Here is the correct procedure for amending the complaint in the face of a Rule 12 motion

When the plaintiff files a federal lawsuit and the defendant moves to dismiss the complaint, what is the plaintiff's obligation in filing a motion to amend the complaint to avoid outright dismissal? There is an answer to that question, but the district court in this case overlooked it.

The case is Cresci v. Mohawk Valley Community College, a summary order decided on June 2. Plaintiff is a lawyer who claims the college denied him employment in violation of the First Amendment and USSERA, which prohibits discrimination on the basis of military service. The district court dismissed those claims, but plaintiff argues among other things on appeal that he was denied the right to move to amend the complaint to save the claim. In reversing that decision on the motion to amend, the Court of Appeals (Leval, Calabresi and Carney) invokes a procedure that you may not have been aware of.

In Loreley Financing v. Wells Fargo, 797 F.3d 160 (2d Cir. 2015), the Second Circuit said that "The proper time for a plaintiff to move to amend the complaint is when the plaintiff learns from the District Court in what respect the complaint is deficient. Before learning from the court what are its deficiencies, the plaintiff cannot know whether he is capable of amending the complaint efficaciously." This means that the time to move to amend is not when the defendant argues that the complaint is deficient. Rather, the time to amend is when the district court identifies those deficiencies in a court ruling. "Before learning from the court what are its deficiencies, the plaintiff cannot know whether he is capable of amending the complaint efficaciously."

The district court misapplied the Loreley procedure, ruling in a single order that the complaint failed to state a claim and denying plaintiff leave to amend the complaint, "faulting him for having failed to submit a proposed amended complaint in the time between the defendant's motion to dismiss and the court's ruling on it." As the Court of Appeals says, "It is the District Court’s ruling, not the defendant’s arguments in support of a motion to dismiss, that puts a plaintiff on notice of the complaint’s deficiencies. A plaintiff has no obligation to replead merely because the defendant has argued that the complaint is deficient, without knowing whether the court will agree."