Summary
granting Plaintiff's motion for leave to file a third amended complaint
Summary of this case from Samad Brothers, Inc. v. Bokara Rug Co., Inc.Opinion
09 Civ. 5843 (JFK) (KNF).
June 30, 2010
MEMORANDUM and ORDER
I. INTRODUCTION
Before the Court, in this copyright infringement action, is a Fed.R.Civ.P. 15(a) motion by the plaintiff, Samad Brothers, Inc. ("Samad"), for an order permitting it to serve and file a third amended complaint, through which it will assert the defendants copied, sold and distributed, without authorization, 16 rug designs, in addition to the ten rug designs identified in Samad's second amended complaint and, thereby, infringed the plaintiff's original rug designs, which are registered with the United States Copyright Office. The defendants oppose the motion, which is addressed below.
II. BACKGROUND
Samad's complaint was filed with the court on June 25, 2009. On August 13, 2009, before a responsive pleading was served by a defendant, Samad filed an amended complaint. Thereafter, the parties stipulated that the plaintiff could serve and file a second amended complaint no later than September 11, 2009, and, further, that the defendants would respond to that pleading on or before October 1, 2009.
The assigned district judge held a conference with the parties on October 6, 2009. As a result of that conference, a scheduling order was issued, see Fed.R.Civ.P. 16(b), which, among other things, fixed December 31, 2009, as the deadline for amending pleadings, and March 26, 2010, as the date by which the parties had to complete their pretrial discovery activities.
At some point, which the plaintiff has not identified, it became aware that the Web site of defendant Bokara Rug Company, Inc. ("Bokara") was displaying a rug design the plaintiff contends infringes one of its copyrighted rug designs. Samad determined, at that time, not to seek to amend its complaint to include this additional rug design with the ten designs already identified, in its second amended complaint, as infringing rug designs. Instead, Samad decided to await Bokara's response to the November 20 and December 14, 2009 requests for documents Samad had served on Bokara. Samad elected to proceed this way, although it was aware that Bokara was not required to provide documents responsive to Samad's December 14, 2009 request for documents, until January 13, 2010, well after the date to amend pleadings, December 31, 2009, set forth in the scheduling order.
According to Samad, on January 22, 2010, while it was gathering information and documents to disclose to the defendants, it received invoices and packing lists from an Indian rug manufacturer, that is not a party to this action, showing the defendants had infringed at least 11 more of its copyrighted rug designs. Later, while reviewing packing lists produced, in early February 2010, by the defendants, in response to Samad's document requests, Samad observed data confirming, for it, that the defendants had infringed at least four more of the plaintiff's rug designs, bringing to 16 the number of Samad's copyrighted rug designs, in addition to the ten identified in the second amended complaint, the plaintiff alleges the defendants have infringed. On February 9, 2010, approximately six weeks after the deadline for amending pleadings set forth in the scheduling order, the instant motion, to amend Samad's complaint, for a third time, was made.
For their part, the defendants contend the motion must be denied because: (1) it is untimely, having been made after the deadline for amending pleadings fixed by the assigned district judge in the Fed.R.Civ.P. 16 scheduling order; (2) Samad has not demonstrated good cause exists, as required by Fed.R.Civ.P. 16(b)(4), to modify the deadline for amending pleadings set forth in the scheduling order; (3) Samad's reliance, upon Fed.R.Civ.P. 15, for the relief it seeks through the instant motion, is misplaced; and (4) the proposed third-amended complaint contains factual allegations about new persons and entities, thus changing the plaintiff's "theory of the case" and expanding, potentially, the need for, and the cost of, discovery, which prejudices the defendants.
III. DISCUSSION
Generally, a motion to amend a pleading is governed by Fed.R.Civ.P. 15. In its most pertinent part, the Rule makes clear that leave to amend should be freely given, by a court, when justice so requires. See Fed.R.Civ.P. 15(a). However, notwithstanding this lenient amendment standard, the decision to permit an amendment to be made "rests in the [sound] discretion of the district court. Lincoln v. Potter, 418 F. Supp. 2d 443, 454 (S.D.N.Y. 2006) (citation omitted). In exercising that discretion, a court may determine to deny a motion to amend due to: bad faith, undue delay or prejudice to the opposing party, dilatory motive or futility of amendment. See Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230 (1962).
In the circumstance where a party moves to amend a pleading after the deadline established by a court, for making such a motion, has elapsed, Fed.R.Civ.P. 16(b) governs, see Lowry v. Eastman Kodak Co., 14 Fed. Appx. 27, 30 (2d Cir. 2001), and the party must show "good cause" before leave to amend may be granted. Fed.R.Civ.P. 16(b)(4); seealso Parker v. Columbia Pictures Industries, 204 F.3d 326, 340 (2d Cir. 2000) (citations and quotation marks omitted) ("Disregard of the [scheduling] order would undermine the court's ability to control its docket, disrupt the agreed-upon course of the litigation, and reward the indolent and the cavalier.") (brackets in original). Inasmuch as the plaintiff made the instant motion six weeks after the deadline for amending pleadings set forth in the scheduling order had elapsed, Fed.R.Civ.P. 16 governs this motion, not Rule 15, and the plaintiff must establish "good cause" before it may obtain the relief it seeks through the motion.
In Parker, the Second Circuit Court of Appeals explained that "a finding of `good cause' depends on the diligence of the moving party."Parker, 204 F.3d at 340. Subsequently, the court explained further that, in a circumstance such as this, where a scheduling order governs amendments to pleadings, "the lenient standard under Rule 15(a) . . . must be balanced against the [good cause] requirement under Rule 16(b)."Holmes v. Grubman, 568 F.3d 329, 334-35 (2d Cir. 2009). Therefore, in deciding whether "good cause" exists, a court may consider, inter alia, the moving party's diligence and whether permitting the amendment will prejudice the defendant. See Kassner v. 2nd Avenue Delicatessen Inc., 496 F.3d 229, 244 (2d Cir. 2007). However, a court must remain mindful that diligence is the primary consideration. See id. at 244.
In late January 2010, while Samad was gathering information and assembling documents to disclose to the defendants, it received invoices and packing lists, from a non-party Indian rug manufacturer. These documents demonstrated to Samad that it had understated, by at least 11, the number of its copyrighted rug designs it now contends have been infringed by the defendants. In early February 2010, when the defendants responded to the plaintiff's November and December 2009 document demands, Samad uncovered, by reviewing the defendants' disclosures, four additional Bokara rug designs it maintains are infringing. On February 9, 2010, Samad filed the instant motion.
Based on these facts, the Court finds that Samad acted diligently in moving to amend its complaint anew, after receiving, during the discovery phase of the litigation, additional relevant information from the defendants and a foreign rug manufacturer, it did not possess previously, that provided Samad grounds for seeking to amend its complaint, to include 15 additional Bokara rug designs Samad asserts infringe its copyrights. See Friedl v. City of New York, 210 F.3d 79, 88 (2d Cir. 2000) (finding court erred in denying leave to amend, where,inter alia, no showing of undue delay in seeking to amend after additional relevant facts were revealed through discovery). The Court finds further that the defendants' assertion, that permitting the amendment will prejudice them, because additional costly discovery may have to be undertaken, is unavailing. An "adverse party's burden of undertaking discovery, standing alone, does not suffice to warrant denial of a motion to amend a pleading." U.S. for and on Behalf of Maritime Admin, v. Continental Illinois Nat'l Bank, 889 F.2d 1248, 1255 (2d Cir. 1989). Furthermore, although the defendants contend that permitting the amendment will prejudice them, because it will allow the plaintiff to change the theory of the case, the Court disagrees. From its inception, the subject matter of this action has been the plaintiff's allegation that rug designs, for which it has copyrights, have been exploited commercially by the defendants, without the plaintiff's authorization. While the number of allegedly infringing rugs, about which Samad is complaining, has been in flux, the nature of its allegation: copyright infringement through the unauthorized sale, distribution and copying of rug designs, and the theory on which it seeks to recover damages, remain unchanged.
In the circumstance of the case at bar, where neither undue delay on the plaintiff's part, in seeking to amend its pleading for a third time, after learning of additional relevant facts during the discovery phase of the litigation, nor prejudice to the defendants, has been shown, granting the plaintiff's motion to amend its complaint is reasonable and appropriate.
The Court is mindful that Samad wishes to add a 16th rug design to the complaint, which it discovered by surveying Bokara's Web site; but, owing to Samad's failure to state when it became aware that Bokara featured this allegedly infringing rug design on its Web site, or why, by exercising due diligence, it could not have found this rug on the Web site before filing the original complaint, the Court is unable to conclude that Samad acted diligently, with respect to this lone rug design, and satisfied the "good cause" standard of Fed.R.Civ.P. 16(d). Therefore, no basis exists for granting Samad's motion, as it relates to this additional rug design.