Lawson v. BMW of North America LLC

Background

Michael Lawson sued BMW of North America LLC (BMWNA) and Stevens Creek B, Inc. He sought damages from Stevens Creek for negligent repair and restitution, and damages from BMWNA for alleged breaches of an express warranty under California’s Uniform Commercial Code and the Magnuson-Moss Warranty Act. Lawson alleged that he purchased a 2017 BMW M4 covered by BMWNA’s express warranty, that the vehicle was defective, and that authorized repair facilities failed to adequately repair it.

The court had set September 27, 2021, as the deadline for amending the pleadings. After BMWNA deposed Lawson in December 2022, Lawson said he learned through discovery about BMWNA’s theory concerning Carmax. In January 2023, Lawson asked BMWNA to agree to adding Carmax as a defendant, but BMWNA refused. Lawson then moved for leave to file a First Amended Complaint. BMWNA argued that Lawson had delayed nearly 18 months after the amendment deadline, had known from the beginning that he bought the vehicle from Carmax, and would cause additional discovery by adding a new party.

Legal standard

Because the amendment deadline was set in a scheduling order, the court first applied Federal Rule of Civil Procedure 16(b)(4). That rule allows a schedule to be changed only for “good cause,” which primarily considers whether the party seeking the change acted diligently. If good cause exists, the court then applies Rule 15(a)(2), which generally permits amendment unless there is bad faith, undue delay, prejudice to the opposing party, or futility of the proposed amendment.

Court’s analysis

The court found that Lawson acted diligently. Although substantial time had passed since the amendment deadline, the court accepted Lawson’s explanation that he learned about BMWNA’s theory concerning Carmax through the December 2022 discovery process and that this information made adding Carmax necessary. The court also found that adding Carmax was in the interest of justice and that any prejudice to BMWNA would be minimal. Although additional discovery would be needed, BMWNA had already issued subpoenas to Carmax, and the deadline for hearing dispositive motions was still four months away.

Applying Rule 15(a)(2), the court found no indication of bad faith or a dilatory motive. It also found that Lawson had explained the delay and that BMWNA would suffer only minimal prejudice. The court therefore found the proposed amendment proper under Rule 15(a)(2).

Disposition

The court granted Lawson’s motion for leave to amend the complaint. It ordered Lawson to file his First Amended Complaint by March 17, 2023.