United States District Court, S.D. New York
July 12, 2005.
URBAN BOX OFFICE NETWORK, INC., Plaintiff,
INTERFASE MANAGERS, L.P., et al., Defendants.
The opinion of the court was delivered by: LAURA TAYLOR SWAIN, District Judge
On September 24, 2004, Magistrate Judge Theodore H. Katz issued
a Memorandum Opinion and Order ("Order") granting Plaintiff Urban
Box Office Network, Inc.'s ("UBO" or "Plaintiff") motion
requesting leave to amend its complaint in this breach of
contract action. UBO sought to add three additional defendants,
as well as three new causes of action to the complaint. Defendant
Scott J. Hyten ("Hyten" or "Defendant") timely opposed
Plaintiff's motion, asserting untimeliness and prejudice. Judge
Katz determined that UBO's motion was neither untimely nor
prejudicial, and thus denied Defendant's motion.
Pursuant to Rule 72 of the Federal Rules of Civil Procedure and
28 U.S.C. § 636(b)(1)(A), Defendant timely served and filed his
objections to Judge Katz's Order, arguing that the "Order is
clearly erroneous and contrary to law," and therefore should be
set aside. Upon careful consideration and a thorough review of
Judge Katz's Order, the Court finds no clear legal or factual
error and accordingly denies Defendant's request to vacate the
Order. Standard of Review
On January 27, 2004, this Court referred the instant action to
Magistrate Judge Theodore H. Katz for general pretrial purposes,
which includes scheduling, discovery, non-dispositive pretrial
motions, and settlement. Such referral is in accordance with
28 U.S.C. § 636(b)(1)(A), which allows district judges, with some
exceptions, to "designate a magistrate judge to hear and
determine any pretrial matter pending before the court."
28 U.S.C.A. § 636(b)(1)(A) (West 2002). However, "[a] judge of the
court may reconsider any [non-dispositive] pretrial matter . . .
where it has been shown that the magistrate judge's order is
clearly erroneous or contrary to law." Id. Thus, pursuant to
the Federal Rules of Civil Procedure, following a party's
objection to a magistrate's order, "[t]he district judge to whom
the case is assigned shall consider such objections and shall
modify or set aside any portion of the magistrate judge's order
found to be clearly erroneous or contrary to law." Fed.R. Civ.
A magistrate judge's order is "clearly erroneous" where "`on
the entire evidence,' the [district court] is `left with the
definite and firm conviction that a mistake has been committed.'"
Easley v. Cromartie, 532 U.S. 234, 243 (2001) (quoting United
States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).
Further, the clearly erroneous standard of review is "highly
deferential[, and] . . . magistrate judges are afforded broad
discretion in resolving non-dispositive disputes and reversal is
appropriate only if their discretion is abused." Derthick v.
Bassett-Walker, Inc., Nos. 90 Civ. 5427(JMC), 90 Civ. 7479(JMC),
& 90 Civ. 3845(JMC), 1992 WL 249951, at *8 (S.D.N.Y. Sept. 23,
1992). Judge Katz's Order Utilized the Correct Legal Standard
Defendant objects to the Order on three grounds. Defendant's
first objection to the Order is that an inappropriate legal
standard was used in granting Plaintiff's request to amend its
complaint. Specifically, Hyten argues that, in order to review a
request to amend a complaint brought past the date provided for
in a scheduling order, the court must follow the rule established
under Federal Rule of Civil Procedure 16(b) ("Rule 16(b)"), that
allows a party to change a court-instituted scheduling order, and
thus amend a complaint after the deadline has passed, only if the
party shows "good cause." Fed.R.Civ.P. 16(b) ("A schedule
shall not be modified except upon a showing of good cause and by
leave of the district judge or, when authorized by local rule, by
a magistrate judge."). Here, however, Defendant argues that Judge
Katz considered Plaintiff's request under Federal Rule of Civil
Procedure 15(a) ("Rule 15(a)"), which provides in pertinent part
that "[a] party may amend the party's pleading once as a matter
of course at any time before a responsive pleading is served. . . .
Otherwise a party may amend the party's pleading only be leave
of court or by written consent of the adverse party; and leave
shall be freely given when justice so requires." Fed.R.Civ.P.
In Parker v. Columbia Pictures Indus., the Second Circuit
considered for the first time the question of how a court
reviewing an untimely motion to amend should balance the somewhat
liberal standard of Rule 15(a) with the more stringent
requirement of "good cause" under Rule 16(b). 204 F.3d 326 (2d
Cir. 2000). The Parker Court determined "that[,] despite the
lenient standard of Rule 15(a), a ? court does not abuse its
discretion in denying leave to amend the pleadings after the
deadline set in the scheduling order where the moving party has
failed to establish good cause." Id. at 340. Here, Judge Katz specifically considered the Rule 16(b) good
cause standard as well as the Rule 15(a) standard, noting
Plaintiff's representations concerning prior disclosure of the
relevant facts in documents and as to when it became aware of the
potential cause of action. (Order at 4-5.) His finding that
Plaintiff's conduct was not intentionally dilatory and
recognition of Plaintiff's proffer of "some cause" for the delay
were made in the context of weighing diligence as a measure of
good cause. (Id.) It cannot be said, therefore, that Judge
Katz's decision was in clear error or contrary to law, as the
Order took into consideration the question of good cause under
Rule 16(b) as well as general Rule 15(a) criteria.
Judge Katz Did Not Err in Finding Plaintiff's Request
Hyten asserts that Plaintiff's request for leave to amend its
complaint "was, and is, extremely prejudicial," as the request
was made "after extensive document production, after extensive
preparation for trial, after several key depositions had been
taken, and more than 5 months after the Court's scheduling
deadline for amendment of the pleadings." (Def.'s Obj. at 4.) The
Court does not find Judge Katz's determination that Plaintiff's
request was not prejudicial clearly erroneous or contrary to law.
In order to determine whether Plaintiff's requested amendment
would be unduly prejudicial to Defendants, a court should
generally consider "whether the assertion of the new claim . . .
would `(i) require the opponent to expend significant additional
resources to conduct discovery and prepare for trial; (ii)
significantly delay the resolution of the dispute; or (iii)
prevent the plaintiff from bringing a timely action in another
jurisdiction.'" Monahan v. New York City Dept. of Corr.,
214 F.3d 275, 284 (2d Cir. 2000) (quoting Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993)). The first two
considerations are given more emphasis. Twisted Records, Inc. v.
Rauhofer, No. 03 Civ. 2644(DF), 2005 WL 517328, at *6 (S.D.N.Y.
Mar. 3, 2005). Judge Katz expressly considered whether the
amendment would require the expenditure of significant additional
resources on discovery and thus delay unduly the litigation. He
concluded that he "[did] not perceive great prejudice to
Defendants if the proposed amendments [were] granted," primarily
because Plaintiff's three additional claims "are premised on
essentially the same facts and events which are the basis of the
original breach of contract claim," and thus will not "require
substantial additional documentary discovery" or "substantial
additional [deposition] time." (Order at 7.) Judge Katz's
determination that Plaintiff's requested amendments are
non-prejudicial was neither clearly erroneous nor contrary to
The Order is Not Void
Defendant's final argument in opposition is that the Order is
void for lack of jurisdiction, as "this Court has never referred
non-dispositive motions to the Magistrate Judge." (Def.'s Obj. at
5.) Defendant's argument is entirely without merit. On January
27, 2004, the Court referred this case to Judge Katz for general
pretrial matters,*fn1 a reference that is inclusive of
non-dispositive motions. Thus, Plaintiff's motion to file an
amended complaint was properly before Judge Katz, and his
granting of that Order was neither clearly erroneous nor contrary
to law on that basis. CONCLUSION
For the foregoing reasons, Defendant's motion to vacate Judge
Katz's September 24, 2004, Order granting Plaintiff's request for
leave to file an amended complaint is denied, and Judge Katz's
Order shall stand. The parties shall promptly confer with Judge
Katz as to the completion of any remaining discovery.