United States District Court, D. Massachusetts
DAVID H. HENNESSY U.S. MAGISTRATE JUDGE
action arises from a commercial dispute between Plaintiff
CMRK, Inc. (“CMRK”), which collects and
distributes used clothing, and Defendant Tampico Trading
Group, LLC (“Tampico”), CMRK's customer. In
short, CMRK claims Tampico owes it money for clothing that
CMRK delivered to Tampico pursuant to an agreement between
the parties. See generally Docket #1. Tampico claims
the clothing it received was not the clothing it agreed to
buy; it has refused to pay. See, e.g., Docket #22.
before me by way of referral, see Docket #34, is
Defendant's motion to amend its answer to add
counterclaims against CMRK, Docket #21. Tampico seeks to add
to its answer counterclaims against CMRK for breach of
express warranty, fraudulent inducement, and negligent
misrepresentation. See Docket #22-1 at 4-5. For the
reasons that follow, Tampico's motion to amend is
began this action by filing a complaint in Worcester Superior
Court in February 2017. See Docket #1. Tampico
removed the case to federal court, Docket #1, and then
answered CMRK's complaint on March 14, 2017, Docket #4.
On June 6, 2017, District Judge Hillman entered a scheduling
order in this matter. Docket #15. In it, Judge Hillman
adopted the proposed scheduling order jointly submitted to
the court by both parties on June 5, 2017. Id.;
see Docket #9 ¶ 2. The parties' joint
proposal called for all “motions seeking leave to . . .
amend the pleadings to assert new claims or defenses”
to be filed by September 6, 2017. Id.;
accord Docket #15.
filed the instant motion on September 6, 2017, the last day
permitted by the scheduling order. Docket #21; see
also Docket #22. CMRK opposed the motion in a memorandum
of law filed shortly thereafter. Docket #24.
grant or denial of an opportunity to amend is within the
discretion of the District Court . . . .” Foman v.
Davis, 371 U.S. 178, 182 (1962). Federal Rule of Civil
Procedure 15(a)(2), which governs this motion, instructs that
a court should “freely give leave” to amend a
pleading “when justice so requires.” Fed.R.Civ.P.
Rule 15(a)(2). That said, a motion to amend may be denied
when the movant has exhibited “bad faith or dilatory
motive, ” or when the proposed amendment would be
futile or cause undue delay. Foman, 371 U.S. at 182.
These restrictions prevent litigants from reducing Rule 15 to
a mere vehicle for “‘the old sporting theory of
justice' or the use of the federal courts as a forum for
testing alternative legal theories seriatim.”
Fla. Evergreen Foliage v. E.I. DuPont De Nemours &
Co., 470 F.3d 1036, 1042 (11th Cir. 2006) (quoting
Freeman v. Cont'l Gin Co., 381 F.2d 459, 469-70
(5th Cir. 1967); 6 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1489 (2d ed.
makes three arguments against allowing this motion, none of
which persuades. First, it contends that Tampico wants to
amend its answer in order to unduly delay this litigation.
Docket #24 at 1-3. CMRK claims that Tampico triggered a
proverbial “race to the courthouse” by pleading
its claims against CMRK in a Texas state-court lawsuit
shortly after receiving CMRK's complaint in the instant
case. CMRK emphasizes that Tampico already has
advanced in the Texas action every claim it now seeks to add
to its answer (and three more claims besides) and notes that
Tampico did so more than six months ago. Id. at 2;
see Docket #24-1 ¶¶ 14-19. It appears true
that Tampico advanced identical claims against CMRK several
months ago in the Texas case. However, the instant motion
abides by a filing deadline that CMRK itself jointly
proposed. See Docket #9 ¶ 2. While the
scheduling order certainly does not require that the Court
grant every timely motion to amend, the fact that CMRK agreed
to this deadline undercuts its argument that Tampico abused
Rule 15 by filing its motion as the deadline expired. Cf.
Euro-Pro Operating LLC v. Dyson Inc., 164 F.Supp.3d 235,
240 (D. Mass. 2016) (quoting Steir v. Girl Scouts of the
USA, 383 F.3d 7, 12 (1st Cir. 2004)) (explaining that
Rule 15(a)'s “liberal standard is replaced by a
‘more demanding “good cause” standard'
after a party misses the deadline to amend set forth in the
Court's scheduling order”). I also find
unconvincing CMRK's general assertion that “[t]here
is absolutely no reason or excuse for [Tampico's] delay
in asserting its counterclaim[s]” other than to delay
this case. Tampico may, for example, simply have wished to
conduct discovery before adding its counterclaims. The motion
is timely; on this record, I do not find that its timing
evidences bad faith, dilatory motive, or another unseemly
motivation justifying denial.
next argues that Tampico's purported counterclaims are
actually just defenses to CMRK's complaint, asserting
that “nothing in these counterclaims . . . suggests
that the defendant has any damages, other than that the
merchandise sold is of less value than defendant
anticipated.” Docket #24 at 3. Tampico's proposed
amended answer, Docket #22-1, plainly dispenses with this
argument: It states that “Tampico incurred costs to
transport the 32 shipments [of allegedly defective clothing]
from Massachusetts to Texas, ” id. ¶ 7,
and that “Tampico[']s customers refused to pay
Tampico for the 32 shipments from CMRK, ” id.
¶ 8. The proposed counterclaims thus plead damages.
CMRK argues that Tampico's proposed counterclaim for
fraudulent inducement is futile because it fails the
heightened pleading requirement imposed by Federal Rule of
Civil Procedure 9(b). Docket #24 at 3-4. Rule 9(b) requires a
party pleading a fraud claim to state the circumstances of
the fraud “with particularity.” Fed.R.Civ.P. Rule
9(b). In other words, the pleading must set forth “the
who, what, when, where, and how of the alleged fraud.”
E.g., Lawton ex rel. U.S. v. Takeda Pharm.
Co., 842 F.3d 125, 130 (1st Cir. 2016) (collecting
cases). Here, Tampico's proposed amended answer
identifies the specific transactions in which the fraud
allegedly occurred, Docket #22-1 ¶¶ 3, 6; accuses
CMRK of misrepresenting to Tampico the nature of the clothing
it delivered, id. ¶¶ 9, 18; and states
that CMRK's misrepresentation was knowing or reckless,
id. ¶ 21. Tampico's filing also includes
screenshots of text message conversations between the parties
that identify the individuals involved in the alleged fraud.
See Docket ##22-2 through 22-4. Further, I note that
the parties are small entities whose principals directly
communicated about the contested transactions by phone and
text and are therefore known to each other. On these facts
and at this procedural stage, I find that Tampico's
proposed fraudulent inducement counterclaim is not so clearly
futile that Tampico should be forbidden from asserting
Motion to Amend its Answer to Add Counterclaims, ...