Federal Trade Commission v. Johnson et al
Filing
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ORDER Granting #786 Plaintiff's Motion for Leave to File First Amended Complaint. IT IS FURTHER ORDERED that Plaintiff shall file the proposed First Amended Complaint (Doc. #786 , Exh. 1) within 10 days of the date of this Order. Signed by Magistrate Judge George Foley, Jr on 02/22/2013. (Copies have been distributed pursuant to the NEF - AC)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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FEDERAL TRADE COMMISSION,
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Plaintiff,
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vs.
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JEREMY JOHNSON, et al.,
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Defendants.
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__________________________________________)
Case No. 2:10-cv-02203-MMD-GWF
ORDER
Motion for Leave to File Amended
Complaint (#786)
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This matter comes before the Court on Plaintiff Federal Trade Commission’s (“Plaintiff”)
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Motion for Leave to File First Amended Complaint (#786), filed on January 18, 2013. Defendant
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Jeremy Johnson (“Johnson”) filed a timely Response (#791) on February 4, 2013. Plaintiff filed a
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timely Reply (#814) on February 14, 2013. The deadline to amend pleadings and add parties was
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January 22, 2013. See Scheduling Order, Doc. #675 at 1:17.
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This case involves Defendants’ alleged violation of the Federal Trade Commission Act, 15
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U.S.C. § 41 et seq., the Electronic Fund Transfer Act, 15 U.S.C. § 1693o(c), and Regulation E, 12
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C.F.R. § 205.10(b). Plaintiff filed the original Complaint (#1) on December 21, 2010, naming ten
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individual defendants and 61 corporate defendants. On February 10, 2011, the District Judge
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issued a Preliminary Injunction (#130) freezing the assets of the Corporate Defendants and
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Johnson, and appointing a receiver for the assets. On February 3, 2012, the receiver filed a Report
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of Receiver’s Financial Reconstruction (#464) and supporting Appendices of Exhibits (#465-#468).
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Plaintiff claims the Report (#464)1 indicates transfers of assets from Johnson to individuals Sharla
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Johnson, Kerry Johnson, and Barbara Johnson, and to corporate entities Orange Cat Investments,
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LLC, Zibby, LLC, Zibby Flight Services, LLC, KV Electric, Inc., and the KB Family Limited
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Plaintiff also refers to the receiver’s February 8, 2011 Report of Temporary Receiver’s Activities (#127).
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Partnership (“Proposed Relief Defendants”). Plaintiff now seeks leave to amend the Complaint to
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add the Proposed Relief Defendants to preserve assets for the possibility of redress to the alleged
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victims.
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Federal Rule of Civil Procedure 15(a)(2) provides that courts should permit amendments to
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pleadings “when justice so requires.” Hall v. City of Los Angels, 697 F.3d 1059, 1072 (9th Cir.
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2012). Requests for leave to amend should be granted with “extreme liberality.” Mirmehdi v.
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United States, 689 F.3d 975, 985 (9th Cir. 2011). Amendment is generally permitted unless (1)
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there is undue delay in seeking leave, (2) amendment will prejudice the other party, (3) leave is
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sought in bad faith, or (4) amendment would be futile. See Hall, 697 F.3d at 1072; see also DCD
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Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). Plaintiff did not unduly delay
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seeking leave because the instant Motion was filed before the amendment deadline. Granting leave
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to amend the Complaint will not prejudice Defendants because the discovery cutoff in this case is
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not until April 2, 2013. See Scheduling Order, Doc. #675 at 1:18. The Court also finds Plaintiff
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did not file the instant Motion in bad faith. Therefore, justice requires leave for Plaintiff to file an
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amended complaint. Accordingly,
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IT IS HEREBY ORDERED that Plaintiff’s Motion for Leave to file First Amended
Complaint (#786) is granted.
IT IS FURTHER ORDERED that Plaintiff shall file the proposed First Amended
Complaint (Doc. #786, Exh. 1) within 10 days of the date of this Order.
DATED this 22nd day of February, 2013.
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______________________________________
GEORGE FOLEY, JR.
United States Magistrate Judge
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