Forrester Environmental Services, Inc. et al v. Wheelabrator Technologies, Inc.
Filing
219
ORDER denying 210 Motion for Leave to File Amended Reply to Defendant's Counterclaim. So Ordered by Chief Judge Joseph N. Laplante.(jb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Forrester Environmental
Services, Inc. and Keith E.
Forrester
v.
Civil No. 10-cv-154-JL
Wheelabrator Technologies, Inc.
SUMMARY ORDER
Plaintiffs Keith Forrester and Forrester Environmental
Services, Inc. have moved for leave to file an amended reply to
the counterclaim of defendant Wheelabrator Technologies, Inc.
Specifically, they seek permission to raise an additional
affirmative defense--that Wheelabrator’s counterclaim is barred
by the applicable statute of limitations–-that they did not
include in their two previous replies to the counterclaim.
As
explained herein, given plaintiffs’ lack of diligence in seeking
leave to amend, the court denies the motion.
Wheelabrator initially filed its counterclaim on May 20,
2010, in conjunction with its answer to plaintiffs’ complaint.
The counterclaim alleges that Forrester, a former employee of
Wheelabrator’s predecessor entity, flouted his contractual and
common-law obligations to the company, misappropriating its
intellectual property and claiming it as his own.
Based upon
these allegations, Wheelabrator seeks a judgment “declaring that
it is the owner of the methods, technologies and other
intellectual property which plaintiffs claim to own,” an
accounting, and injunctive relief.
Plaintiffs filed a timely reply to the counterclaim on June
3, 2010, asserting only two “affirmative defenses”:
first, that
the counterclaim “fails to state a claim upon which relief may be
granted,” and second, that the counterclaim “is barred by the
doctrine of laches.”
Following briefing on Wheelabrator’s motion
to dismiss one of the counts of plaintiffs’ complaint, the court
granted plaintiffs leave to amend their complaint, although the
deadline for amending pleadings set forth in the scheduling
order--December 1, 2010--had already passed.
7, 2011.
See Order of March
Plaintiffs duly filed a second amended complaint on
March 10, 2011.
On March 24, 2011, Wheelabrator answered the
second amended complaint, in the process renewing the same
counterclaim against plaintiffs.
The deadline for plaintiffs to reply to Wheelabrator’s
renewed counterclaim was April 11, 2011.
Plaintiffs did not file
a reply to the counterclaim by that date; instead, on April 20,
2011, they moved for leave to file an untimely reply.
The court
granted plaintiffs’ motion, and they filed their reply to the
counterclaim on July 29, 2011.
That reply again asserted the
same two affirmative defenses that their earlier reply to the
counterclaim had asserted, neither of which invoked the statute
of limitations.
2
One month later, on August 30, 2011, plaintiffs moved for
summary judgment on Wheelabrator’s counterclaim, arguing that the
counterclaim was barred by New Hampshire’s three-year statute of
limitations.
See N.H. Rev. Stat. Ann. § 508:4.
On December 16,
2011, this court denied plaintiffs’ motion for summary judgment
on the grounds that they did not “assert a statute of limitations
defense in their reply to the counterclaim” and that they had
“not sought leave of court to amend their reply to add a statute
of limitations defense.”
Forrester Envtl. Servs., Inc. v.
Wheelabrator Techs., Inc., 2011 DNH 212, 35-36.
On January 10,
2012, plaintiffs filed the instant motion, seeking leave to add a
statute of limitations defense to their reply.
The scheduling order established a deadline of December 1,
2010 for plaintiffs to amend their pleadings.
That deadline
expired well over a year before plaintiffs filed their motion to
amend.
Although ordinarily “[t]he court should freely give leave
[to amend] when justice so requires,” Fed. R. Civ. P. 15(a)(2), a
scheduling order “may be modified only for good cause.”
Fed. R.
Civ. P. 16(b)(4); see also Steir v. Girl Scouts of the USA, 383
F.3d 7, 12 (2004).
It is the plaintiffs’ burden, as the parties seeking leave
to amend, to establish “good cause” for the late amendment.
Steir, 383 F.3d at 12.
The focus of the “good cause” inquiry is
“the diligence of the party seeking the amendment.”
3
O’Connell v.
Hyatt Hotels, 357 F.3d 152, 155 (1st Cir. 2004).
To carry their
burden of showing good cause, plaintiffs must demonstrate that
the deadline in the scheduling order could not reasonably be met,
despite their diligence.
Id. at 154.
They have not done that.
Plaintiffs’ motion to amend comes more than eighteen months
after they filed their initial reply to the counterclaim, more
than one year after the deadline for amending pleadings, six
months after plaintiffs filed their reply to the renewed
counterclaim, and several months after both the discovery and
dispositive motion deadlines had passed.
Such “protracted delay,
with its attendant burdens on the opponent and the court, is
itself a sufficient reason for the court to withhold permission
to amend.”
Steir, 383 F.3d at 12.
The sole excuse plaintiffs offer for this protracted delay,
moreover, is “inadverten[t] fail[ure] to reduce the statute of
limitations defense to writing.”
In other words, plaintiffs
acknowledge there was no legitimate reason they could not have
met the agreed-upon deadline in the scheduling order.
They
simply failed to exercise the care and caution they should have
in drafting their written pleadings.
is neglect.
That is not diligence; it
And neglect--or to use plaintiffs’ preferred term,
“inadvertence”--is not grounds for granting plaintiffs leave to
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amend their answer to the counterclaim this late in the day.1
See Zimmerman v. Cambridge Credit Counseling Corp., 529 F. Supp.
2d 254, 265 (D. Mass. 2008) (“[E]xtensive delay . . .,
accompanied by only a minimal explanation of ‘inadvertence,’ is
insufficient to show the diligence that would surmount the good
cause standard.”); see also 6A Charles Alan Wright et al.,
Federal Practice and Procedure § 1522.2, at 322-25 & n.13 (3d ed.
2010) (noting that “[a]ttorney neglect or inadvertence will not
constitute good cause” and citing cases).2
Plaintiffs also argue that adding the defense at this stage
will not prejudice Wheelabrator.
But Rule 16’s “good cause”
standard is less concerned with prejudice to the opposing party
1
This is not the first time the court has had to address
such neglect by plaintiffs. As noted supra, the court already
granted plaintiffs leave to (1) file an amended complaint outside
the scheduling order’s deadline and (2) file an untimely reply to
the counterclaim. More recently, the court denied plaintiffs’
motion to extend the deadline to challenge expert testimony due
in large part to their delay in seeking to depose Wheelabrator’s
expert. See Order of Jan. 24, 2012. Were this the first time
plaintiffs had failed to diligently comply with a deadline, the
court might be more inclined to view their “inadvertence”
sympathetically. But plaintiffs have established a pattern.
“[L]itigants cannot be permitted to treat a scheduling order as a
frivolous piece of paper idly entered, which can be cavalierly
disregarded without peril.” O’Connell, 357 F.3d at 155.
2
It is worth noting that even under Rule 15(a)’s liberal
amendment policy, where--as here--“considerable time has elapsed
between the filing of the [original pleading] and the motion to
amend, the movant has the burden of showing some valid reason for
his neglect and delay.” Acosta-Mestre v. Hilton Int’l of Puerto
Rico, Inc., 156 F.3d 49, 52 (1st Cir. 1998). The court perceives
no valid reason for plaintiffs’ neglect in their advertence to
“inadvertence.”
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than it is with the diligence of the moving party.
357 F.3d at 155.
O’Connell,
Assuming, dubitante, that a lack of prejudice
would excuse plaintiffs’ utter lack of diligence in seeking leave
to amend, the court does not agree that Wheelabrator would not be
prejudiced by the proposed amendment.
As an initial matter, the court cannot accept the premise of
plaintiffs’ argument--that Wheelabrator knew of the anticipated
statute of limitations defense before the close of discovery.
To
support this premise, plaintiffs rely upon requests for admission
that they served upon Wheelabrator in March 2011 and a discovery
motion that followed a month later.
But neither the requests for
admission nor the discovery motion referred to N.H. Rev. Stat.
Ann. § 508:4, which plaintiffs contend is the applicable statute
of limitations, or even mentioned the term “statute of
limitations.”
The motion did indicate that plaintiffs were
seeking to establish “that [the] counterclaim was time-barred.”
But plaintiffs’ reference to a time bar could just as easily have
referred to laches, which plaintiffs did plead as an affirmative
defense.3
As the court noted in its order denying plaintiffs’ motion
for summary judgment on the counterclaim, that was “the first
filing that squarely raise[d] their statute of limitations
3
Indeed, the United States Supreme Court has referred to
laches as a time bar. See, e.g., Oneida Cnty., N.Y. v. Oneida
Indian Nation of N.Y. State, 470 U.S. 226, 240 n.13 (1985).
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defense,” and thus the first time Wheelabrator and the court were
put on notice that plaintiffs were asserting that defense.
Forrester Envtl. Servs., Inc. v. Wheelabrator Techs., Inc., 2011
DNH 212, 38.
That motion was filed two months after the close of
fact discovery and not long before the (then-scheduled) trial.
Even if, as plaintiffs argue, all the facts relevant to the
statute of limitations defense are in Wheelabrator’s possession,
the lack of notice to Wheelabrator regarding the defense means
that it did not have a meaningful opportunity to conduct its own
investigation into those facts.
It also means that Wheelabrator
has been deprived of the same opportunity as plaintiffs to
formulate a trial strategy that incorporates a statute of
limitations defense to the counterclaim.
Plaintiffs’ lack of
diligence aside, Wheelabrator would be prejudiced by the addition
of a statute of limitations defense at this stage of the
proceedings.
Plaintiffs’ motion for leave to file an amended reply to
defendant’s counterclaim (document no. 210) is therefore DENIED.
SO ORDERED.
Joseph N. Laplante
United States District Judge
Dated:
March 19, 2012
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cc:
Erik Graham Moskowitz, Esq.
Michael J. Markoff, Esq.
Sibley P. Reppert, Esq.
Steven E. Grill, Esq.
Jonathan M. Shirley, Esq.
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