Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00580/USCOURTS-casd-3_16-cv-00580-5/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1030 Fraud &amp; Related Activity in Connection with Computers

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16-CV-0580 W (AGS)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DK HOLDINGS, dba DOTCOM HOST,

Plaintiff,

v.

MIVA, INC., et al.,

Defendants.

Case No.: 16-CV-0580 W (AGS)

ORDER DENYING MOTION TO 

AMEND THE SCHEDULING 

ORDER [DOC. 203]

Pending before the Court is Plaintiff’s motion to amend the scheduling order to 

allow for the filing of a Fourth Amended Complaint. [Doc. 203.] The Court decides the 

matters on the papers submitted and without oral argument pursuant to Civil Local Rule 

7.1(d)(1). For the reasons below, the Court DENIES the motion.

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I. BACKGROUND

The deadline for moving to amend the pleadings in this case is August 22, 2016. 

(Scheduling Order [Doc. 23].) Parties have three times moved to file amended pleadings 

on a joint basis in 2018, years after this date lapsed. (Joint Mots. to Amend [Docs. 116, 

131, 144].) In each instance, the Court allowed for the filing of an amended pleading by 

stipulation, irrespective of the much-earlier scheduling order deadline. Following a 

counterclaim by Defendant Manuel Ramirez filed on September 5, 2018, discovery 

reopened—closing only recently, on May 3 of 2019. (Ramirez Counterclaim [Doc. 155]; 

April 19, 2019 Order [Doc. 205].)

In between the filing of the Second Amended Complaint (“SAC”) on April 18, 

2018 and the Third Amended Complaint (“TAC”) on August 22, 2018, Plaintiff took 

several depositions indicating that Defendant Miva, Inc. may have offered lower software 

prices to third-party competitors, independent of its own web hosting service.1 These 

facts ostensibly supported a separate breach of the Most Favored Nations (“MFN”) 

clause—apart from the breach of contract claim alleged in the SAC, which solely alleged 

breach through discounted software sales to Miva’s own web hosting service. (SAC

[Doc. 133] ¶¶ 93–102.) Yet when parties jointly moved to afford Plaintiff leave to amend 

in August of 2018 so as to dismiss the trade secrets claim against the Miva Defendants

(Joint Mot. to File TAC [Doc. 144]), Plaintiff did not include this theory in the new 

complaint. (TAC [Doc. 148].) The TAC, which remains the operative pleading, alleged 

nothing of a violation of the MFN clause through discounted software sales to third 

parties. (Id.)

Parties filed cross-motions for summary judgment, and the Court held that Plaintiff 

could not pursue the theory that Miva had breached the MFN clause through discounted 

 

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(See Wilson Depo. [Doc. 170-2, Exh. 1] (June 4, 2018); Osborne Depo. [Doc. 194-6, Exh. 4] (June 26, 

2018); Bottoli Depo. [Doc. 194-7, Exh. 5] (June 11, 2018); Carroll Depo. [Doc. 194-9, Exh. 7] (June 13, 

2018).) 

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software sales to third parties, as the TAC did not afford Defendants notice of the 

grounds upon which this claim rested in accordance with Federal Rule of Civil Procedure 

8(a)(2). (Jan. 24, 2019 Order [Doc. 192] 13.) Plaintiff moved for reconsideration. [Doc. 

194.] This motion was denied. (Apr. 3, 2019 Order [Doc. 202].)

On April 15, 2019, Plaintiff filed the instant motion to amend the scheduling order 

so as to allow for the filing of a Fourth Amended Complaint. (Pl.’s Mot. [Doc. 203].) 

Defendants oppose. (Defs.’ Opp’n [Doc. 206].)

II. LEGAL STANDARD

“After a party has amended a pleading once as a matter of course, it may only 

amend further after obtaining leave of the court, or by consent of the adverse party.” 

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citing Fed. 

R. Civ. P. 15(a)(2)). “The court should freely give leave [to amend] when justice so 

requires.” Fed. R. Civ. P. 15(a)(2). The policy in favor of leave to amend “is ‘to be 

applied with extreme liberality.’ ” Eminence Capital, LLC, 316 F.3d at 1051 (quoting 

Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)). “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 v. Davis, 371 U.S. 178, 182 (1962) (internal quotations omitted). 

However, “[n]ot all of the factors merit equal weight.” Eminence Capital, LLC, 316 F.3d 

at 1052. “As this circuit and others have held, it is the consideration of prejudice to the 

opposing party that carries the greatest weight.” Id. “Prejudice is the ‘touchstone of the 

inquiry under rule 15(a).’ ” Id. (quoting Lone Star Ladies Inv. Club v. Schlotzsky’s Inc., 

238 F.3d 363, 368 (5th Cir. 2001)).

That being said, a scheduling order “may be modified only for good cause and with 

the judge’s consent.” Fed. R. Civ. P. 16(b)(4). “A court’s evaluation of good cause is 

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not coextensive with an inquiry into the propriety of the amendment under . . . Rule 15.” 

Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (quoting 

Forstmann v. Culp, 114 F.R.D. 83, 85 (M.D.N.C. 1987)).

Unlike Rule 15(a)’s liberal amendment policy[,] which focuses on the bad 

faith of the party seeking to interpose an amendment and the prejudice to the 

opposing party, Rule 16(b)’s “good cause” standard primarily considers the 

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

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

the party seeking the extension.”

Id. at 609 (quoting advisory committee’s notes (1983 amendment)). 

“[C]arelessness is not compatible with a finding of diligence and offers no 

reason for a grant of relief.” Johnson, 975 F.2d at 609. “Although the existence or 

degree of prejudice to the party opposing the modification might supply additional 

reasons to deny a motion, the focus of the inquiry is upon the moving party’s 

reasons for seeking modification.” Id. Critically, “If that party was not diligent, 

the inquiry should end.” Id.

III. DISCUSSION

In order to amend the pretrial schedule, dotCOM must demonstrate that it 

acted diligently to comply with the existing pretrial schedule, or in seeking to 

modify that schedule. See Fed. R. Civ. P. 16(b)(4); Johnson, 975 F.2d at 609. It 

does not.

dotCOM ostensibly discovered the facts underlying the theory it now seeks 

to pursue via deposition testimony in June of 2018, months before the filing of the 

TAC. Yet it did not seek to amend the scheduling order until April 15, 2019. 

(Pl.’s Mot. [Doc. 203].) dotCOM argues that it only discovered the problem with 

its pleading when opposing counsel raised the issue during summary judgment 

briefing. (Pl.’s Mot. [Doc. 203-1] 1:18–2:23.) This is not diligence. Plaintiff is 

responsible for complying with the pleading standard. No good cause for not

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including the alternative theory of breach in the TAC appears in the instant motion. 

“[C]arelessness is not compatible with a finding of diligence and offers no reason 

for a grant of relief.” Johnson, 975 F.2d at 609. If Plaintiff wanted to pursue an

alternative theory of breach that did not appear in the operative pleading, it should 

have sought to amend the scheduling order shortly after discovering the facts

underlying that theory—in mid-2018. It did not.

Because dotCOM fails to demonstrate that it acted diligently as per Rule 

16(b)(4), the inquiry ends. Johnson, 975 F.2d at 609.

IV. CONCLUSION & ORDER

Plaintiff’s motion to amend the scheduling order is DENIED. [Doc. 203.]

IT IS SO ORDERED.

Dated: June 18, 2019

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