Snap! Mobile, Inc. v. Croghan, 5:18-cv-04686

Snap! Mobile sued former worker Paul Croghan for trade secret misappropriation and related claims after Croghan left and began working with a competitor; Croghan had been an independent contractor (May 2014–July 18, 2017) and then an employee.
Croghan asserted multiple wage-and-hour counterclaims (unreimbursed expenses, meal/rest breaks, minimum wage, overtime, wage statements, payroll records, waiting time penalties, UCL, etc.) across successive answers and amendments.
Croghan served PAGA notices to the LWDA on August 29, 2018 and a supplemental notice on December 21, 2018 (the latter added Snap CEO Cole Morgan as an individual counterdefendant and waiting-time claims). The LWDA did not elect to investigate within 65 days.
Before the court’s amendment deadline (May 6, 2019), Croghan moved for leave to file a Third Amended Answer and Counterclaim to add Morgan individually and assert a PAGA penalties count on behalf of aggrieved employees.
Snap opposed as untimely and futile (lack of PAGA standing; statute of limitations), and argued amendments would unduly prejudice and delay resolution. Croghan effectively conceded futility in reply and proposed further revisions.
The district court denied leave to amend, concluding the proposed PAGA counterclaim was futile (Croghan lacked standing under his own definition and the claim was time-barred) and that further amendment would be unduly prejudicial and cause undue delay.

Issue	Plaintiff's Argument (Snap)	Defendant's Argument (Croghan)	Held
Whether leave to add CEO Cole Morgan and assert a PAGA penalties counterclaim should be allowed	Deny: amendment is futile, untimely, prejudicial; PAGA claim lacks standing and is time-barred	Allow: filed before the court’s amendment deadline; seeks to pursue PAGA penalties and add individual defendant	Denied — motion timely but amendment futile and would cause undue prejudice/delay
Whether Croghan has PAGA standing as an "aggrieved employee"	N/A (Snap contests standing)	Croghan contended he can pursue PAGA on behalf of aggrieved employees per his pleadings and notices	Denied — under Croghan’s proposed definition he is not an aggrieved employee, so lacks PAGA standing
Whether the proposed PAGA counterclaim is barred by the statute of limitations	PAGA penalties subject to one-year limit; Croghan’s relevant alleged violations occurred more than one year before notice	Argued PAGA notice periods and definitions could support claim; sought leave to amend to cure timing issues	Denied — claims arise from conduct ending July 18, 2017 and December 21, 2017 is the relevant cutoff, so PAGA claim is time-barred
Whether further leave to amend should be granted despite prior amendments	N/A	Sought leave to file another amended pleading to re-define aggrieved employees and excise time-barred language	Denied — repeated amendments and proposed additional attempts would unduly prejudice Snap and delay case resolution

Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (Rule 15 favors resolution on merits; leave to amend should be freely given)
Foman v. Davis, 371 U.S. 178 (U.S. 1962) (factors permitting denial of leave to amend: undue delay, bad faith, repeated failure to cure, undue prejudice, futility)
Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522 (9th Cir. 2008) (denial of leave to amend appropriate when amendment would unduly prejudice opposing party or be futile)
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) (prejudice to opposing party is the most important Foman factor; presumption in favor of leave absent prejudice)
Miller v. Rykoff-Sexton, Inc., 845 F.2d 209 (9th Cir. 1988) (futility standard: proposed amendment must be able to state a valid claim)
Netbula, LLC v. Distinct Corp., 212 F.R.D. 534 (N.D. Cal. 2002) (courts often defer merits challenges until after amendment is filed)