United States District Court, E.D. Missouri, Eastern Division
SCOTT PEARLSTONE, individually and on behalf of similarly situated individuals, Plaintiff(s),
COSTCO WHOLESALE CORPORATION, Defendant(s).
MEMORANDUM AND ORDER
STEPHEN R. CLARK, UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendant Costco Wholesale
Corporation's Motion for Leave to File First Amended
Answer . The Court grants, in part, and denies, in part,
the motion for leave to file first amended answer.
Scott Pearlstone filed a class action complaint in this Court
on April 19, 2018, alleging Defendant Costco Wholesale
Corporation failed to honor a “Risk-Free 100%
Satisfaction Guarantee” to provide a full refund of
membership fees to executive members who cancel their
membership. Pearlstone alleges claims of breach of contract,
unjust enrichment, and violation of the Missouri
Merchandising Practices Act (“MMPA”), Mo. Rev.
Stat. § 407.010 et seq.
filed a motion to dismiss Pearlstone's complaint arguing
(1) Pearlstone failed to state a breach of contract claim as
a matter of law, (2) Pearlstone's unjust enrichment claim
should be dismissed because it fails to properly plead an
essential element of the claim and is barred by the economic
loss doctrine, and (3) Pearlstone failed to establish any
deception or unfair practice that would give rise to a claim
under the MMPA. The Court denied the motion to dismiss and,
on March 21, 2019, Costco filed an answer. On July 1, 2019,
Costco filed the pending motion for leave to file first
motion for leave to amend, Costco seeks to amend its answers
to paragraphs 11 and 12 of Pearlstone's Complaint and its
eighth affirmative defense, and to add five new affirmative
defenses. Pearlstone objects to the amendment as it relates
to Costco's attempt to pursue defenses based on lack of
personal jurisdiction or improper venue.
Rule of Civil Procedure 15(a) allows a defendant to amend its
answer once as a matter of right at any time within twenty
days after it is served. If twenty days has passed since the
filing of the answer, the defendant may amend “only by
leave of court or by written consent of the adverse
party.” Fed.R.Civ.P. 15(a)(2). “Leave shall be
freely given [by the court] when justice so requires.”
Id. “Unless there is a good reason for denial,
such as undue delay, bad faith, or dilatory motive, repeated
failure to cure deficiencies by amendments previously
allowed, undue prejudice to the non-moving party, or futility
of the amendment, leave to amend should be granted.”
Bediako v. Stein Mart, Inc., 354 F.3d 835, 840 (8th
Cir. 2004). “Delay alone is not enough to deny a motion
to amend; prejudice to the nonmovant must also be
shown.” Id. at 841.
may amend an answer to incorporate affirmative defenses that
are inadvertently omitted. See Groninger v. Davison,
364 F.2d 638, 640 (8th Cir. 1966); see also Joseph v.
Allen, 712 F.3d 1222, 1226 n.3 (8th Cir. 2013) (district
court did not err in granting defendants leave to amend their
answer to assert a defense of qualified immunity, even though
the motion for leave to amend was not filed until after the
plaintiff filed a motion for summary judgment) (citing
Chesnut v. St. Louis Cty., Mo., 656 F.2d 343, 349
(8th Cir. 1981)). The decision whether to allow such an
amendment lies in the sound discretion of the trial court.
Groninger, 364 F.2d at 640.
allowing Costco to amend its answer to assert defenses of
lack of personal jurisdiction and improper venue would be
futile. A party waives the defenses of lack of personal
jurisdiction and improper venue when it omits them from a
motion raised under Federal Rule of Civil Procedure 12(b)(6)
or fails to include it in a responsive pleading. Fed.R.Civ.P.
12(h)(1). A party may lose the privilege to assert a personal
jurisdiction defense by “failure to assert it
seasonably, by formal submission in a cause, or by submission
through conduct.” Neirbo v. Bethlehem Shipbuilding
Corp., 308 U.S. 165, 168 (1939). “A defendant may
voluntarily consent or submit to the jurisdiction of a court
which otherwise would not have jurisdiction over it.”
Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196,
1199 (8th Cir. 1990). Costco consented to the jurisdiction of
this Court and waived any objections it had to personal
jurisdiction and venue by failing to raise the objections in
its motion to dismiss.
argues the Court should use its discretion to excuse the
waiver in this instance, because the U.S. Supreme Court's
ruling in Bristol-Meyers Squibb v. Superior Court of
California, San Francisco County, 137 S.Ct. 1773 (2017)
may affect whether some potential members of the class can
join in this action. A court may excuse a party for failing
to raise a defense that would have been futile under
previously binding precedent. Bennett v. City of
Holyoke, 362 F.3d 1, 7 (1st Cir. 2004) (citing
Curtis Pub. Co. v. Butts. 388 U.S. 130, 143-45
(1967)). But that is not the situation the Court faces here.
plain text of Rule 12(h) does not give the Court authority to
excuse a waiver of Rule 12(b)(2)-(5) defenses. Fed.R.Civ.P.
12(h)(1). Even if it did, the Supreme Court decided
Bristol-Meyers on June 19, 2017. Pearlstone filed
this action on April 19, 2018, and Costco filed its first
response to the complaint, its motion to dismiss, on July 23,
2018, well after the Supreme Court decided
Bristol-Meyers. At the time it filed its motion to
dismiss, Costco knew of the Bristol-Meyers decision
and could have raised it, but chose not to do so. If the
Court had authority to excuse Costco's waiver, it would
not do so. The Court accordingly denies Costco's motion
for leave to amend as to ¶¶ 11 and 12 and
affirmative defenses 26 and 27.
Court permits Costco to make the remaining proposed
amendments to its answer. Rule 12(h)-waiver does not apply to
these defenses, and the Rule 15(a)(2) freely-give-leave
standard applies. Additionally, Pearlstone did not object to
the remaining proposed amendments in his opposition brief or
during oral argument. Costco seeks to amend affirmative
defense eightto add the applicable Missouri statutes,
Mo. Rev. Stat. §§ 516.120, 516.190, and to state
the limitations began to run as of the date of cancellation
of the particular membership at issue. Costco also seeks to
add the following defenses: (25) Plaintiff's and the
putative class members' lack of standing to pursue the
claim and/or the doctrines of res judicata or
collateral estoppel bar the claims; (28) accord and
satisfaction, waiver, settlement, and/or release bar the
claims; and (29) Plaintiff is not a member of the putative
class or is otherwise unsuitable to serve as class
sought leave to amend within the time period allowed by the
Case Management Order, so there has not been undue delay and
there is no suggestion Costco seeks leave to amend in bad
faith or for a dilatory motive. Pearlstone did not show he
faces undue prejudice or that amendment would be futile as to
these defenses. Therefore, the ...