Salud Servs., Inc. v. Caterpillar, Inc. (In re Caterpillar Inc., C13 & C15 Engine Prods. Liab. Litig.)

• Citation: 67 F.Supp.3d 663
• Decision Date: 16 December 2014
• Docket Number: 14–3722 JBS/JS.,Master Docket Nos. 14–3722 JBS/JS,MDL No. 2540.
• Court: U.S. District Court — District of New Jersey
• Parties: In re: CATERPILLAR INC., C13 and C15 Engine Productions Liability Litigation. Salud Services, Inc., Plaintiff, v. Caterpillar, Inc., Defendant.

67 F.Supp.3d 663

In re: CATERPILLAR INC., C13 and C15 Engine Productions Liability Litigation.Salud Services, Inc., Plaintiff

v.Caterpillar, Inc., Defendant.

MDL No. 2540.

Master Docket Nos. 14–3722 JBS/JS

14–3722 JBS/JS.

United States District Court, D. New Jersey.

Signed Dec. 16, 2014.

James E. Cecchi, Carella Byrne Cecchi Olstein Brody & Agnello, P.C., Roseland, NJ, James C. Shah, Natalie Finkelman Bennett, Shepherd, Finkelman, Miller & Shah, LLP, Collingswood, NJ, Scott A. George, Seeger Weiss, LLP, Newark, NJ, for Plaintiffs.

Anthony J. Anscombe, Sedwick, Deter, Moran & Arnold LLP, Chicago, IL, Ashley Webber Broach, C. Bradford Marsh, Swift, Currie, McGhee & Hiers, LLP, Atlanta, GA, C. Todd Koebele, John Paul J. Gatto, Murnane Brandt, PA, St. Paul, MN, Gordon James, III, Segwick, LLP, Kelsey K. Black, Kenneth Wayne Waterway, Waterway Black, Fort Lauderdale, FL, James Holsey Keale, Joseph F. Falgiani, Mary E. Buckley, Sedgwick LLP, Newark, NJ, Jason T. Madden, Mark L. Tripp, Bradshaw, Fowler, Proctor & Fairgrave, S.C., Des Moines, IA, Kimberly A. Cook, Sedgwick LLP, Miami, FL, Stephanie Underwood Roberts, Spilman Thomas & Battle, PLLC, Winston–Salem, NC, Steven Dwight Di Saia, Sedgwick LLP, Los Angeles, CA, Tiffany M. Alexander, Campbell Campbell Edwards & Conroy, Wayne, PA, for Defendants.

OPINION

JOEL SCHNEIDER, United States Magistrate Judge.

This Opinion addresses whether plaintiffs will be granted leave to amend their consolidated MDL complaint to add more plaintiffs, change their class definition, and clarify their theory of the case insofar as their defect claim is concerned. The motion comes on the heels of the first case management conference where the Court essentially adopted plaintiffs' case management proposal. The major complication resulting from plaintiffs' motion is that it will result in a substantial change to the present case management structure and it will temporarily moot a number of substantive motions that are pending. Thus, the Court is faced with the question of whether it should proceed on its present course or whether it should make a major change which is likely to save resources and time in the future but which will result in some short term inefficiencies. For the reasons to be discussed, plaintiffs' motion will be granted.¹

Background

This matter is a consolidated multi-district litigation (“MDL”) involving Caterpillar's MYCAT 2007 engines. The MDL involves sixteen complaints filed in different federal district courts. At issue are two engine models, C13 and C15, used to power trucks, buses and other heavy equipment. The subject MDL Order was issued on June 11, 2014.²

Before the cases were consolidated the first filed Salud matter docketed in the Southern District of Florida on October 10, 2012, had progressed the farthest. That case only involved a proposed class of purchasers or lessees of C13 bus engines in Florida, Tennessee, Illinois, Texas and Indiana. After discovery was taken, and on the eve of the deadline for the plaintiffs to file their motion for class certification and for defendant to file their motion to dismiss, the MDL Order was entered. At that point, the Salud plaintiffs had filed their third amended complaint following the granting of defendant's motion to dismiss. Two months later, the Salud plaintiffs moved to file a fourth amended complaint seeking to expand their putative class definition beyond buses to include all vehicles. The Honorable Patricia A. Seitz denied the motion, finding that good cause did not exist to permit the amendment because plaintiffs were aware prior to the deadline to amend pleadings that non-bus vehicles were also potentially at issue.

When the MDL Order was entered the BK Trucking case filed in the District of New Jersey on April 2, 2013, also progressed past the pleading stage and into the discovery phase. Unlike Salud, BK Trucking addressed purchasers of C13 and C15 truck engines in New Jersey, Illinois and Ohio.

The first comprehensive case management conference in the MDL was held on August 5, 2014, which resulted in the entry of Case Management Order (“CMO”) No. 2 on August 8, 2014. At plaintiffs' request the Salud bus engine case became the “bellwether.” CMO No. 2 included deadlines for the filing of plaintiffs' motion for class certification and defendant's motion to dismiss in Salud. See CMO No. 2 at ¶ 2. The CMO also provided that the other bus engine cases would be temporarily stayed (¶ 3), and that no new discovery could be taken in the truck cases until plaintiffs' Consolidated Class Action Complaint (“CCAC”) was filed (¶ 5).

Plaintiffs filed their Salud motion for class certification on August 19, 2014 and their Consolidated Class Action Complaint (“CCAC”) on October 16, 2014. Thereafter, defendant filed its Salud motions to dismiss and for summary judgment on November 3, 2014. Defendant also filed four motions to exclude the reports, testimony and declarations of the experts the Salud plaintiffs relied upon in support of their motion for class certification. After defendant's motions were filed plaintiffs complained they learned about relevant discovery that defendant should have produced earlier. Specifically, plaintiffs point to the 60–page Declaration of Charles R. Smock which Caterpillar attached to its opposition to class certification. Plaintiffs claim the Smock Declaration contains critical information regarding warranty data and engineering reviews previously unknown to them. Plaintiffs contend that because of what they recently learned discovery needs to be opened up in Salud in order for them to obtain a complete record for their certification motion. Defendant denies plaintiffs' assertion but has agreed to produce some additional discovery, including making its affiant, Charles R. Smock, available for deposition.

The procedural history described above has resulted in the de facto organization of these consolidated cases into three groups. The first group is the Salud bus case involving only C13 engines. The second group is the bus cases that have been stayed. See CMO No. ¶ 3. The third group is the remaining truck cases involving C13 and C15 engines.

On November 14, 2014, the Court held a status conference to address case management and discovery issues. At the conference plaintiffs argued there were no material differences between C13 and C15 truck and bus engines.³ This being the case the Court questioned why plaintiffs chose to treat the truck and bus cases differently. This apparently led plaintiffs to reflect on their earlier case management decisions and to conclude that the present motion to amend was appropriate. Plaintiffs candidly acknowledged that the distinction between C13 and C15 engines was “a little artificial” and advocated putting “Humpty Dumpty back together[.]” Nov. 14, 2014 Tr. 20:10–19 [Doc. No. 90].⁴

According to plaintiffs their motion requests leave to make two amendments: (1) to amend the class definition to include the truck plaintiffs and the new bus plaintiffs, and (2) to clarify plaintiffs' claims as they relate to express warranties regarding workmanship and material, implied warranty disclaimers, and design defects. Pls.' Br. at 1. [Doc. No. 84–1].⁵ As to this later change plaintiffs write:

Specifically, Plaintiffs seek to clarify that the defects at issue relate to an overall poor design choice—a single defect that spans C13 and C15 MY2007 CAT Engines, regardless of engine type or application.

Id. In essence, plaintiffs now want to include all present MDL plaintiffs in the class definition. That is, they want to bring truck and bus owners of C13 and C15 engines under the same umbrella.⁶ Plaintiffs also want to clarify their defect claim. Plaintiffs argue they are seeking:

to propose an amended complaint to cover all of the Plaintiffs in the MDL and to focus on the common design defect with the CAT MY 2007 engines—specifically that the CRS is not sufficiently robust to manage all of the emissions control in real-world applications of the CAT engines. The result is the frequent failure of the emissions control system to remove particulate as anticipated, and the engines shutting down and requiring repair. Since this defect pervades all of the C13 and C15 engines, regardless of whether the engine is used by the truck or bus, Plaintiffs seek to amend the operative complaint to align all of the claims for more efficient administration.

Pls.' Br. at 4.

Defendant characterizes plaintiffs' amendments differently. Defendant argues that plaintiffs' amendments (1) revive claims previously abandoned or never asserted in Salud, (2) circumvent the Florida Court's October 10, 2013 Order that required them to file their Notice of Limitations of Damages, and (3) change and add other factual allegations. Def.'s Opp. at 3.

Plaintiffs argue their amendment would not result in undue delay, it is not made in bad faith, and they have no dilatory motive. Although recognizing that their amendment will result in some “backtracking” given the extensive motion practice thus far in Salud, plaintiffs nevertheless argue defendant is not prejudiced by their amendment. Defendant disagrees in part. Defendant is not objecting to plaintiffs' motion except insofar as it relates to Salud. Defendant argues that the Salud plaintiffs are bound by Judge Seitz's March 3, 2014 Order denying the expansion of the complaint to include non-bus vehicles, plaintiffs have not established good cause for their amendment, and the amendment is sought for tactical advantages which would result in prejudice to defendant.

Discussion

Pursuant to Fed.R.Civ.P. 15(a), leave to amend pleadings “shall be freely given when justice so requires.” Leave shall be freely given in the absence of undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies in previous amendments, undue prejudice or futility of the amendment. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) ; see also Shane...