Opinion
No. 00-2043-CM.
March 11, 2002
MEMORANDUM AND ORDER
Pending before the Court is Plaintiff's Motion for Leave to File Second Amended Complaint (doc. 258). In support of its Motion, Plaintiff states that during the discovery process, factual information supporting claims of negligent and innocent misrepresentation against Defendants were discovered; accordingly, Plaintiff seeks to amend the Complaint to plead such claims. Defendants oppose the Motion on grounds that the Motion is untimely. More specifically, Defendants claim Plaintiff lacks good cause to amend its Complaint, and Defendants would be severely prejudiced if the Court permits the requested amendment. In addition, Defendants contend the Court should deny Plaintiff's Motion because the amendments proposed are futile as a matter of law.
The Court will deny the Motion on the basis that it is untimely. The Scheduling Order deadline for filing motions to amend was September 5, 2000. Plaintiff did not file its Motion to Amend until October 23, 2001, almost fourteen months after the deadline.
Relevant Factual Background
Plaintiff Western Resources ("Plaintiff") generates, distributes and sells retail electric power in Kansas and is co-owner and designated operator of the Jeffrey Energy Center ("JEC"), a coal-fired electric generating facility located in Pottawatomie County, Kansas. Defendants Union Pacific Railroad Company ("UP") and Burlington Northern and Santa Fe Railway Company ("BNSF") (collectively "Defendants" or "Railroads") are interstate railroads that, among other things, provide transportation of coal by rail.
Plaintiff asserts it entered into two Rail Transportation Agreements effective in January 1993, both of which govern transportation services for the movement of coal by one or both Defendants from the Powder River Basin in Wyoming ("PRB") to Plaintiff at its JEC facility in Kansas. Plaintiff alleges in its First Amended Complaint that Defendants breached both the express terms of the contracts and the implied duty of good faith and fair dealing in performing these contracts.
Relevant to the Motion currently pending, the original Complaint in this lawsuit was filed on January 24, 2000. On June 6, 2000, after receiving the report of Parties' Planning Meeting, the Court entered a Scheduling Order that incorporated the parties' joint proposal to set September 5, 2000 as the deadline for any motion to amend the pleadings. See June 6, 2000 Scheduling Order at ¶ 3; May 23, 2000 Report of Parties' Planning Meeting at p. 3. With leave of Court, Plaintiff subsequently filed a First Amended Complaint on September 1, 2000, which added a claim against Defendants for restitution.
On October 23, 3002, Plaintiff filed a motion for leave to further amend its Complaint, this time to add two new claims — one for innocent misrepresentation and the other for negligent misrepresentation — based on facts allegedly occurring during the 1992-1994 negotiations that led to the contract currently at issue in this lawsuit. In support of its Motion, Plaintiff asserts
During these negotiations the Railroads made representations to [Plaintiff] that the Railroads, individually and collectively, could transport JEC's full coal requirements from certain mines in Wyoming and could provide such services timely and efficiently and in a manner that afforded maximum equipment utilization. In addition, the Railroads represented to [Plaintiff] that each Railroad had sufficient plan capacity, equipment, personnel and facilities to transport JEC's coal requirements in an efficient and timely basis.
Paragraph 31, Plaintiff's Proposed Second Amended Complaint, Ex. A to Plaintiff's Motion for Leave to File Second Amended Complaint (doc. 258). Plaintiff asserts the Railroads' representations regarding its ability to transport Plaintiff's coal requirements were inaccurate and that, under applicable law, such alleged misrepresentations permit Plaintiff to retroactively rescind the contract.
Discussion
Rule 15 of the Federal Rules of Civil Procedure allows one amendment of the pleadings, before a responsive pleading is served or within twenty days after service. Subsequent amendments are allowed by leave of court or by written consent of an adverse party. Fed.R.Civ.P. 15(a). Subsequent amendments should be "freely given when justice so requires." Woolsey v. Marion Labs., Inc., 934 F.2d 1452, 1462 (10th Cir. 1991). "The decision to grant leave to amend a complaint, after the permissive period, is within the trial court's discretion, Fed.R.Civ.P. 15(a), and will not be disturbed absent an abuse of that discretion." Id. The district court should deny leave to amend only when it finds "undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment." Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).
Notably, "[u]ntimeliness in itself can be a sufficient reason to deny leave to amend, particularly when the movant provides no adequate explanation for the delay." Panis v. Mission Hills Bank, 60 F.3d 1486, 1495 (10th Cir. 1995). In addition, if the motion is filed after the Scheduling Order deadline, as here, the moving party must show good cause for allowing the amendment out of time. SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1518 (10th Cir. 1990). To establish good cause, the moving party must show that the deadline "could not have been met with diligence." Denmon v. Runyon, 151 F.R.D. 404, 407 (D.Kan. 1993).
In support of good cause, Plaintiff argues that, until it recently obtained confidential information from the Railroads, it did not know, and reasonably could not have known, that a factual basis existed for the two proposed claims. More specifically, Plaintiff argues any delay in pursuing the misrepresentation claims is attributable to Defendants' unreasonable delay in the production of certain documents between May 1, 2001 and December 5, 2001. Plaintiff contends it was only after obtaining these certain documents that it became aware Defendant Union Pacific already had "developed an internal awareness of the stresses on its system that was inconsistent with the representations that [Defendant Union Pacific] had made to [Plaintiff] during the course of their negotiations." Plaintiff's Reply at p. 5 (doc. 298).
The Court is not persuaded by Plaintiff's argument. As a preliminary matter, Plaintiff fails to explain why it waited until October 23, 2001 before moving to add the new claims when it received on May 1, 2001 — over five months earlier — two of the referenced documents Plaintiff contends contained the confidential information that forms the factual basis for the new claims. Given the May 5, 2001 date upon which these two referenced documents were produced to Plaintiff, the Court finds the five-month delay in presenting Plaintiff's new claims to be unreasonable.
As correctly noted by Defendants in their briefing, five of the documents identified by Plaintiffs as instrumental in making Plaintiff aware there was a factual basis for the new claims were produced to Plaintiff after it filed its Motion to Amend.
The Court's finding of unreasonable delay by Plaintiff in pursuing the requested amendment is also supported by the fact that one of Plaintiff's retained experts provided the following report on May 24, 2001:
[I]nternal UP documents as early as 1991 reflect an awareness of "severe capacity constraints" on the coal corridor (UP 48435-48444). These concerns continued throughout 1993 and 1994. . . . These capacity constraints and related congestion problems in the [Powder River Basin] were in addition to and independent of the effects of the floods of 1993 that affected much of the Midwest.
May 24, 2001 Report of Plaintiff's retained expert William C. Lyman, at pp. 12-13. Thus, on May 24, 2001, one of Plaintiff's retained experts explicitly refers to documents produced by Defendant Union Pacific stating that Defendant Union Pacific was aware of stresses on its system that were not communicated to Plaintiff in the negotiation process.
Based on this discussion, the Court finds Plaintiff has failed to show the amendment "deadline could not have been met with due diligence"; thus, Plaintiff has failed to show good cause for not meeting the amendment deadline. See Denmon v. Runyon, 151 F.R.D. at 407. Plaintiff's Motion for Leave to Amend the Complaint is denied.
IT IS SO ORDERED.