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. e du/thir dc ir c uit_2001/106Filed May 16, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-1559

TAI KWAN CURETON; LEATRICE SHA W, each individually and on behalf of all others similarly situated;
ALEXANDER WESBY; ANDREA GARDNER

v.

NATIONAL COLLEGIATE ATHLETIC ASSOCIA TION

Tai Kwan Cureton; Leatrice Shaw; Alexander Wesby; Andrea Gardner ,

Appellants

Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 97-cv-00131) District Judge: Honorable Ronald L. Buckwalter

Argued November 9, 2000

Before: ROTH, MCKEE and STAPLETON, Cir cuit Judges

(Opinion filed May 16, 2001)

Andre L. Dennis, Esquire (Argued) Danielle Banks, Esquire Stradley, Ronon, Steves & Young 2600 One Commerce Square Philadelphia, PA 19103Adele P. Kimmel, Esquire

Trial Lawyers for Public Justice, P.C. 1717 Massachusetts Avenue, N.W., Suite 800 Washington, D.C. 20036

J. Richard Cohen, Esquire Southern Poverty Law Center 400 Washington Avenue Montgomery, AL 36104

Attorneys for Appellants

David P. Bruton, Esquire (Argued) Michael W. McTigue, Jr., Esquir e Drinker, Biddle & Reath 18th & Cherry Streets One Logan Square Philadelphia, PA 19103-6996

Elsa Kircher Cole

General Counsel National Collegiate Athletic
Association
1802 Alonzo Watford Sr. Drive Indianapolis, IN 46202

Attorneys for Appellees

OPINION OF THE COURT

ROTH, Circuit Judge:

This is a putative class action by African-American student-athletes challenging the minimum standar di zed test score requirement for fr eshman year varsity intercollegiate athletic participation. This suit b egan almost four years ago and has previously been befor e us o n appeal. See Cureton v. National Collegiate Athletic Ass'n, 198 F.3d 107 (3d Cir. 1999). In the instant appeal, we must
determine whether the District Court abused its dis cretion in denying plaintiffs' motion to alter or amend sum mary judgment and for contemporaneous leave to file a se cond amended complaint. We conclude that the District Co urt

2did not abuse its discretion, and for the r easons that follow

we will affirm the judgment of the District Court.

I. FACTS

The National Collegiate Athletic Association (NCAA) is an unincorporated voluntary association of more that o ne thousand members, a majority of which are public an d private four-year colleges and universities that co nduct varsity intercollegiate athletic programs. The NCAA member colleges are divided into Divisions. This suit deal s with an NCAA bylaw called Proposition 16, which af fects in itial eligibility only in Division I.1 Proposition 16, co dified at NCAA Bylaw 14.3, has two components which operate o n a sliding scale: a minimum high school grade point av erage (GPA) in thirteen required cor e courses and a mini mum standardized test score on the Scholastic Aptitude Test (SAT) or the ACT Assessment.

Plaintiffs are African-American student-athletes wh o exceeded the NCAA minimum GPA requir ement for freshman year athletic participation but failed to achieve the minimum required score on the SA T as required by Proposition 16. They allege that, because of Pr opo sition 16, they lost the opportunity to compete in Division I varsity intercollegiate athletics during their fr eshman ye ar, were denied admission to Division I schools, were denied athletic scholarships, and/or were denied recruiting opportu nities by Division I schools.

Because the factual and procedural history of this case bears directly on our decision, we recite it in som e detail. Plaintiffs began this action on January 8, 1997, al leging that the minimum standardized test scor e component of Proposition 16 violated Title VI r egulations becau se it had an unjustified disparate impact on African-American student-athletes. As plaintiffs' counsel stated in a declaration filed with the District Court, counsel chose to pursue a disparate impact challenge to Proposition 16, rather than an intentional discrimination claim, be cause a

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1. Division I is comprised generally of the lar ger universities and colleges with the greater availability of athletic scholarsh ip monies.

3disparate impact claim had a less "demanding" stand ard of

proof. On February 5, 1997, the NCAA moved to dismi ss plaintiffs' complaint, contending, inter alia, that (1) there was no private right of action for unintentional discrimination under Title VI; (2) the NCAA was not a "program or activity" subject to T itle VI; and (3) the NCAA did not receive the federal funding necessary to su bject it to
Title VI.

Plaintiffs responded to the NCAA's motion to dismis s and moved for partial summary judgment on the gr ounds that, as a matter of law, the NCAA was a covered pr ogram or activity subject to a Title VI action and was a rec ipient of federal financial assistance for purposes of T itle VI. The NCAA contends, and the District Court found, that a s part of their opposition to the motion, plaintiffs demon strated knowledge of several of the facts that plaintif fs would later allege were evidence of intentional discrimination. Specifically, plaintiffs referr ed to criticism fro m the
administrator of the SAT and from the NCAA's own st udies
which warned that the NCAA's use of standar dized t est scores for freshman eligibility would have a dispar ate impact on African-American student-athletes. Despit e the existence of this evidence, however, plaintif fs di d not suggest that it demonstrated intentional discrimina tion. To the contrary, the District Court found that plainti f fs praised the NCAA's motives in adopting initial eligibility standards

as "laudable."

On October 9, 1997, the District Court denied the N CAA's motion to dismiss while granting in part and denyin g in part plaintiffs' motion for partial summary judgmen t. The court determined that there was a private right of action under Title VI for disparate impact2 and held that the NCAA is a "program or activity" within the meaning of Ti tle VI. However, the court left open the question of whethe r the
NCAA receives federal funds as a result of its rela tionship with the National Youth Sports Program (NYSP).

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2. The Supreme Court has recently held that there i s no private right of action to enforce disparate impact regulations prom ulgated under Title VI. Alexander v. Sandoval, ___ U.S. ___ (2001).

4On June 22, 1998, the United States Supreme Court

issued its decision in Gebser v. Lago Vista Ind. Sc h. Distr., 524 U.S. 274 (1998). As a result, plaintif fs' coun sel became aware that the Supreme Court had articulated a deli berate indifference standard, albeit in the Title IX conte xt, to determine whether a recipient of federal funds coul d be liable for knowingly allowing discrimination to occ ur. Meanwhile, in response to the Supreme Court having granted certiorari in a Title VI case, the NCAA mov ed in September of 1998 to amend the District Court's Oct ober 9, 1997, order and to certify for appeal the question of whether Title VI's implementing regulations permitt ed a private right of action.

Plaintiffs acknowledge that they consider ed moving to amend their complaint to allege intentional discrim ination at this point. However, because the District Court denied the NCAA's motion to certify the private right of a ction question for appeal, plaintiffs made a tactical dec ision not to move to amend their complaint. Plaintiffsfiled a motion for summary judgment on their disparate impact clai m on October 6, 1998. That motion contained a footnote suggesting plaintiffs' belief that they could alleg e a purposeful discrimination claim in light of Gebser. 3

On November 13, 1998, plaintiffs moved to amend the ir complaint by adding two additional named parties. T he NCAA filed a cross motion for summary judgment on November 18, 1998, and opposed plaintiffs' motions for summary judgment and for leave to add party plainti f fs. In support of its motion for summary judgment, the NCA A attached the affidavit of an NCAA official who opin ed that one of the valid educational objectives of Pr oposi tion 16 was closing the gap between black and white student-ath lete graduation rates.

By memorandum and order dated December 18, 1998,
the District Court allowed the two additional named plaintiffs to intervene pursuant to Fed.R.Civ.P. 24 . The District Court's order granting the motion specific ally stated

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3. With the exception of that footnote, plaintiffs did not advance an
intentional discrimination claim until after their disparate impact claim had been rejected on appeal.

5that "it bears noting that the time is near to when motions

of this sort would affect the close of discovery an d consequently, any additional similar requests will be looked
on with disfavor."

Subsequently, both parties filed supplemental submissions in support of summary judgment and participated in oral argument. On March 8, 1999, th e District Court denied the NCAA's motion for summary judgment and granted plaintiffs' motion for summary judgment, declaring Proposition 16 unlawful under T itle VI's implementing regulations and permanently enjoi ning application of Proposition 16. See Cur eton v. Nati onal Collegiate Athletic Ass'n, 37 F. Supp. 2d 687 (E.D. Pa. 1999). The District Court concluded that the NCAA w as an indirect recipient of federal funding due to its co mplete control over the NYSP Fund. Alternatively, the Dist rict Court determined that the NCAA was subject to Title VI coverage because member schools had ceded contr oll ing authority to it.

Next, the District Court determined that the NCAA's legitimate objective in adopting Proposition 16 was raising overall student-athlete graduation rates and r ejec ted the NCAA's alternative justification of closing the gap between black and white student-athlete graduation rates. T he court held that the NCAA's second proffer ed objective, c losing the gap between black and white student-athletes, was "unequivocally not the purpose behind" adoption of Proposition 16. Finally, the court deter mined that the use of the standardized test score for fr eshman eligib ility had an unjustified disparate impact on African-American student-athletes and that there were equally effect ive alternatives to the standardized test score compone nt which could further the NCAA's objective of incr ea sing graduation rates of student-athletes. On Mar ch 16, 1999, the District Court clarified its injunction and enj oined the NCAA from denying eligibility based on the minimum standardized test component of Proposition 16.

On December 22, 1999, we reversed the District Cour t's grant of summary judgment to plaintiffs and r emand ed the case with directions to enter judgment for the NCAA . See Cureton v. NCAA, 198 F.3d 107 (3d Cir. 1999). Speci fically,

6we found that the Title VI regulations under which

plaintiffs sued were program specific (i.e., specif ic to the NYSP) and therefore did not reach Pr oposition 16. In addition, we rejected the "controlling authority" a rgument and found that the NCAA was not a recipient of fede ral funds based on its relationship to its member insti tutions.

On February 28, 2000, after the case was remanded t o the District Court, plaintiffs filed a motion to al ter or amend summary judgment and a motion for leave to am end their complaint under Federal Rules of Civil Pr oce dure 59(e) and 15(a). In their proposed amended complaint, pla intiffs allege that Proposition 16 has been adopted and use d by
the NCAA as an instrument of intentional discrimina tion against African-American student-athletes. On April 13, 2000, the District Court denied the motion, finding it to be untimely, prejudicial to the NCAA, and futile. The District Court denied plaintiffs' request for r econsiderati on, and plaintiffs timely appealed.

II. JURISDICTION AND STANDARD OF REVIEW

The District Court exercised federal question juris diction pursuant to 28 U.S.C. S 1331. We have jurisdiction over the District Court's final order denying plaintif fs' m otion pursuant to 28 U.S.C. S 1291.

We review a district court's refusal to allow a pla intiff to amend his complaint pursuant to Fed.R.Civ.P. 15(a) for abuse of discretion. Adams v. Gould Inc. , 739 F.2d 858, 863 (3d Cir. 1984) cert. denied, 469 U.S. 1122 (1985). Similarly, when a district court rejects a motion to alter or amend a judgment filed pursuant to Rule 59(e), we r eview f or abuse of discretion, except over matters of law, which ar e subject to plenary review. Id. at 863-64.

III. DISCUSSION

Both a motion to amend a judgment and a motion for leave to amend a complaint are addressed to the sou nd discretion of the district court. Where a timely mo tion to amend judgment is filed under Rule 59(e), the Rule 15 and 59 inquiries turn on the same factors. Id. ; Newark Branch,

7NAACP v. Town of Harrison, 907 F.2d 1408, 1417 n.14 (3d

Cir. 1990). A district court may deny leave to amen d a complaint if a plaintiff 's delay in seeking amendm ent is undue, motivated by bad faith, or prejudicial to th e opposing party. Foman v. Davis, 371 U.S. 178, 182 ( 1962). Moreover, the court may deny a r equest if the mova nt fails to provide a draft amended complaint, see Lake v. A rnold, 232 F.3d 360, 374 (3d Cir. 2000), or may refuse to allow an
amendment that fails to state a cause of action. Ad ams, 739 F.2d at 864, citing Massarsky v. General Motors Corp., 706 F.2d 111, 125 (3d Cir. 1983).

The mere passage of time does not requir e that a m otion to amend a complaint be denied on grounds of delay. Adams, 739 F.2d at 868. In fact, delay alone is an insufficient ground to deny leave to amend. Cornell & Co., Inc. v. Occupational Safety & Health Review Comm'n. , 573 F.2d 820, 823 (3d Cir. 1978). However , "at some po int, the delay will become `undue,' placing an unwarranted b urden on the court, or will become `prejudicial,' placing an unfair burden on the opposing party." Adams, 739 F.2d at 8 68. Delay may become undue when a movant has had pr evi ous opportunities to amend a complaint. See Lor enz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993) (three year lapse between filing of complaint and proposed amendment was "unreasonable" delay where plaintif f had "numerous opportunities" to amend); see also Rolo v. City Inv esting Co. Liquidating Trust, 155 F.3d 644, 654-55 (3d Cir. 19 98) (rejecting proposed second amended complaint where plaintiffs were repleading facts that could have be en pled earlier). When a party delays making a motion to am end until after summary judgment has been granted to th e adverse party, other courts have recognized that th e interests in judicial economy and finality of litig ation may become particularly compelling. See Diersen v. Chic ago Car Exch., 110 F.3d 481, 489 (7th Cir . 1997); Humphrey s v. Roche Biomed. Lab. Inc., 990 F.2d 1078, 1082 (8th C ir 1993); Union Planters Nat'l Leasing Inc. v. W oods, 687 F.2d 117, 121 (5th Cir. 1982); Dussouy v. Gulf Coast Inv . Corp., 660 F.2d 594, 598 n.2 (5th Cir. 1981). Thus, while bearing in mind the liberal pleading philosophy of the fede ral rules, Adams, 739 F.2d at 864, the question of undue delay

8requires that we focus on the movant's r easons for not

amending sooner. Id. at 868.

Moreover, substantial or undue pr ejudice to the no nmoving party is a sufficient ground for denial of l eave to amend. Lorenz, 1 F.3d at 1414. The issue of prejudi ce requires that we focus on the hardship to the defen dants if the amendment were permitted. Adams , 739 F.2d at 8 68. Specifically, we have considered whether allowing a n amendment would result in additional discovery, cos t, and preparation to defend against new facts or new theo ries. Compare id. at 869 (finding no pr ejudice because n o new facts or additional discovery were requir ed) with Rolo, 155 F.3d at 655 (finding duration of case and substanti al effort and expense in resolving underlying motion to dismi ss could constitute undue delay or prejudice to defend ants) and Cornell, 573 F.2d at 823-24 (finding significan t prejudice because proposed amendment changed legal and factual basis of claim and prevented defendant from presenting defense).

Turning to the case before us, the District Court, when it denied plaintiffs' post-judgment motion to amend, c ited four reasons why plaintiffs' delay was undue: (1) t he motion was filed three years after the complaint wasfiled; (2) the factual information on which the proposed amendment relied was known almost two-and-a-half years before plaintiffs sought leave to amend;4 (3) judicial ef ficiency would be damaged by trying claims seriatim; and (4) the interest in the finality of the proceedings would b e compromised by amendment. Furthermor e, the Distric t Court examined plaintiffs' asserted reasons for the delay in seeking amendment and determined that no "r easonab le explanation" existed to overlook the delay. The cou rt concluded that the only real reason advanced by pla intiffs for the substantial lapse in time was plaintif fs' misplaced confidence in their original disparate impact theor y.

The court next concluded that the NCAA would be prejudiced if plaintiffs were allowed to amend the complaint

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4. In fact, the District Court found that the plain tiffs demonstrated knowledge of many of the facts supporting their int entional discrimination claim as early as July 1997.

9to add a claim of intentional discrimination. It de termined

that the new claim might require the court to revis it the
certification of the class and that amendment would lead to further discovery requests and significant new prep aration. The court concluded that "the proposed amendment wo uld essentially force the NCAA to begin litigating this case again."5

We cannot say that the District Court abused its considerable discretion in denying the post-judgmen t motion to amend. The court carefully analyzed plain tiffs' proffered reasons for delay, the prejudice to the N CAA, and the substance of the amended complaint. It conclude d that the assertion of the claim was untimely and pr ejud icial to the NCAA. The District Court, which had considerabl e familiarity with the development of the factual and legal issues in this matter, concluded that the new claim fundamentally altered the proceeding and could have been
asserted earlier. We find no err or in the District Court's
conclusions.

Plaintiffs contend, however, that our decision in A dams warrants reversal of the District Court. W e disagr ee. In fact, a careful reading of Adams supports the District Co urt's decision to deny leave to amend.

In Adams, the plaintiffs brought an ERISA breach of fiduciary duty claim against the trustees of a pens ion plan. The defendants moved for summary judgment. In defen ding against this motion, plaintiffs advanced two legal theories. The District Court accepted plaintiffs' first theor y and denied defendants' motion for summary judgment. The
District Court did not address the alter native the ory raised by plaintiffs. The District Court then certified a question for appeal based on the first theory. 739 F.2d at 862. We reversed the District Court's denial of summary jud gment and directed that judgment be entered in favor of defendants. Id. at 863. We specifically declined to address the alternative legal theory which plaintif fs agai n sought to

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5. The District Court also concluded that allowing plaintiffs to amend would be futile. Because the District Court's judgm ent can be affirmed on grounds of delay and prejudice, we expr ess no o pinion on the validity of the intentional discrimination claim alleged in plaintiffs' proposed amended complaint.

10present. Id. at 863, 866 n.8. After r emand, plaint iffs

"formally advanced the [alternative] theory," by mo ving to alter or amend the judgment, pursuant to Rule 59(e) , and
for leave of the District Court to file a second am ended complaint, pursuant to Rule 15(a). Id. at 863. The District Court denied plaintiffs' motions. On the second app eal, we
held that the District Court abused its discr etion in denying
the motions to amend.

Plaintiffs contend that the instant matter is indistinguishable from Adams. They focus on the Dis trict Court's denial of the NCAA's motion for summary judgment, our reversal with instructions to enter j udgment for the NCAA, and the District Court's denial, on r emand, of plaintiffs' motion to amend. However , plaintiff s overlook significant factual and procedural dif ferences bet ween Adams and the instant matter.

Unlike the instant case, the alternative theory tha t the Adams plaintiffs ultimately pursued had been raised at earlier points in the litigation. "This contention was asserted earlier in the litigation in plaintif fs' briefs, but was not addressed either by the district court or by th is court . . . ." Id. at 861. In Adams,"[w]e specifically li mited our holding to the certified question, and declined to reach the issue now before us, although the plaintif fs tried to raise it at oral argument." Id. at 863.

Thus, in contrast to the plaintiffs her e, the Adam s plaintiffs proffered the alter native theory to bot h the district and appellate courts prior to moving to amend. Mor e importantly, unlike the instant case, the Adams pl aintiffs had not cross-moved for summary judgment and thus h ad not themselves sought a merits determination on the ir claims. In contrast, although the plaintiffs here b y their own admission had sufficient facts and legal author ity to allege an intentional discrimination claim at least by September of 1998, rather than attempting to add th at claim, they filed for judgment on the merits on the ir disparate impact claim. A month later, they moved t o add party plaintiffs, and the district court gave them the opportunity to do so.6 The District Court heard ora l

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6. While plaintiffs styled their motion a"Motion to Amend to Add PartyPlaintiffs and/or Alternative Motion to Intervene," the District Court determined that the additional parties would be rec ognized as intervenors pursuant to Rule 24.

11argument on the cross-motions for summary judgment and,

after considering voluminous exhibits and the undis puted facts, resolved the legal issues and reached the me rits of the disparate impact claim. See Cureton , 37 F. Sup p. 2d 687. We reversed the District Court's or der on app eal. In light of the fact that plaintiffs participated in comprehensive proceedings which resulted in summary judgment for the NCAA, "the concerns offinality in litigation become more compelling [because] the lit igant has had the benefit of a day in court, in some fashion, on the merits of his claim." Dussouy, 660 F .2d at 598 n.2

.

Moreover, the Adams defendants demonstrated no prejudice from the amendment. Here, the prejudice t o the NCAA is significant. During the lengthy and compr e hensive proceedings below, the NCAA had defended against a disparate impact challenge to Proposition 16 and ha d no notice that the question of discriminatory intent w as at issue. This is not a case where the question of discriminatory intent permeates the plaintif fs' or iginal claim. See Coventry v. U.S. Steel Corp., 856 F.2d 5 14, 519 (3d Cir. 1988) (finding little prejudice where defe ndant had
notice of amended claim because additional issue permeated original claim); see also Adams , 739 F.2 d at 869 (finding no prejudice where plaintif fs proffered a lternative theory before both district and appellate courts be fore moving to amend). On the contrary, to the extent th at the NCAA's intent had been addressed in this case, it h ad been characterized by plaintiffs as "laudable" and by th e District Court as "legitimate." Cureton, 37 F. Supp. 2d at 7 01-05. Thus, if amendment were permitted, the NCAA would b e prejudiced by having to engage in burdensome new discovery and significant new trial preparation.

In Adams, we recognized that these matters are
committed to the District Court's sound discr etion . 739 F.2d at 868. The refusal to grant leave without any justification for the denial can be an abuse of dis cretion. See Foman, 371 U.S. at 182; Lake, 232 F .3d at 373. However, "[i]t is certainly not inconceivable to us that
instances could occur in which the failure to make a timely motion to amend a complaint would place an unwarran ted burden upon a trial court, or be prejudicial to the party

12opposing the motion." Coventry, 856 F .2d at 520. I n such

circumstances, the obligation of the district court in its disposition of the motion is to articulate the pr e judice caused by the delay and to balance those concer ns against the reasons for delay. Id. The District Court satis fied its obligation here. We find no reason to disturb its j udgment.

IV. CONCLUSION

For the foregoing reasons, we conclude that the Dis trict Court did not abuse its discretion in denying plain tiffs' motion to alter or amend summary judgment and for contemporaneous leave to file a second amended comp laint. We will affirm the judgment of the District Court.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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