FidoTV Channel, Inc. v. Inspiration Network, Inc.

          ORDER AFFIRMING AND ADOPTING THE APRIL 29, 2019 RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE AND GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR LEAVE TO AMEND COMPLAINT AND JOIN PARTIES

          CHRISTINE M. ARGUELLO, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon the April 29, 2019 Recommendation of United States Magistrate Judge Nina Y. Wang that this Court grant in part and deny in part Plaintiff FidoTV Channel, Inc.'s Motion for Leave to Amend Complaint and Join Parties (“Motion for Leave to Amend Complaint”) (Doc. # 58). (Doc. # 69.) Plaintiff objects to one portion of Magistrate Judge's Recommendation. (Doc. # 70.) For the reasons described herein, the Court affirms and adopts the Recommendation and grants in part and denies in part Plaintiff's Motion for Leave to Amend Complaint.

         I. BACKGROUND

         The Magistrate Judge's Recommendation thoroughly recites the factual and procedural background of this litigation and is 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 Plaintiff's Objection.

         Plaintiff provides a cable television channel “on dogs for dog lovers.” (Doc. # 5 at 1.) Defendant The Inspirational Network, Inc., (“Defendant Inspiration”) is a media company that provides operational support, satellite uplink services, and transponder time to connect channels to cable, satellite television, and telecom video distributors throughout the country. (Doc. # 20 at 1.) In February 2015, Plaintiff and Defendant Inspiration entered into a Network Operations Services Agreement (the “Agreement”), the purpose of which was for Defendant Inspiration to provide network services to carry Plaintiff's channel to cable and satellite television distributors. See (Doc. # 5 at 10-20.) The dispute between Plaintiff and Defendant Inspiration concerns payments owed for month 33 (July 2018) and month 34 (August 2018) under the terms of the Agreement. The Court need not detail the parties' factual allegations and the relevant content of the Agreement for purposes of considering Plaintiff's Objection to the Recommendation.

         Plaintiff initiated this action on August 30, 2018, and asserts two claims against Defendant Inspiration: (1) breach of contract, and (2) breach of the implied covenant of good faith and fair dealing. (Id. at 5-7.) Plaintiff also sought injunctive relief (id. at 6), which this Court granted in the form of a preliminary injunction on September 28, 2018 (Doc. ## 33-34). The preliminary injunction barred Defendant Inspiration from terminating service under the Agreement through November 30, 2018, subject to Plaintiff's posting of a $335, 000 bond. (Doc. # 34.) The preliminary injunction expired at 11:59 PM on November 30, 2018. (Id. at 2.)

         On January 18, 2019, Defendant Inspiration produced several documents to Plaintiff. See (Doc. # 58 at 1.) The deadline for the amendment of pleadings and joinder of parties was approximately two weeks later, on January 31, 2019. See (Doc. ## 47, 54.) On January 31, 2019, Defendant Inspiration filed a Second Amended Answer (Doc. # 57), and Plaintiff filed its Motion for Leave to Amend Complaint (Doc. # 58).

         Relevant here, Plaintiff moves amend its Complaint to join Mark Kramer and David Cerullo as defendants, “to provide extensive new and updated factual allegations based on the new documentary evidence” Defendant Inspiration produced on January 18, 2019, and to “update and add claims as follows:”

1. Update First Claim for Relief (Breach of Contract against [Defendant Inspiration]);

2. Update Second Claim for Relief (Breach of the Implied Covenant of Good Faith and Fair Dealing against [Defendant Inspiration]);

3. Add Third Claim for Relief (Breach of Fiduciary Duty against Defendant Kramer);

4. Add Fourth Claim for Relief (Breach of Fiduciary Duty against Defendant Cerullo);

5. Add Fifth Claim for Relief (Aiding and Abetting Breach of Fiduciary Duty against Defendants [Inspiration], Cerullo, and Kramer);

6. Add Sixth Claim for Relief (Tortious Interference with Prospective Business Advantage against [Defendants ...