ROBERT E. WIER, Magistrate Judge.
Rocky Balboa thrived on second chances: it took him two bouts to best both Apollo Creed and, later, Clubber Lang. See Rocky (Chartoff-Winkler Productions 1976); Rocky II (Chartoff-Winkler Productions 1979). As much as this litigation may resemble heavyweight boxing, hype included, it differs in, at least, one critical way: litigants rarely get what Rocky depended on—a second opportunity to come out on top.
BancTec, weeks after discovery closed and after the filing of dispositive motions, asked the Court to reconsider its prior denial of the untimely motion to modify the schedule to permit an amended answer. FTC opposed, and BancTec replied. The Court assumes familiarity with the background (the road to DE #69), evaluates each contention, and wholly
"The Federal Rules of Civil Procedure do not explicitly address motions for reconsideration of interlocutory orders." Rodriguez v. Tenn. Laborers Health & Welfare Fund, 88 F. App'x 949, 959 (6th Cir. 2004). However, "[d]istrict courts have inherent power to reconsider interlocutory orders and reopen any part of a case before entry of a final judgment." Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991); see also, e.g., In re Life Investors Ins. Co. of Am., 589 F.3d 319, 326 n.6 (6th Cir. 2009) ("[A] district court may always reconsider and revise its interlocutory orders while it retains jurisdiction over the case."). "This authority allows district courts to afford such relief from interlocutory orders as justice requires. Traditionally, courts will find justification for reconsidering interlocutory orders when there is (1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear error or prevent manifest injustice." Rodriguez, 88 F. App'x at 959 (internal quotation marks and alteration removed); Louisville/Jefferson Cnty. Metro Gov't v. Hotels.com, L.P., 590 F.3d 381, 389 (6th Cir. 2009) (same). "This standard obviously vests significant discretion in district courts." Rodriguez, 88 F. App'x at 959 n.7; see also, e.g., Kerns v. Caterpillar Inc., 144 F.Supp.3d 963, 967 (M.D. Tenn. 2015) (applying the standard); Simmerman v. Ace Bayou Corp., 304 F.R.D. 516, 518 (E.D. Ky. 2015) (same).
As background, BancTec had until September 16, 2016, by its own agreement, to file any motion(s) to amend pleadings. See DE ##20, at ¶ 3; 14, at ¶ 5. Nearly a month after that deadline passed, BancTec filed an untimely motion for leave to amend its answer. DE ##49, 50. The Court, accordingly, undertook an extensive evaluation of and ultimately denied BancTec's belated motion to change the schedule and tardily amend the answer. See DE #69 (Memorandum Opinion & Order denying BancTec's motion). BancTec now asserts that the Court should reconsider DE #69 based on (1) two alleged clear errors of law, (2) newly available evidence, and (3) manifest injustice. DE #77 (Motion). FTC opposes on each ground. DE #86 (Response); see also DE #94 (Reply).
BancTec first contends that the Court committed two clear errors of law: (1) finding prejudice, which BancTec claims FTC "failed to address and cannot prove," and (2) applying Fed. R. Civ. P. 6(b). DE #77-1, at 4-8.
The Court, indeed, determined that, if it permitted BancTec's tardy amendment, "FTC would suffer undue prejudice." DE #69, at 15. "Most obviously," this prejudice resulted from the "additional discovery time and expense" FTC would face "if the Court granted BancTec's motion." Id. The Court continued: "Especially at this late stage of the case, with mere days left in discovery, adding new claims would unquestionably require a substantial schedule reset, reopening discovery for additional weeks or months and expanding the appropriate scope of discovery." Id. at 15-16 (concluding that the brandnew claims BancTec wanted to introduce would require FTC "to expend significant additional resources to conduct discovery and prepare for trial and significantly delay the resolution of the dispute" (internal alteration omitted)).
As an initial matter, the Court finds BancTec wrong on the law regarding a prejudice determination.
Very recently, the Sixth Circuit has confirmed this understanding, expressing that when a party "moves to amend the complaint after the deadline established by a scheduling order, [that party] first must show good cause . . . and
As these cases harmoniously indicate, an evaluation of and a finding on prejudice to the nonmovant is, indeed, required to deny a motion to amend, but
However, even hypothetically assuming (contrary to Sixth Circuit case law) that BancTec is correct that FTC had the burden to establish prejudice, FTC did satisfactorily raise prejudice in the response and earlier proceedings in the case. FTC argued, albeit in the Rule 6 context, that potential prejudice, as one "of the excusable neglect factors[,] weigh[s] against granting the Second Motion for Leave." DE #61, at 8 n.3. The Court has re-reviewed the entirety of DE #61 and finds considerations of prejudice implicit throughout. Obviously, to the Court, FTC strenuously opposed the motion to amend and predicted prejudice if the Court had granted the motion.
In fact, in opposition to BancTec's first motion for leave to file an amended answer (DE #38), which BancTec later withdrew (DE #47), FTC
Additionally, FTC made its position on prejudice perfectly clear at the October 31, 2016, discovery conference. As one example, the Court queried FTC's counsel on the likely posture if the Court permitted BancTec's proposed amendment. Mr. Gartland responded that there was "[n]o question" that if the Court permitted an amended answer, FTC would "say [it] need[s] additional discovery." DE #65, at 37. The Court specifically relied on the discovery conference colloquy in making the prejudice determination. DE #69, at 15. The Court easily concludes, on this record, that FTC unequivocally, fully, and adequately, in context, presented and argued prejudice.
BancTec next argues, rather tersely, that "Rule 6(b) does not apply[.]" DE #77-1, at 7-8 (emphases removed). This strikes the Court as an unusual contention, given that BancTec explicitly made its prior motion "pursuant to . . . Fed. R. Civ. P. 6(b)(1)(B)[.]" DE #49, at 1. Indeed, Rule 6(b) is the only Federal Rule that DE #49 cites as a motion basis.
BancTec's argument is so inconsequential the Court hardly knows where to begin. As a starting point, the Court fails to perceive how it made a clear error of law by addressing an authority the movant brought to the Court's attention—on the very first page of its motion—and which it stated was the entire basis for its request for relief. DE #49, at 1. Addressing Rule 6(b), when BancTec made its motion "pursuant to" that Rule, was wholly proper.
Second, the Court finds BancTec wrong, again, on the law. The Sixth Circuit has applied, and other Circuits regularly apply, Rule 6(b) when reviewing decisions to amend (or not) a case schedule. See, e.g., Morgan v. Gandalf, Ltd., 165 F. App'x 425, 427-28 (6th Cir. 2006) (applying Rule 6(b) to a decision "to grant defendants an enlargement of time to file their answer" after "completion of discovery" and in the midst of briefing on "cross-motions for summary judgment");
Third, all the Court said regarding Rule 6 was that it "affects the burden and analysis" regarding the motion because "BancTec's request to change the schedule implicates a deadline already passed[.]" DE #69, at 8. Surely Rule 6(b) does so pertain— a Rule governing requests for time extensions "made after the time has expired," in the Court's view, logically is relevant, as one piece of the overall puzzle, to evaluating a motion for leave to file an amended answer after the scheduling order deadline to file such an amendment motion has passed. Rule 16(b)(4) provides one unified "good cause" standard for schedule modification, which Rule 6(b)(1) reasonably informs through its before- and after-time-expiration bifurcation, only one of which is subject to the more stringent "excusable neglect" showing requirement. The Court stands by that analysis and questions whether, in reality, BancTec actually quarrels with it.
Rule 6, though, was not the primary decisional Rule in the Court's Opinion. The Court merely "briefly analyze[d]" Rule 6(b) "because BancTec d[id] include a single citation to the Rule in DE #49[.]" DE #69, at 16. Further, the request was post-deadline. The Court, acknowledging the parties' "scant consideration" of the Rule, relegated it to a mere page-and-a-half discussion in an 18-page Opinion. The Rule 6 discussion, in truth, added little (if anything) of consequence to the Opinion, which was primarily a Rule 16-based denial. See id. at 17 ("The Court has substantially explored all the [excusable neglect] factors in its discussion above."). The Court made its Rule 6 determination "for thoroughness," based only on "the reasons already covered" and "for the reasons already set out extensively[.]" Id. BancTec's motion failed conclusively, and primarily, on the Rule 16 basis; the brief Rule 6 analysis, which BancTec itself invited, was simply part of a complete assessment.
Thus, as this discussion suggests, even if the Court completely eliminated any reference to Rule 6(b) in DE #69, BancTec's motion would still fail. First, it would fail regarding Schedule 7 due to DE #20, a decisional basis BancTec does not address whatsoever in the motion for reconsideration. See DE #69, at 5-7. Second, the motion would fail in its totality due to Rule 16(b)(4). See id. at 7-16 (concluding, for example, that BancTec "wholly flunk[ed]" the "primary" good cause test of diligence: "BancTec did not act diligently in attempting to meet the case's pleading amendment deadline."). In the reconsideration motion, BancTec deliberately
Next, BancTec argues for reconsideration based on "two documents produced by FTC and two admissions by FTC" between October 31 and December 31, 2016. DE #77-1, at 8-11. The documents at issue are a series of December 2009 emails (DE #77-5) and a Schedule 7 lease file checklist (DE #77-6); the admissions are to BancTec admission requests 9 and 10 (DE #77-7, at 7).
The Court utterly fails to perceive how any of these documents or admissions impact DE #69's analysis or the Rule 16 good cause exploration. Remember that the matter is before the Court on BancTec's request for reconsideration of the prior Rule 16-based denial, based primarily on BancTec's failure to establish good cause to modify the schedule to permit an amended pleading following the deadline to move to amend. As a foundational procedural starting point, none of these newly submitted documents or admissions affects the Court's prior good cause/diligence analysis whatsoever, leading to no relief via reconsideration. The standard is
Further, BancTec says that FTC produced the December 2009 emails (DE #77-5) on November 16, 2016. DE #77-1, at 8. This was before BancTec's reply deadline on the underlying motion to amend, see DE #61 (Response, filed 11/7/16, meaning BancTec's reply was due 11/21/16), but BancTec did not bring the emails to the Court's attention in reply.
Same for the checklist and admissions. BancTec says FTC produced the checklist (DE #77-6) on December 7, 2016. DE #77-1, at 9. Again, in the twenty days between that production and the Court's decision, BancTec perceived no need to alert the Court to this document. Finally, FTC certified service of the admissions on December 22, 2016—the day of a telephonic discovery conference and well before the Court's opinion—but BancTec did not bring the clear admissions to the Court's attention or assert they should change the analysis. Regardless, BancTec has known of FTC's position on the two admitted matters for many years, throughout this and the related state-court litigation, but did not earlier argue this confirmatory discovery as a basis to permit a tardy amendment.
Much of BancTec's argument regarding these documents simply goes to one of the ultimate case questions (or, perhaps more accurately, an issue BancTec wishes were an ultimate case question), which the Court will address, as appropriate, as part of assessment of the numerous dispositive motions. The issue here, though, is not the substantive question BancTec argues; rather, it is whether BancTec justifies, in the largely procedural Rule 16(b)(4) context, reconsideration of the prior conclusion that it did not establish good cause to amend the answer following passage of the deadline to move to amend.
Finally, BancTec argues, in one paragraph, that "[m]anifest injustice will occur if BancTec's motion for reconsideration and motion for leave are not granted[.]" DE #77-1, at 11. The entire basis
The Court will not unduly linger on this argument; it sees no merit to the contention that proper operation of Rule 16 and enforcement of a scheduling order work any injustice on a party, must less manifestly so. See, e.g., SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1518-19 (10th Cir. 1990) (affirming, on Rule 16 grounds, "the denial of the defendants' motion for leave to file [a] compulsory counterclaim"); see also Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006); All W. Pet Supply Co. v. Hill's Pet Prods. Div., Colgate-Palmolive Co., 152 F.R.D. 202, 206 (D. Kan. 1993) ("Hill's has not persuaded the court that the pretrial order must be amended to permit it to assert its supplemental counterclaim in order to avoid manifest injustice."); Prevmed, Inc. v. MNM-1997, Inc., No. H-15-2856, 2016 WL 3773399, at *10 (S.D. Tex. July 8, 2016) (denying motion for leave to tardily amend and assert counterclaims, per Rule 16(b)(4), and stating, "In addition to failing to explain its delay (both in conducting discovery and seeking leave to assert original counterclaims), FCL fails to demonstrate that allowing the proposed counterclaims to be asserted at this late date would not unduly prejudice the plaintiffs."); Small v. Ramsey, No. 1:10CV121, 2012 WL 405049, at *2 (N.D. W. Va. Feb. 8, 2012) (denying motion to amend, per Rule 16(b)(4), to assert a counterclaim).
For the reasons stated, the Court
Beeck v. Aquaslide `N' Dive Corp., 562 F.2d 537 (8th Cir. 1977) (cited by BancTec), is solely a Rule 15 case, as is DCD Programs, Ltd. v. Leighton, 833 F.2d 183 (9th Cir. 1987). These aged cases, from foreign Circuits, are not binding and, regardless, are inapposite in this Rule 16 context.
Even substantively evaluating the documents, the Court fails to perceive any significance vis-à-vis BancTec's ability to amend the answer. Rather, the December 2009 emails appear to simply confirm FTC's basic position in the case—that the "payment of remaining lease payments" language "was not in the lease that was signed by Banc[T]ec." DE #77-5, at 1. Jim Bates, the FTC President, confirmed that he "refused to allow John and Banc[T]ec to change the language. The lease remains a FMV at end of term lease[.]" Id. As the Court indicated earlier, "whether and how the emails may impact the case" remains to be seen, DE #69, at 18, but they are no justification to call the prior Rule 16 determination into doubt.
The Court sees even less significance to the checklist. DE #77-6. BancTec does not argue the checklist itself has any particular substantive meaning. The concern, instead, appears to be about a "schedule 7 quote." DE #77-1, at 10. BancTec alleges this quote "was not included in the file folder," id., but admits that FTC produced it "as an attachment to an email." Id. at 10 n.7.
The same analysis applies to the document improperly mentioned first in the Reply. See DE #94, at 11. BancTec does not attach this document or, in any coherent way, connect it to the prior amendment denial or explain why it should change the outcome.