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United States District Court, S.D. New York

June 1, 2004.


The opinion of the court was delivered by: BARBARA JONES, District Judge


Eon appeals Special Master Peterson's Order of April 26, 2004 ("Order"), which granted Astra's motion to withdraw and amend the default admissions under Fed.R.Civ.P. 36(b), and denied Eon's motion to deem its requests for admission conclusively established. For the reasons below, the Order is AFFIRMED.


  This opinion assumes familiarity with the factual circumstances leading up to the Order, but summarizes pertinent facts for convenience.

  Eon served Astra with its Fourth Set for Requests for Admission on October 14, 2003 ("Requests" or "RFAs"). Astra initially took the position that it was not required to file a response because the response would have been due after the close of discovery under the scheduling order then in place. However, when fact discovery was extended to December 15, Astra acknowledged its duty to submit responses.

  On March 4, 2004, Eon, having received no response to date, moved for an order holding all of its Requests conclusively established, pursuant to Fed.R.Civ.P. 36.*fn1 In opposition, Astra asserted that its failure to file responses was "inadvertent," urged the Court to permit withdrawal of the default admissions, and attached for the first time formal responses to Eon's Requests. (Ltr. from Astra to Special Master Peterson, dated Mar. 15, 2004).

  In the Order, the Special Master applied a two-prong test to decide whether to allow Astra to withdraw its default and amend its response. Specifically, he required the parties to show that, "(1) the presentation of the merits must be subserved by allowing the amendment, withdrawal or late response, and (2) the party that obtained the admission must not be prejudiced in its presentation of the case if the amendment, withdrawal, or late response is permitted."*fn2 Order at 2 (quoting 7-36 MOORE'S FEDERAL PRACTICE — CIVIL § 36.13 (Mathew Bender 2004)). Applying this test to the facts as he found them, the Special Master held that the merits would be subserved by not allowing Astra to amend, and that Eon did not demonstrate that it would suffer prejudice sufficient to deny Astra's motion to amend. Therefore, the Special Master held that Astra should be allowed to amend its default responses. Eon appealed.


  a. Standard of Review

  The Court reviews those portions of the Special Master's Order that Eon appeals de novo, and "may adopt or affirm; modify; wholly or partly reject or reverse" the Order pursuant to Federal Rules of Civil Procedure 53. See F.R.C.P. 53(g)(3)-(4).

  b. Eon's Appeal

  Eon argues that that the Order "was erroneously decided on the law and the facts." (Ltr. from Eon to the Hon. Barbara S. Jones, dated 4/28/04 ("4/28 Ltr."), at 1). Specifically, Eon asserts that the Second Circuit uses more stringent standards for allowing amendment of responses that were admitted by default than those used by the Special Master, which, Eon argues, used precedent from different circuits and standards that would apply to amendment of timely-made responses.

  The Court recognizes that there are cases in this circuit that have questioned whether the same standards should apply in analyzing a motion to amend admissions that were properly and timely filed, and a motion to amend admissions that were deemed admitted by default. See Weinberger v. Provident Life & Cas. Ins. Co., 1999 WL 225537, *1 (S.D.N.Y. Apr. 19, 1999). However, none of these cases — and no cases that are binding upon this Court — go so far as to hold squarely that this standard does not apply in cases of default. See id. (declining to hold that the relief afforded by Fed.R.Civ.P. 36(b) is not available in cases of default); Baker v. Dorfman, 2000 WL 420551, *5-6 (S.D.N.Y. Apr. 17, 2000) (same).

  In addition, there are several courts in this circuit that have applied the two-prong test to motions to amend responses admitted by default.*fn3 See, e.g., Securities and Exchange Comm'n v. Batterman, 2002 WL 31190171, *6 (S.D.N.Y. Sept. 30, 2002); Securities and Exchange Comm'n v. Thrasher, 1996 WL 460148, *1 (S.D.N.Y. Aug. 13, 1996); Local Union No. 38 v. Tripodi, 913 F. Supp. 290, 294 (S.D.N.Y. Feb. 2, 1996).

  Moreover, it is clear that the decision to allow amendment ultimately lies within the sound discretion of the Court. See, Donovan v. Carls Drug Co., Inc., 703 F.2d 650, 651-52 (2d Cir. 1983), rejected on other grounds, McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988); see also Thrasher, 1996 WL 460148, at *1 ("Th[e] language [of Fed.R.Civ.P. 36(b)]. . . make[s] it clear that the court has some discretion to forgive tardiness."); Local Union No. 38, 913 F. Supp. at 294 (stating, on an issue of whether a party can amend its admissions after a default, that "under Rule 36(b), the court has discretion to excuse the [party] from its admissions").

  The Court finds that the standard employed by the Special Master in this case was correct. It seems to this Court that because the merits of this case would be subserved if Astra was not permitted to amend its default admissions, prohibiting the amendment would operate merely as a sanction, and impede the true fact-finding process. Generally, courts should allow amendment where the merits would be subverted except upon a showing of prejudice to the opposing party, or, possibly, dilatory tactics or improper motivations of the responding party. In this case, Eon has not made the requisite showing.

  First and foremost, Eon had notice from previously-conducted discovery of the substance of many of Astra's responses. See, e.g., Order at 14. In addition, although Eon asserts that it is foreclosed from conducting discovery regarding the Astra's responses because fact discovery has closed, it may move to take further discovery upon a showing of good cause. See id. at 9.

  Eon's principle argument regarding the prejudice it will encounter is with respect to Yoshitomi witnesses and documents. See generally 4/28 Ltr. Eon claims that if Astra is allowed to amend their default responses to indicate that the 1982 Agreement is no longer in effect, it will somehow be harmed. If Eon is prejudiced, however, it is because of Astra's failure to produce documents, pursuant to the Special Master's Order of December 11, 2003 compelling Astra to request from Yoshitomi documents in good faith, prior to the expiration of the 1982 Agreement, and not because of Astra's failure to timely answer the RFA's.*fn4 Moreover, if Astra did not amend, the record would reflect that the 1982 Agreement with Yoshitomi is still in effect, even though none of the parties actually take the position that it is currently operative.

  Lastly, Eon claims that Astra's failure to respond was not inadvertent, but rather "was a calculated and intentional act, designed to conceal, for a critical time period, from Eon, the Special Master and this Court the fact that Astra was, in November and December 2003, in the process of renegotiating and re-rewritng [sic] its Agreement with Yoshitomi . . ." (4/28 Ltr. at 2). The Special Master found, and the Court agrees, that Eon did not persuasively show that Astra failed to answer because of a deceitful motivation. CONCLUSION

  In conclusion, the Court finds that the merits of this case would be subserved by not allowing Astra to file amended responses, and that Eon has not demonstrated prejudice sufficient to warrant the denial of Astra's motion to amend. In addition, the Court, in its discretion, believes that Astra should be allowed to amend for the reasons stated above and in the Special Master's Order.

  Accordingly, Eon's appeal of the Special Master's Order is DENIED.


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