Opinion ID: 35610
Heading Depth: 2
Heading Rank: 2

Heading: denial of the plaintiffs' third attempt to amend

Text: 11 In March 2001, the district court entered a preliminary pretrial conference order that gave the parties thirty days in which to file any final amendments. Within the prescribed period, the Plaintiffs filed a motion for leave to supplement and amend their complaint for a third time (the district court had allowed two previous amendments). Because the Plaintiffs' filing was considered to be somewhat incoherent, the magistrate judge ordered the Plaintiffs to provide opposing counsel with a comprehensive pleading that they propose to file, and offered BCBS an opportunity to submit a supplemental opposition. In response, the Plaintiffs filed what they styled as a Restated Complaint. 12 BCBS opposed this third amendment on two principal grounds. First, BCBS asserted that the Plaintiffs' amendment would be unfairly prejudicial because it would radically change the nature of the litigation after extensive discovery and pretrial activity, and only five months before the case was scheduled for trial. Second, BCBS argued that leave to amend should be denied as futile because the new claims proposed by the Plaintiffs were preempted by ERISA. 13 In denying the Plaintiffs' motion for leave to amend, the magistrate judge stated that [t]he state law claims which plaintiff attempts to assert appear to be preempted by ERISA. The magistrate judge further observed that the claims are not new and should have been brought far earlier than now. The district court affirmed the magistrate judge's ruling, declaring that [t]he proposed amendment to the complaint is untimely; further, it seeks to add state law claims that are preempted by ERISA.
14 The Plaintiffs' motion for leave to amend was filed well within the time prescribed by the trial court in its pretrial conference order. Neither the district court nor the magistrate judge made any express findings that the Plaintiffs acted in bad faith or with a dilatory motive or that BCBS would be prejudiced by the amendment. The Supreme Court has explicitly disapproved of denying leave to amend without adequate justification. 10 We have consistently expressed our strong preference for explicit reasons and indicated the disfavor with which we view district court denials of amendments without stated reasons. 11 In light of the presumption in favor of allowing pleading amendments, courts of appeals routinely hold that a district court's failure to provide an adequate explanation to support its denial of leave to amend justifies reversal. 12 15 When the reason for the denial is readily apparent, 13 however, a district court's failure to explain adequately the basis for its denial is unfortunate but not fatal to affirmance if the record reflects ample and obvious grounds for denying leave to amend. 14 This is such a case. Our examination of the procedural history of this action leaves us with a definite and firm conviction that BCBS and Dr. Gengelbach would have suffered undue prejudice if the district court had allowed the Plaintiffs' proposed amendments. It is true that the Plaintiffs motion for leave to amend was not untimely in the sense of being filed outside the deadline prescribed in the preliminary pretrial conference order. And, we know that delay alone is an insufficient basis for denial of leave to amend: The delay must be undue, i.e., it must prejudice the nonmoving party or impose unwarranted burdens on the court. 15 The Plaintiffs' motion was certainly untimely in light of the procedural history and posture of the case. The district court was obviously concerned that the Plaintiffs had waited until such a late stage in the proceedings before seeking leave to assert these amended claims, which — if granted — would work a massive change in the nature and direction of the case.
16 In this context, we must determine whether the proposed amendment (1) was merely proposing alternative legal theories for recovery on the same underlying facts or (2) would fundamentally alter the nature of the case. 16 Amendments that fall into the former category generally should be permitted, as they advance Rule 15(a)'s policy of promoting litigation on the merits rather than on procedural technicalities. Amendments that fall into the latter category, however, may be denied if the circumstances warrant. Here, they clearly do. 17 The Plaintiffs' so-called Restated Complaint — an unabashed attempt to avoid ERISA preemption and defeat federal court jurisdiction — essentially pleaded a fundamentally different case with new causes of action and different parties. As stated by the Eighth Circuit, when late tendered amendments involve new theories of recovery and impose additional discovery requirements, courts [of appeal] are less likely to find an abuse of discretion due to the prejudice involved. 17 In their Restated Complaint, the Plaintiffs were effectively reconstructing the case anew, after it had been pending in the district court for years and was nearing the close of extensive discovery. Indeed, the Plaintiffs were proposing to abandon Mayeux's claim for medical benefits under the ERISA Plan — the claim that had been at the core of the Plaintiffs' case from the outset. We conclude that permitting the amendment would have unduly prejudiced BCBS and Dr. Gengelbach, the new defendant whom the Plaintiffs proposed to add to the suit. The district court, therefore, did not abuse its discretion by denying the Plaintiffs leave to amend. 18