Rule 15 Motion to Amend

This episode is about the Rule 15 Motion to Amend. We discuss the three ways to satisfy 15(a), a threshold test that applies to all amendments in federal court. We then discuss statutes of limitation and the relation-back of amendments. 

Transcript

Copy Transcript Copied

Speaker 1 0:13

Welcome to the civic procedure podcast. I am your host Thomas Mayne . This episode is about rule 15 motions to amend. We need about 30 minutes for this episode. So let's get started. Motions to amend are common in litigation because parties are frequently responding to additional information or making strategic determinations throughout the course of litigation. And whenever a party wants to amend their pleading, the motion to amend is the way they get there. And that's rule 15 and will 15 is frequently tested on exams because it is one of the rules in the federal rules that has a lot of detail. Compare it for example, to the 12 B six and our pleading standard, where there isn't very much detail or guidance in the rule itself that is in contrast to rule 15, which has a lot of steps of analysis. So this is a frequently tested subject in civil procedure because it is testing your ability to read a rule federal rule, 15 applies only to pleadings. We don't use this rule to amend motions. We use it to amend pleadings. We also use it only to amend our own pleadings. You don't amend another party's pleadings. The intro in our federal rule, 15 says that a party may amend its pleadings. What is a pleading rule? Seven a gives us the comprehensive list of pleadings that are contemplated under the federal rules, but almost always when we're talking about emotion to a man that focuses on complaints, usually it's the plaintiff invoking rule 15 because they want to amend their complaint. So imagine that they want to amend paragraph 17 because there's some detail in paragraph 17 that is incorrect, or maybe they want to add a new allegation to strengthen an existing cause of action, or maybe they want to amend their complaint to add an entirely new cause of action. They've done some additional research and now they have a new fraud claim. In addition to their contract claim, or maybe a plaintiff wants to amend their complaint to expand the remedies that they seek in the litigation. Sometimes for example, they might later on move to amend and add a claim for let's say punitive damages are frequently. Plaintiffs will amend their complaint to add an entirely new party to the suit. Every motion to amend here . Me, every motion to amend begins with 15 a and 15 a can be satisfied in any one of three ways. So three ways to satisfy 15 a and every motion to amend begins with this analysis. The first of these three ways is 15 a one. And let's refer to that as the freebie. It's the freebie because you may once appreciate the limit on the number of times you can invoke the freebie. You can amend your pleading once as a matter of course provided you do it with any particular period of time. If you're looking at 15, a one, you'll see that the period of time is 21 days from something, but which something you need to count 21 days from depends upon what the pleading is. That's being amended. If it's a complaint, which is the more typical application of the motion to amend, you're actually in the second and longer part of 15, a one , which is 21 days after the defendant's answer or motion. So 21 days after the defendant has filed an answer or 21 days after the defendant has filed, say for example, a 12 B six, the freebie runs for 21 days. From that moment. If instead you were amending an answer rather than a complaint, you would be in 15, a one a, which would be 21 days from the filing of the answer. So make sure you're invoking the right sub paragraph of 15, a one, a for application of the freebie. When a plaintiff is amending their complaint, every motion to amend analysis begins with 15, a one of the three ways to satisfy 15 days with this freebie. And that freebie runs for quite a long period. It runs for 21 days after the defendant has filed their answer or a 12 B six. So appreciate what that means after the complaint has been filed. Defendant moves to dismiss the freebie runs for 21 days after the defendant has filed that 12 B six. So that gives you a chance to address whatever defect might be in that complaint. But to address that defect, you would have to move to amend and begin that analysis with 15 a and 59 would be satisfied here under this freebie provision provided you did it promptly. So the freebie is one of three ways to satisfy 15 a when the freebie isn't available, perhaps because you already used it once, then you need one of the other bases. And the second way of satisfying 15 a is with the consent of the adverse party. Now you might imagine this isn't going to happen very often and you'd be right, but it could be something that's exchanged negotiated. Occasionally parties will give up something in exchange for something. And so plaintiffs might be willing to give to something of value to the defendants in exchange for their consent on the motion to amend a defendant might especially be willing to negotiate their consent in circumstances where they're quite confident that the motion to amend is going to be granted anyway. And if the motion is going to be granted anyway, well, then let's save the expense of arguing that motion and let's get whatever we can get in exchange for our consent to that motion to amend. So that's the second way of satisfying 15 a the third way of satisfying 15 a is what you are most likely to see in practice or on an exam. And that is whether quote justice so requires close quote. That's the standard that a judge is supposed to apply with the other two bases that we've discussed here. The judge isn't even involved, but this bases involves the judge and the standard that the judge is supposed to apply with respect to 15 a is whether or not justice so requires that's a vague standard. And so we need an attack plan. And the attack plan is to go to the fact pattern and find facts that allow you to explore two different lines of inquiry. Number one, delay, and number two prejudice for delay. Let's talk about that one first, we're talking about how much time has passed and why has that amount of time passed? Let's get through a particular example here so that you can see what a particular analysis would look like on an exam. If the fact pattern involves a plaintiff amending their complaint to add a new let's say cause of action for fraud. If the complaint was filed two years ago, so two years have passed before the plaintiff filed the motion to amend. That is the subject of our inquiry. That two year passage of time is the how long. And the fact pattern might give us some insight as to why the two year delay, is there a good reason for that delay appreciate also that there are two different periods of time that we're talking about here. So this allows you to really get sophisticated in your analysis. If we're talking about the plaintiff, amending their complaint to add the fraud claim, there's the period of time between the filing of the complaint. And they're realizing that they had a fraud claim. So that's one period of time to talk about how long and why. And then there's a second period of time between the moment that they discovered or appreciated that they had a fraud claim and the passage of time between that discovery and their filing of the motion to amend. So that's another, how long and why that you can do on an exam when we're analyzing the why for the delays. We're looking for facts in the fact pattern that allow us to argue that it's excusable, that they waited as long as they did, or it's inexcusable when counsel is competent and conscientious and diligent. And there are facts that are indicative of that. Well, then the delay is probably excusable. If on the other hand, plaintiff really could have done this sooner and they really waited longer than they should have. And it's only because of incompetence or lack of attention or distraction. Well, that's why the delay, well , then that moves the delay factor in the direction of maybe justice doesn't require the amendment in this circumstance. So delay how long and why now let's turn to the second inquiry prejudice for this. We're looking for facts in the fact pattern that allow us to analyze the extent to which the party opposing the amendment. Again, usually a defendant, the extent to which the defendant is compromised by the timing of this new thing that they have to defend against. So if the new thing is a cause of action for fraud, our inquiry here is, is the defendant's defense to that fraud claim compromised by the fact that it's being asserted. Now six months after the complaint was filed or two years or whatever the particular period of time is rather than having it been in the complaint all along. Imagine for example, that the new cause of action requires a different type of evidence and the defendant would have done something differently in this period of time between the filing of the complaint and the filing of the motion to amend, but they didn't think they needed to retain that evidence or keep contact with those former employees or retain those records. When the company was purchased in a mergers and acquisitions deal, the idea is we're looking for something that's happened in this particular period of time that has compromised or prejudiced the defendant's ability to defend against that claim. The common mistake that I see is that students will analyze the prejudice to the defendant of defending against this claim compared to not having to face this claim. That's wrong. The prejudice that we want to analyze is defending against this claim later, as opposed to defending against this claim earlier in the course of litigation, that's the prejudice that we're looking for. Once we have that notion of prejudice figured out, we can combine that with what we've already discussed, which is the inquiry into the delay. So we combine delay and prejudice. And what we wind up with is, okay, so plaintiff waited, how long and why did they wait as long as they did? And what is the consequence of that delay to the defendant? That's how we see the delay and the prejudice weaving together to allow the court to analyze whether justice so requires. And if it's close, then remember that the rule says, leave shall be freely. Given judges are not supposed to be stingy with this. This is the drafters of the federal rules, recognizing the dynamic nature of litigation and trying to build in that flexibility into the rule structure itself. That's 15, a and every motion to amend begins with 15 a if 15 a is not satisfied, then we're done. And the motion to amend is denied when 15 a is satisfied. Well, then we have a whole bunch more questions that we need to address. And the first of those is whether the plaintiff is adding a claim, including a claim against a new party or a claim against a already named party is adding a claim that would be barred by the statute of limitations. If this were a brand new lawsuit. So we isolate this claim, that's being added. Let's stick with that example of the new fraud claim that's being added by the amendment. Would this fraud claim be barred by the statute of limitations? If this plaintiff were filing a brand new lawsuit for fraud, that in turn would require us to figure out well, when could the plaintiff have sued for fraud? What's that date? And what is the statute of limitations on fraud claims? If this claim would be barred by the statute of limitations, if it were a new claim, then plaintiff needs relation back and that's what 15 C is all about. So our question here is, would the plaintiff's claim be barred by the statute of limitations? If it wouldn't we're done, if it would be barred by the statute of limitations, then we move on to the next step of the analysis. The next step is a quickie, but it's an important one it's that we need to make sure that relation back will in fact, solve that statute of limitations. Problem relation back gets us an earlier date. It's not a cure all for statute of limitations problems. So before we do the relation back analysis, we want to make sure that we understand what earlier date relation back will get us and whether that date is early enough. So what we're focused on here is the idea that relation back we'll treat the amended claim as though it had been in the complaint all along. So what is the date of this thing that we're amending what's the date that it was filed, and then make sure that if this new fraud claim had been in the complaint from the beginning, will , would it have been barred by the statute of limitations, even then, that's the fact pattern that we're trying to catch with this step right here, when relation back will solve our statute of limitations problems. And we're going to proceed on to relation back, which is our next step. But if relation back would not even solve the statute of limitations problem, well, then there's no reason to spend time doing that on an exam. And so now we're ready for a relation back. And if we've reached this step it's because all of the other steps in this analysis have been satisfied. 15 a has been satisfied. We do have a statute of limitations problem. The statute of limitations problem would be solved by relation back . Now we're ready to tackle the three ways of establishing relation back. Any one of these three is good enough. The first of these applies only to state law claims. If it's a federal cause of action, that's being added by amendment. This prong of 15 C cannot help you. If the cause of action that you're adding by amendment arises under state law in 15 [inaudible] might allow relation back what the federal rule is doing here is that it is incorporating by reference, essentially copying and pasting the state practice and procedure on relation back in circumstances where it's a state law claim, that's found its way into federal court. The point here is that some state rules of relation back are much more generous than the federal rule to know whether that's the case. You'd have to be given the state rule on relation back, but here, the federal rule is allowing you to incorporate more forgiving, more generous. You don't have to worry about it. If the state rule is stricter on relation back than the federal rule, this is instead a one way ratchet that says if the state would allow relation back under these circumstances, then you get to take advantage of it here in federal court. Of course, sometimes it's not a state law claim that's being added by amendment, or maybe it is a state law claim that's being added by amendment. But the state rule of relation back is no more generous than the federal rule . Then we need to look at the other two ways of establishing relation back under 15 C. And the second of those shows up under 15 [inaudible] , which applies to circumstances. You're adding only a claim, but not a party, not a party. If you are only adding a claim, a new cause of action, 15 [inaudible] allows relation back. If the new claim, the one that you're adding arises out of the same transaction or occurrence as the claims that were in the original complaint. So in that hypothetical amendment, adding a fraud claim, does the fraud claim arise out of the same transaction or occurrence as the breach of contract claim in the original complaint to do a same transaction or occurrence analysis consult the episode on joinder. That's the place where we get into the greatest detail about how to do a same transaction or occurrence analysis. We would apply that here. We would talk about whether the fraud claim is proximate in time or proximate in space, or has a logical relationship to the breach of contract claim. That was in the original complaint. That's what that analysis would look like. But under 15, [inaudible] our second way of establishing relation back. If you're only adding a claim that is not adding a new party, then same TNO is all that you need to get relation back. And now we're ready for the third and final way of establishing relation back, which provides a whole sequence of requirements. That must be satisfied in order to add a new claim against a new party. So let's work through all of the requirements of 15 [inaudible] . There are several, the first is that this new claim against this new party must arise out of the same transaction or occurrence as the claims against the original parties that were named in the complaint. And so once again, that's our familiar same transaction or occurrence analysis. That's our first step here now onto the second step that party that we're adding by amendment must have had notice. And there are two components to notice. I think of it as notice of what and notice when what we're looking for here are facts in the fact pattern that help us analyze whether the party who is going to be added by amendment had notice, notice of what and notice when let's analyze the what and the, when, what must this defendant have had notice of answer the lawsuit. You're adding a party to a lawsuit. And what we're asking here is whether this party you're adding new , that lawsuit existed. This idea of notice is not formal. Notice this isn't the due process kind of capital N term of art. Notice that we talk about in another part of this course in relation to the due process clause and service of process. This is notice with a lower case, and this is notice with a K, did the defendant no didn't did the defendant know what no , that there was this lawsuit pending. So we're asking here, are there facts in the fact pattern that tell us what the defendant knew about the filing of the original suit, the suit that they are being added to? The other part of notice that we're asking here is does the fact pattern tell us when this defendant knew about this ongoing lawsuit and what the rule says in 15 [inaudible] by incorporating federal rule four M is that it's asking whether the defendant had notice within 90 days, that's how you should read for M in 15. [inaudible] the idea is the defendant must have had notice that there was this lawsuit that existed, and it must have had that notice within 90 days, I'm emphasizing this at length and repeating it because it's a common mistake. Notice of what notice when it is not relevant, that the defendant had noticed that the plaintiff was injured. It is not relevant. Whether the defendant had noticed that the plaintiff wanted to file a lawsuit, it is not relevant. Whether the defendant had noticed that the plaintiff had consulted a lawyer, what is relevant is notice of a lawsuit. Notice of what the lawsuit, moreover, that notice must be within the 90 day period. If they had notice of the lawsuit five months after the lawsuit was filed, that is not notice of the lawsuit within 90 days of its filing. Notice of what and notice of when the fact pattern will give you details, or those details will be conspicuously absent for you to do this analysis. But if you're going to add a new claim against a new party, this as an essential step, if that satisfied, then we have notice and we're onto the final requirement, which is mistake. We can only get relation back of our new claim against a new party. When the plaintiff made a mistake, importantly, lack of knowledge is a mistake. That's the more frequent scenario plaintiff is suing somebody and they didn't realize, or didn't know the identity of who manufactured the product or which officer committed the violation of their civil rights. And so they don't know the identity of someone. And then later on, after the statute of limitations as run, the plaintiff wants to amend their complaint to add a new party or substitute a party. And this step of the analysis won't allow it unless the defendant knows that the plaintiff made a mistake. The paradigmatic mistake is a typographical error. You misspelled the defendant's name or you sued McDonald's Inc and you should have sued McDonald's corporation. And now you're moving to amend the complaint to substitute the ladder for the former type of graphical errors are mistakes. So when we stack all of these requirements under 15 C one C together, we end up with a set of circumstances that are pretty hard to satisfy, same TNO. Notice of what notice when mistake, it is hard to add a new claim against a new party after the statute of limitations has run, but that's a defensible approach. Statutes of limitations are supposed to mean something. In any instance, when the statute of limitations is applied, it's extinguishing an otherwise totally valid claim merely because of the passage of time, the notion behind a statute of limitations is that precious, limited judicial resources should be allocated to fresh claims in a way from stale claims where memories have faded, and it's going to be harder to litigate. Statutes of limitations. Also incorporate a notion of repos where the idea is that after a certain amount of time, it's just good to let things be done and not have things crawling out of the woodwork years later. That's what statutes of limitation achieve. When we allow relation back, we are by definition circumventing statutes of limitation. And when you're bringing in a whole new party after the statute of limitations as run, well, that's even a more profound circumvention of a statute of limitation then is just simply adding a new claim against an existing party. And so I hope that gives you a more intuitive sense of where those requirements are coming from. And with that, we can conclude this episode of the civil procedure podcast on the rule, 15 motion to a man . Thank you for your attention. Be sure to consult the episode list on your podcast feed or look@civilprocedure.com for more information about related topics, having .