Quad/Graphics, Inc. v. Tag Worldwide (USA) Inc.

Filing 59

MEMORANDUM OPINION AND ORDER re: 39 FIRST LETTER MOTION for Leave to File Motion to File Amended Answer addressed to Judge Jesse M. Furman from Christopher A. Gorman dated November 1, 2024. filed by Tag Worldwide (USA) Inc. Fact disc overy in this case is now closed. See ECF No. 50. Shortly before the close of fact discovery, however, Defendant Tag Worldwide (USA) Inc. (Tag) filed a motion for leave to file an amended answer to add a new affirmative defense and counterclaims. S ee ECF No. 39. Under Rule 15 of the Federal Rules of Civil Procedure, a court should freely give leave to amend a pleading when justice so requires. Fed. R. Civ. P. 15(a)(2). But, [w]here, as here, a scheduling order governs amendments to the [plea ding], the lenient standard under Rule 15(a)... must be balanced against the requirement under Rule 16(b) that the Courts scheduling order shall not be modified except upon a showing of good cause. As further set forth in this Order, applying thes e standards here, the Court denies Tag leave to file an amended answer, substantially for the reasons set forth in Plaintiff Quad/Graphics, Inc.s opposition and surreply. See ECF Nos.. 48, 57. Put simply, Tag knew or should have known of the info rmation that forms the basis of its proposed amendments long ago. Indeed, many of the proposed amendments are based on the parties agreement and, as pre-litigation correspondence makes plain, were known to Tag even before the case was filed. See EC F No. 48, at 2-3. Moreover, even if it were true that Tag could not have amended until it received discovery, the fact is that it received that discovery on June 9, 2024. See id. at 4. Thus, it waited nearly five months, until less than a week bef ore the close of discovery and all but one deposition had been conducted, to seek leave to amend. Tags explanation for this delay that it could not even start meaningful review of Quad/Graphicss production until months after it was received becaus e Tag had to fulfill its own discovery obligations, see ECF No. 52, at 3 is utterly unpersuasive. In light of this record, the Court finds that Tag knew or should have known earlier of the information that forms the basis of its proposed amendmen t and, accordingly, that Tag fails to show good cause. for its failure to include the new allegations, affirmative defense, and counterclaims in it answer. See McBeth, 2018 WL 5997918, at *2. The Clerk of Court is directed to terminate ECF No. 39. SO ORDERED. (Signed by Judge Jesse M. Furman on 11/25/2024) (ar)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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QUAD/GRAPHICS, INC.,
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Plaintiff,
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TAG WORLDWIDE (USA) INC.,
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Defendant.
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24-CV-21 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
Fact discovery in this case is now closed. See ECF No. 50. Shortly before the close of
fact discovery, however, Defendant Tag Worldwide (USA) Inc. (“Tag”) filed a motion for leave
to file an amended answer to add a new affirmative defense and counterclaims. See ECF No. 39.
Under Rule 15 of the Federal Rules of Civil Procedure, a court “should freely give leave” to
amend a pleading “when justice so requires.” Fed. R. Civ. P. 15(a)(2). But, “[w]here, as here, a
scheduling order governs amendments to the [pleading], 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.” Holmes v. Grubman, 568 F.3d
329, 334-35 (2d Cir. 2009) (internal quotation marks and citation omitted); see Fed. R. Civ. P.
16(b)(4) (“A schedule may be modified only for good cause and with the judge’s consent.”).
“Whether good cause exists turns on the diligence of the moving party.” Holmes, 568 F.3d at
335 (internal quotation marks omitted). Specifically, the moving party “must demonstrate that it
has been diligent in its efforts to meet the Court’s deadlines” and that, “despite its having
exercised diligence, the applicable deadline could not have been reasonably met.” Sokol
Holdings, Inc. v. BMB Munai, Inc., No. 05-CV-3749 (KMW) (DF), 2009 WL 2524611, at *7

(S.D.N.Y. Aug. 14, 2009), aff’d, 2009 WL 3467756 (S.D.N.Y. Oct. 28, 2009). “A party fails to
show good cause when the proposed amendment rests on information that the party knew, or
should have known, in advance of the deadline.” Perfect Pearl Co., Inc. v. Majestic Pearl &
Stone, Inc., 889 F. Supp. 2d 453, 457 (S.D.N.Y. 2012) (internal quotation marks omitted); see
also Parker v. Columbia Pictures Indus., 204 F.3d 326, 340-41 (2d Cir. 2000) (affirming denial
of a motion to amend because the plaintiff had the relevant information when filing an earlier
complaint); McBeth v. Porges, No. 15-CV-2742 (JMF), 2018 WL 5997918, at *2 (S.D.N.Y.
Nov. 15, 2018) (denying leave to amend because the plaintiff failed to “provide a good reason
for his failure to discover” the relevant information “earlier in the litigation”).
Applying these standards here, the Court denies Tag leave to file an amended answer,
substantially for the reasons set forth in Plaintiff Quad/Graphics, Inc.’s opposition and surreply.
See ECF Nos. 48, 57. Put simply, Tag knew — or should have known — of the information that
forms the basis of its proposed amendments long ago. Indeed, many of the proposed
amendments are based on the parties’ agreement and, as pre-litigation correspondence makes
plain, were known to Tag even before the case was filed. See ECF No. 48, at 2-3. Moreover,
even if it were true that Tag could not have amended until it received discovery, the fact is that it
received that discovery on June 9, 2024. See id. at 4. Thus, it waited nearly five months, until
less than a week before the close of discovery and all but one deposition had been conducted, to
seek leave to amend. Tag’s explanation for this delay — that it “could not even start meaningful
review of” Quad/Graphics’s production until months after it was received because Tag had to
fulfill its own discovery obligations, see ECF No. 52, at 3 — is utterly unpersuasive. In light of
this record, the Court finds that Tag knew or should have known earlier of the information that
forms the basis of its proposed amendment and, accordingly, that Tag fails to show good cause

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for its failure to include the new allegations, affirmative defense, and counterclaims in it answer.
See McBeth, 2018 WL 5997918, at *2.
The Clerk of Court is directed to terminate ECF No. 39.
SO ORDERED.
Dated: November 25, 2024
New York, New York

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JESSE M. FURMAN
United States District Judge

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