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LLC v. Syncom Space Services, LLC

United States District Court, E.D. Louisiana

May 12, 2017


         SECTION: “N” (4)



         Before the Court is a Motion to Amend Complaint (R. Doc. 22) filed by Plaintiff OJ's Janitorial Sweeping Service, LLC seeking permission from the Court to file a seconded amended complaint. The motion is opposed. R. Doc. 27. The motion was submitted on May 10, 2017. For the following reasons, the motion is GRANTED.

         I. Background

         This action was filed in the District Court on March 29, 2016 asserting claims under 42 U.S.C. § 1981 and the Louisiana Unfair Trade Practices Act. R. Doc. 1. The Plaintiffs Otis Jones and OJ's Janitorial Sweeping Service, LLC (“OJ's Janitorial”) alleges that Syncom Space Services, LLC (“S3”) was formed in order to bid on a Synergy Achieving Consolidated Operations and Maintenance contract (the “contract”) at two NASA facilities. Id. at p. 3. The Plaintiffs allege that S3 and PAE Applied Technologies, LLC (“PAE”) contacted the Plaintiffs seeking to have OJ's Janitorial participate in the bidding process for the custodial work to be performed. Id. at p. 3-4. The Plaintiffs allege that S3 and PAE was motivated to involve the Plaintiffs in order for their overall bid to be comprised of three precent HUBZone-certified small businesses as well as to appear to be a promoter of diversity given that OJ Janitorial's is HUBZOne-certified and owned by an African American. Id. at p. 5. The Plaintiffs further allege that S3 and PAE's interest in awarding the custodial work to OJ's Janitorial was merely a charade to ultimately award the contract to Madison Services, Inc., a white-owned company. Id.

         After S3 received the contract, S3 and PAE allegedly informed Jones and OJ's Janitorial that it was no longer being considered for the custodial work as a result of a bidding mistake. Id. at p. 7. The Plaintiffs also allege that that they were lied to again by the Defendants when they stated that OJ's Janitorial was withdrawn from consideration because of Jones's unprofessional conduct. Id. at p. 8. Moreover, after removing OJ's Janitorial from consideration, Madison was ultimately awarded the custodial work.

         As such, the Plaintiffs asserted claims under 42 U.S.C. § 1981 and the Louisiana Unfair Trade Practices Act. On April 28, 2016, the Plaintiffs filed an amended complaint seeking $300, 000 in punitive damages against each defendant for each plaintiff under 42 U.S.C. § 1981a(b)(3)(D) for a total of $1, 200, 000.00. On August 4, 2016, the District Court dismissed Jones's claims to § 1981 damages. R. Doc. 12.

         At this time, Plaintiff OJ's Janitorial seeks to file a second amended complaint in order to assert an additional action for breach of contract as well as dismiss the allegations in the amended complaint limiting OJ's punitive damages. R. Doc. 22. The Plaintiff argues that it should be allowed to file this amended complaint because it only recently became aware of a Teaming Agreement between the Plaintiff and PAE that creates this alternate avenue of relief and it was through its counsel's previous misunderstanding of punitive damages under § 1981 that it capped its damages. R. Doc. 22-1.

         The Defendants have opposed the motion arguing that it should be denied because it is untimely and because the Plaintiff has not demonstrated good cause for the untimely amendment. R. Doc. 27. In particular, the Defendants argue that the Plaintiff has not demonstrated good cause because: (i) the Plaintiff has been aware of the Teaming Agreement that gives rise to its breach of contract claim well before the deadline to amend; and (ii) the amended claim would seriously prejudice the Defendants given the increase in punitive damages claimed from $1, 200, 000 to $12, 000, 000. Id. at p. 1.

         II. Standard of Review

         Federal Rule of Civil Procedure 15(a) governs the amendment of pleadings before trial. Rule 15(a) allows a party to amend its pleadings “only with the other party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Moreover, the Rule urges that the Court “should freely give leave when justice so requires.” Id. In taking this liberal approach, the Rule “reject[s] the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.” Conley v. Gibson, 355 U.S. 41, 48 (1957).

         “Rule 15(a) requires a trial court ‘to grant leave to amend freely, ' and the language of this rule ‘evinces a bias in favor of granting leave to amend.'” Jones v. Robinson Prop. Grp., 427 F.3d 987, 994 (5th Cir. 2005) (internal quotations marks omitted) (quoting Lyn-Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir.2002)). When denying a motion to amend, the court must have a “substantial reason” considering such factors as “‘undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party ...and futility of the amendment.'” Marucci Sports, LLC v. Nat'l Collegiate Athletic Ass'n, 751 F.3d 368, 378 (5th Cir. 2014) (quoting Jones, 427 F.3d at 994). An amendment is deemed to be futile if it would be dismissed under a Rule 12(b)(6) motion. Id. (citing Briggs v. Miss., 331 F.3d 499, 508 (5th Cir 2003)).

         “[T]he Fifth Circuit [has] clarified that when, as here, a scheduling order has been issued by the district court, Rule 16(b) governs amendment of pleadings.” Royal Ins. Co. of America v. Schubert Marine Sales, 02-0916, 2003 WL 21664701, at *2 (E.D. La. July 11, 2003) (Englehardt, J.) (citing S & W Enterprises, L.L.C. v. Southtrust Bank of Ala., 315 F.3d 533, 535-36 (5th Cir.2003)). Rule 16(b) limits changes in the deadlines set by a scheduling order “only for good cause and with the judge's consent.” Fed.R.Civ.P. 16(b)(4). To determine if good cause exists as to untimely motions to amend pleadings, the Court should consider: “(1) the movant's explanation for its failure to timely move for leave to amend; (2) the importance of the amendment; (3) the potential prejudice in allowing the amendment; and (4) the availability of a continuance to cure that prejudice.” Schubert Marine Sales, 2003 WL 21664701, at *2 (citing S & W Enterprises, 315 F.3d at 536). If the movant can show good cause, the Court will then apply the liberal standards of Rule 15(a). S&W Enterprises, 315 F.3d at 536.

         III. ...

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