United States District Court, W.D. Louisiana, Shreveport Division
SABRE INDUSTRIES, INC.
MODULE X SOLUTIONS, LLC, ET AL.
HORNSBY MAGISTRATE JUDGE.
MAURICE HICKS, JR., UNITED STATES DISTRICT JUDGE.
the Court is a Magistrate Appeal (Record Document 69) filed
by Defendants Module X Solutions, LLC (“MXS”),
Steven L. Schoonover, Jeff Hood, and Jim Dean and
Counter-Plaintiff and Third Party MXS (collectively referred
to as “Defendants”). Defendants object to and
appeal the Magistrate Judge’s Memorandum Order (Record
Document 65) dated February 7, 2017, granting Plaintiff and
Defendant-in-Counterclaim Sabre Industries, Inc.’s
(“Sabre”) Motion for Reconsideration and
dismissing Defendants’ counterclaim against Kohlberg
& Company, LLC (“Kohlberg”). Sabre opposes
the Magistrate Appeal. See Record Document 82. For
the reasons set forth below, the Magistrate Appeal (Record
Document 69) is DENIED and Magistrate Judge
Hornsby’s Memorandum Order (Record Document 65) of
February 7, 2017 is AFFIRMED.
party may appeal a magistrate judge’s ruling on a
non-dispositive matter to a district court judge under Rule
72(a) of the Federal Rules of Civil Procedure and Local Rule
74.1 M & W. The decision by Magistrate Judge Hornsby to
grant Sabre’s Motion for Reconsideration is a
non-dispositive matter. It is an order from the magistrate
judge on a non-dispositive matter that requires the district
court to uphold the ruling unless it is clearly erroneous or
contrary to law. See 28 U.S.C. § 636(b)(1)(A)
& F.R.C.P. 72(a); see also Castillo v. Frank, 70
F.3d 382, 385 (5th Cir. 1995); Perales v. Casillas,
950 F.2d 1066, 1070 (5th Cir.1992). This Court will review
the Magistrate Judge’s legal conclusions de
novo, and will review his factual findings for clear
error. See Choate v. State Farm Lloyds, No.
03-CV-2111, 2005 WL 1109432, *1 (N.D.Tex. May 5, 2005).
agreement of counsel and approval of the Court, the deadline
for amendment of pleadings was extended until December 22,
2016. See Record Documents 49 & 52. On that
date, both parties filed unopposed motions to amend their
pleadings with the proposed amendments attached. Sabre
amended its complaint to add claims and Defendants amended
their counterclaim to add claims against Sabre and to name
and assert claims against Kohlberg. See Record
Documents 54, 55 & 57.
Memorandum Order, Magistrate Judge Hornsby briefly explained
that Defendants’ motion for leave to amend represented
that it was unopposed and it was granted as a matter of
course. See Record Document 65 at 1. Sabre sought
reconsideration of the amendment arguing, among other things,
that its counsel misunderstood the nature of
Defendants’ proposed amendment, namely that its lawyers
though Defendants were only amending their claim and not
adding a new party. See id.
deciding Sabre’s Motion for Reconsideration, Magistrate
Judge Hornsby held:
After considering the arguments of the parties, the
undersigned finds that the best exercise of the court’s
discretion is to deny leave to amend to add Kohlberg as a new
party. The discovery deadline is March 31, 2017. The lawsuit
has been pending for over 14 months. Importantly, Defendants
have known about Kohlberg for quite some time, yet they
delayed seeking leave to add Kohlberg. In fact, Defendant
Schoonover threatened to bring charges against Kohlberg even
before this lawsuit was filed. Doc. 59-1, Exhibit 2.
Defendants also discussed Kohlberg in an amended counterclaim
that was filed almost a year ago. Doc. 33, para. 178
(“Sabre ... was sold to Kohlberg & Company in
August 2012.”; Para. 183: “Kohlberg was aware of
the unreimbursed rebate scheme....”).
Document 65 at 2. Magistrate Judge Hornsby also considered
“other important considerations,” such as
prejudice to the existing parties and the new party; the
extensive discovery in the case; the discovery deadline; and
the court’s trial schedule. Id. at 2-3. He
ultimately granted Sabre’s Motion for Reconsideration
and vacated the order allowing Defendants’ amendment to
the extent that it set forth claims against Kohlberg. See
id. at 3.
instant appeal, Defendants contend that Magistrate Judge
Hornsby erred because there was not a substantial reason to
deny their motion to amend. See Record Document 69
at 5 (“Clearly under Rule 15(a) a motion to amend
should not be denied absent a substantial reasons to do so.
Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir.
1998).”). The Court disagrees. Even a cursory review of
Magistrate Judge Hornsby’s Memorandum Order reveals
close analysis and establishes “substantial
reasons” for his ruling. Moreover, after an independent
review of the record, the undersigned believes there was, at
a minimum, undue delay in Defendants’ filing of the
motion for leave to amend to add Kohlberg as a party. See
Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th
Cir.2003) (courts within the Fifth Circuit examine five
considerations to determine whether to grant a party leave to
amend a complaint: (1) undue delay; (2) bad faith, or
dilatory motive on the part of the movant; (3) repeated
failure to cure deficiencies by amendments previously
allowed; (4) undue prejudice to the opposing party by virtue
of allowance of the amendment; and (5) futility of the
amendment). Magistrate Judge Hornsby’s decision to
grant Sabre’s Motion for Reconsideration and vacate the
order allowing Defendants’ amendment to the extent it
set forth claims against Kohlberg was a proper exercise of
judicial discretion and was neither clearly erroneous or
contrary to law. See Addington v. Farmer's Elevator
Mut. Ins. Co., 650 F.2d 663, 666 (5th Cir.1981)
(decision to grant or deny a motion for leave to amend lies
within the sound discretion of the trial court).
the Magistrate Appeal (Record Document 69) is
DENIED and Magistrate Judge Hornsby’s
Memorandum Order (Record Document 65) of February 7, 2017 is
IS SO ORDERED.