Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SAXHOLM AS v. DYNAL

June 10, 1996

SAXHOLM AS, and THE ESTATE OF ROLF SAXHOLM, GUNVOR SAXHOLM, as SOLE HEIR, Plaintiffs,
v.
DYNAL, INC., and DYNAL AS, Defendants.



The opinion of the court was delivered by: POHORELSKY

 POHORELSKY, Magistrate Judge:

 The plaintiffs, Saxholm AS and the Estate of Rolf Saxholm (collectively "Saxholm") have moved for leave to file an amended complaint which would add a new defendant, Dyno Particles, AS, ("Dyno") and would drop the Estate of Rolf Saxholm as a plaintiff. The defendants have cross-moved for sanctions against Saxholm in connection with the making of the motion. Both motions have been referred to this magistrate judge. For the reasons set forth below, the motion to amend the complaint is GRANTED, and it is my report and recommendation that Dynal's application for sanctions be DENIED.

 I. BACKGROUND

 The plaintiffs commenced this action on May 20, 1994, asserting patent infringement claims against the defendants, Dynal, Inc., and Dynal AS (collectively "Dynal"). Specifically, the present complaint asserts claims against Dynal, Inc. for direct infringement of three United States patents owned by Saxholm, and claims against Dynal AS for inducing and contributing to Dynal, Inc.'s infringement of those patents. Saxholm seeks damages as well as declaratory and injunctive relief. *fn1"

 The Saxholm patents concern biomagnetic separation products used in medical and biological laboratories in conducting tests on blood and other biological substances. The defendant Dynal AS, a Norwegian corporation, manufactures and distributes, worldwide, two biomagnetic separation products, "Dynabeads" and "Dynal MPC," which Saxholm contends infringe the Saxholm patents. The other defendant, Dynal, Inc., is a New York corporation. It is a wholly-owned subsidiary of Dynal AS and is the North American distributor of Dynabeads and Dynal MPC. Dyno Particles AS, whom the plaintiffs now seek to add as an additional defendant, is a Norwegian corporation that owns fifty percent of Dynal AS. It, too, manufactures biomagnetic separation products, called "Dynospheres," which Dynal AS purchases and resells as "Dynabeads." *fn2" Saxholm alleges that Dynal, Inc., has sold Dynabeads, Dynal MPC, and Dynospheres (as Dynabeads) to customers in the United States, including customers in New York.

 The defendants oppose the addition of Dyno as a defendant on the grounds that they will be prejudiced by the delay and expense that the addition of Dyno would cause and that, in any event, the claims against Dynal are futile because they fail as a matter of law. *fn3"

 II. THE MOTION TO AMEND

 Once a responsive pleading has been filed, plaintiff may amend the complaint only with leave of court. Fed. R. Civ. P. 15(a). The rule states that leave to amend should be granted freely, and amendment is typically permitted. Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222 (1962); Nerney v. Valente & Sons Repair Shop, 66 F.3d 25, 28 (2d Cir. 1995). Futility of the amendment and undue delay on the part of the movant, however, are sufficient cause for denial of the application. John Hancock Mut. Life Ins. Co. v. Amerford Int'l Corp., 22 F.3d 458, 462 (2d Cir. 1994); Sterling v. Interlake Industries, Inc., 154 F.R.D. 579, 588 (E.D.N.Y. 1994). Thus, if granting the motion would result in substantial prejudice to the non-movant, the application should be denied. Foman, 371 U.S. at 183; Interlake, 154 F.R.D. at 588. Likewise, if the court concludes that the proposed amendments fail to state legally cognizable claims for relief, it is not an abuse of discretion for the district court to deny leave to amend. Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131-32 (2d Cir. 1993); accord, Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir. 1990). The discussion below examines each of these concepts in turn.

 A. Delay and Prejudice

 Although courts have recognized that prejudice tends to increase with delay, see, e.g., Strauss v. Douglas Aircraft Co., 404 F.2d 1152, 1155 (2d Cir. 1968); Select Creations, Inc. v. Paliafito America, Inc., 830 F. Supp. 1213, 1216 (D.C.Wis. 1993), delay alone is seldom reason to deny a motion to amend. Ashe v. Corley, 992 F.2d 540, 543 (5th Cir. 1993); Gay v. Petsock, 917 F.2d 768, 773 (3d Cir. 1980). The non-movant carries the burden of demonstrating that substantial prejudice would result were the proposed amendment to be granted. Interlake, 154 F.R.D. at 589, citing Panzella v. Skou, 471 F. Supp. 303, 305 (S.D.N.Y. 1979). Any prejudice which the non-movant demonstrates must be balanced against the court's interest in litigating all claims in a single action and any prejudice to the movant which would result from a denial of the motion. Bertrand v. Sava, 535 F. Supp. 1020, 1026 (S.D.N.Y. 1981), rev'd on other grounds, 684 F.2d 204 (2d Cir. 1982); Henderson v. U.S. Fidelity & Guar. Co., 620 F.2d 530, 534 (5th Cir. 1980), cert. denied, 449 U.S. 1034, 101 S. Ct. 608, 66 L. Ed. 2d 495 (1981).

 Here, although Saxholm's application comes late in the day, it is unlikely to have any substantial impact in delaying the final disposition of this case. This matter has been stayed pending a re-examination, by the United States Patent Office, of the '377 patent. As all parties have conceded, the re-examination process is crucial to the resolution of this action, *fn4" and such re-examinations are typically lengthy, sometimes taking as many as four years to complete. The re-examination being conducted here has not yet been pending for even a year. Although fact discovery has been completed (at least as to the present parties) and the parties have thus advanced this case some way toward resolution, it is not yet on the "eve" of disposition. In fact, in light of the re-examination proceeding, the joinder of Dyno may not delay resolution of this matter for any period of time. Some discovery regarding Dyno has already occurred, and to the extent some additional fact discovery is necessary regarding the claims against Dyno, that discovery can be conducted now while the reexamination process is pending. Although the additional discovery might result in some duplication of discovery effort, and thus cause Dynal to bear some expenses it would not otherwise have encountered, the court can alleviate such prejudice by limiting discovery or requiring Saxholm to reimburse Dynal for such expenses. See, e.g., Fed. R. Civ. P. 26(b)(2), (c); Local Civil Rule 15.

 This case is thus different from H.L. Hayden Co. v. Siemens Medical Systems, Inc., 112 F.R.D. 417 (S.D.N.Y. 1986), cited by the defendants, in which the court denied an application to amend the complaint to add an additional party on the basis of undue delay. One of the most important factors in that court's calculus was the degree to which the proposed amendment "would delay the final disposition of the action." Id. at 419. There, because discovery was completed and dispositive motions from all of the parties were already sub judice, the court estimated that joinder of an additional defendant would put off the final disposition of that matter for at least an additional six months. Id. at 420. That is not the situation here.

 Moreover, weighed against the concerns raised by Dynal is the court's not insubstantial interest in adjudicating the entire dispute in one action. As the court in Hayden recognized, an important factor for the court to consider when deciding a motion for leave to amend is whether denying leave is likely to lead to the initiation of a second action which encompasses substantially the same factual and legal questions as the initial proceeding. Id. at 421. Here, since Saxholm has indicated its intention to initiate a second action if leave to amend be denied, and since such an action would involve most of the exact same facts, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.