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Kische USA LLC v. Simsek

United States District Court, W.D. Washington, Seattle

February 22, 2017

KISCHE USA LLC, Plaintiff,
ALI SIMSEK, et al., Defendants.


          JAMES L. ROBART United States District Judge.


         Before the court is Plaintiff Kische USA LLC's (“Kische”) second motion for leave to amend its complaint. (2d MTA (Dkt. # 66).) The court has reviewed the motion, Defendants Ali Simsek, Diane Walker, and JD Stellar LLC's (“JD Stellar”) (collectively, “Stellar Defendants”) opposition to the motion (Resp. (Dkt. # 68)), Kische's reply (Reply (Dkt. # 69)), the relevant portions of the record, and the applicable law. Being fully advised, [1] the court GRANTS Kische's motion for the reasons set forth below.


         On February 4, 2016, Kische brought this suit against Mr. Simsek, Ms. Walker, attorney Kevin Costanza, [2] their respective marital communities, and JD Stellar. (See Compl. (Dkt. # 1) at 1.) Against Stellar Defendants, Kische originally alleged (1) unfair competition under the Lanham Act; (2) false description under the Lanham Act; (3) common law passing off; (4) common law misappropriation of trade secrets; (5) violation of Washington's Uniform Trade Secrets Act (“UTSA”), RCW ch. 19.108; (6) “common law injury to business reputation”; (7) breach of contract; (8) breach of fiduciary duty; (9) intentional interference with contractual relations; (10) conversion; (11) business opportunity fraud under RCW ch. 19.110; and (12) violation of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68. (Id. at 12-19.) Against Mr. Costanza, Kische alleged legal malpractice based on theories of negligence and breach of fiduciary duty. (Id. at 19-20.)

         All of the initial defendants moved to dismiss the original complaint for failure to state a claim (1st Stellar MTD (Dkt. # 18); 1st Costanza MTD (Dkt. # 28)), and the court granted in part and denied in part Stellar Defendants' motion to dismiss and granted Mr. Costanza's motion to dismiss (6/29/16 Order (Dkt. # 39)). Specifically, the court dismissed all of Kische's claims except for breach of contract, breach of fiduciary duty, and tortious interference. (Id. at 18, 22.) The court's dismissal was without prejudice because the court concluded that “[t]hough Kische has not plausibly pleaded many of its claims, the court cannot say on the record before it that leave to amend would be futile or that any other relevant factors weigh against granting leave to amend.” (Id. at 31.)

         Despite already having the court's leave to amend, on July 19, 2016, Kische filed a motion to amend its complaint. (See 1st MTA (Dkt. # 42).) Kische sought to amend its complaint “with additional claims, case law[, ] and facts to substantiate [Kische's] claims against Defendants.” (Id. at 1.) Kische argued that “[s]ome facts and law were not originally included in the verified complaint, and, because of this, the [c]ourt was not able to find facts sufficient to support multiple claims as stated.” (Id. at 2.) Kische further stated that it knew some of those “new” facts at the time it filed its first complaint, while it became aware of other “new” facts during discovery. (Id.) Kische also stated that it omitted from its proposed amended complaint “claims for which there may be insufficient corroborating evidence.” (Id. at 2; see also Id. at 4 (stating that Kische omitted its RICO claim).) None of the defendants opposed Kische's first motion for leave to amend. (Costanza Resp. to 1st MTA (Dkt. # 48); Stellar Resp. to 1st MTA (Dkt. # 51).)

         The court permitted Kische to file its proposed amended complaint. (See 8/1/16 Order (Dkt. # 52); Am. Compl. (Dkt. # 53).) In its amended complaint, Kische asserted 12 causes of action-10 against Stellar Defendants and three against Mr. Costanza. (Am. Compl.) Against Mr. Costanza, Kische alleged legal malpractice on a negligence theory, breach of fiduciary duty, and civil conspiracy. (Id. ¶¶ 14.1-14.6, 15.1-15.4.) Against Stellar Defendants, Kische alleged (1) a trademark infringement claim under the Lanham Act; (2) a false advertising claim under the Lanham Act; (3) a trademark dilution claim under the Lanham Act; (4) violation of Washington's Consumer Protection Act (“CPA”), RCW ch. 19.86; (5) breach of contract; (6) breach of fiduciary duty; (7) tortious interference with business relations; (8) conversion; (9) fraud; and (10) civil conspiracy. (Id. ¶¶ 5.1-13.10, 15.1-15.4.)

         All of the defendants then again moved to dismiss Kische's amended complaint, with the exception of the claims that survived Defendants' first motions to dismiss. (See 2d Costanza MTD (Dkt. # 54); 2d Stellar MTD (Dkt. # 56).) The court dismissed without prejudice Kische's claims against Stellar Defendants for trademark infringement of the Marseille and Dantelle marks, false advertising, trademark dilution, violation of the CPA, fraud, and civil conspiracy, but the court declined to dismiss Kische's claims for breach of fiduciary duty and conversion. (See 12/13/16 Order at 43.) The court also dismissed Kische's claims against Mr. Costanza: the legal malpractice and breach of fiduciary claims with prejudice, and the civil conspiracy claim without prejudice. (Id. at 43-44.)

         In the second order of dismissal, the court stated that the scope of the court's leave to amend was limited and that “Kische may not add claims” to an amended complaint without first obtaining the court's leave. (Id. at 43.) The court ordered Kische to file any second amended complaint no later than January 3, 2017. (Id.)

         Rather than filing a second amended complaint within the scope of the court's December 13, 2016, order, Kische filed a second motion to amend its complaint. (See 2d MTA.) In doing so, Kische failed to comply with Local Civil Rule 15, which requires a party moving to amend its complaint to “indicate on the proposed amended pleading how it differs from the pleading that it amends by bracketing or striking through the text to be deleted and underlining or highlighting the text to be added.” Local Rules W.D. Wash. LCR 15. Accordingly, the court ordered Kische to file a proposed amended complaint that complied with Local Civil Rule 15. (2/3/17 Order (Dkt. # 70).) Kische filed a proper proposed amended complaint the same day. (Prop. SAC.) The court now addresses Kische's second motion to amend.

         III. ANALYSIS

         A. Legal Standard

         Federal Rule of Civil Procedure 15 (a)(2) requires the court to “freely give” leave to amend a pleading “when justice so requires.” Fed.R.Civ.P. 15(a)(2). This policy is “applied with extreme liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001); see also DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987); United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). It is within the court's discretion whether to grant or deny leave to amend. See Webb, 655 F.2d at 979. “In exercising this discretion, a court must be guided by the underlying purpose of Rule 15 to facilitate a decision on the merits, rather than on the pleadings or technicalities.” Id. Accordingly, the court analyzes five factors in ruling on a motion for leave to amend: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the party has previously amended its pleading. Allen v. City of Beverly Hills, 911 F.2d 367, ...

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