Malick for failing to deliver a copy of the
"Sansho the Bailiff" stage play and "The English Speaker" screenplay.
Second, plaintiffs seek to add Frankfurt Garbus as a necessary party in
light of new information about their alleged involvement in the scheme
which the defendants recently produced in discovery.*fn5 Some time after
Rubin formed plaintiff Briarpatch Limited L.P. by agreement with the
other Briarpatch entities (the "Named General Partners") on January 1,
1994, Frankfurt Garbus was hired as counsel for the named General
Partners. As the Named General Partners, Geisler and Roberdeau were
fiduciaries of Briarpatch and Rubin, and the plaintiffs argue that
counsel for the Named General Partners, Geisler and Roberdeau, Frankfurt
Garbus, was also a fiduciary to the plaintiffs. Plaintiffs contend that
Frankfurt, Garbus not only knowingly negotiated contracts with the other
defendants, which deprived the plaintiffs of their contractual right to
exclusive remuneration for the Projects, but also fraudulently concealed
these acts from the plaintiffs, in violation of fiduciary duty and
various New York laws.
Third, the plaintiffs seek to assert two new causes against defendants
Phoenix, Malick and proposed defendants Frankfurt Garbus, for "conspiracy
to commit conversion and trover with respect to `The Thin Red Line,'
`Sansho the Bailiff,' and `The English Speaker,'" and for aiding and
abetting the same. (Proposed First Amended Complaint ("PFAC") ¶¶
Malick has opposed the motion on the grounds of futility, and Phoenix
and Medavoy oppose on the grounds of undue delay, destruction of diversity
jurisdiction, and irreparable prejudice.
Disposition of the motions was deferred pending related proceedings in
the Bankruptcy Court in Dallas, Texas, in which it was hoped that
settlement could be achieved. This hope perished on May 29, 2001,
according to the Bankruptcy Judge, the Honorable Steven A. Felsenthal.
I. Relevant Legal Standards
A. Amending a Complaint Pursuant to Rule 15(a)
Rule 15(a) provides that a party may amend a pleading only by leave of
the court if more than 20 days have passed after the pleading is served,
and that leave shall be "freely given if justice so requires."
Fed.R.Civ.P. 15(a). The Supreme Court has, however, interpreted Rule 15
to permit such amendments only when (1) the party seeking the amendment
has not unduly delayed, (2) when the party is not acting in bad faith or
with a dilatory motive, (3) when the opposing party will not be unduly
prejudiced by the amendment, and (4) when the amendment is not futile. See
Grace v. Rosenstock, 228 F.3d 40, 53 (2d Cir. 2000) (citing Foman v.
Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962)).
Although mere delay, absent bad faith or undue prejudice, does not
provide a basis for denial of leave to amend, "the longer the period of an
unexplained delay, the less will be required of the nonmoving party in
terms of a showing of prejudice." Block v. First Blood Associates,
988 F.2d 344, 350 (2d Cir. 1993).
Finally, delay as a predicate for a finding of bad faith is a
sufficient reason to deny leave to amend. See, e.g., Vine v. Beneficial
Finance Co., 374 F.2d 627, 637 (2d Cir.), cert. denied, 389 U.S. 970, 88
S.Ct. 463, 19 L.Ed.2d 460 (1967).
"where . . . a considerable amount of time has passed between
filing the complaint and the motion to amend, courts have placed the
burden upon the movant to show some valid reason for [its] neglect and
delay." Sanders v. Thrall Car Mfg. Co., 582 F. Supp. 945 (S.D.N Y
1983), aff'd, 730 F.2d 910 (2d Cir. 1984).
In determining prejudice, courts must examine whether the opposing
party will be required to expend significant additional resources,
whether amendment will significantly delay disposition, and the movant's
ability to bring a timely claim in another jurisdiction. See Block
988 F.2d at 350.
Prejudice is particularly likely where the amendment raises new
theories of recovery or would require additional discovery. See Bell v.
Allstate Life Ins. Co., 160 F.3d 452, 454 (8th Cir. 1998).
Plaintiffs seek to join Frankfurt Garbus as "additional proper,
necessary, or indispensable parties" pursuant to Rules 15 and 19 or 20.
As the motion has been brought post-removal, it is governed by
section 1447(e) of Title 28 of the United States Code provides:
If after removal the plaintiff seeks to join additional
defendants whose joinder would destroy subject matter
jurisdiction, the court may deny joinder, or permit
joinder and remand the action to the State Court.
28 U.S.C. § 1447(e).