Jenkins v. Immedia, Inc.

          ORDER AFFIRMING AND ADOPTING THE APRIL 25, 2019 RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE AND DENYING MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF'S THIRD AMENDED COMPLAINT

          CHRISTINE M. ARGUELLO United States District Judge

         This matter is before the Court upon the April 25, 2019, Recommendation by United States Magistrate Judge Kristen L. Mix that this Court grant Plaintiff's Renewed Motion for Leave to Amend Complaint to Add a Claim for Punitive Damages and to Conform to the Court's Orders (Doc. # 359). (Doc. # 368.) Defendant Immedia, Inc. objected to Magistrate Judge Mix's Recommendation. (Doc. # 370.) Plaintiff Franklyn A. Jenkins responded to Defendant's Objection. (Doc. # 377.) For the reasons described herein, Defendant's objections are overruled. The Court affirms and adopts the Recommendation.

         Related to Defendant's Objection (Doc. # 370) is Defendant's Motion for Partial Dismissal of Plaintiff's Third Amended Complaint. (Doc. # 371.) Because the Court affirms and adopts the Recommendation, the Court also addresses Defendant's Motion for Partial Dismissal. For the following reasons, the Court denies Defendant's Motion for Partial Dismissal.

         I. BACKGROUND

         This Court recited the factual and procedural background of this dispute in its October 27, 2017 Order Granting Plaintiff's Motion for Reconsideration (Doc. # 268), which is incorporated herein. The Magistrate Judge's Recommendation also provides a thorough recital of the factual and procedural background of this dispute and it is also incorporated herein by reference. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Accordingly, this Order will reiterate only what is necessary to address Defendant's Objection (Doc. # 370) and Defendant's Motion for Partial Dismissal (Doc. # 371).^[1]

         On October 5, 2018, Plaintiff filed a Motion for Leave to Amend Complaint to Add a Claim for Punitive Damages (“Initial Motion for Leave”). (Doc. # 307.) Due to procedural and formatting defects, the Court denied the Initial Motion for Leave and directed Plaintiff to file a Renewed Motion for Leave on or before February 13, 2019. (Doc. # 347.) Plaintiff timely filed his Renewed Motion for Leave on February 6, 2019. (Doc. # 353.) Plaintiff argued that the Court should permit him with leave to file a Third Amended Complaint to add a claim for punitive damages because recently obtained fact and expert evidence sufficiently supported Plaintiff's claim for punitive damages. (Id. at 1-3, 12-13.)

         Defendant filed its response in opposition to Plaintiff's Renewed Motion for Leave on February 27, 2019. (Doc. # 358.) Defendant asserted that Plaintiff's proffered evidence was not sufficient to constitute “clear and convincing evidence” that Defendant “intentionally or deliberately disregarded the safety of others.” (Id. at 4.) Moreover, Defendant argued that Plaintiff's Renewed Motion for Leave was untimely and unsupported by good cause, and that granting the motion would prejudice Defendant. (Id. at 12-15.)

         On February 28, 2019, Plaintiff replied to Defendant's Response and argued that Defendant's improper attempts to raise factual issues to oppose the Renewed Motion for Leave did not diminish Plaintiff's ability to establish the prima facie case necessary to amend his complaint and add a claim for punitive damages. (Doc. # 359 at 2, 4-5.) Additionally, Plaintiff averred that good cause supported his Renewed Motion for Leave because Defendant's failure to timely disclose relevant evidence delayed Plaintiff's ability to file the Initial Motion for Leave, and as a result, Defendant is not prejudiced by Plaintiff's sought amendments. (Id. at 2-4.)

         Magistrate Judge Mix issued her Recommendation that the Court grant Plaintiff's Renewed Motion for Leave on April 25, 2019. (Doc. # 368.) The Magistrate Judge first determined that Plaintiff established good cause for moving to amend his complaint out of time because he “heavily relie[d] upon evidence that was obtained after the March 1, 2018 deadline to amend pleadings” as a result of Defendant's belated disclosures, which triggered Plaintiff's need for additional fact and expert depositions. (Id. at 5-8.)

         Next, Magistrate Judge Mix followed “a new consensus within the District of Minnesota” and applied Rule 15, and not Minn. Stat. § 540.20, when analyzing whether to grant a motion to amend a complaint to add a claim for punitive damages in a federal diversity case. (Id. at 10.) The Magistrate Judge explained that, procedurally, the Court is required to (1) view the proposed amended complaint “through the permissive Rule 15 lens[, ]” and (2) apply substantive Minnesota state law when determining whether a moving party states a plausible claim for punitive damages. (Id. at 11.)

         Applying Rule 15, Magistrate Judge Mix determined that Plaintiff's claim for punitive damages was not futile because he adequately pleaded a claim “that the acts of the defendant show[ed] deliberate disregard for the rights or safety of others.” (Id. at 18 (citing Minn. Stat. § 549.20).) Moreover, Magistrate Judge Mix concluded that neither unfair prejudice nor undue delay constituted grounds to deny Plaintiff's Renewed Motion for Leave. (Id. at 19-20.)

         Defendant filed its Objection to Magistrate Judge Mix's Recommendation on May 10, 2019. (Doc. # 370.) As is explained in further detail below, Defendant asserts that Magistrate Judge Mix applied “the wrong legal standard” and misunderstood “the relevant facts.” (Id. at 1.) Plaintiff responded to Defendant's Objection on May 24, 2019 (Doc. # 377), and argued that pursuant to Rule 72(a), Magistrate Judge Mix's decision was not clearly erroneous or contrary to law. (Doc. # 377 at 2-8.) For the following reasons, the Court agrees with Plaintiff that Magistrate Judge Mix's Recommendation is not clearly erroneous or contrary to law, and therefore, it will affirm and adopt the Recommendation.

         II. LEGAL STANDARDS

         A. REVIEWING AN OBJECTION TO A MAGISTRATE JUDGE'S RECOMMENDATION

         When a magistrate judge issues an order on a nondispositive pretrial matter, “[t]he district judge in the case must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed.R.Civ.P. 72(a) (emphasis added). Under the clearly erroneous standard, “the reviewing court [must] affirm unless it ‘on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'” Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1464 (10th Cir. 1988) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)); Allen v. Sybase, Inc., 468 F.3d 642, 658 (10th Cir. 2006). The “‘clearly erroneous' standard is ‘significantly deferential.'” Chung v. Lamb et. al., No. 14-cv-03244-WYD-KLM, 2018 WL 7141423, at * 1 (D. Colo. Jan. 3, 2018) (quoting United States v. Gallegos, 314 F.3d 456, 462 n.3 (10th Cir. 2002)). ...