Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 1 of 8
`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 1 of 8
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`WWW"
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`THE UNITED STATES DISTRICT COURT
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`FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
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`CRESTWOOD MEMBRANES, INC.,
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`Plaintiffl
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`V.
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`CONSTANT SERVICES, INC.,
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`Defendant.
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`:
`1
`2
`S
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`3:15-CV-537
`(JUDGE MARIAN”
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`MEMORANDUM OPINION
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`i. INTRODUCTION
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`FILED
`SCRANTON
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`MAY 3 0 2017
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`PE
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`DcF‘
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`CLERK
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`Presently before the Court is Plaintiff’s Motion for Leave to Amend its Complaint,
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`(Doc. 120). The Motion primarily seeks to add four additional patterns to the list of
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`copyrighted pool liner patterns that Plaintiff asserts Defendant infringed upon by allegedly
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`printing without Plaintiffs consent. Defendant opposes this Motion, and, in the alternative.
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`requests that, if Plaintiff is allowed to amend its Complaint, the Court should reopen
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`discovery with respect to the new allegations.
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`(Doc. 123). For the reasons that follow, the
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`Court will grant Plaintiffs Motion to Amend its Complaint and will also reopen fact discovery
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`as it concerns these new allegations.
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`ll. PROCEDURAL HISTORY
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`On March 17, 2015. Plaintiff, Crestwood Membranes, |nc., d/bla i2M (“iZM”), filed a
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`Complaint against Defendant, Constant Services, Inc. (“CSI”).
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`(Doc. 1). The Complaint
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`stemmed from a business relationship in the pool liner industry and, as relevant here,
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`f____—r__—W ,
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`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 2 of 8
`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 2 of 8
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`alleged that CSI infringed upon i2M's copyrights to two patterns used for printing on
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`swimming pool liners. The parties engaged in various—and somewhat contentious—
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`discovery up until May of 2016. By May 31, 2016, both parties had filed motions for
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`summary judgment.
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`(Docs. 23, 56). Then, on August 5, 2016, this Court referred the case
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`to Magistrate Judge Saporito for the purpose of conducting settlement negotiations.
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`(Doc.
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`78). Those negotiations were ultimately unsuccessful.
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`The Court also referred both summary judgment motions to Magistrate Judge
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`Carlson for a Report and Recommendation (“R&R”). On February 3, 2017, the Magistrate
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`Judge issued an R&R concerning i2M’s Motion for Summary Judgment.
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`(Doc. 95). On
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`February 8, 2017, the Magistrate Judge issued a second R&R, this one concerning CSl's
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`Motion for Summary Judgment.
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`(Doc. 96). Upon review of the R&Rs, the Court ultimately
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`resolved the two summaryjudgment motions, (Docs. 104, 107, 108), and then set a trial
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`date of January 29, 2018.
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`(Doc. 113).
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`Subsequent to setting a trial date, i2M filed the present motion on April 23, 2017,
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`seeking to amend its Complaint to add four new copyrighted patterns to the lists of patterns
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`it alleges that CSI infringed.1 In the brief accompanying the Motion, i2M asserts that it first
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`became aware that CSI infringed upon the four additional copyrighted patterns when i2M
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`received a group of documents from CSI on May 31, 2016.
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`(Doc. 120-1 at 3).
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`i2M further
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`1 Additionally, the proposed Amended Complaint, in the words of i2M, “updates certain matters,
`such as eliminating its original third claim for breach of implied warranty as to which the Court granted
`summary judgment in CSl’s favor, striking the specific dollar amounts of estimated damages, and making
`minor language changes." (Doc. 120—1 at 6). While opposing i2M's motion as a whole, CSI has not made
`any specific arguments that address these additional changes to i2M's Complaint.
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`2
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`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 3 of 8
`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 3 of 8
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`contends that it first “shared its conclusions about CSl’s infringement of at least four
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`additional i2M-owned patterns” with CSI at the settlement negotiations in August of 2016.
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`(id. at 4).
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`III. ANALYSIS
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`Federal Rule of Civil Procedure 15 provides that a party may amend their complaint
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`once within twenty-one days of service. Fed. R. Civ. P. 15(a)(1). After that time, “a party
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`may amend its pleading only with the opposing party's written consent or the court’s leave.
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`The court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). “The
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`United States Court of Appeals for the Third Circuit has adopted a liberal approach to the
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`amendment of pleadings in order to ensure that 'a particular claim will be decided on the
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`merits rather than on technicalities.” Payne v. Duncan, 2016 WL 2859612, at *1 (MD. Pa.
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`2016) (quoting Dole v. Arco Chem. Co., 921 F.2d 484, 486-87 (3d Cir. 1990)).
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`Indeed, the
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`Third Circuit has noted that “[g]enerally, Rule 15 motions should be granted,” United States
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`ex rel. Customs Fraud investigations, LLC v. Victaulic Co., 839 F.3d 242, 249 (3d Cir.
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`2016), and that “the pleading philosophy of the Rules counsels in favor of liberally permitting
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`amendments to a complaint" or pleading, CMR D.N. Corp. v. City of Phila, 703 F.3d 612,
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`629 (3d Cir. 2013).
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`Nevertheless, “[t]here are three instances when a court typically may exercise its
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`discretion to deny a Rule 15(a) motion for leave to amend: when ‘(1) the moving party has
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`demonstrated undue delay, bad faith or dilatory motives, (2) the amendment would be futile.
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`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 4 of 8
`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 4 of 8
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`or (3) the amendment would prejudice the other party.” United States ex rel. Customs
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`Fraud investigations, 839 F.3d at 249 (quoting United States ex rel. Schumann v.
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`Astrazeneca Pharma. L.P., 769 F.3d 837, 849 (3d Cir. 2014)). “[Plrejudice to the
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`nonmoving party is the touchstone for the denial of the amendment.” Dole, 921 F.2d at 488
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`(quotation marks omitted).
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`in its Brief in Opposition. CSI argues that i2M's motion should be denied because (1)
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`i2M's motion was unduly delayed. and (2) granting i2M’s motion would cause prejudice to
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`CSI.2 The Court will address each of CSl’s arguments in turn.
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`“Delay alone will not constitute grounds for denial” of a motion for leave to amend.
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`Bjorgung v. Whitetail Resort, LP. 550 F.3d 263, 266 (3d Cir. 2008) (citing Cureton v. Nat’l
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`Collegiate Athletic Ass’n, 252 F.3d 267, 273 (3d Cir. 2001)). Undue delay, however, may
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`justify a denial of a motion for leave to amend. United States ex rel. Customs Fraud
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`investigations, 839 F.3d at 249. “Delay becomes ‘undue,’ and thereby creates grounds for
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`the district court to refuse leave, when it places an unwarranted burden on the court or
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`when the plaintiff has had previous opportunities to amend." Bjorgung, 550 F.3d at 266.
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`Nevertheless, “[t]he passage of time, without more, does not require that a motion to amend
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`a complaint be denied." Adams v. Gould inc, 739 F.2d 858, 868 (3d Cir. 1984).
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`2 CSI also. in several places in its brief, accuses i2M of having a dilatory motive in moving to
`amend its Complaint at this time. CSI fails. however. to point to any extrinsic evidence of dilatory motive or
`bad faith outside of the fact that the motion was not made eadier in the case. Thus. because CSI provides
`no support for its contention that i2M acted with a dilatory motive in moving for leave to amend, the Court
`rejects this argument. However. to the extent that CSI argues that the asserted “undue delay” evidences
`i2M's bad faith, the Court will address that contention in the context of its discussion of whether the motion
`was indeed unduly delayed.
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`4
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`While there has been some delay in the filing of the present motion, the Court cannot
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`say that it rises to the level of undue delay and requires the Court to deny i2M's motion.
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`According to i2M, it first came to believe that CSI printed four other patterns for which i2M
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`possessed the copyrights to on May 31, 2016, when CSI turned over certain documents to
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`i2M.
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`(Doc. 120-1 at 3). CSI agrees that it turned over documents it obtained from a third
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`party on this date.
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`(Doc. 123 at 6).
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`i2M then made CSI aware during settlement
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`negotiations that i2M believed it had additional claims against CSI. (Doc. 120-1 at 4; Doc.
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`123 at 6). Then, in December of 2016, approximately two months after settlement
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`negotiations failed, i2M moved to supplement the record on its Motion for Summary
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`Judgment to include information about the otherfour patterns.
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`(Doc. 91). Thereafter, on
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`February 3, 2017, Magistrate Judge Carlson issued an R&R which explicitly did not consider
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`this additional material.
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`(Doc. 95 at 7). The R&R advised the parties that, if they felt “that
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`recent discovery has broadened their dispute, they should seek to amend their pleadings,
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`and conduct orderly discovery on these newly disputed matters.” (Id.). Then, on March 10,
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`2017, this Court adopted the R&R.
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`(Doc. 104). Approximately six weeks later, i2M filed the
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`present Motion to Amend.
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`(Doc. 120).
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`While this timeline shows that there has been some delay in moving to amend, the
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`Court cannot say it is undue. Granting the motion at this stage in the litigation will not
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`burden the Court. Although a trial date is set, that date is months away, and there is still
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`ample time for the parties to conduct discovery on these additional matters. Thus, allowing
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`Case 3:15-cv-00537-RDM Document 129 Filed 05/30/17 Page 6 of 8
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`the current amendment will not postpone trial. Further, given the nature of the
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`amendment—adding additional patterns to the list of alleged infringed copyrights—granting
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`the motion will not significantly broaden the scope of trial.
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`Finally, contrary to CSl’s contentions, the timeline of events does not evince any bad
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`faith or dilatory motive on the part of i2M. Indeed, after coming to believe that CSI infringed
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`upon other copyrighted patterns, i2M made CSI aware of its belief leading up to the
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`settlement negations.
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`i2M also made CSI aware of some of the contours of its additional
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`claims in the supplemental materials it filed in December of 2016 and January of 2017.
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`(Docs. 91, 93). Accordingly, although i2M may not have chosen the best course of action
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`concerning its Motion to Amend, there is no indication that i2M tried to hide its additional
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`claims or is trying to gain an unfair tactical advantage by raising them at this stage.
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`Next, CSI argues that it will be unfairly prejudiced if the Court allows i2M to amend
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`its Complaint. “A mere claim of prejudice is not sufficient; there must be some showing that
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`[a party opposing a motion to amend] ‘was unfairly disadvantaged or deprived of the
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`opportunity to present facts or evidence which it would have offered had the .
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`amendments been timely.” Dole, 921 F.2d at 488 (second alteration original) (quoting
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`Cornell & Co. v. OSHRC, 573 F .2d 820, 823 (3d Cir. 1978)).
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`It is the party opposing the
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`amendment who has the burden of showing that such prejudice will occur. Klser v. Gen.
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`Elec. Corp, 831 F.2d 423, 428 (3d Cir. 1987). Thus, “[ijn order to make the required
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`showing of prejudice, regardless of the stage of the proceedings, [a party opposing a motion
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`to amend] is required to demonstrate that its ability to present its case would be seriously
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`impaired were amendment allowed." Dole, 921 F.2d at 488. Additionally, Courts may
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`“consider[] whether allowing an amendment would result in additional discovery, cost, and
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`preparation to defend against new facts or new theories.” Cureton, 252 F.3d at 273.
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`CSI has not shown that it would be unfairly disadvantaged or deprived of the
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`opportunity to present facts or evidence it otherwise would have offered had i2M amended
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`earlier.3 Nor has CSl shown that its ability to defend against i2M's action would be seriously
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`impaired if this Court was to grant i2M's motion.
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`Instead, CSI primarily contends that it
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`would be prejudiced because an amendment would necessitate reopening discovery.
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`However, “the need for additional discovery does not conclusively establish prejudice."
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`Dole, 921 F.2d at 488.
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`Indeed, although discovery, as discussed below, would need to be
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`reopened in this case, the nature of the amendment i2M has proposed indicates that the
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`required additional discovery would be limited.
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`i2M’s amendment primarily adds four
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`patterns to the list of copyrighted patterns it alleges that CSI infringed upon by printing
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`without i2M's consent.
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`It does not add any additional causes of actions or substantially
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`change i2M’s theory of recovery. Accordingly, given the limited nature of the amendment, it
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`is unlikely that CSI will incur substantial costs in conducting the additional discovery.
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`Consequently, allowing i2M to amend its Complaint as it has proposed would not cause CSI
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`3 CSI does argue that it is disadvantaged because i2M has been able to plan its prosecution on
`these claims for months while CSI has done nothing to prepare. CSI, however, was on notice as early as
`October of 2016 that i2M might seek to amend its Complaint to add these additional claims.
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`7
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`unfair prejudice. Therefore, the Court will grant i2M’s Motion for Leave to Amend its
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`Complaint.
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`Finally, because the Court is allowing i2M to amend its Complaint, the Court will
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`reopen fact discovery limited to the new facts and issues raised by i2M's amendment.
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`Although i2M has argued that additional discovery is not necessary, these arguments are
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`utterly without merit.
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`i2M’s proposed Amended Complaint raises new factual issues that
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`CSI is entitled to test and explore before trial through discovery. CSI has requested that the
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`Court reopen discovery for at least three months. Because i2M has not put forth any
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`alternative time frame for additional discovery, the Court will grant CSl’s request.
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`IV. CONCLUSION
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`For the reasons outlined above, the Court will grant i2M’s Motion for Leave to Amend
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`its Complaint. The Court will further grant CSl’s request to reopen fact discovery, but such
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`discovery shall be limited to the new matters raised by Plaintiff’s Amended Complaint. A
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`separate Order follows.
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`United States District Judge
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