A Blog About Intellectual Property Litigation and the District of Delaware


FRCP 15 governs amendment to pleadings, so it would stand to reason that it would be the operative rule when seeking to amend a complaint. However, when seeking to amend after the deadline in the scheduling order, the movant must satisfy not only the relatively liberal requirements of Rule 15 but also the more exacting "good cause" standard of Rule 16. Unlike Rule 15, which permits amendment in the absence of undue delay, bad faith, or dilatory motive, Rule 16 requires diligence by the party seeking amendment.

Analog Clock
None, Ocean Ng, Unsplash

A recent ruling by Judge Fallon demonstrates the danger of ignoring Rule 16's requirements when seeking amendment after the deadline. The plaintiff in NRT Tech. Corp. v. Everi Holdings Inc., C.A. No. 19-804-MN-SRF sought to amend its complaint, asserting Walker Process and sham litigation antitrust claims, almost a full year after the expiration of the amendment deadline.

Judge Fallon noted that although plaintiffs "bear the burden of showing that they exercised diligence in seeking the proposed amendment under Rule 16(b)(4)," their motion "does not address the applicable good cause standard for motions to amend filed after the deadline."

Plaintiffs apparently argued that defense counsel should have alerted them of the applicability of Rule 16, but Judge Fallon rejected that argument:

In their reply brief, Plaintiffs suggest that it was Defendants' responsibility to inform Plaintiffs of the proper legal standard during the meet and confer process prior to filing the motion. . . . It is not the job of counsel to provide legal advice to an opposing party. Rather, it is expected that practicing attorneys should be familiar with the Federal Rules of Civil Procedure.

Setting aside plaintiffs' failure to address the proper standard, Judge Fallon found that the record did not demonstrate diligence as required by Rule 16.

Plaintiffs argued that the amendment was based on "recent discovery," but also asserted that the same details were disclosed in interrogatory responses months before the motion to amend was filed. Moreover, the documents and information identified in the interrogatory responses were available to plaintiffs even earlier, and many were produced by plaintiffs or publicly available.

Plaintiffs also argued that they could not have amended before defendants began producing documents in March 2021, but as Judge Fallon pointed out, "Plaintiffs offer no explanation for the delay between Defendants' production of documents in March 2021 and Plaintiffs' submission of the motion to amend on September 15, 2021."

This argument misconstrues the Rule 16(b)(4) standard by suggesting that an inability to timely amend a pleading within the scheduling order deadline excuses a party from exercising diligence in seeking leave to amend outside of the deadline. . . . Defendants' delay in producing documents does not give Plaintiffs license to delay seeking leave to amend for an additional six months. . . . In this district, delays of this length are routinely found to be dilatory.

Judge Fallon denied plaintiffs' motion to amend.

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

All

Similar Posts