The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Plaintiff Waturu Iwata ("Iwata") has moved pursuant to Fed.R. Civ. P.
15(a) to amend the complaint against defendant MaggieMoo's
International, LLC ("MMI") to add a claim of defamation. For the reasons
set forth below, the motion is denied.
On December 11, 2003, Iwata, along with other plaintiffs, filed this
action. A first amended complaint was filed on February 27, 2004. On
April 15, 2004, each of the plaintiffs moved to file a second amended
On May 19, 2004, the claims of all plaintiffs except Iwata were
transferred to the United States District Court for the District of
Maryland. See G&R Moojestic Treats v. MaggieMoo's Int'l, 03 Civ. 10027,
2004 WL 1110423 (S.D.N.Y. May 19, 2004). In addition, each of Iwata's
claim, except for a single fraud claim, were dismissed.
Because the claims of the plaintiffs besides Iwata have been
transferred, the motion will be treated as having been made by Iwata
alone. After exchange of briefs, the motion was taken on submission on
May 12, 2004. Facts
Iwata seeks to add a defamation claim based on a statement allegedly
made by MMI's Chief Executive Officer and President Jon Jameson
("Jameson") in an interview for publication in the March 2004 issue of
LJN's Franchising Business & Law Alert (the "Law Alert "). According to
the proposed second amended complaint, the Law Alert is a national
publication with a wide multi-state distribution. At the end of the
article, entitled "Maggiemoo's Ice Cream, Two Franchisees Appear Headed
to Court," Jameson is quoted as saying:
It is our belief that the plaintiffs may be interested
in defaming our name and reputation, and may be
engaging in practices approaching extortion. While we
prefer and encourage straightforward and open
discussion, Maggiemoo's International, LLC will not
shy away from aggressive defense of our brand and good
name, including the possibility of counterclaims if
The article names the two prospective franchisees, G&R Moojestic
and JI International, LLC, as well as the owner of JI International, Jun
Iwata, who is Iwata's brother. Iwata is not named in the article.
Discussion Rule 15(a) of the Federal Rules of Civil Procedure provides that the
district court should freely grant leave to amend "when justice so
requires." Fed.R.Civ.P. 15(a). However,
amendment is not warranted in the case of, among
other things, "futility." A proposed amendment to a
pleading would be futile if it could not withstand
a motion to dismiss pursuant to Rule 12(b)(6).
Oneida Indian Nation of New York v. City of Sherrill, New York,
337 F.3d 139
, 268 (2d Cir. 2003) (internal citations omitted). A district
court may also deny leave to amend where it is "unlikely to be
productive." Ruffolo v. Oppenheimer & Co., 987 F.2d 129
, 131 (2d Cir.
MMI argues that amendment of the complaint would be futile because the
statement made by Jameson is not defamatory because it does not accuse
plaintiffs of the crime of extortion or even of "practices approaching
Although neither party raises the issue, New York law governs this
matter because Iwata is a New York resident and the statement was
published in a nationwide publication. "Under New York choice-of-law rules
in defamation cases the state of the plaintiff's domicile will usually
have the most significant relationship to the case, and its law will
therefore govern." Hamilton Bank, N.A. v. Kookmin Bank, 245 F.3d 82, 94
(2d Cir. 2001) (quoting Lee v. Bankers Trust Co., 166 F.3d 540, 545 (2d
Cir. 1999)). "Although the preference for the plaintiff's domicile is not
conclusive, xthe significant contacts [in a defamation case] are, almost
exclusively, the parties' domiciles and the locus of the tort.'" Lee 166
F.3d at 545 (quoting AroChem Int'l, Inc. v. Buirkle, 968 F.2d 266, 270
(2d Cir. 1992)).
Jameson's "use of the word `extortion', which is defined as a felony in
Penal Law § 155.05(2)(e), does not necessarily make his remarks
actionable statements of fact. Depending upon the context in which it is
used, such an accusation can be understood as mere `rhetorical hyperbole'
or a `vigorous epithet,' which is not actionable." Trustco Bank of New
York v. Capital Newspaper Div. of Hearst Corp., 213 A.D.2d 940, 942,
624 N.Y.S.2d 291, 293 (3d Dep't 1995) (citing Gross v. New York Times
Co., 82 N.Y.2d 146, 155, 603 N.Y.S.2d 813, 623 N.E.2d 1163 (1993); 600
W. 115th St. Corp. v. Von Gutfeld, 80 N.Y.2d 130, 143-145,
589 N.Y.S.2d 825, 603 N.E.2d 930 (1992)).
Considering the context of Jameson's statements in an article
describing the lawsuit against MMI, "no reasonable reader could
understand [Jameson's] statements as saying that plaintiff committed the
criminal act of extortion." Trustco Bank, 213 A.D.2d at 942. It would
make little sense for Jameson to invite "straightforward and open
discussion" with parties he believed to be criminally extorting his
company. As the United States Supreme Court held in an analogous case
considering whether accusations of `blackmail,' constituted libel, "even the most careless reader must have
perceived that the word was no more than rhetorical hyperbole, a vigorous
epithet used by those who considered [plaintiff's] negotiating position
extremely unreasonable." Greenbelt Coop. Publ'g Ass'n, Inc. v. Bresler,
398 U.S. 6, 14 (1970). The defamation claim against Iwata would therefore
not withstand a motion to dismiss, and amending the complaint to add the
defamation claim would be futile.
For the reasons set forth above, Iwata's motion pursuant to Rule 15(a)
for leave to amend the complaint to assert ...