Bald v. Wells Fargo Bank, N.A.
1:13-cv-00135-SOM-RT
D. Haw.Nov 20, 2017Background
- Plaintiffs (Bald et al.) sued Wells Fargo and others in Hawaii state court on Sept. 7, 2012; case removed to federal court on March 20, 2013.
- District Court initially granted defendants’ motion to dismiss on July 25, 2013; Plaintiffs appealed.
- Ninth Circuit reversed the dismissal and remanded on April 24, 2017; subsequent Rule 16 scheduling issued May 23, 2017.
- Plaintiffs moved (Oct. 20, 2017) for leave to file a First Amended Complaint to add plaintiffs, subclasses, and factual allegations and to modify/remove certain allegations.
- Defendant (Wells Fargo) opposed on grounds of prejudice, undue delay, futility, and statute-of-limitations concerns given information was allegedly available at filing.
- Magistrate Judge Kevin S.C. Chang granted leave to amend, emphasizing liberal Rule 15(a) standards, noting procedural infancy of case, and permitting discovery and dispositive motions to address limitations and relation-back issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether leave to amend should be granted under Rule 15(a) | Plaintiffs sought to add parties, subclasses, and allegations to pursue claims on the merits | Granting amendment would be prejudicial, unduly delay case, and be futile; some claims time-barred | Granted: court applied liberal Rule 15(a) standard and allowed amendment |
| Prejudice from voluminous discovery and delay | Plaintiffs said amendments necessary and the case posture permits them | Defendant argued discovery burden and delay would be prejudicial after long elapsed time | Denied: court found case still in early stages and defendant can conduct discovery to address new claims |
| Futility / statute of limitations barrier | Plaintiffs contended proposed claims are viable | Defendant asserted proposed subclasses/claims are time-barred and futile | Not decided on merits: court allowed amendment but left limitations/relat-back/futility for dispositive motions |
| Bad faith / dilatory motive | Plaintiffs acted to conform pleadings after Ninth Circuit remand | Defendant implied amendments were tactical and late | Court found no bad faith; amendments permitted |
Key Cases Cited
- Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) (leave to amend should be freely given; prejudice most important factor)
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (policy favoring deciding cases on merits and factors for denying leave to amend)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (U.S. 1971) (trial court discretion in granting leave to amend)
- In re Morris, 363 F.3d 891 (9th Cir. 2004) (Rule 15(a) purpose: facilitate decisions on merits)
- Bonin v. Calderon, 59 F.3d 815 (9th Cir. 1995) (futility alone can justify denial of leave to amend)
- Miller v. Rykoff-Sexton, Inc., 845 F.2d 209 (9th Cir. 1988) (amendment futile if no set of facts can support claim)
- DCD Programs, Ltd. v. Leighton, 833 F.2d 183 (9th Cir. 1987) (party opposing amendment bears burden of showing prejudice)
- Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242 (5th Cir. 1997) (presumption in favor of granting leave absent prejudice)