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EPL Oil & Gas, Inc v. Tana Exploration Company, LLC

United States District Court, E.D. Louisiana

September 14, 2018

EPL OIL & GAS, INC.
v.
TANA EXPLORATION COMPANY, LLC.

         SECTION: “M” (4)

          ORDER AND REASONS

          KAREN WELLS ROBY CHIEF UNITED STATES MAGISTRATE JUDGE

         Before the Court is a Motion for Leave to File its First Amended and Supplemental Complaint (R. Doc. 20) filed by the Plaintiff, EPL Oil & Gas, Inc. The motion is unopposed. R. Doc. 127. The Motion was heard on the briefs on September 5, 2018.

         I. Background

         This breach of contract action stemming from a failed oil well was originally filed in the District Court pursuant to its jurisdiction under the Outer Continental Shelf Lands Act, 43 U.S.C. 1333, et eq. R. Doc. 1; January 25, 2018. The original complaint alleges that Plaintiff and Defendant were joint operators of an oil and gas lease, serial number OCS-G 33657 (“Lease”), located in the Outer Continental Shelf off the coast of Louisiana. Id., p. 2. Pursuant to oil exploration on the Lease, Defendant and Plaintiff entered into an Operations Agreement, effective March 1, 2013, and a subsequent Amendment to Participation Agreement, effective April 24, 2014 (“Agreements”). Plaintiff alleges that, pursuant to the Agreements, Defendant has not paid their proportionate share of operating and drilling expenses incurred conducting natural resource exploration on the Lease. Id. Plaintiff claims Defendant owes $1, 997, 000.00 under the lease. Id.

         The Motion before the Court was filed by Plaintiff on August 16, 2018. R. Doc. 20. Plaintiff seeks leave of the Court to amend their complaint to add an additional breach of contract claim against Defendant pursuant to the Agreements. 20-4, p. 3. The proposed amended complaint states that in May of 2018, four months after the original complaint was filed, Plaintiff proposed plugging and abandoning of the subject Lease. Id. Plaintiff contends that they have fulfilled their obligations under the Agreements, but that Defendant has not paid its proportionate share of the plugging and abandonment expenses according to the Agreements. Id. Defendant has filed no opposition to the Motion.

         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)).

         III. Analysis

         A. Good Cause

         “[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)).

         The Scheduling Order states: “Amendments to pleadings, third-party actions, cross-claims and counter-claims shall be filed no later than MAY 14, 2018.” R. Doc. 12, p. 5. The Scheduling Order also states that (1) depositions for use at trial shall and all discovery shall be completed no later than November 29, 2018; (2) the Final Pre-Trial Conference will take place on January 7, 2019; and (3) trial by jury will commence on January 28, 2019. Id., p. 5-6. The Motion before the Court was filed three months past the Scheduling Order's amended pleadings deadline. Therefore, the Plaintiff must show good cause for the proposed amendment under Rule 16(b)(4).

         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, ...


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