Powell v. XO Services, Inc. et al

Filing 75

WRITTEN Opinion entered by the Honorable Elaine E. Bucklo on 2/7/2012: Plaintiff's motion for leave to amend his complaint 62 is granted. Any motion for summary judgment to be filed by April 30. 2012; Response by May 24, 2012, reply by 6/8/2012, and Ruling set for 7/9/12 at 9:30 a.m. (For further details see written opinion.) Mailed notice (ma,)

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Elaine E. Bucklo

CASE NUMBER

10 C 6813

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

2/7/2012

Powell vs. XO Services, Inc. Et al

DOCKET ENTRY TEXT

Plaintiff’s motion for leave to amend his complaint [62] is granted. Any motion for summary judgment to be
filed by April 30. 2012; Response by May 24, 2012, reply by 6/8/2012, and Ruling set for 7/9/12 at 9:30
a.m.

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
Plaintiff’s motion for leave to amend his complaint is granted. Defendants’ arguments that plaintiff has
brought the motion in bad faith, for dilatory purposes, or after an undue delay are unpersuasive, as is their
argument that they would be unduly prejudiced by allowing the amendment. Plaintiff’s amended complaint
simply is not the “watershed” event defendants make it out to be. I understand the amended complaint to
assert defamation and tortious interference with prospective economic advantage based on Gentles’s verbal
publication, on January 6 and 7, 2010, of certain statements handwritten in the margins of the Nash-Edwards
report. As defendants acknowledge, these statements have been the focus of this litigation all along: In their
own words, “[d]efendants have been defending this case on the allegations of the purported circulation of the
Handwritten Notes.” Def.’s Opp., 10.
Defendants also argue that the amendment would be futile because the amended claims could not
survive summary judgment, citing Sound of Music Co. v. Minnesota Min. & Mfg. Co., 477 F.3d 910 (7th Cir.
2007). Indeed, the bulk of their futility argument is premised on evidence produced during discovery. I
agree that this evidence supports defendants’ argument that no statement actionable as defamation was ever
published, and I do, indeed, have some doubt as to whether plaintiff will ultimately be able to identify
evidence sufficient to enable a reasonable fact-finder to find in his favor. But, as the Court held in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007), “a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and
unlikely.” (Quotation marks and citation omitted). Because, unlike in Sound of Music, no motion for
summary judgment has been filed or briefed in this case, plaintiff has not had the opportunity to present
whatever evidence he may have to show the existence of a genuine dispute of material fact.

10C6813 Powell vs. XO Services, Inc. Et al

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STATEMENT
As Judge Cole explained in Duthie v. Matria Healthcare, Inc., 254 F.R.D. 90, 94-95 (N.D. Ill. 2008) (Cole,
MJ), “[o]f course an amendment is futile if it would not survive a motion for summary judgment,” (citing
King ex rel. King v. East St. Louis School Dist. 189, 496 F.3d 812, 819 (7th Cir. 2007)), but that does not
mean that “futility is measured by the standards by which a motion for summary judgment under Rule 56 is
measured.” Duthie, 254 F.R.D. at 94. In allowing a motion to amend the complaint in Duthie, Judge Cole
distinguished not only King, but three other Seventh Circuit cases (including Sound of Music) in which the
court had found futility based on the “capacity to survive summary judgment” standard, noting that in each
case, summary judgment had been either granted or briefed. Id. at 95 (citing cases). In short, the futility
arguments that rely on the record are, in essence, arguments for summary judgment.
Defendants also argue that the amended complaint asserts statements that are not actionable as
defamation, either because the statements are not defamatory per se or because they are not identified with
sufficient specificity. In my previous opinion, I held that certain of Gentles’s handwritten statements are
actionable. Powell v. XO Services, Inc., 781 F. Supp. 2d 706, 714 (N.D. Ill. 2011). Plaintiff is not required
to allege an actionable utterance in every paragraph of his amended complaint, and I understand many of the
paragraphs defendants challenge as providing additional context to support those that do. Moreover,
plaintiff’s amended allegations generally identify the putative defamatory statements with much more
specificity than the allegations rejected in defendants’ cited authorities. See Manjarres v. Nalco Co., No. 09
C 4689, 2010 WL 918072, at *6 (N.D. Ill. Mar. 9, 2010) (specific statements held to be non-actionable could
not be “saved” by general allegation that “additional defamatory statements were made ‘at various times in at
least 2007 and 2008'”); Wilton Partners III LLC v. Gallagher, No. 03 C. 1519, 2003 WL 22880834 (N.D. Ill.
Dec. 5, 2003) (directing the defendant to amend, in order to provide additional factual context, allegation that
counter-defendant “knowingly and intentionally made false statements about [defendants] to third parties”).
And while I do not disagree that allegations pled “on information and belief” after the close of discovery may
generally be viewed with some skepticism, in this case I understand the formulation to reflect plaintiff’s
theory that circumstantial evidence, rather than direct evidence, supports his claim that certain specific
defamatory statements were published. Without giving the plaintiff an opportunity to present his evidence, it
is too soon to conclude that he could not prevail on such a theory.
Accordingly, the most expedient manner to proceed at this juncture, consistent with the liberal
standards of Rule 15(a), is to grant plaintiff’s motion to amend and to proceed directly to summary judgment
thereafter.1
1. By agreement, the parties held off taking plaintiff’s deposition pending resolution of the pending motion. That deposition may proceed.

10C6813 Powell vs. XO Services, Inc. Et al

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