Monday, December 31, 2018

Circuit revisits the right procedure for amending complaints in the face of Rule 12 motions

This case talks about the procedure guiding motions to dismiss a federal complain under Rule 12(b)(6). In particular, when can the plaintiff amend the complaint after the district court grants the motion to dismiss for failure to state a plausible claim? The Court of Appeals rejects the practice of at least one district court judge in holding that the time for plaintiff to file an amended complaint happens after the court rules on a motion to dismiss.

The case is Kopchik v. Town of East Fishkill, a summary order issued on December 26. I wrote about the ADEA and disability discrimination claims the other day. Not only did the Court of Appeals reinstate the plaintiff's claims on the merits, it throws in a few words about the district court's complaint-amendment procedures.

The district courts know that a motion to dismiss can actually result in two motions. If the first motion is granted because the plaintiff does not allege enough facts to state a claim, the plaintiff can amend the complaint once under rules. This means that, in opposing the motion to dismiss, the plaintiff might also cross-move to amend the complaint to fill in any deficiencies identified by defense counsel in filing the motion. Federal judges do not want two motions to dismiss in the same case, so they have procedures to prevent that. Some judges have the lawyers appear in court for a pre-motion conference to argue the merits of the motion before defense counsel even files it. During that colloquy, the judge might ask plaintiff's counsel if he wants to amend the complaint before the motion is file. Another approach, followed by the district court in this case, is to put the motion to dismiss on hold to see if plaintiff wants to file an amended complaint rather than oppose the motion; if plaintiff choose that route, the motion to dismiss is set aside, as we have a new complaint in the case, though defendant can move against the new complaint, as well. Under this procedure, if plaintiff chooses not to file an amended complaint in the face of defendant's motion, he forfeits the right to file an amended complaint.

The Court of Appeals notes that it has already rejected the latter procedure, citing Lorely Fin. No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 189-91 (2d Cir. 2015). In light of that case, the Court says, "there is no obligation on a plaintiff to expend time and resources to amend a complaint before knowing whether the court will find it insufficient, and if so, in what ways." The Court said in the Lorely case, "Without the benefit of a ruling, many a plaintiff will not see the necessity of amendment   or be in a position to weigh the practicality and possible means of curing specific deficiencies." In the end, the Court says, "It is inappropriate to deny a plaintiff the opportunity to replied after a defendant's motion to dismiss is granted, simply because the plaintiff decided not to replied before learning whether the court would find the complaint insufficient. The opportunity to amend the complaint is appropriately presented after the district court rules on a motion to dismiss."

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