United States District Court, D. South Dakota, Western Division
CHEVAL INTERNATIONAL and AUGUST K. ANDERSON, Plaintiffs,
SMARTPAK EQUINE, LLC, PAAL GISHOLT and REBECCA MINARD, Defendants.
MEMORANDUM OPINION AND ORDER ON MOTION TO AMEND
Lawrence L. Piersol United States District Judge.
Cheval International (Cheval) and August K. Anderson
(Anderson) have filed a Motion for Leave to Amend the Amended
Complaint pursuant to Federal Rule of Civil Procedure 15.
(Doc. 114.) For the following reasons, the motion will be
denied in part and granted in part.
Complaint in this case was filed on February 24, 2014. Much
of the background underlying this lawsuit is set forth in the
Memorandum Opinion and Order on Motion for Summary Judgment
issued on March 15, 2016, where this Court granted in part
and denied in part Smartpak's motion for summary
judgment. (Doc. 60.) Those rulings allowed Plaintiffs to
proceed with their claims for Trademark Infringement, Unfair
Competition, and False Description as to the trademarks
"Black-As-Knight, " "Gold-As-Sun, " and
"Red-D-Vinity." Plaintiffs' state law claims
for defamation, tortious interference with business
expectancy, unfair competition and trademark infringement
also withstood summary judgment. Summary judgment was granted
in favor of SmartPak as to the marks "Bug-Off and
"Inside-Out" on all counts of the complaint, and
also on the state law deceptive trade practices claim.
the decision on summary judgment, new counsel noticed their
appearances for Plaintiffs. Counsel moved to amend the
complaint in June 2016, and the Court granted the motion to
amend on August 23, 2016. (Doc. 82.) The Amended Complaint,
filed over two years after the original complaint was filed,
added two defendants, Paal Gisholt and Rebecca Minard. (Doc.
83.) A different mark was alleged in the trademark claim in
Count I for SmartPak's use of the registered
SmartTranquility mark, which Plaintiffs allege infringes on
their "Tranquility Oil" mark. (Doc. 83,
§§ 87, 88.) Allegations were added to the unfair
competition/false advertising claim in Count II for three
products that were not included in the original complaint:
"White-As-Snow, " "Lame-A-Way, " and
"Silver Horse." (Doc. 83, § 92.) Count III of
the Amended Complaint added a new state law claim for breach
of the common law duty of good faith and fair dealing. (Doc.
83, § 98.) Finally, Plaintiffs asserted two new claims
in Counts VI and VII of the Amended Complaint for
cancellation of SmartPak's registered trademarks
"SmartBug-Off' (doc. 83, ¶ 128) and
"SmartTranquility" (doc. 83, ¶ 137). The state
trademark infringement claim that was in the original
complaint was not asserted in the Amended Complaint.
September 27, 2016, Defendants answered the Amended Complaint
and moved to dismiss Rebecca Minard. (Docs. 89, 90.)
October 14, 2016, the Court issued a Scheduling Order setting
the deadline to move to j oin additional parties and to amend
the pleadings for November 1, 2016, the discovery deadline
for February 28, 2017, the motion deadline for March 30,
2017, the pretrial conference for July 5, 2017, and the jury
trial for August 22, 2017. (Doc. 93.)
November 2016, Plaintiffs fired their new lawyers. The Court
allowed Anderson time to cancel the limited partnership
registration of Cheval, and Anderson subsequently submitted
documentation showing that Cheval was changed to a sole
proprietorship. (Docs. 103, 113.)
Court granted SmartPak's motion for a protective order on
November 22, 2016. (Doc. 111.) On December 13, 2016, Anderson
filed a motion to "clarify" the Protective Order to
allow her to have access to documents that SmartPak has
designated as Attorneys' Eyes' Only (doc. 113), which
SmartPak opposed (docs. 116, 118). Anderson's reply
included a motion for further relief (doc. 120), which SmartPak
also opposed (doc. 121).
December 16, 2016, Anderson moved for leave to file a second
amended complaint to add fraud and RICO claims and a new
defendant, Henry Schein. (Docs. 114, 115.) Henry Schein is a
publicly traded company which Anderson believed purchased a
60% ownership interest in SmartPak in 2014. (Doc. 114-1,
¶¶ 6, 7(b), 159.) The fraud and RICO claims are
asserted in Counts VIII and IX of the proposed second amended
complaint. The state trademark infringement claim alleged in
Count X was in the original complaint but not in the first
asserts that she was unable to amend her complaint prior to
the November 1, 2016 deadline because Defendants did not
respond to any discovery until December 22, 2016. (Doc. 124
at 12.) Defendants oppose the motion for leave to file a
second amended complaint, arguing that Anderson was aware of
the claims she seeks to add, as well as the new party, as
early as July 2015. (Doc. 122 at 5.)
Federal Rules of Civil Procedure liberally permit amendments
to pleadings." Dennis v DillardDep 'tStores,
Inc., 207 F.3d 523, 525 (8th Cir. 2000); see
also Fed.R.Civ.P. 15(a)(2) ("The court should
freely give leave when justice so requires."). A timely
motion to amend pleadings should normally be granted under
Rule 15(a) absent good reasons to the contrary. See Popp
Telcom v. American Sharecom, J>?c., 210F.3d928, 943
(8th Cir. 2000). A district court appropriately denies the
motion to amend if "there are compelling reasons such as
undue delay, bad faith, or dilatory motive, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the non-moving party, or futility of the
amendment." Moses Com Securities, Inc v
Comprehensive Software Sys, Inc., 406 F.3d 1052, 1065
(8th Cir. 2005) (internal marks omitted).
when a party seeks leave to amend a pleading outside the
deadline established by the Court's scheduling order, the
party must satisfy the good-cause standard of Rule 16(b)(4)
rather than the more liberal standard of Rule 15(a).
Sherman v Winco Fireworks, Inc.,532 F.3d 709, 716
(8th Cir. 2008). The "interplay between Rule 15(a) and
Rule 16(b) is settled in this circuit." Id.
Scheduling orders issued pursuant to Rule 16(b) "must
limit the time to j oin other parties, amend the pleadings,
complete discovery, and file motions." Fed.R.Civ.P.
16(b)(3)(A). When a scheduling order is issued pursuant to
Rule 16(b), the "schedule may be modified only for good
cause and with the judge's consent." Fed.R.Civ.P.
16(b)(4). Therefore, "if a party files for leave to
amend [a pleading] outside of the court's scheduling
order, the party must show cause to modify the
schedule." Sherman,532F.3dat716 (quoting
Popoalii v Correctional Med. Servs.,512F.3d488, 497 (8th Cir. 2008)) (internal quotation marks
omitted). In these circumstances, "the application of
Rule 16(b)'s good-cause standard is not optional."
Sherman, 532 F.3d at 716. "To permit district
courts to consider motions to amend ...