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Ruales v. Spencer Savings Bank

United States District Court, D. New Jersey

July 26, 2019

MIGUEL RUALES, Plaintiff,
v.
SPENCER SAVINGS BANK, Defendant.

          OPINION

          MICHAEL A. HAMMER UNITED STATES MAGISTRATE JUDGE.

         This matter comes before the Court by way of pro se Plaintiff Miguel Ruales's (“Plaintiff”) renewed motion for leave to file a Second Amended Complaint. Renewed Prop. Second Am. Compl., Apr. 17, 2019, D.E. 28. Defendant opposes the motion. Opp'n Brief to Renewed Sec. Am. Compl., May 1, 2019, D.E. 29. The Court has reviewed Plaintiff's motion and applicable law. Pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1, the Court has considered this matter without oral argument. For the reasons set forth below, the Court grants Plaintiff's motion to amend.

         I. BACKGROUND

         Plaintiff, a resident of Elizabeth, New Jersey, claims that by letter dated August 9, 2017, Defendant, a state-chartered mutual savings and loan association of the State of New Jersey, notified him that it would be closing his account effective September 9, 2017. Renewed Prop. Second Am. Compl., Apr. 17, 2019, D.E. 28, at 2. Plaintiff contends that Defendant did not provide Plaintiff with a reason for closing his account. Id. Plaintiff claims that as a result of the account's closure he incurred financial consequences, i.e., his credit rating was negatively impacted, checks written on the account bounced, and his future ability to obtain credit was jeopardized. Id.

         On May 14, 2018, Plaintiff brought this action pro se against Defendant for negligence, claiming that Defendant had a duty to Plaintiff as its customer and that Defendant breached that duty by closing Plaintiff's account abruptly, without notice, and without explanation to Plaintiff. Compl., May 14, 2018, D.E. 1, at ¶¶ 23-39. On June 11, 2018, Defendant filed a motion to dismiss the Complaint, arguing that no duty existed on the part of Defendant to explain why it was closing Plaintiff's account and that the Court did not have subject matter jurisdiction over the case because Plaintiff did not state a claim under federal law. Mot. to Dismiss, Jun. 11, 2018, D.E. 5, at 4.

         The following day, Plaintiff filed an Amended Complaint. First Am. Compl., Jun. 12, 2018, D.E. 7. The First Amended Complaint reiterated Plaintiff's negligence claim. Id. at ¶¶ 25-41. The First Amended Complaint also added a claim under 42 U.S.C. § 1983, which alleged that Defendant's conduct discriminated against Plaintiff based on his Hispanic heritage and thereby violated his civil rights. Id. at 5-7, ¶¶ 42-51.

         On August 9, 2018, Defendant moved to dismiss the First Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Mot. to Dismiss First Am. Compl., Aug. 9, 2018, D.E. 10. The Court granted Defendant's motion to dismiss the Amended Complaint in its entirety and provided Plaintiff thirty days to move to amend. Order, Jan. 9, 2019, D.E. 21.

         On January 24, 2019, Plaintiff filed a motion for leave to file a Second Amended Complaint. Prop. Second Am. Compl., Jan. 24, 2019, D.E. 22. Defendant opposed the motion. Opp'n Brief to Sec. Am. Compl., Jan. 30, 2019, D.E. 23. This Court denied Plaintiff's motion for leave to file a Second Amended Complaint on the basis of Local Civil Rules 7.1(f) and 15(a)(2), [1] ordering Plaintiff to file a renewed motion with a red-lined version of the proposed amended pleading no later than April 12, 2019. Am. Order, Mar. 18, 2019, D.E. 26.

         On April 17, 2019, Plaintiff filed the instant renewed motion for leave to file a Second Amended Complaint, containing red-lined edits per Local Civil Rules 7.1(f) and 15(a)(2). Renewed Prop. Second Am. Compl., Apr. 17, 2019, D.E. 28. Plaintiff seeks to amend his Complaint to: (1) add additional facts in support of his negligence claim; (2) add counts for breach of fiduciary duty and for breach of the covenant of good faith and fair dealing; and (3) replace his § 1983 claim with a claim under 42 U.S.C. § 1981 claim. Id. at 4-7.

         Defendant opposes the motion. Opp'n Br., May 1, 2019, D.E. 29. Defendant asserts that this Court must deny Plaintiff's motion to amend for two reasons: (1) Plaintiff filed it in an untimely manner; and (2) the Proposed Second Amended Complaint fails to state a claim for discrimination under § 1981. Id. at 5-12. Defendant further contends that if the Court denies the motion to amend, only state law claims will remain, and the Court should dismiss the action for lack of subject matter jurisdiction.[2] Id.

         II. DISCUSSION

         The first issue for the Court is whether Federal Rule of Civil Procedure 15 or 16 governs Plaintiff's motion to amend. Karlo v. Pittsburgh Glass Works, LLC, Civ. No. 10-1283, 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)).

         There is a recognized tension between Rule 15 and Rule 16 that has not been directly resolved by the United States Court of Appeals for the Third Circuit. See Race Tires America, Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d. Cir. 2010); Graham v. Progressive Direct Ins. Co., 271 F.R.D. 112, 118 (W.D. Pa. 2010). However, courts “within the Third Circuit have consistently reached the same conclusion: a party seeking to amend the pleadings after the deadline set by the Court must satisfy the requirements of Rule 16(b)(4)-i.e., they must show ‘good cause.'” Karlo, 2011 WL 5170445, at *2 (citing Fed.R.Civ.P. 16(b)(4)) (emphasis added).

         Here, Plaintiff filed his pleading after the deadline set by this Court, and, therefore, the Court must consider Rule 16. The operative Order instructed that any motion to amend the pleadings be filed by April 12, 2019. Am. Order, Mar. 18, 2019, D.E. 26. Plaintiff filed the instant motion on April 17, 2019. Renewed Prop. Second Am. Compl., Apr. 17, 2019, D.E. 28. Because Plaintiff filed the present motion three business days after the April 12, 2019, filing deadline, the Court must first determine whether, under Rule 16, good cause exists to adjust the deadline to permit Plaintiff to file his motion. If there is good cause to amend, the Court will then turn to Rule 15 to determine whether to permit Plaintiff to file his amended pleading as justice so requires. Home Semiconductor Corp. v. Samsung Electronics Co., Ltd., Civ. No. ...


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