Phyllis Schafly Revocable Trust et al v. Cori et al

Filing 137

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiffs' motion for leave to file a second amended complaint and to add SpearTip as a party is GRANTED. (Doc. No. 135 ). IT IS FURTHER ORDERED that Defendants' motions to dismiss are DE NIED as moot. (Doc. Nos. 124 , 127 ). IT IS FURTHER ORDERED that, given the addition of SpearTip, the case management order is VACATED to be reset upon later instruction by the Court. (Doc. No. 123 ). Signed by District Judge John A. Ross on 8/12/2020. (CLO)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
PHYLLIS SCHLAFLY REVOCABLE
TRUST, et al.,
Plaintiffs,
v.
ANNE CORI, et al.,
Defendants.

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Case No. 4:16-cv-01631-JAR

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs’ motion for leave to file a second amended
complaint. (Doc. No. 135). Defendants Cathie Adams, Anne Cori, Shirley Curry, Rosina Kovar,
Carolyn McLarty, and Eunie Smith (hereinafter, the “Individual Defendants”) filed their
opposition to the motion on July 24, 2020. (Doc. No. 136). For the following reasons, the Court
will grant Plaintiff’s motion.
I.

Background
On October 19, 2016, Plaintiffs Phyllis Schlafly Revocable Trust, Eagle Trust Fund, and

Eagle Forum Education and Legal Defense Fund initiated this action against the Individual
Defendants, Jane or John Does 1-5, and Eagle Forum. Plaintiffs’ amended complaint, filed April
17, 2017, asserts twelve counts against Defendants, alleging, among other things, the infringement
and misappropriation of intellectual property that previously belonged to the late Phyllis Schlafly.
On November 15, 2017, the Court determined that a temporary stay was appropriate in this
case due to the existence of related lawsuits in various jurisdictions that had issues that overlapped
with issues before this Court. The Court directed the parties to keep it apprised of the status of
those cases so it could continue to monitor the appropriateness of the continued stay. In Plaintiffs’
status report filed April 6, 2020, they moved to have the stay lifted, arguing that progression (and
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non-progression) in other related ligation supported moving forward with the instant case.
Plaintiffs further argued that they had recently discovered evidence that Defendants—through the
use of a cyber-intelligence company known as SpearTip—had stolen an important trade secret
(hereinafter, the “Schlafly Database”) in 2016 and that immediate resumption of this case was
necessary so that Plaintiffs could prevent Defendants from continued misappropriation. After
considering the arguments of the parties, the Court ultimately lifted the stay on May 12, 2020,
finding that the just course was to allow this case to progress on the merits. The Court subsequently
directed the parties to confer and propose a scheduling plan.
The parties filed their joint scheduling plan on May 19, 2020, wherein the parties agreed
to an expedited schedule. The Court adopted the parties’ scheduling plan and entered a case
management order for this case on May 21, 2020. The scheduling order set the deadline for filing
an amended complaint and joining additional parties for July 10, 2020.
On June 8, 2020, the Individual Defendants and Defendant Eagle Forum filed motions to
dismiss Plaintiffs’ amended complaint. (Doc. Nos. 124, 127). These motions became fully briefed
and ready for disposition on July 2, 2020. Shortly after, on July 10, 2020, Plaintiffs submitted the
instant motion to file a second amended complaint in order to add specific allegations detailing the
Defendants’ theft of the Schlafly Database as facilitated by SpearTip and to add claims for trade
secret misappropriation under the Federal Defend Trade Secrets Act and Missouri Uniform Trade
Secrets Act against SpearTip.
II.

Discussion

Motions to amend pleadings are governed by Rule 15(a) of the Federal Rules of Civil
Procedure. See Lexington Ins. Co. v. S & N Display Fireworks, Inc., 2011 WL 5330744, at *2
(E.D. Mo. Nov. 7, 2011). Under Rule 15(a), leave to amend should be “freely given when justice

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so requires.” Fed. R. Civ. P. 15(a)(2). Under this liberal standard, denial of leave to amend
pleadings is appropriate only if “there are compelling reasons such as undue delay, bad faith or
dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the nonmoving party, or futility of the amendment.” Sherman v. Winco Fireworks,
Inc., 532 F.3d 709, 715 (8th Cir. 2008). “The party opposing the amendment has the burden of
demonstrating the amendment would be unfairly prejudicial.” Nadist, LLC v. Doe Run Res. Corp.,
No. 4:06CV969 CDP, 2009 WL 3680533, at *1 (E.D. Mo. Oct. 30, 2009) (citing Roberson v. Hayti
Police Dept., 241 F.3d 992, 995 (8th Cir. 2001)). “Whether to grant a motion for leave to amend
is within the discretion of the Court.” Id. (citing Popoalii v. Correctional Med. Servs., 512 F.3d
488, 497 (8th Cir. 2008)).
Here, Plaintiffs argue that they should be granted leave to file their second amended
complaint because, in addition to providing more factual detail, the inclusion of the claims against
SpearTip will allow for an efficient and complete resolution of this dispute. Plaintiffs further argue
that the case has not progressed far enough for an amended pleading to unfairly prejudice
Defendants, especially given that the new claims are against a different party.
In response, Defendants argue that, given the expedited schedule that the parties agreed to,
allowing for Plaintiffs to amend their complaint would be prejudicial because there would not be
enough time to re-brief the currently outstanding motions to dismiss. Defendants assert that
forcing the parties to re-brief the motions to dismiss would also be inefficient and allege that
Plaintiffs are attempting to inject delay into the proceedings to necessitate the changing of the
scheduling order. Defendants further express doubt as to the legitimacy of adding SpearTip—an
ESI vendor hired by Defendants in connection with the Madison County Lawsuit—as a party to
the lawsuit.

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The Court has considered the arguments of the parties, but ultimately finds that Plaintiffs’
motion should be granted. The Court is cognizant of the fact that Plaintiffs’ timely, albeit lastmoment, motion to amend creates inefficiencies given the two outstanding and fully briefed
motions to dismiss. The Court also recognizes the fact that the timing of this motion appears to be
in direct contradiction to Plaintiffs’ previously expressed desire to move expeditiously forward
with this case, especially given that Plaintiffs were knowledgeable of SpearTip and its actions
dating back to at least April 6, 2020. However, the parties conferred about, agreed to, and
requested that July 10, 2020, be the deadline for the parties to add claims and join parties. The
Court entered a scheduling order based on the parties’ agreement and Plaintiffs have met that
deadline. As such, Plaintiffs had the Court’s leave to file their second amended complaint and no
argument that Defendants have raised convinces the Court that Plaintiffs’ motion should not be
granted.
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ motion for leave to file a second amended
complaint and to add SpearTip as a party is GRANTED. (Doc. No. 135).
IT IS FURTHER ORDERED that Defendants’ motions to dismiss are DENIED as moot.
(Doc. Nos. 124, 127).
IT IS FURTHER ORDERED that, given the addition of SpearTip, the case management
order is VACATED to be reset upon later instruction by the Court. (Doc. No. 123).

JOHN A. ROSS
UNITED STATES DISTRICT JUDGE
Dated this 12th day of August, 2020.
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