Affiliated Foods Midwest Cooperative, Inc. v. SuperValu Inc.

Filing 229

ORDER that AFM/AWG's Motion for Leave to File Supplemental Counterclaim and Supplemental Third-Party Complaint (Filing No. 171 ) is denied. Member Cases: 8:16-cv-00466-JFB-MDN, 8:16-cv-00465-JFB-MDN Ordered by Magistrate Judge Michael D. Nelson. (LAC)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
AFFILIATED FOODS MIDWEST
COOPERATIVE, INC., a Nebraska
corporation; and ASSOCIATED
WHOLESALE GROCERS, INC.,
Plaintiffs,

8:16CV465
MEMBER CASE

vs.
ORDER
SUPERVALU INC., a Delaware corporation;
Defendant.
BOROWIAK IGA FOODLINER, INC.,
Plaintiff,
vs.
AFFILIATED FOODS MIDWEST
COOPERATIVE, INC., and ASSOCIATED
WHOLESALE GROCERS, INC.,

8:16CV466
LEAD CASE
ORDER

Defendants,
Counterclaimants, and
Third-Party Defendants,
vs.
TREVOR BOROWIAK,
Third-Party Defendant.
This matter is before the Court on the Motion for Leave to File Supplemental
Counterclaim and Supplemental Third-Party Complaint (Filing No. 171) filed in the Lead Case
by Defendants, Affiliated Foods Midwest Cooperative, Inc. and Associated Wholesale Grocers,
Inc. (“AFM/AWG”). AFM/AWG requests leave to file a supplemental counterclaim and thirdparty complaint against Borowiak IGA Foodliner, Inc. (“Borowiak IGA”) and Trevor Borowiak
adding a claim for violations of the Illinois Eavesdropping Act. (Filing Nos. 171-1, 172). The
Court will deny the motion.

BACKGROUND
The Borowiak plaintiffs initially filed the instant action against AFM on October 12,
2016, alleging that AFM failed to fulfill certain obligations under a Supply Agreement dated
December 29, 2015. (Filing No. 1). The Court later joined AWG as a defendant. (Filing No.
22). On November 3, 2016, AFM/AWG filed a counterclaim against Borowiak IGA and a third
party complaint against Trevor Borowiak. (Filing No. 11). On May 16, 2017, AFM/AWG filed
an amended Counterclaim against Borowiak IGA for breach of the parties’ Supply Agreement
and an incorporated Promissory Note and for fraudulent and negligent misrepresentations, and an
amended third-party complaint against Trevor Borowiak for breach of guarantor obligations,
tortious interference with contract, and fraudulent and negligent and misrepresentations. (Filing
No. 44).
AFM/AWG assert that during discovery in this case, the Borowiak parties produced
“three recordings of conversations between [Trevor Borowiak] and representatives from AFM
and/or AWG” taken during meetings in Illinois without the consent of the other conversation
participants. (Filing No. 172 at p. 2). The deposition of Trevor Borowiak indicates that the
recordings were taken “before any lawsuits were commenced,” with the first one occurring
sometime in September 2016, the second one in October 2016, and the third in late January or
early February 2017.1 (Filing No. 173-1 at p. 4; Trevor Borowiak Deposition 8:6-9:17, 18:9-16,
22:16-17). AFM/AWG now move the court pursuant to Rule 15(d) of the Federal Rules of Civil
Procedure for leave to supplement their counterclaim and third-party complaint by adding a
claim against the Borowiak parties for violations of the Illinois Eavesdropping Act, 720 Ill.
Comp. Stat. § 5/14-1 et seq., “for surreptitiously recording conversations without the consent of
all parties to the conversation.” (Filing No. 172 at p. 2; Filing No. 171-1).

ANALYSIS
Federal Rule of Civil Procedure 15(d) governs supplemental pleadings, providing, “On
motion and reasonable notice, the court may, on just terms, permit a party to serve a
supplemental pleading setting out any transaction, occurrence, or event that happened after the
date of the pleading to be supplemented.” Fed. R. Civ. P. 15(d). “An amended pleading is
AFM/AWG’s proposed supplemental pleading alleges that two of the recordings took place on September 21 and
23, 2016 (before either of the above-captioned lawsuits were filed), and the third in February 2017. (Filing No. 1711).
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designed to include matters occurring before the filing of the [pleading] but either overlooked or
not known at the time.” United States v. Vorachek, 563 F.2d 884, 886 (8th Cir. 1977)(quoting
Berssenbrugge v. Luce Mfg. Co., 30 F. Supp. 101, 101 (W.D. Mo. 1939)). “Unlike amendments,
which typically rest on matters in place prior to the filing of the original pleading, supplements
set out “transaction[s], occurrence[s], or event[s] that happened after the date of the pleading to
be supplemented.’” Human Genome Scis., Inc. v. Kappos, 738 F. Supp. 2d 120, 122 (D.D.C.
2010)(internal citation and quotation omitted).
As an initial matter, AFM/AWG seek to supplement their operative pleading, the
amended Counterclaim and Third-Party Complaint, which was filed on May 16, 2017. (Filing
No. 44). However, each of the events, transactions, or occurrences that AFM/AWG seek to add
(i.e., the three recordings taken by Trevor Borowiak) all occurred before May 16, 2017,2 which is
“the date of the pleading to be supplemented.”

Fed. R. Civ. P. 15(d).

In other words,

AFM/AWG’s proposed supplemental pleading does not allege occurrences or events that
happened “after the date of the pleading to be supplemented,” but instead concern matters that
occurred before the filing of their pleading but were not known at the time. Fed. R. Civ. P.
15(d); Vorachek, 563 F.2d at 886. Therefore, it appears that AFM/AWG’s motion is one to
amend its pleading, not to supplement. See, e.g., Vorachek, 563 F.2d at 886 (concluding that
Rule 15(a) applied rather than Rule 15(d) because the significance of the proposed supplements
allegedly occurred prior to the original complaint, though the plaintiff was not aware of them);
Poullard v. Fed. Bureau of Prisons, 535 F. Supp. 2d 146, 149 (D.D.C. 2008)(construing
proposed supplemental complaint as a proposed amended complaint “because plaintiff’s
proposed supplemental pleading itself does not allege facts pertaining to occurrences or events
taking place after the date of the original Complaint[.]”).
Nevertheless, this is largely a distinction without difference because “The erroneous
characterization of the corrected pleading as a ‘supplement to the complaint’ is immaterial.”
Vorachek, 563 F.2d at 886 n.1. Additionally, “Most courts use the same standard in deciding
whether to grant or deny leave to file a supplemental pleading that is used in deciding whether to
grant or deny leave to amend.” Riggs v. City of Owensville, No. 4:10-CV-793 CAS, 2011 WL
1576723, at *2 (E.D. Mo. Apr. 26, 2011). Finally, the trial court has broad discretion to

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Two of the three recordings were taken before either of the above-captioned lawsuits were even filed.

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determine whether to grant a party leave to amend under Rule 15(a) or to supplement under Rule
15(d). See Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 714 (8th Cir. 2008); Minnesota
Min. & Mfg. Co. v. Superior Insulating Tape Co., 284 F.2d 478, 481 (8th Cir. 1960). Regardless
of whether AFM/AWG’s motion is construed as one to supplement or as one to amend, the Court
finds it should be denied.
A party does not have an absolute right to amend and “denial of leave to amend may be
justified by undue delay, bad faith on the part of the moving party, futility of the amendment or
unfair prejudice to the opposing party.”
2008)(quotation and citation omitted).

Amrine v. Brooks, 522 F.3d 823, 833 (8th Cir.
Similarly, “[A] party should not be permitted to

supplement a pleading where the supplementation would hinder judicial efficiency, prejudice the
rights of other parties to the action, or would insert a frivolous claim.” Hines v. Smith, No. 16CV-3797 (DSD/SER), 2017 WL 5593526, at *5 (D. Minn. Oct. 23, 2017), report and
recommendation adopted, No. CV 16-3797(DSD/SER), 2017 WL 5564556 (D. Minn. Nov. 17,
2017).
The Court finds that permitting AFM/AWG to add a new claim under the Illinois
Eavesdropping Act at this time will cause unfair prejudice to the Borowiak parties (and
necessarily SuperValu, as these cases have now been consolidated for all purposes).3 The abovecaptioned cases were filed more than two years ago and largely pertain to contractual
relationships between the parties.

AFM/AWG’s proposed new claim under the Illinois

Eavesdropping Act is tangentially related to the Lead Case in that it involves the same parties;
however, addition of the new claim will require further discovery and depositions unrelated to
the claims in these cases, and would require this Court to interpret Illinois law in a case that
otherwise would not require the Court to do so. Adding this new claim at this stage of the
proceedings will not “secure the just, speedy, and inexpensive determination” of this action and
will instead hinder judicial efficiency and only serve to further derail progress in what has been
extremely protracted and contentious litigation. See Fed. R. Civ. P. 1, 15; see also 6A Charles
Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1506 (3d
ed. 1998)(“[W]hen the matters alleged in a supplemental pleading have no relation to the claim
originally set forth and joinder will not promote judicial economy or the speedy disposition of

Additionally, it is unclear when AFM/AWG received the recordings – only that it was “[t]hrough discovery in this
matter” – and therefore the Court cannot fully assess whether there was any undue delay in filing this motion.
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the dispute between the parties, refusal to allow the supplemental pleading is entirely justified.”).
This is apparent from reading the parties’ briefs in support of and in opposition to the instant
motion. Both parties spend the majority of their briefs parsing the language of the Illinois
Eavesdropping Act and related case law to determine whether or not AFM/AWG’s proposed
claim is frivolous, as recent Illinois case law and statutory amendments make it unclear whether
Illinois is a one-party consent state. (Filing Nos. 172 and 192 in the Lead Case; Filing No. 200
in the Member Case). Judicial economy does not favor this Court making that determination in
this action, and there is no reason why AFM/AWG cannot file a separate action under the Illinois
Eavesdropping Act in a more appropriate forum. Accordingly,
IT IS ORDERED that AFM/AWG’s Motion for Leave to File Supplemental
Counterclaim and Supplemental Third-Party Complaint (Filing No. 171) is denied.
Dated this 25th day of October, 2018.
BY THE COURT:
s/ Michael D. Nelson
United States Magistrate Judge

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