The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:
Plaintiff Perfect Pearl Co. ("Perfect") moves for leave to amend its complaint against defendant Majestic Pearl & Stone, Inc. ("Majestic") to add claims of misuse of trademark notice and false advertising under the Lanham Act and a claim of false advertising under New York law, and to add to the factual basis for its existing claims of unfair competition under the Lanham Act and New York law. For the following reasons, Perfect's motion is granted in part and denied in part.
Perfect commenced this action on May 14, 2010 with the filing of a complaint alleging unfair competition under both the Lanham Act, 15 U.S.C. § 1125 et seq., and New York law. The gravamen of that complaint is that Perfect has allegedly used the marks MAJESTIC and MAJESTIC PEARL in the course of its jewelry business since at least 1986, and that defendant Majestic began using identical marks in its own jewelry business sometime thereafter, confusing consumers and harming Perfect's relations with potential customers. On October 13, 2010, the Hon. Robert W. Sweet, to whom this case was then assigned, issued a scheduling order setting the deadline for amended pleadings at January 6, 2011. Dkt. 16. Perfect noticed a Federal Rule of Civil Procedure 30(b)(6) deposition of Majestic's corporate designee on October 29, 2010. However, despite Perfect's repeated efforts to schedule that deposition with Majestic's Hong Kong-based witness-efforts that culminated in the filing of a motion to compel-the deposition did not occur until September 20, 2011. In the interim, the parties exchanged document discovery relating both to Perfect's claims and Majestic's counterclaims.*fn2
In a conference before the Court on November 1, 2011, to discuss, inter alia, the case schedule following the November 30 close of discovery, Perfect's counsel advised the Court that it was considering moving to amend the complaint based on information it learned in the September 20, 2011 deposition of Majestic's Rule 30(b)(6) corporate designee. There, Perfect claims, it learned that: (1) Majestic does not own an active trademark registration for MAJESTIC, but instead has falsely used the ® symbol with the MAJESTIC mark on advertising and promotional materials which continue to be distributed to customers; and (2) Majestic's representation on its website that it owns a registered trademark for MAJESTIC- which it uses to distinguish itself from Perfect-is false (hereinafter, the "False Comparative Advertising Statement").
With the Court's permission, on November 29, 2011, Perfect brought this motion to amend the complaint. Perfect's proposed amended complaint ("PAC") contains four counts instead of the two in the current complaint. The new counts allege: (1) violation of the Lanham Act, 15 U.S.C. § 1125(a), for misuse of a trademark notice, based on the ® in Majestic's promotional materials; and (2) false advertising, also under the Lanham Act, based on both the promotional materials being distributed and the False Comparative Advertising Statement on Majestic's website. Perfect also seeks to amend the existing count alleging a violation of New York law, so as to add a theory of false advertising to its current theory of unfair competition.
In support of its motion for leave to amend, Perfect argues that: (1) it did not unduly delay seeking this amendment, because it was not until the September 20, 2011 deposition of Majestic's Rule 30(b)(6) designee that it knew the facts necessary to make the new claims; (2) the long-delayed deposition supplies good cause under Fed. R. Civ. P. 16 to excuse noncompliance with the January 6, 2011 deadline for amended pleadings; and (3) its new claims are not futile, and thus may be added pursuant to Fed. R. Civ. P. 15.
In opposition, Majestic argues that: (1) Perfect was not diligent in amending its theory of the case because the information on which the new and amended claims are based was known to it from discovery produced over a year ago; (2) Perfect's additions would unduly prejudice Majestic at this stage of the case; (3) Perfect's claim for misuse of trademark notice is not an affirmative claim, but only a defense, and adding it is therefore futile; and (4) Perfect's false advertising claim is futile because it falls short of applicable pleading standards.
II.Applicable Legal Standard
Federal Rule of Civil Procedure 15(a)(2) provides that leave to amend a complaint shall be "freely" given when "justice so requires," although "a district court has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200--01 (2d Cir. 2007). However, when a scheduling order has been entered which has restricted a party's ability to file an amended complaint, Rule 15's liberal standard must be balanced against the more stringent standard of Rule 16, under which such an order "may be modified only for good cause." Fed. R. Civ. P. 16(b)(4); see also Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000); Scott v. New York City Dep't of Corr., No. 10-931-cv, 2011 U.S. App. LEXIS 22168, at *2--3 (2d Cir. Nov. 2, 2011) (summary order).
Thus, "despite the lenient standard of Rule 15(a), a district 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." Parker, 204 F.3d at 340; see also Holmes v. Grubman, 568 F.3d 329, 334--35 (2d Cir. 2009). To show good cause, a movant must demonstrate that it has been diligent, see Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244, 266--67 (2d Cir. 2009); Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003), meaning that, "despite its having exercised diligence, the applicable deadline could not have been reasonably met." Sokol Holdings, Inc. v. BMB Munai, Inc., No. 05-cv-3749, 2009 U.S. Dist. LEXIS 72659, at *24 (S.D.N.Y. Aug. 14, 2009) (citing Rent-A-Center Inc. v. 47 Mamaroneck Ave. Corp., 215 F.R.D. 100, 104 (S.D.N.Y. 2003)). A party fails to show good cause when the proposed amendment rests on information "that the party knew, or should have known, in advance of the deadline." Sokol Holdings, 2009 U.S. Dist. LEXIS 72659, at *24 (collecting cases); see also Lamothe v. Town of Oyster Bay, No. 08-cv-2078, 2011 U.S. Dist. LEXIS 120843, at *15--16 (E.D.N.Y. Oct. 19, 2011). Because compliance with Rule 16 is a threshold matter which may obviate the Rule 15 analysis, that issue is addressed first.
A.Good Cause Under Rule 16
Here, Perfect has shown good cause under Rule 16 for the delay in adding allegations based on the continuing use of the ® symbol on Majestic's promotional materials, but has not done so with regard to the new claims based on the False ...