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County of Essex v. Aetna Inc.

United States District Court, D. New Jersey

December 13, 2019

COUNTY OF ESSEX and THE ESSEX COUNTY BOARD OF CHOSEN FREEHOLDERS Plaintiffs,
v.
AETNA INC., AETNA LIFE INSURANCE COMPANY, INC., ABC CORPS. 1-100, and JOHN DOES 1-100, Defendants.

          HONORABLE CATHY L. WALDOR UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on Defendants', Aetna Inc. and Aetna Life Insurance Company (collectively, “Aetna”), Motion for Leave to Amend and Supplement their Answer and Counterclaim. ECF No. 90. Plaintiffs, County of Essex and the Essex County Board of Chosen Freeholders (collectively, the “County”) oppose Aetna's motion. ECF No. 100. Decided without oral argument under Federal Rule of Civil Procedure 78, Aetna's motion is DENIED.

         BACKGROUND

         The Court assumes the parties' familiarity with the factual and procedural history of this action and addresses only those facts necessary for the resolution of the instant motion. The underlying suit involves a dispute over the terms of insurance plans Aetna provided to Plaintiffs for its employees and retirees. See generally ECF Nos. 1, 2.

         On March 2, 2018, this Court entered its original Pretrial Scheduling Order (“Scheduling Order”) that included an August 31, 2018 deadline for any motion to amend the pleadings. ECF No. 11. On at least three separate occasions, at the parties' request, the Court amended the deadlines in the Scheduling Order. See ECF Nos. 13, 26, 29. While certain dates were amended based on the Court's Orders, the Court did not modify the deadline for filing motions to amend pleadings and no request for such a modification was ever submitted by the parties.

         In 2018, the parties cross moved for judgment on the pleadings. (ECF Nos. 14, 20), and Judge William H. Walls (deceased) (“Judge Walls”) issued an Opinion and Order on those motions on December 13, 2018. ECF Nos. 30, 31. On January 9, 2019, the County filed a Motion for Reconsideration of the December 13, 2018 Opinion and Order, which Defendants opposed on February 25, 2019, and on March 12, 2019, the County replied. ECF Nos. 32, 40, 41. In response to Plaintiffs' Motion for Reconsideration, Judge Walls issued an Opinion and Order on May 1, 2019, determining that Plaintiffs were entitled to judgment on the pleadings for all contract years except 2010.[1] ECF Nos. 50, 51. Defendants then moved for reconsideration of the May 1, 2019 Opinion and Order. ECF No. 59-8. Defendants argued, among other things, the County's December 21, 2015 public resolution (the “2015 Resolution”) (ECF No. 40-3), that Aetna was a party to (ECF No. 40-3 at 12), and the County referenced in its Complaint (ECF No. 1-2 ¶¶ 17, 21), precipitated Plaintiffs' to change their theory of the case. ECF No. 59-8 at 16-21. On August 15, 2019, Judge Susan D. Wigenton (“Judge Wigenton”) denied Defendant's Motion for Reconsideration because Defendants' posited new arguments based upon information already in their possession and their position was “nothing more than a disagreement with the Court's ruling.” ECF Nos. 83. On October 22, 2019, this Court issued an Order directing the parties to pursue damages discovery. ECF No. 98.

         Now, to circumvent the Opinions and Orders issued by Judges' Walls and Wigenton, on September 27, 2019, Defendants brought the instant motion to amend its answer, add affirmative defenses, and counterclaims[2]. ECF No. 90-1. This motion comes over a year after the deadline to amend. ECF No. 90. Plaintiff filed its response to the instant motion, (ECF No. 100), and Defendant filed its reply (ECF No. 107).

         DISCUSSION

         In Defendants' moving brief, they seek leave to file an Amended Answer pursuant to Federal Rule of Civil Procedure 15(a) and state that Federal Rule of Civil Procedure 16 is inapplicable. ECF No. 90-1. Plaintiffs' opposed Defendants' motion. ECF No. 100. In Defendants' reply, they briefly address Rule 16 “good cause” but incorrectly recite the standard, specifically stating that “‘good cause' exists where . . . the movant seeks leave to amend in response to material developments in the case.” ECF No. 107 at 6.

         Under Rule 15 of the Federal Rules of Civil Procedure, “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). However, in situations such as those present in this case, if 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.” Karlo v. Pittsburgh Glass Works, LLC, 2011 WL 5170445, at 2 (W.D.Pa. Oct. 31, 2011); see also Dimensional Commc'n, Inc. v. OZ Optics, Ltd., 148 Fed.Appx. 82, 85 (3d Cir. 2005) (adopting the Rule 16 good cause standard on a motion to amend where the deadline to amend had elapsed).

         Good cause is determined based “on the diligence of the moving party” who must show that despite its efforts, “the deadlines set forth in the scheduling order could not reasonably be met.” Harbor Laundry Sales, Inc. v. Mayflower Textile Servs. Co., No. 09-6259, 2011 WL 6303258, at *3 (D.N.J. Dec. 16, 2011). The District of New Jersey has found that “allowing extensions in the absence of good cause . . . deprive[s] trial judges of the ability to effectively manage the cases on their overcrowded dockets and severely impair[s] the utility of scheduling orders.” Monroe v. City of Hoboken, No. 11-2556, 2012 WL 1191177, at *5 (D.N.J. Apr. 10, 2012) (citations omitted). If a movant had the knowledge necessary to file a motion to amend prior to the expiration of the Court's deadline set forth in the scheduling order, and if the movant can provide no satisfactory explanation for the delay, the Court may, in its discretion, deny the motion.” Lasermaster International Inc. v. Netherlands Insurance Co., 2018 WL 619190115-cv-7614 (D.N.J. Nov. 28, 2018).

         Defendants failed to demonstrate that they diligently pursued the proposed amendments and therefore, have not demonstrated the necessary “good cause” for the Court to amend its scheduling order. As an initial matter, Defendant's motion to amend is untimely because it was submitted more than a year after the deadline for amendment of the pleadings had passed. As noted above, the Court amended the Scheduling Order at least three (3) separate occasions and Defendants never sought an extension of time to file an amended pleading. “Because this motion is untimely, Defendant[s] ha[ve] the burden to demonstrate that [they] acted diligently” in presenting their amended answer, additional affirmative defenses and counterclaims. Lasermaster, 2018 WL 6191901 (D.N.J. Nov. 28, 2018). However, Defendants' briefing completely failed to provide any evidence that they acted diligently in seeking this motion to amend. Out of an abundance of caution, the Court also applied Defendants' Rule 15 arguments concerning their lack of undue delay in seeking leave to amend to this Rule 16 analysis. Defendants' arguments are unavailing because, as noted above, Defendants had multiple opportunities to seek to amend the and failed to do so.

         Defendants' asserted three reasons for why “good cause” existed for their proposed amendments: (1) that they have “good cause” to add counterclaims because Plaintiff changed its legal theory of the case in its March 12, 2019 reply (ECF No. 41) that was based upon the public 2015 Resolution; (2) that the deposition of Alan Abramowitz supports their mitigation defense (ECF No. 107 at n. 6); and (3) that the Court's approval of the parties Stipulation of Partial Dismissal with Prejudice (ECF No. 102) regarding the 2010 contract year supports their additional affirmative defenses. Defendants' state that that “good cause” exists where “the movant seeks leave to amend in response to material developments in the case.” ECF No. 107 at 6. However, as noted above, this is not the crux of a Rule 16 analysis, rather “good cause” rests upon the moving parties' diligence in its pursuit of amending the pleadings. 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)); Chancellor v. Pottsgrove Sch. Dist., 501 F.Supp.2d 695, 702 (E.D.Pa. Aug. 8, 2007) (“[a]bsent diligence, there is no ‘good cause.' ”); see also Fed. R. Civ. P. 16(b), advisory committee's note (1983 Amendment) (“[T]he court may modify the schedule on a showing of good cause if it cannot reasonably be met despite the diligence of the party seeking the extension.”).

         The Court finds Defendants' arguments in support of “good cause” unpersuasive. First, Defendants' did not direct the Court to any evidence demonstrating they diligently pursued amending and supplementing their answer and counterclaims. ECF Nos. 90-1, 107 at 6-9. Second, Defendants' point the Court to a few lines in Plaintiffs' reply to Defendants opposition to Plaintiffs' Motion for Reconsideration that was predicated on the public 2015 Resolution that was expressly referenced in the County's Complaint (ECF No. 1-2 ¶¶ 17, 21), and Aetna was a party to (ECF No. 40-3 at 12). Given that Defendants' theory for adding counterclaims rests upon a publicly available document from 2015, that was referenced in the County's Complaint, and that Aetna signed in November 2015 (ECF No. 40-3 at 12), Defendants' were surely aware of or in possession of the 2015 Resolution as early as November 2015 or at the latest, December 27, 2017, the date the Complaint was filed. When “the party knows ...


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