General Linen Service, Inc. v. General Linen Service Co., Inc.

Filing 48

ORDER denying 34 Motion to Amend. This case is limited to GL Newburyport's four claims against GL Somersworth and GL Somersworth's counterclaims. So Ordered by Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
General Linen Service, Inc.
v.

Civil No. 12-cv-111-LM
Opinion No. 2015 DNH 021

General Linen Service Co.
O R D E R
General Linen Service, Inc. (“GL Newburyport” or “GL-N”)
has sued its competitor, General Linen Service Co. (“GL
Somersworth” or “GL-S”), under a variety of federal and state
legal theories.

Before the court is GL Newburyport’s motion to

amend its complaint to add five new defendants.
objects.

GL Somersworth

For the reasons that follow, plaintiff’s motion to

amend is denied.
I. Background
The following facts are drawn from plaintiff’s first
amended complaint, document no. 26, which is the operative
complaint in this case.

GL Newburyport and GL Somersworth are

competitors in the business of providing linens to commercial
customers.

GL-N provides services to its customers pursuant to

contracts with them.

It maintains customer information in

digital format, as does GL Somersworth, and both companies use
the same software vendor.

In addition, GL-N allows its

customers to access their accounts and transact business online, through a “web portal.”

In April of 2010, one of GL Newburyport’s customers, Hart
House, reported to GL-N that it had received a sales pitch from
a GL Somersworth representative who, during the course of his
presentation, provided Hart House with a package of GL-N’s
invoices.

GL-N then deduced that the GL-S representative could

only have gotten GL-N receipts through the GL-N web portal.
Through its software vendor, GL-N learned that its web portal
had been accessed on several occasions by an unfamiliar
username.

GL-N’s general manager traced that username to an IP

address registered to GL-S.

As a result of GL-S’s use of GL-N’s

pricing information to solicit business, GL-N lost several
customers entirely and was forced to lower the rates it charged
several other customers.
This action followed.

In its original complaint, filed on

March 23, 2012, GL Newburyport asserted claims against GL
Somersworth under the federal Computer Fraud and Abuse Act, New
Hampshire’s Consumer Protection Act, New Hampshire’s Trade
Secret Act, and New Hampshire common law.1

GL-S was the only

entity named as a defendant in GL-N’s original complaint.
II. Discussion
In its motion to amend, GL Newburyport states that, based

GL Somersworth, in turn, asserts counterclaims arising
under the federal Lanham Act, the New Hampshire Consumer
Protection Act, and New Hampshire common law.
1

2

upon its examination of GL Somersworth’s interrogatory answers,
it has, “for the first time, identified [five] individuals who,
upon information and belief, appear to have personally
participated” in the conduct that underlies its claims.
Amend (doc. no. 34) 2.

Mot. to

The purpose of GL-N’s motion to amend is

to add those five individuals, four GL-S employees and one
former GL-S employee, as party defendants.

See id. at 3.

As

noted, GL-S objects to GL-N’s motion to amend.
Under the circumstances of this case, plaintiff needs
either defendant’s consent, which is not forthcoming, or leave
of the court to amend its complaint.
15(a)(2).

See Fed. R. Civ. P.

“The court should freely give leave [to amend] when

justice so requires.”

Id.

Defendant, however, argues that the

court should not grant leave because plaintiff: (1) filed its
amended complaint after the limitation period on its claims had
run; and (2) is not entitled to relief under the rules governing
relation back.

The court agrees.

It is undisputed that the limitation period had run on
claims arising from GL Somersworth’s alleged intrusion into GL
Newburyport’s electronic data by the time GL-N filed the motion
to amend that is now before the court.

Claims asserted in an

amended complaint that is filed outside the limitation period
are “time-barred as a matter of law unless the amended complaint
‘relates back’ to the original complaint.”
3

Coons v. Indus.

Knife Co., 620 F.3d 38, 42 (1st Cir. 2010).

“Under the doctrine

of relation back, an amended complaint can be treated, for
purposes of the statute of limitations, as having been filed on
the date of the original complaint.”

Id. at 42 n.4 (quoting

Pessotti v. Eagle Mfg. Co., 946 F.2d 974, 975 (1st Cir. 1991)).
With regard to the mechanics of relation back, the Federal
Rules of Civil Procedure provide, in pertinent part:
(1)

When an Amendment Relates Back. An amendment to
a pleading relates back to the date of the
original pleading when:

(A) the law that provides the applicable statute of
limitations allows relation back;
(B) the amendment asserts a claim or defense that
arose out of the conduct, transaction, or
occurrence set out — or attempted to be set out
— in the original pleading; or
(C) the amendment changes the party or the naming of
the party against whom a claim is asserted, if
Rule 15(c)(1)(B) is satisfied and if, within the
period provided by Rule 4(m) for serving the
summons and complaint, the party to be brought
in by amendment:
(i)

received such notice of the action that it
will not be prejudiced in defending on the
merits; and

(ii) knew or should have known that the action
would have been brought against it, but for
a mistake concerning the proper party’s
identity.
Fed. R. Civ. P. 15(c).

A plaintiff who seeks to add a new

defendant may rely upon either Rule 15(c)(1)(A) or Rule
15(c)(1)(C).

See Coons, 620 F.3d at 42; see also 3 James Wm.
4

Moore, Moore’s Federal Practice § 15.19[2] (3d ed. 2014).

GL

Newburyport relies exclusively on Rule 15(c)(1)(C).
The plaintiff “bears the burden of showing that the Rule
15(c) relation back doctrine applies.”

Kelly v. Dowaliby, No.

13-cv-107-LM, 2014 WL 2605478, at *3 (D.N.H. June 10, 2014)
(citing Coons, 620 F.3d at 44; Smith v. Chrysler Corp., 45 F.
App’x 326, 2002 WL 1899615, at *1 (5th Cir. 2002)); see also AlDahir v. F.B.I., 454 F. App’x 238, 242 (5th Cir. 2011).
precise nature of that burden is not entirely clear.

The

Rule 15(c)

issues are often litigated when a defendant moves for summary
judgment on grounds that a claim asserted in an amended
complaint is time-barred.

In those situations, courts look to

the record to determine whether the plaintiff has carried its
burden of demonstrating that the relation-back doctrine applies.
See, e.g., Ham v. Sterling Em’cy Servs. of the Midwest, Inc.,
575 F. App’x 610, 617 (6th Cir. 2014); Wilkins v. Montgomery,
751 F.3d 214, 225 (4th Cir. 2014) (rejecting plaintiff’s
relation-back argument when it had “zero support in the
record”).

Here, by contrast, Rule 15(c) has arisen in the

context of an objection to a proposed amendment, so there is no
summary-judgment record to which the court can turn.

On the

other hand, plaintiff has produced several exhibits in support
of its motion to amend, and several more in support of its reply
to defendants’ objection.

In any event, because the question
5

before the court may be resolved on purely legal grounds, there
is no need to further characterize the nature of a plaintiff’s
burden to show that the relation-back doctrine applies.
Rule 15(c)(1)(C) requires GL Newburyport to demonstrate
that: (1) its claims against the five individuals it seeks to
add as defendants satisfy Rule 15(c)(1)(B) by arising out of the
same conduct on which the original complaint is based; (2)
within the time limit set by Rule 4(m), those individuals
received at least constructive notice of GL-N’s claims, and that
notice was sufficient to prevent them from being prejudiced by
having to defend on the merits; and (3) within the Rule 4(m)
time frame, i.e., 120 days from the filing of GL-N’s original
complaint, the individuals knew or should have known that GL-N
would have brought an action against them, if it had not made a
mistake concerning their identities.

See Coons, 620 F.3d at 42.

GL Newburyport has made the first showing.

Its proposed

claims against the five current or former GL Somersworth
employees arise from unauthorized access to its digital data.
That is also the factual basis for GL-N’s original claims
against GL-S.

For the purpose of the analysis that follows, the

court will assume that GL-N has made the second requisite
showing, regarding the individuals’ notice of its claims.

GL-N,

however, has not carried its burden of showing that, within the
Rule 4(m) time frame, those individuals knew or should have
6

known that GL-N would have named them as defendants “but for a
mistake concerning the [their] identit[ies],” Fed. R. Civ. P.
15(c)(1)(C)(ii) (emphasis added).

The problem is that GL-N has

not identified a mistake concerning the individuals’ identities
of the kind that is cognizable under Rule 15(c)(1)(C)(ii).
GL Newburyport’s motion is based upon assertions that: (1)
in interrogatory answers and documents produced by GLSomersworth in August and September of 2014, GL-S identified,
for the first time, individuals who allegedly participated in
the conduct underlying GL-N’s claims; and (2) “[u]ntil it [i.e.,
GL-N] received these responses from [GL-S], [GL-N] had no way of
identifying [GL-S]’s employees who unlawfully obtained and
utilized [GL-N]’s customer information to gain a competitive
advantage,” Pl.’s Mot. to Amend (doc. no. 34) 3.2
For the proposition that the foregoing factual scenario
describes a mistake, for purposes of Rule 15(c), plaintiff turns
to the Supreme Court’s decision in Krupski v. Costa Crociere S.
p. A., 560 U.S. 538 (2010).

In that case, the issue before the

court was whether a plaintiff’s knowledge of the existence of a
potential but unnamed defendant, at the time it filed its
original complaint, precluded the plaintiff from demonstrating a
GL-N makes a similar assertion in its reply brief:
“Despite diligent best efforts, it was not until September 2,
2014 that the identities of these five (5) individuals were
disclosed in a manner that enabled GL Newburyport to finally
discern culpability.” Pl.’s Reply (doc. no. 42) 2.
2

7

mistake that satisfies Rule 15(c).

The Court held that the

determinative issue is not the plaintiff’s knowledge, but,
rather, the potential defendant’s.

And then the court

explained:
That a plaintiff knows of a party’s existence does not
preclude her from making a mistake with respect to
that party’s identity. A plaintiff may know that a
prospective defendant — call him party A — exists,
while erroneously believing him to have the status of
party B. Similarly, a plaintiff may know generally
what party A does while misunderstanding the roles
that party A and party B played in the “conduct,
transaction, or occurrence” giving rise to her claim.
If the plaintiff sues party B instead of party A under
these circumstances, she has made a “mistake
concerning the proper party’s identity”
notwithstanding her knowledge of the existence of both
parties. The only question under Rule
15(c)(1)(C)(ii), then, is whether party A knew or
should have known that, absent some mistake, the
action would have been brought against him.
Id. at 549.

In reliance upon Krupski, GL Newburyport makes the

following argument:
In this case, there is no question: GL Newburyport
misunderstood the roles that the Added Defendants
[i.e., the five individuals] played in the ‘conduct,
transaction, or occurrence’ that is the subject of the
Amended Complaint. GL Newburyport knew that GL
Somersworth had undertaken illegal action to obtain
confidential information, but it did not have
knowledge regarding the individual actions and
personal liability associated with GL Somersworth’s
behavior.
Pl.’s Mot. to Amend. (doc. no. 34) at 6.

The gist of GL

Newburyport’s argument is not that it erroneously sued party A
when it knew about, and should have sued, party B; GL-N’s

8

argument is that it sued party A because it did know about party
B until after the limitation period had run.
GL Newburyport’s reliance upon Krupski misplaced, because
the legal issue resolved in that case is not present in this
case.

More importantly, however, lack of knowledge is not a

mistake for the purpose of relation back.

As Judge Stahl has

explained:
Rule 15(c)(3) [the virtually identical predecessor to
Rule 15(c)(1)(C)(ii), see Krupski, 560 U.S. at 552
n.4] permits an amendment to relate back only where
there has been an error made concerning the identity
of the proper party . . . but it does not permit
relation back where, as here, there is a lack of
knowledge of the proper party.
Wilson v. U.S. Gov’t, 23 F.3d 559, 563 (1st Cir. 1994) (quoting
Worthington v. Wilson, 8 F.3d 1253, 1256 (7th Cir. 1993))
(internal quotation marks omitted, emphasis supplied by Wilson).
Judge Stahl continued:
In this case, there was no “mistake concerning
the identity of the proper party,” as required by Rule
15(c)(3). Rather, Wilson merely lacked knowledge of
the proper party. In other words, Wilson fully
intended to sue GEGS, he did so, and GEGS turned out
to be the wrong party. We have no doubt that Rule
15(c) is not designed to remedy such mistakes.
Id.

The decision in Wilson is in accord with more recent

decisions from other circuits.

See, e.g., Moore v. Tenn., 267

F. App’x 450, 455 (6th Cir. 2008) (“[A] plaintiff’s lack of
knowledge pertaining to an intended defendant’s identity does
not constitute a ‘mistake concerning the party’s identity’
9

within the meaning of Rule 15(c).”) (citation omitted); Joseph
v. Elan Motorsports Techs. Racing Corp., 638 F.3d 555, 558 (7th
Cir. 2011) (“A failure to identify the proper party is a mistake
not about the defendant’s name but about who is liable for the
plaintiff’s injury.”).
GL Newburyport argues that, as a result of Krupski, Wilson
is no longer good law.

The court must disagree.

Krupski says

nothing to undermine the rule that lack of knowledge of a
possible defendant is not a mistake for the purpose of applying
the relation-back doctrine.

To the contrary, Krupski addresses

the situation in which a plaintiff knows about two or more
possible defendants and misunderstands their roles in the
conduct underlying the plaintiff’s suit.

As Judge Castel has

explained when presented with a similar argument:
The situation addressed by the Court in Krupski
is not that faced here, nor is it the situation
addressed by the Second Circuit in Barrow [v.
Wethersfield, 66 F.3d 466, 470 (2d Cir. 1995) (“We are
compelled to agree with our sister circuits [including
the First] that Rule 15(c) does not allow an amended
complaint adding new defendants to relate back if the
newly-added defendants were not named originally
because the plaintiff did not know their
identities.”)]. Unlike Krupski, the plaintiff here
did not harbor a misimpression as to known parties’
identities. Rather, the plaintiff did not know the
identities of officers Suarez and Nozelle until after
the statute of limitations had run. The plaintiff
here, unlike the plaintiff in Krupski, did not have
the requisite information to sue the correct party.
Therefore, on these facts, Krupski does not control
and Barrow should apply to bar plaintiff’s proposed
amendment.
10

Rodriguez v. City of N.Y, No. 10 Civ. 1849(PKC), 2011 WL
4344057, at *9 (S.D.N.Y. Sept. 7, 2011) (citing Dominguez v.
City of N.Y., No. 10 Civ. 2620(BMC), 2010 WL 3419677, *2–3
(E.D.N.Y. Aug. 27, 2010) (finding that Krupski does not overturn
or limit Barrow, but rather “merely picks up where Barrow left
off . . . [t]herefore, Barrow’s holding that a lack of knowledge
is not a mistake is still intact”); Daniel v. City of Matteson,
No. 09-cv-3171, 2011 WL 198132, *4 (N.D. Ill. Jan. 18, 2011)
(concluding that even after Krupski, “[l]ack of knowledge as to
the identity of the proper defendant is not a mistake”); Wilson
v. Delta Airlines, Inc., No. 2:09-cv-2687-JPM-dkv, 2010 WL
2836326, *4 (W.D. Tenn. July 19, 2010) (concluding that Sixth
Circuit precedent holding that lack of knowledge does not
constitute a mistake within the meaning of Rule 15(c) remains
applicable after Krupski); Burdine v. Kaiser, No. 3:09CV1026,
2010 WL 2606257, *2 n.2 (N.D. Ohio June 25, 2010) (finding
same).
Regarding the rationale for the rule stated in Wilson,
Moore, Joseph, and Rodriguez, the court turns to Hall v. Norfolk
Southern Railway Co., which includes the following passage:
It is the plaintiff’s responsibility to determine the
proper party to sue and to do so before the statute of
limitations expires. A plaintiff’s ignorance or
misunderstanding about who is liable for his injury is
not a “mistake” as to the defendant’s “identity.”

11

469 F.3d 590, 596 (7th Cir. 2006).

That statement from Hall, in

turn, puts to rest any argument by GL Newburyport that it is
entitled to relation back due to a purported failure of
disclosure by GL Somersworth.

It was not GL-S’s obligation to

identify other defendants for GL-N; it was GL-N’s obligation to
figure out who to sue.
GL Newburyport’s motion to amend is based upon nothing more
than its admitted ignorance of the five individuals’ identities.
Thus, it has not carried its burden of demonstrating that it
made a mistake concerning the identities of those possible
defendants.

Absent a mistake concerning those identities, GL

Somersworth is entitled to denial of GL Newburyport’s motion to
amend.
III. Conclusion
For the reasons described above, plaintiff’s motion to
amend, document no. 34, is denied.

Accordingly, this case is

limited to GL Newburyport’s four claims against GL Somersworth
and GL Somersworth’s counterclaims.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
February 4, 2015
cc:

Sara Yevics Beccia, Esq.
Dennis J. Kelly, Esq.
James F. Laboe, Esq.
12

Laura Witney Lee, Esq.
Paul R. Mastrocola, Esq.
Joseph Gardner Mattson, Esq.
Jeffrey C. Spear, Esq.

13