The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.
MEMORANDUM OPINION AND ORDER
Before this Court is Plaintiff JPMorgan Chase Bank, N.A.'s ("JPMorgan") motion for leave to amend the Complaint to add (1) Patrik Edsparr as a defendant; (2) causes of action against Defendant The IDW Group, LLC ("IDW") for tortious interference with economic relations and aiding and abetting breach of fiduciary duty; and (3) a claim for punitive damages against IDW. For the reasons stated below, JPMorgan's motion is GRANTED.
Between February 2007 and June 2008, IDW entered into four written agreements with JPMorgan in which IDW agreed to provide certain executive search services to JPMorgan. On October 23, 2008, JPMorgan filed the Complaint, which alleged that IDW breached these agreements, breached the implied covenant of good faith and fair dealing, and breached its fiduciary duty to JPMorgan, by inter alia, recruiting JPMorgan employees to work at Citadel Investment Group, LLC ("Citadel"), a competing firm. The Complaint alleges that the first of these employees to leave for Citadel was Edsparr, who as of January 2008, "functioned as JPMorgan's Global Head of Rates, Foreign Exchange, Securitized Products, Fixed-Income Exotics & Hybrids, Proprietary Positioning, and Principal Investments." (Cmplt. ¶ 23)
On November 12, 2008, IDW moved to dismiss JPMorgan's good faith and fair dealing, fiduciary duty, and attorneys' fees claims. In JPMorgan Chase Bank, N.A. v. IDW Group, LLC, No. 08 Civ. 9116 (PGG), 2009 U.S. Dist. LEXIS 9207, 2009 WL 321222 (S.D.N.Y. Feb. 9, 2009), this Court granted in part and denied in part IDW's motion to dismiss the good faith and fair dealing claim, denied the motion to dismiss the fiduciary duty claim, and granted the motion to dismiss the claim for attorneys' fees. On February 25, 2009, IDW filed an Answer to the Complaint and asserted a Counterclaim against JPMorgan for unpaid fees for recruiting services. JPMorgan filed its Answer to the Counterclaim on March 20, 2009.
On March 25, 2009, JPMorgan filed the instant motion to amend, which was fully submitted on April 16, 2009. The proposed amendment would add two new counts against IDW for tortious interference with economic relations (Proposed Count Five) and for aiding and abetting Edsparr's alleged breach of fiduciary duty (Proposed Count Six), and also add a claim for punitive damages against IDW. (Proposed 1st Am. Cmplt. at 18-19, 25) The proposed amendment would also add Edsparr as a defendant and would plead six counts against him -- two tortious interference claims (Proposed Counts Nine and Ten), two breach of contract claims (Proposed Counts Seven and Eleven), a breach of fiduciary duty claim (Count Eight), and a claim for a declaratory judgment (Count Twelve).*fn1 (Id. ¶¶ 94--132)
Apart from three nonparty depositions -- the last of which is scheduled for May 19, 2009 -- May 4, 2009 was the deadline for completion of fact discovery. At present, June 1, 2009 is the deadline for dispositive motions.
I. LEGAL STANDARD GOVERNING JPMORGAN'S MOTION TO AMEND
"Rule 15(a) generally governs the amendment of complaints, but in the case of proposed amendments where new defendants are to be added, Rule 21 governs." Momentum Luggage & Leisure Bags v. Jansport, No. 00 Civ. 7909 (DLC), 2001 WL 58000, at *1 (S.D.N.Y. Jan. 23, 2001). See Sheldon v. PHH Corp., No. 96 Civ. 1666 (LAK), 1997 WL 91280, at *3 (S.D.N.Y. Mar. 4, 1997) ("[A] broad reading of Rule 15 would permit amendments for any purpose, including changes of parties. . . . Nevertheless, the preferred method is to consider such motions under Fed. R. Civ P. 21, which specifically allows for the addition and elimination of parties."). Rule 21 provides that a party may be added to an action "at any time, on just terms." Fed. R. Civ. P. 21. Under Rule 21, "courts must consider judicial economy and their ability to manage each particular case, as well as how the amendment would affect the use of judicial resources, the impact the amendment would have on the judicial system, and the impact the amendment would have on each of the parties already named in the action." Momentum Luggage, 2001 WL 58000, at *2; Sly Magazine, LLC v. Weider Publ'ns LLC, 241 F.R.D. 527, 532 (S.D.N.Y. 2007) (same) (quoting Momentum Luggage, 2001 WL 58000, at *2). In deciding whether to permit joinder, this Court "is guided by 'the same standard of liberality afforded to motions to amend pleadings under Rule 15.'" Momentum Luggage, 2001 WL 58000, at *2 (quoting Soler v. G & U, Inc., 86 F.R.D. 524, 527--28 (S.D.N.Y. 1980) (internal quotation omitted)); FTD Corp. v. Banker's Trust Co. 954 F. Supp. 106, 109 (S.D.N.Y. 1997) ("Although Rule 21, and not Rule 15(a), normally governs the addition of new parties to an action, 'the same standard of liberality' applies under either Rule.") (quoting Fair Housing Dev. Fund Corp. v. Burke, 55 F.R.D. 414, 419 (E.D.N.Y.1972)).
Where, as here, amendment requires leave of the court, Rule 15(a)(2) of the Federal Rules of Civil Procedure directs that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). "It is settled that the grant of leave to amend the pleadings pursuant to Rule 15(a) is within the discretion of the trial court." Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 802 (1971) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230 (1962)). "The Second Circuit has held that a Rule 15(a) motion 'should be denied only for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party.'" Aetna Cas. & Sur. Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 603--04 (2d Cir. 2005) (quoting Richardson Greenshields Secs., Inc. v. Lau, 825 F.2d 647, 653 n.6 (2d Cir.1987)). See Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008) (citing 6 Wright, Miller, & Kane, Federal Practice and Procedure: Civil 2d § 1487 (2d ed. 1990)) (suggesting that prejudice to the opposing party is "'the most important factor'" and "'the most frequent reason for denying leave to amend'"). See also Foman, 371 U.S. at 182, 83 S.Ct. at 230 ("In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, be 'freely given.'").
"The rule in this Circuit has been to allow a party to amend its pleadings in the absence of a showing by the non-movant of prejudice or bad faith." Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993). See State Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981) ("Mere delay, however, absent a showing of bad faith or undue prejudice, does not provide a basis for the district court to deny the right to amend."). "However, '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, 988 F.2d at 350 (quoting Evans v. Syracuse City Sch. Dist., 704 F.2d 44, 47 (2d Cir. 1983)).
II. LEGAL ANALYSIS OF JPMORGAN'S MOTION TO AMEND
IDW argues that granting JPMorgan's proposed amendment would cause it substantial prejudice, that JPMorgan has no excuse for failing to bring these claims earlier, and that JPMorgan's conduct amounts to bad faith. (Def. Br. 9) JPMorgan contends that the proposed amendment would promote judicial economy and that IDW's claims ...