United States District Court, W.D. Louisiana, Shreveport Division
DOUGHTY, MAGISTRATE JUDGE.
L. Hornsby, U.S. Magistrate Judge.
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.
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.
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.
of Relevant Facts
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.”
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.
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.
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.
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.
after the Pleadings Deadline
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