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Dopico v. IMS Trading Corp.

United States District Court, D. New Jersey

January 30, 2018

MARIE DOPICO, for Plaintiff and the class of Members defined herein Plaintiff,
IMS TRADING CORP, et al., Defendants.


          DOUGLAS E. ARPERT United States Magistrate Judge

         This matter comes before the Court on a motion [ECF No. 52] by Plaintiffs for leave to file a Third Amended Complaint. Defendant has opposed the Motion. For the reasons set forth below, Plaintiffs' Motion is GRANTED.


         Plaintiffs bring this putative class action against Defendant IMS Trading Corporation a/k/a IMS Pet Industries (“IMS” or “Defendant”), alleging that dog treats marketed and sold to pet owners by IMS caused illness and/or death to dogs that consumed the product. The matter was removed from the Superior Court of New Jersey in March 2014, after which Plaintiffs filed an Amended Complaint containing the following Counts: (a) Count I, breach of express warranty under the Uniform Commercial Code (“UCC”); (b) Count II, breach of implied warranty under the UCC; (c) Count III, violation of the New Jersey Consumer Fraud Act (“NJCFA”); (d) Count IV, violation of the Magnuson-Moss Warranty Act (“MMWA”); (e) Count V, unjust enrichment; (f) Count VI, failure to warn (products liability); and (g) Count VII, defective design or manufacture (products liability).

         IMS moved to dismiss the Amended Complaint, and in April 2015, Judge Sheridan dismissed Counts II, III and V with prejudice as being subsumed by the New Jersey Products Liability Act, N.J.S.A. § 2A:58C, et seq. (“NJPLA”). In September 2015, Plaintiffs filed a Motion for leave to file a Second Amended Complaint (“SAC”) [ECF No. 31] naming two additional class representatives, one a resident of New Jersey and the other a resident of Arizona. The proposed SAC included certain claims applicable to the Arizona Plaintiff only, which are as follows: (a) breach of implied warranty under the UCC (Count II); (b) violation of the NJCFA (Count III); (c) unjust enrichment (Count V); and (d) violation of the Arizona Consumer Fraud Act (Count VIII). Defendant opposed the motion on the ground that Judge Sheridan previously dismissed with prejudice the claims for breach of implied warranty, violation of the NJCFA, and unjust enrichment.

         In February 2016, the Court issued an Order granting Plaintiffs' Motion, finding that a New Jersey Plaintiff, to whom New Jersey law applied, brought the claims which were previously dismissed by Judge Sheridan as being subsumed by the NJPLA. [ECF No. 34]. In contrast, the out-of-state Plaintiff named in the SAC alleged that he resided in Arizona, purchased Defendant's dog treats in Arizona, and, presumably, tended to his dog which allegedly became ill in Arizona, where he incurred over $200 in veterinary bills. Therefore, the Court found that, before the question of NJPLA subsumption is reached, it must first be established that the NJPLA applies to the Arizona Plaintiff's claims, vis a vis a choice of law analysis. Defendant subsequently filed an appeal with the District Judge, who affirmed the Order.

         Now, Plaintiffs move for leave to file a Third Amended Complaint (“TAC”), in order to name an additional class representative, a resident of Oregon. [ECF No. 52]. Like the SAC, the proposed TAC includes certain claims applicable to the Oregon Plaintiff only, which are as follows: (a) breach of implied warranty under the UCC (Count II); (b) violation of the NJCFA (Count III); (c) unjust enrichment (Count V); and (d) violation of the Oregon Unlawful Trade Practices Act (“UTPA”) (Count IX). Defendant opposes the motion and, once again, argues that the TAC attempts to re-plead claims which were previously dismissed as subsumed by the NJPLA through Counts II, III, and V. Defendant also, for the first time, challenges Plaintiffs' claims under Counts I and IV as futile, contending that the challenged representations are inactionable under the applicable law. Finally, Defendant contests Count IX. Moreover, in July 2017, Defendant filed a Motion to Dismiss also challenging Plaintiffs' claims as alleged under Counts I and IV. [ECF No. 56]. That Motion is currently pending.

         II. ANALYSIS

         A. Standard of Review

         As a threshold issue, Defendant argues that Plaintiffs must demonstrate good cause under Federal Rule of Civil Procedure 16(b)(4), because the instant Motion was untimely filed. Defendant's Opposition Brief (“Def.'s Opp'n.”), at 12-17. In that connection, Defendant contends that good cause is lacking, because Plaintiffs had knowledge of the potential new Plaintiff and UTPA claim before August 30, 2016, i.e., the Court imposed deadline for amending the pleadings.[1]Id., at 13-15. However, this argument is without merit, as the circumstances under which Plaintiffs filed this Motion constitute good cause.

         Although a motion to amend is generally governed by Rule 15(a), a party who moves to amend a pleading “after a scheduling order deadline has passed must also meet Rule 16's ‘good cause requirement.'” Kuchinsky v. Pressler & Pressler, LLP, No. 12-1903, 2014 U.S. Dist. LEXIS 58461, at *5 (D.N.J. April 28, 2014) (citing Dimensional Commc'ns, Inc. v. OZ Optics, Ltd., 148 F. App'x 82, 85 (3d Cir. 2005)). To demonstrate good cause pursuant to Rule 16, the moving party must show that, despite its diligence, the deadlines set forth in the scheduling order could not reasonably be met. Venetec Inter., Inc. v. Nexus Med., LLC, 541 F.Supp.2d 612, 618 (D. Del. 2008). For this reason, a District Court may deny a Motion to amend for lack of good cause if the moving party had “knowledge of [a] potential claim before the deadline to amend[]” expired. Stallings v. IBM Corp., No. 8-3121, 2009 U.S. Dist. LEXIS 81963, at *47 (D.N.J. Sept. 8, 2009) (citations omitted). On the other hand, a finding of good cause is appropriate under Rule 16 where a moving party provides a “sufficient explanation of its diligence.” Harbor Laundry Sales, Inc. v. Mayflowers Textile Serv. Co., No. 09-6269, 2011 U.S. Dist. LEXIS 144878, at *15 (D.N.J. Dec. 16, 2011).

         In this case, Rule 16 does not serve as a basis for denying Plaintiffs' Motion. Defendant argues that, because “Plaintiffs have purportedly represented a national class of consumers. . . Plaintiffs [cannot] claim that the potential new plaintiff was completely unknown to Plaintiffs' counsel . . . .” Def.'s Opp'n., at 13. Yet the representation of a nation-wide class, which presumably comprises of numerous individuals, does not reasonably suggest that counsel is informed as to the identity of every class member. To the contrary, Plaintiffs could not have complied with this Court's deadline through the exercise of reasonable diligence. Indeed, Plaintiffs contend that they were contacted by the Oregon Plaintiff after the deadline passed, and subsequently moved to amend the SAC, to include a new class representative and claim under the UTPA.[2] Under these circumstances, therefore, Plaintiffs have satisfied their burden of demonstrating good cause under Rule 16. See Sabatino v. Union Twp., No. 11-1656, 2013 U.S. Dist. LEXIS 54866, at *11-18 (D.N.J. April 15, 2013) (permitting the plaintiff to file an amended complaint naming additional parties, as the identities of those parties were not clear prior to the date upon which all proposed amendments were to be submitted).[3]

         Having found good cause, the Court proceeds to examine Plaintiffs' proposed amendments under the liberal standard of Rule 15(a). Pursuant to Rule 15(a), “a party may amend its pleading only with the opposing party's written consent or the court's leave” and “[t]he court should freely give leave when justice so requires.” The decision to grant leave to amend rests within the sound discretion of the trial court. Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321, 330 (1970). In determining a motion for leave to amend, courts consider the following factors: (1) undue delay on the part of the party seeking to amend; (2) bad faith or dilatory motive behind the amendment; (3) repeated failure to cure deficiencies through multiple prior amendments; (4) undue prejudice on the opposing party; and/or (5) futility of the amendment. See Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 174 (3d Cir. 2010) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

         B. ...

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