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Redmonds Enterprise, Inc. v. CSX Transportation, Inc.

United States District Court, D. Maryland

July 27, 2018

REDMONDS ENTERPRISE, INC.
v.
CSX TRANSPORTATION, INC.

          MEMORANDUM

          Catherine C. Blake United States District Judge

         Plaintiff Redmonds Enterprise, Inc. ("Redmonds") filed a state-court action, subsequently removed to this court, alleging that defendant CSX Transportation, Inc. ("CSX") is liable for defamation, injurious falsehood, and tortious interference with economic advantage or business relationships under Maryland law. Now pending are two motions to withdraw as attorney filed by Redmonds' local counsel (ECF Nos. 33 and 37), a motion for summary judgment from CSX (ECF No. 34), a motion for sanctions against the plaintiffs counsel from CSX (ECF No. 36), a motion to amend the complaint from Redmonds (ECF No. 44), and a motion to deem admitted certain requests for admission ("discovery motion") (ECF No. 50). The motions have been fully briefed, and no hearing is necessary to their resolution. See Local Rule 105.6. For the reasons discussed below, the motions to withdraw and for summary judgment will be granted. The motions to amend the complaint and for sanctions will be denied. The discovery motion will be denied as moot.

         BACKGROUND

         The full facts surrounding this case are described in the court's previous memorandum regarding the motion to dismiss. (See May 30, 2017 Memo, at 1-3 (ECF No. 20).) In summary, this case arises from a vandalism incident at CSX's railyard in Jessup, Maryland in October 2015 and the subsequent attempts to identify the culprit. Prior to the incident, Redmonds had subcontracted with automobile transportation companies at the railyard, notably Moore Transportation and United Road. After the vandalism incident, Redmonds experienced a significant decline in business with these two main customers. Redmonds allegedly was informed that this decline was due to an email sent from Rick Orner, a purported CSX employee, informing the transportation companies that Redmonds would be banned from the railyard due to "habitually vandalizing cars" (the "Orner email") (Compl. ¶ 21). Based on this information, Redmonds then filed a lawsuit against CSX in the Circuit Court for Anne Arundel County, Maryland on September 28, 2016, claiming defamation, injurious falsehood, and tortious interference with economic advantage or business relationships based on the statements made in the alleged email. (See Civil Cover Sheet, ECF No. 2; Compl.) CSX removed the action to this court on December 8, 2016. (Notice of Removal, ECF No. 1.) CSX subsequently filed a motion to dismiss, which was denied on May 30, 2017. (May 30, 2017 Order, ECF No. 21.)

         Discovery closed on December 4, 2017. (Oct. 10, 2017 Order, ECF No. 26.) Neither party has produced the specific email underlying Redmonds' claims. (See Mot. Summ. J. ¶ 2; Memo. Supp. Mot. Amend at 5, ECF No. 41.) Nor has Redmonds produced evidence that Orner is a CSX employee as alleged in the complaint. Accordingly, in an email declining Redmonds' request to amend the complaint to add additional parties on November 21, 2017, CSX requested that Redmonds dismiss the case. (Mot. Sanctions Ex. H at 3, ECF No. 36-10.) CSX received no response to this request. On December 18, 2017, CSX sent Redmonds a letter reiterating this request and including a copy of its motion for sanctions in accordance with Fed.R.Civ.P. 11(c)(2).[1] Redmonds declined to dismiss its complaint the following day. (Mot. Sanctions Ex. B at 2, ECF No. 36-4.) CSX filed a motion for summary judgment on January 9, 2018, and the motion for sanctions on January 11, 2018. Redmonds' local counsel, Sheryl Wood, filed a motion to withdraw on January 9, 2018, and again on January 19, 2018.

         Redmonds filed its opposition to the motion for sanctions on January 24, 2018. In response to the motion for summary judgment, Redmonds filed a motion to amend its complaint and a memorandum supporting its motion and opposing CSX's motion for summary judgment on January 31, 2018.[2] Redmonds seeks to base its amended complaint on a Major Damage Report completed by CSX employee Rashida Bridwell and allegedly sent to Moore Transportation on November 11, 2015. (See First Am. Compl. ¶¶ 3-4, ECF No. 44-1; Memo. Supp. Mot. Amend at 8, ECF No. 46.) Ms. Bridwell's comments on the report read:

Moore Transport Trucker Damage: unit found in bay with multiple deep scratches on the hood, right rear door and quarter panel. Scratches on the hood consists [sic] of words that are hand carved. Video footage was reviewed and conclusive evidence was found that Moore Transport driver vandalized the unit. The driver has been permanently banned by TDSI Director Phillip Peay. Video footage has been saved to ECM.

(Ex. 9, Memo. Supp. Mot. Amend at 2, ECF No. 46-9). Redmonds alleges that the phrase "conclusive evidence was found that Moore Transport driver vandalized the unit" is objectively false, and thus supports its claims for defamation, injurious falsehood, and tortious interference in place of the nonexistent email. (See generally Red-lined First Am. Compl., ECF No. 46-2; Memo. Supp. Mot. Amend at 14.) Redmonds further alleges that this communication is part of a larger conspiracy to "scapegoat" Redmonds for damage by an unknown, unidentified party at the railyard. (Memo. Supp. Mot. Amend at 7-10.) Redmonds requested a deposition of Ms. Bridwell and other individuals on November 26, 2017, six business days before the close of discovery. (Ex. B, Mem. Opp. Mot. Amend at 3-4.) She was not available for deposition prior to the close of discovery on December 4, 2017, as her last day with CSX was December 1, 2017. (Id. at 1.)

         CSX filed its opposition to Ms. Wood's motion to withdraw on February 2 (ECF No. 45), its reply regarding the motion for sanctions on February 8 (ECF No. 47), and its opposition to the motion to amend on February 14, 2018 (ECF No. 48). Ms. Wood filed her reply regarding her motion to withdraw on February 16, 2018. (ECF No. 49). CSX filed a motion to deem admitted certain requests for admissions on February 20, 2018, to which no response has been filed.

         ANALYSIS

         I. Motion to Amend/Correct the Complaint

         Redmonds seeks to amend to identify a communication from CSX employee Rashida Bridwell as the basis for its suit, rather than the nonexistent email from Mr. Orner. Leave to amend must be freely granted under Rule 15(a), and amendments are generally accepted absent futility or undue prejudice. See Foman v. Davis, 371 U.S. 178, 182 (1962); Matrix Capital Mgmt. Fund, LP v. BearingPoint, Inc., 576 F.3d 172, 193 (4th Cir. 2009) ("[L]eave to amend should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or amendment would be futile.").[3] Modifications to a scheduling order, however, are governed by Rule 16(b), which states that "[a] schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). The good cause standard "focuses on the tardiness of the amendment and the reasons for its tardy submission... a movant must demonstrate that the reasons for the tardiness of his motion justify a departure from the rules set by the court in its scheduling order." Rassoull v. Maximus, Inc., 209 F.R.D. 372, 374 (D. Md. 2002); see also Odyssey Travel Center, Inc. v. RO Cruises, Inc., 262 F.Supp.2d 618, 632 (D.Md. 2003) (denying motion to amend complaint to correct the defendant when motion was filed only after the defendant's motion for summary judgment, despite earlier notice of the correct defendant).

         While these two rules sometimes are in tension, in this instance both point toward a denial of Redmonds' motion to amend. Redmonds has demonstrated neither good cause for modification of the scheduling order, nor absence of prejudice to the opposing party. First, the scheduling order set the deadline for amendment of pleadings on July 24, 2017. The documents upon which Redmonds now intends to rely were produced in the late summer or fall of 2017. (See Memo. Supp. Mot. Amend at 12; Ex. A, Resp. Opp. Mot. Amend at 2, ECF No. 48-1.) Nonetheless, Redmonds did not move to modify the scheduling order to permit amendment of its pleadings. Even if such a motion is assumed within Redmonds' motion to amend, that motion was not filed until January 31, 2018, over five months after Redmonds had obtained these documents. Redmonds argues that owing to its limited financial resources, it could not authenticate CSX's documents until CSX responded to Redmonds' requests for admissions on January 10, 2018. Redmonds could have filed its requests for admissions prior to the December 11, 2017, deadline, however, if amending its complaint truly depended upon the documents' authentication.[4] Further, Redmonds requested to depose Ms. Bridwell on November 26, 2017, six business days prior to the close of discovery. Redmonds presumably was contemplating using the Major Damage Report as a basis for its claims at least as early as that request, and could have moved to amend its complaint that much sooner.

         Setting aside the tardiness of the amendment, permitting the amendment would be prejudicial to CSX, and so should be barred under Rule 15(a). Redmonds did not move to amend its pleading until over a month after close of discovery. Thus, CSX did not have notice of the new basis for Redmonds' claims at any point during the discovery period. Redmonds argues that because CSX produced the documents, it would have no need to conduct additional discovery regarding them. This is not correct. Delay in identifying the documents that would support Redmonds' claim prevented CSX from deposing or otherwise conducting discovery with any of the newly-implicated individuals. Most importantly, CSX was unable to depose or otherwise conduct discovery surrounding Rashida Bridwell, the author of the statement that Redmonds now claims was made with malice. She is no longer employed by the company, so it is unclear whether she would be available if discovery were to be re-opened. To permit amendment after the opportunity has passed for discovery on the basis of Ms. Bridwell's comment on the Major Damage Report would prejudice CSX.

         Finally, it appears the amendment would be futile for several reasons. First, a statement that "conclusive" evidence was found regarding a single incidence of vandalism in a Major Damage Report is very different from an allegation of "habitual vandalism" in an e-mail sent to all current and potential clients, especially for the purposes of injurious falsehood and tortious interference claims. Second, characterizing the evidence in the video as "conclusive" is merely the opinion of the author. Objectively, the video did provide evidence used to determine who committed the vandalism. Ms. Bridwell's statement is not an untrue statement of fact. Third, there is no evidence alleged suggesting malice on the part of Ms. Bridwell in preparing the Major Damage Report. Further, it seems likely ...


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