Terry v. Wasatch Advantage Group, LLC ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 Denika Terry, et al., No. 2:15-cv-00799-KJM-DB 12 Plaintiffs, ORDER 13 v. Wasatch Advantage Group, LLC, et al., 1S Defendants. 16 17 Owner and Non-Owner defendants move for judgment on the pleadings on plaintiffs’ 18 | claim under the False Claims Act and their state causes of action. The court denies the motion. 19 A jury trial for Phase 1 of this case is set to begin on July 30, 2024. See Final Pretrial 20 | Order at 16, ECF No. 396. The deadline for dispositive motions in the court’s scheduling order 21 | passed two years ago. See Order (Mar. 15, 2022), ECF No. 237; Rule 16 Scheduling Order, ECF 22 | No. 143. Though this case has been proceeding for more than nine years, defendants assert they 23 | recognized a conflict of interest among themselves for the first time in December 2023 and have 24 | now divided themselves into two groups, Wasatch Property Management defendants and Owner 25 | and Non-Owner defendants. See Ex Parte Appl. at 1, ECF No. 349; see generally Am. Joint 26 | Pretrial Statement, ECF No. 378. The motion is fully briefed. See Mot., ECF No. 387; Opp’n, 27 | ECF No. 392; Reply, ECF No. 395. The court submitted the motion without a hearing as 28 | provided under Local Rule 230(g). See Min. Order, ECF No. 397. 1 “After the pleadings are closed—but early enough not to delay trial—a party may move 2 for judgment on the pleadings.” Fed. R. Civ. P. 12(c). To file a motion for judgment on the 3 pleadings after the dispositive motion deadline, the movant must show good cause under Rule 4 16(b). See Bland v. Messinger, No. 20-0051, 2022 WL 1478106, at *2 (E.D. Cal. Apr. 26, 2022). 5 Federal Rule of Civil Procedure 16(b) provides, “[a] schedule may be modified only for good 6 cause and with the judge’s consent.” “Rule 16(b)’s ‘good cause’ standard primarily considers the 7 diligence of the party seeking the amendment. The district court may modify the pretrial 8 schedule ‘if it cannot reasonably be met despite the diligence of the party seeking the extension.’” 9 Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (quoting Fed. R. Civ. 10 P. 16 advisory committee’s notes (1983 amendment)). “[C]arelessness is not compatible with a 11 finding of diligence and offers no reason for a grant of relief.” Id. “Although the existence or 12 degree of prejudice to the party opposing the modification might supply additional reasons to 13 deny a motion, the focus of the inquiry is upon the moving party’s reasons for seeking 14 modification. If the party was not diligent, the inquiry should end.” Id. (citation omitted). 15 Owner and Non-Owner defendants recognize the deadline to file dispositive pleadings has 16 passed but do not separately move to modify the scheduling order. See Mem. at 3, ECF No. 387- 17 1. In their motion, defendants do argue good cause exists to modify the scheduling order, 18 [B]ecause they have been diligent in seeking the relief requested 19 herein, and have worked diligently to review the record and 20 evidence in the case, have resolved entity ownership and 21 representation issues not previously addressed, have submitted, with 22 counsel for Plaintiffs and WPM, two joint pretrial statement 23 submissions, as well as a subsequent joint pretrial statement as 24 directed by the Court[], and have participated in the Final Pretrial 25 Conference[.] 26 Id. at 3. Owner and Non-Owner defendants also cite the conflict of interest among defendants 27 and the fact that the scheduling order has already been modified several times as part of their 28 justification for good cause. See id. at 3. 29 The court is not persuaded by Owner and Non-Owner defendants’ arguments. They 30 provide no explanation for why it took nine years to discover the conflict of interest among 31 defendants or why the motion could not have been raised earlier, for example, immediately upon 1 new counsel’s association in January 2024. See generally Mem.; Bland, 2022 WL 1478106, at *2 2 (“[T]he substitution of new counsel does not justify failure to comply with a scheduling order.” 3 (citation omitted)). To demonstrate they were diligent, Owner and Non-Owner defendants 4 reference only instances of their participation that reflect their basic duties in litigating the case, 5 such as reviewing the record, providing joint statements with opposing counsel and participating 6 in the Final Pretrial Conference, by which time they communicated their plan to bring this motion 7 and a separate motion for reconsideration as well. See Mem. at 3. They do not provide an 8 explanation of why they have delayed until now to bring this motion. Moreover, they bring this 9 motion on the eve of the Phase 1 trial, which is now less than three months away. See Final 10 Pretrial Order at 16. To amend the scheduling order at this late date would threaten the sort of 11 disruption that Rule 16(b) was designed to prevent, namely, to alleviate unwarranted case 12 management problems. See Johnson, 975 F.2d at 610; Duarte Nursery, Inc. v. United States 13 Army Corps of Eng’rs, No. 13-02095, 2017 WL 416097, at *2–3 (E.D. Cal. Jan. 31, 2017). The 14 court finds Owner and Non-Owner defendants have not demonstrated diligence and thus have not 15 shown good cause for allowing such a tardy and disruptive amendment. See J.M. v. Red Roof 16 Inns, Inc., No. 22-00672, 2024 WL 871870, at *4 (E.D. Cal. Feb. 28, 2024). 17 The court does not reach the question whether waiver under the court’s standing order 18 provides independent grounds for dismissing the motion. See Standing Order ¶ 4(A)(e) (citing 19 Shewbridge v. El Dorado Irrigation Dist., No. 05-0740, 2007 WL 1294392, at *3 (E.D. Cal. 20 Apr. 30, 2007)) (“The parties are cautioned that failure to raise a dispositive legal issue that could 21 have been tendered to the court by proper pretrial motion prior to the dispositive motion cut-off 22 date may constitute waiver of such issue.”). 23 For these reasons, the court denies Owner and Non-Owner defendants’ motion for 24 judgment on the pleadings as untimely. 25 This order resolves ECF No. 387. 26 IT IS SO ORDERED. 27 DATED: May 21, 2024.