Court Opinion

ID: 199876
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:39:21+00
Date Added: 2024-06-11T17:27:03.498811
License: Public Domain

[NOT FOR PUBLICATION-NOT TO BE CITED AS PRECEDENT]

          United States Court of Appeals
                        For the First Circuit

No. 01-1617

                            JERRY L. WEST,

                        Plaintiff, Appellant,

                                  v.

                       DAVID F. MULLER, ET AL.,

                        Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Joseph L. Tauro, U.S. District Judge]

                                Before

                         Boudin, Chief Judge,
                   Selya and Lipez, Circuit Judges.

     David J. Fine, with whom W. Mark McNair, Robert C. Schubert,
Juden Justice Reed, and Schubert & Reed, LLP were on brief, for
appellant.
     James S. Dittmar, with whom Robert L. Kirby, Jr., William J.
Connolly III, and Hutchins, Wheeler & Dittmar were on brief, for
appellees Jeffrey A. Bernfield, Rajiv P. Bhatt, Kimberly A. Doney,
John G. Frantzis, Peter E. Litman, Richard F. Miller, John A.
Norris, Richard M. Traskos, and Summit Technology, Inc.
     Timothy W. Mungovan, with whom Deborah L. Thaxter, John
Pagliario, and Nixon Peabody LLP were on brief, for appellee David
Muller.

                            March 19, 2002
           PER CURIAM.     Appellant Jerry West filed a derivative

action on behalf of appellee Summit Technologies, Inc. ("Summit")

in   December,    1996,   alleging    misconduct   by   several   of   the

corporations's officers and directors.       Roughly four years later,

Summit merged with Alcon Holdings, Inc., making Alcon the sole

holder of Summit stock.    Summit then moved to dismiss the action on

the ground that West was no longer a shareholder, and therefore

lacked standing to pursue his derivative claims.        West conceded as

much, but sought leave to file an amended complaint recasting his

derivative claims as direct ones, and adding several new claims
addressing the merger itself. The district court denied the motion

without explanation and dismissed the suit.
           West appealed, arguing that the district court erred in
refusing to permit amendment.        We entered an Order directing the

district court to state its reasons for denying West's motion.          In
response, the district court explained that, given the history of
the litigation, the amended complaint "was untimely and sought to

engraft a totally new suit on the skeleton of a suit brought years
previously."     We review that decision for an abuse of discretion,
Grant v. News Group Boston, Inc., 55 F.3d 1, 5 (1st Cir. 1995), and

affirm.
           This is not a case where the newly-asserted claims were
in the case from the beginning but were not presented in a timely

fashion.   In such circumstances, the party seeking to amend its
complaint may be barred from raising the new claims in subsequent

litigation. See Johnson v. SCA Disposal Servs., Inc., 931 F.2d 970

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(1st   Cir.    1991)    (holding      that    plaintiff   was   precluded   from

asserting in a second suit claims that were part of the same cause

of action as claims adjudicated in an earlier action).                Thus, the
district court must weigh the possible res judicata effect of its

ruling when deciding whether to permit amendment.                See id. at 976

& n.19 (suggesting that district court may abuse its discretion in
denying a motion to amend when the newly-asserted claims should

have been raised in the original complaint, and so would be barred

in any subsequent litigation); Fed. R. Civ. P. 15(a) (stating that

leave to amend "shall be freely given when justice so requires").

              Here,    the   claims    set    out   in   the   proposed   amended

complaint were prompted by an event -- the merger -- that occurred

long after West filed his original complaint.                     Following the
merger, West requested permission to amend his complaint and

substitute the new claims for the old. The district court rejected

his entreaty, concluding that the new claims were too far removed
from the original derivative claims to justify bringing them into

the case so late in the day.          That decision will not preclude West

from asserting the merger-related claims in a new action.                  See N.

Assurance Co. v. Square D Co., 201 F.3d 84, 88 (2d Cir. 2000).

Accordingly, we hold that the district court did not abuse its

discretion in refusing to permit amendment.

              Affirmed.

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