Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00490/USCOURTS-casd-3_16-cv-00490-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 47:0227 FCC-Unsolicited Telephone Sales

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHRISTOPHER MELINGONIS,

individually and on behalf of all others

similarly situated,

Plaintiff,

CASE NO. 16cv490-WQH-KSC

ORDER

v.

RAPID CAPITAL FUNDING, L.L.C.;

and, MERCHANT WORTHY, INC.,

Defendants.

HAYES, Judge:

The matters before the Court are the motion to dismiss the first amended

complaint filed by Defendant Merchant Worthy, Inc. (“Merchant Worthy”) (ECF No.

26) and the motion for leave to amend the complaint filed by Plaintiff Christopher

Melingonis (ECF No. 27). 

I. Background

On February 24, 2016, Plaintiff initiated this action by filing a complaint against 

Defendant Rapid Capital Funding L.L.C. (“Rapid Capital”) alleging violations of the

Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (ECF No. 1). On April

15, 2016, Rapid Capital filed an answer. (ECF No. 4). 

On August 16, 2016, the Magistrate Judge issued a Scheduling Order in this

matter requiring that any motion to join other parties, to amend the pleadings or to file

additional pleadings be filed on or before September 12, 2016. (ECF No. 17). 

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On October 18, 2016, Plaintiff filed a first amended complaint against Defendant

Rapid Capital and the newly-added Defendant Merchant Worthy. (ECF No. 18). 

On December 30, 2016, Defendant Merchant Worthy filed a motion to dismiss

the first amended complaint. (ECF No. 26). Plaintiff did not file a response in

opposition to this motion to dismiss. On January 30, 2017, Defendant Merchant

Worthy filed a “Notice of No Opposition Filed in Response to Defendant Merchant

Worthy Inc.’s Motion and Motion to Dismiss First Amended Class Action Complaint.” 

 (ECF No. 32).

On January 9, 2017, Plaintiff filed a motion for leave to file an amended

complaint, in which Plaintiff states that he withdraws the first amended complaint. 

(ECF No. 27). On January 23, 2017, Defendant Merchant Worthy filed a response in

opposition to the motion seeking leave to file an amended complaint. (ECF No. 29). 

On January 30, 2017, Plaintiff filed a reply. (ECF No. 31). 

II. Plaintiff’s Motion for Leave to File an Amended Complaint 

Plaintiff states that he “withdraws the First Amended Complaint which was filed

on October 19, 2016” and requests leave to amend the original complaint to add

Merchant Worthy as a defendant. (ECF No. 27-1 at 2). Plaintiff states that he has no

objection to Defendant Merchant Worthy’s alternative request to set a new Case

Management Conference to restart the deadlines in this action. Id. at 3. Plaintiff further

requests that Defendant Merchant Worthy’s motion to dismiss be denied as moot. Id.

at 4. Plaintiff contends that good cause exists to amend his complaint because he could

not have included Defendant Merchant Worthy in the original complaint. Plaintiff

contends that he was not aware of the existence of Defendant Merchant Worthy or its

relation to the current action until September 30, 2016 following the receipt of written

discovery. Id. at 3; ECF No. 31 at 2. Plaintiff contends that during discovery,

Defendant Rapid Capital represented that at least one of the phone calls received by

Plaintiff was placed by Defendant Merchant Worthy. (ECF No. 27-1 at 3). 

Defendant Merchant Worthy contends that Plaintiff should not be granted leave

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to amend because Plaintiff failed to obtain leave of Court to file the first amended

complaint as required by Federal Rule of Civil Procedure 15(a). (ECF No. 29 at 5). 

Defendant Merchant Worthy contends that it will be prejudiced if it is added as a

defendant at this stage of proceedings because, absent intervention by the Court, it will

have “no opportunity to participate in any class discovery or prepare for a class

certification motion, and will have no meaningful opportunity to participate in fact

discovery in this action.” Id. at 6. Defendant Merchant Worthy contends that Plaintiff

failed to obtain leave of Court to add Defendant Merchant Worthy as a defendant as

required by Federal Rule of Civil Procedure 21. Id. Defendant Merchant Worthy

contends that Plaintiff failed to seek leave of Court to modify the Scheduling Order. 

Defendant Merchant Worthy contends that Plaintiff has made no showing of good cause

to modify the Scheduling Order as required by Federal Rule of Civil Procedure

16(b)(4). Id. at 8. 

A. Legal Standards 

A motion for leave to amend filed after the time period specified in a district

court’s scheduling order is governed by the “good cause” standard of Federal Rule of

Civil Procedure 16(b). Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08

(9th Cir. 1992). Federal Rule of Civil Procedure 16 provides that a district court must

issue a scheduling order that limits “the time to join other parties, amend the pleadings,

complete discovery, and file motions.” Fed. R. Civ. P. 16(b). Federal Rule of Civil

Procedure 16(b) also provides that “[a] schedule may be modified only for good cause

and with the judge’s consent.” Id. “Rule 16(b)’s ‘good cause’ standard primarily

considers the diligence of the party seeking amendment. The district court may modify

the pretrial schedule ‘if it cannot reasonably be met despite the diligence of the party

seeking the extension.’” Johnson, 975 F.2d at 609 (citing Fed. R. Civ. P. 16 advisory

committee’s notes (1983 amendment)). If the court finds that a plaintiff has shown

good cause pursuant to Federal Rule of Civil Procedure 16(b), the court must consider

whether leave to amend is proper under Federal Rule of Civil Procedure 15. Id. at 608.

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Federal Rule of Civil Procedure 15(a) provides that after the time for amendment

“as a matter of course” has passed, “a party may amend its pleading only with the

opposing party’s written consent or the court’s leave.” Id. Federal Rule of Civil

Procedure 15 mandates that leave to amend “be freely given when justice so requires.” 

Id. “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v.

Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation omitted). In Foman v.

Davis, 371 U.S. 178 (1962), the Supreme Court offered several factors for district

courts to consider in deciding whether to grant a motion to amend under Rule 15(a):

In the absence of any apparent or declared reason – such as 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, futility of

amendment, etc. – the leave sought should, as the rules require, be “freely given.” Foman, 371 U.S. at 182; see also Smith v. Pac. Prop. Dev. Co., 358 F.3d 1097, 1101

(9th Cir. 2004). “Not all of the [Foman] 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, 316 F.3d at 1052 (citations omitted). “The

party opposing amendment bears the burden of showing prejudice.” DCD Programs,

Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). “Absent prejudice, or a strong

showing of any of the remaining Foman factors, there exists a presumption under Rule

15(a) in favor of granting leave to amend.” Eminence Capital, 316 F.3d at 1052.

B. Discussion

Plaintiff concedes that he filed the first amended complaint without first seeking

leave of Court pursuant to Federal Rule of Civil Procedure 15(a) and 21. (ECF No. 27-

1 at 3; ECF No. 31 at 3). In the motion seeking leave to file an amended complaint,

Plaintiff requests to withdraw the improperly filed first amended complaint and seeks

leave to file the first amended complaint. The Court grants Plaintiff’s request to

withdraw the first amended complaint. 

Because the Scheduling Order (ECF No. 17) was entered in this case, Plaintiff’s

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motion for leave to amend is initially governed by Rule 16(b).1 See Johnson, 975 F.2d

at 608 (citing Forstmann v. Culp, 114 F.R.D. 83, 85 (M.D.N.C. 1987) (“party seeking

to amend pleading after date specified in scheduling order must first show ‘good cause’

for amendment under Rule 16(b), then, if ‘good cause’ be shown, the party must

demonstrate that amendment was proper under Rule 15”)). 

Plaintiff contends that he did not learn of Defendant Merchant Worthy’s

existence and involvement in this matter prior to receiving discovery responses from

Defendant Rapid Capital and filed the amended complaint “as soon as was practicable.” 

(ECF No. 27-1 at 3). Plaintiff states that he “could not have amended the Complaint

before the Court’s cut off of September 12, 2016, because Plaintiff did not learn of the

existence of [Defendant Merchant Worthy] until September 30, 2016[.]” (ECF No. 31

at 2). Plaintiff includes a declaration by his counsel which states that Plaintiff received

Defendant Rapid Capital’s written discovery responses on September 30, 2016 and that

“Plaintiff first found out about the existence of [Defendant Merchant Worthy], and their

relation to this case, from [Defendant Rapid Capital] in [Defendant Rapid Capital’s]

initial discovery responses.” (ECF No. 31-1 at 2). Plaintiff filed the first amended

complaint on October 19, 2016 and the motion for leave to file the amended complaint

on January 9, 2017. (ECF Nos. 18, 27). Plaintiff provides evidence to establish that,

despite proceeding diligently, he could not have met the Court’s September 12, 2016

deadline to file a motion to join other parties or amend the pleading. See Johnson, 975

F.2d at 609. The Court concludes that Plaintiff has shown good cause to amend the

complaint to include Defendant Merchant Worthy. 

Because the Court finds that Plaintiff has shown good cause, the Court considers

whether leave to amend is proper under Federal Rule of Civil Procedure 15. See

Johnson, 975 F.2d at 608. Defendant Merchant Worthy contends that it will be

prejudiced by being added as a defendant at this point in the proceedings because a

1

 On March 8, 2017, the Magistrate Judge vacated the remaining dates on the scheduling order in light of these pending motions. (ECF No. 37). 

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number of deadlines in the Scheduling Order have already passed. In DCD Programs,

the Ninth Circuit Court of Appeals noted that “[a]mending a complaint to add a party

poses an especially acute threat of prejudice to the entering party.” DCD Programs,

833 F.2d at 187 (quoting Korn v. Royal Caribbean Cruise Line, Inc., 724 F.2d 1397,

1400 (9th Cir. 1984)). However, in DCD Programs the Court determined that the

newly added defendant would not be prejudiced by the timing of the proposed

amendment in because the case was at the discovery stage with no trial date pending or

pretrial conference scheduled. Id. at 187-88. This case is currently in the discovery

stage and no trial date is pending. Further, Plaintiff states that he has “no objection to

[Defendant Merchant Worthy’s] alternative request to set a new Case Management

Conference to restart the deadlines in this action” and requests the Court reset the

discovery deadlines. (ECF No. 27-1 at 3-4). Defendant Merchant Worthy has not

satisfied its burden to demonstrate that it will be prejudiced if it is named in an amended

complaint. The Court concludes that Defendant Merchant Worthy has not made a

sufficiently strong showing of the Foman factors to overcome the presumption of Rule

15(a) in favor of granting leave to amend. See Eminence Capital, 316 F.3d at 1052.

III. Defendant Merchant Worthy’s Motion to Dismiss 

Defendant Merchant Worthy moves this Court for an Order dismissing the first

amended complaint against Defendant Merchant Worthy and dismissing Merchant

Worthy as a defendant in this action. (ECF No. 26-1 at 3). Defendant contends that

Plaintiff has failed to comply with Federal Rule of Civil Procedure 15(a), Federal Rule

of Civil Procedure 21, and the Court’s Scheduling Order issued on August 16, 2016. 

Alternatively, Defendant Merchant Worthy requests that the Court “set a new

scheduling conference to restart the deadlines in this action in order to allow [Defendant

Merchant Worthy] to participate on a fair basis with the other parties and avoid such

prejudice.” Id. at 3. 

Plaintiff did not file a response in opposition to this motion to dismiss. In his

reply in support of the motion seeking leave to file an amended complaint, Plaintiff

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states, “Plaintiff did not file an opposition to [Defendant Merchant Worthy’s] motion,

as they were correct in pointing out Plaintiff’s error in failing to request leave to amend

the complaint. Plaintiff thought it would be best to instead make that request for leave

to amend and offer the court a different remedy than dismissal.” (ECF No. 31 at 2-3). 

The Court has granted Plaintiff’s request to withdraw the first amended complaint. The

Court denies the motion to dismiss as moot. 

IV. Conclusion 

IT IS HEREBY ORDERED that Plaintiff’s request to withdraw the first amended

complaint is GRANTED. (ECF No. 27). 

IT IS FURTHER ORDERED that the motion for leave to amend the complaint

is GRANTED. (ECF No. 27). Plaintiff has leave to file an amended complaint adding

Merchant Worthy as a defendant. Plaintiff shall file the amended complaint within

fourteen (14) days of the date this Order issues. 

IT IS FURTHER ORDERED that the motion to dismiss filed by Merchant

Worthy is DENIED as moot. (ECF No. 26). Any requests regarding a new scheduling

order or additional discovery matters are referred to the Magistrate Judge. 

DATED: May 1, 2017

WILLIAM Q. HAYES

United States District Judge

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