Global Ventu Holding B.V. v. Zeetogroup, LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 GLOBAL VENTU HOLDING B.V., Case No. 19-cv-1018 DMS (DEB) 12 Plaintiffs, ORDER DENYING ZEETOGROUP, LLC AND TIBRIO, LLC’S 13 v. MOTION FOR LEAVE TO FILE SECOND AMENDED CROSS- 14 ZEETOGROUP, LLC, COMPLAINT SAMPLES.COM, LLC, AND TIBRIO, 15 LLC, 16 Defendants. 17 18 This case comes before the Court on ZeetoGroup, LLC and Tibrio, LLC’s 19 motion for leave to file Second Amended Cross-Complaint to include claims against 20 a former Tibrio employee Corey Oneal. Global Ventu Holding B.V. and Alex 21 Andebeek filed an opposition to the motion, and ZeetoGroup and Tibrio filed a reply. 22 For the reasons discussed below, the motion is denied. 23 I. 24 BACKGROUND 25 The facts underlying the present case are set out in this Court’s previous orders 26 on Global Ventu’s motions to dismiss. (See ECF Nos. 32, 54.) Through the present 1 motion, ZeetoGroup and Tibrio look to sweep some additional facts into the case. 2 Those facts involve a dispute between Tibrio and one of its former employees Corey 3 Oneal. Tibrio alleges that after Oneal left Tibrio’s employ, he had conversations 4 with Andebeek that violated Oneal’s Proprietary Information and Inventions 5 Assignment Agreement with Tibrio. Tibrio alleges that through these conversations, 6 Oneal also interfered with Tibrio’s future relationship with Global Ventu. Based on 7 these facts, ZeetoGroup and Tibrio seek leave to file a Second Amended Cross- 8 Complaint adding Oneal as a Cross-Defendant on claims for breach of contract and 9 interference with prospective economic advantage. 10 II. 11 DISCUSSION 12 Federal Rule of Civil Procedure 15 provides that leave to amend a party’s 13 pleading “shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a). In 14 accordance with this Rule, the Supreme Court has stated, 15 in the absence of any apparent or declared reason -- such as undue delay, 16 bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to 17 the opposing party by virtue of allowance of the amendment, futility of 18 amendment, etc. -- the leave sought should, as the rules require, be “freely given.” 19 20 Foman v. Davis, 371 U.S. 178, 182 (1962). Of these factors, the Ninth Circuit has 21 stated “it is the consideration of prejudice to the opposing party that carries the 22 greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th 23 Cir. 2003). The party opposing the amendment bears the burden of showing 24 prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186-87 (9th Cir. 1987). 25 Absent prejudice, or a strong showing of any of the remaining Foman factors, there 26 exists a presumption under Rule 15(a) in favor of granting leave to amend. Eminence 1 Capital, 316 F.3d at 1052. 2 Here, Global Ventu and Andebeek argue all of the Foman factors overcome 3 the presumption in favor of leave to amend. First, they assert ZeetoGroup and Tibrio 4 unduly delayed in filing the present motion. They state ZeetoGroup and Tibrio were 5 aware of the facts underlying their claims against Oneal by at least December 2019, 6 but waited approximately four months to file the present motion. ZeetoGroup and 7 Tibrio do not dispute these facts, but argue there were other reasons for their delayed 8 filing. Specifically, they were engaged in an arbitration proceeding in which Oneal 9 was a witness, and they feared filing the present motion would create the appearance 10 that Oneal “was being added [to this case] for the sole purpose of influencing 11 testimony.” (Mem. of P. & A. in Supp. of Mot. at 9) (citation omitted). 12 There is no dispute ZeetoGroup and Tibrio delayed filing the present motion. 13 The only question for the Court is whether the delay was undue. “’Undue delay’ is 14 delay that prejudices the nonmoving party or imposes unwarranted burdens on the 15 court.” Altair Instruments, Inc. v. Walmart, Inc., No. 2:18-cv-09461-R-FFM, 2019 16 WL 7166060, at *3 (C.D. Cal. Sept. 25, 2019). Global Ventu and Andebeek dispute 17 the merits of ZeetoGroup and Tibrio’s explanation for the delay, but they have not 18 shown the delay was “undue.” Accordingly, this factor does not overcome the 19 presumption in favor of leave to amend. 20 The next factor is bad faith or dilatory conduct on the part of the movant. 21 Global Ventu and Andebeek argue ZeetoGroup and Tibrio’s requested amendment 22 is taken in bad faith, but there is no clear evidence to support their accusations. 23 Therefore, this factor does not overcome the presumption in favor of leave to amend. 24 The next factor is failure to cure deficiencies in previous amendments. This 25 is ZeetoGroup and Tibrio’s first request to add claims against Oneal, and thus this 26 factor is inapplicable here. 1 Global Ventu and Andebeek also raise arguments on the futility factor, but 2 those arguments are more properly directed to prejudice, not futility. Therefore, the 3 Court turns to that most important issue. 4 Here, Global Ventu and Andebeek argue they will be prejudiced if the motion 5 is granted. Specifically, they assert the proposed amendment will expand the scope 6 of the case, which will require the parties to conduct additional discovery and delay 7 resolution of the case. ZeetoGroup and Tibrio dispute that Global Ventu and 8 Andebeek will suffer any prejudice. They contend Global Ventu and Andebeek will 9 have to participate in discovery related to the proposed claims either in this case or 10 a separate case, and that it would be more efficient to conduct that discovery in one 11 case rather than two. ZeetoGroup and Tibrio also assert that the claims against Oneal 12 are related to the claims against Global Ventu and Andebeek, and thus it would be 13 more efficient to litigate the claims together rather than separately. 14 The Court disagrees with the premise of ZeetoGroup and Tibrio’s argument 15 that the proposed claims against Oneal are related to the claims against Global Ventu 16 and Tibrio. Although the legal claims are the same (intentional interference with 17 prospective economic advantage and breach of contract), the factual bases for the 18 claims are completely different. The interference claim against Global Ventu and 19 Andebeek is based on their alleged interference with ZeetoGroup and Tibrio’s 20 relationship with Fluent, while the proposed claim against Oneal is based on his 21 alleged interference with the relationship between ZeetoGroup, Tibrio and Global 22 Ventu. And ZeetoGroup and Tibrio’s breach of contract claim against Global Ventu 23 and Andebeek is based on the Publisher Service Agreement and the Revenue Sharing 24 Agreement between those parties, while the proposed claim against Oneal is based 25 on his Proprietary Information and Inventions Assignment Agreement with Tibrio. 26 Although Oneal had conversations with Andebeek concerning Global Ventu’s ||relationship with Tibrio, those conversations do not make the claims related. Rather, 2 ||the claims involve different parties, different facts and different contracts. Allowing 3 ||those claims to be added to this case will expand the scope of the case and the 4 ||necessary discovery, (see Opp’n to Mot. at 11-12), and may delay resolution of the 5 ||case. At this stage of the case, where the parties are fully engaged in discovery, and 6 ||the fact discovery cut-off is less than two months away, Global Ventu and Andebeek 7 || would be unduly prejudiced if the amendment is allowed. See Kennedy v. Natural 8 || Balance Pet Foods, Inc., No. 07-CV-1082 H(RBB), 2008 WL 2053551, at *2 (S.D. 9 ||Cal. May 13, 2008) (denying motion for leave to amend where amendment “would 10 ||result in undue prejudice to Defendant.”) 11 III. 12 CONCLUSION AND ORDER 13 Although the majority of the Foman factors do not overcome the presumption 14 ||in favor of leave to amend, the prejudice factor weighs against allowing the proposed 15 ||amendment in this case. Contrary to ZeetoGroup and Tibrio’s assertion, the claims 16 ||against Oneal are not related to or intertwined with the claims against Global Ventu 17 ||and Andebeek. Indeed, they would essentially insert an entirely new and different 18 ||case into these proceedings. Thus, ZeetoGroup and Tibrio’s motion for leave to file 19 |}a Second Amended Cross-Complaint adding claims against Oneal is denied. 20 ||Consistent with the Court’s April 21, 2020 Order on Global Ventu and Andebeek’s 21 ||motions to dismiss and strike, ZeetoGroup and Tibrio may file a Second Amended ||Cross-Complaint on or before July 6, 2020. 23 IT IS SO ORDERED. 24 ||Dated: June 25, 2020 <, f 2 inn yw. 25 Hon. Dana M. Sabraw United States District Judge 27 -~5- 19-cv-1018 DMS (DEB) 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