1 – OPINION & ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

VESTA CORPORATION, 

No. 3:14-cv-1142-HZ

Plaintiff,

OPINION & ORDER

v.

AMDOCS MANAGEMENT 

LIMITED and AMDOCS, INC., 

Defendants.

Erick J. Haynie

Daniel T. Keese

Joanna T. Perini-Abbott

Stephen English

Julia E. Markley

Meredith Price

PERKINS COIE, LLP 

1120 NW Couch Street, 10th Floor 

Portland, OR 97209

Indra Neel Chatterjee

Andrew Ong

ORRICK, HERRINGTON & SUTCLIFFE LLP

1000 Marsh Road

Menlo Park, CA 94025

Attorneys for Plaintiff

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Andrew G. Klevorn

Bruce G. Vanyo

Yonaton M. Rosenzweig

Christina Lucen Costley

KATTEN MUCHIN ROSENMAN, LLP

2029 Century Park East, Suite 2600 

Los Angeles, CA 90067

Kristin J. Achterhof

Meegan I. Maczek

Richard H. Zelichov

KATTEN MUCHIN ROSENMAN, LLP

525 West Monroe Street

Chicago, IL 60661

Joshua L. Ross 

Robert A. Shlachter

Timothy S. DeJong

STOLL STOLL BERNE LOKTING & SHLACHTER, PC

209 SW Oak Street, Fifth Floor 

Portland, OR 97204 

Attorneys for Defendants

HERNÁNDEZ, District Judge:

Plaintiff Vesta Corporation moves to file a Third Amended Complaint (TAC) in this 

breach of contract and misappropriation of trade secrets case. Defendants Amdocs Management 

Limited and Amdocs, Inc. contend that allowing Plaintiff to amend the complaint would 

prejudice Defendants and cause undue delay. For the reasons that follow, the Court grants 

Plaintiff’s motion.

PROCEDURAL BACKGROUND

Plaintiff filed this action in state court in June of 2014 and Defendants removed the case 

to federal court on July 17, 2014. Notice of Removal, ECF 1. The original complaint brought 

claims of breach of contract, theft of trade secrets, and fraud. Compl., ECF 1-1. This Court 

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granted in part and denied in part Defendants’ motion to dismiss Plaintiff’s complaint and, on 

January 13, 2015, dismissed Plaintiff’s fraud claim. Opinion & Order, Jan. 13, 2015, ECF 42. 

On April 7, 2015, Plaintiff filed a First Amended Complaint (FAC), in which Plaintiff 

made several changes to the original complaint. FAC, ECF 52. Plaintiff added three antitrust 

claims, removed the fraud claim, and made changes to the damages allegations in its breach of 

contract claim. Id. On September 3, 2015, this Court granted Defendants’ motion to dismiss 

Plaintiff’s antitrust claims. Opinion & Order, Sept. 3, 2015, ECF 97.

On December 2, 2015, this Court granted Plaintiff leave to file an amended complaint to 

remove an inaccurate statement in the First Amended Complaint. Order, Dec. 2, 2015, ECF 146. 

In that order, the Court noted:

Plaintiff’s proposed complaint still includes claims which were dismissed by this Court 

on September 3, 2015. . . Plaintiff is directed to file an amended complaint which 

accurately reflects the claims that remain in this case within 7 days of this Order. 

Id.

On December 9, 2015, Plaintiff filed a Second Amended Complaint (SAC) in which 

Plaintiff removed the inaccurate statement in ¶ 40 of the FAC and removed all of the antitrust 

claims. However, Plaintiff did not remove all of the factual allegations relating to the antitrust 

claims, which spurred Defendants to file a motion to strike allegations in the SAC. Mot. Strike, 

Dec. 21, 2015, ECF 159.

On December 29, 2015, the Court entered an order striking several paragraphs of the

SAC because Plaintiff did not have leave of Court or consent of Defendants to convert its prior 

antitrust allegations into trade secret misappropriation allegations. Order, Dec. 29, 2015, ECF 

162. Plaintiff was directed to file an amended complaint within 10 days that complied with the 

order and removed “factual allegations and claims that were included in Plaintiff’s First 

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Amended Complaint as part of Plaintiff’s now-dismissed antitrust claims.” Id. Plaintiff was 

further directed that, if it wished to amend its complaint in any other way, it must seek leave to 

amend pursuant to Rule 15. Id. Pursuant to the Court’s order, Plaintiff filed a Corrected Second 

Amended Complaint (CSAC) on January 8, 2015. CSAC, ECF 166. 

On January 27, 2015, Plaintiff filed the present motion for leave to file a Third Amended 

Complaint (TAC). Mot. Leave. Am., ECF 171. 

FACTUAL BACKGROUND

Plaintiff is an electronic payments and fraud prevention technology company. CSAC 

Intro. Defendants are telephone billing software and services companies. Id. Both Plaintiff and 

Defendants provide services to national and international mobile phone network operators 

(MNOs). Id. at ¶¶ 7-8.

Plaintiff’s original complaint, filed in June of 2014, alleged that the parties had 

collaborated on numerous occasions to integrate their services and platforms in order to appeal to 

their shared customer base. Compl. ¶¶ 13-14. In the course of jointly collaborating on marketing 

and the possibility of acquisition, Plaintiff shared information with Defendants including 

“proprietary information about [Plaintiff’s] payment solution” and “confidential and proprietary 

business and financial information.” Id. at ¶¶ 17, 23. Plaintiff alleged that Defendants stole 

Plaintiff’s proprietary information to develop, market, and sell a “copycat payments solution” 

that it sold to MetroPCS (an MNO). Id. at ¶ 45. Plaintiff also alleged that Defendants were 

“actively marketing [their] copycat payment solution to other potential buyers.” Id. at ¶ 50. In 

addition, Plaintiff alleged that Defendants used Plaintiff’s “confidential risk information” to price 

their services in a way to competitively and unfairly advantage Defendants and to make a 

decision regarding their offer to sell a payments solution to MetroPCS. Id. at ¶¶ 95-96. The 

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Complaint did not allege that Defendants had stolen any other customer or potential customer, 

besides MetroPCS, from Plaintiff. However, as to damages, the Complaint pled damages as to 

the lost revenue on the MetroPCS account as well as “other damages . . . including lost revenue 

on other accounts.” Id. at ¶¶ 70, 77, 86, 97.

In September of 2014, Plaintiff learned that Sprint (another MNO) had selected 

Defendants to replace Plaintiff as Sprint’s vendor for prepaid wireless payment processing. TAC 

¶ 58. In April of 2015, Sprint finished the transition of its payment services to Defendants. Id. at 

¶ 59. Also, in late 2014, Plaintiff learned that T-Mobile (another MNO) had selected Plaintiff and 

Defendants as the two final bidders to provide payment processing to T-Mobile. Id. at ¶¶ 61, 62. 

While Plaintiff ultimately won the bid, it had to significantly lower its price to compete with 

Defendants and avoid being foreclosed from the marketplace. Id. at ¶ 63. 

The business dealings with Sprint and T-Mobile occurred while the parties were litigating 

Defendants’ first motion to dismiss, which was filed on September 15, 2014 and resolved on 

January 13, 2015. See ECF 25, 42. Plaintiff contends that, because the motion to dismiss was 

pending, Plaintiff did not immediately seek to amend the Complaint to add allegations regarding 

Sprint and T-Mobile when it learned of the allegedly offending behavior.

In April 2015, Plaintiff filed its FAC, which included three new antitrust claims. In 

support of the new claims, Plaintiff added factual allegations relating to Defendants’ conduct 

with Sprint and T-Mobile. FAC, ¶¶ 128-37. However, Plaintiff did not add factual allegations 

related to Sprint and T-Mobile to the breach of contract and trade secret misappropriation claims. 

Plaintiff did amend its allegations of damages to encompass damages from lost profits on 

“various accounts,” instead of only the MetroPCS account. Id. at ¶¶ 153, 160. 

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In May of 2015, Defendants filed a motion to dismiss Plaintiff’s antitrust claims. Mot. 

Dismiss, ECF 65. This Court granted Defendants’ motion on September 3, 2015. However, for 

reasons described in the “Procedural Background” section above, Plaintiff did not file a second 

amended complaint until December of 2015 and did not file a corrected second amended 

complaint that removed all of the factual allegations related to the antitrust claims until January 

of 2016. 

On January 27, 2016, Plaintiff moved for leave to file the third amended complaint at 

issue in this motion. The TAC includes factual allegations regarding Defendants’ alleged use of 

Plaintiff’s confidential information to obtain contracts with MetroPCS and Sprint, and to trigger 

a bidding war over the T-Mobile business. TAC ¶¶ 55-63. The TAC also expressly alleges 

damages suffered on accounts with MetroPCS, Sprint, and T-Mobile. Id. at ¶¶ 75, 82, 92, 104. 

The information that Plaintiff seeks to include in the TAC is nearly identical to language 

Plaintiff included in the FAC and SAC, which this Court ordered Plaintiff to remove because it 

had been added in connection with the antitrust claims that were dismissed. In other words, 

Plaintiff initially added these allegations in the antitrust claims in the FAC, left them in the SAC, 

removed them upon order of the Court in the CSAC, and now seeks leave to add them to the 

trade secret and breach of contract claims in the TAC. Plaintiff argues that it intended all along 

for the allegations to relate to both the trade secret and breach of contract claims that remain in 

the case, as well as the dismissed antitrust claims. 

STANDARDS

Under Federal Rule of Civil Procedure 15, if a party cannot amend as a matter of course 

under Rule 15(a)(1), “a party may amend its pleading only with the opposing party's written 

consent or with the court's leave.” Fed. R. Civ. P. 15(a)(2). “The court should freely give leave 

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when justice so requires.” Id. However, the 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. v. Dialysist West, Inc., 465 F.3d 

946, 951 (9th Cir. 2006). “When a district court has already granted a plaintiff leave to amend, 

its discretion in deciding subsequent motions to amend is particularly broad.” Chodos v. West 

Publ'g Co., Inc., 292 F.3d 992, 1003 (9th Cir. 2002).

DISCUSSION

The primary issue is whether allowing Plaintiff to file a third amended complaint would 

produce an undue delay in litigation and prejudice Defendants. In addition, Defendants argue

that Plaintiff’s motion is sought in bad faith.1

I. Undue Delay and Prejudice

Defendants argue that Plaintiff unduly delayed in seeking leave to amend and that 

granting Plaintiff’s motion would disturb the trial schedule. Undue delay alone is not a sufficient 

ground for denying leave to amend. Hurn v. Retirement Fund Trust of the Plumbing, Heating and 

Piping Industry, 648 F.2d 1252, 1254 (9th Cir. 1981). However, the time and expense of 

continued litigation, with the possibility of additional discovery, can cause prejudice. Jackson v. 

Bank of Hawaii, 902 F.2d 1385, 1387-88 (9th Cir. 1990) (explaining that undue delay must be 

accompanied by prejudice); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160-61 

(9th Cir. 1989) (putting the defendant “through the time and expense of continued litigation on a 

new theory, with the possibility of additional discovery,” would cause undue prejudice). 

Prejudice to the opposing party carries the “greatest weight” in determining whether to deny 

leave to amend. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

 1 Defendants also assert that Plaintiff’s amendments are futile; however, they do not present any argument 

on this assertion. Defs.’ Opp. Pl. Mot. Leave Am. 14, ECF 189.

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Plaintiff included the factual allegations regarding Sprint and T-Mobile in the FAC in 

April of 2015. However, this TAC is the first time that Plaintiff includes the allegations as part of 

its breach of contract and trade secret misappropriation claims. Defendants portray Plaintiff’s 

attempt to add allegations regarding Sprint and T-Mobile as an excessively delayed effort 

because Plaintiff knew about the relevant facts over year ago. 

Plaintiff learned that Sprint selected Defendants to replace Plaintiff as Sprint’s vendor for 

prepaid wireless payment processing in September 2014; the replacement was complete in April 

of 2015. Perini-Abbott Decl. Ex. 1, ECF 2042; TAC ¶ 59. In the “latter half” of 2014, Plaintiff 

suffered a loss when it agreed to significantly lower its bid for T-Mobile business to compete 

with Defendants to provide a payment processing solution to T-Mobile. TAC ¶¶ 61-63. On April 

7, 2015, Plaintiff filed its FAC, which included the Sprint and T-Mobile allegations as part of its 

antitrust claims. Therefore, there was little to no delay from when Plaintiff knew of the alleged 

damage caused by Defendants’ behavior with Sprint and T-Mobile to when Plaintiff included 

these allegations in its FAC. 

Plaintiff argues that the FAC language was enough to put Defendants on notice that the 

breach of contract and trade secret misappropriation claims incorporated the allegations 

regarding Sprint and T-Mobile because Plaintiff amended its damages allegations to state that it 

suffered profits and royalties on “various accounts” and the breach of contract and trade secret 

misappropriation claims included language that incorporated all the preceding paragraphs. See

 2 Plaintiff’s FAC stated that Plaintiff learned that Sprint had selected Defendants “in or about June 2014.” 

FAC ¶ 129. However, Plaintiff’s Reply states that Plaintiff actually learned this information in September 

2014. Pl. Reply 4. Defendants argue that Plaintiff is judicially estopped from changing the date of this 

allegation. The Court finds no “unfair detriment” to Defendants by accepting Plaintiff’s September 2014 

date, because the key fact for the Court’s consideration is that Sprint’s selection of Defendants was 

complete in April of 2015. See New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (listing factors courts 

consider in a judicial estoppel analysis).

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FAC ¶¶ 142, 164 (“Vesta repeats and realleges each of the allegations in the preceding 

paragraphs as if fully set forth herein.”). 

Plaintiff also contends that the parties’ conduct in discovery thus far demonstrates that 

Defendants were on notice of the inclusion of the Sprint and T-Mobile allegations in Plaintiff’s 

case. Defendants respond that “discovery is not substitute for a complaint,” and explain that 

Defendants included Sprint and T-Mobile on the eDiscovery search term list because the nature 

of Plaintiff’s contacts with those clients is relevant to Plaintiff’s trade secret claim. 

The Court concludes that neither the FAC nor the parties’ discovery conduct clearly 

includes the Sprint and T-Mobile allegations as part of the breach of contract and trade secret 

misappropriation claims. While the Court does not imply that Plaintiff unduly delayed 

incorporating such allegations in a complaint, it is clear that Plaintiff is now, for the first time, 

expressly seeking to include these allegations in claims other than antitrust claims.

The issue, therefore, hinges upon whether Defendants would be prejudiced by such an 

addition at this point in the litigation. Defendants argue that they will be substantially prejudiced 

if Plaintiff is allowed leave to amend its complaint because such amendments will double the 

scope of the case and require Defendants to redo hundreds, if not thousands, of hours of 

document collection and witness interviews. Defs.’ Opp. 11, ECF 189. Plaintiff counters that 

Defendants will not be prejudiced because none of the work they have already performed will go 

to waste. Plaintiff argues that it is “simply adding to its damages theory,” not changing its legal 

theory. Pl.’s Reply 8-9. 

In support of their arguments, both parties cite to a case in which this Court granted a 

motion for leave to amend: Cedano v. Thrifty Payless, Inc., No. CV-10-237-HZ, 2011 WL 

5117930 (D. Or. Oct. 25, 2011). In that case, Plaintiff Cedano brought a class action suit against 

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his employer, Rite Aid, alleging that he had been misclassified as an assistant store manager 

exempt from overtime wages in violation of Oregon’s wage and hour laws. Id. at *1. After 

Cedano’s counsel lost contact with Cedano, counsel sought leave to amend to add a new plaintiff 

and class representative. Id. at *2. The Court found that there was no undue delay where the 

motion to amend was filed approximately three months before the close of the class certification 

discovery deadline and not on the eve of any dispositive motion proceeding. Id. at*3-4. As to 

prejudice, even though the defendants had spent fifty hours investigating Cedano, the defendants 

would not be unduly prejudiced because little discovery had taken place, no motion to dismiss 

had been filed or considered by the Court, the underlying claim would not be rendered moot by 

the addition of a new class representative, the motion to amend was not in violation of any 

scheduling order deadlines nor was it filed on the eve of trial, the motion to amend would not 

expand the scope of litigation, and the action had been pending for less than two years. Id. at *4-

6. 

Here, the parties agree that the fact discovery deadline in this case will need to be 

extended, regardless of whether Plaintiff is granted leave to amend. See Mot. Extend Case 

Schedule 2, ECF 211. Furthermore, Plaintiff represents that document discovery has yet to begin 

in earnest—the parties have exchanged a limited number of documents, but they have not yet 

undertaken the process of an e-discovery review and production. On March 4, 2016, the parties 

confirmed the search terms and custodians regarding Plaintiff’s Confidential Risk Information. 

However, no depositions have been noticed or taken. In addition, the parties have not engaged in 

discovery regarding Plaintiff’s Confidential Solutions Methods, because the parties have not 

agreed that Plaintiff has identified its trade secrets with sufficient particularity to comply with 

this Court’s order.

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In sum, as in Cedano, little discovery has taken place and the motion for leave to amend 

is not made on the eve of any dispositive motion proceeding. Undoubtedly, granting the motion 

for leave to amend in this case may significantly expand the scope of the case; however, 

considering the fact that the case schedule needs to be extended anyway in conjunction with the 

fact that Defendants, even if not on full notice, have had awareness of the Sprint and T-Mobile 

allegations in Plaintiff’s case since at least April of 2015, persuades the Court to find that 

Defendants will not be unduly prejudiced by this Court granting leave to amend. 

II. Bad Faith

The Court finds no evidence of bad faith or support for Defendants’ theory that Plaintiff

brings these amendments in order to circumvent a discovery order. 

CONCLUSION

The Court grants Plaintiff’s Motion for Leave to Amend to File a Third Amended 

Complaint [171]. Plaintiff is directed to file the Third Amended Complaint by April 12, 2016.

IT IS SO ORDERED.

Dated this ____________day of ________________________, 2016. 

________________________________________________

MARCO A. HERNÁNDEZ

United States District Judge

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