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Vandehey v. Real Social Dynamics, Inc.

United States District Court, D. Nevada

October 4, 2017

TODD VANDEHEY, Plaintiff(s),
v.
REAL SOCIAL DYNAMICS, INC., et al., Defendant(s).

          ORDER (DOCKET NOS. 28, 32)

          NANCY J. KOPPE United States Magistrate Judge

         Pending before the Court are Plaintiff's motions to amend the complaint and to conduct discovery, filed on an emergency basis. Docket Nos. 28, 32. Defendants have filed a response in opposition. Docket No. 37. Plaintiff filed replies. Docket Nos. 38, 39. The motions are properly resolved without a hearing. See Local Rule 78-1. For the reasons discussed below, the motions to amend and conduct discovery are both GRANTED.

         I. MOTION FOR LEAVE TO AMEND

         Plaintiff seeks leave to file an amended complaint. Docket No. 32. In particular, Plaintiff seeks to file an amended complaint that includes: (1) a claim for declaratory relief regarding the enforceability of the non-competition and non-solicitation provisions of the Contractor Agreement, which is brought against Defendants Real Social Dynamics, Kho and Cook (“First Claim”); (2) a claim for unauthorized access and alteration of Plaintiff's personal email account in violation of the Stored Communications Act, which is brought against currently-unknown Doe Defendants (“Second Claim”); (3) a claim for unauthorized access to and obtaining of information from Plaintiff's personal email account in violation of the Computer Fraud and Abuse Act, which is brought against currently-unknown Doe Defendants (“Third Claim”); (4) a claim for improperly accessing, obtaining information from, and interfering with Plaintiff's personal email account in violation of N.R.S. 205.4765, which is brought against currently-unknown Doe Defendants (“Fourth Claim”); and (5) a claim for conversion of funds from a PayPal account, which is brought against currently-unknown Doe Defendants (“Fifth Claim”). See Docket No. 32-2 (proposed amended complaint).

         Motions for leave to amend are governed by Rule 15(a) of the Federal Rules of Civil Procedure, which provides that “[t]he court should freely give leave [to amend] when justice so requires.” There is a strong public policy in favor of permitting amendment. Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). As such, the Ninth Circuit has made clear that Rule 15(a) is to be applied with “extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (per curiam). Under Rule 15(a), courts consider various factors, including: (1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of the amendment; and (5) whether the plaintiff has previously amended the complaint. See Id. at 1052. The party opposing the amendment bears the burden of showing why leave to amend should be denied. See, e.g., Desert Protective Council v. U.S. Dept. of the Interior, 927 F.Supp.2d 949, 962 (S.D. Cal. 2013) (citing Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989)).

         Defendants oppose the motion for leave to amend based on the overarching argument that amendment is forbidden given the existence of an arbitration provision covering “any claim or controversy arising out of or relating to [the Operating] Agreement.” See, e.g., Docket No. 37 at 4. The Court interprets Defendants' argument as an assertion that the proposed amendments would be futile. As to the Second Claim, Third Claim, Fourth Claim, and Fifth Claim, [1] Defendants make no attempt to explain how allegations that currently-unknown Doe Defendants accessing Plaintiff's PayPal account and his personal email account are claims related to the Operating Agreement. On their face, these causes of action appear unrelated to the Operating Agreement.[2] Similarly, with respect to the First Claim, Plaintiff seeks declaratory relief as to the validity of provisions in the Contractor Agreement, not as to any provision of the Operating Agreement. See Docket No. 32-2 at ¶ 186. Defendants have failed to adequately explain why a claim regarding the validity of the Contractor Agreement is subject to an arbitration provision related to claims arising out of the Operating Agreement. Without any explanation on these fronts, the Court is unpersuaded that the amendments would be futile such that leave to amend should be denied.[3] Accordingly, the motion for leave to amend will be GRANTED.[4]

         II. MOTION FOR DISCOVERY

         Plaintiff seeks discovery from third-parties to identify the Doe Defendants who allegedly accessed and converted funds from the PayPal account, and who allegedly accessed and interfered with Plaintiff's personal email account. Docket No. 28 at 8-10. The Ninth Circuit has held that, where the identity of defendants is unknown prior to the filing of a complaint, the plaintiff should be given an opportunity through discovery to identify the unknown defendant, unless it is clear that discovery would not uncover the identities of the defendants, or that the complaint would be dismissed on other grounds. See Wakefield v. Thompson, 177 F.3d 1160, 1163 (9th Cir. 1999) (citing Gillespie v. Civiletti, 629 F.2d 637, 642 (9th Cir. 1980)). Defendants do not provide meaningful discussion as to why this discovery should not be allowed in this case. To the extent Defendants are implying that the claims against the Doe Defendants are subject to dismissal or that the discovery sought is otherwise improper based on the existence of the cited arbitration provision, they have failed to show that the arbitration provision is triggered by the claims presented. Accordingly, the motion for discovery will be GRANTED.

         III. CONCLUSION

         For the reasons discussed above, the Court hereby rules as follows:

         • Plaintiff s motion for leave to amend is GRANTED. In compliance with Local Rule 15-1(b), Plaintiff shall promptly file the proposed amended complaint on the docket, and shall serve the known Defendants with the amended complaint.

         • Plaintiffs motion to conduct discovery to identify the Doe Defendants is GRANTED. Plaintiff shall promptly seek discovery into the identities of the Doe Defendants, and shall file a motion to substitute the Doe Defendants with their actual identities within 90 days of the issuance of this order.

         IT IS ...


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