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Battle Born Munitions Inc. v. Dick's Sporting Goods, Inc.

United States District Court, W.D. Pennsylvania

October 22, 2019

BATTLE BORN MUNITIONS, INC., Plaintiff,
v.
DICK'S SPORTING GOODS, INC., Defendant.

          MEMORANDUM OPINION

          Nora Barry Fischer Senior U.S. District Judge.

         I. INTRODUCTION

         This commercial dispute between Plaintiff Battle Born Munitions, Inc., (“Battle Born”), and Defendant Dick's Sporting Goods, Inc., (“Dick's”), returns to the Court on competing motions involving Battle Born's Second Amended Complaint filed on September 1, 2019 which seeks to convert this lawsuit to a class action brought on behalf of hundreds of unidentified vendors asserting breach of contract claims against Dick's. (Docket No. 54). To that end, Dick's moves to strike the pleading as it was filed in violation of the Court's Case Management Order while Battle Born seeks leave of court to file it nunc pro tunc. (Docket Nos. 55; 60). The motions have been fully briefed and are now ripe for disposition. (Docket Nos. 55; 56; 60-62; 65). After careful consideration of the parties' positions, and for the following reasons, Battle Born's motion to amend [60] is denied, its Second Amended Complaint [54] is dismissed, and Dick's motion to strike [55] is denied, as moot.

         II. BACKGROUND

         As the parties are well familiar with the facts of this matter in light of the Court's prior rulings, the Court sets forth only those facts necessary to resolve the instant motions. (See Docket Nos. 35; 43). On May 3, 2019, this Court issued a Memorandum Opinion granting a Rule 12(b)(6) motion to dismiss filed by Dick's, and denying its corresponding Rule 12(f) motion to strike, as moot. (Docket No. 35). Specifically, the Court dismissed Battle Born's fraudulent inducement, negligent misrepresentation and Bilt-Rite claims and also partially dismissed its breach of contract claims to the extent that it sought consequential damages or lost profits, as such relief is barred by the parties' contract. (Id.). The Court held that its dismissal was with prejudice and denied Battle Born leave to amend its claims and damages a second time. (Id.). The Court subsequently denied Battle Born's motion requesting leave to certify the Court's Order and to permit an interlocutory appeal. (Docket No. 43).

         The Court held a case management conference on June 12, 2019 at which time a case management order was entered establishing a deadline for fact discovery of October 10, 2019 and a deadline for the filing of motions to amend pleadings and/or to add parties by September 1, 2019. (See Docket No. 49). The case was also referred to mediation as part of the mandatory Alternative Dispute Resolution Program. (Docket No. 50). During the case management conference, the parties briefly discussed the potential class action claim given a reference to same in their Rule 26(f) Report, (see Docket No. 44 at ¶ 9.d), and the Court provided them with a citation to its prior decision in Graham v. Progressive Direct Ins. Co., 271 F.R.D. 112 (W.D. Pa. Sep. 15, 2015) denying leave to amend for the purpose of adding a class action claim. The case was not resolved at the June 26, 2019 ADR session and the parties proceeded to fact discovery. In a joint status report filed on August 15, 2019, the parties reported that some documents and written discovery needed to be exchanged but that they “believe[d] discovery will be completed by the October 10, 2019 cut-off date.” (Docket No. 53).

         On September 1, 2019, Battle Born filed its Second Amended Complaint, without consent of Dick's or leave of court. (Docket No. 54). In its proposed class action, Battle Born seeks to bring breach of contract claims against Dick's on behalf of three separate classes of similarly situated vendors: vendors who involuntarily warehoused Dick's branded inventory due to Dick's failure to take delivery, as promised, within a commercially reasonable period; vendors against whom Dick's took improper payment discounts; and vendors against whom Dick's deducted chargebacks without justification. (Docket Nos. 54; 61). Dick's responded by moving to strike the pleading on September 6, 2019. (Docket Nos. 55; 56). Four days later, Battle Born filed a class action complaint against Dick's in the U.S. District Court for the District of Nevada, asserting fraud and statutory claims under Nevada law, (“Nevada lawsuit”). See Battle Born Munitions, Inc. v. Dick's Sporting Goods, Inc., Civ. A. No. 3:19-561, Docket No. 1 (D. Nev. Sept. 10, 2019). Without mentioning the Nevada lawsuit, Battle Born requested a seven-day extension of time to file its response to Dick's motion to strike, which the Court granted. (Docket Nos. 58; 59). On September 27, 2019, Battle Born filed a motion for leave to file its Second Amended Complaint, brief in support and a brief in opposition to the motion to strike. (Docket Nos. 60-61). Dick's submitted its brief in opposition on October 7, 2019. (Docket No. 65). No further briefing has been requested[1] and the Court considers the motions to be fully brief and ripe for disposition.

         III. LEGAL STANDARDS

         A party seeking leave to amend the pleadings after the deadline set by the Court's Case Management Order must satisfy the requirements of Rule 16(b)(4) of the Federal Rules of Civil Procedure. See Walker v. Centocor Ortho Biotech, Inc., 558 Fed.Appx. 216, 221-22 (3d Cir. 2014) (citing Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d Cir. 2010)). A Case Management Order “may be modified only for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4). Good cause requires a demonstration of due diligence. Race Tires Am., Inc., 614 F.3d at 84. “Many courts have recognized that ‘[w]here ... the party knows or is in possession of the information that forms the basis of the later motion to amend at the outset of the litigation, the party is presumptively not diligent.'” Graham, 271 F.R.D. at 119 (quoting Price v. Trans Union, LLC, 737 F.Supp.2d 276, 280 (E.D. Pa. 2010)).

         Only once the moving party demonstrates good cause under Rule 16(b)(4) can the Court consider the motion under Rule 15's standard. Cf. Walker, 558 Fed.Appx. at 221-22 (citing Race Tires Am., Inc., 614 F.3d at 84). “[A] party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). “The court should freely give leave when justice so requires.” Id. “[M]otions to amend pleadings should be liberally granted.” Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004) (citations omitted). “Leave to amend must generally be granted unless equitable considerations render it otherwise unjust.” Arthur v. Maersk, Inc., 434 F.3d 196, 200 (3d Cir. 2006) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). “Among the factors that may justify denial of leave to amend are undue delay, bad faith, and futility.” Id. (citing Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993)). “It is well-settled that prejudice to the non-moving party is the touchstone for the denial of [leave to file] an amendment.” Cornell & Co. v. Occupational Safety and Health Review Com'n, 573 F.2d 820, 823 (3d Cir. 1978) (citations omitted). “As to prejudice, the Court of Appeals has ‘considered whether allowing an amendment would result in additional discovery, cost, and preparation to defend against new facts or new theories.” Graham, 271 F.R.D. at 123 (citing Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001)). “Given the liberal standard under Rule 15(a), ‘the burden is on the party opposing the amendment to show prejudice, bad faith, undue delay, or futility.'” Id. (citing Chancellor v. Pottsgrove Sch. Dist., 501 F.Supp.2d 695, 700 (E.D. Pa. 2007)). The test under Rule 15(a) “is in the disjunctive, meaning that if [Defendants] meet[ ] [their] burden to prove any one of these elements, the [amendment] should not be permitted.” Id.

         IV. DISCUSSION

         The parties dispute whether Battle Born has met its burden to demonstrate that it should be granted leave to file its Second Amended Complaint at this time. (Docket Nos. 55-56; 60-62; 65). Battle Born maintains that it has shown good cause for the proposed amendments and that Dick's will not be prejudiced by same because it was made aware of the potential class action at the outset of this litigation. (Docket Nos. 60-62). Dick's counters that it has been prejudiced by Battle Born's delays given that fact discovery was scheduled to end on October 10, 2019 and further asserts that this case should proceed as to the remaining breach of contract claim between these two entities only. (Docket Nos. 55-56; 65). Having considered the parties' positions, the Court holds that Battle Born has failed to demonstrate that its Second Amended Complaint should be permitted under the prevailing standards governing motions under both Rule 15 and Rule 16. See Graham, 271 F.R.D. at 119, 121. Therefore, its untimely motion to amend its complaint a second time to assert class action claims against Dick's will be denied. The Court's rationale follows.

         With respect to Rule 16, Battle Born has not established good cause for failing to adhere to the September 1, 2019 deadline to file motions to amend pleadings or add new parties and has not otherwise acted with diligence in pursuing its class action claims. As this Court has held previously,

“[c]arelessness, or attorney error, which might constitute ‘excusable neglect' under Rule 6(b), is insufficient to constitute ‘good cause' under Rule 16(b).” Likewise, tactical errors and delays by experienced attorneys, such as those made in this action, do ...

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