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Blue Buffalo Co., Ltd. v. Wilbur-Ellis Co. LLC

United States District Court, E.D. Missouri, Eastern Division

June 6, 2019

BLUE BUFFALO COMPANY, LTD., Plaintiff,
v.
WILBUR-ELLIS COMPANY, LLC and, DIVERSIFIED INGREDIENTS, INC., Defendants. AND RELATED ACTIONS

          ORDER AND MEMORANDUM

          RODNEY W. SIPPEL UNITED STATES DISTRICT JUDGE

         This matter is before me on Diversified Ingredients' (Diversified) Motion for Leave to Amend Its Complaint [1339]. I address Blue Buffalo's Motion for Leave to Amend Its Complaint [1325] in a separate Order.

         Diversified moves for leave to amend its complaint in order to incorporate facts it alleges it has learned during the course of discovery, to add new counts of negligence, negligent misrepresentation, and breach of contract against Blue Buffalo, and to plead new damages against Wilbur-Ellis and Custom Ag. After fully considering the parties' submissions and arguments on Diversified's motion on January 9, 2019, and for the reasons below, I will deny Diversified's motion as it pertains to the counterclaims against Blue Buffalo, and I will grant it in part as it pertains to the addition of damages allegations to its cross-claims against Wilbur-Ellis and third party claims against Custom Ag.

         I. Background

         Diversified first became a party to this lawsuit when Blue Buffalo alleged cross-claims against it in May 2015. Since that time, a complicated set of dispositive motions, discovery disputes, and criminal investigations have kept this case from moving to trial. The case is currently stayed, pursuant to an Order I entered on March 9, 2017 so the United States' Attorney for the Eastern District of Missouri could pursue potential criminal charges against the defendants and several of their employees.

         In the time since I ordered the stay, Diversified and Wilbur-Ellis have both pleaded guilty to federal misdemeanor charges and the parties have largely paused discovery (especially that which requires them to submit answers under oath). See USA v. Rychlik et al, 4:17-CR-100-NAB [hereinafter “Rychlik”], Nos. 86, 110; July 19, 2018 Order, ECF No. 1293 (permitting the parties in this case to exchange written discovery that does not involve submitting answers under oath).

         Before I issued the stay, Diversified was preparing to ask for leave to amend its pleadings. It did not do so before the stay went into effect. Diversified now asks that I grant leave so that it can amend its pleadings.

         II. Legal Standard

         As a general rule, leave to amend a party's pleadings should be freely given when justice so requires. See Fed.R.Civ.P. 15(a). However, on April 21, 2016, I ordered further requests to amend pleadings in this case must satisfy the requirements of Fed.R.Civ.P. 16(b)(4). [See April 21, 2016 Order, ECF Doc. No. 768, at 2] None of the Parties objected to that Order. Accordingly, Rule 16(b)(4) applies to Diversified's motion for leave to amend its pleadings.

         Where, as here, a party seeks leave to amend the pleadings after the case management deadline to do so has passed, courts must first determine whether good cause exists under Rule 16(b)(4)'s good cause standard. See Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497 (8th Cir. 2008). Then, if the movant establishes good cause, courts will consider whether amendment is proper under Rule 15(a). See Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 716 (8th Cir. 2008) (citing Leary v. Daeschner, 349 F.3d 888, 909 (6th Cir.2003)).

         The primary consideration when courts apply the good cause standard is the movant's “diligence in attempting to meet the [case management] order's requirements.” Sherman 532 F.3d at 716. Next, because a party seeking to amend its pleadings must also satisfy the requirements of Rule 15(a), prejudice to the nonmovant resulting from the amendment “may also be a relevant factor.” Id. at 717; see also Foman v. Davis, 371 U.S. 178, 182 (1962). “The burden is on the party opposing the amendment to show such prejudice.” Beeck v. Aquaslide “N” Dive Corp., 562 F.2d 537, 540 (8th Cir. 1977). Courts generally “will not consider prejudice if the movant has not been diligent in meeting the scheduling order's deadlines.” Sherman, F.3d at 717 (citing Bradford v. DANA Corp., 249 F.3d 807, 809 (8th Cir.2001)).

         Finally, courts will not grant leave to amend a complaint when the proposed amendment is futile, meaning “the amended claim could not withstand a motion to dismiss under Rule 12(b)(6).” Hillesheim v. Myron's Cards & Gifts, Inc., 897 F.3d 953, 955 (8th Cir. 2018). This means that, in assessing whether an amendment is futile, I must accept as true all factual allegations in the Proposed Amended Pleadings [ECF Doc. No. 1339-1] (“PAP”). Fed.R.Civ.P. 12(b)(6); Erickson v. Pardus, 551 U.S. 89, 94 (2007). This requirement remains in effect “even if it strikes a savvy judge that actual proof of those facts is improbable.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319, 327 (1989) (“Rule 12(b)(6) does not countenance . . . dismissals based on a judge's disbelief of a complaint's factual allegations.”). The issue is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of her claim. Id.

         III. Discussion

         Diversified's proposed amendments seek to allege negligence claims or, in the alternative, a breach of contract claim against Blue Buffalo. Additionally, Diversified seeks to allege ...


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