2:21-cv-01540
E.D. La.
Apr 8, 2022
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Background

  • Plaintiffs Tara Shaw and Tara Shaw Designs sued Restoration Hardware (RH) alleging an oral agreement and that RH used factories/artisans identified by plaintiffs to manufacture unlicensed products, seeking unpaid compensation.
  • Plaintiffs conceded RH complied with a written agreement that permitted RH to use the identified factories/artisans and provided for royalties; plaintiffs acknowledged they do not own or control those factories/artisans.
  • Procedural history: complaint filed Aug. 14, 2021; first amended complaint filed Oct. 15, 2021; RH moved to dismiss; the court granted RH’s motion to dismiss the amended complaint on Feb. 4, 2022 but allowed a limited extension to add parties.
  • Plaintiffs filed a motion for reconsideration and for leave to file a second amended complaint (SAC) on Mar. 7, 2022 (31 days after the dismissal), and sought broader amendment against RH; RH opposed.
  • The proposed SAC deleted several previously alleged factual assertions (e.g., promises by RH, alleged understanding about permission to use factories) and largely reiterated conclusory claims without added factual detail.
  • The court denied reconsideration and leave to amend as to RH, holding the motion is governed by Rule 60(b), the proposed amendment was futile and untimely under the scheduling order/Rule 16(b), and the unjust enrichment claim was properly dismissed as subsidiary to alleged legal remedies.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Proper standard for reconsideration (Rule 59(e) v. Rule 60(b)) Shaw argued the court committed judicial error and sought reconsideration of dismissal and denial of leave to amend RH noted the motion was filed >28 days after the order so Rule 60(b) governs, requiring specific grounds/extraordinary circumstances Motion filed 31 days after order -> governed by Rule 60(b); plaintiffs failed to show any Rule 60(b) ground or extraordinary circumstances; denied
Leave to amend under Rule 15(a) to re-plead claims against RH Shaw: Rule 15(a) requires leave be freely given and amendment would cure defects RH: amendment would be futile, previously pled facts insufficient, and plaintiffs deleted facts that had been undisputed; prejudice from repeated re-pleading Court exercised discretion, found amendment futile and denied leave to amend as to RH
Timeliness and good cause under Rule 16(b) (scheduling order) Shaw: sought extensions to evaluate discovery and add parties; later sought broader amendment RH: scheduling deadlines passed; only limited extension granted for adding parties; no showing of good cause for further amendment Scheduling order set deadlines; later extension was limited to adding parties; plaintiffs failed to show good cause under Rule 16(b)(4); amendment untimely
Viability of unjust enrichment claim given other remedies alleged Shaw: dismissal of breach/detrimental reliance leaves no remedy, so unjust enrichment should remain RH: unjust enrichment is subsidiary; precluded where plaintiff alleges other remedies at law even if those fail Court held unjust enrichment properly dismissed because plaintiffs pleaded other causes of action; mere failure on those claims does not open unjust enrichment relief

Key Cases Cited

  • Sheperd v. Int'l Paper Co., 372 F.3d 326 (5th Cir. 2004) (motions for reconsideration treated under Rules 59/60 framework)
  • Tex. A & M Rsch. Found. v. Magna Transp., Inc., 338 F.3d 394 (5th Cir. 2003) (timing distinguishes Rule 59(e) and Rule 60(b) relief)
  • Batts v. Tow-Motor Forklift Co., 66 F.3d 743 (5th Cir. 1995) (Rule 60(b)(6) requires extraordinary circumstances)
  • Webb v. Davis, 940 F.3d 892 (5th Cir. 2019) (Rule 60(b)(6) is a catchall for extraordinary relief)
  • Mayeaux v. La. Health Serv. & Indem. Co., 376 F.3d 420 (5th Cir. 2004) (bias in favor of granting leave to amend but within court's discretion)
  • Rosenzweig v. Azurix Corp., 332 F.3d 854 (5th Cir. 2003) (Foman factors for leave to amend)
  • Foman v. Davis, 371 U.S. 178 (1962) (principal factors for denying leave to amend)
  • S & W Enters., L.L.C. v. SouthTrust Bank of Ala., N.A., 315 F.3d 533 (5th Cir. 2003) (Rule 16(b) good-cause standard for post-deadline amendments)
  • Buck v. Davis, 137 S. Ct. 759 (2017) (Rule 60(b)(6) relief is limited to extraordinary circumstances)
  • Gonzalez v. Crosby, 545 U.S. 524 (2005) (limits on Rule 60(b)(6) relief)
  • Priester v. J.P. Morgan Chase Bank, N.A., 927 F.3d 912 (5th Cir. 2019) (Rule 60(b)(6) extraordinary-circumstances standard)
  • U.S. ex rel. Garibaldi v. Orleans Parish Sch. Bd., 397 F.3d 334 (5th Cir. 2005) (Rule 60(b)(6) rare and limited relief)
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