Milwaukee Electric Tool Corporation et al v. Chervon North America Inc

Filing 174

ORDER signed by Judge J.P. Stadtmueller on 4/10/2017 DENYING 149 Plaintiffs' Expedited Motion for Leave to Amend Complaint. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
MILWAUKEE ELECTRIC TOOL
CORPORATION, METCO BATTERY
TECHNOLOGIES LLC, AC (MACAO
COMMERCIAL OFFSHORE) LIMITED,
and TECHTRONIC INDUSTRIES CO.
LTD.,

Case No. 14-CV-1289-JPS

Plaintiffs,
v.
CHERVON NORTH AMERICA INC.,

ORDER
Defendant.
On March 15, 2017, Plaintiffs filed an expedited motion under Civil
Local Rule 7(h) for leave to amend their complaint to add Chervon (HK)
Limited (“Chervon HK”), a Chinese entity located in Hong Kong, as a
defendant in this matter. (Docket #149). Chervon HK is, according to
Plaintiffs, the parent to Defendant Chervon North America, Inc. (“Chervon
NA”). Id. at 1. Chervon HK allegedly made sales of the infringing products
at issue here. Id. Because Plaintiffs’ motion was filed as expedited under Civil
Local Rule 7(h), its argument in support of amendment is scant. See Civ. L. R.
7(h) (limiting argument in support to three pages). Plaintiffs claim that
joining Chervon HK will not change the substantive issues raised in this case,
nor will it require additional discovery. Id. Rather, Plaintiffs seek merely to
add a defendant who is related to Chervon NA and who also participated in
the alleged infringement of Plaintiffs’ patents. Id. at 1–3.
Chervon opposes the motion. (Docket #155). First, it says that the
amendment is untimely, since it comes two and a half years after the suit was
filed, although there is evidence that Plaintiffs knew of Chervon HK’s

participation in the relevant conduct much earlier than that. Id. at 1–2.
Second, Chervon NA contends that amendment would be unfairly
prejudicial, citing the delay in seeking amendment and the delay the
proposed amendment would cause. Id. at 2–3. In particular, Chervon NA
notes that serving Chervon HK in China could, under the relevant treaties,
take as long as six months, which would delay the case well past the current
dispositive motion deadline and probably past the trial date, which is set for
October 16, 2017. Id. Finally, Chervon NA claims that the proposed
amendment would be futile, as Plaintiffs could not establish that personal
jurisdiction or proper venue exists over Chervon HK in this Court. Id.
On the basis of these arguments, the Court must deny Plaintiffs’
motion.1 Federal Rule of Civil Procedure 15(a) provides that leave to amend
a complaint “shall be freely given when justice so requires.” Fed. R. Civ. P.
15(a). Courts favor granting leave to amend, but they act within their
discretion to deny such leave when there is a substantial reason to do so.

1

On March 27, 2017, Plaintiffs filed a letter attempting to address Chervon’s
arguments and requesting oral argument on its motion. (Docket #164). The letter
reads like a reply brief, but by invoking Civil Local Rule 7(h), Plaintiffs deprived
themselves of the ability to file such a brief absent leave of the Court. Civ. L. R.
7(h). Plaintiffs did not designate the letter as a reply, nor ask for leave to file it, and
so the Court is left with a document filed out of the normal stream of expedited
motion briefing.
The Court will neither consider the arguments made in the letter nor grant
the request for oral argument. First, because Plaintiffs chose to operate under the
strictures of Rule 7(h), Plaintiffs cannot escape those strictures now that the
complexity of the relevant issues has come into full view. Nor would it be fair to
Chervon NA, which was forced to file a 3-page opposition in conformity with Rule
7(h). Finally, the Court notes that oral argument is almost never permitted in this
branch of the Court, and deciding whether to grant it rests in the Court’s
discretion. Id. 7(e). No cause exists to entertain oral argument on this motion,
particularly not on Plaintiffs’ stated reason that it needs to address Chervon’s
arguments. If Plaintiffs thought a reply would have been useful, they should not
have resorted to the expedited motion procedures the Court provides.

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Select Creations, Inc. v. Paliafito Am., Inc., 830 F. Supp. 1213, 1216 (E.D. Wis.
1993). This includes undue delay, bad faith, dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, or futility of the amendment. Foman v. Davis, 371 U.S. 178, 182
(1962).
Here, while Plaintiffs may be correct that Chervon’s foreign parent
had a part to play in the alleged infringement, it has simply been far too long
to permit a change in the cast of this case. Normally delay is not itself a
sufficient basis for denying a motion to amend, Feldman v. Allegheny Int’l,
Inc., 850 F.2d 1217, 1225 (7th Cir.1988), but “the longer the delay, the greater
the presumption against granting leave to amend.” Tamari v. Bache & Co.
S.A.L., 838 F.2d 904, 908 (7th Cir. 1988); Bohen v. City of E. Chicago, Ind., 799
F.2d 1180, 1184 (7th Cir. 1986) (“[C]onsiderations of delay and prejudice may
preclude automatic grant of an amendment.”). Chervon NA’s evidence
demonstrates that Plaintiffs knew that Chervon HK was involved at least
since the beginning of this case over two years ago. Despite this, only now
that Chervon NA’s defense is revealed—namely, that it “facilitated” the
infringement but is not itself liable—do Plaintiffs seek to join its foreign
parent. Without commenting upon the merit of Chervon’s NA’s theory, the
Court is not persuaded that, on the facts known to it from the very start of
this litigation, Plaintiffs should not have foreseen the wisdom in joining
Chervon HK much earlier. Select Creations, 830 F. Supp. at 1217 (given a long
passage of time, “the party seeking leave to amend must justify that request
by more than invocation of the concept of the liberality of Rule 15(a)”).
Amendment under Rule 15(a) cannot be used as “a license for carelessness or

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gamesmanship.” Feldman v. Allegheny Int’l, Inc., 850 F.2d 1217, 1225 (7th Cir.
1988).
Moreover, although the case has lived much of its life under a stay
during proceedings before the U.S. Patent and Trademark Office, the Court,
consistent with its usual practice, set an aggressive schedule for the final
resolution of this matter more than two months ago. (Docket #137). Yet
Plaintiffs waited until now to seek to join a foreign defendant whose
participation would likely push back the Court’s schedule substantially.
Notably, this case is unlike Clark v. Universal Builders, Inc., 501 F.2d 324,
339–40 (7th Cir. 1974), where the district court erred in denying leave to join
as defendants the officers and directors of the closely-held corporate
defendants, since those individuals had “constructive notice of the action and
indeed were active participants in it since its inception.” In the present case,
although there is a relationship between these two Chervon entities, and
although it appears Chervon HK has been aware of this action, the link
between Chervon HK and Chervon NA is far more tenuous than the
connection between a closely held corporation and its directors.
Considering the Court’s duties under Federal Rule of Civil Procedure
1 to construe all the Rules in order to secure the “just, speedy, and
inexpensive determination of every action,” the Court cannot stretch even the
liberal standards of Rule 15 as far as Plaintiffs request. See Amendola v. Bayer,
907 F.2d 760, 764 (7th Cir. 1990) (no abuse of discretion to deny motion for
leave to amend complaint where plaintiff gave no good reason for failure to
earlier seek amendment and because granting leave “would impair the public
interest in prompt resolution of legal disputes”); Perrian, 958 F.2d at 195
(“The burden to the judicial system can justify a denial of a motion to amend
‘even if the amendment would cause no hardship at all to the opposing
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party.’”) (quoting Tamari, 838 F.2d at 908). The motion will, therefore, be
denied.
Accordingly,
IT IS ORDERED that Plaintiffs’ expedited motion for leave to amend
their complaint (Docket #149) be and the same is hereby DENIED.
Dated at Milwaukee, Wisconsin, this 10th day of April, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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