Howard v. Tanium, Inc.

Background

Daniel Howard sued Tanium, Inc. for fraud, alleging that Tanium misrepresented the value of its stock to induce him to leave his then-employer and work for Tanium. Howard alleged that a hiring manager said Tanium shares were worth $5 per share when their stated value was $2.01 per share.

Howard filed the complaint without a lawyer, and the complaint did not request a jury trial. Tanium initially requested a jury trial in a case-management statement. Howard later obtained counsel and requested a jury trial during an August 2022 case-management conference. The parties later took different positions on whether the case should be tried to a jury or to the judge.

The district court had previously granted Tanium’s motion for summary judgment. The Ninth Circuit reversed that ruling and sent the case back to the district court. The pending motions concerned only whether the case would be tried to a jury and whether Howard could amend his complaint.

Motion for a Jury Trial

Federal Rule of Civil Procedure 38 generally requires a written jury demand within 14 days after the last pleading addressing the issue. Neither party made a timely demand. Howard’s complaint did not demand a jury, and Tanium answered on January 5, 2022, making January 19, 2022, the deadline under Rule 38.

Under Federal Rule of Civil Procedure 39(b), however, the court may order a jury trial despite an untimely demand when the failure was caused by something beyond mere oversight or inadvertence. The court found that Howard had shown sufficient cause. When he filed the complaint without a lawyer, he deliberately chose not to request a jury because he was concerned about appearing without a lawyer before a jury. After obtaining counsel, he requested a jury at the first opportunity identified in the opinion.

The court also considered that fraud generally involves factual questions suitable for a jury, granting the request would not disrupt the schedule because no trial date had yet been set, and Tanium would suffer little prejudice because it had initially requested a jury trial. The court therefore GRANTS Howard’s motion for a jury trial.

Motion to Amend the Complaint

The scheduling order set July 1, 2022, as the deadline to seek amendment of the pleadings. Because that deadline had passed, the court applied Federal Rule of Civil Procedure 16 rather than Rule 15’s more flexible amendment standard. Rule 16 requires “good cause,” with the main focus on the diligence of the party seeking the change.

Howard sought to amend the complaint to clarify requests for general damages, which he explained meant damages for pain and suffering, and to seek punitive damages. He also sought attorney’s fees under California Code of Civil Procedure section 1021.5, asserting that the case could show Tanium engaged in a pattern of misleading potential employees.

The court found that Howard had not identified the specific evidence supporting the proposed punitive-damages amendment or explained why he could not have found it earlier. Some documents he relied on predated the complaint, and depositions he cited occurred about two months before Tanium moved for summary judgment. The court also noted that Howard had referred to exemplary damages in earlier case-management statements, which suggested he had reason to seek the amendment before the deadline.

As to attorney’s fees, the court found that Howard had not identified the evidence supporting that amendment or explained why he could not have sought it sooner. The court also stated that the proposed amendment would likely be futile because Howard had not brought a claim under California Business and Professions Code section 17200 and had not shown the requirements for a public-interest attorney-fee award under section 1021.5.

The court therefore DENIES Howard’s motion to amend the complaint. The order disposes of Docket Nos. 66 and 70.