GM Global Technology Operations, LLC v. Quality Collision Parts, Inc. and General Motors Company, Inc. and General Motors, LLC

Summary

The United States District Court for the Eastern District of Michigan grants GM Global Technology Operations, LLC’s motion for leave to file a first amended complaint and join additional parties. The court also denies Quality Collision Parts, Inc.’s motion to seal exhibits, concluding that the motion was procedurally defective and failed to establish a clearly defined and serious injury or satisfy the requirement for narrowly tailored sealing. The proposed amendment concerns additional patent-infringement theories, successor and alter-ego liability, and an alleged fraudulent transfer of assets.

Holdings

1. The motion to seal was denied because Quality Collision Parts failed to identify a clearly defined and serious injury, failed to establish a compelling interest overcoming the public's interest in access, and failed to provide the required document-by-document and line-by-line showing.
2. GM's motion for leave to amend was granted because the amendment was brought promptly after discovery of the facts concerning Power Auto Parts, did not cause undue prejudice to Quality Collision Parts, was not shown to be brought in bad faith, and was not futile.
3. The proposed patent-infringement claims were not futile because the asserted deficiencies in GM's infringement charts and prefiling investigation did not establish failure to state a plausible claim, and the court could not consider the extrinsic expert report in the futility analysis.
4. GM plausibly pleaded that Power Auto Parts was a successor or mere continuation of Quality Collision Parts, so the successor-liability theory was not futile.
5. GM had standing as a creditor under the Michigan Uniform Voidable Transactions Act, and its proposed fraudulent-transfer claim was not futile.
6. GM plausibly pleaded an alter-ego theory against the individual proposed defendants, and pursuing that theory was not premature merely because GM had not yet obtained a judgment.
7. Good cause existed under Rule 16(b)(4) to modify the scheduling order because GM acted diligently after learning the facts supporting amendment and Quality Collision Parts did not show undue prejudice.
8. Power Auto Parts and the individual proposed defendants could be joined because the proposed claims arose from the same series of transactions and involved common legal or factual questions, and the allegations described coordinated conduct and potentially joint tort liability rather than unrelated independent infringement.

Questions Presented

1. Whether GM should receive leave under Rule 15(a)(2) to amend its complaint and add claims and parties.
2. Whether the proposed amendments were futile because the proposed patent-infringement, successor-liability, fraudulent-transfer, and alter-ego theories allegedly failed to state plausible claims.
3. Whether Rule 16(b)(4) required modification of the scheduling order and, if so, whether good cause existed.
4. Whether Power Auto Parts and the individual proposed defendants could be permissively joined under Rule 20(a)(2) and 35 U.S.C. § 299.
5. Whether Quality Collision Parts established grounds to file opposition exhibits under seal.

Disposition

other