A Blog About Intellectual Property Litigation and the District of Delaware


Snail
Wolfgang Hasselmann, Unsplash

The FRCP 15 standard for a motion to amend is very forgiving. It states that the Court should grant leave to amend "freely . . . when justice so requires." The Third Circuit likewise has a "policy favoring liberal amendment of pleadings." Dole v. Arco Chem. Co., 921 F.2d 484, 487 (3d Cir. 1990)

Regardless, a party can still lose a motion to amend if it waits long enough. That's what happened last week, when Judge Burke denied a motion to amend to add an unclean hands defense, a breach-of-contract claims, and a trade secret counterclaim.

The defendant waited to add its defenses until more than six months after the deadline to amend, and more than two months after the close of fact discovery. Judge Burke quickly denied the motion, and it wasn't pretty for the defendant:

ORAL ORDER: The . . . Motion is DENIED. For reasons set out by Plaintiffs, (D.I. 254 at 2), the Court thinks it is very possible that Defendant, had it exercised diligence, could have moved to amend its counterclaims prior to the October 1, 2020 deadline for amendment set out in the Scheduling Order, (D.I. 118 at 1). Were that so, there would surely not be "good cause" to permit a post−Scheduling Order−deadline amendment here. But separate and apart from the question of whether the "good cause" standard could be satisfied, the Court concludes that pursuant to Federal Rule of Civil Procedure 15, Defendant's Motion should be denied because Defendant otherwise unduly delayed in waiting to file the Motion until April 10, 2021. . . . The Court comes to this conclusion for the following reasons: (1) The Motion was filed nearly six and a half months after the deadline for amendments, and just over four months in advance of the filing date for summary judgment motions.; (2) Even if one accepts at face value Defendant's argument that it had no reason to suspect that Mr. Horie may have improperly accessed confidential information from the Illinois Action until October 27, 2020 (when Plaintiffs sought to have Mr. Horie review Defendant's source code in this case), Defendant unduly drug its feet from there in getting the Motion filed. After all, it waited another eight weeks, until December 22, 2020, to request Mr. Horie's deposition. . . . And from there, Defendant[,] knowing that the initial February 2021 discovery cut off came and went, and that the case dispositive filing deadline was only months away, waited another 15 weeks, until April 10, 2021, to get its Motion on file. It simply waited too long. . . . and (3) Were the claims permitted, the case schedule would be adversely affected. The proposed new claims involve alleged trade secrets, and trade secret discovery can be complicated. Those claims also implicate some complex issues involving attorney−client privilege. Both sides will need discovery, and Defendant never cogently explains how that could occur within the constraints of the current schedule.

Sysmex Corporation et al v. Beckman Coulter, Inc., C.A. No. 19-1642-RGA-CJB, D.I. 296 (D. Del. June 1, 2021).

How Would These Claims Have Fit Into the Schedule Anyway?

Looking at the briefing, I have to wonder what the movant's plan was. They moved to add fact-heavy claims like unclean hands and trade secret misappropriation, but they their opening brief did not say whether they wanted more discovery, or how it would fit into the schedule.

Even in their reply brief, they cited some cases for the idea that the need for additional discovery by itself is not sufficient to deny a motion to amend, but they made no attempt to explain what they actually wanted the Court to do. Did they want to delay trial? Set a separate discovery period and new dispositive motion deadline for the new claims? Try to prove their new claims based on existing discovery?

While it likely would not have been enough to carry the day, I think they would have benefited from explaining to the Court exactly what they were really asking for—and maybe offering concessions such as an abbreviated scope of discovery period to limit the disruption.

If you enjoyed this post, consider subscribing to receive free daily or weekly e-mails about any new posts.

All

Similar Posts