Bobrick Washroom Equipment, Inc. v Scranton Products, Inc.
Filing
239
MEMORANDUM OPINION -For the foregoing reasons, Bobrick's Motion for Leave to File an Amended Answer With Counterclaims will be granted. A separate order follows. Signed by Honorable Robert D. Mariani on 12/16/16. (jfg)
THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SCRANTON PRODUCTS, INC.,
Plaintiff,
v.
3:14-CV-00853
(JUDGE MARIANI)
BOBRICK WASHROOM
EQUIPMENT, INC.,
Defendant.
MEMORANDUM OPINION
Presently before the Court is a Motion for Leave to File Amended Answer With
Counterclaims filed by Defendant Bobrick Washroom Equipment, Inc. ("Bobrick"). (Doc.
213). For the reasons that follow, the Court will grant Bobrick's motion.
I.
INTRODUCTION AND PROCEDURAL HISTORY
Plaintiff Scranton Products, Inc. C'SP") filed a complaint (the "Complaint") in May 2014
alleging, among other things, that Defendant Bobrick "carefully orchestrated a campaign to
scare architects, product specifiers, procurement representatives, building owners, and
others in the construction industry into believing that Scranton Products' toilet partitions are
fire hazards, are unsafe and pose health and safety risks if used in building projects across
the country." (Compl. at 1f 1). SP asserts two claims under the Lanham Act, 15 U.S.C. §
1125(a), claiming "literally false advertising," and "deceptive and misleading advertising" and
seeks both monetary damages and equitable relief. (ld. at 1f1f 61-76). SP also brings claims
under Pennsylvania law, alleging common law unfair competition, commercial
disparagement, and tortious interference with existing or prospective business relations.
(Id. at mr 77-92). Bobrick filed its Answer on June 25, 2014. (Doc. 21). In accordance with
the Court's Case Management Order, dated August 5, 2014, "[m]otions to amend the
pleadings shall be filed no later than September 15,2014." (Doc. 28, at 113).
Since Bobrick filed its Answer, nearly thirty months ago, the parties have engaged in
protracted and contentious discovery. According to Bobrick, newly discovered evidence has
revealed information that would support an amendment to its Answer to include
counterclaims. Specifically:
Evidence revealed in discovery in this case, mostly only by Order of this Court, has
enabled Bobrick to assert with confidence that SP has deliberately and systematically
mislead purchasers and other market participants by falsely representing that certain of
its high density polyethylene ("HDPE") toilet partitions meet the requirements of the
NFPA 286 room-corner test ("NFPA 286") that is incorporated into many fire, building,
and life safety codes nationwide. Further, over the course of discovery, it has become
clear that Scranton Products has abused the litigation process primarily to accomplish a
purpose for which it was not intended, namely to obstruct Bobrick's ability to fairly and
vigorously compete in the marketplace against SP. Accordingly, Bobrick requests leave
to file an Amended Answer to raise Lanham Act, unfair competition, and abuse of legal
process counterclaims.
(Doc. 214, at 1-2). Thus, on November 10, 2016 Bobrick filed the instant motion. (Doc.
213). SP opposes Bobrick's motion, principally arguing that the Court should deny
Bobrick's motion "because (1) Bobrick has not shown good cause for granting such relief
more than two years after the deadline for amendments to pleadings; and (2) Bobrick has
unduly delayed in seeking leave to amend its answer to include a counterclaim." (Doc. 226,
at 1).
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II.
ANALYSIS
Federal Rule of Civil Procedure 15(a)(2) provides, in relevant part, that "a party may
amend its pleading only with the opposing party's written consent or the court's leave. The
court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). liThe
United States Court of Appeals for the Third Circuit has adopted a liberal approach to the
amendment of pleadings in order to ensure that 'a particular claim will be decided on the
merits rather than on technicalities.'" Payne v. Duncan, Civil No. 3:15-cv·1010, 2016 WL
2859612, at *1 (M.D. Pa. May. 16,2016) (quoting Dole v. Arco Chem. Co., 921 F.2d 484,
486-87 (3d Cir. 1990)). Indeed, the Third Circuit has noted that "[g]enerally, Rule 15
motions should be granted," United States ex rei. Customs Fraud Investigations, LLC v.
Victaulic Co., 839 F.3d 242, 249 (3d Cir. 2016), and that "the pleading philosophy of the
Rules counsels in favor of liberally permitting amendments to a complaint" or pleading.
CMR D.N. Corp. v. City of Philadelphia, 703 F.3d 612, 629 (3d Cir. 2013). Nevertheless,
"[t]here are three instances when a court typically may exercise its discretion to deny a Rule
15(a) motion for leave to amend: when '(1) the moving party has demonstrated undue
delay, bad faith or dilatory motives, (2) the amendment would be futile, or (3) the
amendment would prejudice the other party."' United States ex rei. Customs Fraud
Investigations, 839 F.3d at 249 (quoting United States ex rei. Schumann v. Astrazeneca
Pharma. L.P., 769 F.3d 837, 849 (3d Cir. 2014)). "[P]rejudice to the nonmoving party is the
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touchstone for the denial of the amendment." Dole, 921 F.2d at 488 (internal citation and
quotation marks omitted).
As an initial matter, in its brief in opposition to Bobrick's motion, (Doc. 226), SP makes
no argument that it would be prejudiced should the Court grant Bobrick's motion. Nor has
SP argued that Bobrick's proposed amendment to its Answer would be futile. Id. In light of
SP's failure to claim either futility or prejudice, the question thus becomes whether Bobrick's
delay in filing its motion to amend warrants a denial of the motion.
"Delay alone will not constitute grounds for denial" of a motion for leave to amend.
Bjorgung v. Whitetail Resort, L.P., 550 F.3d 263, 266 (3d Cir. 2008) (citing Cureton v. Nat'l
Collegiate Athl. Ass'n, 252 F.3d 267, 273 (3d Cir. 2001)). Undue delay, however, may
justify adenial of a motion for leave to amend. "Delay may become undue when amovant
has had previous opportunities to amend a complaint but instead delays making a motion to
amend until after judgment has been granted to the adverse party and when allowing an
amendment would result in additional discovery, costs, and preparation to defend against
new facts or new theories." Jang v. Boston Sci. Scimed, Inc., 729 F.3d 357, 368 (3d Cir.
2013) (internal citation and quotation marks omitted). Denial of a motion for leave to amend
is also appropriate "where the moving party offered no cogent reason for the delay in
seeking the amendment." CMR D.N. Corp., 703 F.3d at 629.
Upon review of the record, the Court finds that Bobrick's delay in seeking leave to
amend its Answer does not constitute undue delay warranting denial of its motion for at
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least three reasons. First, Bobrick's nearly two-and-a-half-year delay in seeking leave to
amend was not the product of its own bad faith or dilatory tactics. Rather, it was often SP's
conduct-namely, refusing to produce certain documents and information which required
the Court's repeated intervention-that resulted in a delay of Bobrick obtaining the
information necessary to assert its counterclaims. 1 Second, and relatedly, the Court finds
that Bobrick has offered a cogent and compelling justification for the delay in seeking leave
to amend-namely that SP's own intransigence has prevented Bobrick from timely
developing the necessary facts to support its counterclaims. Finally, the Court 'finds that
allowing Bobrick to amend its Answer to assert counterclaims would not result in substantial
additional discovery, costs, or require SP to defend against new facts and new theories.
The common nucleus of operative facts giving rise to Bobrick's counterclaims is the same
set of facts that give rise to Plaintiffs claims (and for which discovery has been on-going for
the past two-and-a-half-years). As Bobrick notes:
[M]uch of the evidence that would be required to support Bobrick's counterclaims will
also be required to support or defend SP's claims against Bobrick, which have
already been subject to discovery. For example, evidence as to whether SP's
products comply with NFPA 286 is the centerpiece of this case and will be necessary
to defend against SP's Lanham Act and unfair competition claims as well as to
prosecute Bobrick's Lanham Act and unfair competition counterclaims. In that
sense, SP's claims and Bobrick's counterclaims are largely intertwined.
1 The
Court has issued several orders over the course of this litigation directing SP to produce
certain documents to Bobrick, over SP's objection. (Docs. 42, 88,125,193,232).
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(Doc. 214, at 3-4). In sum, the Court finds that Bobrick has not unduly delayed in seeking
leave to amend its Answer to assert counterclaims and, accordingly, will grant Bobrick's
motion.2
III.
CONCLUSION
For the foregoing reasons, Bobrick's Motion for Leave to File an Amended Answer With
Counterclaims will be granted. A separate order follows.
2 For similar reasons, the Court finds that Bobrick has established "good cause" to modify the
pretrial scheduling order. Federal Rule of Civil Procedure 16(b)(4) provides that a pretrial scheduling order
"may be modified only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). Because
Bobrick was not in possession of sufficient facts underlying its counterclaim before the expiration of the
pretrial scheduling deadline, the Court finds that good cause exists to modify the pretrial scheduling order.
Cf. Dimensional Commnc'n, Inc. v. Oz Optics, Ltd., 148 F. App'x 82. 85 (3d Cir. 2005) (defendant "could
not satisfy Rule 16(b)'s good cause requirement because [it] was in possession of facts underlying the
proposed counterclaim well before the amendment deadline").
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