JOSEPH A. DICKSON, Magistrate Judge.
This matter comes before the Court upon motion (ECF No. 50) by plaintiff Nike, Inc. ("Plaintiff') to amend the complaint pursuant to Federal Rule of Civil Procedure 15. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, no oral argument was heard. Upon consideration of the parties' submissions, and for the reasons stated below, Plaintiffs motion to amend the complaint to add City Ocean International, Inc. and City Ocean Logistics Co., Ltd, is
The present motion in this trademark infringement action asks the Court to determine whether Plaintiff should be permitted to amend its complaint to name additional defendants, City Ocean International, Inc. and City Ocean Logistics Co., Ltd. (collectively, "City Ocean"). Plaintiff argued that the proposed amended complaint is substantially identical to its initial Complaint, and that the additional allegations are limited to those necessary to add City Ocean as named defendants to the claims Plaintiff has made from the beginning of this action. City Ocean is currently a Third Party Defendant to claims alleging indemnification, contribution, and negligence. (Answer, ECF No. 10).
Plaintiff was notified in 2009 by United States Customs and Border Protection ("Customs") that two shipments "consisting of 20,320 pairs of counterfeit shoes bearing the Nike trademark" had been seized at the Port of Newark. (Compl. ¶¶ 12, 17, ECF No. 1). In its complaint filed July 28, 2011, Plaintiff alleged Defendant Eastern Ports Custom Brokers, Inc. ("Eastern Ports") "imported, distributed, transported, or assisted in the importation, distribution, or transportation" of counterfeit goods bearing Plaintiffs trademarks. (
Pursuant to the scheduling order, Plaintiff began written discovery, soliciting requests for admissions and interrogatories from Eastern Ports and City Ocean. (Pl. Br. 3, ECF No. 50). On July 3, 2012, City Ocean categorically denied Plaintiffs request for admission stating to "[a]dmit that City Ocean caused Eastern Ports to file [entry paperwork] on behalf of Saint Gobain." (Pl. Resp. 5, ECF No. 55). However, seven months later, on January 13, 2013, City Ocean amended its response, admitting that it had arranged and paid for the transportation of the allegedly counterfeit shoes from China to the United States. (
Generally, Federal Rule of Civil Procedure 15 governs motions to amend or supplement proceedings. However, where, as here, the plaintiff failed to make a motion to amend its complaint within the deadline set in the Rule 16 pretrial schedule, both Rules 15 (a) and 16 are implicated.
First, where deadlines for amending pleadings are the subject of a scheduling order and the deadlines have passed, the moving party must meet Rule 16's "good cause" standard in order to amend.
Second, Rule 15(a) governs amendments made before the expiration of the statute of limitations on a claim for which a party seeks to amend its pleading. Fed. R. Civ. P. 15 (a). Rule 15(a) provides that after a responsive pleading has been flied:
Fed. R. Civ. P. 15(a)(2).
The grant or denial of leave to amend under Rule 15(a) is a matter "committed to the sound discretion of the district court."
Leave to amend a pleading may be denied where the court finds: (1) undue delay; 2) unfair prejudice to the non-moving party; (3) bad faith or dilatory motive; or (4) futility of amendment.
A proposed amendment may also be denied based on futility if it "would fail to stat a claim upon which relief could be granted."
Plaintiff filed the instant motion on March 15, 2013, after obtaining additional information concerning City Ocean's role in the shipment of the counterfeit goods. City Ocean opposed Plaintiff's motion to add it as a defendant, arguing that Plaintiff knew about City Ocean's role in the shipment well before the August 15, 2012 deadline to add new parties. Moreover, City Ocean suggested Plaintiff acted with dilatory motive, and submitted that granting Plaintiffs motion would result in undue delay and prejudice. (Def. Opp'n 4, ECF No. 52).
As a threshold matter, this Court must first determine whether Plaintiff satisfied the good cause requirement of Rule 16. Thereafter, the Court will determine whether the general amendment requirements of Rule 15(a) have been satisfied.
The most common basis for finding a lack of good cause is the party's knowledge of the potential claim before the deadline to amend has passed.
City Ocean argued that Plaintiff did not satisfy Rule 16's good cause standard because it had knowledge of the potential claim before the deadline to amend passed. Specifically, City Ocean suggested that Saint Gobain notified Plaintiff as early as 2009 that City Ocean provided freight forwarding services in connection with the shipments of goods that Nike claimed infringed its trademarks. (Wang Decl. Exs. B, C, ECF No. 53). Further, City Ocean stated that "Nike does not identify a single item of discovery it claims to have received late from City Ocean that was necessary (or even useful) in drafting its proposed amended complaint." (Def. Opp'n 6, ECF No. 52).
Although Plaintiff did not directly address Rule 16, it nevertheless disputed the contention that it did not receive important discovery after the August 15, 2012 deadline. Plaintiff claimed that the discovery process shed light on the business relationship between Defendant Eastern Ports and City Ocean. Among other facts, Plaintiff asserted that it learned that City Ocean had "arranged for and paid for the transportation of the counterfeit shoes," filed entry documents in Saint Gobain's name, and provided Eastern Ports with fraudulent shipping documents. (Pl. Br. 3, ECF No. 50). However, this discovery appears to have been completed prior to the August 15, 2012 deadline.
Plaintiff further alleged that City Ocean amended its responses to certain discovery requests after the August 15, 2012 deadline. (
Next, this Court must consider whether amendment is permissible under Rule 15(a). The three questions pertinent to this Court's analysis are (i) was Plaintiffs delay in seeking to amend the Complaint undue; (ii) would amendment prejudice the proposed defendant City Ocean; and (iii) are the claims to be asserted against the City Ocean futile.
The first question to consider is whether Plaintiffs delay in seeking to amend the Complaint was undue. The Court finds it was not. As stated, Plaintiff received written discovery from City Ocean on July 3, 2012, denying that it had caused Defendant Eastern Ports to file documents on behalf of Saint Gobains. (Pl. Br. 3, ECF No. 50). Nearly seven months later, on January 13, 2013, City Ocean changed its response, admitting that it had caused Eastern Ports to file shipping documents. (
Next, the Court finds that allowing amendment of the Complaint would not unfairly prejudice City Ocean. City Ocean merely claimed that allowing amendment would be prejudicial, but provided nothing further in support of this assertion. (Def. Opp'n. 4, ECF No. 52). Because City Ocean has been a party to the litigation for several years, it would not be required to expend significant additional resources to conduct discovery and prepare for trial. Additionally, amendment will not significantly delay the resolution of the dispute, nor will it in any way place an unfair burden on City Ocean. Accordingly, the Court finds that allowing the complaint to be amended would not be unfairly prejudicial.
Finally, the Court considers whether the proposed amendment would be futile. In Counts One through Four of its proposed amended complaint, Plaintiff asserted that City Ocean violated the Lanham Act under 15 U.S.C. §§ 1114 and 1125 (a) and (c). (Proposed Amended Complaint, ECF No. 50). The Lanham Act creates civil liability for:
15 U.S.C. § 1114(1)(a). Moreover, 15 U.S.C. § 1125 provides civil liability for any person who uses in commerce any word, term, or symbol that is likely to cause confusion, or to cause mistake as to the origin of the goods in question.
In its proposed amended complaint, Plaintiff alleged that City Ocean, "without the consent of Nike, imported and/or distributed in interstate commerce footwear bearing unauthorized reproduction, copies, counterfeits and colorable imitations" of Plaintiff's trademarks. (Proposed Amended Complaint ¶ 12, ECF No. 50). Further, Plaintiff alleged that the counterfeit footwear bears a mark indistinguishable from Plaintiffs trademarks, which would likely lead to "confusion, deception, and mistake among the consuming public." (
City Ocean, however, argued that Plaintiff failed to state a claim under the Lanham Act because it did not allege facts showing that City Ocean placed Plaintiff's marks on the goods in question. However, in the Third Circuit, trademark infringement is established by proving "(1) the mark or marks are valid and legally protectable, (2) the marks are owned by Plaintiff, and 3) the defendant's use of [those] marks to identify goods or services is likely to create confusion concerning the origin of goods or services."
City Ocean also suggested that Count Five of the proposed amended complaint is futile, arguing 15 U.S.C. § 1124 does not provide for a private cause of action. Although it is true the statute does not explicitly provide for a private cause of action, some courts have found 15 U.S.C. §§ 1116 and 1117-which authorize relief for "a violation of any rights of the registrant of a [registered] mark" — create a private cause of action under§ 1124.
For the foregoing reasons, Plaintiff's motion to amend the Complaint (ECF No. 50) is