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High Plains Livestock, LLC v. Allen

United States District Court, D. New Mexico

March 29, 2018

HIGH PLAINS LIVESTOCK, LLC, et al., Plaintiffs,
BARRY ALLEN, et al., Defendants.



         This matter comes before the undersigned pursuant to the Court's Order of Reference (doc. 35), referring Plaintiffs' Motion for Leave to File Second Amended Complaint (doc. 22) for determination by the undersigned in accordance with 28 U.S.C. § 636(b)(1)(A) and Fed.R.Civ.P. 72(a). Defendants oppose Plaintiffs' Motion for Leave to File Second Amended Complaint on grounds of futility, arguing that the proposed amendments therein do not cure the pleading defects alleged in Defendants' Motion to Dismiss (doc. 15). See generally doc. 26. See also Jefferson Cty. Sch. Dist. No. R-1 v. Moody's Investor's Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999) (“A proposed amendment is futile if the complaint, as amended, would be subject to dismissal.”) (citations omitted).

         While Defendants' opposition to Plaintiffs' Motion on futility grounds overlaps with their arguments in their Motion to Dismiss, Defendants' Motion to Dismiss has not been referred to the undersigned for recommendations. See 28 U.S.C. § 636(b)(1)(B). As such, the undersigned will not express any opinion about the merits of Defendants' dispositive arguments and the following analysis of Plaintiffs' Motion for Leave will be necessarily limited in scope. See Id. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); see also doc. 35. For the reasons that follow, Plaintiffs' Motion for Leave to File Second Amended Complaint will be GRANTED.

         I. Background

         Plaintiffs brought the instant litigation in the Ninth Judicial District Court for the State of New Mexico on January 19, 2017. Doc. 1-1. Plaintiffs include the livestock auction business High Plains Livestock, LLC, its owner, Michael Flen, and two employees, Calvin and Darcie Pareo. Defendants include the New Mexico Livestock Board (“NMLB”) as well as NMLB executive director, Ray Baca, and NMLB law enforcement agents Barry Allen and Shawn Davis. Doc. 23-1 at 1-2. According to the First Amended Complaint, Plaintiffs' claims stem from alleged tortious and unconstitutional conduct by Defendants dating back to 2009 which Plaintiffs contend substantially interfered with Plaintiffs' ability to conduct their business, including defamation, abuse of process, and violations of Plaintiffs' First, Fourth, Fifth, and Fourteenth Amendment rights. See doc. 1-5 at 11-17.[1]

         Plaintiffs filed their First Amended Complaint in state court on February 6, 2017. Doc. 1-5. Although all claims in the First Amended Complaint were purportedly based on the New Mexico Tort Claims Act (“NMTCA”), Counts IV and V plainly implicated the United States Constitution, giving rise to federal-question jurisdiction. See Id. at 14- 17. Accordingly, Defendants removed the matter to this Court on March 17, 2017. Doc. 1. The Individual Defendants filed a Motion to Dismiss the federal claims contained in Plaintiffs' First Amended Complaint on May 25, 2017, on both 12(b)(6) grounds as well as on the basis of qualified immunity. Doc. 15. Plaintiffs then filed the instant Motion for Leave to File Second Amended Complaint on June 26, 2017. Doc. 22. The Motion for Leave was fully briefed on July 24, 2017, and was referred to the undersigned on January 26, 2018. Docs. 26, 28, 29, 35.

         II. Standard of Review

         Plaintiffs are beyond the 21-day time period during which they may file an amended pleading as a matter of course. Fed.R.Civ.P. 15(a)(1). Therefore, Plaintiffs must obtain either Defendants' consent or the Court's leave in order to amend. Fed.R.Civ.P. 15(a)(2). The Court should “freely give” such leave “when justice so requires.” Id. The decision to grant leave to amend a complaint is within the Court's discretion. Pallottino v. City of Rio Rancho, 31 F.3d 1023, 1027 (10th Cir. 1994). “Refusing leave to amend is generally only justified upon a showing of undue delay, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or undue prejudice to the opposing party, or futility of amendment, etc.” Castleglen, Inc. v. Resolution Trust Corp., 984 F.2d 1571, 1585 (10th Cir. 1993) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

         Whether prejudice would result to the nonmoving party has been treated by the Tenth Circuit as the “most important[] factor in deciding a motion to amend the pleadings[.]” Minter v. Prime Equipment Co., 451 F.3d 1196, 1207 (10th Cir. 2006). “Typically, courts will find prejudice only when an amendment unfairly affects non- movants in terms of preparing their response to the amendment.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (quotations and alteration omitted). Courts most often make such a finding “when the amended claims arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues.” Minter, 451 F.3d at 1208. Thus, an amendment may be found to be prejudicial “if its timing prevents the defendant from pursuing a potentially promising line of defense[.]” Id. at 1209.

         III. Analysis

         As discussed in greater detail below, the salient differences between Plaintiffs' First Amended Complaint and the proposed Second Amended Complaint include: (1) substituting a claim that Defendants violated their Fifth and Fourteenth Amendment rights to due process by destroying exculpatory evidence with a Sixth Amendment claim based on the same allegations; (2) the deletion of allegations of tortious interference with contract; (3) the deletion of Plaintiffs' claim that Defendants violated their First Amendment right to free association; (4) the addition of an equal protection “class-of-one” claim; (5) the addition to Plaintiffs' existing Fourth Amendment claim based on unreasonable search and seizure that Plaintiffs themselves were unreasonably seized during a search of High Plains operations on January 21, 2015; and (6) the addition of claims for punitive damages and attorney's fees. See generally docs. 1-5, 23-1. The undersigned finds that no prejudice to Defendants will result from allowing these amendments to the Complaint. Thus, treating prejudice as the most important applicable factor, and absent authority to opine on Defendants' dispositive arguments, the undersigned will grant Plaintiffs' Motion.

         Broadly speaking, these proposed amendments do not significantly alter the First Amended Complaint, nor should they affect the Court's analysis of the Individual Defendants' qualified immunity defense as to Plaintiffs' Fourth or Fourteenth Amendment claims. Of course, the addition of the Sixth Amendment claim would require some additional qualified immunity briefing on that issue. Generally, however, the undersigned agrees with Individual Defendants that if the deficiencies they allege in their Motion to Dismiss do indeed warrant dismissal of the federal claims in the First Amended Complaint, allowing the proposed amendments would not change that result. See doc. 26 at 1-2.

         For example, in their Reply to Defendants' Response to the Motion for Leave to Amend, Plaintiffs fail to address Defendants' argument that a significant number of Plaintiffs' claims are time-barred. See generally doc. 28. Their only cursory acknowledgment of the statute-of-limitations defense relates to factual averments contained in the Second Amended Complaint that certain criminal charges brought against them by Defendants in 2009 and 2012 were dismissed. See doc. 23-1 at 4, 5. In their Reply, Plaintiffs argue that “[t]he citation and allegations of acquittal of the magistrate charges [from 2009 and 2012] are not ‘stale, ' have no bearing on alleged defense of applicable statutes of limitation, and again evidence the pattern and context of illegitimate law enforcement that proceeded without probable cause and constitute sufficient notice pleading.” Doc. 28 at 8.

         There is no further mention in Plaintiffs' Reply of the statute-of-limitations defense, which Defendants argue should apply to bar other claims unrelated to the 2009 and 2012 charges, including those claims based on the following factual allegations: (1) NMLB's denial of Plaintiffs' request for two sales per week at their sales barn; (2) NMLB's policy that brand inspectors not stay at Plaintiffs' sales barn past 7:00 p.m.; (3) representations by Defendants Allen and Davis that Plaintiffs could not move to a new facility; (4) NMLB's directive to Animal Plant and Health Inspections Services not to approve Plaintiffs' move to a new facility; (5) the seizure of metal clips and back tags from Plaintiffs by Defendants' brand inspectors; (6) Defendants Allen and Davis's threats to two veterinarians not to service Plaintiffs' auction house; and (7) Defendants' instruction to the New Mexico DOT to ...

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