Smith v. 9W Halo Western OpCo L.P.

Background

Kenneth C. Smith moved under Federal Rule of Civil Procedure 15(a)(2) for permission to file a second amended complaint. The proposed amendments would: (1) replace “Angelica Corporation” and “Angelica Textile Services, Inc.” with “9W Halo Western OPCO L.P. dba Angelica”; (2) add KKR & Co., Inc. (“KKR”) as a defendant; and (3) add a claim under California’s Private Attorneys General Act against KKR.

Reasoning

Rule 15(a)(2) generally requires courts to freely allow amendments when justice requires, unless there is undue delay, bad faith, repeated failure to correct deficiencies, undue prejudice, or futility. The court noted that the party opposing amendment bears the burden of showing prejudice.

The parties agreed that correcting the defendant’s name was permissible. The court also found that adding KKR was permissible. According to the opinion, Smith learned during informal mediation that KKR was financially involved with the defendant but did not add KKR because the defendant allegedly said it would not continue mediation if KKR were added. After mediation ended, and after Smith learned that KKR may have acquired the defendant and sold its assets, Smith sought leave to add KKR. The court found no evidence of bad faith or undue delay and concluded that the existing defendant would not face prejudice because the claims against KKR involved the same conduct already alleged.

The court also found the proposed Private Attorneys General Act claim permissible. It explained that an amendment is futile only if no set of facts could be proved that would amount to a valid claim. The court rejected the argument that Smith’s earlier amendment justified denial because he had amended only once before and was not repeatedly attempting to fix deficiencies in the same claims.

Disposition

The court GRANTS Smith’s motion for leave to amend. It instructs Smith to submit only one second amended complaint containing all of the proposed amendments. Judge Phyllis J. Hamilton signed the order. The opinion does not decide the ultimate merits of Smith’s claims or KKR’s liability.