Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-05175/USCOURTS-cand-3_08-cv-05175-9/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MIXT GREENS,

Plaintiff,

v.

SPROUT CAFÉ,

Defendant.

___________________________________/

No. C-08-5175 EMC

ORDER GRANTING PLAINTIFF’S

MOTION FOR LEAVE TO FILE FIRST

AMENDED COMPLAINT

(Docket No. 81)

Plaintiff Mixt Greens has moved for leave to file a first amended complaint. Mixt Greens

seeks an amendment in order to (1) add as new defendants to the action Vinh Vi, Tu Ha Huynh, and

Café Sprout, Inc. (dba Sprout Café) and (2) add allegations supporting an alter ego theory (such that

Mr. Vi and Mr. Huynh could be held personally liable for any wrongdoing by Café Sprout, Inc.). 

Having considered the parties’ briefs, the oral argument of counsel, and all other evidence of record,

the Court hereby GRANTS the motion for leave to amend.

I. FACTUAL & PROCEDURAL BACKGROUND

Mixt Greens initiated this lawsuit in November 2008. See Docket No. 1 (complaint). In its

original complaint, the only defendant named in the action was Sprout Café (“Sprout”). Mixt

Greens described Sprout Café in its original complaint as an entity of unknown origin. See Compl. ¶

5.

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On April 2, 2010, this Court granted a motion to compel filed by Mixt Greens. As part of

this order, the Court required Sprout to produce its financial statements. See Docket No. 62 (order). 

Most of the financial statements were produced in May and June 2010. 

Mr. Vi was deposed by Mixt Greens on March 23 and May 10, 2010. Mr. Hyung was

deposed on May 20, 2010. See Mot. at 4; see also Cirillo Decl., Ex. 2 (Vi Depo.); Cirillo Decl., Ex.

3 (Huynh Depo.). Both of these depositions have yet to be completed.

On June 21, 2010, Mixt Greens filed the currently pending motion, essentially arguing that

the recently produced discovery described above gave rise to the need to file an amended complaint.

II. DISCUSSION

Federal Rule of Civil Procedure 15(a) provides that,

after the initial period for amendments as of right, pleadings may be

amended only by leave of court, which "leave shall be freely given

when justice so requires." "Four factors are commonly used to

determine the propriety of a motion for leave to amend. These are: bad

faith, undue delay, prejudice to the opposing party, and futility of

amendment." 

Ditto v. McCurdy, 510 F.3d 1070, 1078-79 (9th Cir. 2007). 

In the instant case, Sprout argues both undue delay and prejudice in opposing the motion for

leave to amend. The critical issue here is prejudice, i.e., whether allowing the amendment would

prejudice either Sprout or the new defendants. This is because, even assuming undue delay on the

part of Mixt Greens, “[u]ndue delay by itself . . . is insufficient to justify denying a motion to

amend.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). There must also be, e.g., a showing of

prejudice in order to justify a denial of a motion for leave to amend. See id. (noting that the Ninth

Circuit has “previously reversed the denial of a motion for leave to amend where the district court

did not provide a contemporaneous specific finding of prejudice to the opposing party, bad faith by

the moving party, or futility of the amendment”). 

Ninth Circuit case law indicates that prejudice may effectively be established by

demonstrating that a motion to amend was made after the cutoff date for such motions, or when

discovery had closed or was about to close. See, e.g., Zivkovic v. Southern Cal. Edison Co., 302

F.3d 1080, 1087 (9th Cir. 2002) (affirming denial of plaintiff’s motion for leave to amend where

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proposed amendment would have added additional causes of action which would have required

further discovery and discovery was set to close five days after motion to amend was filed);

Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999) (stating that

“[a] need to reopen discovery and therefore delay the proceedings supports a district court's finding

of prejudice from a delayed motion to amend the complaint”); Solomon v. North Am. Life & Cas.

Ins. Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (affirming the denial of leave to amend where the

motion was made "on the eve of the discovery deadline" and “[a]llowing the motion would have

required re-opening discovery, thus delaying the proceedings”).

In the instant case, the fact discovery deadline was, at the time Mixt Greens filed the

currently pending motion, July 14, 2010. See Docket No. 70 (stipulation and order). Trial was

slated for October 18, 2010. See Docket No. 44 (order). Although such a schedule might suggest

that Mixt Greens’s proposed amendment would be prejudicial to Sprout and/or the new defendants,

it became clear at the hearing that any prejudice that might be suffered could easily be cured. That

is, the amendment, if allowed, would not require Sprout or the new defendants to engage in

substantial additional discovery because all of the information related to the principals and the

incorporation of Café Sprout, Inc. was within their possession, custody, or control. At best, Sprout

or the new defendants would need to propound limited contention interrogatories on Mixt Greens in

order to determine what its litigation position related to the new allegations would be. Nor would

the amendment, if allowed, require Sprout or the new defendants to respond to substantial new

discovery by Mixt Greens. In fact, at the hearing, Mixt Greens represented that it only needed to

complete the depositions of the principals in order to support the claims and allegations of the

proposed amendment. Accordingly, a brief extension of discovery deadlines could cure any

prejudice were the amendment allowed.

Both in its papers and at the hearing, Sprout argued that, even with an extension of discovery

deadlines, the amendment would be prejudicial to at least Mr. Vi and Mr. Huynh because they may

need to find new counsel to prepare for the case because there may be a conflict for Sprout’s counsel

to represent both Sprout and the individuals. See Opp’n at 4. But this argument is largely

speculative at this point. The Court notes that Sprout and the principals have been aware of the

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proposed amendment since at least June 21, 2010, but in the more than three weeks that have passed

there is nothing concrete to establish that, e.g., the insurer would not permit counsel for Sprout to

also represent the principals. Moreover, it should have been evident that there was a risk of personal

liability incurred for alleged infringing activities that occurred while the restaurant was open and

operating prior to the incorporation of Café Sprout, Inc. Yet no potential conflict of evidence has

given rise to any cited problems in defense of this action to date.

Based on the lack of prejudice, the Court shall permit the proposed amendment requested by

Mixt Greens.

III. CONCLUSION

For the foregoing reasons, Mixt Greens’s motion for leave to amend is granted. Mixt Greens

shall file its amended complaint within a week of the date of this order.

Consistent with the discussion at the hearing, the parties shall meet and confer and submit a

proposed case management schedule, including, e.g., new discovery deadlines, with a new trial start

date of December 13, 2010. The Court is continuing the trial date in part to allow the parties to

explore settlement.

This order disposes of Docket No. 81

IT IS SO ORDERED.

Dated: July 15, 2010

_________________________ EDWARD M. CHEN

United States Magistrate Judge

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