Restis et al v. American Coalition Against Nuclear Iran, Inc. et al

Filing 266

OPINION AND ORDER re: 146 MOTION for Leave to File Amended Complaint filed by Enterprises Shipping and Trading S.A., Victor Restis.Plaintiffs' request for leave to amend is therefore GRANTED. The May 2014 proposed SAC is deeme d as the operative Complaint in this action. Plaintiffs are directed to electronically file the Second Amended Complaint no later than Monday, October 6, 2014. The Court will treat Defendants' pending motion to dismiss as a motion to dismiss the SAC. The Clerk of the Court is respectfully directed to terminate the motion (Doc. 146). It is SO ORDERED. ( Amended Pleadings due by 10/6/2014.) (Signed by Judge Edgardo Ramos on 9/30/2014) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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VICTOR RESTIS and ENTERPRISES SHIPPING AND :
TRADING S.A.,
:
:
Plaintiffs,
:
:
- against :
:
AMERICAN COALITION AGAINST NUCLEAR IRAN, :
INC. a/k/a UNITED AGAINST NUCLEAR IRAN,
:
MARK D. WALLACE, DAVID IBSEN, NATHAN
:
CARLETON, DANIEL ROTH, MARTIN HOUSE,
:
MATAN SHAMIR, MOLLY LUKASH, LARA PHAM, :
and DOES 1-10,
:
:
Defendants.
:
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OPINION AND ORDER
13 Civ. 5032 (ER)

Ramos, D.J.:
Plaintiffs commenced this action on July 19, 2013. Doc. 1. On October 17, 2013,
Defendants filed a motion to dismiss. Doc. 25. On December 2, 2013, Plaintiffs submitted a
proposed Amended Complaint. On December 11, 2013, the Court entered an order granting
Plaintiffs’ request for leave to amend the Complaint. Doc. 33. Pursuant to the December 11,
2013 Order, the Court treated Defendants’ motion to dismiss the original Complaint as a motion
to dismiss the Amended Complaint.
On May 13, 2014, Plaintiffs filed a motion for leave to file a Second Amended Complaint
(“SAC”). Doc. 146. Plaintiffs seek leave to amend in order to add allegations relating to
purportedly defamatory statements made by Defendants in February 2014, as well as to name
additional individual defendants whose roles in the alleged defamation were “recently disclosed”
to Plaintiffs. See Pls. Mem. L. 4, 7. Plaintiffs further claim that leave should be granted to

include newly-discovered information about Defendants’ alleged role in the filing of criminal
charges against Plaintiff Victor Restis. See id. at 7. Defendants renew their argument that their
publications, including the February 2014 publications, are not defamatory as a matter of law and
also contend that the proposed newly named defendants lack the necessary resources to defend
the litigation. Id. at 11.
Pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure, “[a] court should
freely give leave [to amend] when justice so requires.” “Generally, ‘[a] district court has
discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue
prejudice to the opposing party.’” Holmes v. Grubman, 568 F.3d 329, 334 (2d Cir. 2009)
(quoting McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007)). Where a
scheduling order governs amendments to the complaint, the lenient standard under Rule 15(a)
must be balanced against the requirement under Rule 16(b) that the Court’s scheduling order
shall not be modified except upon a showing of good cause. Id. (quoting Grochowski v. Phx.
Constr., 318 F.3d 80, 86 (2d Cir. 2003)). Here, the Civil Case Discovery Plan and Scheduling
Order set a December 15, 2013 deadline for amended pleadings. Doc. 20. Accordingly, the
Court will review Plaintiffs’ request in view of Rule 15(a) as well as Rule 16(b). 1
“[W]hile diligence is ‘the primary consideration’ in determining whether the moving
party satisfies the good cause requirement of Rule 16(b), a district court ‘also may consider other
relevant factors including, in particular, whether allowing the amendment of the pleading at this
stage of the litigation will prejudice defendants.” Grant v. Citibank (S.D.), N.A., No. 10 Civ.
2955 (KNF), 2010 WL 5187754, at *7 (S.D.N.Y. Dec. 6, 2010) (quoting Kassner v. 2nd Ave.
Delicatessen Inc., 496 F.3d 229, 244 (2d Cir. 2007)). “After the moving party demonstrates
1

Plaintiffs argue that even if the Court applies the “good cause” standard, Plaintiffs’ proposed amendments “easily
meet[] this standard.” Pls. Reply Mem. L. 2.

2

diligence under Rule 16, the Rule 15 standard applies to determine whether the amendment is
proper.” Id. “A decision to grant or deny a motion to amend is within the sound discretion of
the trial court.” Krumme v. WestPoint Stevens Inc., 143 F.3d 71, 88 (2d Cir. 1988); see also
Kassner, 496 F.3d at 245 (noting that a court’s decision to grant or deny leave to amend is “an
exercise of its broad discretion concerning the pleadings”).
The proposed Second Amended Complaint adds additional facts, not claims or theories of
recovery. 2 Moreover, Plaintiffs’ proposed amendments are substantively identical to the
allegations in the Amended Complaint and are based on facts discovered and events that
occurred in February 2014, after the December 15, 2013 deadline. See Pls. Mem. L. 5. Second,
Plaintiffs claim that it was through Defendants’ March 24, 2014 production of documents that
they learned of the proposed additional defendants’ involvement in the defamation campaigns.
Id. at 8. Finally, Plaintiffs state that they “recently learned” of Defendant UANI’s alleged
involvement in Mr. Restis’ detention in Greece. Id. at 12. Accordingly, the Court discerns no
lack of diligence on the part of Plaintiffs in filing the proposed SAC within three months of the
February 2014 statements and only two months after Defendant’s production. Cf. Beastie Boys
v. Monster Energy Co., 983 F. Supp. 2d 354, 361 (S.D.N.Y. 2014) (finding that plaintiffs acted
with a sufficient “modicum of diligence” in moving to amend complaint nearly six months after
discovery of additional instance of copyright infringement); Salomon v. Adderley Indus., Inc.,
960 F. Supp. 2d 502, 507 (S.D.N.Y. 2013) (noting that plaintiffs’ proposed amendment upon
learning of additional facts through discovery—and after scheduling order deadline—did not
constitute a failure of diligence); Enzymotec Ltd. v. NBTY, Inc., 754 F. Supp. 2d 527, 537

2

In addition, the proposed Second Amended Complaint abandons Plaintiffs’ claim for negligent interference with
prospective economic advantage.

3

(E.D.N.Y. 2010) (finding that good cause existed to amend complaint insofar as defendant did
not contest that plaintiff learned of the alleged contract breaches during the course of discovery).
Defendants contend that Plaintiffs’ amendments are abusive and in bad faith because the
proposed new defendants are junior staff members of UANI who did not undertake any act
outside the scope of their employer’s instructions. Defs. Mem. L. 19-21. Those arguments are
unavailing, at least at this juncture. Moreover, the Court does not find that the amendments
would lead to undue prejudice, especially given that the parties have not completed discovery.
Cf. Salomon, 960 F. Supp. 2d at 508 (allowing amendment where it would lead to “mere delay”
as a consequence of additional discovery and noting that the parties would not have to expend
significant additional resources as a result of the amendment). 3
Plaintiffs’ request for leave to amend is therefore GRANTED. The May 2014 proposed
SAC is deemed as the operative Complaint in this action. Plaintiffs are directed to electronically
file the Second Amended Complaint no later than Monday, October 6, 2014.

3

Defendants further challenge the allegations regarding their involvement in Mr. Restis’ detention on the grounds
that this accusation is implausible and serves no purpose. Defs. Mem. L. 22-23. Defendants contend that such
allegations, if included in the SAC, would be subject to a successful motion to strike as redundant, immaterial and/or
scandalous, and that the amendment of the pleadings to include such claim would therefore be futile. Id. at 23.
Allegations are rarely stricken from a complaint, and even seemingly inflammatory allegations may be included in
pleadings as long as they have some relevance to the claims at issue. M’Baye v. World Boxing Ass’n, No. 05 Civ.
9581 (DC), 2007 WL 844552, at *4 (S.D.N.Y. Mar. 21, 2007). Plaintiffs’ allegations of Defendants’ involvement in
Mr. Restis’ detention may bear on, inter alia, whether Defendants acted with actual malice. Thus, it is unclear
whether Defendants could make the required showing that no supporting evidence would be admissible. See, e.g.,
Schoolcraft v. City of New York, 299 F.R.D. 65, 67 (S.D.N.Y. 2014) (stating that to prevail on a motion to strike, a
party must show that (1) no evidence in support of the allegations would be admissible; (2) the allegations have no
bearing on the relevant issues; and (3) permitting the allegations to stand would result in prejudice to the movant);
Shakima O. v. Westchester Cnty., No. 12 Civ. 9468 (VB), 2014 WL 521608, at *5 (S.D.N.Y. Feb. 10, 2014) (“In
deciding whether to strike immaterial matter, ‘it is settled that the motion will be denied, unless it can be shown that
no evidence in support of the allegation would be admissible.’” (quoting Lipsky v. Commonwealth United Corp.,
551 F.2d 887, 893 (2d Cir. 1976))).

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