Court Opinion

ID: 4681107
Source: CourtListenerOpinion
Date Created: 2021-04-26 20:03:10.20742+00
Date Added: 2024-06-11T09:02:21.996663
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                        APR 26 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

JOHN DOE, ex rel. United States of              No.    20-55067
America,
                                                D.C. No.
                Plaintiff-Appellant,            8:18-cv-00270-JVS-DFM

and
                                                MEMORANDUM*
UNITED STATES OF AMERICA,

                Plaintiff,

 v.

VRATSINAS CONSTRUCTION
COMPANY, an Arkansas corporation; et al.,

                Defendants-Appellees,

and

VCC HOLDCO, INC.; et al.,

                Defendants.

                   Appeal from the United States District Court
                      for the Central District of California
                    James V. Selna, District Judge, Presiding

                       Argued and Submitted April 16, 2021
                              Pasadena, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: PAEZ and VANDYKE, Circuit Judges, and KORMAN,** District Judge.

      Relator in this False Claims Act (“FCA”) case appeals the district court’s

decision to dismiss his Fourth Amended Complaint with prejudice. “The trial

court’s denial of leave to amend a complaint is reviewed for an abuse of discretion.”

United States ex rel. Lee v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011).

We will not disturb the district court’s decision to deny leave to amend absent “a

definite and firm conviction that the district court committed a clear error of

judgment.” Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990) (internal

quotation omitted). We consider five factors when determining whether the district

court abused its discretion: “(1) bad faith, (2) undue delay, (3) prejudice to the

opposing party, (4) futility of amendment; and (5) whether plaintiff has previously

amended his complaint.” In re W. States Wholesale Nat. Gas Antitrust Litig., 715

F.3d 716, 738 (9th Cir. 2013) (internal quotation marks and citation omitted). After

carefully considering the relevant factors, we cannot conclude that the district court

abused its discretion.

      1.     “The district court’s discretion to deny leave to amend is particularly

broad where plaintiff has previously amended the complaint.” Allen v. City of

Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (internal quotation marks and

      **
             The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.

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citation omitted).   That is especially true where, as here, a plaintiff had an

opportunity to cure deficiencies identified by the district court and has failed to do

so. See Loos v. Immersion Corp., 762 F.3d 880, 890–91 (9th Cir. 2014).

      2.     The district court also found undue delay, “[g]iven that it is now over a

year and a half since [relator] filed his initial complaint, and the [number] of

amendments he has made to his complaint.” ER 24. “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. As the district court noted, relator “has offered no satisfactory explanation for

his failure to develop his contentions in the five prior iterations of the complaint

except to suggest that he did not have” the relevant information “because he had not

been able to gather [it] through discovery.” ER 25. Relator’s argument runs counter

to the purpose of subjecting FCA claims to the heightened pleading standard of Fed.

R. Civ. P. 9(b), which is to “deter the filing of complaints as a pretext for the

discovery of unknown wrongs.” United States ex rel. Swoben v. United Healthcare

Ins. Co., 848 F.3d 1161, 1180 (9th Cir. 2016) (internal quotation omitted).

      3.     “Prejudice to the opposing party is the most important factor” in

determining whether denying leave to amend is appropriate. Jackson, 902 F.2d at

1387. The district court found that there was evidence of prejudice to defendants.

The district court previously explained that defendants’ business is suffering from

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this prolonged litigation, which “certainly prejudices [d]efendants.” ER 9–10. And,

while the parties have not yet engaged in discovery, defendants have had to expend

resources to respond to multiple deficient complaints. The district court thus did not

commit clear error in concluding that there was prejudice here.

      4.     There is also evidence that relator conducted this litigation in bad faith.

Although the district court did not make a finding of bad faith, we may affirm the

denial of leave to amend when “it is apparent from the record” that there is reason

for doing so, even if the district court did not give a particular reason in its denial.

Lockman Found. v. Evangelical All. Mission, 930 F.2d 764, 772 (9th Cir. 1991).

Relator missed 11 deadlines throughout the course of the litigation, and the district

court noted that it was “troubled by [relator’s] careless disregard as to the Court’s

deadlines.” ER 10. Bad faith can be inferred from numerous missed deadlines. See

Foman v. Davis, 371 U.S. 178, 182 (1962) (comparing bad faith with “dilatory

motive”).

      Moreover, the district court was concerned with relator’s “clear disregard of

the Court’s prior order which granted leave to amend only for purposes of addressing

deficiencies in” the Third Amended Complaint. ER 24. Indeed, instead of following

the district court’s instructions, the Fourth Amended Complaint added two new

defendants and a claim for violation of the Sherman Act, 15 U.S.C. § 1. After the

Department of Justice sent a letter to the parties noting that it did not authorize relator

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to bring an antitrust action on behalf of the United States, and after defendants moved

to strike the Sherman Act Claim from the Fourth Amended Complaint, relator

voluntarily dismissed those defendants and the Sherman Act claim to avoid an

adverse ruling from the district court. Relator further demonstrates his bad faith by

seeking to reinstate the defendants and Sherman Act claim in his proposed Fifth

Amended Complaint.1

     5.      Having concluded that the other factors weigh in favor of defendants,

“we need not reach the futility point per se.” Jackson, 902 F.2d at 1388 & n.4 (undue

delay, combined with prejudice, sufficient to deny leave to amend); W. Shoshone

Nat’l Council v. Molini, 951 F.2d 200, 204 (9th Cir. 1991) (undue delay, combined

with prejudice and two prior amendments, sufficient to deny leave to amend).

     AFFIRMED.

1
 Relator asks us to take judicial notice of his Fifth Amended Complaint. Because
we treat the allegations as nothing more than a summary of what he would replead—
which could have been included in his brief—his motion to take judicial notice is
denied.

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