Malibu Media, LLC v. Fantalis
| Decision Date | 18 October 2012 |
| Docket Number | Civil Action No. 12-cv-00886-MEH |
| Parties | MALIBU MEDIA, LLC, Plaintiff/Counter-Defendant, v. JEFF FANTALIS, Defendant/Counter-Claimant, BRUCE DUNN, Defendant. |
| Court | U.S. District Court — District of Colorado |
ORDER ON MOTION TO AMEND AND MOTION FOR SANCTIONS
Before the Court are Defendant/Counter-Claimant's Motion to Extend Time to File Second Amended Answer & Counterclaim and Motion for Leave to File Second Amended Answer and Counterclaim [filed August 31, 2012; docket #69] and Plaintiff's Notice and Motion for Rule 11 Sanctions [filed August 31, 2012; docket #68]. These matters are fully briefed, and the Court finds oral argument would not assist the Court in its adjudication of the motions. For the reasons that follow, the Court grants the Defendant/Counter Claimant's motion to amend and denies without prejudice Plaintiff's motion for sanctions. Further, because the Second Amended Answer and Counterclaim supercedes the operative pleading, Plaintiff's Motion to Dismiss Defendant/Counter Claimant's Amended Counterclaim [filed August 8, 2012; docket #55] is denied as moot.
The facts of this case have been described in previous orders in this case and, thus, need not be set forth in detail here. Essentially, Plaintiff alleges that Defendants collectively infringed itscopyrighted works using a BitTorrent file transfer protocol, resulting in a number of unrelated computers being connected and downloading movies without permission from or payment to the owner. Computers are connected in this manner for the purpose of sharing a file (otherwise known as a "swarm") that would otherwise be too large for one computer to download. The movies are broken into pieces, collected to another computer and given specific file names, and the reassembled into the stolen work.
In response to the Complaint, Defendant Fantalis, proceeding pro se, filed an Answer and Counterclaims on May 29, 2012. Docket #18. After having been granted an extension of time, Plaintiff filed a motion to dismiss the counterclaims on June 25, 2012. Docket #30. Fantalis timely filed a response to the motion, together with a First Amended Answer and Counterclaim pursuant to Fed. R. Civ. P. 15(a)(1) on July 16, 2012. Dockets #38 and #39. Meanwhile, the Court had held a scheduling conference and issued a Scheduling Order on July 17, 2012 listing, among other deadlines, the deadline for amendment of pleadings as August 17, 2012. Docket #45.
On August 2, 2012, the Court issued an order denying Plaintiff's motion to dismiss as moot in light of the First Amended Counterclaims and Plaintiff's concession that the motion was rendered moot. Docket #50. Plaintiff then filed a motion to dismiss the First Amended Counterclaims on August 8, 2012. Docket #55. On August 27, 2012, Fantalis filed a response to the motion and erroneously filed a Second Amended Answer and Counterclaims at the same time. Dockets #61 and 62. The Court granted Plaintiff's motion to strike the Second Amended Answer and Counterclaim (docket #67), and on August 31, 2012, Fantalis filed the present motion for leave to amend pursuant to Fed. R. Civ. P. 15(a)(2). Docket #69. That same day, Plaintiff filed the present motion for sanctions concerning the First Amended Counterclaims. Docket #68.
In his motion, Fantalis concedes that he erred by filing the Second Amended Counterclaims without first seeking leave and argues that he demonstrates good cause to allow amendment afterthe deadline, and that justice requires amendment, particularly considering that he has corrected identified deficiencies and dropped a claim that is not recognized by Colorado law. Plaintiff counters that Fantalis' amendments are futile, and that he fails to demonstrate diligence or good cause for amending after the deadline.
In its motion for sanctions, Plaintiff contends that Fantalis' amended counterclaims are frivolous and wholly unwarranted by existing law. Plaintiff relies fully on its arguments set forth in the motion to dismiss for support of the present motion. Fantalis counters that the standards for analyzing motions to dismiss and motions for sanctions are entirely different and, thus, Plaintiff may not rely on its motion to dismiss. Further, Fantalis claims that he has acted reasonably and in good faith throughout the litigation.
The Court will address each of the motions in turn.
A federal court must construe a pro se plaintiff's Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (quotations and citations omitted). The Tenth Circuit interpreted this rule to mean, "if the court can reasonably read the pleadings to state a valid claim on which the plaintiff could prevail, it should do so despite the plaintiff's failure to cite proper legal authority, his confusion of various legal theories, his poor syntax and sentence construction, or his unfamiliarity with pleading requirements." Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). However, this interpretation is qualified in that it is not "the proper function of the district court to assume the role of advocate for the pro se litigant." Id. Rule 15 of the Federal Rules of Civil Procedure provides that, following a 21-day period for service of the complaint or service of a responsive pleading or Rule 12 motion, a party may amendits complaint only by leave of the court or by written consent of the adverse party. Fed. R. Civ. P. 15(a) (2011). Rule 15 instructs courts to "freely give leave when justice so requires." Id. Nevertheless, denying leave to amend is proper if the proposed amendments are unduly delayed, unduly prejudicial, futile, or sought in bad faith. Foman v. Davis, 371 U.S. 178, 182 (1962); Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).
Because Fantalis filed his motion after the deadline for amendment of pleadings, Plaintiff is correct that granting Fantalis' motion pursuant to Rule 15(a) would require a modification of the Scheduling Order. Thus, the Court employs a two-step analysis. First, the Court evaluates whether Fantalis demonstrates good cause allowing modification of the Scheduling Order. Second, if Fantalis shows good cause, he must also meet the requirements of Fed. R. Civ. P. 15(a).
A Scheduling Order may be modified only upon a showing of "good cause" under Fed. R. Civ. P. 16(b). The standard for "good cause" is the diligence demonstrated by the moving party in attempting to meet the Court's deadlines. Colorado Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000). "Rule 16 erects a more stringent standard [than Rule 15(a)], requiring some persuasive reason as to why the amendment could not have been effected within the time frame established by the court." Id. In order to show good cause, Fantalis "must provide an adequate explanation for any delay" in meeting the Scheduling Order's deadline. Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006).
Notably, rigid adherence to the Scheduling Order is not advisable. Sil-Flo, Inc. v. SHFC, Inc., 917 F.2d 1507, 1519 (10th Cir. 1990). A failure to seek amendment within the deadline may be excused if due to oversight, inadvertence or excusable neglect. Id. Additionally, learning information underlying the amendment through discovery that occurs after the deadline set forth in the Scheduling Order constitutes good cause to justify an extension of that deadline. Pumpco, Inc.v. Schenker Int'l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001).
The Court finds that Fantalis has demonstrated good cause to modify the Scheduling Order by fourteen (14) days in this case. Fantalis contends that his proposed Second Amended Counterclaims correct certain defects raised in Plaintiff's motion to dismiss, filed just one week before the deadline to amend, including dropping a claim (invasion of privacy - false light) that is not recognized under Colorado law. As set forth in the Advisory Committee comments to the 2009 Amendments to Rule 15(a),
Further, the Court finds that Fantalis has been diligent in attempting to file viable counterclaims in this action. The deadline for amendment fell on August 17, 2012, just nine days after Plaintiff filed its motion to dismiss. Under the local rules, Fantalis had twenty-one days within which to respond to the motion, and within that time, he responded by attempting to file his Second Amended Counterclaims. Mindful that Fantalis proceeds in this action pro se, the Court finds that Fantalis has demonstrated an adequate explanation for the brief delay in meeting the amendment deadline. Therefore, the Court finds that Fantalis' attempt to correct deficiencies by filing the Second Amended Counterclaims demonstrates good cause to modify the deadline for amendment of pleadings. Thus, the deadline for amendment of pleadings in this case is extended to August 31, 2012, the date on which Fantalis filed his motion.
In the Tenth Circuit, untimeliness alone may be a sufficient basis for denying a party leave to amend. See Duncan v. Manager, Dep't of Safety, 397 F.3d 1300, 1315 (10th Cir.2005); Hayes v. Whitman, 264 F.3d 1017, 1026 (10th Cir. 2001). The important inquiry is not simply whetherFantalis has delayed, but whether such delay is undue. Minter v. Prime Equip. Co., 451 F.3d...
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