Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00201/USCOURTS-caed-2_16-cv-00201-6/pdf.json

Parties Involved:
CSG
Defendant
California State Grange
Defendant
Robert McFarland
Defendant
National Grange of the Order of Patrons of Husbandry
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

THE NATIONAL GRANGE OF THE 

ORDER OF PATRONS OF 

HUSBANDRY, a District of 

Columbia nonprofit 

corporation,

Plaintiff,

v.

CALIFORNIA STATE GRANGE, a 

California corporation, d/b/a 

“CSG,” and ROBERT McFARLAND, 

a California resident,

 Defendants.

Civ. No. 2:16-201 WBS AC

ORDER

----oo0oo----

On February 1, 2016, plaintiff initiated this action, 

alleging claims for (1) false designation of origin under the 

Federal Trademark Act of 1946 (“Lanham Act”), 15 U.S.C. 

§ 1125(a)(1)(A); (2) false advertising under the Lanham Act, 15 

U.S.C. § 1125(a)(1)(B); (3) false advertising under California 

Business and Professions Code § 17500; (4) trade libel under 

California law; (5) intentional interference with contractual 

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relations under California law; and (6) copyright infringement, 

17 U.S.C. § 106. (Docket No. 1.) Pursuant to Federal Rule of 

Civil Procedure 15(a), plaintiff now seeks leave to amend its 

Complaint to (1) add a new claim for federal trademark 

infringement under the Lanham Act, 15 U.S.C. § 1114(1)(a); (2) 

add a new claim for infringement of plaintiff’s unregistered logo 

and trade dress under the Lanham Act, 15 U.S.C. § 1125(a)(1); (3) 

add state law claims for trespass and conversion; (4) amend its 

prayer for relief to more specifically address defendants’ 

alleged wrongdoing; and (5) add plaintiff’s currently-chartered 

California chapter, the California State Grange, as a plaintiff. 

(See Pl.’s Proposed First Amended Compl. (Docket No. 55-2); Pl.’s 

Mem. at 3:25-7:18 (Docket No. 55-1).)1

“Rule 15(a) is very liberal and leave to amend ‘shall 

be freely given when justice so requires.’” AmerisourceBergen 

Corp. v. Dialysist W., Inc., 465 F.3d 946, 951 (9th Cir. 2006); 

see also United States v. Hougham, 364 U.S. 310, 316 (1960) 

(discussing the “liberal rules governing the amendment of 

pleadings” and how Rule 15 “was designed to facilitate the 

amendment of pleadings”); Eminence Capital, LLC v. Aspeon, Inc., 

316 F.3d 1048, 1051 (9th Cir. 2003) (emphasizing that Rule 15’s 

policy that “leave shall be freely given when justice so requires 

. . . is to be applied with extreme liberality”) (internal 

quotation marks and citation omitted). As the Supreme Court has 

 

1 Having read the parties’ briefs, the court concludes 

that oral argument is unnecessary. The court will therefore 

vacate the hearing set for August 22, 2016 and take the matter 

under submission pursuant to Eastern District Local Rule 230(g).

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explained, “[t]he Federal Rules reject the approach that pleading 

is a game of skill in which one misstep by counsel may be 

decisive to the outcome and accept the principle that the purpose 

of pleading is to facilitate a proper decision on the merits.” 

Hougham, 364 U.S. at 317 (internal quotation marks and citation 

omitted). A district court may nonetheless decline to grant 

leave to amend under Rule 15(a) 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. 

Although defendants oppose plaintiff’s motion to amend, 

none of their arguments pass muster under Rule 15(a)’s liberal 

standard and the policy favoring resolution of cases on the 

merits. Defendants’ primary theory of prejudice is that they 

should not have to expend resources to defend against plaintiff’s 

“newly evolving theories” regarding defendants’ compliance with 

the permanent injunction issued in the related predecessor case, 

National Grange of the Order of Patrons of Husbandry v. 

California State Grange, No. 2:14-CV-676 WBS AC. (See Defs.’ 

Opp’n at 6:7-14 (Docket No. 72).) Plaintiff’s “newly evolving 

theories,” however, would not be necessary if defendants did not 

continually find creative ways to comply with the language of the 

injunction while still attempting to reap the benefits of the 

California State Grange’s former affiliation with plaintiff. 

The court is also not persuaded that plaintiff is 

seeking leave to amend in bad faith or that giving plaintiff 

leave to amend will unduly delay the litigation. Plaintiff 

sought leave to amend less than four months after initiating this 

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action and the court has yet to set a trial date or deadlines for 

discovery and dispositive motions. The Status (Pretrial 

Scheduling) Conference is currently set for November 7, 2016,

which allows the court and parties to create a schedule based on 

the claims and allegations in the First Amended Complaint. 

Lastly, and as numerous courts have explained, “denial 

of leave to amend on futility grounds alone is rare.” Harris v. 

Chipotle Mexican Grill, Inc., No. 2:13-CV-2472 WBS EFB, 2014 WL 

2993796, at *4 (E.D. Cal. July 2, 2014); see also Duhn Oil Tool, 

Inc. v. Cooper Cameron Corp., No. 1:05-CV–1411 OWW GSA, 2010 WL 

596312, at *14 (E.D. Cal. Feb. 16, 2010) (“[D]enial on [the 

ground of futility] is rare and courts generally defer 

consideration of challenges to the merits of a proposed amended 

pleading until after leave to amend is granted and the amended 

pleading is filed.”); Netbula v. Distinct Corp., 212 F.R.D. 534, 

539 (N.D. Cal. 2003) (“Ordinarily, courts will defer 

consideration of challenges to the merits of a proposed amended 

pleading until after leave to amend is granted and the amended 

pleading is filed.”). The merits of plaintiff’s claims are

better addressed through the normal procedures designed to test 

the sufficiency of allegations or evidence. 

In light of Rule 15(a)’s liberal standard and the 

policy in favor of deciding cases on the merits, the court will 

grant plaintiff’s motion for leave to amend the Complaint.

IT IS THEREFORE ORDERED that:

(1) plaintiff’s motion for leave to amend, (Docket No. 55), 

be, and the same hereby is, GRANTED and plaintiff shall file its 

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First Amended Complaint within three days of the date of this 

Order; 

(2) defendants’ pending motions to dismiss and motion to 

strike the original Complaint, (Docket Nos. 20, 21, 32), be, and 

the same hereby are, DENIED without prejudice to them being refiled in light of plaintiff’s First Amended Complaint; and 

(3) plaintiff shall withdraw its pending motion for a 

preliminary injunction, (Docket No. 54), and may file an amended 

motion for preliminary injunction in light of its First Amended 

Complaint. Any amended motion for preliminary injunction shall 

be filed no later than August 22, 2016 if plaintiff wants the 

amended motion heard on September 19, 2016, which is the hearing 

date set for its pending motion for preliminary injunction. 

Dated: August 16, 2016

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