In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 13-3350

AARON MCCOY,

Plaintiff,

v.

IBERDROLA RENEWABLES, INC., and STREATOR-CAYUGA RIDGE 

WIND POWER, LLC,

Defendants, Third-Party Plaintiffs,

and 

GAMESA TECHNOLOGY CORPORATION, INC., and GAMESA 

WIND US, LLC,

Defendants, Third-Party Plaintiffs, Counter DefendantsAppellees,

v. 

OUTLAND RENEWABLE ENERGY, LLC, n/k/a RENOVO 

RENEWABLE ENERGY, LLC, and OUTLAND ENERGY SERVICES, 

LLC, n/k/a NORTHWIND HOLDINGS, LLC, f/k/a OUTLAND 

RENEWABLE ENERGY FIELD SERVICES, LLC,

Third-Party Defendants, Counter Plaintiffs-Appellants.

____________________
2 No. 13-3350

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 11-CV-00592 — Charles P. Kocoras, Judge.

____________________

ARGUED MAY 21, 2014 — DECIDED JULY 28, 2014

____________________

Before BAUER, ROVNER, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge. This lawsuit began as a personal 

injury case. It expanded to encompass disputes over the entire business relationship between the appellants (collectively “Outland”) and appellees (collectively “Gamesa”). Only 

Outland’s numerous third-party counterclaims against 

Gamesa are at issue in this appeal. Gamesa prevailed on a 

motion to dismiss, and the district court denied Outland’s 

motion for leave to amend.

Outland’s third-party counterclaims are not part of the 

original case or controversy, so Outland needed an independent basis for federal subject matter jurisdiction to assert 

them as part of this lawsuit. In an effort to salvage part of its 

case, therefore, Outland now makes the desperate argument 

that its own federal antitrust counterclaims were so feeble 

that they could not support federal question jurisdiction under 28 U.S.C. § 1331 and that its original third-party counterclaims based on state law fell outside the scope of supplemental jurisdiction under 28 U.S.C. § 1367 that Outland itself 

invoked. In the alternative, Outland argues that the district 

court erred in applying Illinois substantive law and should 

have granted leave to amend. We affirm across the board.
No. 13-3350 3

I. Factual and Procedural Background

The procedural history on the defense side of this case is 

complex. We provide a simplified summary, and we accept 

as true all factual allegations from Outland’s counterclaims 

and proposed amended counterclaims. See Hayes v. City of 

Chicago, 670 F.3d 810, 813 (7th Cir. 2012); Gillman v. Burlington Northern R.R. Co., 878 F.2d 1020, 1022 (7th Cir. 1989).

A. The Parties and the McCoy Accident

Appellees Gamesa Wind US and Gamesa Technology 

Corp. (collectively “Gamesa”) are wholly-owned domestic 

subsidiaries of a non-party Spanish manufacturer of wind 

turbines. They contracted with Minnesota-based appellants 

Outland Renewable Energy and Outland Energy Services 

(collectively “Outland,” though their names have since 

changed) to provide maintenance services for Gamesa wind 

turbines. Utility company Iberdrola Renewables (“Iberdrola”) operated Gamesa-made wind turbines at the Cayuga 

Ridge Wind Farm in Illinois.

While servicing a wind turbine at Cayuga Ridge, Outland employee Aaron McCoy was electrocuted when the 

turbine unexpectedly re-energized. McCoy began this case 

by filing a personal injury case in state court against Iberdrola and Gamesa Technology Corp. The case was removed to 

federal court on the basis of diversity of citizenship. Iberdrola then impleaded Gamesa Wind US and Outland to seek 

indemnification for the McCoy accident based on contract 

and the Illinois Joint Tortfeasor Contribution Act (“JTCA”). 

The various defendants then filed numerous cross-claims 

and counterclaims related to the personal injury dispute. 
4 No. 13-3350

B. Outland’s Original Counterclaims and the Settlement

This appeal concerns only Outland’s third-party counterclaims against Gamesa. Gamesa asserted third-party claims 

against Outland for contribution for the McCoy accident 

based on contractual indemnification and the Illinois JTCA. 

Outland responded with 22 counterclaims, raising a host of 

new issues and greatly widening the scope of the case. These 

included indemnification for the McCoy accident; federal 

antitrust claims under the Sherman and Clayton Acts; state 

antitrust claims under Illinois, Minnesota, and Texas law; 

and numerous other state law claims. Outland makes only 

jurisdictional arguments regarding these claims on appeal.

In response to Outland’s third-party counterclaims, 

Gamesa attempted to enforce a contractual provision providing for venue exclusively in Pennsylvania, but the district 

court found the provision invalid under Illinois law. Outland 

then moved for a preliminary injunction against Gamesa’s 

allegedly unfair competitive practices. After a five-day hearing, Outland’s request for a preliminary injunction was denied based on Illinois substantive law.

Gamesa then moved for judgment on the pleadings under Rule 12(c). The district court dismissed all but one of 

Outland’s counterclaims for failure to state claims for relief. 

Only the claim for indemnification related to the McCoy accident survived. McCoy, Gamesa, and Outland then settled. 

The district court accepted the settlement with a finding of 

good faith, protecting Outland and Gamesa from further 

claims for contribution under the Illinois JTCA, see 740 Ill. 

Comp. Stat. 100/2, and all claims arising from the accident 

among those parties were dismissed. At that point, only the 

original personal injury dispute between McCoy and 
No. 13-3350 5

Iberdrola remained, but the court had not issued a final 

judgment.

C. Outland’s Proposed Amended Counterclaims

About six months after the district court dismissed Outland’s third-party counterclaims, Outland moved for leave to 

amend its counterclaims against Gamesa. Outland presented 

seven proposed amended counterclaims and argued for the 

first time that the substantive law of Minnesota, not Illinois, 

should apply. The district court determined that Outland 

had waived the choice of law issue. It then denied leave to 

amend based on futility and undue delay. Outland focuses 

its appeal on the merits of the proposed amended counterclaims, so we follow suit.

The proposed amended counterclaims arose from the following alleged events from early 2011. Gamesa attempted to 

acquire Outland but was rebuffed. Duke Energy, a utility 

company and Gamesa customer, then entered an agreement 

to purchase a twenty-five percent stake in Outland. Duke 

and Outland also began negotiating a possible fleet services 

agreement, which would have been very lucrative for Outland by making it the main provider of maintenance services 

for Duke-operated wind turbines. They also discussed a possible agreement for Duke to purchase all of Outland, which 

would be funded in part by an institutional investor.

During these negotiations, the federal Occupational Safety and Health Administration (“OSHA”) issued six citations 

to Outland based on the McCoy accident. Shortly thereafter, 

Duke informed Gamesa of its ongoing negotiations with 

Outland. Gamesa made its own offer to provide maintenance services for Duke-operated wind turbines, but Duke 
6 No. 13-3350

declined. Gamesa then sent a letter to Outland saying that 

the OSHA citations resulting from the McCoy accident 

showed a breach of their maintenance contract. Gamesa 

stopped issuing new purchase orders to Outland as a result 

of the alleged breach, which significantly reduced the value 

of Outland. (For reference, Outland’s revenue from Gamesa 

purchase orders was over $6 million in 2010.) Duke and Outland eventually closed the complete acquisition agreement, 

but only after Duke lowered its offer by $15 million after 

Gamesa stopped issuing purchase orders to Outland. Duke 

did not enter a contractual fleet services agreement despite 

having previously “agreed” to do so. 

Outland alleged that it did not breach its contract with 

Gamesa and that Gamesa’s letter claiming breach based on 

the OSHA citations was sent in bad faith. Outland presented 

three theories of liability based on the resulting change in the 

value of the complete acquisition agreement—tortious interference with contract; tortious interference with prospective 

economic advantage; and if the other two theories failed, the 

generic “prima facie tort,” a problematic concept not adopted by Illinois state courts. The district court determined that 

these claims would not survive a motion to dismiss and denied leave to amend based on futility. 

Outland further alleged that Gamesa had been planning 

to replace Outland with in-house maintenance services but 

had encouraged Outland to expand and train new personnel. The cessation of new purchase orders after the OSHA 

citations was done in bad faith to complete this scheme. Outland alleged claims for promissory estoppel based on its detrimental reliance and for breach of fiduciary duty on the 

theory that Gamesa and Outland had a principal-agent rela-
No. 13-3350 7

tionship. The district court denied leave to amend to add 

these claims because the nearly six months that had passed 

since the Rule 12(c) dismissal constituted an undue delay 

that unfairly prejudiced Gamesa.

The sixth proposed counterclaim sought indemnification 

for the OSHA penalties imposed on Outland for the McCoy 

accident. The district court denied leave to amend based on 

the settlement order and undue delay. The final proposed 

counterclaim again alleged federal antitrust violations of the 

Sherman and Clayton Acts based on Gamesa’s supposed 

monopoly over its own services and its unusually high market power despite having roughly ten percent of wind turbine sales market. The district court also denied leave to 

amend these claims based on futility.

The district court entered a separate judgment under 

Federal Rule of Civil Procedure 54(b) on Outland’s counterclaims against Gamesa. Outland then moved to alter or 

amend the judgment under Rule 59(e), arguing for the first 

time that the district court lacked subject matter jurisdiction 

over the original counterclaims. Outland argued that its own 

federal antitrust claims were too weak even to invoke federal 

question jurisdiction under 28 U.S.C. § 1331 and alternatively that its own state claims did not fall within the scope of 

supplemental jurisdiction under 28 U.S.C. § 1367(a). At no 

point did Outland request the district court to exercise its 

discretion under § 1367(c), which allows a court to decline 

supplemental jurisdiction under certain circumstances even 

when a claim falls within the scope of § 1367(a). The district 

court denied the motion, and Outland has appealed.
8 No. 13-3350

II. Analysis

A. Subject Matter Jurisdiction

The extraordinary feature of this case is Outland’s argument that its own federal antitrust counterclaims were so 

“fatally flawed” that they did not even invoke federal question jurisdiction under 28 U.S.C. § 1331, and thus could not 

have been the basis for the exercise of supplemental jurisdiction over its state law claims under 28 U.S.C. § 1367. Cf. City 

of Chicago v. International College of Surgeons, 522 U.S. 156, 168 

(1997) (“Understandably, ICS does not rest [its argument that 

the district court lacked jurisdiction] on the notion that its 

federal claims are so insubstantial as not to establish federal 

jurisdiction.”).

Whether there is an independent basis for federal jurisdiction over Outland’s counterclaims would not matter if 

they arose from the allegations supporting McCoy’s original 

personal injury claims, which provided the court with diversity jurisdiction under § 1332. But Outland’s antitrust and 

commercial tort third-party counterclaims arose from a different set of facts and were not part of the same case or controversy, as required for supplemental jurisdiction under 

§ 1367(a). The federal antitrust claims are the only jurisdictional anchors for those third-party counterclaims. In the alternative, Outland argues that its state law claims did not 

“form part of the same case or controversy under Article III” 

as the federal antitrust claims, as required by § 1367(a), and 

that the district court should have exercised its discretion to 

decline jurisdiction under § 1367(c). We address these arguments in turn.
No. 13-3350 9

1. Federal Question Jurisdiction

Outland argues that its own federal antitrust claims were 

so feeble (carefully avoiding the term “frivolous”) that they 

could not even invoke federal question jurisdiction. That argument leaves Gamesa to offer a delicate defense of its opponent’s claims, at least to a point. Gamesa argues that Outland merely failed to state claims for relief but that the 

claims were not so utterly frivolous as to fail to invoke federal jurisdiction. We agree.

When it comes to invoking federal question jurisdiction, 

the bar is low. The district court generally has jurisdiction 

over a claim “arising under” federal law. 28 U.S.C. § 1331; 

International College of Surgeons, 522 U.S. at 163. Even if the 

federal claim fails to state a cause of action, the district court 

retains jurisdiction to say so. See Bell v. Hood, 327 U.S. 678, 

682 (1946). “[T]he district court has jurisdiction if ‘the right 

of the petitioners to recover under their complaint will be 

sustained if the Constitution and laws of the United States 

are given one construction and will be defeated if they are 

given another,’ unless the claim ‘clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.’” Steel Co. v. Citizens for a Better Environment, 523 U.S. 

83, 89 (1998), quoting Bell v. Hood, 327 U.S. at 685, 682–83.

Outland’s strategy on appeal could expose it to sanctions 

under Federal Rule of Civil Procedure 11 or otherwise. We 

have noted that “[i]n deciding whether a claim is so insubstantial as not to invoke federal jurisdiction, the cases sometimes use language more emphatic than one encounters in 

modern Rule 11 cases.” Crowley Cutlery Co. v. United States, 

849 F.2d 273, 278 (7th Cir. 1988). A district court lacks juris-
10 No. 13-3350

diction only if a suit is “utterly frivolous” on the face of the 

pleadings, but “Rule 11 is not so cabined” both in the sense 

that it can reach (arguably) less egregious conduct and can 

be based on defects not evident from the pleadings alone. Id. 

Outland’s first federal antitrust claim alleged that Gamesa conspired with its Spanish parent company and Iberdrola. 

It has been clear for thirty years that a subsidiary cannot 

“conspire” with its parent in violation of the Sherman Act. 

Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771–

74 (1984). For reasons that are not clear from the record, Outland did not try to save this claim from dismissal by pointing to the alleged involvement of Iberdrola. Instead, Outland 

relied only on a district court decision issued before Copperweld settled the parent-subsidiary question. This strategy 

was a certain loser, but the poor argument in its defense did 

not deprive the court of jurisdiction. (At this point in the litigation, waiver would block any attempt Outland might 

make to revive this claim based on alleged involvement of 

Iberdrola.)

The second claim alleged that Gamesa unlawfully tied 

maintenance services to the sales of its wind turbines and 

had disproportionate market power in the late 2000s in a 

market for maintenance services for Gamesa turbines. The 

district court dismissed the claim because of the insufficiency of Gamesa’s alleged market power. Gamesa supposedly 

had a ten percent share of the wind turbine market, which is 

just not enough by itself, if that’s the relevant market and 

there were no extraordinary circumstances. However, Outland opposed dismissal by arguing that Gamesa did have 

market power at the relevant time because of serious shortages in the wind turbine market, giving it the power to tie 
No. 13-3350 11

the sale of maintenance services to the sale of the turbines 

themselves. That may be a tough theory to prove. How long 

might the shortage have lasted? See Sheridan v. Marathon Petroleum Co., 530 F.3d 590, 594 (7th Cir. 2008) (market power is 

ability to charge a price persistently above competitive level 

despite existence of competitors). We need not wrestle these 

nuances to the ground, however, because Outland does not 

attack the dismissal or try to defend its theory. It argues instead that its theory was so vacuous as to fail to invoke federal question jurisdiction. Suffice it to say there was at least 

some room for argument about market power, so the alleged 

claim was not “utterly frivolous,” nor was the theory of a 

combination between Gamesa and Iberdrola. Outland also 

has not admitted to pleading the federal antitrust claims as a 

mere pretext for bringing its other claims into federal court 

using supplemental jurisdiction. Cf. Steel Co., 523 U.S. at 89.

Accordingly, although Outland has essentially confessed 

to sanctionable conduct (an issue Gamesa may take up with 

the district court if it wishes to), the claims under the Sherman and Clayton Acts were sufficient to invoke the district 

court’s subject matter jurisdiction.

2. Supplemental Jurisdiction

Not until after judgment was entered did Outland question supplemental jurisdiction—which Outland itself had

asked the court to exercise by filing its original counterclaims and its motion for leave to amend. Even then, its motion under Rule 59(e) argued only that the “other state 

claims” (the original counterclaims that were not federal or 

state antitrust claims) were not part of the “same case or controversy” as required by 28 U.S.C. § 1367(a). The motion did 

not address the discretionary factors in § 1367(c). A post-
12 No. 13-3350

judgment motion would have been too late to raise the issue 

anyway, but Outland clearly forfeited its argument that the 

district court should have exercised its discretion under 

§ 1367(c) to decline jurisdiction by failing ever to make it to 

the district court.

The discretionary power to decline jurisdiction under 

§ 1367(c) does not present a limit on subject matter jurisdiction that a district court must raise and decide on its own: 

“This division between the requisites of jurisdictional competence in § 1367(a) and the criteria for the exercise of discretion in § 1367(c) also marks, we believe, the division between 

matters the court must examine on its own and those that 

depend on an assertion of error by the litigants.” Myers v. 

County of Lake, 30 F.3d 847, 850 (7th Cir. 1994); see also International College of Surgeons, 522 U.S. at 172 (reaffirming the 

proposition that pendent or supplemental jurisdiction “is a 

doctrine of discretion, not of plaintiff’s right”); Mayor of Philadelphia v. Educational Equality League, 415 U.S. 605, 627 (1974) 

(discretionary doctrine of pendent jurisdiction, the forerunner of § 1367(c), was not “something akin to subject matter 

jurisdiction that may be raised sua sponte at any stage”). We 

therefore address only whether the other state law claims 

formed part of the “same case or controversy” as the anchoring federal antitrust claims. 

Section 1367(a) “authorizes the district courts to exercise 

jurisdiction to the full extent of Article III’s ‘case or controversy’ requirement.” Baer v. First Options of Chicago, Inc., 

72 F.3d 1294, 1299 (7th Cir. 1995). Claims form part of the 

same case or controversy when they “derive from a common 

nucleus of operative fact.” United Mine Workers v. Gibbs, 

383 U.S. 715, 725 (1966). To satisfy this requirement, “‘[a] 
No. 13-3350 13

loose factual connection between the claims is generally sufficient.’” Baer, 72 F.3d at 1299, quoting Ammerman v. Sween, 

54 F.3d 423, 424 (7th Cir. 1995). In Ammerman, the plaintiff 

brought a Title VII claim against her employer for sexual 

harassment by a co-worker and a state tort claim against her 

co-worker for assault and battery. The district court had 

supplemental jurisdiction over the state claim because the 

assault facts relevant to the tort claim formed a subset of the 

facts supporting the Title VII claim. Ammerman, 54 F.3d at 

424. 

Outland concedes that its state antitrust claims overlapped with its federal antitrust claims, but in fact all of its 

original counterclaims arose from a common nucleus of operative facts. Ammerman is instructive because Outland put 

its entire relationship with Gamesa at issue through the federal antitrust claims, and each of the state claims arose from 

a subset of the antitrust allegations. We discuss the other 

state law claims in three groups: tortious interference claims, 

contract claims, and defamation claims.

The tortious interference claims dealt with Gamesa’s 

conduct with respect to Outland’s other business relationships. Outland alleged that Gamesa interfered with prospective agreements with third parties for maintenance services, 

including its acquisition by Duke Energy. Outland also alleged that Gamesa interfered with its technicians and safety 

policies, which ultimately led to the McCoy accident and 

OSHA sanctions. These tactics threatened Outland’s existence, thus contributing to the federal antitrust claims and 

forming part of the same nucleus of operative facts. 

The contract claims dealt with Gamesa’s conduct with respect to its own business with Outland. The allegations in-
14 No. 13-3350

cluded straightforward breach of the maintenance service 

contract and dealing in bad faith by encouraging Outland to 

hire new workers while planning to cut back on Outland’s 

services. The alleged bad-faith commercial conduct clearly 

relates to the federal antitrust claims. Outland also tied the 

terms of the maintenance services contract, which allegedly 

restrained competition, into its federal antitrust claims. Different causes of action between the same parties that arise 

from the same contract and same events will ordinarily be 

part of the same case or controversy. See, e.g., Channell v. Citicorp Nat’l Servs., Inc., 89 F.3d 379, 385–86 (7th Cir. 1996) 

(holding that actions based on signing and termination of 

the same lease formed part of the same case or controversy 

under § 1367(a)). Outland shows no reason for requiring litigation of the contract claims in a separate case.

The defamation claims alleged that Gamesa made unspecified false statements about Outland’s service and about 

its breach of the maintenance services contract, the same 

course of events supporting the federal antitrust claims. Outland never alleged any particular defamatory statement, 

which was a problem in itself. In any event, because an antitrust claim for conspiracy to monopolize requires a showing 

of a specific intent to monopolize, see 15 U.S.C. § 2; Great Escape, Inc. v. Union City Body Co., 791 F.2d 532, 540–41 (7th Cir. 

1986), and because the unspecified allegations of defamation 

to harm Outland as a potential competitor could have contributed to an inference of intent, the defamation claims 

were part of the same case or controversy.

The federal antitrust claims had a large “nucleus of operative facts,” and the other original state law claims all had a 

basis in at least a portion of those facts. Accordingly, the dis-
No. 13-3350 15

trict court could exercise supplemental jurisdiction over all 

of the original counterclaims.

B. Denial of Leave to Amend

Outland also contests the district court’s denial of leave to 

amend its third-party counterclaims. While the federal 

courts “should freely give leave [to amend a pleading] when 

justice so requires,” Rule 15(a)(2), a district court may deny 

leave for a variety of reasons, including undue delay and futility. See Foman v. Davis, 371 U.S. 178, 182 (1962); Hukic v. 

Aurora Loan Servs., 588 F.3d 420, 432 (7th Cir. 2009). We review the denial of leave to amend for an abuse of discretion. 

See Bausch v. Stryker Corp., 630 F.3d 546, 561 (7th Cir. 2010).

The district court applied Illinois substantive law and 

denied leave to amend. Outland argues now that the district 

court should have applied Illinois choice of law principles, 

which it asserts would have led to the application of Minnesota substantive law and a more favorable outcome. Outland 

also defends six of the seven proposed counterclaims on the 

merits. (The proposed federal antitrust claim is similar to its 

feeble predecessors; Outland does not defend it on appeal.) 

We conclude that the district court did not err by (1) finding 

that Outland waived its choice of law argument and applying Illinois law, (2) denying leave to add Counts I, II, and III 

of the proposed amended counterclaims for futility, and (3) 

denying leave to add Counts IV, V, and VI of the proposed 

amended counterclaims for undue delay. 

1. Choice of Law

Federal courts hearing state law claims under diversity or 

supplemental jurisdiction apply the forum state’s choice of 

law rules to select the applicable state substantive law. See 
16 No. 13-3350

Felder v. Casey, 487 U.S. 131, 151 (1988); Houben v. Telular 

Corp., 309 F.3d 1028, 1032 (7th Cir. 2002). The choice of law 

issue may be waived, however, if a party fails to assert it. See 

Vukadinovich v. McCarthy, 59 F.3d 58, 62 (7th Cir. 1995). For 

example, in Lott v. Levitt we held that a plaintiff who “submitted to Illinois law and relied solely on it” at the motion to 

dismiss stage had waived his argument for different substantive law raised seven months later. 556 F.3d 564, 567–68 

(7th Cir. 2009); see also Muslin v. Frelinghuysen Livestock Managers, Inc., 777 F.2d 1230, 1231 n.1 (7th Cir. 1985). When no 

party raises the choice of law issue, the federal court may 

simply apply the forum state’s substantive law. Camp v. TNT 

Logistics Corp., 553 F.3d 502, 505 (7th Cir. 2009).

In this case, Outland acquiesced to the application of Illinois law. The original counterclaims included alleged antitrust violations under Illinois, Minnesota, and Texas statutes, 

but Outland made no argument in favor of any particular 

state’s substantive common law. Outland benefitted from Illinois venue law, under which the court invalidated a provision in its contract with Gamesa that provided for venue in 

Pennsylvania. Outland did not object to the court’s later application of Illinois substantive law when deciding its motion for a preliminary injunction and even relied entirely on 

Illinois law when defending its original counterclaims 

against Gamesa’s motion for judgment on the pleadings. 

Outland finally raised the choice of law issue only as this 

litigation approached the two-year mark and after it had lost 

on the merits under Illinois law. We do not condone such 

procedural gamesmanship. Cf. Lott, 556 F.3d at 568. With 

Outland having acquiesced to the application of Illinois law, 
No. 13-3350 17

the district court did not err by applying Illinois law to the 

proposed amended counterclaims.

2. Futility

The district court denied leave to amend five of Outland’s 

seven proposed amended counterclaims based on futility. 

We address only Counts I, II, and III, alleging various torts 

for interference with Outland’s acquisition by Duke. (We affirm denial regarding Count VI on the alternate ground of 

undue delay. We need not address the undefended federal 

antitrust claim.)

“District courts may refuse to entertain a proposed 

amendment on futility grounds when the new pleading 

would not survive a motion to dismiss.” Gandhi v. Sitara Capital Mgmt., LLC, 721 F.3d 865, 869 (7th Cir. 2013). “To survive 

a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009), quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 

570 (2007). 

Outland’s proposed amended counterclaims for tortious 

interference with contract, tortious interference with prospective economic advantage, and “prima facie tort” arise 

from the same alleged conduct and injury. Outland claims 

that Gamesa’s breach letter based on the OSHA penalties 

was sent to disrupt the ongoing negotiations with Duke for 

the complete acquisition agreement and fleet services 

agreement, focusing on the alleged $15 million reduction in 

value of the closed complete acquisition agreement.

An action for tortious interference with contract requires 

the plaintiff to prove that the defendant induced a third par-
18 No. 13-3350

ty to breach a contract. See HPI Health Care Servs., Inc. v. Mt. 

Vernon Hosp., Inc., 545 N.E.2d 672, 676 (Ill. 1989); Philip I. 

Mappa Interest, Ltd. v. Kendle, 554 N.E.2d 1008, 1011 (Ill. App. 

1990). Outland has not alleged any breach, either of the original or the amended agreement with Duke. It complains only 

that Gamesa’s alleged interference lowered the value of the 

complete acquisition agreement, which was still being negotiated at the time Gamesa sent its letter. Because Outland did 

not allege a breach by Duke, amendment of this claim would 

have been futile. 1

The elements of a claim for intentional interference with 

prospective economic advantage are different. A plaintiff 

must allege “(1) a reasonable expectancy of entering into a 

valid business relationship, (2) the defendant’s knowledge of 

the expectancy, (3) an intentional and unjustified interference 

by the defendant that induced or caused a breach or termination of the expectancy, and (4) damage to the plaintiff resulting from the defendant’s interference.’” Voyles v. Sandia 

Mortg. Corp., 751 N.E.2d 1126, 1133–34 (Ill. 2001), quoting 

Anderson v. Vanden Dorpel, 667 N.E.2d 1296, 1299 (Ill. 1996). 

The district court determined this claim was not viable be-

 

1 Two additional points warrant brief attention. First, the district court 

based its futility determination in part on Outland’s allegation that 

Gamesa had knowledge of negotiations but not the exact terms of the 

final amended agreement. We doubt that complete knowledge of details 

is necessary, but we need not consider the exact level of knowledge required because Outland did not allege a breach. Second, Outland describes its understanding with Duke regarding the fleet services agreement as a “commitment” but not a contract. The district court correctly 

noted that a vague “commitment” is not a sufficient stand-in for a valid 

contract. See, e.g., HPI Health Care Servs., 545 N.E.2d at 676–77 (tortious 

interference with contract protects plaintiff’s contractual rights). 
No. 13-3350 19

cause (1) Outland alleged only a temporal connection between Gamesa’s letter and the negotiations rather than 

knowledge, (2) Gamesa’s alleged interference did not result 

in a complete termination of Outland’s relationship with 

Duke, and (3) Gamesa’s activity was protected because it was 

acting as a commercial competitor. We find each of these 

reasons problematic, but we affirm on another ground. 

Finding futility based on the first and third grounds 

would raise the plausibility requirement of Twombly too 

high. See generally 550 U.S. at 555, 570. While the temporal 

connection between the Duke negotiations and Gamesa’s 

breach letter alone raises a plausible inference of knowledge, 

Outland additionally alleged that Duke informed Gamesa 

about the ongoing negotiations after the original partial acquisition. Outland also plausibly alleged that Gamesa had a 

bad-faith motive for its actions rather than a good-faith motive of genuine competition. 

The second ground—that the relationship between Outland and Duke was merely impaired but not terminated—

presents a close question of state law. It is possible that Illinois courts would require a complete termination of the prospective relationship as the district court did in this case, but 

most Illinois cases on the subject involve an employee’s suit 

against an employer for a rejection from another job, which 

is necessarily an all-or-nothing proposition. See, e.g., Anderson, 667 N.E.2d at 1300 (stating that firm job offer can be basis for prospective economic advantage claim, but “leading 

candidate” after first interview does not have a reasonable 

expectancy). Here, Outland’s expectancy did ripen into an 

acquisition by Duke, but only after it allegedly suffered a 

significant drop in value for which Outland blames Gamesa. 
20 No. 13-3350

And Outland might have benefitted even more from the 

never-consummated fleet services agreement; that potential 

relationship with Duke was entirely terminated.2

Nevertheless, Outland’s claim still would have failed under Illinois law because it did not allege that Gamesa interfered improperly by communicating with Duke. “Actions 

that form the basis of a tortious interference claim must be 

directed at third-party business prospects.” F:A J Kikson v. 

Underwriters Laboratories, Inc., 492 F.3d 794, 800 (7th Cir. 

2007), citing Galinski v. Kessler, 480 N.E.2d 1176, 1180 (Ill. 

App. 1985). Gamesa did not send the letter to Duke, and 

Outland alleged only that Gamesa made a competing offer 

during its prior communications with Duke. Assuming, as 

we must, that Gamesa’s breach letter was directed at lowering the value of Outland in bad faith, the proper cause of action would be different. (Outland opted to bring claims for 

promissory estoppel and breach of fiduciary duty, but a badfaith claim of breach would often itself be a breach of contract.) Without any allegedly improper action directed to the 

relevant third party, this claim must fail. Cf. F:A J Kikson, 

492 F.3d at 800–01 (analyzing four communications between 

defendant and third parties); Voyles, 751 N.E.2d at 1134 (considering reports made by defendant to credit agencies). 

Thus, amendment would have been futile.

Turning to the generic claim for “prima facie tort,” Outland concedes that this vaguely defined cause of action has 

not been recognized under Illinois law. Outland makes much 

 2 While a “commitment” is not a contract, see n.1 supra, it can be a reasonable expectancy for purposes of tortious interference with prospective economic advantage.
No. 13-3350 21

of a parenthetical comment in a decision of this court: “Some 

states, though not Illinois (not yet anyway), recognize an animal called ‘prima facie tort,’ a catchall for harmful intentional misconduct that eludes the familiar categories.” 

Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1042–43 

(7th Cir. 1999) (internal citation omitted). That comment did 

not implicitly predict that Illinois courts would adopt the 

new tort. Fifteen years later they still have not done so. Furthermore, Gamesa’s alleged misconduct does not “elude the 

familiar categories.” It merely falls outside the two causes of 

actions we have already discussed. Amendment to add this 

claim also would have been futile.

3. Undue Delay

Gamesa allegedly misled Outland by saying it expected 

to continue using Outland’s services when in fact it was 

planning to develop in-house maintenance services. Outland 

proposed Counts IV and V for promissory estoppel and 

breach of fiduciary duty, the latter based on an alleged principal-agent relationship. The district court denied leave to 

amend to add these claims based on undue delay, reasoning 

that Outland should have known about these theories when 

it asserted its original counterclaims. The court also denied 

leave to amend Count VI, requesting indemnification from 

Gamesa for the OSHA penalties, for both futility and undue 

delay. We affirm for undue delay alone. While we approach 

the concept of undue delay at the pleading stage with some 

skepticism, we find no abuse of discretion in this case.

The issue of undue delay generally arises when a plaintiff seeks leave to amend deep into the litigation. See, e.g., 

Sanders v. Venture Stores, Inc., 56 F.3d 771, 773–74 (7th Cir. 

1995) (affirming denial of leave to amend after close of dis-
22 No. 13-3350

covery because more discovery would have been needed). 

The underlying concern is the prejudice to the defendant rather than simple passage of time. Id.; see also Bell v. Allstate 

Life Ins. Co., 160 F.3d 452, 454 (8th Cir. 1998) (“Delay alone is 

insufficient justification; prejudice to the nonmovant must 

also be shown.”). Although the litigation on Outland’s various commercial tort counterclaims was still in the pleading 

stage, the parties had already invested significant resources 

in the case. In particular, the district court was cognizant of 

Gamesa’s costs in defeating Outland’s motion for a preliminary injunction and was understandably unwilling to grant 

Outland leave to present new theories.

Outland had been a party for twenty months when it requested leave to amend, and almost six months had passed 

since its original counterclaims had been dismissed. Outland 

presented no excuse for omitting these three theories originally, and the unexplained delay looks more like procedural 

gamesmanship than legitimate ignorance or oversight. Cf. 

Doe v. Howe Military School, 227 F.3d 981, 990 (7th Cir. 2000) 

(“[P]leading is not like playing darts: a plaintiff can’t keep 

throwing claims at the board until she gets one that hits the 

mark.”). That impression is consistent with the sheer number of original counterclaims and even Outland’s desperate 

arguments before this court, challenging its own attempts to 

invoke federal jurisdiction. Undue delay is unusual at the 

pleading stage, see Dubicz v. Commonwealth Edison Co., 

377 F.3d 787, 793 (7th Cir. 2004) (reversing denial of leave to 

amend for undue delay at pleading stage where only prejudice to defendant was unsupported allegation of loss of evidence), but there was no abuse of discretion here.
No. 13-3350 23

III. Conclusion

Despite Outland’s perverse contention that its own federal claims were too feeble to invoke jurisdiction, the district 

court properly exercised federal question and supplemental 

jurisdiction over the original third-party counterclaims. It 

also properly applied Illinois substantive law and denied 

leave to amend Outland’s counterclaims based on futility 

and undue delay. The judgment is AFFIRMED.