United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON PLAINTIFF'S MOTIONS TO AMEND AND
SUPPLEMENT
Tim A.
Baker United States Magistrate Judge
I.
Introduction
At
issue are Plaintiff GEFT Outdoor, L.L.C.'s motions for
leave to file a second amended complaint [Filing No. 109] and
for leave to file a supplemental complaint. [Filing No. 116.]
GEFT filed suit against Defendant City of Westfield, Indiana,
in November 2017, alleging the City's sign ordinances are
unconstitutional. In December 2017, GEFT filed an amended
complaint, adding claims related to an alleged confrontation
between GEFT and City representatives, which occurred on
December 16, 2017. Both GEFT and the City sought preliminary
injunctions, and the Court granted the City's motion but
denied GEFT's, which GEFT unsuccesfully appealed to the
Seventh Circuit. Now, GEFT seeks to amend its complaint to
add GEFT's founder and owner, Jeffrey Lee, as an
additional plaintiff, and to include Lee's individual
claims stemming from the December 16 incident. GEFT also
seeks to supplement its complaint to add claims challenging
the constitutionality of the City's amended sign
ordinances and the Board of Zoning Appeals' decision to
deny GEFT a variance. The City opposes the changes to the
complaint, arguing they are untimely, futile, and
prejudicial. However, many of the City's arguments have
been rendered moot by developments occurring after its
filings. The City's remaining arguments are unpersuasive,
and GEFT meets its Rule 15 burden. Therefore, the Court
grants GEFT's motions to amend [Filing No. 109] and
supplement its complaint. [Filing No. 116.] GEFT shall file
its amended and supplemental complaint within seven days.
II.
Background
GEFT's
business is to buy or lease land so it can build, maintain,
and operate signs on that land. GEFT uses the signs to
display commercial and noncommercial speech. GEFT leased some
land in Westfield and applied for and received a permit from
the State of Indiana to erect a digital billboard on the
property. Westfield has a Unified Development Ordinance with
a chapter on signs that requires permits for all signs that
are not exempted. GEFT began building the sign at issue in
early November 2017, but did not seek a permit, and instead
filed this lawsuit challenging the constitutionality of the
City's sign restrictions and exemptions. A few days after
GEFT filed this lawsuit, the City posted a “stop work
notice, ” indicating the construction was in violation
of the permit requirements. GEFT responded with a letter
informing the City it intended to continue building the sign
and that it believed the sign ordinance was unconstitutional.
The City replied to the letter, instructing GEFT to remedy
the violations within 30 days to avoid an enforcement action.
On
December 16, 2017, GEFT set to work installing the
advertising head and digital billboard on the steel pole that
had already been erected. GEFT alleges an inspector and
police sergeant from the City confronted GEFT and its
contractors, demanding the work cease. GEFT's
founder/owner, Lee, asked what would happen if GEFT continued
with the instillation, and the police sergeant responded that
Lee would be “asking for trouble.” [Filing No.
117-1, at ECF p. 15, ¶ 83.] According to GEFT, the
City's inspector then went to each contractor to
individually tell them they would be fined if they continued
working on the sign. Roughly 20 minutes after the inspector
and sergeant left, GEFT claims an attorney for the City
arrived and threatened to have them all arrested if they did
not stop work immediately. GEFT asserts the City's
attorney declined to speak with GEFT's attorney over the
phone. Instead, the City's attorney allegedly stated that
continuing to work on the sign was a nuisance in violation of
the stop work notice. GEFT claims the attorney threatened to
arrest and jail Lee, GEFT's contractors, and the owner of
the property if GEFT continued working on the sign. Faced
with the threats, GEFT claims it halted work. The following
week GEFT filed an amended complaint to include its claims
based on this alleged incident, but the amendment did not
include any claims on behalf of Lee. [Filing No. 21, at ECF
pp. 8-11, ¶¶ 40-63.]
A few
months later, on March 1, 2018, GEFT timely moved to amend
its complaint to add Lee's claims as well as add
additional allegations. On April 20, the City amended the
UDO. During a telephonic status conference the following
November, GEFT informed the Court that it intended to seek a
variance under the Amended UDO and would be filing another
motion to amend to add related claims. GEFT's March 1
motion to amend was still pending, so the Court recommended
GEFT withdraw the motion and file a new motion after it
sought the variance. [Filing No. 104.] GEFT requested a
variance under the Amended UDO in December of 2018, and GEFT
filed a motion to file a second amended complaint in January
2019. [Filing No. 109.] The City's Board of Zoning
Appeals held a hearing on February 12, 2019, denying
GEFT's request for a variance. A month later, GEFT filed
its motion for leave to file a supplemental complaint.
[Filing No. 116.]
III.
Discussion
The
standards for amending and supplementing a complaint under
Rule 15 are generally the same. Glatt v. Chi. Park
Dist., 87 F.3d 190, 194 (7th Cir. 1996). However, the
procedural posture of this case puts an additional hurdle on
amendments. The Court set an April 2, 2018, deadline for
amendments-but not supplements-in the Case Management Plan,
and that deadline has long passed. [Filing No. 42, at ECF p.
3.] Parties must show good cause to amend the CMP, and this
heightened standard to amend a scheduling order trumps the
general standard from Rule 15. Adams v. City of
Indianapolis, 742 F.3d 720, 734 (7th Cir. 2014);
Trustmark Ins. Co. v. Gen. & Cologne Life Re of
Am., 424 F.3d 542, 553 (7th Cir. 2005). The difference
between a supplement and an amendment is the timing of the
underlying events. Supplemental pleadings concern “any
transaction, occurrence, or event that happened after the
date of the pleading to be supplemented.” Fed.R.Civ.P.
15(d). The December 16, 2017, incident occurred before GEFT
filed its amended complaint. [Filing No. 21, at ECF p. 9.]
Therefore, GEFT must show good cause for its delay in seeking
to add Lee's claims that arise from the December 16,
2017, incident.
GEFT
easily clears this additional hurdle because the delay was
out of its control. GEFT first moved to amend its complaint
on March 1, 2018-a month and a day before the deadline. The
Court had not yet ruled on this motion when the parties
appeared by counsel for a telephonic status conference in
November 2018. At that point, the parties were more focused
on the appeal of the Court's preliminary injunction
order, and GEFT indicated it would again seek leave to amend
after it requested a variance from the City. [Filing No.
104.] To simplify things, the Court recommended GEFT withdraw
its March 1 motion in favor of a more complete motion
following the variance application. In two months, GEFT
sought a variance and had filed a new motion for leave to
file a second amended complaint. The Court appreciates the
City's concern that over a year has passed since the case
began. However, the “‘good cause' standard
primarily considers the diligence of the party seeking
amendment.” Trustmark Ins. Co. v. Gen & Cologne
Life Re of Am., 424 F.3d 542, 553 (7th Cir. 2005)
(quoting Johnson v. Mammoth Recreations, Inc., 975
F.2d 604, 609 (9th Cir. 1992)). Greater diligence on the part
of GEFT could not have prevented the delay, so good cause is
shown.
With
good cause shown for the delay, the Court now turns to
whether GEFT can satisfy Rule 15's relatively lax
standard for the amendment and supplemental claims. Rule 15
“require[s] a district court to allow amendment unless
there is a good reason-futility, undue delay, undue
prejudice, or bad faith-for denying leave to amend.”
Life Plans, Inc. v. Sec. Life of Denver Ins. Co.,
800 F.3d 343, 357-58 (7th Cir. 2015); Glatt v. Chi. Park
Dist., 87 F.3d 190, 194 (7th Cir. 1996) (holding that
the same standard applies to amendments and supplemental
pleadings);[1] see also Chi. Reg'l Council of
Carpenters v. Vill. of Schaumburg, 644 F.3d 353, 356
(7th Cir. 2011) (the court has substantial discretion either
to permit or deny a motion to supplement).
The
City makes several arguments supporting its position that
GEFT's proposed changes to its complaint are futile. In
determining whether a claim added under Rule 15 is futile,
the Court considers whether the allegation is sufficient to
withstand a motion to dismiss. Vargas-Harrison v. Racine
Unified Sch. Dist., 272 F.3d 964, 974 (7th Cir. 2001).
The City argues GEFT's changes would not withstand a
motion to dismiss because GEFT's pleading regarding the
Amended UDO is deficient, Lee lacks a property interest to
serve as a basis for his due process claims, the Court lacks
jurisdiction over the supplemental claims, and the abstention
doctrine prohibits the Court from affording the relief GEFT
seeks.[2]
The
City argues GEFT's as applied challenge to the Amended
UDO is deficient because GEFT never applied for the permits
required by the UDO and Amended UDO. The City also takes
issue with the fact GEFT argues the UDO applies even though
GEFT also challenges the Amended UDO. However, these
arguments are undeveloped and unpersuasive. The City does not
explain how the lack of permit applications renders
GEFT's complaint deficient. Further, the proposed
complaint recognizes that the Amended UDO may apply, and it
is not clear from the proposed complaint which version the
BZA applied when reviewing GEFT's recent application for
a variance. [Filing No. 117-1, at ECF pp. 8, 17-20,
¶¶ 40, 98-128.] To the extent these arguments
question whether GEFT has standing to challenge the Amended
UDO, the arguments are unpersuasive. To have standing, the
plaintiff must show it suffered an injury that the defendant
caused and that can be redressed through a favorable
decision. Matushkina v. Nielsen, 877 F.3d 289, 292
(7th Cir. 2017). GEFT has alleged an injury-its speech was
prevented-that was caused by what GEFT argues is an
unconstitutional permit requirement, and that alleged injury
is redressable by an injunction or declaratory judgment from
this Court.
The
City next argues that adding Lee to GEFT's fifth and
sixth causes of action is futile because Lee lacks any
property interest in the land at issue. GEFT leases the
property on which the sign was to be built. Because GEFT is
an LLC, Lee does not have a personal interest in the
property. See Pazmino v. Bose McKinney & Evans,
LLP, 989 N.E.2d 784, 786, 789 (Ind. App. 2013) (LLCs are
legally distinct from their owners). However, GEFT and Lee do
not base these due process claims solely on property rights.
While GEFT does allege it was illegally deprived of the use
of its property, GEFT and Lee also seek to recover damages
for the allegedly illegal arrest threats. [Filing No. 109, at
ECF pp. 29-32, ΒΆΒΆ 189-91, 193, 196-99, 201-03.]
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