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finding it "premature" to consider the legal sufficiency of the plaintiff's amended complaint "under the guise of considering Defendants' Opposition"
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No. 2:10-cv-02478-MCE-KJN.
October 19, 2011
MEMORANDUM AND ORDER
Presently before the Court is Relators Derek Hoggett and Tavis Good's (together "Relators") Motion for Leave to File Second Amended Complaint [ECF No. 27]. Also pending is Defendants University of Phoenix and Apollo Group, Inc.'s (together "Defendants") Motion to Dismiss [ECF No. 12].
Defendants filed their Motion to Dismiss on July 12, 2011. At that time, the operative pleading was Relators' original (corrected) Complaint. On August 5, without leave of court and without a stipulation from Defendants, Relators filed a First Amended Complaint ("FAC"). On August 15, having found that Relators' FAC was not timely filed, the Court ordered it stricken without prejudice to refiling upon either: 1) an order of the Court issued in response to a properly noticed motion for leave to amend; or 2) the stipulation of the parties. On August 30, Relators' responded by filing the present Motion for Leave to File Second Amended Complaint ("SAC"), which adds twenty-two paragraphs of details to the original Complaint. Defendants declined to stipulate to the filing of the SAC and oppose Relators' motion to amend.
Relators sought and obtained leave to correct their original Complaint on the basis that two pages were incorrectly included from another complaint [see ECF No. 4].
"The standard for granting leave to amend is generous."Balistreri v. Pacifica Police Dept., 901 F.2d 696, 701 (9th Cir. 1990). When a party seeks leave of the court, "[t]he court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). "This policy is to be applied with extreme liberality."Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation and citation omitted)). "Five factors are taken into account to assess the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint." Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). Although the Court considers each factor, "[f]utility alone can justify the denial of a motion to amend." Id.
In their Opposition, Defendants argue that Relators' Motion for Leave to File Second Amended Complaint is untimely and that any amendment would be futile. They do not allege bad faith on Relators' part and they do not contend that they will experience any prejudice if Relators are permitted to amend.
Regarding timeliness, Defendants argue that this Court only gave Relators until August 23 to file their motion to amend, and that the instant motion was not filed until August 30. This, however, is incorrect. The Court did not clearly specify a date for the filing of a motion to amend. Therefore Relators' motion is not untimely. The Court granted Relators leave to amend upon the filing of a properly noticed motion, which the Relators have now done.
Defendants also allege that any amendment would be futile. They contend that Relators' proposed SAC violates the first-to-file rule because Relators allege conduct that was already litigated in United States ex. Rel. Hendow v. Univ. of Phoenix, No. 2:03-cv-0457-GEB-DAD (E.D. Cal. 2009) and they argue that Relators' supplemental allegations are implausible and are contradicted by exhibits that Defendants attach to their Opposition. In other words, Defendants' Opposition attacks the legal sufficiency of Relators' claims and is, in essence, a supplement to Defendants' previously filed Motion to Dismiss.
The Court, however, finds that amendment would not be futile. "[A] proposed amendment is futile only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988) (citation omitted)). "However, denial on this ground 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." Clarke v. Upton, 703 F. Supp. 2d 1037, 1043 (E.D. Cal. 2010) (citations omitted).
Although styled as a Second Amended Complaint, the Court has not yet permitted Relators to amend and the Court has not yet addressed the merits of Defendants' Motion to Dismiss, which is directed to the legal sufficiency of Relators' original (corrected) Complaint. The additional paragraphs that Relators added to their proposed SAC are presumably designed to counter the arguments raised in Defendants' Motion to Dismiss. But the Court has not yet considered the legal sufficiency of Relators' claims and finds it premature to do so under the guise of considering Defendants' Opposition. The Court therefore defers its consideration of the merits of Relators' claims until after the SAC has been filed and Defendants have had the opportunity to amend their Motion to Dismiss.
Because the Court concludes that none of the Johnson factors militate against amendment, Relators' Motion for Leave to File Second Amended Complaint is GRANTED. Because the operative pleading is now Relators' SAC, the Court denies Defendants' Motion to Dismiss as moot, but grants leave to amend.
IT IS SO ORDERED.