UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

QUALITY ASSOCIATES, INC.,

Plaintiff,

vs.

THE PROCTOR & GAMBLE 

DISTRIBUTING, LLC, et al., 

Defendants.

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Case No. 1:18-cv-75

Judge Timothy S. Black

ORDER (1) GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE AN 

AMENDED COMPLAINT (DOC. 27); AND (2) DENYING AS MOOT 

DEFENDANTS’ MOTION TO DISMISS (DOC. 24)

This civil case is before the Court on the renewed motion to dismiss the complaint 

(Doc. 24) by Defendants The Procter and Gamble Distributing, LLC (“P&G”), Yannis 

Skoufalos, Patrick Paolino, Elizabeth Radke, and Michelle Eggers (collectively, 

“Defendants”), and the parties’ responsive briefing (Docs. 29, 30). Also before the Court 

is a motion for leave to amend the complaint (Doc. 27) by Plaintiff Quality Associates, 

Inc. (“QAI”), and the parties’ responsive briefing (Docs. 31, 32). 

I. BACKGROUND

The underlying facts in this matter are thoroughly recorded in the Orders of this 

Court (Doc. 17) and the Sixth Circuit Court of Appeals, Quality Assocs., Inc. v. The 

Procter & Gamble Distrib. LLC, 949 F.3d 283 (6th Cir. 2020). Briefly stated, QAI sued 

Defendants under 42 U.S.C. § 1981 alleging Defendants terminated their contract with 

QAI in a racially discriminatory manner. While QAI was a plaintiff in federal court, it 

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was defending a suit against P&G in state court related to the same terminated contract. 

This Court dismissed the federal case relying on P&G’s argument that the § 1981 claim 

was a compulsory counterclaim that Plaintiff was obligated to assert in the concurrent 

state court litigation. The Court expressly declined to consider Defendants’ second 

argument for dismissal that Plaintiffs had released their § 1981 claim when they signed 

the agreement terminating their business relationship with P&G (“the Termination 

Agreement”). (Doc. 17 n.5-6)

On February 10, 2020, the Sixth Circuit reversed this Court’s dismissal. Quality 

Assocs., Inc., 949 F.3d at 283. The opinion instructs this Court to consider the “entirely 

independent issue of waiver and release.” (Doc. 22). On remand, Defendant 

immediately filed a new motion to dismiss. (Doc. 24). Plaintiff responded (Doc. 29), but 

also filed a motion for leave to amend the complaint, (Doc. 27). The parties have 

presented responsive briefing on the motion to dismiss (Docs. 29, 30), and the motion for 

leave to amend, (Docs.31, 32). The state court litigation remains ongoing though 

discovery has now concluded.

1

 

II. STANDARD OF REVIEW

Pursuant to Federal Rule of Civil Procedure 15(a), “leave to amend a pleading

shall be freely given when justice so requires.” Coe v. Bell, 161 F.3d 320, 341 (6th Cir. 

1 See Procter & Gamble Distrib. LLC v. Quality Assocs., Inc., No. A-17-00465 (Hamilton Cty. 

Court of Common Pleas), available at https://www.courtclerk.org/data/case_summary.php?

sec=history&casenumber=A+1700465&court%5BCCV%5D=on&court%5BCCR%5D=on&cou

rt%5BMCV%5D=on&court%5BMCR%5D=on&court%5BCDR%5D=on&court%5BCOA%5D

=on&submit.x=22&submit.y=19 (last accessed March 15, 2021).

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1998) (citing Brooks v. Celeste, 39 F.3d 125, 130 (6th Cir. 1994)). Rule 15(a) embodies 

“a liberal policy of permitting amendments to ensure the determinations of claims on 

their merits.” Marks v. Shell Oil Co., 830 F.2d 68, 69 (6th Cir. 1987). In deciding a 

party’s motion for leave to amend, the Court of Appeals for the Sixth Circuit has 

instructed that district courts must consider several elements, including “[u]ndue delay in 

filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure 

to cure deficiencies by previous amendments, undue prejudice to the opposing party, and 

futility of amendments . . . .” Coe, 161 F.3d at 341. In the absence of any of these 

findings, leave should be “freely given.” Foman v. Davis, 371 U.S. 178, 182 (1962). 

Ultimately, determination of whether justice requires the amendment is entrusted 

to the sound discretion of a district court. Moore v. City of Paducah, 790 F.2d 557, 559 

(6th Cir. 1986).

III. ANALYSIS

Plaintiff primarily seeks to amend its complaint to add specificity to the existing 

claim that P&G forced it to sell its business operations and that Plaintiff entered the 

Termination Agreement under duress. But, in general, the Court finds that the proposed 

amended complaint (“PAC”) contains more detail across the board. It paints a picture, 

lacking from the first complaint, of a company symbiotically dependent on P&G and 

entirely at its mercy. The PAC also adds a claim for discrimination against Plaintiff 

related to the allegedly forced sales of its business locations. In the Court’s view, these 

are important and substantial amendments. 

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P&G argues that Plaintiff has not been diligent; that it should have made these 

additions at some point earlier in the two years between the initial complaint and the 

PAC. It is true two years elapsed between the initial complaint and the PAC. But mere

delay is seldom enough to deny leave to amend. See Tefft v. Seward, 689 F.2d 637 (6th 

Cir.1982). To justify denial, the delay must be undue and result in some prejudice to 

defendant. Id. Here, the delay can hardly be attributed to Plaintiff. Plaintiff is right to 

point out that most of that two years was spent waiting on courts to do their business. 

And though this case has progressed slowly, it has not progressed far. This case is still in 

the pleading stage. Defendants cannot plausibly claim they will be prejudiced when 

discovery has not even commenced. See Janikowski v. Bendix Corp., 823 F.2d 945, 952

(6th Cir. 1987).

On the other hand, a lot happened in that two years between the complaint and the 

PAC; developments that may provide Plaintiff the details to make its complaint more 

definite. For starters, the parallel state court litigation has carried on. When Plaintiff 

filed the PAC, it had the benefit of limited discovery from that case. That fact is even 

more true today now that parties have taken depositions in the state case. Furthermore, 

Plaintiff has now had a greater opportunity to observe P&G’s operations without QAI as 

a supplier, which may sharpen Plaintiff’s claims that P&G’s actions were racially 

motivated. These enhancements redound to the benefit of the litigation process. 

Defendants next argue that amendment would be futile. They assert that Plaintiff 

released its claims when it signed the Termination Agreement. But that argument ignores 

that the PAC challenges the validity of the Termination Agreement. From the start,

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Plaintiff has argued that the Termination Agreement was executed under duress. The 

PAC’s new facts related to the relationship and relative bargaining strength of the parties 

are material to those allegations. See St. v. J.C. Bradford & Co., 886 F.2d 1472 (6th Cir. 

1989). 

Defendants also contend that it would be futile for QAI to allege that it executed 

the Termination Agreement under duress while simultaneously arguing for its 

enforcement in the state court matter. Not so. Plaintiff is free to make arguments in the 

alternative. Plaintiff may argue that the Termination Agreement is void and, in the 

alternative, still seek enforcement of whatever provisions benefit Plaintiff. Defendants’ 

contention ignores the possibility that the Court could, hypothetically, find parts of the 

agreement are void and severable under Ohio law, in which case Plaintiff could 

comfortably advocate for enforcement of one provision and invalidity of another. See In 

re United Air Lines, Inc., 453 F.3d 463, 467 (7th Cir. 2006). 

Finally, Defendants assert that the new cause of action in the PAC is also futile 

because it is facially implausible and would not survive a motion to dismiss. They cite 

the familiar Twombly standard. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). 

The Court will not accept the parties’ invitation to fully assess the sufficiency of the PAC 

on this Rule 15 motion. Ewalt v. GateHouse Media Ohio Holdings II, Inc., No. 2:19-CV4262, 2022 WL 682668, at *3 (S.D. Ohio Mar. 8, 2022) (“It is “the better exercise of 

discretion to permit the amendment and allow Defendant to address the sufficiency of the 

pleadings in a dispositive motion before the District Judge.”). Here and now, the Court 

cannot find Plaintiff’s new cause of action futile. 

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On a motion for leave to amend, the Court “is charged with determining whether 

the futility of an amendment is so obvious that it should be disallowed.” Bear v. 

Delaware Cty., Ohio, No. 2:14-CV-43, 2015 WL 1954451, at *3 (S.D. Ohio Apr. 28, 

2015); Brown v. Worthington Steel, Inc., 211 F.R.D. 320, 323 (S.D. Ohio 2002) (“A court 

will not ordinarily consider the merits of a proposed amended complaint in ruling on a 

motion for leave to amend unless it appears to be frivolous”). The new cause of action 

alleges that P&G forced Plaintiff to sell its assets and surrender its property on 

unfavorable terms. According to the PAC, Plaintiff was entirely dependent on P&G for 

business to the point where Plaintiff had no choice but to accept P&G’s demands or else 

risk going unpaid, losing more business, and suffering further racially discriminatory 

treatment. Based on the facts alleged in the PAC, this claim is not frivolous nor 

obviously futile. 

IV. CONCLUSION

Based upon the foregoing: 

Plaintiff’s motion to amend the complaint (Doc. 27) is GRANTED. Plaintiff shall 

file an amended complaint within 14 days of this Order; and, 

Defendants’ motion to dismiss the complaint (Doc. 24) is DENIED as moot.

IT IS SO ORDERED. 

Date: 

Timothy S. Black

United States District Judge

3/16/2022 s/Timothy S. Black

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