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Glotech USA, Inc. v. Bluebird, Inc.

United States District Court, D. New Jersey

August 16, 2017

GLOTECH USA, INC., Plaintiff,
v.
BLUEBIRD, INC., Defendant.

          OPINION AND ORDER

          JAMES B. CLARK, III, UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on a motion by Plaintiff Glotech USA, Inc. (“Glotech” or “Plaintiff”) for leave to amend its Complaint [Dkt. No. 71]. Defendant Bluebird, Inc. (“Bluebird” or “Defendant”) opposes Plaintiff's motion [Dkt. No. 73]. For the reasons set forth below, Plaintiff's motion to amend is GRANTED in part and DENIED in part.

         I. BACKGROUND

         Bluebird manufactures and sells “enterprise mobile devices.” Dkt. No. 73 at p. 4. In 2009, Bluebird and Glotech entered into a written agreement whereby Glotech would promote Bluebird's products to potential customers in the United States (“the Commission Agreement”). Compl. at ¶ 12. Pursuant to the Commission Agreement, Glotech's fee for the successful promotion of Bluebird's products to new customers would be the difference in price between Bluebird's quoted price for a product to Glotech and the actual price paid by the new customer for the product. According to Defendant, Glotech would only be entitled to a fee under the Commission Agreement if Glotech “secured the customer, established the communication network, and managed the customer as a reseller where payment would go through Glotech.” Dkt. No. 73 at p. 5. Plaintiff, however, appears to contend that Glotech would earn a commission “if Bluebird entered into a sales contract directly with a new client developed by Glotech, and sales occurred pursuant to that contract.”[1] Dkt. No. 76 at p. 3.

         According to Plaintiff, Glotech introduced Bluebird products to two customers, Invivodata and PHT, which are now two of the largest purchasers of Bluebird products. Plaintiff contends that in violation of the Commission Agreement, Bluebird failed to pay Glotech its commission on sales of Bluebird products to Invivodata and PHT. Based upon Bluebird's failure to pay the commission for PHT and Invivodata, to which Glotech believes it is entitled, Glotech filed its Complaint in this action, asserting claims for: (1) non-payment of commissions; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; and (4) intentional interference with prospective economic advantage. In response, Defendant claims that no commission is owed to Glotech for sales to PHT and Invivodata because after Glotech was “unable to close the deals, ” Bluebird directly negotiated a deal with Invivodata in October 2011 and with PHT in April 2011 “with much lower pricing terms than those which Glotech had originally proposed for PHT.” Dkt. No. 73 at p. 5.

         Plaintiff now seeks to amend to add two additional counts to its Complaint stating causes of action for: (1) unjust enrichment and; (2) quantum meruit. These additional counts, Plaintiff states, are pled in the alternative to Plaintiff's existing claims, and will allow Plaintiff to recover compensation purportedly owed to Glotech by Bluebird for services performed by Glotech under a quasi contract theory in the event that a determination is made that Glotech is not owed any compensation under the Commission Agreement. The basis for Plaintiff's two additional proposed causes of action is two-fold. First, Plaintiff claims that while Defendant initially took the position that prices for PHT and Invivodata were quoted directly from Bluebird to PHT and Invivodata and that Glotech was never quoted prices for those customers, Defendant has shifted its litigation strategy and is now taking the position that Glotech was in fact quoted prices for PHT and Invivodata, but that the prices quoted to Glotech were higher than the actual sales price of Bluebird's products to those customers.

         Second, during the pendency of this action, eResearch Technology, Inc. (“ERT”) has become the successor company to both PHT and Invivodata. After last selling its products to ERT in 2015, Bluebird entered into a contract with ERT in August of 2016 for sales of a new Bluebird product (the “ERT Agreement”). The ERT Agreement has not yet been implemented and Bluebird has not yet made any sales under the ERT Agreement. Defendants claim that Glotech had no involvement in the ERT Agreement and that Glotech could not have been involved in negotiating the ERT Agreement because it included questions about new Bluebird products which Glotech would not have been equipped to address. Glotech claims to have learned of the ERT Agreement in October of 2016 “through its own investigation” and contends that because Glotech was initially responsible for introducing ERT, through PHT and Invivodata, to Bluebird products, Glotech is entitled to compensation for sales that have resulted from that introduction.

         Finally, Plaintiff seeks to amend the first count of its Complaint to seek exemplary damages under New Jersey's Commission Protection Act (the “CPA”). In support of this amendment, Glotech claims that it “learned it had a right to seek exemplary damages as relief for its [nonpayment of commission] count.” Dkt. No. 71 at p. 15, n. 1. Plaintiff does not state what led to the discovery of its purported right to seek the proposed relief or why this relief was not sought in Plaintiff's initial Complaint.

         II. DISCUSSION

         “The threshold issue in resolving a motion to amend is the determination of whether the motion is governed by Rule 15 or Rule 16 of the Federal Rules of Civil Procedure.” Karlo v. Pittsburgh Glass Works, LLC, 2011 WL 5170445, at *2 (W.D.Pa. Oct. 31, 2011). Rule 15 states, in pertinent part, “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “Rule 16, on the other hand, requires a party to demonstrate ‘good cause' prior to the Court amending its scheduling order.” Karlo, 2011 WL 5170445, at *2 (citing Fed.R.Civ.P. 16(b)(4)). In situations such as the present, where a party seeks to amend “after the deadline for doing so set by the Court, the movant must satisfy the [good cause standard] of Rule 16 before the Court will turn to Rule 15.” Id. at *2; see also Dimensional Commc'n, Inc. v. OZ Optics, Ltd., 148 F.App'x 82, 85 (3d Cir. 2005) (instructing that the Third Circuit has adopted a good cause standard when determining the propriety of a motion to amend after the deadline has elapsed).

         The initial Pretrial Scheduling Order in this matter was entered on April 27, 2015, and set forth a deadline for moving to amend pleadings on September 30, 2015. See Dkt. No. 21 at ¶ 10(b). Plaintiff first sought the Court's leave to move to amend on February 17, 2016 [Dkt. No. 41], which the Court granted [Dkt. No. 43], and Plaintiff filed a motion to amend on February 25, 2016 [Dkt. No. 44]. The parties agreed to proceed to private mediation in an attempt to resolve this matter and the Court entered a stay of discovery and terminated Plaintiff's motion to amend pending the outcome of the parties' mediation. See Dkt. No. 52. Mediation was unsuccessful and Plaintiff filed a renewed motion to amend its Complaint on August 26, 2016. See Dkt. No. 55. While its motion to amend was pending, Plaintiff sought the Court's permission to add an additional amendment to its motion. See Dkt. No. 67. The Court granted Plaintiff's request to move to further amend its Complaint and terminated Plaintiff's then pending motion to allow Plaintiff to consolidate all of its proposed amendments into a single motion. See Dkt. No. 70. Plaintiff filed its consolidated motion to amend on January 27, 2017, which is now pending before the Court [Dkt. No. 71]. Defendant, citing the January 27, 2017 filing date of Plaintiff's present motion to amend, asserts that Plaintiff's motion was filed sixteen months after the expiration of the deadline set forth the Pretrial Scheduling Order. However, while Plaintiff's presently pending motion was not filed until January 27, 2017, Plaintiff first moved to amend in February 17, 2016, and as a result of various delays, which are not attributable solely to Plaintiff, resolution of Plaintiff's request has been delayed until the present. Accordingly, in calculating the amount of time between the expiration of the deadline to move to amend and Plaintiff's motion to amend, the Court will utilize the original filing date of February 25, 2016, which results in a five month delay, rather than the sixteen month delay asserted by Defendant.

         In light of Plaintiff's motion to amend being filed after the expiration of the September 30, 2015 deadline, the Court first determines whether Plaintiff has demonstrated “good cause” under Rule 16. Rule 16 of the Federal Rules of Civil Procedure authorizes courts to enter schedules of proceedings. The pretrial scheduling order allows a court to take “judicial control over a case and to schedule dates for completion by the parties of the principal pretrial steps.” Harrison Beverage Co. v. Dribeck Imps., Inc., 133 F.R.D. 463, 469 (D.N.J. Oct. 19, 1990) (quoting Fed.R.Civ.P. 16 advisory committee's note (1983 Amendment)); see also Newton v. A.C. & S., Inc., 918 F.2d 1121, 1126 (3d Cir. 1990) (stating the purpose of Rule 16 is to provide for judicial control over cases, streamline proceedings, maximize efficiency of the court system, and actively manage the timetable of case preparation to expedite speedy and efficient disposition of cases).

         A scheduling order must, among other things, “limit the time to join other parties, amend the pleadings, complete discovery, and file motions.” Fed.R.Civ.P. 16(b)(3)(A). The requirement of a deadline for amending pleadings in the pretrial scheduling order “assures that at some point . . . the pleadings will be fixed.” Fed.R.Civ.P. 16(b) advisory committee's note (1983 Amendment); see also Harrison, 133 F.R.D. at 469 (“The careful scheme of reasonable framing and enforcement of scheduling orders for case management would thus be nullified if a party could inject amended pleadings upon a showing of less than good cause after scheduling deadlines have expired.”). The burden is on the moving party to show “good cause” for its failure to comply with the applicable scheduling order, and accordingly, for the Court to allow its proposed amended pleading. Prince v. Aiellos, No. 09-5429, 2012 WL 1883812, at *6 (D.N.J. May 22, 2012) (quoting Graham, 271 F.R.D. at 118); see also Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d Cir. 2010) (affirming the trial court's holding that “Rule 16(b)(4) focuses on the moving party's burden to show due diligence”).

         Whether “good cause” exists under Rule 16 hinges to a large extent on the diligence, or lack thereof, of the moving party. GlobespanVirata, Inc. v. Texas Instruments, Inc., 2005 WL 1638136, at *3 (D.N.J. July 12, 2005) (quoting Rent-A-Ctr. v. Mamaroneck Ave. Corp., 215 F.R.D. 100, 104 (S.D.N.Y. Apr. 9, 2003)). Put succinctly, “[a]bsent diligence, there is no ‘good cause.' ” Chancellor v. Pottsgrove Sch. Dist.,501 F.Supp.2d 695, 702 (E.D.Pa. Aug.8, 2007); see also Fed. R. Civ. P. 16(b), advisory committee's note (1983 Amendment) (“[T]he ...


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