Opinion
No. 01 Civ. 7007 (WHP) (JCF)
July 2, 2002
MEMORANDUM AND ORDER
The plaintiff in this action, Swaranjit S. Rikhy, originally filed a pro se complaint alleging that the defendants discriminated against him in his employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"), and 42 U.S.C. § 1981. He now moves pursuant to Rule 15(a) of the Federal Rules of Civil Procedure to amend his complaint to add claims of fraud and of violation of the New York State Human Rights Law, N.Y. Exec. Law § 296 (the "NYSHRL"), and the New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq. (the "NYCHRL"). For the following reasons, Mr. Rikhy's motion is granted in part and denied in part.
Discussion
A motion to amend is governed by Rule 15(a) of the Federal Rules of Civil Procedure, which states that leave to amend "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a); see also Ronzani v. Sanofi S.A., 899 F.2d 195, 198 (2d Cir. 1990). Notwithstanding the liberality of the general rule, "it is within the sound discretion of the court whether to grant leave to amend," John Hancock Mutual Life Insurance Co. v. Amerford International Corp., 22 F.3d 458, 462 (2d Cir. 1994) (citation omitted), and for the proper reasons, a court may deny permission to amend in whole or in part. See H.L. Hayden Co. v. Siemens Medical Systems, Inc., 112 F.R.D. 417, 419 (S.D.N.Y. 1986). In discussing the use of this discretion, the Supreme Court has stated:
In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should . . . be "freely given."
Foman v. Davis, 371 U.S. 178, 182 (1962).
A. Delay
The defendants first argue that Mr. Rikhy's motion should be denied in its entirety because he was dilatory in making it: the motion was filed a year after the action was commenced and at the very close of discovery. However, delay, absent bad faith or prejudice, is not a sufficient basis for denying leave to amend. See Parker v. Columbia Pictures Industries, 204 F.3d 326, 339 (2d Cir. 2000); Block v. First Blood Associates, 988 F.2d 344, 350 (2d Cir. 1993); Richardson Greenshields Securities, Inc. v. Lau, 825 F.2d 647, 653 n. 6 (2d Cir. 1987); In re Horizon Cruises Litigation, 101 F. Supp.2d 204, 215 (S.D.N.Y. 2000).
The only prejudice the defendants allege is the need for additional discovery and the potential delay in obtaining a resolution of the action. But "the adverse party's burden of undertaking discovery, standing alone, does not suffice to warrant denial of a motion to amend a pleading." United States v. Continental Illinois National Bank Trust Co., 889 F.2d 1248, 1255 (2d Cir. 1989) (citation omitted); see also A.V. by Versace, Inc. v. Gianni Versace S.p.A., 87 F. Supp.2d 281, 299 (S.D.N.Y. 2000). Moreover, no further discovery would be warranted with respect to the NYSHRL and NYCHRL claims, since they parallel the plaintiff's existing Title VII claims.
B. Bad Faith
The defendants also argue that Mr. Rikhy's delay is evidence of his bad faith. The plaintiff counters that he only learned of the facts underpinning his new claims during the course of discovery. This cannot be true with respect to the NYSHRL and NYCHRL claims, since they are supported by the same facts as the Title VII claim. Nevertheless, Mr. Rikhy is an inexperienced pro se litigant, and his failure to recognize all potential causes of action at the outset does not demonstrate bad faith.
The defendants further argue that an amendment that simply offers facts to bolster the original claims should be rejected. However, Mr. Rikhy is asserting additional state and local law claims, and the fact that the new factual allegations also relate to the Title VII claim causes the defendants no prejudice.
C. Futility
An amendment may be denied if it would be futile, and in order to determine whether a proposed amendment is futile, a court applies the same standard as it does in ruling on a motion to dismiss. See Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir. 2001); Nettis v. Levitt, 241 F.3d 186, 193 (2d Cir. 2001); Smith v. CPC International, Inc., 104 F. Supp.2d 272, 274 (S.D.N.Y. 2000), aff'd, No. 01 Civ. 7381, 2002 WL 731774 (2d Cir. April 26, 2002). Here, the defendants contend that Mr. Rikhy's fraud claim is futile because it is not pled with the specificity required by Rule 9(b) of the Federal Rules of Civil Procedure.
Rule 9(b) directs that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." To plead a fraud claim with the necessary particularity, the plaintiff must at minimum: "(1) specify the statements that . . . were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Stevelman v. Alias Research Inc., 174 F.3d 79, 84 (2d Cir. 1999) (citations and quotations omitted); accord Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1127-28 (2d Cir. 1994). Conclusory averments of fraud are insufficient, see Grandon v. Merrill Lynch Co., 147 F.3d 184, 193-94 (2d Cir. 1998), though "a plaintiff need not plead dates, times and places with absolute precision, so long as the complaint gives fair and reasonable notice to defendants of the claim and the grounds upon which it is based." International Motor Sports Group, Inc. v. Gordon, No. 98 Civ. 5611, 1999 WL 619633, at *3 (S.D.N.Y. Aug. 16, 1999) (internal quotations and citation omitted). In establishing scienter, the complaint must provide facts "giving rise to a `strong inference' of fraudulent intent . . . either (a) by [advancing] . . . strong circumstantial evidence of conscious misbehavior or recklessness, or (b) by . . . show[ing] that defendants had both motive and opportunity to commit fraud." Stevelman, 174 F.3d at 84 (citation omitted).
Mr. Rikhy's fraud claim fails this test. He alleges only that "the defendant has committed an actionable fraud on plaintiff by inducing people to write against the plaintiff and making fraudulent documents, in reliance on the defendant's misrepresentations of facts (including its intentions)." (Amended Complaint, ¶ 36). This allegation does not identify which of the four defendants committed the purported fraud, who was induced to "write against the plaintiff" and why that would have been fraudulent, what specific fraudulent documents were created, or what misrepresentations of fact were made. Because the plaintiff's claim of fraud is wholly conclusory, amendment of the complaint to assert this cause of action is denied. See ESI, Inc. v. Coastal Corp., 61 F. Supp.2d 35, 80 (S.D.N.Y. 1999) (amendment to include fraud claim that did not meet Rule 9(b) requirements denied); Loewy v. Stuart Drug Surgical Supply, Inc., No. 91 Civ. 7148, 1999 WL 76939, at *5 (S.D.N.Y. Feb. 11, 1999) (same).
Conclusion
For the reasons set forth above, the plaintiff's motion to amend his complaint is granted insofar as he seeks to claim violations of the New York State Human Rights Law and the New York City Human Rights Law and denied to the extent he seeks to add a fraud claim. The plaintiff shall therefore serve and file promptly an amended complaint identical to the proposed amended complaint that accompanied his motion, except that it shall omit the fraud claim.