Case 2:22-cv-02120-ODW-JEM Document 98 Filed 08/25/22 Page 1 of 5 Page ID #:1701

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8 United States District Court 9 Central District of California

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11 PERRIN BERNARD SUPOWITZ, LLC, Case № 2:22-cv-02120-ODW (JEMx)

12 Plaintiff,

ORDER GRANTING MOTION FOR

13 v.

LEAVE TO AMEND [88] AND

14 PABLO MORALES, et al., DENYING AS MOOT MOTION FOR 15 PRELIMINARY INJUNCTION [28] Defendants.

AND MOTION FOR PARTIAL

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SUMMARY JUDGMENT [60]

17 18 I. INTRODUCTION 19 Plaintiff Perrin Bernard Supowitz LLC (“Perrin”) brings suit against Pablo 20 Morales; Legacy Wholesale Group, LLC; Savino Morales; and Sergio Escamilla for 21 damages arising from Pablo’s,1 Savino’s, and Escamilla’s alleged diversion of Perrin’s 22 clients and sales to their own company, Legacy. Having deposed Pablo, Perrin now 23 seeks leave to amend the Complaint by adding a tenth claim for fraud against Pablo 24 and Legacy. (Mot. Leave Amend (“Motion” or “Mot.”), ECF No. 88.) Having 25 carefully considered the papers filed in connection with the Motion, the Court finds 26 the matter appropriate for decision without oral argument and accordingly VACATES 27 28 1 First names of the Savinos are used for clarity and efficiency. No disrespect is intended. Case 2:22-cv-02120-ODW-JEM Document 98 Filed 08/25/22 Page 2 of 5 Page ID #:1702

1 the hearing on the Motion. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For the reasons 2 that follow, the Court GRANTS Perrin’s Motion. 3 II. BACKGROUND 4 Perrin does business as Individual Foodservice and is in the business of selling 5 food service products. (Compl. ¶ 2, ECF No. 1.) Pablo Morales and Savino Morales 6 are ex-employees of Perrin, and Perrin alleges that they and Escamilla, through their 7 company Legacy: competed against Perrin; used Perrin’s confidential and trade secret 8 information to identify customers and vendors; purchased goods from Perrin’s 9 vendors at confidential pricing negotiated by Perrin; and sold goods to Perrin’s 10 customers at prices that were at or lower than Perrin’s confidential pricing, all while 11 Pablo and Savino still worked for Perrin. (Id. ¶ 30.) 12 On March 31, 2022, Perrin filed its Complaint, setting forth claims for 13 (1) violation of the Defend Trade Secrets Act; (2) violation of the California Uniform 14 Trade Secrets Act; (3) breach of contract; (4) tortious inducement to breach of 15 contract; (5) breach of duty of loyalty; (6) conversion; (7) tortious inducement to 16 breach duty of loyalty; (8) tortious interference with business relations; and (9) unfair 17 competition. On April 25, 2022, Perrin moved for a temporary restraining order, and 18 rather than granting immediate relief, the Court set Perrin’s request as a formally 19 noticed Motion for Preliminary Injunction. (Mot. Prelim. Inj., ECF No. 28.) That 20 motion is fully briefed and remains pending. (Opp’n Prelim. Inj., ECF No. 38; Reply 21 Prelim. Inj., ECF No. 43.) 22 Thereafter, on May 23, 2022, Defendants moved for partial summary judgment. 23 (Mot. Partial Summ. J., ECF No. 60.) Upon Perrin’s ex parte application, the Court 24 found the summary judgment motion to be premature and continued the hearing to 25 September 26, 2022. (Mins., ECF No. 74.) Defendants’ summary judgment motion 26 remains pending and is not yet fully briefed. 27 Perrin’s Motion for Leave to Amend is now fully briefed and is ripe for 28 determination. (Opp’n, ECF No. 96; Reply, ECF No. 97.)

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1 III. LEGAL STANDARD 2 Federal Rule of Civil Procedure (“Rule”) 15(a)(2) provides that “[t]he court 3 should freely give leave [to amend] when justice so requires.” Fed. R. Civ. 4 P. 15(a)(2); Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009). The 5 decision whether to grant leave to amend rests in the sound discretion of the district 6 court. California ex rel. Cal. Dep’t of Toxic Substances Control v. Neville Chem. Co., 7 358 F.3d 661, 673 (9th Cir. 2004). Courts should freely grant leave to amend absent 8 special circumstances, such as “undue delay, bad faith or dilatory motive on the part 9 of the movant, repeated failure to cure deficiencies by amendments previously 10 allowed, undue prejudice to the opposing party by virtue of allowance of the 11 amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 12 (1962). The party opposing the amendment bears the burden of showing why leave to 13 amend should be denied. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186–87 14 (9th Cir. 1987). 15 IV. DISCUSSION 16 As a preliminary matter, under Central District of California Local Rule 7-3, 17 “counsel contemplating the filing of any motion shall first contact opposing counsel to 18 discuss thoroughly, preferably in person, the substance of the contemplated motion 19 and any potential resolution.” Defendants dispute whether Perrin fulfilled this 20 requirement before filing its Motion. (Opp’n 1.) Having reviewed the email 21 correspondence of counsel submitted in connection with Perrin’s Motion, the Court 22 finds that Perrin satisfied this obligation and proceeds to the merits of the Motion. 23 Leave to amend is appropriate. Perrin’s request is timely under the Scheduling 24 and Case Management Order governing this case, (Scheduling & Case Management 25 Order 24, ECF No. 80), and Defendants present no argument to carry their burden of 26 showing that leave to amend is inappropriate, DCD Programs, 833 F.2d at 186–87. In 27 particular, Defendants argue that Perrin has always been in possession of the two 28 emails it now avers are the basis for amendment, that Perrin unduly delayed in moving

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1 for leave to amend, and that Perrin’s Motion should therefore be denied. (Opp’n 1.) 2 But Perrin does not argue that the two emails alone provide a basis for amendment; it 3 argues that the two emails, in combination with Pablo’s newly acquired deposition 4 testimony, provide a basis for amendment. (Mem. ISO Mot. 2, ECF No. 89.) This is a 5 colorable argument that Defendants fail to rebut. 6 Otherwise, Defendants argue that Perrin’s fraud claim cannot support a claim 7 for damages, (Opp’n 1), but this is an argument better suited for a pleading attack or a 8 dispositive motion, not a motion for leave to amend. The Court declines to deny leave 9 to amend based on the assertion of futility. 10 For these reasons, Perrin’s Motion is GRANTED. 11 Defendants’ Motion for Partial Summary Judgment was based on the original 12 Complaint, which is rendered inoperative by this Order. A summary judgment motion 13 directed toward an inoperative pleading is moot. See, e.g., Green v. Bishop, No. C10- 14 5206BHS, 2010 WL 4690884, at *2 (W.D. Wash. Nov. 10, 2010) ([Defendant] elected 15 to file its motion for summary judgment prior to the allotted due date for filing 16 amended pleadings. Therefore, [defendant] is not prejudiced—it can renew its motion 17 for summary judgment after the amended complaint is filed.” (citation omitted)). 18 Defendants’ Motion for Partial Summary Judgment is therefore DENIED AS MOOT. 19 (ECF No. 60.) 20 Perrin’s Motion for Preliminary Injunction was also based on the now- 21 inoperative Complaint. One of the principal inquiries raised by motions for 22 preliminary injunctions is whether the moving party is likely to be successful on the 23 merits of the action. This inquiry necessarily involves reference to the movant’s 24 claims, their sufficiency, and the evidence submitted in support thereof. Adding new 25 allegations and claims significantly alters the preliminary injunction analysis and 26 therefore moots the movant’s request. See, e.g., Kifle v. YouTube LLC, No. 21-cv- 27 01752-CRB, 2021 WL 1530942, at *1 (N.D. Cal. Apr. 19, 2021). Perrin’s Motion for 28 Preliminary Injunction is accordingly DENIED AS MOOT. (ECF No. 28.)

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1 Vv. CONCLUSION 2 For these reasons, the Court VACATES the August 29, 2022 hearing on 3 || Perrin’s Motion for Leave to Amend Complaint and GRANTS the Motion. (ECF No. 4] 88.) Within three (3) Court days of the date of this Order, Perrin shall file a clean, 5 || separate copy of the First Amended Complaint as proposed. The parties are directed 6 || toward Central District of California Local Rule 15-3 regarding the date of service of 7 || the First Amended Complaint. Perrin’s Motion for Preliminary Injunction and 8 | Defendants’ Motion for Partial Summary Judgment are each DENIED AS MOOT. 9 || (ECF Nos. 28, 60.) 10 11 IT IS SO ORDERED. 12 13 August 25, 2022 wg Gedluit 15 OTIS D. WR RIGHT, Il 6 UNITED STATES DISTRICT JUDGE

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