CTC Global Corporation v. Jason Huang et al

REPLY in Support of NOTICE OF MOTION AND MOTION for Leave to file Amended Complaint 161

C.D. Cal.March 25, 2019

DLA P IPER LLP (US) LOS ANGELES PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TAMANY J. VINSON BENTZ (SBN 258600) tamany.bentz@dlapiper.com AARON T. GOODMAN (Pro Hac Vice) aaron.goodman@dlapiper.com HECTOR E. COREA (SBN 318971) hector.corea@dlapiper.com DLA PIPER LLP (US) 2000 Avenue of the Stars Suite 400 North Tower Los Angeles, California 90067-4704 Tel: 310.595.3000 Fax: 310.595.3300 RICHARD J. FREY (SBN 174120) rfrey@ebglaw.com EPSTEIN BECKER GREEN 1925 Century Park East, Suite 500 Los Angeles, California 90067 Attorneys for Plaintiff and Counterdefendant CTC GLOBAL CORPORATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CTC GLOBAL CORPORATION, a Delaware corporation, Plaintiff, v. JASON HUANG, an individual, RULONG CHENG, an individual; and JIANPING HUANG a/k/a JAMES HUANG, an individual, Defendant. CASE NO. 8:17-CV-02202-AG-KES PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S REPLY BRIEF IN SUPPORT OF MOTION FOR LEAVE TO AMEND JASON HUANG, an individual, Counterclaimant, v. CTC GLOBAL CORPORATION, a Delaware Corporation, Counterdefendant. Date: April 15, 2019 Time: 10:00 a.m. Courtroom: 10D Complaint Filed: December 18, 2017 Trial Date: May 7, 2019 Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 1 of 15 Page ID #:17935 DLA P IPER LLP (US) LOS ANGELES -i- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page I. INTRODUCTION .................................................................................. 1 II. FACTUAL & PROCEDURAL BACKGROUND ...................................... 1 III. ARGUMENT......................................................................................... 2 A. Rule 16 Chen Amendment: CTC’s Diligence was Sufficient in the Face of Concealed Facts. ............................................................. 2 B. Rule 15 Factors: Defendants Concede Three of Five actors to CTC with Respect to Both Proposed Amendments. ...... . ............. 5 C. Chen Amendment: CTC’s Motion Brought Within Two Months of the New Discovery Was Not Unduly Delayed. ....................... 6 D. Chen Amendment: Defendant Chen Will Not Suffer Undue Prejudice Given the Straightforward Nature of the Claim. ................ 6 E. Huang Amendment: Good Cause Exists Under Rule 16 Given CTC’s Legitimate Claim Against Defendant Jason Huang. ............... 7 F. Huang Amendment: A Finding of Undue Delay under Rule 15 is Not Determinative........................................................................ 8 G. Huang Amendment: Defendant Huang Cannot Claim Prejudice Given He Was on Notice of the Instant Claims. ............................... 8 IV. CONCLUSION ................................................................................... 9 Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 2 of 15 Page ID #:17936 DLA P IPER LLP (US) LOS ANGELES -ii - PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases Anderson v. City & Cty. of San Francisco, 169 F. Supp. 3d 995 (N.D. Cal. 2016) ................................................................. 9 Aten Int’l Co. v. Emine Tech. Co., No. SACV090843AGMLGX, 2011 WL 13134915 (C.D. Cal. Mar. 23, 2011) ......................................................................................................... 4 Carlin v. DairyAmerica, Inc., No. 109CV00430AWIEPG, 2017 WL 3671860 (E.D. Cal. Aug. 25, 2017) ......................................................................................................... 6 Cent. Freight Lines, Inc. v. Amazon Fulfillment Servs., No. C17-0814JLR, 2019 WL 1115257 (W.D. Wash. Mar. 11, 2019) ................... 5 Contemporary Servs. Corp. v. Landmark Event Staffing Servs., Inc., No. SACV0900681AGANX, 2012 WL 12964900 (C.D. Cal. Sept. 24, 2012) ......................................................................................................... 4 Cook v. U.S. Capital Ins. Co., No. C-93-1077 MHP, 1994 WL 327039 (N.D. Cal. June 29, 1994) ..................... 9 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) ................................................................... 5 Flowrider Surf, Ltd. v. Pac. Surf Designs, Inc., No. 315CV01879BENBLM, 2016 WL 6565888 (S.D. Cal. Nov. 4, 2016) ..................................................................................................... 4, 5 Griggs v. Pace Am. Grp., Inc., 170 F.3d 877 (9th Cir. 1999) ..................................................................... 5 Johnson v. Mammoth Recreations, Inc., 975 F.2d 604 (9th Cir. 1992) ..................................................................... 3 Kaseberg v. Conaco, LLC, No. 15-CV-1637 JLS (DHB), 2018 WL 5994548 (S.D. Cal. Nov. 15, 2018) ................................................................................................ 8 Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 3 of 15 Page ID #:17937 DLA P IPER LLP (US) LOS ANGELES -iii - PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 M/V American Queen v. San Diego Marine Construction C rp., 708 F.2d 1483 (9th Cir. 1983) .................................................................. 2, 9 Martella v. Marine Cooks & Stewards Union, Seafarers Int’l Union of N. Am., AFL-CIO, 448 F.2d 729 (9th Cir. 1971) ..................................................................... 3 Precor Inc. v. Fitness Quest, Inc., No. C05-0993L, 2007 WL 136749 (W.D. Wash. Jan. 12, 2007) .......................... 4 Sako v. Wells Fargo Bank, Nat. Ass’n, No. 14CV1034-GPC JMA, 2015 WL 5022326 (S.D. Cal. Aug. 24, 2015) ......................................................................................................... 4 Securimetrics, Inc. v. Hartford Cas. Ins. Co., No. C 0500917CW, 2005 WL 1712008 (N.D. Cal. July 21, 005)....................... 8 Smith v. Stone, 308 F.2d 15 (9th Cir. 1962) ....................... ................................................ 4 Sonoma Cty. Ass’n of Retired Employees v. Sonoma Cty., 708 F.3d 1109 (9th Cir. 2013) ................................................................... 5 Stoddart v. Express Servs., No. 212CV01054KJMCKD, 2017 WL 3333994 (E.D. Cal. Aug. 4, 2017) ......................................................................................................... 6 Texaco, Inc. v. Ponsoldt, 939 F.2d 794 (9th Cir. 1991) ..................................................................... 9 Tivoli LLC v. Spa, No. SACV141285DOCJCGX, 2016 WL 6138406 (C.D. Cal. Feb. 19, 2016) ..................................................................................................... 3, 5 Twin City Fire Ins. Co. v. Mitsubishi Motors Credit of Am., Inc., No. SA CV 04-43-GLTMLGX, 2005 WL 5980994 (C.D. Cal. Feb. 22, 2005) ..................................................................................................... 7, 8 Union Pac. R.R. Co. v. Nevada Power Co., 950 F.2d 1429 (9th Cir. 1991) ................................................................... 3 Walsh v. Nev. Dep’t of Human Res., 471 F.3d 1033 (9th Cir. 2006) ................................................................... 5 Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 4 of 15 Page ID #:17938 DLA P IPER LLP (US) LOS ANGELES -iv- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In re WellPoint, Inc. Out-of-Network UCR Rates Litig., 865 F. Supp. 2d 1002 (C.D. Cal. 2011) ......................................................... 7 Other Authorities Rule 15 ............................................................................................................ 5, 8 Rule 15(a) ............................................................................................................ 5 Rule 16 ............................................................................................................ 2, 7 Rule 60(b) ....................................................................................................... 3 Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 5 of 15 Page ID #:17939 DLA P IPER LLP (US) LOS ANGELES -1- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION CTC Global Corporation’s (“CTC”) Motion is designed to escape gamesmanship—not encourage it—by preserving its overwhelmingly meritorious claims against Defendants Rulong Chen and Jason Huag. Such claims do not pose “gross prejudice” to Defendants. This is because CTC’s Motion is based on newly discovered facts and newly asserted arguments justifying a straightforward amendment of the Complaint that adds a ingle contract claim against Defendant Rulong Chen, and a revised version of the same contract between CTC and Defendant Jason Huang. No amount of foresight would have enabled CTC to establish the particular facts giving rise to this particular contract claim against Defendant Chen—i.e., Defendant Chen’s unlawful withholding of her entire email file from CTC’s corporate email account, including CTC’s confidential information. Chen’s claims of prejudice are hollow given she had exclusive knowledge over these particular facts since b fore the inception of this lawsuit. The same is true with respect to Defendant Jason Huang, who claims, incredulously, that he did not have an employment agreement with CTC. This, despite his written acceptance of CTC’s employment offer containing the terms and conditions of his employment, and his testimony admitting he was a board member and executive officer of CTC. The failure to attach the contract to the Complaint is not fatal to CTC’s claims or a reason to deny this motion. There is no requirement that a contract be attached to the Complaint. Moreover, the claim CTC is asserting is identical to the original claim, based on the same terms, between the same parties. CTC maintains the Court should grant its Motion. II. FACTUAL & PROCEDURAL BACKGROUND Many of the facts and background relating to this Motion are set forth in detail in CTC’s opening Motion (Dkt No. 161-1). CTC here merely clarifies that Defendants’ mistakenly cited the discovery fact cut-off as December 5, 2018 instead Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 6 of 15 Page ID #:17940 DLA P IPER LLP (US) LOS ANGELES -2- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of the Court’s revised cut-off date of February 4, 2019. (Dkt. No. 66.) III. ARGUMENT A. Rule 16 Chen Amendment: CTC’s Diligence was Sufficient in the Face of Concealed Facts. Defendants’ Rule 16 arguments and authorities boil down to one point of law: courts are unlikely to find due diligence where “the facts and the theory” of a proposed amendment have been known to the party seeking amend ent since the inception of the cause of action. (Opp. 6.) See M/V American Queen v. San Diego Marine Construction Corp., 708 F.2d 1483, 1492 (9th Cir. 1983). Defendants’ contentions, are simply misplaced in this case. While it is true that CTC might have alleged a contract claim against Defendant Chen at the outset of this case (and indeed counsel thought it had), CTC could not have alleged the narrow claim at issue in this motion. The instant motion involves CTC discovering a new fact that was unknown to CTC at the inception of the lawsuit—namely, that Defendant Chen kept CTC’s confidential information on her laptop after she was terminated by CTC. (Bentz Decl. ¶¶ 2-4, Ex. B.) CTC’s contract claim against Defendant Chen is narrowly tailored to address this new information. While CTC knew Chen had an agreement with CTC, it did not know the nature and scope of Chen’s breach of that agreement. (Id.) At most, CTC believed Chen had helped Huang in disclosing CTC’s trade secrets. But this factual knowledge does not imply the specific fact that Chen kept her CTC email file on her laptop. What is most incredulous is that Defendants fault CTC for not discovering this fact within Defendant Chen’s exclusive possession. No amount of diligence by CTC would have allowed it to inspect Defendant Chen’s computer to discover her unlawful withholding of CTC’s information. In reality, CTC’s diligence was its discovery efforts designed to identify a factual underpinning giving rise to the instant breach of Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 7 of 15 Page ID #:17941 DLA P IPER LLP (US) LOS ANGELES -3- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contract claim. Due diligence begins at that point, a d not before.1 See, e.g., Tivoli LLC v. Spa, No. SACV141285DOCJCGX, 2016 WL 6138406, at *3 (C.D. Cal. Feb. 19, 2016) (granting leave to amend because “[a]lthoug Plaintiffs may have believed Defendants committed fraud, Plaintiffs did not have th adequate evidence of those actions until much later in the discovery process and fter the cut-off date for amendment of the pleadings, due in part to Defendants’ rolling discovery.”). Defendants’ cited authorities are thus simply inapposite to the factual circumstances here because the facts giving rise to CTC’s amendment were in Defendant Chen’s exclusive possession. For instance, in Johnson v. Mammoth Recreations, Inc., plaintiff’s counsel was thrice informed of the fact that defendants did not own the premises giving rise to Johnson’s personal injury claim. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 606-07 (9th Cir. 1992). This fact was communicated to Johnson at the inception of the lawsuit, during discovery, and at latest, through written correspondence exchanged “well ithin the amendment cut- off date.” Id. Defendant Chen here did not disclose her breach until well after the Court’s scheduling order cut-off date had passed. (Dkt. No. 66.) Moreover, Johnson sought to add a claim to join a new party, unlike here where CTC seeks to add a claim against a common Defendant. See Union Pac. R.R. Co. v. Nevada Power Co., 950 F.2d 1429, 1432 (9th Cir. 1991) (“Amendments seeking to add claims are to be granted more freely than amendments adding parties.”). Defendants’ remaining authorities are similarly inapposite. See Martella v. Marine Cooks & Stewards Union, Seafarers Int'l Union f N. Am., AFL-CIO, 448 F.2d 729, 730 (9th Cir. 1971) (discussing inapplicable Rule 60(b) “excusable neglect” 1 Defendants’ additional contention that CTC “must have suspected” that Chen kept CTC’s information is without merit. By that standar , CTC could have equally intuited that Defendant James Huang had produced those emails, or more likely, that Defendant Jason Huang had produced the emails from his personal computer, JASONPC, that was the subject of CTC’s request for inspection. CTC’s diligence is focused on its discovery efforts to confirm potential facts—which led to Chen’s deposition and eventual admission giving rise to the instant Motion. Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 8 of 15 Page ID #:17942 DLA P IPER LLP (US) LOS ANGELES -4- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 standard for seeking appeal); Smith v. Stone, 308 F.2d 15, 17 (9th Cir. 1962) (same); Precor Inc. v. Fitness Quest, Inc., No. C05-0993L, 2007 WL 136749, at *2 (W.D. Wash. Jan. 12, 2007) (denying plaintiffs’ request for leave to amend where plaintiffs’ sought to add additional gym devices to list of allegedly infringing devices in the complaint because “the evidence makes it clear that plaintiffs were not dependent on defendants in locating these devices”); Flowrider Surf, Ltd. v. Pac. Surf Designs, Inc., No. 315CV01879BENBLM, 2016 WL 6565888, at *2 (S.D. Cal. Nov. 4, 2016) (denying PSD’s leave to amend motion where “the facts supporting its new claims related to the ‘589 patent were [publicly] available to PSD when it filed its original Answer in October 2015,” and several months before am ndment cut-off date). The relevant authorities underscore that due diligence depends on the reasonable discovery of facts within a party’s control that would support the proosed claim. Compare Aten Int'l Co. v. Emine Tech. Co., No. SACV090843AGMLGX, 2011 WL 13134915, at *2 (C.D. Cal. Mar. 23, 2011) (“Defendants meet the ‘good cause’ requirement . . . The Uniclass License was only produced in late January 2011, well after the August 2010 amendment cut-off. Defendants could not have amended their Answer to assert this license defense before the cut-off.”) with Sako v. Wells Fargo Bank, Nat. Ass'n, No. 14CV1034-GPC JMA, 2015 WL 5022326, at *2 (S.D. Cal. Aug. 24, 2015) (“Based on the evidence . . . the Court concludes that Plaintiff knew about facts to support [proposed claims] . . . before and during the litigation”). CTC further emphasizes its meet and confer efforts prior to the filing of the Motion. CTC informed Defendants of its planned motion as early as January 30, and requested that Defendants meet and confer in an attemp to resolve the disputes before the Court. These good faith efforts further contributed to the “alleged delay”—efforts that should not be counted against CTC. See Contemporary Servs. Corp. v. Landmark Event Staffing Servs., Inc., No. SACV0900681AGANX, 2012 WL 12964900, at *2 (C.D. Cal. Sept. 24, 2012) (holding plaintiff’s “purs it of a stipulation regarding the amendment” materially supported finding of due diligence). Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 9 of 15 Page ID #:17943 DLA P IPER LLP (US) LOS ANGELES -5- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Finally, there is no bright-line “two-month” rule as Defendants contend. Several courts have found delays of several months were not undue. Compare Cent. Freight Lines, Inc. v. Amazon Fulfillment Servs., No. C17-0814JLR, 2019 WL 1115257, at *4 (W.D. Wash. Mar. 11, 2019) (finding good cause to amend scheduling order and add new defendant where plaintiff filed motion nearly four months after “receiv[ing] [Defendant’s] October 30, 2018 document production” substantiating basis for plaintiff’s proposed amendments) andSpa, 2016 WL 6138406, at *2 (finding good cause despite plaintiff’s nearly 2-month delay) with Flowrider Surf, 2016 WL 6565888, at *2 (denying leave to amend given two-month delay). This is because Courts look at the facts and circumstance of the case to determine whether a delay was undue. Here, CTC discovered the new fact, and attempted to meet and confer with Defendants within a month after the discovery and within two weeks after completing the nearly dozen d positions scheduled through January 30. Given the parties were unable to reach an agreement, CTC spent the following three weeks drafting its four dispositive motions. These considerations support a finding of due diligence and good cause to permit amendment as to Chen. B. Rule 15 Factors: Defendants Concede Three of Five Factors to CTC with Respect to Both Proposed Amendments. Defendants did not address the good faith, prior amendment, and futility factors in their Opposition. This constitutes waiver. See Walsh v. Nev. Dep’t of Human Res., 471 F.3d 1033, 1037 (9th Cir. 2006) (failure to address legal issue in opposition deemed waiver). CTC is thus entitled to “a presumption under Rule 15(a) in favor of granting leave to amend” absent a “strong showing” of the remaining undue delay and prejudice factors. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (emphasis added); see also Sonoma Cty. Ass'n of Retired Employees v. Sonoma Cty., 708 F.3d 1109, 1117 (9th Cir. 2013); Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999) (“Generally, [the Rule 15] determination should be performed with all inferences in favor of granting the motion.”). Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 10 of 15 Page ID #:17944 DLA P IPER LLP (US) LOS ANGELES -6- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. Chen Amendment: CTC’s Motion Brought Within Two Months of the New Discovery Was Not Unduly Delayed. CTC incorporates its due diligence arguments above, and further notes that CTC’s delay was not undue given Defendants contributed to the delay by unreasonably forestalling Defendant Chen’s deposition until the final four weeks of discovery. (Doc. 161-1 at 4; Bentz Decl. ¶ 3, Ex. A.) See Carlin v. DairyAmerica, Inc., No. 109CV00430AWIEPG, 2017 WL 3671860, at *19 (E.D. Cal. Aug. 25, 2017) (granting leave to amend in part because “[w]hile it is likely true that amendment will cause some amount of delay in this case . . . Any delay is arguably caused by [defendant’s] actions in failing to follow [their discovery obligations].”); Stoddart v. Express Servs., No. 212CV01054KJMCKD, 2017 WL 3333994, at *3 (E.D. Cal. Aug. 4, 2017) (granting leave to amend where “defendants themselves were [] complicit in the discovery delays to date.”). In short, the enormous litigation workload, CTC’s good faith meet and confer efforts, and Defendants’ contributory delay precludes a finding of undue delay here. D. Chen Amendment: Defendant Chen Will Not Suffer Undue Prejudice Given the Straightforward Nature of the Claim. Defendants here jumble the analysis by making undue prejudice arguments against the proposed Chen amendment on the basis of alleged harm to Defendant Huang. CTC here addresses only Defendant Chen’s prejudice claims. First, while Defendants complain that CTC’s motion coincided with Defendants’ summary judgment motion, they fail to explain how this prejudiced Defendant Chen. Nor can they. Had CTC filed its Motion earlier—for example, in early February, Defendants still could not have sought summary judgment on this claim given the motion cutoff date on March 4. Moreover, such motion would have be n fruitless given Chen’s admissions—which themselves warrant a grant of summary judgment in CTC’s favor. Second, the factual basis for CTC’s amendment was in fact known to Defendant Chen. This is not unavailing—it is compelling, because Defendant Chen: Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 11 of 15 Page ID #:17945 DLA P IPER LLP (US) LOS ANGELES -7- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1) knew she had an agreement with CTC; 2) knew that agreement required her to return all of CTC’s information in her possession when she was terminated; and 3) knew she kept that information after her termination. (Bentz. Decl. ¶ 4, Ex. B, Chen Depo.) Chen’s claim to prejudice here strains reason given she was on notice of this potential amendment since the start of the case. Defendants further strain the bounds of logic by claiming Defendant Chen will suffer prejudice because she would suffer the burden of additional discovery, while simultaneously contending that she would be prejudiced if she was not granted additional discovery. (Opp. pp 16-17.) Moreover, CTC did not voice any intent to re-open discovery upon the grant of the Motion. CTC more accurately voiced a willingness to re-open discovery if the Court was inclined to deny its Motion. CTC maintains no further discovery is necessary given Dfendant Chen’s clear admissions, and asks the Court to grant its Motion as to Defendant Chen. E. Huang Amendment: Good Cause Exists Under Rule 16 Given CTC’s Legitimate Claim Against Defendant Jason Huang. CTC is asking the Court to allow it to assert the same contract claim, based on the same contract terms, between the same parties. The claim has not changed, only the attachment to the Complaint has changed. “Under th applicable law, courts generally grant motions where, as here, a party seeks to elaborate on an existing claim based on information obtained during discovery.”See Twin City Fire Ins. Co. v. Mitsubishi Motors Credit of Am., Inc., No. SA CV 04-43-GLTMLGX, 2005 WL 5980994, at *3 (C.D. Cal. Feb. 22, 2005) (internal citations omitted). It would be a different case if CTC revealed a new agreement in the eleventh hour governing new terms to which Defendant Huang had no reasonable notice. But CTC here put Defendant Huang on notice of the particular contract claim asserted against him by outlining the terms of that contract and how his conduct breached it. This is why this amendment is reasonably considered nonmaterial. See In re WellPoint, Inc. Out-of- Network UCR Rates Litig., 865 F. Supp. 2d 1002, 1046 (C.D. Cal. 2011) (“A plaintiff Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 12 of 15 Page ID #:17946 DLA P IPER LLP (US) LOS ANGELES -8- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 who sues on a written contract is not required to attach a copy of the contract to the complaint, but its existence and how it was breached must be identified.”); Securimetrics, Inc. v. Hartford Cas. Ins. Co., No. C 0500917CW, 2005 WL 1712008, at *2 (N.D. Cal. July 21, 2005) (“Plaintiff has plead the ‘legal effect’ of the contract [by] alleg[ing] sufficient facts to enable Defendant to understand and respond to its claims.”). The federal pleading rules were designed to ensure “cases [] be decided upon their merits, rather than upon technical defici n ies in the pleadings.” Kaseberg v. Conaco, LLC, No. 15-CV-1637 JLS (DHB), 2018 WL 5994548, at *4 (S.D. Cal. Nov. 15, 2018) (internal citations omitted). For these reasons, good cause exists to permit CTC to append the revised contract to the Complaint. F. Huang Amendment: A Finding of Undue Delay under Rule 15 is Not Determinative. As discussed above, a finding of undue delay here should not extinguish CTC’s legally meritorious claim. Moreover, the timing ofCTC’s Motion was in fact premised on Defendants’ new contention that CTC had no enforceable contract claim against Defendant Huang. CTC accordingly investigated this new claim—which led to CTC’s meet and confer efforts and transmission of the natively-sourced files containing the revised agreement sought to be added to the Complaint. See Twin City Fire Ins. Co., 2005 WL 5980994, at *2–3 (granting amendment because “[w]hether or not the deponents’ [new] testimony was ‘equivocal,’ it provides a basis for Defendant’s motion . . . the newly discovered information appears to supplement the previous allegation and provide a firmer basis to assert the counterclaims Defendant now wants to add”). These considerations oppose a finding of undue delay. G. Huang Amendment: Defendant Huang Cannot Claim Prejudice Given He Was on Notice of the Instant Claims. Defendant Huang cannot reasonably claim prejudice. First, Defendants claim Huang would be harmed because CTC may circumvent summary judgment on this issue. Not so. Instead of “circumventing” summary judgment, CTC opposed it Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 13 of 15 Page ID #:17947 DLA P IPER LLP (US) LOS ANGELES -9- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 directly, noting in its summary judgment opposition that there is sufficient evidence giving rise to a genuine dispute of fact. (Dkt. No. 185 p.18.) Defendants concede this in their Opposition. (Opp. p.18.) It is hard to grasp what harm befalls Defendant Huang when his summary judgment motion depends not o the instant Motion, but on discovered facts raising a genuine dispute precluding summary judgment. And unlike the cases cited by Defendants, CTC has a good faith basis for the instant motion—to preserve its legitimate claim against Defendant Jason Huang. See Cook v. U.S. Capital Ins. Co., No. C-93-1077 MHP, 1994 WL 327039, at *9 (N.D. Cal. June 29, 1994) (where plaintiffs “offer absolute y no explanation for their delay” and “[a]bsent any explanation for their delay in bringing this motion . . . . plaintiffs’ motion to amend must be denied.”) ; Anderson v. City & Cty. of San Francisco, 169 F. Supp. 3d 995, 1038 (N.D. Cal. 2016) (denying plaintiff’s request to assert discrimination claims premised on her dismissal from 118th iteration of fire academy that occurred after close of discovery because “none of her [nearly identical] claims related to the 115th or the 117th Fire Academy survived summary judgment”). Moreover, unlike any of the precedents cited by Defendants, CTC here brings the same claim against the same defendant involving the same contractual terms. See Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 799 (9th Cir. 1991) (affirming denial of leave to amend where party “would have been unreasonably prejudiced by the addition of numerous new claims so close to trial”); M/V American Queen, 708 F.2d at 1492 (affirming denial of leave to amend where “the new allegations would totally alter the basis of the action, in that they covered different acts, employees and time periods”). Finally, as discussed previously, CTC has no intent to re-open discovery unless the Court holds such discovery is necessary to allevi t any prejudice. CTC maintains no such discovery is necessary. In short, CTC requests that the Court grant its Motion with respect to Defendant Huang. IV. CONCLUSION For the foregoing reasons, the Court should grant CTC’s Motion and consider Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 14 of 15 Page ID #:17948 DLA P IPER LLP (US) LOS ANGELES -10- PLAINTIFF AND COUNTERDEFENDANT CTC GLOBAL CORPORATION’S MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION FOR LEAVE TO AMEND THE COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the proposed First Amended Complaint the operative complaint. Dated: March 25, 2019 DLA PIPER LLP (US) By: /s/ TAMANY J. VINSON BENTZ TAMANY J. VINSON BENTZ AARON T. GOODMAN HECTOR E. COREA Attorneys for Plaintiff CTC GLOBAL CORPORATION Case 8:17-cv-02202-AG-KES Document 192 Filed 03/25/19 Page 15 of 15 Page ID #:17949