate structure in January 2007. (Id., Ex. O.) In

addition, in February 2007, Defendants admitted through a Request for

Admissions that New Verde Mines LLC and Newmont Realty Company were

wholly owned subsidiaries of Defendant Newmont USA Limited and that

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28 2 All further Rule references are to the Federal Rules of Civil

Procedure.

3

Newmont Mining Corporation owns shares in Newmont Capital Limited. 

(Id., Ex. S at 3, 11.) Plaintiff then filed this motion on March 23,

2007 to amend the scheduling order and to amend its complaint. (Pl.’s

Mot. to Amend at 1.) The motion was argued on April 30, 2007.

DISCUSSION

I. Amending the Scheduling Order

Plaintiff asserts it has good cause to amend the portions of

the Scheduling Order establishing the deadline for amendment of

pleadings. (Pl.’s Mot. to Amend at 6:16-17.) Defendants rejoin good

cause does not exist to justify allowing Plaintiff to make further

amendments. (Defs.’ Opp’n at 2:21.) 

Federal Rule of Civil Procedure 162 provides that a pretrial

Scheduling Order “shall not be modified except upon a showing of good

cause and by leave of the district judge.” “Rule 16(b)’s good cause

standard primarily considers the diligence of the party seeking the

amendment.” Johnson v. Mammoth Recreations, 975 F.2d 604, 609 (9th

Cir. 1992) (internal quotation marks omitted). 

[T]o demonstrate diligence under Rule 16’s good

cause standard, the movant may be required to show

the following: (1) that [it] was diligent in

assisting the Court in creating a workable Rule 16

order, (2) that [its] noncompliance with a Rule 16

deadline occurred or will occur, notwithstanding

[its] diligent efforts to comply, because of the

development of matters which could not have been

reasonably foreseen or anticipated at the time of

the Rule 16 scheduling conference, and (3) that

[it] was diligent in seeking amendment of the Rule

16 order, once it became apparent that [it] could

not comply with the order.

Jackson v. Laureate, Inc., 186 F.R.D. 605, 607 (E.D. Cal. 1999)

(internal quotation marks omitted). 

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A. Creating a Workable Order

Defendants argue Plaintiff was not diligent in creating a

workable Rule 16 order because Plaintiff filed three status reports in

which Plaintiff said it had no intention of adding Defendants and then

subsequently moved to amend its Complaint to add Defendants. (Defs.’

Opp’n at 4:13-14.) Plaintiff rejoins that when those status reports

were filed Plaintiff “simply did not yet know the identity and

relationships among the Related Newmont Entities” and therefore,

Plaintiff did not know it would move at a later date to add

Defendants. (Pl.’s Mot. to Amend at 5:1-3.) In addition, Plaintiff

responds that it participated in all scheduling discussions and agreed

to a “Joint Stipulation and Order for Extension of Time” with

Defendants to modify the law and motion deadlines. (Pl.’s Mot. to

Amend at 7:10-19.) 

Nothing in the record indicates Plaintiff knew it would seek

to amend its complaint at the time the status reports were filed. 

Since Plaintiff participated in creating a workable Rule 16 order,

Plaintiff has shown diligence.

B. Development of Unforeseen Matters

Plaintiff asserts that although it was aware of the

existence of New Verde Mines LLC and Newmont North America LLC in

2004, it was not aware of the relationship between these entities and

Newmont; nor was it aware of the role these entities played in

Newmont’s Grass Valley operations until the close of discovery. 

(Pl.’s Reply at 3:5-9.) Therefore, Plaintiff asserts it has good

cause to amend its complaint. (Id.) Defendants countered at the

hearing that Plaintiff received documents listing New Verde Mines LLC

as the mineral rights holder underneath Plaintiff’s property as early

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as 2004. Defendants further asserted that since Newmont is a publicly

traded company, Plaintiff could have ascertained the relationship

between the other Related Newmont Entities through public records

searches before the close of discovery. Defendants argued that

therefore, Plaintiff was not diligent conducting discovery and has not

shown good cause to amend its complaint. 

i. New Verde Mines LLC & Newmont North America LLC

Plaintiff admitted at the hearing that it received the chain

of title guarantee in 2004 listing New Verde Mines LLC as the holder

of mineral rights in Grass Valley. Plaintiff asserts, however, that

the chain of title guarantee was part of a 30,000 document production

from Defendants, that Newmont has hundreds of related entities, and

therefore, it was difficult and time consuming for Plaintiff to

accurately determine which of Newmont’s related entities should be

joined in this litigation.

The diligence issue concerns whether Plaintiff’s counsel

acted as a reasonable attorney would have acted in pursuing

information in a similar situation. White v. Sabatino, 2007 U.S.

Dist. LEXIS 18760, *12 (D. Haw. Mar. 16, 2007) (holding plaintiff was

diligent despite not uncovering relevant information during discovery

because it would not by readily ascertainable by reasonable counsel). 

This is a difficult question to decide.

Plaintiff did not uncover the relevant information regarding

the relationship between New Verde Mines LLC and Newmont Mining

Corporation until the close of discovery. Plaintiff did take steps to

attempt to acquire this information, but whether additional steps

should have been taken in 2004 is not patently clear. Plaintiff had

to wade through thousands of documents about hundreds of related

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entities, and therefore, Plaintiff appears to have been diligent in

its search for the relevant information. In addition, Plaintiff was

aided in its endeavor to investigate the public records when it hired

a public record search firm where at least two specialists conducted

public records searches. However, Plaintiff stated at the hearing

that these experts were unable to determine the relationship between

the Related Newmont Entities because of missing documents in the

record. The record presents a difficult question on the issue of

whether Plaintiff was diligent in pursuing discovery regarding New

Verde Mines LLC and Newmont North America LLC. But Plaintiff’s

showing meets the bare minimum required to have the Scheduling Order

amended.

ii. Remaining Related Newmont Entities

Plaintiff further contends it was diligent in pursuing

information regarding the remaining Related Newmont Entities. 

Defendants do not point to any documents disclosed during discovery

that should have reasonably alerted Plaintiff to the remaining Related

Newmont Entities’ relationship to Newmont Mining or their involvement

in Newmont’s Grass Valley operations. Instead, Defendants argued at

the hearing that Plaintiff was not diligent because Plaintiff should

have discovered this information through public records. Plaintiff

rejoined that despite conducting public records searches, it was

unable to ascertain the necessary information regarding which Newmont

entities were proper Defendants.

Although Plaintiff was unable to uncover the relevant

information before the close of discovery, Plaintiff has shown it took

reasonable steps to ascertain the relationship of the Related Newmont

Entities through public record searches. Therefore, Plaintiff was

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diligent and its inability to comply with the Scheduling Order is

based on reasonably unforeseen events.

C. Diligence in Seeking Amendment

Plaintiff asserts it sought to amend as soon as it

reasonably could. (Pl.’s Mot. at 7:26-27.) Defendants rejoin

Plaintiff’s delay is inexcusable. (Defs.’ Opp’n at 4.)

Plaintiff sent Defendants a letter on December 5, 2006

informing Defendants of its intention to move to add New Verde Mines

LLC and Newmont North America LLC as Defendants and also specified

that Plaintiff “anticipate[d] that additional Newmont entities may

become known during the remaining months of discovery.” (Bardwick

Decl., Ex. J at 1.) Plaintiff then conducted its deposition of

Defendants’ “person most knowledgeable” on corporate structure in

January 2007 and received Defendants’ responses to its Request for

Admissions in February 2007. (Id., Ex. O, Ex. S.) Plaintiff filed

this motion on March 23, 2007. (Pl.’s Mot. to Amend at 1.) 

Plaintiff did not have sufficient evidence to move to amend

its complaint to add the Related Newmont Entities prior to Plaintiff’s

deposition of Defendants’ person most knowledgeable in January 2007

and Defendants’ answers to Plaintiff’s Request for Admissions in

February 2007. It is understood that it takes time to prepare a

motion before it can be filed and therefore, it was not unreasonable

for Plaintiff to wait until March 2007 to file its motion. 

D. Prejudice

Defendants assert they will suffer prejudice if Plaintiff’s

motion is granted because “[d]iscovery has closed, dispositive motions

have been filed, and the parties are preparing for trial in five

months.” (Defs.’ Opp’n at 5:9-10.) Plaintiff rejoins that it does

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not seek any additional discovery and does not seek to change any of

the other dates set by the Scheduling Order. (Pl.’s Reply at 6:25-

27.) In addition, Plaintiff asserts it “provided Newmont more than

adequate notice of its intent to move for this amendment, precisely to

avoid any possibility of prejudice.” (Pl.’s Reply at 25-26.)

Although the focus of analysis under Rule 16 is on the

diligence of the moving party, “the existence or degree of prejudice

to the party opposing the modification might supply additional reasons

to deny a motion.” Jackson, 186 F.R.D. at 607. However, a delay in

the litigation proceedings is insufficient to deny a request to amend. 

See DCD Programs, Ltd v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). 

Likewise, extending deadlines for discovery, in light of information

Plaintiff learns through discovery, is not the type of prejudice that

precludes amendment under Rule 16. Fru-Com Constr. Corp. v.

Sacramento Mun. Util. Dist., 2006 U.S. Dist. LEXIS 94421, *16-17 (E.D.

Cal. Dec. 15, 2006). In addition, allowing an amendment to add

Defendants which makes a case more complicated is not prejudice

sufficient to preclude amendment under Rule 16. Id. 

Defendants will not suffer the type of prejudice which

justifies precluding amendment under Rule 16. Therefore, Plaintiff

has shown good cause to amend the Scheduling Order.

II. Amending the Complaint

Plaintiff asserts the Related Newmont Entities meet the

requirements for joinder under Rule 20 because Plaintiff alleges they

are jointly and severally liable for Newmont’s actions in Grass

Valley. (Pl.’s Mot. at 8:24-25.) Defendants do not respond to this

argument.

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Rule 20 provides that joinder is proper when the right to

relief against the party to be joined is asserted jointly or

severally. Since Plaintiff asserts joint and several liability

against the Related Newmont Entities, Plaintiff’s motion to amend its

complaint is granted. 

III. Pending Summary Judgment Motion

Currently cross motions for summary judgment are pending and

are set for hearing on May 14, 2007. Defendants stated at the hearing

that if Plaintiff’s motion to amend were granted, the pending summary

judgment motion would need to be “restyled” to include the additional

Defendants. Therefore, the May 14, 2007 hearing on the motions for

summary judgment is vacated and rescheduled to commence at 10:00 a.m.

on June 11, 2007. If either party’s pending motion requires changes

to incorporate the additional Defendants, the revised motions shall be

filed by May 17, 2007. Any opposition shall be filed by May 25, 2007

and any reply shall be filed by June 4, 2007.

CONCLUSION

Plaintiff has five days from the date on which this Order is

filed to file and serve its Third Amended Complaint.

IT IS SO ORDERED.

Dated: May 9, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

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