Tevra Brands LLC v. Bayer HealthCare LLC ( 2020 )

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 TEVRA BRANDS LLC, Case No. 19-cv-04312-BLF 8 Plaintiff, ORDER GRANTING PLAINTIFF’S 9 v. MOTION FOR LEAVE TO AMEND AND TERMINATING BAYER 10 BAYER HEALTHCARE LLC, et al., HEALTHCARE LLC’S MOTION TO DISMISS THE COMPLAINT 11 Defendants. [ECF 25, 79] 12 13 On July 26, 2019, Plaintiff Tevra Brands LLC (“Tevra”) sued Defendants Bayer HealthCare 14 LLC (“Bayer HealthCare”), Bayer Animal Health GmbH (“Bayer Animal”), and Bayer AG, alleging 15 various violations of the Clayton Antitrust Act and the Sherman Antitrust Act. ECF 1. The suit 16 concerns topical flea and tick treatments containing the active ingredient Imidacloprid. Id. ¶¶ 1,15. 17 The Complaint claimed, inter alia, that Defendants have (1) forced retailers and distributors to agree 18 not to carry generic Imidacloprid topicals in competition with Defendants’ name brand products, id. 19 ¶ 3, and (2) illegally tied the purchase of their topical treatments with their patented flea collar, id. 20 ¶¶ 4-5. 21 On September 27, 2019, Bayer HealthCare1 moved to dismiss the Complaint pursuant to 22 Federal Rule of Civil Procedure 12(b)(6). ECF 25 (“MTD”). The motion was for set for hearing 23 on February 27, 2020. Id. In connection with that motion, on November 14, 2019, Bayer 24 HealthCare filed a request for judicial notice asking the Court to consider various contracts between 25 Bayer HealthCare and its dealers. ECF 43. Bayer HealthCare argued that these contracts were 26 27 1 The motion was brought only by Bayer HealthCare, as the other two Bayer entities had not been 1 “incorporated by reference” in the Complaint, id. at 1, though it is undisputed that Plaintiff did not 2 have access to these agreements when it drafted the Complaint, see ECF 39; ECF 79 (“Mot. for 3 Leave”) ¶ 2. 4 Then, on February 10, 2020, Plaintiff filed a Motion for Leave to File a First Amended 5 Complaint (“FAC”). ECF 79. According to Plaintiff, the primary purpose of amendment is “to 6 address the agreements with retailers and distributors that Bayer HealthCare LLC first produced on 7 November 14, 2019.” Mot. for Leave at 2-3. In the interest of judicial economy and to avoid 8 unnecessary travel costs for the parties’ counsel, the Court continued the hearing for Bayer 9 HealthCare’s motion to dismiss to March 26, 2020, by which time Plaintiff’s Motion for Leave 10 would be fully briefed. See ECF 83. The Motion for Leave—which Bayer HealthCare has 11 opposed—is now ripe for the Court’s decision. Having reviewed the parties’ submissions, the Court 12 finds that the motion is suitable for decision without oral argument and GRANTS it. 13 Pursuant to Federal Rule of Civil Procedure Rule 15(a), leave to amend “shall be freely given 14 when justice so requires.” See also Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc). 15 The Ninth Circuit has repeatedly instructed district courts to grant leave to amend unless one or 16 more of the following factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) 17 repeated failure to cure deficiencies by amendment, (4) undue prejudice to the opposing party, and 18 (5) futility of amendment. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th 19 Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). As explained below, the Court finds 20 that none of these factors justifies denial of leave to amend here. 21 To begin with, it is perfectly reasonable for Plaintiff to amend its complaint to account for 22 the dealer agreements. The parties clearly agree that the agreements are relevant to Plaintiff’s 23 claims, as Bayer HealthCare sought judicial notice of them. However, Bayer HealthCare contends 24 that Plaintiff unduly delayed in amending its complaint, as Plaintiff came into possession of the 25 dealer agreements in November 2019. See ECF 86 (“Opp.”) at 1-2. There are at least two problems 26 with this objection. First, even if the Court agreed that a delay of three months was “undue,” the 27 Ninth Circuit has made clear that “delay alone is not sufficient to justify the denial of . . . leave to 1 importantly, Plaintiff filed its Motion for Leave by the deadline to amend pleadings or add parties 2 || in the parties’ stipulated case schedule. See ECF 72 (setting deadline as February 10, 2020). The 3 || Court is therefore not persuaded that Plaintiffs filing “threatens the overall schedule for this case,” 4 Opp. at 1. 5 Second, Bayer HealthCare argues that amendment would prejudice it because it “will have 6 || spent significant time in briefing, preparing and arguing a motion to dismiss that will be mooted.” 7 Opp. at 2. Although the Court is sympathetic to Bayer HealthCare’s frustration, this is not a 8 sufficiently serious showing of prejudice to rebut the presumption in favor of leave to amend. As 9 Plaintiff points out, the litigation is still at an early stage: Fact discovery remains open and, again, 10 || Plaintiff met the parties’ agreed-upon deadline to amend its pleading. Bayer HealthCare has not 11 articulated any prejudice to its ability to defend this suit. To the extent Bayer HealthCare believes 12 || the FAC has failed to cure the flaws in the original Complaint, it is certainly free to renew those 13 arguments. Ultimately, considering the apparent importance of the dealer agreements to this suit, 14 || the Court believes efficiency will be served by permitting Plaintiff to clarify its theories in light of 3 15 those agreements. a 16 Finally, Bayer HealthCare contends that amendment would be futile because the FAC 3 17 remains deficient for the reasons articulated in its pending Motion to Dismiss the Complaint. Opp. 18 || at 2. Amendment is futile only if “the pleading could not possibly be cured by the allegation of 19 || other facts.” Lopez, 203 F.3d at 1127. Even if Plaintiffs claims are deficient in the ways urged by 20 || Bayer HealthCare, the Court is not prepared to say that amendment would be futile. 21 Accordingly, the Court GRANTS Plaintiffs Motion for Leave to File a First Amended 22 || Complaint, ECF 79. Plaintiff shall file the FAC no later than March 20, 2020. As the operative 23 || complaint is now the First Amended Complaint, Bayer Healthcare’s Motion to Dismiss the 24 || Complaint, ECF 25, is hereby TERMINATED as moot. 25 IT IS SO ORDERED. 26 || Dated: March 16, 2020 han an Kod Leow fern BETH LABSON FREEMAN 28 United States District Judge