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Bias On Objective Evaluation
Bias On Objective Evaluation
“Under Rule 15(a), ‘leave to amend shall be freely given when justice so requires,’ and
should be granted absent some justification for refusal.” United States ex rel. Willard v. Humana
Health Plan of Tex. Inc., 336 F.3d 375, 386 (5th Cir. 2003) (citing Foman, 371 U.S. at 181-82); see
also Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004) (noting Rule 15(a) “evinces a bias in
favor of granting leave to amend”) (internal quotation marks and citations omitted). To determine
whether to grant leave to amend, the Court considers five factors: (1) undue delay, (2) bad faith or
dilatory motive, (3) repeated failure to cure deficiencies by previous amendments, (4) undue
prejudice to the opposing party, and (5) futility of the amendment. Smith, 393 F.3d at 595 (citing
Foman, 371 U.S. at 182; Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003)). Courts
should afford a claimant an opportunity to amend a complaint “[i]f it appears that a more carefully
drafted pleading might state a claim upon which relief could be granted.” Kennard v. Indianapolis
Life Ins. Co., 420 F. Supp. 2d 601, 608 (N.D. Tex. 2006) (Fish, C.J.). Compare U.S. ex rel. Dekort
v. Integrated Coast Guard Sys., 705 F. Supp. 2d 519, 558 n.18 (N.D. Tex. 2010) (O’Connor, J.)
(denying leave to amend where “further amendment would be futile”), with Whiddon v. Chase Home
Fin., LLC, 666 F. Supp. 2d at 693 (granting leave to amend because “it does not appear that
[plaintiff’s] . . . claims are patently frivolous or that an amendment could not cure their defects”).
It appears that Plaintiffs may be able to state a claim upon which relief could be granted, and
the Court notes that none of the above-mentioned five factors are present in this case. Accordingly,
the Court finds it appropriate to allow Plaintiffs an opportunity to amend their complaint.
BCBS Alabama filed a Motion to Compel Arbitration and for Dismissal of Certain Claims
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Case 3:12-cv-01607-O Document 138 Filed 02/03/14 Page 25 of 45 PageID 2754
negligent misrepresentation, and promissory estoppel claims against BCBS Alabama relating to SB
The Court must first determine whether there is a valid agreement to arbitrate. BCBS
Alabama must establish that an arbitration agreement exists. ASW Allstate Painting & Constr. Co.
v. Lexington Ins. Co., 188 F.3d 307, 311 (5th Cir. 1999). To determine whether an agreement to
arbitrate exists, courts apply ordinary state-law contract principles. Will-Drill Res., 352 F.3d at 214
(internal quotation marks and citations omitted). “Under Texas law, a valid contract requires an
offer, acceptance, mutual assent, execution and delivery of the contract with the intent that it be
mutual and binding, and consideration.”11 In re Online Travel Co., ___ F. Supp. 2d ___, 2013 WL
2948086, at *2 (N.D. Tex. 2013) (Boyle, J.) (internal citations omitted). Whether a contract has been
formed is determined by the “objective standard of what the parties said and how they acted, not by
their subjective state of mind.” Motten v. Chase Home Fin., 831 F. Supp. 2d at 1003 (internal
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Victory’s breach of contract, negligent misrepresentation, and promissory estoppel claims against
BCBS Alabama relating to SB’s plan are state law claims and the Court’s jurisdiction is based on diversity.
See Pls.’ 1st Am. Compl. ¶ 35 (citing 28 U.S.C. §§ 1331, 1332). Therefore, Texas choice-of-law rules apply.
See Coghlan v. Wellcraft Marine Corp., 240 F.3d 449, 452 n.2 (5th Cir. 2001). Both parties in their briefing
assume Texas law applies to Victory’s claims against BCBS Alabama, and neither party argues the
application of any other state’s laws. See generally Mot. Compel, ECF No. 49; Br. Supp. Resp. Mot.
Compel, ECF No. 74; Reply, ECF No. 99. The Court assumes, without deciding, that Texas law governs.
See Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 705 (5th Cir. 1999).
The Court notes that federal courts in Alabama also consider whether a valid agreement to arbitrate
exists and whether the dispute falls within the scope of the agreement when determining whether parties
agreed to arbitrate a dispute. See King v. Cintas Corp., 920 F. Supp. 2d 1263, 1267 (N.D. Ala. 2013).
Furthermore, the elements for the formation of a valid contract under Alabama law are similar to those under
Texas law. See Cook v. Talladega Coll., 908 F. Supp. 2d 1214, 1223 (N.D. Ala. 2012) (“[T]he requisite
elements of a contract, generally include: an offer and an acceptance, consideration, and mutual assent to
terms essential to the formation of a contract.”) (quoting Strength v. Ala. Dep’t of Fin., 622 So.2d 1283, 1289
(Ala. 1993)) (internal quotation marks omitted).
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