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Mountain Marketing Group, LLC v. Heimerl & Lammers, LLC

United States District Court, D. Minnesota

April 29, 2015

Mountain Marketing Group, LLC, and John A. Krueger d/b/a Krueger Law Firm, Plaintiffs,
v.
Heimerl & Lammers, LLC, Defendant.

David P. Jendrzejek, Glen E. Schumann, and Timothy R. Franzen, Moss & Barnett, P.A., 150 South Fifth Street, Suite 1200, Minneapolis, MN 55402, for Plaintiffs.

James F. Boyle, Boyle Fredrickson, SC, 840 North Plankinton Avenue, Milwaukee, WI 53203; and Michael Lammers, Heimerl & Lammers, LLC, 901 North Third Street, Minneapolis, MN 55401, for Defendant.

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant's Objections [Doc. No. 64] to U.S. Magistrate Judge Becky R. Thorson's April 9, 2015 Order denying Defendant's Motion for Leave to File an Amended Answer. For the reasons stated below, the Court affirms the Magistrate Judge's Order.

II. BACKGROUND

A. The Pretrial Proceedings and the Scheduling Orders

Plaintiffs filed their Complaint in this matter in January 2014 in the U.S. District Court for the Western District of Wisconsin, asserting claims for trademark infringement and unfair competition. (See Compl. [Doc. No. 1] ΒΆΒΆ 28-68.) The case was transferred to this Court on March 27, 2014, and Defendant filed an Answer on April 11, 2014 that stated three affirmative defenses. (See Answer [Doc. No. 29] at 7.) A pretrial conference was held on May 27, 2014, and the minutes from that conference (which were filed the same day) provided a deadline of July 1, 2014 for filing a motion to amend the pleadings to add claims or defenses, and a deadline of November 1 for completion of discovery. (Court Minutes dated May 27, 2014 [Doc. No. 34] at 2.) The Scheduling Order issued on June 11 contained these same deadlines. (Scheduling Order dated June 10, 2014 [Doc. No. 35] at 1.)

On October 22, 2014 and January 19, 2015, the parties filed stipulations seeking to extend the discovery deadline to February 1, 2015 and March 31, 2015, respectively, stating that the modifications "would not have any effect on any other deadlines of the Scheduling Order." (Stip. to Amend Scheduling Order dated Oct. 22, 2014 [Doc. No. 44] at 1; Stip. to Amend Scheduling Order dated Jan. 19, 2015 [Doc. No. 46] at 1-2.) Both stipulations were approved-the latter after a January 27 telephone conference. (Order Amending Scheduling Order dated Oct. 24, 2014 [Doc. No. 45]; Second Amended Scheduling Order dated Jan. 28, 2015 [Doc. No. 49].) Meanwhile, on January 8, 2015, Defendant took the depositions of two of Plaintiff Mountain Marketing Group's principals. (Def.'s Mem. of Law in Supp. of Mot. for Leave to File an Amended Answer [Doc. No. 54] ("Def.'s Mem.") at 2.)

B. Defendant's Motion and the Magistrate Judge's Order

On February 24, 2015, Defendant moved pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure for leave to file an amended answer for purposes of asserting affirmative defenses and counterclaims for cancelation of Plaintiff Mountain Marketing Group's trademarks. (Def.'s Mot. for Leave to File an Amended Answer [Doc. No. 52] at 1.) According to Defendant, it first became aware of facts that would support a defense of abandonment due to nonuse or naked licensing during the January 8 depositions of Plaintiff Mountain Marketing Group's principals. (Def.'s Mem. at 2.) Defendant argued that leave to amend its Answer to assert those affirmative defenses should be granted under Rule 15(a)(2) because the Scheduling Order would not be "substantially disrupt[ed], " Defendant did not anticipate needing any additional discovery on the issue of abandonment, and Defendant was willing to grant Plaintiffs any extension necessary to accommodate the change. (Id. at 4.) In opposition, Plaintiffs argued that a motion for leave to amend should be denied if the amendment would be futile, and that the amendment requested by Defendant would be futile because neither of the claims that Defendant seeks to add to its Answer could withstand a motion to dismiss for failure to state a claim. (See Pls.' Mem. of Law Opposing Def.'s Mot. for Leave to File an Amended Answer [Doc. No. 58] at 2-8.)

Defendant's Motion was heard on April 6 [Doc. No. 62], and the Magistrate Judge issued her Order denying that Motion on April 9. The Magistrate Judge determined that, because Defendant did not file its Motion until eight months after the July 1, 2014 deadline for doing so had expired, Rule 15(a) was no longer applicable. (Order and Mem. dated Apr. 9, 2015 [Doc. No. 63] ("Apr. 9 Order") at 5.) Instead, she applied Rule 16(b)(4) and found that Defendant had not demonstrated the requisite good cause for modifying the Scheduling Order because Defendant had not demonstrated that it had been diligent in pursuing its defenses. (Id. at 5-8.) In particular, the Magistrate Judge found that Defendant had not shown that the deposition testimony was the only means by which Defendant could have learned of the factual basis of its new affirmative defenses, and that Defendant had neglected to inform the Court of its need to amend the amendment-of-pleadings deadline even during the telephone conference that was held within weeks after the depositions. (Id. at 7.) The Magistrate Judge also noted that, although prejudice to the nonmoving party generally is not considered under Rule 16(b)(4), Plaintiffs' need to re-open fact discovery to explore these new defenses constitutes sufficient prejudice to warrant denial of Defendant's Motion. (Id. at 8 & n.3.) Finally, the Magistrate Judge discussed the importance of a scheduling order and pointed out that the Scheduling Order in this case has already been amended twice. (Id. at 8-9.)

III. DISCUSSION

A. Standard of ...


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