Premier Comp Solutions LLC v. UPMC ( 2020 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 19-1838
PREMIER COMP SOLUTIONS, LLC,
Appellant
v.
UPMC, a Pennsylvania nonprofit non-stock corporation;
UPMC BENEFITS MANAGEMENT SERVICES, INC.,
doing business as UPMC WORKPARTNERS;
UPMC HEALTH BENEFITS, INC., doing business as
UPMC WORKPARTNERS; MCMC LLC,
a wholly-owned subsidiary of York Risk Management
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2-15-cv-00703)
District Judge: Honorable David S. Cercone
Submitted under Third Circuit L.A.R 34.1(a)
March 2, 2020
Before: SMITH, Chief Judge, HARDIMAN, and KRAUSE,
Circuit Judges.
(Filed: August 12, 2020)
Jeffrey S. Jacobovitz
Arnall Golden & Gregory
1775 Pennsylvania Avenue, N.W.
Suite 1000
Washington, DC 20006
Stanley M. Stein
Stanley M. Stein
445 Fort Pitt Boulevard
Suite 150
Pittsburgh, PA 15219
Attorneys for Appellant Premier Comp Solutions, LLC
Richard B. Dagen
Daniel K. Oakes
Thomas G. Rohback
Axinn Veltrop & Harkrider
950 F Street, N.Q.
7th Floor
Washington, DC 20004
Peter S. Wolff
Pietragallo Gordon Alfano Bosick & Raspanti
301 Grant Street
One Oxford Centre, 38th Floor
Pittsburgh, PA 15219
Attorneys for Appellees UPMC, UPMC Benefits
Management Services, Inc, and UPMC Health Benefits Inc
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Paul S. Mazeski
Curtis M. Schaffner
Buchanan Ingersoll & Rooney
501 Grant Street
One Oxford Centre, Suite 200
Pittsburgh, PA 15219
Attorneys for Appellee MCMC LLC
OPINION OF THE COURT
HARDIMAN, Circuit Judge.
This appeal implicates a district court’s discretion to
manage its docket. Well after the deadline the District Court
set in a scheduling order, Plaintiff Premier Comp Solutions,
LLC, moved to amend its complaint and add a party. In
support, Premier cited the liberal standard of Rule 15 of the
Federal Rules of Civil Procedure. The Court denied the motion,
reasoning that because the deadline had passed, Rule 16(b)(4)
required Premier to show good cause. Premier appeals the
Court’s order denying its motion. We will affirm because Rule
16(b)(4) applies once a scheduling-order deadline has passed,
and Premier did not show good cause.
I
Premier sued UPMC WorkPartners and MCMC LLC,
alleging federal antitrust and state unfair competition claims.
The District Court issued a Case Management Order (CMO)
on February 22, 2016, stating that “[t]he parties shall move to
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amend the pleadings or add new parties by June 22, 2016.”
App. 246. On the day of the deadline, Premier requested an
extension. The Court agreed and set a new deadline for thirty
days after UPMC responded to Premier’s discovery requests.
Because UPMC finished responding to those requests on
October 14, 2016, the new deadline became November 13,
2016.
November 13 passed without Premier requesting
another extension. Months later, on March 7, 2017, Premier
deposed a UPMC employee who, according to Premier,
testified to facts suggesting UPMC and York Risk
Management Group had entered into an illegal bid-rigging
agreement. It moved to file a second amended complaint
asserting a new antitrust count and adding York as a defendant.
In its brief, Premier asked the District Court to apply Rule 15(a)
of the Federal Rules of Civil Procedure, which states that
courts should “freely give[] [leave to amend] when justice so
requires.” App. 563. Premier did not mention Rule 16(b)(4),
which says a CMO “may be modified only for good cause and
with the judge’s consent.”
UPMC countered that Premier’s motion “relie[d] on the
wrong rule” and failed to show diligence, App. 630–31, which
we have recognized as relevant to a district court’s
determination of “good cause” under Rule 16(b)(4), see, e.g.,
Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57,
84–85 (3d Cir. 2010) (deciding a district court “properly denied
leave to amend” after plaintiff moved to amend after the CMO
deadline and failed to show “due diligence”). In reply, Premier
conceded that Rule 16(b)(4) applied and argued for the first
time that it had been diligent. Premier did not dispute that
diligence was relevant to the Court’s good-cause determination
under Rule 16(b)(4).
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The District Court denied Premier’s motion. It noted
Premier failed “to even discuss due diligence, relying instead
on Rule 15(a).” App. 3. Thus, Premier “utterly fail[ed] to
establish good cause” under Rule 16(b)(4). Id. Premier moved
for reconsideration, arguing that while it “initially rel[ied]
solely on the liberal leave to amend standard of Rule 15(a),” its
“subsequent reply briefs . . . discuss the Rule 16(b)(4) ‘good
cause’ standard and [Premier’s] due diligence in depth.” App.
1185. The Court denied reconsideration. It explained it would
not consider “issues raised by [Premier] for the first time in its
reply brief.” App. 1266. UPMC and MCMC later moved for
summary judgment, which the Court granted. Premier appeals
the Court’s order denying its motion to amend.
II
The District Court had jurisdiction under 28 U.S.C.
§§ 1331 and 1367. We have jurisdiction under 28 U.S.C.
§ 1291. We review for abuse of discretion the order denying
Premier’s motion to amend. Race Tires, 614 F.3d at 84.
Before addressing Premier’s arguments on appeal, we
take this opportunity to clarify that when a party moves to
amend or add a party after the deadline in a district court’s
scheduling order has passed, the “good cause” standard of Rule
16(b)(4) of the Federal Rules of Civil Procedure applies. A
party must meet this standard before a district court considers
whether the party also meets Rule 15(a)’s more liberal
standard.1
1
This interpretation is consistent with all of our sister
circuits that have addressed the issue. See Gorsuch, Ltd., B.C.
v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1241 (10th
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Premier makes two arguments on appeal: (1) Rule
16(b)(4)’s “good cause” standard does not require a party to
show diligence; and (2) if such a showing is required, its reply
brief sufficed. Neither argument supports reversal of the
District Court’s order.
Premier failed to present the first argument to the
District Court and so forfeited it on appeal. App. 814–35,
1185–89, 1258–65; see In Re: J & S Props., LLC, 872 F.3d
138, 146 (3d Cir. 2017) (citing United States v. Joseph, 730
F.3d 336, 341–42 (3d Cir. 2013)) (explaining arguments not
raised in the district court are forfeited on appeal). Regardless,
we have repeatedly recognized—and we reaffirm today—that
whether “good cause” exists under Rule 16(b)(4) depends in
part on a plaintiff’s diligence. See Race Tires, 614 F.3d at 84–
85; Eastern Minerals & Chemicals Co. v. Mahan, 225 F.3d
330, 340 (3d Cir. 2000).
As for Premier’s second argument, the Court did not
abuse its discretion in ignoring Premier’s attempt to address
Rule 16(b)(4)’s “good cause” standard. In its motion, Premier
relied solely on Rule 15(a); it did not address Rule 16(b)(4)
Cir. 2014); Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th
Cir. 2011); Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298
(4th Cir. 2008); O’Connell v. Hyatt Hotels of Puerto Rico, 357
F.3d 152, 154–55 (1st Cir. 2004); Leary v. Daeschner, 349 F.3d
888, 906, 909 (6th Cir. 2003); S&W Enters., LLC v. SouthTrust
Bank of Ala., NA, 315 F.3d 533, 535–36 (5th Cir. 2003); Parker
v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000);
In re Milk Prods. Antitrust Litig., 195 F.3d 430, 437 (8th Cir.
1999); Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th
Cir. 1998) (per curiam); Johnson v. Mammoth Recreations,
Inc., 975 F.2d 604, 607–08 (9th Cir. 1992).
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except in reply to UPMC. So the District Court was entitled to
find Premier forfeited its argument under Rule 16(b)(4). See,
e.g., Narducci v. Moore, 572 F.3d 313, 324 (7th Cir. 2009); cf.
Venuto v. Carella, Byrne, Bain, Gilfillan, Cecchi & Stewart,
P.C., 11 F.3d 385, 388 (3d Cir. 1993) (“The district court
properly exercised its discretion and refused to consider
contentions first addressed in [a] sur reply memorandum.”)
(citation omitted).
* * *
For the reasons stated, we will affirm the District
Court’s order denying Premier’s motion to amend and add a
new party.
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