True Health Chiropractic Inc v. McKesson Corporation
- Haywood Gilliam
- 4:13-cv-02219
- U.S. District Court · Northern District of California
- 4
In True Health Chiropractic v. McKesson, Judge Gilliam denied MTI’s motion to amend its answer, finding it lacked good cause after a lengthy delay.
McKesson Technologies, Inc. (MTI), whose motion was denied, and True Health Chiropractic Inc., which had relied on the admission in prior motions practice.
What happened
True Health Chiropractic sued McKesson Corporation, and McKesson Technologies, Inc. (MTI) was later added as a defendant. MTI asked to change an admission in its answer about receiving a document from the Federal Communications Commission.
The court applied a rule requiring MTI to show a good reason for changing its answer after the case’s deadline. The court found that MTI and its lawyers had known about the alleged error for more than four years and should have acted sooner.
Judge Haywood Gilliam denied MTI’s motion for leave to file an amended answer. The court also explained that MTI could potentially withdraw the admission without amending its answer and said MTI had already laid a foundation for doing so through its briefs and evidence.
The detailed version
- True Health Chiropractic Inc v. McKesson Corporation · No. 4:13-cv-02219
- Haywood Gilliam
- Mar. 16, 2020
Background
True Health Chiropractic Inc. sued McKesson Corporation in 2013. True Health later filed a second amended complaint adding McKesson Technologies, Inc. (MTI) as a defendant. MTI filed its answer in August 2014.
MTI sought permission to amend paragraph 20 of its answer. That paragraph admitted that Exhibit C to the second amended class-action complaint appeared to be a true and correct copy of a document MTI had received from the Federal Communications Commission.
Legal standard
Under Federal Rule of Civil Procedure 16, a scheduling order may be changed only for good cause and with the judge’s consent. The court explained that good cause mainly depends on the diligence of the party seeking the change. If that requirement is met, the party must also satisfy Rule 15, which generally allows amendments when justice requires them and considers factors such as bad faith, delay, prejudice, futility, and prior amendments.
Analysis
MTI argued that Rule 16 did not apply because the court had not set a specific deadline for amending pleadings. The court disagreed, finding that a 2014 scheduling order expressly required a showing of good cause for further amendments.
The court also rejected MTI’s claim that it had acted diligently. MTI sought to change an admission that True Health had repeatedly relied on in motions practice. The court found that MTI’s new counsel knew of the apparent error by at least October 2015, yet MTI waited more than four years before seeking to amend its answer. The court concluded that MTI should have acted sooner, even though MTI identified some evidence suggesting that the admission was incorrect.
Ruling
The court denied MTI’s motion for leave to file an amended answer because MTI failed to show good cause. The court separately noted that a motion to amend is not necessarily required to retract a judicial admission—a statement in a pleading that may bind the party that made it. The court found that MTI had already laid a foundation for retracting the admission through briefs opposing class-certification motions and evidence submitted with the motion. It therefore concluded that denying the amendment would not unfairly prejudice MTI based only on a technicality.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.