Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-00744/USCOURTS-casd-3_09-cv-00744-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SOUTHERN CALIFORNIA STROKE

REHABILITATION ASSOCIATES, INC.,

Plaintiff,

CASE NO. 09-CV-744 JLS (MDD)

ORDER: DENYING PLAINTIFF’S

MOTION FOR LEAVE TO

AMEND COMPLAINT

(ECF No. 129)

vs.

NAUTILUS, INC.,

Defendant.

Presently before the Court is Plaintiff Southern California Stroke Rehabilitation

Associates, Inc.’s (“SCSRA”) motion for leave to amend its complaint. (Motion, ECF No. 129.) 

Also before the Court is Defendant Nautilus, Inc.’s opposition (Opp’n, ECF No. 131) and

Plaintiff’s reply (Reply, ECF No. 135). For the reasons stated below, Plaintiff’s motion for leave

to file an amended complaint is DENIED.

BACKGROUND

On December 22, 2008, Plaintiff filed a complaint against Nautilus for breach of express

warranty, breach of implied warranty for fitness of purpose, and breach of implied warranty of

merchantability arising out of the purchase of “custom designed, medical grade [exercise]

equipment designed for stroke rehabilitation purposes.” (See Compl., ECF No. 1.) The extensive

Case 3:09-cv-00744-CAB-MDD Document 140 Filed 01/30/12 Page 1 of 6
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factual and procedural history of this case is detailed in the Court’s March 24, 2011 Order,

incorporated here, in which the Court denied both parties’ motions for summary judgment except

as to Plaintiff's cross-motion for summary judgment on Defendant’s statute of limitations defense. 

(ECF No. 113.) The case is now poised for trial.

LEGAL STANDARD

Leave to amend should be freely given “when justice so requires.” Fed. R. Civ. P.

15(a)(2). But while the rule should be interpreted extremely liberally, leave should not be granted

automatically. Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990). The opposing party

bears the burden of demonstrating why denial is necessary. A trial court may deny a motion for

leave to amend based on various factors, including bad faith, undue delay, prejudice to the

opposing party, futility of amendment, and whether the party has previously amended. Foman v.

Davis, 371 U.S. 178 (1962).

ANALYSIS

Defendant argues leave to amend should be denied due to bad faith, undue delay, prejudice

to Defendant, and futility of amendment. The Court considers each in turn.

1. Bad Faith

Defendant argues that the proposed amended complaint should be denied because Plaintiff

is attempting to mislead the Court by “cleverly removing certain allegations . . . that would

effectively negate his basis for seeking the Amendment . . . under the guise of ‘streamlining’ the

Complaint.” (Opp’n 4.) In further support of its bad faith argument, Defendant points to prior

instances in which Plaintiff’s litigation tactics and bad-faith motives for suing Nautilus have been

judicially recognized. (Id.)

The Court agrees that Plaintiff’s description of the proposed amendment in its motion for

leave to amend does not fully comport with the amendment itself. Plaintiff states that “[t]he

proposed amendment would add a cause of action under the Magnuson-Moss Warranty Act (the

“MMWA”), 15 U.S.C. § 2301 et seq., and otherwise streamline the complaint.” (Motion 2.) In

fact, the proposed amendment does reduce the number of pages of the complaint by four, even

though it adds a cause of action. (See Proposed Amendment, Motion Ex. A.) However, the

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motion does not make clear that the proposed amendment significantly alters Plaintiff’s factual

allegations so as to state facts that might support a claim under a consumer protection statute such

as the MMWA, which the original complaint completely lacked. 

In its original complaint, Plaintiff stated that a “central component of Mr. Sukumar’s

business plan was the acquisition and deployment of state-of-the-art exercise systems to function

as the ‘core’ of SCSRA’s therapeutic/rehabilitative regime.” (Compl. ¶ 12.) The original

complaint alleges that Mr. Sukumar had several specific design features in mind for the exercise

equipment which he felt “would help ensure that SCSRA’s clients – given their unusually fragile

state – were not accidentally injured in the rehabilitation process.” (Id.) Mr. Sukumar apparently

conducted “extensive diligence” and concluded that no ready-made medical-grade exercise

equipment existed “that met all of SCSRA’s needs for rehabilitation/therapeutic exercise

equipment.” (Compl. ¶ 13.) Accordingly, Mr. Sukumar contracted with Nautilus “for the design

and manufacture of medical-grade machines to use in SCSRA’s facilities.” (Id.) In contrast, the

proposed amendment asserts that Mr. Sukumar purchased the exercise equipment for the purpose

of the rehabilitation of his father. (Proposed Amendment ¶ 12.) Plaintiff further asserts that

“Nautilus knew that the Nautilus Equipment was intended and customized for the rehabilitation of

Mr. Sukumar’s father.” (Id.) The idea of forming a company that would operate rehabilitation

centers for elderly patients who suffered from neuromuscular dystrophies apparently came later

and was only secondary. 

These changes are of material importance to Plaintiff’s new cause of action under the

MMWA, which applies only to the sale of consumer products. Under the terms of the Act, a

consumer product is “any tangible personal property which is distributed in commerce and which

is normally used for personal, family, or household purposes.” 15 U.S.C. § 2301(1). The fact that

Plaintiff’s motion to amend fails to point out and request leave to make material changes in the

factual allegations of the complaint concerns the Court. And viewed in the context of Plaintiff’s

history of repetitive delay in this matter, Plaintiff has not provided “persuasive justification” for

further delay. (See June 23, 2011 Order, ECF No. 125.) Even if these omissions were not made in

bad faith, the additional claim will certainly expand the scope of the litigation, contrary to

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Plaintiff’s assurances that it won’t. The MMWA claim will necessitate the determination of

additional elements – at the very least, whether or not the exercise equipment qualifies as a

consumer product under the Act. 

2. Undue Delay

Defendant also argues the amendment should be denied due to Plaintiff’s excessive delay

in bringing the motion and the procedural stance of this case as over three years old, past summary

judgment, and poised for trial. The Court agrees. Plaintiff has not provided any reliable

justification for the excessive delay, making this motion untimely.

In most situations, undue delay by itself “is insufficient to justify denying a motion to

amend.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). But in some egregious cases, delays

may be sufficient on their own to deny amendment. See AmerisourceBergen Corp v. Dialysist

West, Inc., 465 F.3d 946, 953 (9th Cir. 2006). Under the undue delay analysis, a relevant inquiry

is also whether the plaintiff “knew or should have known the facts and theories raised by the

amendment in the original pleading.” Jackson, 902 F.2d at 1388. 

Plaintiff attempts to justify the timing of the proposed amendment to add the MMWA

claim by stating that “SCSRA filed its Motion as soon as practicable after the deposition of Greg

Webb.” (Reply 2.) Apparently, it was not until this deposition had been taken that Plaintiff

realized that the exercise equipment could be suited for home use and thus qualified as a consumer

product under the MMWA. (Motion 2.) Given that Plaintiff now states he purchased the

equipment for personal use, i.e. the rehabilitation of his father, the motion to amend is inherently

contradictory. If Plaintiff’s proposed amended complaint is to be believed, then his reason for

delay approaches the preposterous. In addition, courts have held that ignorance of the law is an

unsatisfactory excuse for excessive delay. See Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72

(2d Cir. 1990) (affirming the lower court’s denial of leave to amend, stating that “the court is free

to conclude that ignorance of the law is an unsatisfactory excuse.”) (citing Goss v. Revlon Inc., 548

F.2d 405, 407 (2d Cir. 1976)). 

Further, Mr. Sukumar knew, or should have known, the facts relevant to his reasons for

purchasing the exercise equipment at the time of filing the original complaint. Plaintiff has not

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1

 See, e.g., Cresswell, 922 F.2d at 72 (affirming the lower court’s denial of leave to amend the

complaint due to the court’s discretion “to deny leave to amend where the motion is made after an

inordinate delay, no satisfactory explanation is offered for the delay, and the amendment would

prejudice the defendant.”)

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provided any reason why those facts were not properly stated in the original complaint. Thus,

Plaintiff has failed to provide any justification as to why the complaint’s factual allegations now

require amendment.

3. Prejudice to Defendant

Defendant argues that Plaintiff’s proposed amendment would be prejudicial because of the

extensive delays Plaintiff has already caused in this litigation and because the amendment would

necessitate another motion for summary judgment. (Opp’n 12.) As discussed above, the Court

agrees that the addition of the MMWA claim would not “simply allow SCSRA to recover the

statutory remedies” without changing the scope of the litigation at all. (Motion 3.) Further,

Defendant is correct that the Court has already admonished the parties that no further continuances

would be given in this matter absent “persuasive justification.” (June 23, 2011 Order.) The Court

could certainly allow Defendant the opportunity to file a motion for summary judgment on the new

cause of action, which would cause delay even more substantial than the delay caused by a

continuance. 

4. Futility of Amendment

Finally, Defendant argues that the motion to amend should be denied for futility, because it

does not apply to Plaintiff, a corporate entity, and because it should not relate back to the original

complaint and thus is barred by the applicable statute of limitations. Although the Court finds

both of these arguments persuasive, it need not discuss or make findings as to these issues because

it finds the reasons discussed above entirely justify denying Plaintiff’s motion.

CONCLUSION

Although leave to amend should be freely given, it is not granted in every case.1

 Here,

where Plaintiff’s proposed amendment makes material changes not brought to the Court’s

attention which are inconsistent with the original complaint and the reasons given for amendment,

where Plaintiff has waited too long to seek this amendment with no satisfactory justification, and

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because to allow the amendment at this late stage would unduly prejudice Defendant, Plaintiff’s

motion for leave to amend the complaint is DENIED.

IT IS SO ORDERED. 

DATED: January 30, 2012

Honorable Janis L. Sammartino

United States District Judge

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