Rooney ex rel. Situated v. Ezcorp, Inc. SAM SPARKS SENIOR USA DISTRICT JUDGE

EZCORP filed its financials that are restated 2Q12 through 1Q15. The Restatement unveiled, among other items, EZCORP’s working earnings ended up being overstated by $90.7 million, or 27.3%, throughout the restated durations, as well as its profits per share had been overstated by $0.78, or 36.8%, through the restated periods. after the filing of the restated results that are financial EZCORP’s stock declined $0.29 per share to shut at $6.51 per share.

III. Procedural History

Plaintiff filed this lawsuit, alleging Defendants false and deceptive statements caused EZCORP’s stock to trade at artificially filled costs and Plaintiff suffered economic losings because of EZCORP’s restated economic reports. See Compl. #1. The Court granted Defendants’ first movement to dismiss, concluding Plaintiff failed to plead facts showing an inference that is strong Kuchenrither possessed the necessity scienter once the statements had been made. Order #44 at 1, 14-24. The Court’s dismissal ended up being without prejudice, and Plaintiff filed his second complaint that is amended. See 2nd Am. Compl. #47.

When you look at the second amended issue, Plaintiff again alleged Defendants violated federal securities law by simply making false and deceptive statements built to artificially inflate the cost of EZCORP’s stock. Id. В¶ 157. And once more, Defendants relocated to dismiss. 2nd Mot. Dismiss #50. This time around, the Court discovered Plaintiff had acceptably pled facts rise that is giving a strong inference of scienter regarding the Loan purchase statements, not regarding the Non-Performing Loan statements. Purchase of might 8, 2017 #54 at 25.

Discovery proceeded on Plaintiff’s surviving claims. Throughout the length of finding, Plaintiff uncovered papers presumably bolstering Plaintiff’s allegations of scienter as to misstatements made in regards to the Non-Performing Loans. Plaintiff now seeks to register a third amended problem containing brand new allegations based on these papers. Movement keep #84-1 at 5-6. Due to the fact due date for the filing of amended pleadings has passed away, Plaintiff also seeks leave to amend the scheduling purchase. Id. at 8-9.

Defendants argue the Court should reject Plaintiff’s movement considering that the Private Securities Litigation Reform Act (PSLRA) bars the application of finding materials to regenerate formerly dismissed claims. Resp. #88-1 at 10-12. Defendants additionally argue the Court should reject Plaintiff’s motion because Plaintiff cannot indicate good cause to amend the scheduling purchase under Rule b that is 16( and while there is significant explanation to reject keep to amend under Rule 15(a)(2). Id. at 18-21. The Court addresses each argument in change.

Defendants first argue the PSLRA pubs Plaintiff from utilizing information uncovered during finding to regenerate formerly dismissed claims. Resp. #88-1 at 10-11.

This argument fails. Defendants never have pointed to your supply of this PSLRA barring the amendment looked for by Plaintiff. Rather, Defendants allude up to a provision that is single of PSLRA delivering breakthrough needs to be remained throughout the pendency of any movement to dismiss. That supply, 15 U.S.C. В§ 78u-4(b)(3)(B), provides that that site “all finding as well as other procedures will be stayed through the pendency of every movement to dismiss.” Yet no discovery remain are at problem here, and neither party disputes Plaintiff ended up being eligible to discovery on their claims defendants that are surviving past movement to dismiss. While there is no breakthrough remain, the breakthrough remain provision is inapplicable. And Defendants have never identified just about any basis that is statutory concluding the PSLRA pubs the amendment.

In place of statutory help, Defendants argue enabling amendment right right here will frustrate the purposes for the breakthrough remain supply. Resp. #88-1 at 10-11. The Court disagrees. The purpose of the PSLRA is “‘to prevent unneeded imposition of breakthrough costs on defendants,’ never to preclude events from making use of legitimately acquired development to refine their situation.” In re Silver Wheaton Corp. Sec. Litig., Nos. 2:15-cv-5146, 2:15-cv-5173, WL 1517130, at *5 (C.D. Cal.) (quoting Petrie v. Elec. Game Card, Inc., 761 F.3d 959, 970 cir. that is(9th); cf. WPP Luxembourg Gamma Three Sarl v. place Runner, Inc., 655 F.3d 1039, 1059 cir that is(9th) (suggesting courts’ power to restore formerly dismissed claims based on newly found information should “temper the heightened pleading requirements for the PSLRA”); In re Allstate lifetime Ins. Co. Litig., Nos. CV-09-8162, CV-09-8174, WL 176497, at *6 (D. Ariz.) (“No court in the Ninth Circuit has held that amendments in PSLRA situations are fundamentally barred commences which can be once discovery”). The point is, Defendants’ appeal to your purposes associated with PSLRA is futile because Defendants have actually did not recognize any ambiguity or inconsistency within the scheme that is statutory. Hence, the Court’s inquiry starts and concludes with all the text that is statutory of breakthrough remain supply. See Robinson v. Shell Oil Co., 519 U.S. 337, 340 (“Our inquiry must cease in the event that statutory language is unambiguous as well as the statutory scheme is coherent and constant.” (interior quote markings and citations omitted)).

II. Scheduling Purchase Modification

Defendants next argue Plaintiff cannot amend his problem since the due date for amended pleadings has passed away and cannot that is plaintiff good cause to change the scheduling purchase. Resp. #88-1 at 18-20.

“Rule 16(b) governs amendment of pleadings after having a scheduling purchase due date has expired.” S&W Enters., LLC v. Southtrust Bank of Ala., N.A., 315 F.3d 533 (5th Cir.). Hence, where in actuality the scheduling order precludes the filing of a amended pleading, the movant must first show cause that is good modification for the purchase. FED. R. CIV. P. 16(b)(4). Just then might the court consider whether leave to amend should really be issued or withheld beneath the more liberal pleading standard of Rule 15(a)(2). See FED. R. CIV. P. 15(a)(2) (“The court should easily provide keep whenever justice therefore calls for.”).

The Fifth Circuit considers four factors in determining whether good cause exists to change a scheduling purchase: (1) the explanation for the failure to prompt move for leave to amend; (2) the significance of the amendment; (3) the possibility prejudice to your nonmoving celebration; and (4) the accessibility to a continuance to cure prejudice. S&W Enters., 315 F.3d at 536. Consideration among these four facets shows cause that is good right right here.

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