Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02953/USCOURTS-casd-3_12-cv-02953-2/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

BENCHMARK YOUNG ADULT 

SCHOOL, INC., 

 Plaintiff,

Case No. 12-cv-02953-BAS(BGS) 

ORDER GRANTING IN PART 

AND DENYING IN PART 

PLAINTIFF’S MOTION FOR 

LEAVE TO FILE FIRST 

SUPPLEMENTAL AND 

AMENDED COMPLAINT 

(ECF NO. 34) 

 v. 

LAUNCHWORKS LIFE SERVICES, 

LLC, et al., 

 Defendants. 

AND RELATED COUNTERCLAIM. 

On December 11, 2012, Plaintiff Benchmark Young Adult School, Inc. dba 

Benchmark Transitions (“Plaintiff”) commenced this action against Defendants 

Launchworks Life Services, LLC dba Mark Houston Recovery Center and 

Benchmark Recovery Center for federal trademark infringement, false designation 

of origin, unlawful trade name use, California common law trademark infringement, 

and unfair competition and unfair business practices. Plaintiff now moves for leave 

to file a first supplemental and amended complaint. (ECF No. 34.) Defendant 

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Launchworks Life Services, LLC dba Benchmark Recovery Center fka Mark 

Houston Recovery Center (“Defendant”) opposes. (ECF No. 41.)

The Court decides the matter on the papers submitted and without oral 

argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the Court GRANTS 

IN PART and DENIES IN PART Plaintiff’s motion for leave to file a 

supplemental and amended complaint. 

I. BACKGROUND 

On December 11, 2012, Plaintiff commenced this action, asserting claims for 

federal trademark infringement, false designation of origin, unlawful trade name use, 

California common law trademark infringement, and unfair competition and unfair 

business practices. (ECF No. 1 (“Complaint”).) On February 1, 2013, Defendant 

filed an Answer. (ECF No. 6.) Pursuant to a stipulation between the parties and 

Court order thereon, on July 3, 2013, Defendant filed an amended Answer and 

Counterclaim seeking a declaration of non-infringement and a declaration of 

unenforceability and/or invalidity. (ECF Nos. 23-26.) 

On June 5, 2013, Magistrate Judge Skomal issued the Case Management 

Conference Order Regulating Discovery and Other Pretrial Proceedings 

(“Scheduling Order”) in this matter which provided that the deadline to file any 

motion to amend the pleadings was June 29, 2013. (ECF No. 22.) On 

September 24, 2013, the parties jointly moved to continue several dates in the 

Scheduling Order, including the fact and expert discovery deadlines, because “due 

to technological snafus in the gathering and processing of electronically stored 

information, neither Party ha[d] produced responsive documents.” (ECF No. 27.) 

In their joint motion, the parties did not request an extension of time to file a motion 

to amend the pleadings. (See id.) On October 1, 2013, Magistrate Judge Skomal 

granted the joint motion, in part, which, among other things, extended the fact 

discovery deadline to November 29, 2013 and the expert discovery deadline to 

March 28, 2014. (ECF No. 28 (“Amended Scheduling Order”.) 

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On January 22, 2014, Plaintiff filed the present motion. (ECF No. 34 at p. 2.) 

Plaintiff initially sought leave to file a supplemental and amended complaint 

pursuant to Federal Rules of Procedure 15(a) and (d). (Id.) However, in its reply, 

Plaintiff concedes that it is only appropriate to seek leave to file an amended 

complaint. (ECF No. 42 (“Reply”) at p. 2, lines 10-12.) 

Plaintiff seeks to file an amended complaint to set forth new allegations 

concerning facts it claims it was unaware of “prior to filing the Complaint, and only 

recently discovered ... through discovery and investigation,” as well as a claim for 

increased damages. (ECF No. 34-1 (“Motion”) at pp. 1-3.) Specifically, Plaintiff 

seeks to add facts relating to Defendant’s “SEGUE BY BENCHMARK” program 

(“Segue Program”). (Id.) 

Defendant opposes Plaintiff’s Motion. (ECF No. 41.) This matter was taken 

under submission on February 24, 2014. (ECF No. 43.) Thereafter, on 

April 28, 2014, Defendant filed a motion for summary judgment or, in the 

alternative, summary adjudication (ECF No. 48) and Plaintiff filed a motion for 

summary judgment (ECF No. 55). Briefing has not completed on the summary 

judgment motions. Oppositions are due no later than July 7, 2014. (ECF No. 60.) 

On May 22, 2014, this case and all pending motions were transferred to Judge 

Bashant. (ECF No. 59.) 

II. LEGAL STANDARD 

In support of its motion,1

 Plaintiff cites Rule 15(a) of the Federal Rules of 

Civil Procedure, which provides that “a party may amend its pleading only with the 

 

1

 In its motion, Plaintiff also moved to file a supplemental complaint citing to 

Rule 15(d) of the Federal Rules of Civil Procedure, which provides that “the court 

may, on just terms, permit a party to serve a supplemental pleading setting out any 

transaction, occurrence, or event that happened after the date of the pleading to be 

supplemented.” Fed. R. Civ. P. 15(d); see also ECF No. 34 at p. 2. However, as 

noted above, Plaintiff conceded in its Reply that it is only appropriate to seek leave 

to file an amended complaint. (Reply at p. 2.) Therefore, the Court will not treat 

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opposing party’s written consent or the court’s leave” and leave shall be given freely 

when justice so requires. Fed. R. Civ. P. 15(a)(2). 

However, Rule 15 does not provide the initial standard under which the Court 

considers Plaintiff’s request to amend its complaint. After a scheduling order has 

been issued setting a deadline to amend the pleadings, as is the case here, and a party 

moves to amend the pleadings after the deadline, the motion amounts to one to 

amend the scheduling order and thus is properly brought under Rule 16(b) rather 

than Rule 15. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 

(9th Cir. 1992).2

Under Rule 16, a scheduling order “may be modified only for good cause and 

with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). The decision to modify a 

scheduling order is within the broad discretion of the district court. Johnson, 975 

F.2d at 607 (citation omitted). If good cause is shown, the court proceeds to 

consider the requirements of Rule 15(a). Id. at 608 (citing approvingly Forstmann v. 

Culp, 114 F.R.D. 83, 85 (M.D.N.C.1987), for its explication of this order of 

operations); C.F. v. Capistrano Unified School Dist., 656 F.Supp.2d 1190, 1192 

(C.D. Cal. 2009).

III. DISCUSSION 

 The Scheduling Order in this case set forth a pleading amendment deadline of 

June 29, 2013. (ECF No. 22 at ¶ 1.) The current motion was not filed until January 

22, 2014. Thus, Plaintiff is required to demonstrate good cause under Rule 16 for 

 

Plaintiff’s motion as one for leave to file a supplemental complaint. 

2

 While a court may deny as untimely a motion for leave to amend after a 

scheduling order deadline has passed, simply because the plaintiff did not request a 

modification of the scheduling order as well, the Court here, in an exercise of its 

discretion, declines to do so. Johnson, 975 F.2d at 608. Rather, the Court exercises 

its discretion to construe the instant motion as one to amend the scheduling order 

and for leave to file an amended complaint. 

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filing an amended pleading nearly seven months past the deadline. See Coleman v. 

Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2010). 

A. Rule 16 Analysis 

Under Rule 16(b)(4)’s good cause standard, the court’s primary focus is on 

the movant’s diligence in seeking the amendment. Johnson, 975 F.2d at 609. 

“Good cause” exists if a party can demonstrate that the scheduling order could not or 

“cannot reasonably be met despite the diligence of the party seeking the extension.” 

Id. (citations omitted). “[C]arelessness is not compatible with a finding of diligence 

and offers no reason for a grant of relief.” Id. “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 [Rule 16] inquiry is upon the moving party’s reasons 

for seeking modification.” Id. (citations omitted). The party seeking to continue or 

extend the deadlines bears the burden of proving good cause. See Zivkovic v. S. Cal. 

Edison Co., 302 F.3d 1080, 1087 (9th Cir.2002); Johnson, 975 F.2d at 608-09. 

In addressing the diligence requirement, one district court in this Circuit 

noted: 

[T]o demonstrate diligence under Rule 16’s “good cause” standard, 

the movant may be required to show the following: (1) that [it] was 

diligent in assisting the Court in creating a workable Rule 16 order..; 

(2) that [its] noncompliance with a Rule 16 deadline occurred or will 

occur, notwithstanding [its] diligent efforts to comply, because of the 

development of matters which could not have been reasonably 

foreseen or anticipated at the time of the Rule 16 scheduling 

conference...; and (3) that [it] was diligent in seeking amendment of 

the Rule 16 order, once it became apparent that [it] could not comply 

with the order.... 

Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D.Cal.1999) (internal citations 

omitted). If the district court finds a lack of diligence, “the inquiry should end.” 

Johnson, 975 F.2d at 609. If, however, the movant clears the Rule 16 bar, the Court 

proceeds to considering the motion under the usual standard of Rule 15. Campion v. 

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Old Republic Home Protection Co., Inc., 861 F.Supp.2d 1139, 1150 (S.D. Cal. 

2012).

Plaintiff asserts it was unaware of the Segue Program when it filed its 

Complaint on December 11, 2012. (Motion at p. 1.) Rather, Plaintiff claims it 

visited Defendant’s website at the outset of litigation but did not see any reference to 

the Segue Program, and only learned of the Segue Program later, on or about 

November 19, 2013, during the deposition of Defendant’s Director of Finance. 

(Motion at p. 2, ECF No. 34-3 (“Gubernick Decl.”) at ¶¶ 4-6). In response, 

Defendant argues the Segue Program was established prior to the filing of Plaintiff’s 

Complaint and “[d]etailed information regarding the [Segue Program] has been 

available on the Benchmark website since November 2011.” (ECF No. 41-1 

(“Opp.”) at p. 4, lines 2-4.) In support of this argument, Defendant attaches 

screenshots of its website from showing that a link to the Segue Program appeared 

on its website as early as November 15, 2011. (ECF Nos. 41-2 (“Amstutz Decl.”) at 

¶ 6; 41-4 (“Ex. C”) at p. 10.) Defendant also attaches screenshots of its website 

showing brief information about the Segue Program on its website from as early as 

January 18, 2012. (Amstutz Decl. at ¶ 6; Ex. C at pp. 37-38.) 

 Given the foregoing, the question is whether Plaintiff, acting diligently, could 

have reasonably met the June 29, 2013 deadline to amend the Complaint set forth in 

the Scheduling Order. Arguably, Plaintiff should have known the facts 

underpinning the new allegations it seeks to add prior to the filing of its initial 

Complaint. However, Plaintiff argues it did not see and/or understand the Segue 

Program until after the deposition on November 19, 2013, well past the amendment 

deadline set forth in the Scheduling Order.3

 (Reply at pp. 3-4.) The Court finds this 

 

3

 Defendant argues that Plaintiff was on notice of the Segue Program well 

before November 19, 2013 through discovery. In support of this argument, 

Defendant attached copies of over one hundred pages of documents to their 

Opposition relating to the Segue Program which were produced by Defendant to 

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argument plausible. Particularly as it appears Plaintiff was diligent in assisting the 

Court in creating a workable Scheduling Order, including seeking to modify the 

Scheduling Order through a joint motion when the parties experienced delays in 

producing documents (ECF No. 27), complied with the Scheduling Order in all other 

respects, and was diligent in seeking to amend the Complaint shortly after it 

discovered the new facts at issue. Moreover, there is no suggestion Plaintiff knew of 

the allegations prior to filing the Complaint or made a tactical decision at the outset 

of the litigation not to include the allegations in its initial Complaint. Cf Trans 

Video Electronics, Ltd. V. Sony Electronics, Inc., 278 F.R.D. 505, 508 (N.D. Cal. 

2011). Accordingly, the Court finds Plaintiff has sufficiently demonstrated “good 

cause” to amend the Scheduling Order. Because the Court finds that Plaintiff 

satisfies the requirements of Rule 16(b), the Court proceeds to consider the 

requirements of Rule 15(a). 

B. Rule 15 Analysis 

“Rule 15(a) is very liberal and leave to amend ‘shall be freely given when 

justice so requires.’” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 

946, 951 (9th Cir. 2006) (quoting Fed. R. Civ. P. 15(a)); see also Kaplan v. Rose, 49 

F.3d 1363, 1370 (9th Cir. 1994) (noting the “strong policy in favor of allowing 

amendment”). However, “a district court need not grant leave to amend where the 

amendment: (1) prejudices the opposing party; (2) is sought in bad faith; (3) 

produces an undue delay in litigation; or (4) is futile.” AmerisourceBergen Corp., 

465 F.3d at 951. These factors are not of equal weight as prejudice to the opposing 

party has long been held to be the most crucial factor in determining whether to 

grant leave to amend. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 

 

Plaintiff on September 26, 2013. (Amstutz Decl. at ¶ 4, Exhibits A(1)-(5).) 

However, these documents, produced in September 2013, would not have aided 

Plaintiff in meeting the June 29, 2013 deadline in the Scheduling Order. Nothing 

suggests Plaintiff was actually aware of the Segue Program prior to June 29, 2013. 

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(9th Cir. 2003); Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990); 

Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). The Court considers 

each of these factors in turn. 

1. Prejudice to the Opposing Party

The most critical factor in determining whether to grant leave to amend is 

prejudice to the opposing party. Eminence Capital, 316 F.3d at 1052 (“Prejudice is 

the touchstone of the inquiry under rule 15(a).”) (internal quotes and citation 

omitted)). The burden of showing prejudice is on the party opposing an amendment 

to the complaint. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 

1986). Prejudice must be substantial to justify denial of leave to amend. Morongo 

Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Under Rule 

15(a), [a]bsent prejudice, or a strong showing of any of the remaining [] factors,” 

there is a presumption in favor of granting leave to amend. Eminence Capital, 316 

F.3d at 1052. 

 Defendant argues it will suffer prejudice if Plaintiff is permitted to file an 

amended complaint and re-open discovery, because it would cost Defendant 

“considerable additional time and attorneys’ fees.” (Opp. at p. 5.) In its Opposition, 

Defendant focuses primarily on the prejudice that may be caused by re-opening 

discovery. (Id. at pp. 5-6.) Per the Amended Scheduling Order issued 

October 1, 2013, fact discovery in this matter closed on November 29, 2013 and 

expert discovery closed on March 28, 2014. (ECF No. 28.) This Motion was filed 

less than two months after fact discovery cut off on January 22, 2014. 

 Plaintiff argues “Defendant will not be prejudiced because the proposed 

amended pleading does not seek to radically change the course of this litigation; 

Plaintiff is not introducing new claims.” (Reply at p. 6, lines 2-4.) Moreover, 

Plaintiff argues “[t]he amendments do not suddenly render prior discovery 

meaningless, nor would the amendments require significant and expansive discovery 

and escalated costs associated therewith.” (Id. at lines 4-6.) Plaintiff offers that 

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“only limited discovery” into the Segue Program would be necessary, and the taking 

of only one deposition of Defendant’s person most knowledgeable concerning the 

Segue Program. (Id. at lines 6-9.) 

The Court is not persuaded that Defendant will suffer prejudice should 

Plaintiff be permitted to file an amended complaint. The proposed amended 

complaint does not add a new party or new causes of action, or significantly change 

the course of the litigation. Therefore, any additional discovery would be very 

limited. Moreover, as demonstrated in its Opposition, Defendant has already 

produced well over one hundred documents related to the Segue Program, including 

multiple internal communications, drafts, and brochures regarding the program. 

(Opp. at pp. 2-3; Amstutz Decl. at ¶ 4, Exhibits A(1)-(5).) Thus, to the extent 

additional discovery is required to flesh out the new allegations, much of the work 

on the part of Defendant has already been done and the discovery costs incurred. 

Accordingly, this factor favors amendment.4

 

 2. Undue Delay

“Undue delay is a valid reason for denying leave to amend.” Contact Lumber 

Co. v. P.T. Moges Shipping Co., 918 F.2d 1446, 1454 (9th Cir. 1990). Delay, by 

itself, however, does not always justify denying leave to amend. DCD Programs, 

Ltd., 833 F.2d at 186–87. “Relevant to evaluating the delay issue is whether the 

moving party knew or should have known the facts and theories raised by the 

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

delay with no reasonable explanation is relevant where a proposed amendment 

would cause prejudice to the other party or would significantly delay resolution of 

 

4

 The Court acknowledges that the parties have already filed motions for 

summary judgment in this matter, which is a consideration in this analysis. But 

Plaintiff filed its motion well before the summary judgment motion deadline of 

April 28, 2014 (see ECF No. 28 at ¶ 6). Thus, the Court cannot, in good faith, 

weigh this factor against Plaintiff. 

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the case. Id. However, delay caused by the parties waiting until they had sufficient 

evidence of conduct upon which they could base claims of wrongful conduct is a 

reasonable explanation. DCD Programs, Ltd., 833 F.2d at 187. 

Plaintiff argues it “did not unduly delay in filing its Motion.” (Reply at p. 5, 

line 15.) In support of this argument, Plaintiff asserts it only learned of and/or 

understood the Segue Program ten days before fact discovery cut off and only 

waited until January 22, 2014 to file its motion “because it was not fully aware of 

the extent of Defendant’s use of SEGUE BY BENCHMARK.” (Id. at p. 5, lines 15-

17.) Thus, to the extent there was any delay, Plaintiff argues it was excusable. (Id. 

at p. 5, line 17.) Given the foregoing, the Court agrees there was no undue delay in 

filing this present motion. 

3. Bad Faith

A bad faith motive is a proper ground for denying leave to amend. Sorosky v. 

Burroughs Corp., 826 F.2d 794, 805 (9th Cir. 1987). Defendant argues “Plaintiff’s 

misrepresentations to the Court justify a finding of bad faith.” (Opp. at p. 6, line 3.) 

However, as previously stated, the Court finds Plaintiff’s argument that it did not see 

and/or understand the Segue Program until after the deposition on November 19, 

2013, plausible. Moreover, in light of the technical issues Plaintiff experienced 

searching the discovery (Reply at pp. 2-4; Gubernick Decl.; ECF No. 42-3), the 

Court finds no evidence that Plaintiff acted in bad faith in making representations to 

the Court. 

Defendant further argues that “the real motive behind the request for leave to 

amend is Plaintiff’s desire to retake the depositions of Defendant’s witnesses.” 

(Opp. at p. 5.) However, Defendant does not provide anything to substantiate this 

argument. Therefore, this factor weights in favor of granting Plaintiff leave to file an 

amended complaint. 

/// 

/// 

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4. Futility of Amendment

“Futility of amendment can, by itself, justify the denial of a motion for leave 

to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). “[A] proposed 

amendment is futile only if no set of facts can be proved under the amendment to the 

pleadings that would constitute a valid and sufficient claim or defense.” Sweaney v. 

Ada County, Idaho, 119 F.3d 1385, 1393 (9th Cir. 1997) (citation omitted). 

Plaintiff’s proposed amended complaint (ECF No. 34-2) alleges the same five 

causes of action as its initial complaint: (1) federal trademark infringement (15 

U.S.C. § 1114(1)); (2) false designation of origin (15 U.S.C. § 1125(a)); (3) 

unlawful trade name use (Cal. Bus. & Prof. Code §§ 14200, et seq.); (4) California 

common law trademark infringement (Cal. Bus. & Prof. Code §§ 14200 et seq.); and 

unfair competition and unfair business practices (Cal. Bus. & Prof. Code §§ 17200, 

et seq.) (“UCL”). To prevail on a trademark claim under the Lanham Act, a plaintiff 

must establish it has a protectable ownership interest in the mark and that the 

defendant’s use of the mark is likely to cause consumer confusion. Rearden LLC v. 

Rearden Commerce, Inc., 683 F.3d 1190, 1202 (9th Cir. 2012) (citation omitted). 

Plaintiff’s remaining claims are subject to the same legal standards. See id. at 1221; 

see also Murray v. Cable Natl. Broadcasting Co., 86 F.3d 858, 860 (9th Cir. 1996); 

Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 

944 F.2d 1446, 1457 (9th Cir. 1991); New West Corp. v. NYM Co. of California, 

Inc., 595 F.2d 1194, 1201 (9th Cir. 1979); E.& J. Gallo Winery v. Pasatiempos 

Gallo, S.A., 905 F.Supp. 1403, 1415 (E.D. Cal. 1994). 

The “likelihood of confusion” inquiry “generally considers whether a 

reasonably prudent consumer in the marketplace is likely to be confused as to the 

origin or source of the goods or services bearing one of the marks or names at issue 

in the case.” Rearden LLC, 683 F.3d at 1209. The Ninth Circuit employs eight 

factors (Sleekcraft factors) to determine whether there is a likelihood of confusion: 

(1) the strength of the mark; (2) proximity or relatedness of the goods; (3) similarity 

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of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type 

of goods and the degree of care likely to be exercised by the purchaser; (7) the 

defendant's intent in selecting the mark; and (8) likelihood of expansion of the 

product lines. Id. (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th 

Cir. 1979)). 

As in the initial Complaint, Plaintiff alleges in the proposed amended 

complaint that it is the owner of a federally registered service mark in “RECOVERY 

BY BENCHMARK.” (ECF 34-2 at ¶ 23.) Plaintiff’s new allegations include that 

Defendant’s advertising under the name “SEGUE BY BENCHMARK” which 

“mirrors” Plaintiff’s “RECOVERY BY BENCHMARK” name and offers services 

that “mirror” Plaintiff’s “RECOVERY BY BENCHMARK” services is likely to 

cause confusion and is a violation of each of the alleged causes of action.5

 Plaintiff 

further alleges it has suffered damages as a result. The Court finds these allegations 

sufficient to state a claim, therefore amendment would not be futile. Notably, 

Defendant does not argue in its Opposition that the new allegations are insufficient 

or that amendment would be futile. 

Weighing all of the factors, the Court finds that Plaintiff should be given leave 

to file an amended Complaint. 

IV. CONCLUSION & ORDER 

In light of the foregoing, the Court GRANTS IN PART and DENIES IN 

PART Plaintiff’s motion for leave to file a supplemental and amended complaint. 

The Court DENIES Plaintiff leave to file a supplemental complaint in the form 

attached to its Motion. However, the Court GRANTS Plaintiff leave to file a first 

amended complaint adding allegations related to the Segue Program consistent with 

this Order. If Plaintiff chooses to file an amended complaint, it must do so no later 

 

5

 See ECF 34-2 at ¶¶ 46-52, 58-60, 62, 64, 70-72, 75, 77, 83, 85-87, 90-91, 94-

95, 98, 100, 106, Prayer for Relief ¶¶ 2-3, 7(a)-(c), 8. 

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than July 10, 2014. If the parties wish to re-open discovery on a limited basis 

consistent with this Order following the filing of a first amended complaint and to 

continue the motion deadline, they must seek leave to do so from Magistrate Judge 

Skomal. 

IT IS SO ORDERED. 

DATED: July 3, 2014 

 

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