Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-02807/USCOURTS-casd-3_16-cv-02807-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1681 Fair Credit Reporting Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

AHMED S. ADAN, an individual,

Plaintiff,

CASE NO. 16cv2807-GPC(WVG)

ORDER GRANTING PLAINTIFF’S

MOTION FOR LEAVE TO FILE

AN AMENDED COMPLAINT

[Dkt. No. 15.]

v.

INSIGHT INVESTIGATION, INC. A

California corporation; and DOES 1-

10, inclusive,

Defendant.

Before the Court is Plaintiff’s motion for leave to file an amended complaint. 

(Dkt. No. 15.) An opposition and reply were filed. (Dkt. Nos. 17, 19.) After a review

of the briefs, the Court GRANTS Plaintiff’s motion for leave to file an amended

complaint. 

Background 

On November 15, 2016, the case was removed from state court. (Dkt. No. 1.) 

According to the complaint, on February 20, 2015, Plaintiff Ahmed Adan (“Plaintiff”)

received a written offer of employment as a “Call Center Fit Expert” with Road Runner

Sports (“RRS”). (Dkt. No. 1-2, Compl. ¶ 14.) On the same day, RRS requested an

employment background check report from Defendant Insight Investigations, Inc.

(“Defendant”). (Id. ¶ 15.) Part of the background check involved a criminal history

report. (Id. ¶ 17.) The criminal history report for Plaintiff disclosed a criminal history

of an individual who did not share the same middle name as Plaintiff. (Id. ¶ 21.) 

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Despite the discrepancy in the middle initials, Defendant disclosed the criminal history

report of the other named person on Plaintiff’s employment background check report

which was sold to RRS. (Id. ¶ 23.) Plaintiff was informed he could not be hired

because of the criminal history information. (Id. ¶ 24.) Plaintiff immediately disputed

the information with Defendant but Defendantfailed to comply with certain provisions

of the Fair Credit Reporting Act (“FCRA”). He alleges that Defendant failed to utilize

reasonable procedures to ensure the maximum possible accuracy of information on

Plaintiff’s background check report required by 15 U.S.C. § 1681e(b), failed to use

strict proceduresto ensure that the reported public records information for employment

purposes was complete and up to date as mandated by 15 U.S.C. § 1681k(a)(2), and

failed to disclose to Plaintiff a true copy of the original report upon request as required

by 15 U.S.C. § 1681g(a). (Id.) 

On February 22, 2017, a scheduling order was filed by the Magistrate Judge

setting a deadline of March 24, 2017 as the date to file any motion to amend the

pleadings. (Dkt. No. 12.) On March 24, 2017, Plaintiff filed a motion for leave to file

an amended complaint. (Dkt. No. 15.) Plaintiff seeks to add a cause of action that

Defendant failed to provide Plaintiff a written notice of reinvestigation required under

15 U.S.C. § 1681i(a)(6). Defendant opposes the motion arguing there was undue delay

in bringing the motion and the motion is being brought in bad faith. 

A. Federal Rule of Civil Procedure 15

Under Federal Rule of Civil Procedure (“Rule”) 15(a), leave to amend a

complaint after a responsive pleading has been filed may be allowed by leave of the

court and “shall freely be given when justice so requires.” Foman v. Davis,

371 U.S. 178, 182 (1962); Fed. R. Civ. P. 15(a). Granting leave to amend rests in the

sound discretion of the trial court. Internat’l Ass’n of Machinists & Aerospace

Workers v. Republic Airlines, 761 F.2d 1386, 1390 (9th Cir. 1985). This discretion

must be guided by the strong federal policy favoring the disposition of cases on the

merits and permitting amendments with “extreme liberality.” DCD Programs Ltd. v.

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Leighton, 833 F.2d 183, 186 (9th Cir. 1987). 

Because Rule15(a) favors a liberal policy, the nonmoving party bearsthe burden

of demonstrating why leave to amend should not be granted. Genentech, Inc. v. Abbott

Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989). In assessing the propriety of an

amendment, courts consider several factors: (1) undue delay, (2) bad faith or dilatory

motive; (3) repeated failure to cure deficiencies by amendments previously permitted;

(4) prejudice to the opposing party; and (5) futility of amendment. Foman, 371 U.S. at

182; United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). These

factors are not equally weighted; the possibility of delay alone, for instance, cannot

justify denial of leave to amend, DCD Programs, 833 F.2d at 186, but when combined

with a showing of prejudice, bad faith, or futility of amendment, leave to amend will

likely be denied. Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). The single most

important factor is whether prejudice would result to the non-movant as a consequence

of the amendment. William Inglis & Sons Baking Co. v. ITT Continental Baking Co.,

668 F.2d 1014, 1053 (9th Cir. 1981). 

Defendant argues there was undue delay in seeking the amendment as Plaintiff

waited six months after the original complaint was filed, after the initial disclosures

were exchanged, after the ENE was held and after the court’s scheduling order was

filed, to file a motion for leave to amend the complaint. According to Defendant,

Plaintiff’s failure to explain the delay is fatal to his motion. Next, Defendant contends

that Plaintiff is bringing his motion in bad faith as Plaintiff was expressly notified and

aware of Defendant’s reinvestigation of the report and Plaintiff misunderstood

Defendant’s directions after Plaintiff disputed the information. Plaintiff replies that

there has been minimal delay in seeking the amendment and there is a factual issue as

to whether Plaintiff was aware of Defendant’s reinvestigation ofthe report and whether

Plaintiff misunderstood Defendant’s directions. 

As to undue delay, the Court looks at whether the moving party unduly delayed

in filing their motion. Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990). 

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In making such a determination, the court looks at “whether the moving knew or

should have known the facts and theories raised by the amendment in the original

pleading.” Id. 

It is not clear when Plaintiff learned of the facts to support the proposed fourth

cause of action; nonetheless, Plaintiff timely raised a motion for leave to amend

complaint according to the court’s scheduling order. While the proposed fourth cause

of action may not have been raised until six months after the filing of the complaint,

the case is still in its early stages that undue delay cannot be shown from the filing of

Plaintiff’s motion. See Zoe Mktg., Inc. v. Impressions, LLC, 14cv1881 AJB(WVG),

2015 WL 12216340, at *2 (S.D. Cal. Apr. 9, 2015) (“undue delay will not result from

granting Defendant leave to amend given that the case remains in the early stages of

discovery.”). Moreover, even if Defendant could establish undue delay, “delay alone

. . . cannot justify denial of leave to amend,” DCD Programs, 833 F.2d at 186. Since

Defendant has not demonstrated any of the other factors to oppose the motion, undue

delay does not warrant denial of the motion. See Bowles, 198 F.3d at 758. The Court

concludes that Plaintiff did not unduly delay in bringing the present motion.

There can be bad faith in bringing an amendment if the party seeks to prolong

meritless litigation by adding baseless amendments to their complaint or if there is any

evidence of wrongful motive. Jones v. Bates, 127 F.3d 839, 847 n. 8 (9th Cir. 1997);

Griggs v. Pace American Group, Inc., 170 F.3d 877, 881 (9th Cir. 1999); DCD

Programs. Ltd., 833 F.2d at 187. Here, Defendant’s argument that Plaintiff “was

expressly notified and well aware of Defendant’s reinvestigation ofthe report” and that

Plaintiff misunderstood Defendant’s directions after he disputed the information,

present factual disputes and do not demonstrate wrongful motive or that Plaintiff is

seeking to prolong meritless litigation. Accordingly, Defendant has not demonstrated

that the motion is being brought in bad faith. 

In sum, Defendant has not demonstratedthat leave to amend should not be

granted. See Genentech, 127 F.R.D. at 530-31. Accordingly, the Court GRANTS

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Plaintiff’s motion for leave to file an amended complaint. 

Conclusion

Based on the above, the Court GRANTS Plaintiff’s motion for leave to file an

amended complaint. Plaintiff shall file an amended complaint within five (5) days of

the Court’s order. The hearing date set for April 28, 2017 shall be vacated.

IT IS SO ORDERED.

DATED: April 18, 2017

HON. GONZALO P. CURIEL

United States District Judge

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