Free Motion for Leave to File - District Court of California - California

Case 3:07-cv-04913-SC

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Filed 03/14/2008

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1 BRYAN CAVE LLP Jennifer A. Jackson (SBN 192998) 2 120 Broadway, Suite 300 Santa Monica, California 90401-2386 (310) 576-2100 3 Telephone: Facsimile: (310) 576-2200 4 [email protected] 5 BRYAN CAVE LLP Robert J. Hoffman (Pro Hac Vice) 6 Tarun Mehta (Pro Hac Vice) 3500 One Kansas City Place 7 1200 Main Street Kansas City, Missouri 64105 (816) 374-3200 8 Telephone: Facsimile : (816) 374-3300 9 Attorneys for Defendant 10 GFSI, INC. d/b/a GEAR FOR SPORTS, INC. 11 12 13 14 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Case No. C07-04913-SC DEFENDANT GFSI, INC.'S MOTION FOR LEAVE TO FILE AN AMENDED ANSWER AND COUNTERCLAIM Date: May 23, 2008 Time: 10 a.m. Judge: Samuel Conti Courtroom 1

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15 ROBERT TRENT JONES II, INC., and ROBERT TRENT JONES LICENSING GROUP, LLC, 16 Plaintiffs, 17 v. 18 GFSI, INC. d/b/a GEAR FOR SPORTS, INC., 19 Defendant. 20 21 22 23 24 25 26 27 28
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MOTION FOR LEAVE TO AMEND ANSWER

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Pursuant to Federal Rules of Civil Procedure 13(f) and 15(a), Defendant GFSI, Inc., d/b/a Gear For Sports, Inc. ("GFSI") submits the following Motion to Amend their Answer with these Points and Authorities in response to the Complaint filed by Plaintiffs Robert

6 Trent Jones II, Inc., and Robert Trent Jones Licensing Group, LLC (collectively, 7 "Plaintiffs"), and states in support of such Motion the following: 8 9

I.

INTRODUCTION

Plaintiffs filed their Complaint in this matter on September 21, 2007, and
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served GFSI on October 12, 2007. GFSI filed its answer on November 1, 2007. Plaintiffs

12 then filed a Motion for a Preliminary Injunction on December 3, 2007, for which a hearing 13 was held on January 24, 2008. 14 15 16

Based on the matters attested to at the hearing, and information obtained since GFSI's answer was filed, GFSI has learned new information that merits the filing of

17 an amended answer along with a counterclaim. Specifically, GFSI has reason to believe 18 that Plaintiffs became weary of their business relationship with GFSI and therefore 19 20 21

unreasonably withheld their consent to sell RTJ Apparel to certain stores in order to leverage a better deal with them when dissolving the business relationship. By insisting

22 that GFSI cannot sell to certain stores such as Stein Mart, Syms Corporation and TJ Maxx, 23 Plaintiffs acted in bad faith in violation of their implied duty of good faith and fair dealing, 24 25 26

thereby breaching the contract they had with GFSI. GFSI therefore seeks leave to file an amended answer with a counterclaim for breach of contract. GFSI's counsel has notified

27 opposing counsel in writing of their intent to file this motion for leave and asked whether 28
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1 they would file an opposition, but have yet to hear from opposing counsel. A copy of the 2 3 4 5

amended answer is attached as Exhibit A. II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 15(a) provides that leave to amend "shall be freely

6 given when justice requires." Fed. R. Civ. P. 15(a). "Courts have been quite liberal in granting 7 leave to amend under Fed. R. Civ. P. 15(a) and 13(f)." Cooper Dev. Co. v. Employers Ins. of 8 Wausau, 765 F. Supp. 1429, 1432 (N.D. Cal. 1991). Indeed, leave to amend "should be denied 9
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only when there is a showing of undue delay, bad faith, futility of amendment, or prejudice to the opposing party." Id, citing Hurn v. Retirement Fund Trust of Plumbing, Heating & Piping

10 11 12 Industry of So. Calif., 648 F.2d 1252, 1254 (9th Cir. 1981) (emphasis supplied). "Where there is

13 lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or 14 made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny such a motion." Id 15 (internal quotations omitted). 16 17 18 19 20 be granted because there has been no undue delay, nor bad faith demonstrated, and the Counterclaim will not prejudice Plaintiffs nor is it futile. The proceedings have only just begun. III. ANALYSIS

GFSI's Motion for Leave to Amend its Answer and assert a Counterclaim should

21 Moreover, the basis for GFSI's counterclaim derives, in large part, on the testimony of Robert 22 Trent Jones from the hearing on Plaintiffs' Motion for a Preliminary Injunction that only occurred 23 on January 24, 2008. At that hearing Robert Trent Jones' testimony demonstrated that he did not 24 25 whether Macy's Department Store was a "discount store" and Plaintiffs' counsel responded at first 26 27 that they did not know, and then changed their mind and said that it was not a discount store. know what a "discount store" really was. At one point in the hearing Plaintiffs' counsel was asked

28 These actions at the hearing prove what GFSI has already suspected: Plaintiffs' prevented GFSI
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1 from selling to certain stores in bad faith, not truly believing those stores to be discount stores. 2 Hence, Plaintiffs actions in preventing GFSI from selling their clothing to Stein Mart, Syms 3 4 stores". Indeed, as is now obvious, Plaintiffs cannot tell what a discount store is--they have only 5 6 used that term as a sword to bludgeon the profits of GFSI by precluding GFSI from selling to Corporation and TJ Maxx were all done in bad faith and not because those stores are "discount

7 certain stores in an attempt to diminish GFSI's profits. 8 These actions by Plaintiffs demonstrate that Plaintiffs failed to act within their duty of

9 good faith and fair dealing when they asserted that GFSI was selling to "discount stores" without
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10 actually being able to define "discount stores". GFSI should therefore be able to amend its 11 12 CONCLUSION 13 14 For the reasons outlined above, this Court should grant GFSI's Motion to Amend Answer to assert a Counterclaim to assert such claim.

15 its Answer and Assert a Counterclaim against Plaintiffs. 16 17 18 19 20 21 22 23 24 25 26 27 28
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Respectfully submitted, BRYAN CAVE LLP Jennifer A. Jackson Robert J. Hoffman Tarun Mehta

By: s/Tarun Mehta Tarun Mehta Attorneys for Defendant GFSI, INC. d/b/a GEAR FOR SPORTS, INC.

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PROOF OF SERVICE

I am employed in the County of Jackson, State of Missouri. I am over the age of 18 and not a party to the within action. My business address is 1200 Main Street, Suite 3 3500, Kansas City, MO 64105.
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On March 14, 2008, I served DEFENDANT'S MOTION FOR LEAVE FOR TO FILE AN AMENDED ANSWER AND COUNTERCLAIM, on each interested party in 5 this action, as follows:
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Richard Levine Levine & Baker One Maritime Plaza, Suite 400 San Francisco, CA 94111 Joseph V. Norvell (pro hac vice) Joseph T. Kucala (pro hac vice) Jay M. Burgett ( pro hac vice) Norvell IP llc 1776 Ash Street Northfield, IL 60093

Attorneys for Plaintiff Tel: 415-391-8177 Fax: 415-391-8848 Email: [email protected] Attorneys for Plaintiff Tel: 630-453-8380 Fax: 312-268-5063 Email: [email protected]

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(BY MAIL) I placed a true copy of the foregoing document in a sealed envelope addressed to each interested party as set forth above. I placed each such 15 envelope, with postage thereon fully prepaid, for collection and mailing at Bryan Cave LLP, Kansas City, Missouri. I am readily familiar with Bryan Cave LLP's practice for 16 collection and processing of correspondence for mailing with the United States Postal Service. Under that practice, the correspondence would be deposited in the United States 17 Postal Service on that same day in the ordinary course of business.
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(BY E-MAIL) I caused a true copy of the foregoing document to be served by e-mail transmission at the time shown on each transmission, to each interested party at 19 the e-mail address shown above. Each transmission was reported as complete and without error. 20
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Executed on ______________, 2008, at Kansas City, Missouri. (FEDERAL ONLY) I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made.

I declare under penalty of perjury under the laws of the United States of America and the State of Missouri that the foregoing is true and correct. 24
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s/Lisa Deacy

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