Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 IN RE LPL FINANCIAL CASH SWEEP Case No.: 24-CV-1228 TWR (BJW) LITIGATION, 12 ORDER GRANTING PLAINTIFFS’ 13 MOTION FOR LEAVE TO AMEND This Document Relates to: THE COMPLAINT 14 ALL ACTIONS. 15 (ECF Nos. 100, 111, 117) 16 17 Presently before the Court is Plaintiffs Daniel Peters, Douglas K. Nevitt, and Carol 18 White’s Motion for Leave to Amend the Complaint (“Mot.,” ECF No. 100 & 117 (public 19 redacted)1), as well as Defendant LPL Financial LLC’s (“LPL”) Opposition to (“Opp’n,” 20 ECF No. 108) and Plaintiffs’ Reply in Support of (“Reply,” ECF Nos. 112 (public redacted) 21 and 116 (sealed)) the Motion. The Court took the Motion under submission without oral 22 argument pursuant to Civil Local Rule 7.1(d)(1). (See ECF No. 118.) Having carefully 23 considered Plaintiffs’ proposed Amended Consolidated Class Action Complaint 24 (“PACCAC,” ECF Nos. 100 & 117-3 (public redacted redline), 111-1 (sealed), 111-2 25 / / / 26 27 1 Unless otherwise specified, all ECF citations are to documents filed in lead case number 24-CV- 28 1 (sealed redline), 117 (public redacted)), the record, the Parties’ arguments, and the relevant 2 law, the Court GRANTS the Motion. 3 BACKGROUND 4 Plaintiff Peters filed a putative class action against LPL on July 17, 2024, alleging 5 four causes of action for (1) breach of fiduciary duty; (2) unjust enrichment (in the 6 alternative); (3) unfair or fraudulent business practices in violation of California’s Unfair 7 Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200–17210; and (4) breach of 8 contract (in the alternative). (See generally ECF No. 1 (“Peters Compl.”).) Plaintiff Nevitt 9 filed a separate putative class action against LPL and its corporate parent, LPL Financial 10 Holdings Inc. (“LPL Holdings”) on July 31, 2024, alleging two causes of action for 11 (1) breach of fiduciary duty, and (2) unjust enrichment. (See generally Case No. 24-CV- 12 1358 (“Nevitt”) ECF No. 1 (“Nevitt Compl.”).) Finally, Plaintiff White filed a separate 13 putative class action against LPL and LPL Holdings on September 26, 2024, alleging five 14 causes of action for (1) breach of fiduciary duty, (2) unjust enrichment, (3) breach of 15 contract, (4) breach of the implied covenant of good faith and fair dealing, and (5) gross 16 negligence. (See generally Case No. 24-CV-1724 (“White”) ECF No. 1 (“White Compl.”).) 17 Generally speaking, each of the complaints alleged that LPL had paid de minimis interest 18 to its clients through its cash sweep programs while keeping for itself the vast majority of 19 the interest earned on its clients’ cash during periods of rising interest rates. (See generally 20 Peters, Nevitt, and White Compls.) 21 After Nevitt and White were transferred to the undersigned as related to Plaintiff 22 Peters’ case pursuant to this District’s Civil Local Rule 40.1, (see Nevitt ECF No. 17; White 23 ECF No. 4), the Court consolidated these cases under the caption In re LPL Financial Cash 24 Sweep Litigation in Plaintiff Peter’s low-numbered case, (see ECF No. 30), and appointed 25 interim co-lead counsel pursuant to Federal Rule of Civil Procedure 23(g)(3). (See ECF 26 No. 37.) Plaintiffs then filed a Consolidated Class Action Complaint against LPL and LPL 27 Holdings on December 12, 2024, alleging four causes of action for (1) breach of fiduciary 28 duty, (2) unjust enrichment, (3) breach of contract, and (4) breach of the implied covenant 1 of good faith and fair dealing. (See generally ECF No. 38 (“CCAC”).) They sought to 2 represent “Clients of LPL who had cash deposits or balances in LPL’s Cash Sweep 3 Programs from July 18, 2018, until the unlawful conduct alleged herein ceases.” (See id. 4 ¶ 155 (emphasis omitted).) 5 LPL and LPL Holdings moved to dismiss on January 13, 2025. (See generally ECF 6 No. 40.) After hearing oral arguments on May 7, 2025, (see ECF No. 54; see also ECF 7 No. 55 (“Tr.”)), the Court issued an Order on June 30, 2025, granting in part and denying 8 in part LPL and LPL Holdings’ motion. (See generally ECF No. 58 (the “Dismissal 9 Order”).) Specifically, the Court dismissed without prejudice Plaintiffs’ first cause of 10 action for breach of fiduciary duty, Plaintiffs’ third cause of action for breach of contract, 11 and Defendant LPL Holdings but denied the motion as to Plaintiffs’ second cause of action 12 for unjust enrichment and fourth cause of action for breach of the implied covenant of good 13 faith and fair dealing. (See generally id.) The Court granted Plaintiffs leave to amend, (see 14 id. at 43), but Plaintiffs elected to proceed as to their surviving claims, reserving the right 15 to amend “following a reasonable opportunity for discovery.” (See ECF No. 62.) 16 LPL answered, (see ECF No. 66), and the Honorable Brian J. White issued a 17 Scheduling Order providing that “[a]ny motion to join other parties, to amend the 18 pleadings, or to file additional pleadings shall be filed by January 15, 2026.” (See ECF 19 No. 74 ¶ 1 (emphasis in original).) Plaintiffs did not seek leave to amend or an extension 20 of time before the January 16, 2026 deadline. (See generally Docket.) 21 The Parties then proceeded to discovery. (See, e.g., ECF Nos. 77, 85, 88, 91–93, 22 96–99.) Plaintiffs served their first set of requests for production of documents on 23 August 1, 2025. (See ECF No. 100-2 (“Blatchley Decl.”) ¶ 4.) On February 2, 2026, 24 Magistrate Judge White held a Discovery Conference, (see ECF No. 88), at which he 25 provided parameters for LPL’s document production. (See Blatchley Decl. ¶ 8; ECF No. 26 108-1 (“Floren Decl.”) ¶¶ 12–13.) LPL’s ensuing document review was significant, 27 requiring a team of 70 attorneys to spend almost 10,000 hours conducting first level- 28 review, followed by additional hundreds of hours of review prior to producing the 1 documents at issue. (See Floren Decl. ¶ 14.) As a result, LPL did not make a material 2 production until mid-April 2026. (See Blatchley Decl. ¶ 9; Floren Decl. ¶ 15.) As of 3 August 13, 2026, LPL had produced “more than 60,000 documents (approximately 4 282,000 numbered pages) and hundreds of millions of pages of customer account data.” 5 (See Blatchley Decl. ¶ 15.) 6 Magistrate Judge White held a Status Conference on May 14, 2026, (see ECF No. 7 96), at which Plaintiffs first indicated that they intended to seek an extension of the case 8 schedule. (See Blatchley Decl. ¶ 23.) They did not mention at that time that they intended 9 to seek leave to amend their complaint. (See id.) Magistrate Judge White set a further 10 Status Conference for June 2, 2026, and ordered the Parties to meet and confer. (See ECF 11 No. 96.) Plaintiffs first informed LPL of their intention to file the instant Motion at the 12 ensuing May 28, 2026 meet-and-confer regarding Plaintiffs’ proposed extensions to the 13 case schedule. (See Blatchley Decl. ¶ 24.) 14 At the June 2, 2026 Status Conference, Plaintiffs informed Magistrate Judge White 15 that the Parties had been unable to agree on an extension to the case schedule and that 16 Plaintiffs would like to seek leave to amend their complaint to replead their breach of 17 fiduciary duty claim. (See id. ¶ 25.) Magistrate Judge White ordered the Parties to brief 18 their positions regarding “the class certification and fact discovery deadlines” and set a 19 Case Management Conference for June 25, 2026. (See ECF No. 97.) In their letter brief, 20 Plaintiffs noted that their request for a six-month extension of all deadlines was the result 21 of LPL’s “delayed production of discovery for months” and production “after the current 22 amendment deadline” of “significant materials confirming, among other things, that it 23 owed and breached fiduciary duties to its advisory clients.” (See ECF No. 108-3 at 6.) 24 Plaintiffs added that, “[b]ased on those materials, [they] plan[ned] to seek leave to amend 25 the Complaint to conform to the evidence and, at a minimum, re-assert fiduciary duty 26 claims on behalf of a subclass of advisory clients.” (See id.) Plaintiffs therefore proposed 27 a deadline of July 17, 2026, to file the instant Motion. (See id. at 13.) LPL addressed 28 Plaintiffs’ request to amend in their responsive letter. (See ECF No. 108-4 at 21.) 1 At the June 25, 2026 Case Management Conference, Magistrate Judge White agreed 2 to “extend all future scheduling dates . . . , with status conferences set once per month to 3 ensure the case continues to move forward.” (See ECF No. 98.) He also ordered Plaintiffs 4 to “file a motion seeking leave from the U.S. District Judge to amend the complaint on or 5 before July 17, 2026.” (See id.) The instant Motion followed on July 17, 2026. (See 6 generally ECF No. 100.) 7 LEGAL STANDARD 8 Under Federal Rule of Civil Procedure 15(a), a plaintiff may amend their complaint 9 once as a matter of course within specified time limits. Fed. R. Civ. P. 15(a)(1). “In all 10 other cases, a party may amend its pleading only with the opposing party’s written consent 11 or the court’s leave. The court should freely give leave when justice so requires.” Fed. R. 12 Civ. P. 15(a)(2). “Amendments seeking to add claims are to be granted more freely than 13 amendments adding parties.” Union Pac. R. Co. v. Nev. Power Co., 950 F.2d 1429, 1432 14 (9th Cir. 1991) (citing Martell v. Trilogy Ltd., 872 F.2d 322, 324 (9th Cir. 1989)). 15 After a pretrial scheduling order establishing a timetable for amending the pleadings 16 has been filed, however, any request for leave to amend is reviewed under Federal Rule of 17 Civil Procedure 16. Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294–95 (9th Cir. 2000). 18 “Where a party moves to amend the pleadings after a deadline set in the Rule 16 scheduling 19 order, the Court should not modify the scheduling order ‘except upon a showing of good 20 cause.’” Crockett & Myers, Ltd. v. Napier, Fitzgerald & Kirby, LLP, 430 F. Supp. 2d 1157, 21 1163 (D. Nev. 2006) (quoting Fed. R. Civ. P. 16(b)). Only after a party “satisf[ies] the 22 ‘good cause’ requirement” will the court consider “whether an amended pleading under 23 Rule 15 is proper.” Hoffman v. Blattner Energy, Inc., 315 F.R.D. 324, 335 (C.D. Cal. 24 2016). 25 “Unlike Rule 15(a)’s liberal amendment policy which focuses on the bad faith of the 26 party seeking to interpose an amendment and the prejudice to the opposing party, Rule 27 16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the 28 amendment.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). 1 “While a court may take into account any prejudice to the party opposing modification of 2 the scheduling order, ‘the focus of the [Rule 16(b)] inquiry is upon the moving party’s 3 reasons for seeking modification. . . . If that party was not diligent, the inquiry should 4 end.’” In re W. States Wholesale Nat. Gas, 715 F.3d 716, 737 (9th Cir. 2013) (quoting 5 Johnson, 975 F.2d at 609). 6 ANALYSIS 7 Through the instant Motion, Plaintiffs seek leave to file their Proposed Amended 8 Consolidated Class Action Complaint realleging their previously dismissed breach of 9 contract and breach of fiduciary duty claims based on documents produced by LPL during 10 discovery. (See generally Mot.; see also ECF Nos. 100-1 & 117-1 (“Redacted Mem.”) & 11 111 (“Sealed Mem.”).) LPL opposes on the grounds that Plaintiffs have failed to establish 12 good cause under Rule 16(b) because Plaintiffs were not diligent, (see Opp’n at 13–22), 13 the requested amendment would significantly prejudice LPL, (see id. at 22–24), and 14 Plaintiffs also fail to satisfy the Rule 15 standard. (See id. at 24–25.) 15 I. Rule 16(b) 16 As an initial matter, Plaintiffs contend that Rule 16 does not apply here “because 17 Plaintiffs are seeking leave to amend within the deadline set by [Magistrate Judge White]— 18 July 17, 2026.” (See Mem. at 18 n.5; see also Reply at 2, 8.) The Court does not agree. 19 Magistrate Judge White’s Minute Order is clear—while he set a deadline for Plaintiffs to 20 file the instant Motion, he did not make a finding of good cause or amend the Scheduling 21 Order to extend the deadline by which to move to amend the pleadings. (See ECF No. 98 22 (“Plaintiffs shall file a motion seeking leave from the U.S. District Judge to amend the 23 complaint on or before July 17, 2026.”).) Plaintiffs’ arguments to the contrary are 24 incorrect. 25 The Court therefore first applies Rule 16, under which “[a] schedule may be 26 modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). 27 “Once the district court had filed a pretrial scheduling order pursuant to . . . Rule . . . 16 28 [that] established a timetable for amending pleadings that rule’s standards controlled.” 1 Branch Banking & Tr. Co. v. D.M.S.I., LLC, 871 F.3d 751, 764 (9th Cir. 2017) (quoting 2 Johnson, 975 F.2d at 607–08). “The good cause standard of Rule 16(b) primarily considers 3 the diligence of the party seeking the amendment.” Id. “While a court may take into 4 account any prejudice to the party opposing modification of the scheduling order, ‘the 5 focus of the [Rule 16(b)] inquiry is upon the moving party’s reasons for seeking 6 modification. . . . If that party was not diligent, the inquiry should end.’” In re W. States 7 Wholesale Nat. Gas, 715 F.3d at 737 (quoting Johnson, 975 F.2d at 609). 8 LPL contends that Plaintiffs were not diligent, (see Opp’n at 14–22), and that the 9 proposed amendments would significantly prejudice LPL.2 (See id. at 22–24.) Regarding 10 diligence, LPL contends that Plaintiffs’ assertions are conclusory and insufficient. (See id. 11 at 15 (citing Argonaut Ins. Co. v. Travelers Cas. & Sur. Co., No. 2:22-cv-01036-LK, 2024 12 WL 4107712, at *3 (W.D. Wash. Sept. 6, 2024)). But Plaintiffs make clear that they served 13 their first set of document requests on LPL on August 1, 2025, (see Blatchley Decl. ¶ 4)— 14 five-and-a-half months before the January 15, 2026 deadline to move to amend the 15 pleadings, (see ECF No. 74 ¶ 1)—and that LPL failed to produce any documents responsive 16 to those requests until after the deadline, (see Floren Decl. ¶¶ 12–14 (noting that LPL began 17 reviewing and producing documents after the February 2, 2026 Discovery Conference)), 18 and only substantially completed its sizable document production in mid-April 2026, (see 19 Blatchley Decl. ¶ 9; see also Floren Decl. ¶ 15)—three months after the deadline had 20 expired. Further, Plaintiffs disclosed to LPL their intention to file the instant Motion on 21 May 28, 2026, (see Floren Decl. ¶ 24), approximately six weeks into their review of LPL’s 22 282,000 pages of documents and “hundreds of millions of pages of customer account data.” 23 (See id. ¶ 15.) In short, this clearly is not an instance in which Plaintiffs sat on their hands 24 25 26 2 “Although diligence is the main focus of the good cause inquiry in the Ninth Circuit, the existence or degree of prejudice to the party opposing the modification is also relevant.” See C.F. v. Capistrano 27 Unified Sch. Dist., 656 F. Supp. 2d 1190, 1196 (C.D. Cal. 2009) (citing Johnson, 975 F.2d at 609), aff’d, 654 F.3d 975 (9th Cir. 2011). Because prejudice is among the Foman factors addressed under Rule 15(a), 28 1 or dragged their feet—Plaintiffs filed this Motion within approximately three months of 2 receiving hundreds of millions of pages of documents and data from LPL, eight-and-a-half 3 months after Plaintiffs first requested them. See, e.g., Bowen v. Target Corp., No. CV-16- 4 2587-JGB-MRWX, 2019 WL 9240985, at *3 (C.D. Cal. Nov. 12, 2019) (“The volume and 5 complexity of discovery in a case is an acceptable reason for delayed amendment.” (citing 6 Sandoval v. Cnty. of Sonoma, No. 11-cv-05817-THE, 2014 WL 3956764, at *2 (N.D. Cal. 7 Aug. 12, 2014); Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prod., LLC, No. 8 09-C-0916, 2011 WL 679337, at *2 (E.D. Wis. Feb. 16, 2011); United States v. Sturdevant, 9 No. 07-2233-KHV-DJW, 2008 WL 4198598, at *7 (D. Kan. Sept. 11, 2008))). Further, 10 LPL cannot credibly claim that Plaintiff should have filed the instant Motion by the 11 January 15, 2026 deadline when LPL itself failed to produce the documents referenced in 12 the Proposed Amended Consolidated Class Action Complaint until months after that 13 deadline had passed. The Court therefore concludes that Plaintiffs have demonstrated their 14 diligence and, accordingly, good cause under Rule 16(b). See, e.g., E.E.O.C. v. Bay Club 15 Fairbanks Ranch, LLC, 475 F. Supp. 3d 1099, 1103 (S.D. Cal. 2020) (“The appropriate 16 test of a party’s diligence focuses on when that party obtained new information leading to 17 the motion to amend. Based on Plaintiff remaining active in attempting to obtain new 18 information to support the proposed FAC, . . . Plaintiff has demonstrated diligence and 19 good cause to amend.” (citing Zivkovic v. S. Calif. Edison Co., 302 F.3d 1080, 1087 (9th 20 Cir. 2002))). 21 II. Rule 15(b) 22 Once Rule 16 is satisfied, leave to amend should be “freely given as justice so 23 requires.” Fed. R. Civ. P. 15(a). Granting leave to amend rests in the sound discretion of 24 the district court. Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). 25 “Although the rule should be interpreted with extreme liberality, leave to amend is not to 26 be granted automatically.” Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990) 27 (citations omitted). Five factors, also known as the “Foman factors” because they were 28 articulated in Foman v. Davis, 371 U.S. 178 (1962), are taken into account to assess the 1 propriety of a motion for leave to amend under Rule 15: (1) bad faith, (2) undue delay, 2 (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the plaintiff 3 has previously amended the complaint. See Johnson v. Buckley, 356 F.3d 1067, 1077 (9th 4 Cir. 2004). “Amendments seeking to add claims are to be granted more freely than 5 amendments adding parties.” Union Pac. R. Co. v. Nev. Power Co., 950 F.2d 1429, 1432 6 (9th Cir. 1991) (citation omitted). 7 Because LPL contends that none of the factors weigh in favor of granting Plaintiffs’ 8 Motion, (see Opp’n at 24–25), the Court addresses each in turn below. 9 A. Bad Faith 10 “Bad faith has been construed by the Ninth Circuit as an amendment sought with 11 ‘wrongful motive’ or a plaintiff ‘merely . . . seeking to prolong the litigation by adding new 12 but baseless legal theories.’” Bowen v. Target Corp., No. CV162587JGBMRWX, 2019 13 WL 9240985, at *5 (C.D. Cal. Nov. 12, 2019) (quoting Griggs v. Pace Am. Grp., Inc., 170 14 F.3d 877, 881 (9th Cir. 1999)) (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 15 (9th Cir. 1987)). Here, LPL contends that “the procedural history demonstrates Plaintiffs’ 16 lack of good faith” because “[t]hey declined repeated chances to amend.” (See Opp’n at 17 24.) There is no indication, however, that Plaintiffs have been dilatory, see supra Section 18 I, or that their theories are baseless. See infra Section II.D. Indeed, to the Court, the 19 procedural history reveals that Plaintiffs waited to discover facts providing good cause for 20 their proposed amendments rather than amending futilely and prematurely. The Court 21 therefore concludes that this factor does not weigh against granting Plaintiffs’ Motion. 22 B. Undue Delay 23 Although LPL argues that, “for all of the reasons Plaintiffs were not diligent in 24 seeking amendment, they have also unduly delayed their motion for leave,” (see Opp’n at 25 24), the Court has found that Plaintiffs were diligent in discovering the basis for their 26 proposed amendments and in bringing the instant Motion. See supra Section I. The Court 27 therefore necessarily concludes that Plaintiffs have not unduly delayed. 28 / / / 1 C. Prejudice 2 The Ninth Circuit has instructed courts that “it is the consideration of prejudice to 3 the opposing party that carries the greatest weight” in considering the factors to be 4 considered under Foman. See Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 5 (9th Cir. 2003) (citing DCD Programs, 833 F.2d at 185). Indeed, “[p]rejudice is the 6 ‘touchstone of the inquiry under rule 15(a),’” see id. (quoting Lone Star Ladies Inv. Club 7 v. Schlotzsky’s Inc., 238 F.3d 363, 368 (5th Cir. 2001)) (citing Howey v. United States, 481 8 F.2d 1187, 1190 (9th Cir. 1973)), and, “[a]bsent prejudice, or a strong showing of any of 9 the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of 10 granting leave to amend.” Id. (emphasis in original) (citing Lowrey v. Tex. A&M Univ. 11 Sys., 117 F.3d 242, 245 (5th Cir. 1997)). “The party opposing amendment bears the burden 12 of showing prejudice,” DCD Programs, 833 F.2d at 187, and “[w]here a party opposes a 13 motion for leave to amend on the basis of undue prejudice, the showing of prejudice must 14 be substantial.” See SAES Getters S.p.A. v. Aeronex, Inc., 219 F. Supp. 2d 1081, 1094 15 (S.D. Cal. 2002) (citing Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 16 (9th Cir. 1990)). 17 LPL urges that granting Plaintiffs leave to file their Proposed Amended 18 Consolidated Class Action Complaint would significantly prejudice LPL because it “would 19 necessarily require renewed motion to dismiss briefing, which itself could require a 20 several-months’ extension of the schedule” and, “[d]epending on the outcome, and 21 regardless of whether Plaintiffs intend to seek discovery regarding any newly-added 22 claims, LPL would undoubtedly seek discovery regarding those claims, including 23 regarding potential defenses.” (See Opp’n at 22; see also id. at 25.) Further, “Plaintiffs’ 24 proposed amendment would require LPL’s expert witnesses . . . to completely redo many 25 of their analyses, which have to this point appropriately focused on the existing claims.” 26 (See id. at 23.) This “would be extremely costly, time consuming, and burdensome.” (See 27 id. at 24.) 28 / / / 1 First, it should go without saying that LPL would not be “necessarily require[d]” to 2 file a Rule 12(b) motion in response to the Proposed Amended Consolidated Class Action 3 Complaint; LPL could, of course, elect to answer and, if appropriate, move for judgment 4 on the pleadings under Rule 12(c) or summary judgment under Rule 56 at a later time. In 5 any event, LPL has thoroughly argued its perceived deficiencies, (see Opp’n at 6–12, 6 15–21, 25 (contending that Plaintiffs’ proposed amendments are futile “because they are 7 repackaged theories the Court has already rejected and do not comprise new, legally 8 cognizable claims”)), meaning “the time and resources it will take to restate their position 9 in any response to Plaintiffs’ proposed . . . Amended [Consolidated Class Action] 10 Complaint should be relatively minimal.” See S.D. Coastkeeper v. Pick-Your-Part Auto 11 Wrecking, No. 22-CV-1693 TWR (DDL), 2023 WL 2801199, at *2 (S.D. Cal. Apr. 5, 12 2023). 13 Second, “[n]either delay resulting from the proposed amendment nor the prospect of 14 additional discovery needed by the non-moving party in itself constitutes a sufficient 15 showing of prejudice.” Dong Ah Tire & Rubber Co. v. Glasforms, Inc., No. C 06-3359 JF 16 (RS), 2009 WL 667171, at *2 (N.D. Cal. Mar. 10, 2009) (first citing DCD Programs, 833 17 F.2d at 187; then citing Genentech, Inc. v. Abbott Labys., 127 F.R.D. 529, 530–31 (N.D. 18 Cal. 1989); then citing United States v. Continental Ill. Nat’l Bank & Trust Co. of Chicago, 19 889 F.2d 1248, 1255 (2d Cir. 1989)). The Court understands that LPL has invested a 20 considerable amount of time and money in its expert discovery. (See Opp’n at 23–24; 21 Floren Decl. ¶ 22; see also generally ECF No. 108-6 (“Wong Decl.”).) LPL apparently 22 approved Analysis Group, Inc. to begin work on this case in mid-November 2025, (see 23 Wong Decl. ¶ 5), and, as of July 31, 2026, Analysis Group, Inc. had performed “over 800 24 hours of work in connection with analyzing the damages theories associated with Plaintiffs’ 25 current surviving claims.” (See id. ¶ 15.) Analysis Group, Inc. and LPL contend that, if 26 the Court permits Plaintiffs to file their Proposed Amended Consolidated Class Action 27 Complaint, “[m]ost of the 800 hours of work that Analysis Group performed in connection 28 with Plaintiffs’ current surviving claims would no longer be relevant or usable.” (See id. 1 ¶ 16; see also Floren Decl. ¶ 22.) Had LPL produced documents to Plaintiffs with the same 2 alacrity with which they retained Analysis Group, Inc., however, the Court has no doubt 3 that this Motion would have been filed much sooner and that any allegedly sunken costs 4 would have been substantially limited. 5 Finally, Plaintiffs’ reassertion of its previously dismissed breach of contract and 6 breach of fiduciary duty causes of action do not “greatly alter[] the nature of the litigation.” 7 Cf. Morongo Band of Mission Indians, 893 F.2d at 1079. In any event, “the parties will 8 have adequate time to prepare for the newly pleaded claims,” and, “[i]f further discovery 9 is necessary, there is time for the Court to order such discovery.” See Veg Ex, LLC v. W. 10 Cent. Produce, Inc., No. 2:22-CV-01587-MEMF-JC, 2023 WL 11983386, at *4 (C.D. Cal. 11 Nov. 2, 2023). “Although Defendant[] may incur additional costs, this is always the case 12 when a plaintiff adds new claims and is not sufficient to overcome the liberal policy 13 favoring amendment.” See id. (citing Fed. R. Civ. P. 15(a)(2)). 14 For all these reasons, the Court concludes that LPL has failed to establish that 15 permitting Plaintiffs to file their Proposed Amended Consolidated Class Action Complaint 16 will cause LPL prejudice substantial enough to outweigh the remaining Foman factors and 17 Rule 15(a)’s liberal policy favoring amendment. 18 D. Futility 19 LPL contends that “Plaintiffs’ proposed amendments would be in vain anyway 20 because they are repackaged theories the Court has already rejected and do not comprise 21 new, legally cognizable claims.” (See Opp’n at 25 (citing Memjet Tech. Ltd. v. Vanguard 22 Graphics Int’l, No. 3:23-cv-1810-JES-AHG, 2025 WL 976915, at *6 (S.D. Cal. Apr. 1, 23 2025)); see also id. at 6–12.) Like Plaintiffs’ argument concerning Magistrate Judge 24 White’s extension of the deadline to seek leave to file an amended pleading, the Court finds 25 this argument to be incorrect. 26 Both Plaintiffs’ amended breach of fiduciary duty and breach of contract claim rely 27 on documents that were not before the Court when it issued its prior Dismissal Order. (See 28 generally ECF Nos. 100, 111-2, 117-3 (redlines comparing PACCAC with CCAC).) 1 Based on the documents produced by LPL, it appears that LPL’s senior executives 2 themselves believed that LPL had a fiduciary duty to LPL’s Corporate Advisory clients 3 with respect to their swept cash, (see, e.g., PACCAC ¶¶ 4, 112–13, 122), which may be 4 relevant to whether a fiduciary duty existed. See, e.g., Goldsmith v. UBS Fin. Servs. Inc., 5 No. 1:24-CV-6354-GHW, 2026 WL 819461, at *20–21 (S.D.N.Y. Mar. 25, 2026) 6 (concluding that the plaintiffs had plausibly alleged the existence of a fiduciary relationship 7 where the contract between the plaintiffs and their broker-dealer “acknowledged it was 8 acting as a fiduciary”);3 Doe v. Harbor Schs., Inc., 446 Mass. 245, 253, 843 N.E.2d 1058, 9 1064–65 (2006) (concluding on summary judgment that the defendant owed the plaintiff a 10 fiduciary duty where, “while denying the existence of a fiduciary relationship, [he] 11 acknowledged in his answer to [the plaintiff]’s complaint that he was required to act in [the 12 plaintiff]’s best interests”). As for breach of contract, Plaintiffs now allege that while LPL 13 promised its clients that “[t]he interest rates paid are determined by the amount the Banks 14 are willing to pay,” (see PACCAC ¶ 9), the rate was actually set by LPL’s CFO Matt 15 Audette, former CEO Dan Arnold, and CIO Burt White. (See id. ¶ 80 (January 27, 2022 16 email from Audette to Rich Steinmeier: “Burt and I…..really me….set pricing on deposits. 17 And margin.”).) Simply stated, these are not the same “theories the Court has already 18 rejected.” 19 Further, “[a]t this stage of the litigation, the Court is not ruling on the sufficiency of 20 the proposed pleadings, but only on whether ‘no set of facts’ can be proven that would 21 constitute a valid and sufficient claim.” Santos v. Fid. Nat’l Title Ins. Co., No. 24CV2069- 22 GPC(MSB), 2025 WL 1361478, at *2 (S.D. Cal. May 9, 2025) (quoting Missouri ex rel. 23 Koster v. Harris, 847 F.3d 646, 656 (9th Cir. 2017)). Because this is not a situation in 24 which “‘no set of facts can be proved under the amendment to the pleadings that would 25 26 3 As the Court previously noted, (see Dismissal Order at 31 n.8), the Supreme Judicial Court of 27 Massachusetts could “discern no relevant difference between the fiduciary duty law of New York and Massachusetts,” concluding that “application of either State’s law would yield the same result here.” See 28 1 constitute a valid and sufficient claim or defense,’ or when they ‘are either duplicative of 2 existing claims or patently frivolous,’” Regalado v. Fresno Cnty., No. 1:23-CV-00672- 3 KES-BAM, 2024 WL 4729523, at *5 (E.D. Cal. Nov. 8, 2024) (first quoting Missouri ex 4 rel. Koster, 847 F.3d at 656; then quoting Murray v. Schriro, 745 F.3d 984, 1015 (9th Cir. 5 2014)), Plaintiffs’ proposed amendments are not futile. Although “[t]hat does not mean 6 that the allegations have merit or that the Court thinks that they can ultimately be proven,” 7 see FlatWorld Interactives LLC v. Apple Inc., No. 12-CV-01956-WHO, 2013 WL 8 6406437, at *3 (N.D. Cal. Dec. 6, 2013), “[t]he Court defers addressing [LPL’s] arguments 9 about the merits of the proposed claims at this stage of the proceedings.” See Regalado, 10 2024 WL 4729523, at *6 (citing Wood v. Cnty. of Stanislaus, No. 2:21-cv-01572-TLN- 11 KJN, 2023 WL 7283525, at *2 (E.D. Cal. Nov. 2, 2023)). 12 E. Prior Amendment 13 Finally, LPL urges that Plaintiffs’ Proposed Amended Consolidated Class Action 14 Complaint “would be Plaintiffs’ fifth complaint” because “[t]he three named Plaintiffs each 15 filed complaints and they collectively filed another.” (See Opp’n at 25 (emphasis in 16 original).) Further, “Plaintiffs were previously granted leave to amend and an opportunity 17 to move for leave to amend, but chose not to.” (See id.) “A district court may deny a 18 plaintiff leave to amend if it determines that . . . the plaintiff had several opportunities to 19 amend its complaint and repeatedly failed to cure deficiencies.” Bowen, 2019 WL 20 9240985, at *6 (alteration and emphasis in original) (quoting Telesaurus VPC, LLC v. 21 Power, 623 F.3d 998, 1003 (9th Cir. 2010)). But that has not happened here, where it was 22 the Court—at the joint request of the Parties, (see ECF No. 29 at 4)—that ordered Plaintiffs 23 to file their initial Consolidated Class Action Complaint, (see ECF No. 30 ¶ 9), and 24 Plaintiffs exercised discretion in electing not to file an amended complaint until good cause 25 existed to do so. This factor therefore does not weigh against granting Plaintiffs’ Motion. 26 F. Conclusion 27 On balance, the Foman factors weigh in favor of granting Plaintiffs’ Motion. 28 / / / I CONCLUSION 2 Because Plaintiffs have established good cause under Rule 16(b) and the Foman 3 ||factors weigh in favor of granting amendment under Rule 15(a), the Court GRANTS 4 || Plaintiffs’ Motion (ECF Nos. 100, 117). Accordingly, Plaintiffs SHALL FILE the public 5 redacted version of their Proposed Amended Consolidated Class Action Complaint, which 6 || was previously filed at ECF No. 117-3, as their operative Amended Consolidated Class 7 || Action Complaint. LPL SHALL RESPOND to the Amended Consolidated Class Action 8 || Complaint within twenty-one (21) days of its electronic docketing. 9 IT IS SO ORDERED. 10 || Dated: September 24, 2026 —— (2 [5D \& re 12 Honorable Todd W. Robinson United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28