United States District Court, S.D. Alabama, Southern Division
WILLIAM H. STEELE, Chief District Judge.
This matter comes before the Court on Plaintiff's Motion for Leave to File Amended Complaint (doc. 87). All three named defendants oppose the Motion ( see docs. 91, 92), which has been briefed and is now ripe for disposition.
I. Relevant Background.
Plaintiff, Jasper Wood Products, LLC ("JWP"), filed its Complaint (doc. 1) against defendants, Jordan Scrap M Inc. ("Jordan"), Peterman Mill Project, LLC ("Peterman"), and James Norman ("Norman") back on June 4, 2013. The Complaint alleged an assortment of state-law tort, contract, and statutory claims, arising from a fire that destroyed certain plywood manufacturing equipment (the "Equipment") owned by JWP. According to the well-pleaded allegations of the Complaint, JWP had purchased the Equipment from Norman, and such Equipment was being stored at a facility owned by Peterman, when Jasper (a contractor performing "hot work" at Peterman's mill) failed to extinguish certain materials properly at the end of the workday on December 12, 2012. The Peterman facility burned down during the overnight hours, and JWP's Equipment was a total loss. As originally formulated, JWP's eight-count Complaint was configured as follows: a bailment claim against Peterman and Norman, negligence and wantonness claims against all defendants, misrepresentation and breach of contract claims against Peterman and Norman, a breach of warranty claim against Peterman and Norman, a claim against Jordan for violation of Alabama Code § 7-2-222,  and a claim against Peterman and Norman for violation of Alabama Code § 7-2-714.
In the ordinary course of this federal litigation, Magistrate Judge Cassady entered a Rule 16(b) Scheduling Order (doc. 23) on October 23, 2013. The Scheduling Order provided, in relevant part, that "Motions for leave to amend the pleadings and to join other parties must be filed not later than December 20, 2013." (Doc. 23, ¶ 4.) At no time prior to that December 20 deadline did JWP or anyone else request relief from, or an extension of, the time for amendments or joinder. To be sure, on March 13, 2014 (nearly three months after that deadline for amending pleadings had passed), the parties submitted a Joint Motion for Amended Rule 16(b) Scheduling Order (doc. 47), requesting enlargement of certain discovery and dispositive motions deadlines because "[t]o date, the parties have not taken any depositions, instead having agreed to mediate the case at this point.... Mediation is currently set for April 1, 2014." (Doc. 47, ¶ 3.) However, nothing in the March 13 Joint Motion requested a revival of the long-lapsed period for amending the pleadings or joining additional parties, or even referenced that particular deadline. At any rate, Judge Cassady denied the request to amend the Scheduling Order, explaining that "[w]hile the Court encourages settlement efforts, the parties cannot disregard the scheduling order. If the parties wished to participate in mediation before taking depositions, they should have scheduled their mediation earlier, as the Court advised." (Doc. 50, at 5.)
Ultimately, Jordan pulled out of the mediation at the eleventh hour, citing an unspecified "scheduling conflict." (Doc. 101, Exh. C.) To date, the mediation evidently has never been rescheduled, with the litigants instead focusing on discovery. ( See doc. 54.) In late April 2014, Jordan filed a motion to extend expert disclosure deadlines, and the parties later submitted a supplemental Rule 26(f) report, once again omitting any request for relief from the deadline for amending pleadings and joining parties. ( See doc. 62; doc. 62-1, ¶ 4; doc. 76.) On May 23, 2014, Judge Cassady entered a Supplemental Scheduling Order (doc. 79), enlarging deadlines for, inter alia, completion of discovery, submission of expert reports and pretrial disclosures, as well as the final pretrial conference and trial settings. The Supplemental Scheduling Order did not reopen the long-expired deadline for amending pleadings, nor is there any indication in the court file that any party requested same.
On June 19, 2014, JWP filed its Motion for Leave to File Amended Complaint. Although the Motion is vague as to what modifications are being proposed and why, JWP explains that during the course of "document production and the depositions of corporate representatives, information has come to light which necessitates the filing of the instant motion... in order to amend certain factual allegations, which were either unclear or unknown at the time of the filing of the initial Complaint." (Doc. 87, ¶ 2). Review of the Motion, as well as a side-by-side comparison of the original and proposed amended complaints, reveals that JWP's proposed modifications to its pleading include, inter alia, the following: (i) joinder of two additional parties plaintiff, Natron Wood Products, LLC, and Dunollie Resources, Inc., both of which are owned by Richard McDougal, who also owns JWP; (ii) correction of Jordan's name from "Jordan Scrap M Inc." to "Jordan Scrap, Inc."; (iii) new factual allegations that the Louisville, Mississippi facility where JWP had planned to move the Equipment was not going to be run by JWP, but was actually going to be operated by Natron under a lease executed by Dunollie; (iv) reduction in claims for fair market value of the Equipment from $5, 230, 000 to $2, 113, 000; and (v) new lost-profit allegations in Counts I, II, III, IV, and VII, including new references to lost profits and valuation of that category of damages at $6.8 million. ( Compare doc. 1 with doc. 87-1.)
The sole authority cited by JWP in support of the Motion for Leave to File Amended Complaint is Rule 15 of the Federal Rules of Civil Procedure. All defendants oppose the Motion as untimely and otherwise improper.
A. Rule 16(b)(4) Governs, at Least in the First Instance.
In both its Motion and its Reply, JWP invokes the relaxed, permissive amendment standard prescribed by Rule 15(a)(2), Fed.R.Civ.P., and argues that its Motion must be granted unless defendants prove prejudice or unfair surprise. ( See doc. 87, ¶ 3; doc. 101, at 3-4.) As all defendants point out, however, plaintiff's argument recites the wrong legal standard. A critical fact that plaintiff's filings overlook is that the original Rule 16(b) Scheduling Order fixed a deadline of December 20, 2013 for amending pleadings or joining additional parties, yet JWP did not move to amend its Complaint until fully six months later, on June 19, 2014.
The Scheduling Order deadline for amending pleadings and joining parties was neither aspirational nor advisory. Rather, the Federal Rules of Civil Procedure are clear that such deadlines "may be modified only for good cause and with the judge's consent." Rule 16(b)(4), Fed.R.Civ.P. Where, as here, a motion to amend "comes long after the deadlines for filing motions to amend established in the scheduling orders entered in this case, " a plaintiff must "show good cause under Federal Rule of Civil Procedure 16(b)." Mann v. Taser Int'l, Inc., 588 F.3d 1291, 1312 (11th Cir. 2009). Simply put, JWP's Motion is governed in the first instance by Rule 16(b)(4)'s "good cause" requirement, not by Rule 15(a)(2)'s "freely give leave" standard. See Smith v. School Bd. of Orange County, 487 F.3d 1361, 1367 (11th Cir. 2007) ("despite Smith's argument on appeal that the district court should have granted his motion to amend his complaint in accordance with the liberal amendment instructions of Rule 15(a), Smith still had to comply with Rule 16(b)'s good cause requirement because he filed his motion to amend... after the court's deadline for such motions"); Sosa v. Airprint Systems, Inc., 133 F.3d 1417, 1419 (11th Cir. 1998) ("[B]ecause Sosa's motion to amend was filed after the scheduling order's deadline, she must first demonstrate good cause under Rule 16(b) before we will consider whether amendment is proper under Rule 15(a).").
Under well-settled law, the "good cause" standard prescribed by Rule 16(b) "precludes modification unless the schedule cannot be met despite the diligence of the party seeking the extension." Sosa, 133 F.3d at 1418 (citation and internal quotation marks omitted). "This rule is strictly enforced, particularly where, as here, the nonmovant has objected to the proposed amendment as untimely under the applicable scheduling order." Roberson v. BancorpSouth Bank, Inc., 2013 WL 4870839, *1 (S.D. Ala. Sept. 12, 2013); see also Will-Burn Recording & Pub. Co. v. Universal Music Group Records, 2009 WL 1118944, *2 n.5 (S.D. Ala. Apr. 27, 2009) ("Particularly where a nonmovant objects to a ...