Antitrust Law Daily Wrap Up, ANTITRUST—S.D.N.Y.: Additional complaint amendments barred in aluminum antitrust multidistrict litigation, (Apr 26, 2016)

By Edward L. Puzzo, J.D.

Plaintiffs failed to demonstrate that good cause existed for proposed additional amendments to their complaints in their aluminum antitrust multidistrict litigation, the federal district court in New York has ruled (In re Aluminum Warehousing Antitrust Litigation, April 25, 2016, Forrest, K.).

In ongoing multidistrict litigation (MDL) alleging anticompetitive conduct impacting the price of aluminum, individual plaintiffs (IPs) sought leave to file their Second Joint Amended Complaint (SJAC), first level purchaser plaintiffs (FLPs) sought leave to file their Fifth Amended Complaint (FAC), and they sought to add additional parties. In the current stage of the proceedings, the parties were briefing their motion for class certification and discovery was scheduled to close in less than one month.

Standard applied. First, the court determined that the "good cause" standard of Fed. R. Civ. Proc. 16(b) applied to plaintiffs' motions, as opposed to the less stringent Rule 15(a) standard. In view of the history of proceedings in the case, including a Joint Scheduling Order that foreclosed further amendment subsequent to April 9, 2015, the court ruled that the Rule 16(b) standard was appropriate.

Effect of amendments. The plaintiffs alleged that they merely wished to conform their claims to closely mirror the allegations contained in a separate complaint filed by Fujifilm. But, the court stated, allowing the proposed amendments would totally upend the existing carefully negotiated schedule, because the amendments would significantly alter plaintiffs' theory of the case. The proposed amendments would prejudice defendants and/or require a substantial extension of the operative schedule since the proposed amendments (1) would add two new foreign defendants, the additional of which would, under the Hague Convention, delay service by several months; (2) would effectively change the claims and proposed class definition in ways that could necessitate substantial new discovery; and (3) substantially broaden the claims beyond primary aluminum to include secondary aluminum, a separate market. Those effects would significantly prejudice defendants, the court stated.

Overcoming prejudice. It was possible under Rule 16(b) for plaintiffs to show good cause for such prejudice by showing that they acted diligently and could not have made the proposed amendments at an earlier date. The court was convinced that plaintiffs had not been diligent in bringing the pending motions. First, the claim that they could not have learned of the facts they now sought to add was flatly contradicted by their own assertion that the amendments alleged the same case that the parties have been litigating from the outset. Second, the plaintiffs had access to the adequate documents and information to allow them to make their most significant proposed amendments for months. Third, representations in the earlier stages of the litigation led the court to believe that plaintiffs had the information they needed to make the proposed amendments long ago, but chose not to for tactical reasons.

Consequently, the court ruled that plaintiffs had not demonstrated good cause to permit the proposed amendments, and thus denied plaintiffs' motions for leave to file further amended complaints.

The case is No. 1:15-cv-08307-KBF.

Attorneys: Derek Y. Brandt (Simmons Browder Gianaris Angelides & Bardnerd LLC) and Walter W. Noss (Scottscott LLP) for Fujifilm Manufacturing USA, Inc. Linda P. Nussbaum (Nussbaum Law Group, PC) and Arthur L. Shingler, III (Robbins Geller Rudman & Dowd LLP) for Custom Aluminum Products Inc. Richard C. Pepperman, II (Sullivan and Cromwell, LLP) for Goldman Sachs & Co., Goldman Sachs International and J. Aron & Co.

Companies: Fujifilm Manufacturing USA, Inc.; Custom Aluminum Products Inc.; Goldman Sachs & Co.; Goldman Sachs International; J. Aron & Co.

Cases: Antitrust NewYorkNews