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Tripp v. Pickens

United States District Court, W.D. Louisiana, Shreveport Division

June 19, 2018

LEO TRIPP, ET AL
v.
RICHARD PICKENS, ET AL

          DOUGHTY, MAGISTRATE JUDGE.

          MEMORANDUM ORDER

          Mark L. Hornsby, U.S. Magistrate Judge.

         Introduction

         Plaintiffs are three men who developed a solar-powered chemical injection pump to be used in oil and gas production. They allege that they contracted with Richart Distributors, d/b/a Flomore Products to market the product and split the profits evenly. The relationship soured, and Plaintiffs filed this suit in state court against Flomore and Richard Pickens, who is Flomore's CEO and primary shareholder.

         Defendants removed the case based on diversity jurisdiction and filed a motion for summary judgment. Judge Doughty recently denied the motion based on finding genuine disputes of material fact as to whether the parties had a valid oral contract that could form the basis of Plaintiffs' breach of contract and detrimental reliance claims. Plaintiffs conceded to the dismissal of Mr. Pickens as a defendant.

         The deadline for amendment of pleadings was in September 2017. Trial is set for July 9, 2018. Plaintiffs filed on May 9, 2018 a Motion for Leave to Amend Complaint (Doc. 53). They seek to add claims against Flomore and Mr. Pickens under the Louisiana Unfair Trade Practices Act (“LUTPA”) based on (1) their recent discovery that Mr. Pickens secretly applied for a patent on the pump that listed himself as the sole inventor and (2) Flomore's unilateral termination of the pump distribution contract on April 23, 2018 without any good-faith basis to do so. Defendants object that the proposed amendment is untimely and futile. For the reasons that follow, the court finds that Plaintiffs have demonstrated good cause to allow the amendment and that a continuance of the trial is warranted to allow for discovery and other proceedings related to the new claims.

         Summary of Relevant Facts

         Plaintiffs alleged in their original complaint that they met Flomore representatives at a trade show in 2013 and eventually introduced them to the idea of launching a new pump that they had designed that had advantages over the pump that Flomore was marketing at the time. A prototype was demonstrated, and Flomore agreed with the Plaintiffs that they would go into business together to sell the pump and split the profits 50/50. Flomore would receive the benefit of the improved pump design, and Plaintiffs would benefit from Flomore's expertise in manufacturing and sales. Plaintiffs allege that they “shook hands on the deal, thereby forming a valid and enforceable contract.”

         Plaintiffs allege that they devoted substantial effort to get the pump ready for sale. There were discussions about having lawyers reduce the agreement to writing. Plaintiffs allege that Mr. Pickens told them that he would do so, but he never followed through, and this was part of his scheme to induce them to continue developing the pump for market.

         The product launched in August 2014, and Plaintiffs report that it was a tremendous success. Plaintiffs soon attempted to contact Mr. Pickens to discuss moving forward on their agreement to split the profits, but Mr. Pickens refused to discuss it. Pickens and Flomore employees soon cut off all communications with Plaintiffs. Plaintiffs allege that not one of them ever received any financial benefit from Flomore or Mr. Pickens for sales of the pump or the work they devoted towards development of the pump.

         Plaintiffs filed this suit in state court in February 2017, and it was removed to federal court in April 2017. The case received a prompt trial setting of May 2018. A mediation in April 2018 was unsuccessful. Soon afterwards, the trial was continued to July 9, 2018 Plaintiffs allege in their Motion for Leave to Amend that they learned only recently that Mr. Pickens had, through Flomore's patent attorney, filed in June 2014 a provisional patent application on the pump design and components that Plaintiffs had designed. Pickens allegedly listed only himself as the sole inventor and applicant. Later, in June 2015, Pickens filed a non-provisional patent application, again in his own name. Pickens was asked during his deposition in this case about any patent applications, and he testified that he had filed only one, long ago and unrelated to these events. Months later, during the deposition of another Flomore executive, Plaintiffs learned that at least one patent application was pending regarding the solar pump. They immediately began requesting documents related to the patent and, after a fair amount of wrangling with Defendants, eventually received the documents that revealed facts about Mr. Pickens applying for the patent.

         Plaintiffs' second grounds for an LUTPA claim is directed at Flomore. They allege that on April 23, 2018, soon after the failed mediation, they received a letter from Mr. Pickens and Flomore that purports to unilaterally cancel the contract between the parties. Plaintiffs allege that this is an effort by Flomore to cut off the plaintiffs' claim for damages based on future sales of the pump. They contend that Flomore- given the success of the pump-does not have a good-faith economic reason to terminate the contract.

         Amendment after the Pleadings Deadline

         Federal Rule of Civil Procedure 15(a) governs amendment of pleadings and provides that the court should “freely give leave when justice so requires.” The standard is very liberal. The Fifth Circuit has explained that “unless there is a substantial reason, such as undue delay, bad faith, dilatory motive, or undue prejudice to the opposing party, the discretion of the district court is not broad ...


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