Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_02-cv-00748/USCOURTS-cand-3_02-cv-00748-5/pdf.json

Parties Involved:
1SourceAutoWarranty.com
Plaintiff
California Department of Insurance
Defendant
Harry W. Low
Defendant
PrimeGuard Insurance Company, Inc.
Plaintiff
Jon A. Tomashoff
Defendant

Document Text:

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

PRIMEGUARD INSURANCE COMPANY,

LTD. and

1SOURCEAUTOWARRANTY.COM,

Plaintiffs,

 v.

HARRY W. LOW, Insurance Commissioner of

the State of California; CALIFORNIA

DEPARTMENT OF INSURANCE; JON A.

TOMASHOFF,

Defendants.

 /

No. C 02-748 JSW

AMENDED ORDER DENYING

PLAINTIFFS’ MOTION FOR

LEAVE TO AMEND

Now before the Court is the motion for leave to amend filed by plaintiffs Primeguard

Insurance Company, Inc, and 1SourceAutoWarranty.com (“Plaintiffs”). The Court finds that this

matter is appropriate for disposition without oral argument and the matter is deemed submitted. 

See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for December 9, 2005 is VACATED. 

Having carefully considered the parties’ arguments and relevant legal authority, the Court

hereby DENIES the Plaintiffs’ motion for leave to amend. 

Plaintiffs seek to allege new legal theories under the Commerce Clause and the Equal

Protection Clause of the Fourteenth Amendment of the United States Constitution. Plaintiffs

already allege violations of the Commerce Clause and Equal Protection Clause in the amended

complaint they filed on September 18, 2002. According to Plaintiffs, the California Department 

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of Insurance (“CDOI”) has a “special project” wherein it pursues only out-of-state companies

doing business over the internet for compliance with California Insurance Code § 116(d). 

(Amended Complaint (Docket No. 43), ¶ 23.) Plaintiffs contend that the alleged selective

enforcement violates the Equal Protection Clause. (Id. at ¶ 28.) Plaintiffs also contend that the

alleged selective enforcement and Defendants’ enforcement of provisions of the California

Insurance Code outside of the boundaries of California violates the Commerce Clause. (Id. at ¶¶

29-30.)

In their proposed second amended complaint, Plaintiffs seek to allege additional theories

of constitutional violations. Plaintiff seeks to allege that California Insurance Code § 116(d)

violates the Equal Protection Clause by conferring a monopoly on California automobile dealers

to sell vehicle service agreements for economic protectionist purposes. (Proposed Second

Amended Complaint attached to the Declaration of Stephen A. Barber (“Proposed SAC”), ¶¶

31, 50.) Additionally, Plaintiff seeks to allege that Defendants are violating the Commerce

Clause by enforcing California Insurance Code § 116(d) to prohibit internet sellers of vehicle

service agreements from selling directly to California consumers. (Id. at ¶¶ 36, 53.)

Under the liberal notice pleading of Federal Rule of Civil Procedure 8(a), a plaintiff only

needs to give fair notice of its claim so that the defendant can respond. Conley v. Gibson, 355

U.S. 41, 47-48 (1957). Moreover, a complaint need not allege all the legal theories on which

recovery is being sought. Crull v. GEM Ins. Co., 58 F.3d 1386, 1391 (9th Cir. 1995). Plaintiffs’

motion for leave to amend and Proposed SAC provide Defendants notice of their additional

legal theories. The Court concludes that given the liberal pleading standards, it is not necessary

for Plaintiffs to formally file another amended complaint. Defendants and the Court can address

Plaintiffs legal theories without such an amended pleading. Moreover, the Court concludes that

allowing amendment would further delay this case which was filed close to four years ago. 

Accordingly, the Court DENIES Plaintiffs’s motion for leave to amend.

Also pending before the court is Defendants motion to dismiss or, in the alternative, for

summary judgment. Although this motion already fully briefed, Defendants have not had an

opportunity to brief the legal theories Plaintiffs raised in its motion for leave to amend and

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Proposed SAC. Therefore, the Court ORDERS that Defendants shall file an amended motion to

dismiss, or in the alternative for summary judgment, by no later than December 9, 2005. 

Plaintiffs shall file an opposition to Defendants’ amended motion by no later than December 23,

2005. Defendants shall file an amended reply by no later than December 30, 2005. The Court

HEREBY CONTINUES Defendants’ motion from January 6, 2006 to January 13, 2006. The

Court FURTHER ORDERS that the Case Management Conference currently set for December

9, 2005 is CONTINUED to January 13, 2006 immediately following the hearing on Defendants’

motion at 9:00 a.m.

IT IS SO ORDERED.

Dated: November 21, 2005 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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