UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

ASHLEY FURNITURE INDUSTRIES, 

INC.,

Plaintiff,

 Civil Action 2:11-cv-00427

v. Judge Michael H. Watson

 Magistrate Judge E.A. Preston Deavers

AMERICAN SIGNATURE, INC., et al.,

 

Defendants.

OPINION AND ORDER

This matter is before the Court for consideration of Plaintiff’s Motion for Leave to File

Amended Complaint. (ECF No. 39.) Plaintiff seeks to amend its Complaint to add additional

claims and to withdraw Value City Furniture, Inc., as a Defendant. Defendants maintain that the

Court should deny Plaintiff’s Motion because Plaintiff has been dilatory and seeks amendment in

bad faith. For the reasons that follow, Plaintiff’s Motion is GRANTED.

I. BACKGROUND

Although Plaintiff did not bring its current action until May 2011, the parties were

involved in a prior action before the United States District Court for the Northern District of

Illinois. In August 2010, Plaintiff brought claims against Value City Furniture, Inc., for false

advertising, trademark infringement, false designation of origin and unfair competition,

trademark dilution, and product disparagement under the Lanham Act.1

 (Ex. 1, ECF No. 46-1.) 

Plaintiff also brought claims for deceptive trade and business practices under Illinois law as well

1

 Plaintiff would later attempt to amend its complaint. (Ex. 5, ECF No. 46-1.)

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as a common law trademark infringement claim. (Id.) Upon Plaintiff’s oral motion, the court

dismissed the lawsuit without prejudice. (Tr. 15, ECF No. 17-7.)

Plaintiff brought this current action on May 17, 2011 alleging copyright infringement

against Defendants American Signature, Inc. (“American Signature”), and Value City Furniture,

Inc. On June 8, 2011, Defendants moved for summary judgment, maintaining that American

Signature’s use of the images in question constituted fair use. Plaintiff filed a Rule 56(d) Motion

to Defer Summary Judgment, which the Court granted. The Court specifically permitted the

parties to engage in discovery on the issues of fair use and comparative advertising prior to

Plaintiff’s response to the Motion for Summary Judgment. Discovery related to such issues is

due to be completed on May 4, 2012, with dispositive motions to follow.2

On October 4, 2011, the Court held a preliminary pretrial conference to establish a case

schedule. At the conference, Plaintiff requested a deadline for amendments to the Complaint. 

Accordingly, the Court set a deadline of January 4, 2012 for motions to amend the pleadings

and/or to join or drop parties.

On January 4, 2012, Plaintiff filed its Motion for Leave to File Amended Complaint. 

Plaintiff seeks amendment in order to (1) include seven additional allegations of copyright

infringement; (2) add new causes of action for trademark infringement and false advertising

under the Lanham Act as well as a claim for false advertising under Ohio’s Deceptive Trade

Practices Act; and (3) to drop Value City Furniture, Inc. as a defendant. Plaintiff contends that

leave to amend is proper because it has uncovered information in discovery that establishes

grounds for its additional causes of action.

2

 On March 20, 2012, the Court denied Defendants’ Motion for Summary Judgment

without prejudice subject to re-filing on May 25, 2012.

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Defendants oppose Plaintiff’s Motion. Defendants maintain that Plaintiff’s Complaint in

the Northern District of Illinois action demonstrates that Plaintiff was aware of, and had all the

information necessary to bring, its new claims prior to discovery in this case. Accordingly,

Defendants accuse Plaintiff of bad faith by “holding back on filing their claims.” (Mem. Opp’n

2, ECF No. 45.) 

II. STANDARD

Pursuant to Rule 15(a), the Court should freely grant a party leave to amend his or her

pleadings when justice so requires. Fed. R. Civ. P. 15(a). Rule 15(a) sets forth “a liberal policy

of permitting amendments to ensure the determination of claims on their merits.” Oleson v.

United States, 27 F. App’x 566, 569 (6th Cir. 2001) (internal quotations omitted). 

“Nevertheless, leave to amend should be denied if the amendment is brought in bad faith, for

dilatory purposes, results in undue delay or prejudice to the opposing party, or would be futile.” 

Carson v. U.S. Office of Special Counsel, 633 F.3d 487, 495 (6th Cir. 2011) (internal quotations

omitted). “The decision whether or not to permit the amendment is committed to the discretion

of the trial court.” Gen. Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990).

In considering these factors, the United States Court of Appeals for the Sixth Circuit has

emphasized, “[d]elay by itself is not sufficient reason to deny a motion to amend.” Szoke v.

United Parcel Serv. of Am., Inc., 398 F. App’x 145, 153 (6th Cir. 2010) (internal quotations

omitted). Rather, “[n]otice and substantial prejudice to the opposing party are critical factors in

determining whether an amendment should be granted.” Pittman ex rel. Sykes v. Franklin, 282

F. App’x 418, 425 (6th Cir. 2008) (internal quotations omitted); see also Langley v. Credit

Suisse First Boston Corp., 89 F. App’x 938, 944 (6th Cir. 2004) (holding, despite considerable

evidence of dilatory conduct, that “the district court abused its discretion in denying leave to

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amend on this ground because Defendants would not have been sufficiently prejudiced had the

court permitted amendment”).

III. ANALYSIS

The parties spend a considerable amount of time debating when Plaintiff possessed the

information necessary to bring its new claims. The Court finds only a brief discussion of this

issue necessary. Given the complaints Plaintiff filed in the Northern District of Illinois, it is

likely that Plaintiff had the necessary information to bring at least some of its additional claims

at the time it initially filed the instant action. Nevertheless, in light of Plaintiff’s representations

and the information in the record, the Court does not doubt that Plaintiff uncovered evidence

regarding these allegations, as well as its additional copyright claims, during the discovery

process in this case.

Even assuming that Plaintiff had prior knowledge of its claims, the Court finds that the

overall circumstances favor allowing amendment. Defendants were not without notice of

potential amendments in this case. During the preliminary pretrial conference Plaintiff

suggested that it might seek to amend its Complaint. Accordingly, the Court set a January 4,

2012 deadline for the filing of motions for leave to amend. Plaintiff met this deadline. 

Furthermore, this is Plaintiff’s first request to amend. Under these circumstances, any delay on

the part of Plaintiff does not weigh heavily against amendment. See Rogers v. Travelers Prop.

Cas. Ins. Co., No. 1:10–CV–475, 2011 WL 1124406, at *2 (N.D. Ohio Mar. 25, 2011) (finding

that the “dilatory” factor did not weigh against amendment when the plaintiff had filed its

amended complaint within the Court’s schedule). 

More importantly, the Court finds no proof of bad faith or substantial prejudice in this

case. In contending that Plaintiff seeks amendment in bad faith, Defendants imply that Plaintiff

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will gain some tactical advantage through amendment. It is unclear to the Court, however, what

tactical advantage, or significant prejudice, will result from allowing amendment.3 Although

Defendants have moved for summary judgment on Plaintiff’s current claims, the Court has

denied the Motion without prejudice subject to refiling. Thus, a ruling on dispositive matters is

not imminent. The Court, therefore, finds little merit to any contention that Plaintiff is

“engaging in tactical maneuvers to force the court to consider various theories seriatim.” Indus.

Assets, Inc. v. Capital Equip. Sales Co., Inc., 116 F.3d 1480 (Table), 1997 WL 359061, at *4

(6th Cir. June 26, 1997) (quoting Wimm v. Jack Eckerd Corp., 3 F.3d 137, 141 (5th Cir. 1993)). 

Furthermore, Plaintiff’s additional claims involve factual and legal issues that are similar to and

implicated by its current copyright claims. Consequently, it is unlikely amendment will require

Defendant American Signature to “conduct the defense in a substantially different manner . . . .” 

Grant v. Target Corp., No. 2:10–cv–823, 2012 WL 871093, at *3 (S.D. Ohio Mar. 14, 2012). 

The legal authority upon which Defendants rely in opposing Plaintiff’s Motion for Leave

is unpersuasive under the circumstances of this case. Defendants cite a series of cases

addressing bad faith and dilatory conduct in the context of amending operative pleadings. These

cases are all factually distinguishable from the current matter, and generally involve situations

where the moving party’s tactical motive was clear or the opposing party faced substantial

prejudice by the amendment. See, e.g., Indus. Assets, Inc., 1997 WL 359061, at * 4 (holding that

a plaintiff, who moved to amend in response to a summary judgment motion, acted in bad faith

3

 Of course, Defendants will suffer the inherent prejudice of having to defend against

Plaintiff’s new claims. This obligation to defend is not the type of undue prejudice typically

considered in deciding whether to allow amendment. See Grant v. Target Corp., No.

2:10–cv–823, 2012 WL 871093, at *2–3 (S.D. Ohio Mar. 14, 2012) (discussing “undue

prejudice” within the context of a motion for leave to amend).

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by failing to take advantage of an earlier opportunity to amend and instead relying on a previous

“claim that it knew was improper, but which was more favorable than the appropriate cause of

action”); Wimm, 3 F.3d at 141 (finding bad faith where the plaintiff failed to present new claims

“until summary judgment was imminent”); Sandcrest Outpatient Servs. v. Cumberland Cnty.

Hosp. Sys., Inc., 853 F.2d 1139, 1148–49 (4th Cir. 1988) (affirming denial of motion to amend

because amendment would have forced the defendants to alter their litigation strategy and

appeared “prompted only by the concern that [the plaintiff] would lose on the summary

judgment motion”).

Intertwined with their contentions regarding bad faith, Defendants also accuse Plaintiff of

forum shopping by abandoning its trademark and false advertising claims in the Northern

District of Illinois and attempting to revive these claims in this Court. The Court for the

Northern District of Illinois, however, dismissed Plaintiff’s action without prejudice and did not

require that Plaintiff re-file any future action within that district. Indeed, although it had the

inherent authority to do so, the Illinois Court imposed no conditions on the dismissal. Given the

nature of dismissal, the prior action has little value in assessing whether the Court should allow

Plaintiff to amend here.

Defendants also oppose the substance of Plaintiff’s new claims. Although Defendants do

not explicitly raise a futility argument, they assert that Plaintiff misrepresents the law with

regards to its new claims. The Court declines Defendants’ invitation to address the merits of

Plaintiff’s new claims at this initial juncture. Defendant American Signature is free to move for

dismissal for failure to state a claim if it believes that Plaintiff’s pleadings are inadequate under

the applicable law.

Finally, the parties suggest in their briefing that they have encountered discovery

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conflicts. Specifically, Defendants suggest that Plaintiff has improperly relied upon attorneyclient privilege and the work-product doctrine to shield information from disclosure. Briefing on

Plaintiff’s Motion for Leave to Amend, of course, is not the proper mechanism for consideration

of such issues. If the parties are unable to resolve discovery conflicts extrajudicially, they may

seek an informal discovery conference with the Court or file an appropriate motion.

IV. CONCLUSION

For the foregoing reasons, Plaintiff’s Motion for Leave to File Amended Complaint is

GRANTED. (ECF No. 39.) The Clerk is DIRECTED to file Plaintiff’s Amended Complaint

(ECF No. 39-1), as well as the attached exhibits, and to TERMINATE Defendant Value City

Furniture, Inc., from this action.

IT IS SO ORDERED.

Date: March 27, 2012 /s/ Elizabeth A. Preston Deavers 

 Elizabeth A. Preston Deavers

 United States Magistrate Judge

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