United States District Court, E.D. Louisiana
BETTY J. JOHNSON
INVESTOR EQUITIES, LLC ET AL.
ORDER AND REASONS ON MOTION
C. WILKINSON, JR UNITED STATES MAGISTRATE JUDGE
Motion for Leave to File First Amended Complaint, Record Doc.
No. 26, is before me. Plaintiff seeks to amend her complaint
to clarify her existing claims against the parties, and to
allege new claims under Louisiana law that defendants acted
as a joint venture as to their financial dealings with
plaintiff and that the interest on plaintiff's loans with
defendant Investor Equities, LLC was usurious and subject to
forfeiture. Record Doc. No. 37-2 at pp. 6-7.
December 17, 2018, a Rule 16 scheduling order was issued in
this matter setting January 25, 2019, as the deadline for
amendment of pleadings. Record Doc. No. 22 at p. 1. Plaintiff
filed the instant motion on February 5, 2019, eleven (11)
days after the amendment deadline expired.
the court has entered a scheduling order setting a deadline
for the amendment of pleadings, the schedule “may be
modified only for good cause and with the
judge's consent.” Fed.R.Civ.P. 16(b)(4) (emphasis
added). “Rule 16(b) governs amendment of pleadings
after a scheduling order deadline has expired. Only upon
the movant's demonstration of good cause to modify the
scheduling order will the more liberal standard of Rule
15(a) apply to the district court's decision to grant or
deny leave.” S&W Enters., L.L.C. v. SouthTrust
Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003)
(emphasis added). “In determining good cause, we
consider four factors: ‘(1) the explanation for the
failure to timely move for leave to amend; (2) the importance
of the amendment; (3) potential prejudice in allowing the
amendment; and (4) the availability of a continuance to cure
such prejudice.'” Sw. Bell Tel. Co. v. City of
El Paso, 346 F.3d 541, 546 (5th Cir. 2003) (citing
Fed.R.Civ.P. 16(b)) (quoting S & W Enters., 315
F.3d at 535); accord Fahim v. Marriott Hotel Servs.,
Inc., 551 F.3d 344, 348 (5th Cir. 2008); Nunez v.
U.S. Postal Serv., 298 Fed.Appx. 316, 319 (5th Cir.
2008); In re Int'l Marine, LLC, 2009 WL 498372,
at *1-2 (E.D. La. Feb. 26, 2009).
Civ. P. 15(a) is liberal in favor of permitting amendment of
pleadings. Leffall v. Dallas Indep. Sch. Dist., 28
F.3d 521, 524 (5th Cir. 1994); Martin's Herend
Imports, Inc. v. Diamond & Gem Trading U.S. Am. Co.,
195 F.3d 765, 770 (5th Cir. 1999); Dussouy v. Gulf Coast
Inv. Corp., 660 F.2d 594, 597-98 (5th Cir. 1981). Thus,
“[t]he court should freely give leave when justice so
requires, ” Fed.R.Civ.P. 15(a)(2), but such
leave “is by no means automatic.” Wimm v.
Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993)
(quotation omitted). Relevant factors to consider include
“undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party, and futility of amendment.”
in this context means “that the amended complaint would
fail to state a claim upon which relief could be granted. . .
. [Thus, ] to determine futility, we will apply the same
standard of legal sufficiency as applies under Rule
12(b)(6).” Stripling v. Jordan Prod. Co., 234
F.3d 863, 873 (5th Cir. 2000) (quotations and citations
omitted); accord Fenghui Fan v. Brewer, 377
Fed.Appx. 366, 367 (5th Cir. 2010). “To survive a Rule
12(b)(6) motion to dismiss, the plaintiff must plead
‘enough facts to state a claim to relief that is
plausible on its face.' ‘Factual allegations must
be enough to raise a right to relief above the speculative
level, on the assumption that all the allegations in the
complaint are true (even if doubtful in fact).'”
In Re Katrina Canal Breaches Litig., 495 F.3d 191,
205 (5th Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 547 (2007)) (footnote omitted).
failed to address the proper legal standard for amendment of
pleadings after an amendment deadline has expired in her
original memorandum in support of this motion, basing her
argument exclusively on Rule 15(a). Record Doc. No. 26-1. Her
reply addressed the proposed amendment under Rule 16(b)(4).
Record Doc. No. 39. Plaintiff's explanation for her
failure timely to move for leave to amend her complaint is
that she did not receive discovery responses containing
information to support the alleged joint venture and usurious
loan claims until January 28, 2019, three days after the
amendment deadline expired. Id. at pp. 1-2. This
explanation, coupled with the fact that plaintiff filed the
instant motion only eleven (11) days after the amendment
deadline expired and promptly after learning the new
information to support her proposed claims, weighs in favor
of a finding of Rule 16 good cause.
importance, plaintiff states that her amendment will clarify
and support her existing claims under the Home Ownership and
Equity Protection Act ("HOEPA") and the Truth in
Lending Act ("TILA") and, if the claims are proven,
will entitle her to damages, rescission of certain
transactions and the prevention of the loss of her home.
Record Doc. Nos. 26-1 at p. 1; 37-2 at p. 7. This factor also
weighs in favor of allowing plaintiff to amend.
argue that allowing amendment of plaintiff's complaint
would cause them prejudice by forcing them to engage in
additional discovery related to plaintiff's new
allegations. Record Doc. Nos. 29 at p. 10; 30 at p. 6.
Additionally, defendant Investor Equities, LLC argues that it
will be forced to incur further costs in amending its
counterclaim to address plaintiff's proposed usury claim.
Record Doc. No. 29 at p. 10. Plaintiff argues that defendants
will not be prejudiced because her new claims arise from the
same underlying facts, evidence and allegations of HOEPA and
TILA violations alleged in her original complaint. Record
Doc. No. 37-2 at p. 7. She also asserts that defendants will
not suffer prejudice because discovery in this matter is
ongoing and the discovery deadline is not until August 16,
2019, and trial is set for November 4, 2019. Id.;
Record Doc. No. 22.
that the facts and allegations pertaining to the claims
proposed in the amendment arise from the same underlying
facts and allegations raised in the initial complaint. In
addition, ample time remains under the existing schedule for
defendants to address the new claims asserted in
plaintiff's proposed amendment. Prejudice will be
minimal, and no continuance to cure prejudice should be
necessary. Nevertheless, plaintiff has stated that she will
not oppose any request by defendants for a continuance of
pretrial deadlines if one becomes necessary. Record Doc. No.
37-2 at p. 8. These factors weigh in favor of a Rule 16(b)(4)
good cause finding, such that the more liberal Rule 15(a)
standard may be analyzed.
filed this motion only eleven (11) days after the expiration
of the amendment deadline, based on information received in
discovery responses three (3) days after the amendment
deadline expired. Plaintiff promptly filed the instant motion
approximately one week after receiving discovery responses.
No. prior amendments have been ...