United States District Court, D. South Carolina
ORDER AND OPINION
matter is before the court pursuant to Plaintiff's motion
to strike Defendants' amended counterclaims, (ECF No.
160), and Plaintiff's motion for leave to amend and
supplement Plaintiff's amended complaint, (ECF No. 167).
For the reasons below, the court DENIES Plaintiff's
motion to strike Defendants' amended counterclaims, (ECF
No. 160), and GRANTS Plaintiff's motion for leave to
amend and supplement Plaintiff's amended complaint, (ECF
FACTUAL AND PROCEDURAL BACKGROUND
relevant background to this litigation, the court
incorporates the findings of its December 7, 2016 Findings of
Fact, Conclusions of Law, and Order and Opinion Denying
Poly-Med's Motion for Preliminary Injunction. (ECF No.
154.) As such, the court will only recite such factual and
procedural background as is necessary for ruling on the
November 22, 2016, the court granted Plaintiff's motion
to amend/correct Plaintiffs complaint and ordered Plaintiff
to file its amended complaint by December 1, 2016 (ECF No.
149), which was the date, agreed to by the parties and the
court in the amended scheduling order, at which
“[m]otions to . . . amend the pleadings” were
due, (ECF No. 96). Plaintiff submitted its amended complaint
on November 29, 2016. (ECF No. 153.) In the amended
complaint, Plaintiff made a number of changes, most notably
by asserting claims pursuant to the Defend Trade Secrets Act
of 2016, (id. at 33), and asserting claims of false
advertising and/or misrepresentation in commercial
advertising or promotion under the Lanham Act in Count IX,
(id. at 32).
responsive pleading to the amended complaint was originally
due on December 16, 2016, but by mutual agreement the parties
extended the due date to December 27. (ECF No. 160-1 at 2.)
On that date, Defendants filed their answer, affirmative and
other defenses, and counterclaims. (ECF Nos. 157 & 158.)
Most relevant to this order, Defendants alleged a new manner
in which Plaintiff breached the contract. (Id. at
66-67.) On July 13, 2017, Plaintiff filed a motion to strike
Defendants' amended counterclaims, (ECF No. 160), to
which Defendants filed a response in opposition, (ECF No.
April 4, 2017, Plaintiff filed a motion for leave to amend
and supplement the amended complaint. (ECF No. 167.) In the
motion, Plaintiff requested leave of the court to withdraw
without prejudice certain claims from the amended complaint.
(Id. at 3-4.) Plaintiff also sought to supplement
the amended complaint by alleging “ownership of a
patent issued in the United States on February 14, 2017 along
with corresponding patents in other countries.”
(Id. at 4.) Defendant filed a timely response on
April 24, 2017 (ECF No. 169), and Plaintiff filed a reply in
support of the motion on May 1, 2017, (ECF No. 173).
Rule of Civil Procedure 15(a), provides that “[t]he
court should freely give leave [to amend a pleading] when
justice so requires.” Rule 16(b), instructs that
“[a] schedule may be modified only for good cause and
with the judge's consent.” When a party seeks to
file amendments to a pleading after a scheduling order
deadline, courts subject those amendments to a two-step
analysis. Dilmar Oil Co. v. Federated Mut. Ins. Co.,
986 F.Supp. 959, 980 (D.S.C. Mar. 25, 1997). First, “a
movant must . . . demonstrate to the court that it has a
‘good cause' for seeking modification of the
scheduling deadline under Rule 16(b). If the movant satisfies
Rule 16(b)'s ‘good cause' standard, it must
then pass the requirements for amendment under Rule
15(a).” Id. (emphasis in the original)
(internal quotations omitted).
Plaintiff's Motion to Strike Defendants' Amended
requests in its first motion that the court strike
Defendants' amended counterclaims in ECF Nos. 157 and
158. (ECF No. 160 at 1.) Plaintiff argues that Defendants
filed the amended counterclaims after the deadline agreed to
by the parties in the Amended Conference and Scheduling Order
and thus required either leave of the court or
Plaintiff's consent to amend the counterclaims.
(Id. at 5-8.) Furthermore, Plaintiff argues that,
were the court to consider a motion by Defendants to file
amended counterclaims, the court should deny the motion
because Defendants “cannot show good cause for not
seeking leave to amend before the deadline set forth in the
Scheduling Order.” (Id. at 8.)
in response argue that the amended counterclaims were
properly filed because leave of the court is not required
when a party amends counterclaims in response to an amended
complaint, if those changes are proportional to the other
party's changes. (ECF No. 162 at 3.) In the alternative,
Defendant asks the court to grant Defendant leave to amend
“because Defendants satisfy the burden of showing good
cause for leave to amend.” (Id. at 12.)
a party requires leave of the court to amend counterclaims
responding to an amended complaint appears to be a matter of
first impression for this court. It also appears that
“no appellate court has squarely addressed [the issue],
and the district courts are divided on [it].”
Activevideo Networks, Inc. v. Verizon Comms., Inc.,
2011 WL 13113382, at *3 (E.D. Va. Mar. 1, 2011). Three
distinct approaches to determining the issue have arisen
among the district courts. Id. Because in the Fourth
Circuit, courts “have routinely adopted and applied the
‘moderate' approach” (id.
(collecting cases)), and the “moderate approach”
has found favor with respected commentators, (see
3-15 Moore's Federal Practice - Civil § 15 .17
(2017)), this court will adopt the moderate approach.
moderate approach provides that “an amended response
may be filed without leave only when the amended complaint
changes the theory or scope of the case, and then, the
breadth of the changes in the amended response . . . reflect
the breadth of the changes in the amended complaint.
ActiveVideo Networks, 2011 WL 13113382, at *3. Thus,
if Plaintiff's amended complaint here broadened the scope
or theory of the case and ...