Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_09-cv-01179/USCOURTS-cand-5_09-cv-01179-5/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1981 Civil Rights

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

DAVID MERRITT, et al.,

Plaintiffs,

v.

COUNTRYWIDE FINANCIAL 

CORPORATION, et al.,

Defendants.

Case No. 09-cv-01179-BLF 

ORDER GRANTING IN PART MOTION 

FOR LEAVE TO AMEND

[Re: ECF 170]

On January 2, 2015, pro se plaintiffs David and Salma Merritt (“Plaintiffs”) filed their 

Third Amended Complaint, ECF 168, followed by a “Notice of Compliance with Ninth Circuit 

Order to Amend Complaint and Request for Order Directing U.S. Marshals Service to Serve 

Added Defendants” on January 4, 2015, ECF 170. This latter document was electronically filed 

by Plaintiffs as a “First Motion to Amend/Correct” and appeared to be a request that the Court 

grant leave to amend in order for Plaintiffs to add additional defendants. Construing it as such, the 

Court set a hearing on Plaintiffs’ motion for leave to amend on February 19, 2015.

After more careful review of Plaintiffs’ Third Amended Complaint, it appears that they 

have either failed to follow or misinterpreted the Court’s direction in its Order on Remand that 

“[n]o other claims may be asserted in the amended pleading without leave of court.” See ECF 

150. It appears that the Third Amended Complaint drops a number of claims from the Second 

Amended Complaint (on which the Court granted leave to amend) and adds a number of new 

claims without leave.

1

 The January 4, 2015 “Notice of Compliance” can thus be best construed as 

 

1 As best as the Court can tell, Plaintiffs have dropped the § 1981 (SAC Third COA), federal false 

advertising/marketing (SAC Sixth COA), breach of contract/fiduciary duty (SAC Seventh COA), 

“debt collection” (SAC Eighth COA), “failure to provide disclosures” (SAC Ninth COA), and 

“Debt-to-Income Ratio” (SAC Tenth COA) claims from the Second Amended Complaint. They 

Case 5:09-cv-01179-BLF Document 196 Filed 02/12/15 Page 1 of 3
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United States District Court

Northern District of California

Plaintiffs’ post-hoc request that the Court ratify their decision to add new claims and new parties 

to the Third Amended Complaint. This is entirely improper. 

The Court ordered Plaintiffs to file an amended pleading only as to the claims set forth in 

the Order on Remand and notified them that they would need to affirmatively seek leave of court 

before adding new claims or parties. Plaintiffs have failed to do so. Under normal circumstances, 

the Court would sua sponte strike Plaintiffs’ Third Amended Complaint for failure to comply with 

the Court’s Order on Remand. However, although Defendants2oppose Plaintiffs’ request to 

amend, see ECF 180, Defendants’ Motion to Dismiss substantively addresses all of the claims in 

the Third Amended Complaint—new and old, see ECF 179. Thus, in the interest of judicial 

efficiency and of retaining the briefing and hearing schedule in this case, the Court HEREBY 

GRANTS IN PART Plaintiffs’ “Notice of Compliance,” which this Court construes as a motion 

for leave to amend, to the extent it seeks leave to add the new claims asserted in the Third 

Amended Complaint.3 

Plaintiffs’ request to add new parties presents a different question. Plaintiffs do not 

identify the new parties in their “Notice of Compliance,” nor in their reply to Defendants’ 

opposition. See ECF 170, ECF 187. Furthermore, though citing Federal Rule of Civil Procedure 

15, Plaintiffs make no attempt to demonstrate that adding multiple new parties more than five 

years after the commencement of this action would be in the interest of justice. Although motions 

for leave to amend are typically granted with liberality, the Court must still consider the Foman v. 

Davis, 371 U.S. 178 (1962), factors of bad faith, undue delay, prejudice to the opposing party, and 

futility. Id. at 182; Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001). 

Here, Court finds that the extreme prejudice to Defendants—who have been litigating this case 

 

have added claims for intentional misrepresentation (TAC Count III), unjust enrichment (TAC 

Count V), strict liability (TAC Count VI), strict products liability (TAC Count VII), and race and 

gender discrimination in violation of the Fair Housing Act and the Equal Credit Opportunity Act 

(TAC Count VIII) in the Third Amended Complaint. 

2

For purposes of this order, “Defendants” refers to defendants Bank of America, N.A., Michael 

Colyer, Countrywide Financial Corporation, Countrywide Home Loans, Inc., Ken Lewis, and 

David Sambol. 

3

The Court makes no determination on the substantive validity of the amended claims.

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United States District Court

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since 2009—and to potential new defendants from being added to a lawsuit concerning events that 

occurred nine years ago counsels against allowing Plaintiffs to add new defendants.4 See Korn v. 

Royal Caribbean Cruise Line, Inc., 724 F.2d 1397, 1400 (9th Cir. 1984) (“avoiding prejudice to 

the party to be added” is a “major objective”). Plaintiffs’ “Notice of Compliance,” which this 

Court construes as a motion for leave to amend, is HEREBY DENIED IN PART to the extent it 

seeks leave to add new defendants.

To recapitulate: the Third Amended Complaint at ECF 168 (minus the new parties 

identified in the caption) shall be deemed the operative complaint. The Court will consider all of 

the defendants’ motions to dismiss in light of the Third Amended Complaint. 

This matter was deemed appropriate for submission without oral argument, and the 

February 19, 2015 hearing is accordingly VACATED. Civ. L.R. 7-1(b). 

IT IS SO ORDERED.

Dated: February 12, 2015

______________________________________

BETH LABSON FREEMAN

United States District Judge

 

4 Defendants also note in opposition that the addition of new defendants is futile, as Plaintiffs’ 

claims against the new defendants are likely time barred, precluded by res judicata, or based on 

privileged conduct. Def.’s Opp. 5-6, ECF 180.

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