Douglas P.

Farr (13208)
Jacob D. Barney (16777)
Jack L. Darrington (18349)
BUCHALTER, P.C.
60 E. South Temple, Suite 1200
Salt Lake City, UT 84111
Telephone: (801) 401-8625
dfarr@buchalter.com
jbarney@buchalter.com
jdarrington@buchalter.com

Attorneys for Defendant Dirty Dough LLC

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

CRUMBL LLC, a Utah Limited Liability

Company, CRUMBL IP, LLC, a Utah
Limited Liability Company, and CRUMBL MOTION FOR LEAVE TO FILE
FRANCHISING, LLC, a Utah Limited COUNTERCLAIM
Liability Company,

Plaintiff,
Civil No. 2:22-cv-00318-HCN-CMR

v.
Judge Howard C. Nielson, Jr.

DIRTY DOUGH LLC, an Arizona Limited Magistrate Judge Cecilia M. Romero

Liability Company, and BRADLEY
MAXWELL, an individual.

Defendant.

Pursuant to Federal Rule of Civil Procedure 15(a)(2), Defendant Dirty Dough LLC (“Dirty

Dough”), by and through counsel, hereby submits this Motion for Leave to File Counterclaim

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(“Motion for Leave”) against Plaintiffs Crumbl, LLC; Crumbl IP, LLC; and Crumbl Franchising,

LLC (collectively, “Crumbl”).

RELIEF SOUGHT AND SUPPORTING GROUNDS

Dirty Dough respectfully requests leave of Court to file a counterclaim in this matter. Good

cause exists to grant this motion because the case is still in its infancy and many of the allegations

arose after Dirty Dough filed its Answer. Moreover, Dirty Dough files the Motion for Leave in

good faith, and is not filing it for any dilatory purpose or with any dilatory motive. Finally, Crumbl

will not suffer any prejudice as fact discovery is ongoing.

BACKGROUND

1. On or about May 10, 2022, Crumbl filed a Complaint against Dirty Dough asserting

claims of trade dress infringement and related claims. (ECF No. 2.)

2. On August 3, 2022, Crumbl filed its Amended Complaint. (ECF No. 23.)

3. On August 21, 2022, Dirty Dough filed its Answer to the Amended Complaint.

(ECF No. 36.)

4. On August 12, 2022, the Court entered a Scheduling Order, which, among other

things, set the deadline to file amended pleadings as August 21, 2022, and the end of fact discovery

for July 13, 2023. (See ECF No. 31.)

5. In the early months of 2023, Dirty Dough discovered that Crumbl’s spurious

allegations were causing issues with potential investors.

6. A copy of Dirty Dough’s proposed Counterclaim is attached hereto as Exhibit A.

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 ARGUMENT

The Court should grant the Motion for Leave because good cause exists to permit Dirty

Dough to file its Counterclaim. “A party seeking leave to amend after a scheduling order deadline

must satisfy both the Rule 16(b) and Rule 15(a) standards.” Tesone v. Empire Marketing

Strategies, 942 F.3d 979, 989 (10th Cir. 2019). Rule 16(b) allows modification of a scheduling

“for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). Further, if the deadline

has expired, a party must establish “excusable neglect.” Fed. R. Civ. P. 6(b)(1)(B). In determining

excusable neglect, the Court considers the following factors: “the danger of prejudice to the [non-

moving party], the length of the delay and its potential impact on judicial proceedings, the reason

for the delay, including whether it was within the reasonable control of the movant, and whether

the movant acted in good faith.” Stringfellow v. Brown, 105 F.3d 670 (10th Cir. 1997) (alteration

in original) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd., 507 U.S. 380, 395 (1993)).

Pursuant to Rule 15, leave to amend should be freely given when justice requires. See Fed.

R. Civ. P. 15(a). A denial of a motion to amend is rare and is only justified on a “showing of undue

delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure

deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S. West,

Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).

A. Good Cause exists under Rule 16 for Modification of the Deadline to Amend
Pleadings.

The Court should grant the Motion for Leave because there is no danger of prejudice to

Crumbl, any delay has been minimal given the procedural posture of the case, and Dirty Dough

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only discovered many of the facts giving rise to the Counterclaim recently. When analyzing

excusable neglect, courts look at the following factors: (i) whether there is no danger of prejudice

to the non-moving party; (ii) whether the length of delay is minimal and has no impact on judicial

proceedings; and (iii) whether the delay was within the control of the movant, acting in good faith.

See Stringfellow, 105 F.3d 670. Here, each of these factors weighs in favor of Dirty Dough and a

finding of excusable neglect.

First, allowing Dirty Dough to bring its Counterclaim well before the end of fact discovery

will not prejudice Crumbl. Indeed, courts have found that no prejudice exists when an amendment

is sought prior to the close of fact discovery. See, e.g., Simple Products Corporation v. Chia-Ling

Huang, 2021 WL 2210308, Civ. No. 2:19-cv-00317 (D. Utah June 1, 2021). Further, Dirty

Dough’s proposed Counterclaim will have nearly zero impact on these proceedings because the

there are several months of fact discovery remaining for Crumbl to conduct any discovery on Dirty

Dough’s single cause of action.

Next, the length of the delay in this case—just over six months—is short compared to the

life of the case. Indeed, this case has been pending for nearly a year and is not set for trial until at

least November or December 2023. And, notably, the original deadline to file amended pleadings

was oddly set at just ten (10) days after entry of the scheduling order despite the fact that nearly a

year of fact discovery remained. Stated differently, the parties had less than two weeks from entry

of the scheduling order to determine whether there were sufficient facts, or a sufficient basis, to

support an amended or supplemental pleading.

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 Finally, and most importantly, the information contained in Dirty Dough’s proposed

Counterclaim was not in Dirty Dough’s possession until after the original amendment deadline

had passed in August 2022. As detailed above, this deadline lapsed almost immediately after the

entry of the scheduling order, and, as a result, Dirty Dough reasonably could not have conducted

sufficient discovery in time to learn of the facts giving rise to its proposed Counterclaim. Further,

the facts supporting Dirty Dough’s proposed Counterclaim are the kind that necessitate the passage

of time to develop. For example, Dirty Dough alleges that it has learned through discovery that

Crumbl’s meritless claims have prevented Dirty Dough from expanding and growing its business.

During the discovery period, Dirty Dough has come to understand that several investors are

unwilling to work with Dirty Dough based upon the meritless claims. It also took time for Dirty

Dough fully to comprehend just how little evidence Crumbl has in support of its claims. Put simply,

Dirty Dough could not have, in good faith, asserted its proposed Counterclaim prior to August 21,

2022 because the damages it has suffered only have become clear in the past several weeks. As a

result, Dirty Dough has not acted in bad or unreasonably delayed in asserting its Counterclaim.

Accordingly, the Court should grant the Motion because each of the pertinent factors in an

“excusable neglect” analysis weigh in favor of Dirty Dough, and good cause exists under Rules 6

and 16.

B. Leave to File a Counterclaim is in the Interest of Justice

Leave to file a supplemental or amended pleading should be granted absent “undue delay,

undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by

amendments previously allowed, or futility of amendment.” Frank, 3 F.3d at 1365.

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 As detailed above, granting leave to file a counterclaim months before the close of fact

discovery does not equate to undue delay and will not cause undue prejudice. In fact, courts allow

amendment of pleadings even up to trial, provided the non-moving party has an opportunity to

investigate and conduct discovery on the amended claim. See, e.g., Velocity Press, Inc. v. Key

Bank, N.A., 2012 WL 1556198, Civ. No. 2:09-CV-520 (D. Utah May 2, 2012) (granting leave to

amend days before trial). Here, the parties have several additional months to conduct fact discovery

and plenty of time to seek additional discovery should the need arise.

Further, there is no bad faith or dilatory motive on the party of Dirty Dough in seeking

leave to file its proposed Counterclaim. As discussed, it has taken several months for Dirty Dough

to recognize the damages it has incurred because of this meritless lawsuit. Once those facts became

clear, Dirty Dough quickly sought leave to file a Counterclaim by filing this Motion for Leave.

There simply is no bad faith or dilatory motive here.

Finally, Dirty Dough has not sought leave previously, nor would allowing Dirty Dough to

file its Counterclaim in the first instance be futile. Therefore, the Court should grant leave for Dirty

Dough to file its proposed Counterclaim because each factor weighs in favor of such relief and

because justice will be served thereby.

CONCLUSION

Dirty Dough respectfully requests that the Court grant this Motion for Leave—thus

permitting Dirty Dough to file its proposed Counterclaim attached hereto as Exhibit A—because

good cause exists to extend the deadline to amend pleadings and justice will be served by granting

such relief.

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 DATED: April 6, 2023

BUCHALTER, P.C.

/s/ Douglas P. Farr

Douglas P. Farr
Jacob D. Barney
Jack L. Darrington
Attorneys for Defendant Dirty Dough LLC

CERTIFICATE OF SERVICE

I hereby certify that on this 6th day of April 2023, I served a true and correct copy of the

foregoing through the Court’s electronic filing and delivery system on following:

Case Collard
Tamara L. Kapaloski
DORSEY & WHITNEY LLP
111 S. Main Street, Suite 2100
Salt Lake City, UT 84111

/s/ Douglas P. Farr