Update (October 1, 2015): Below, I argued for a permissive and flexible application of a rule concerning a scheduling order but, for reasons stated by the judge from the bench (but not published in a written memorandum or order), U.S. Mag. Judge Hildy Bowbeer (D. Minn.) denied the plaintiff’s request to amend its pleadings after the deadline for amendment of pleadings.
The day the judge ruled, there was also an unsuccessful settlement conference in the case. But just three days after the unsuccessful settlement conference and the denial of plaintiff’s motion for leave to amend, the lawsuit settled. Today (three days after the trial was supposed to have started), the lawsuit was dismissed.
Original Post (July 28, 2015): Which is more just: allowing for “substantial compliance” or requiring “strict compliance”? Requiring “actual knowledge” or allowing for “constructive knowledge”?
(“Constructive knowledge” is a legal fiction whereby courts can avoid requiring “knowing or proving what is inside a person’s mind” and, instead, courts can require certain steps be taken that would tend to ensure notice and knowledge, after which the court simply assumes knowledge, “constructive knowledge,” that is (really, “constructed knowledge,” “imputed knowledge,” or “well-if-you-didn’t-know-X-then-that’s-your-problem – we’re going to pretend you did”).
How about deadlines? Do you favor courts’ “strict” application of the rules or “flexible” application? Some fans of “strict” application would call “flexible” application, “non-application.”
How about, for example, when a party wishes to amend a pleading (that is, a complaint, an answer, a counterclaim, and the like) after the case schedule deadline? Should courts apply those rules strictly or should they bend them in the name of justice?
To balance the importance of having deadlines with the excessive rigidity of absolute enforcement, state and federal court rules require “good cause” for “leave to amend” after the court-imposed deadline which, of course, simply leads to the next question, “what is good cause”? In most instances, the rule leaves that to the trial court judge to decide.
Plaintiff Wisconsin Staffing brought a lawsuit against Ara because, Wisconsin Staffing alleged, Ara breached contracts with Wisconsin Staffing. As the litigation proceeded, Wisconsin Staffing came to the conclusion that something more serious and nefarious was afoot. Wisconsin Staffing appears to have concluded that Ara unilaterally, without disclosure, and without justification, jacked up its cut — its commission — for the deal the two had entered into, effectively stealing Wisconsin Staffing’s money. So Wisconsin Staffing sought to amend its complaint to add claims for conversion and civil theft after the deadline in the court schedule.
In response, Ara points out that Wisconsin Staffing missed the boat. “Wisconsin Staffing could have included a claim for conversion and civil theft at the outset of this case, and at least prior to the conclusion of discovery and dispositive motion practice.”
Here is why, in my opinion, this dispute seems to present an easy answer. (1) Would it really make sense to force Wisconsin Staffing to bring a separate second lawsuit making these allegations and then ask the two cases be treated as related or consolidated (or force them to litigate two separate lawsuits against the same defendant)? (If the motion to amend were denied, wouldn’t Wisconsin Staffing be able to do that?) (2) We do not want to encourage litigants and their lawyers to make claims of civil theft and conversion early on in business disputes, a “speak now or forever hold your peace” rule. Rather, we want to implement rules in ways that that encourage such claims are only brought after serious and sufficient discovery and deliberation. These are serious allegations, of course.
Under state and federal court rules, if evidence comes out at trial that changes a party’s view of the case, even then, it might be justified in moving to conform the pleadings to fit the evidence. Fed. R. Civ. P. 15(b) (“Amendments During and After Trial”).
But, then again, maybe the question is not so easy. Ara makes a separate “independent duty rule” argument (“When the gravamen of the complaint is the breach of contract, the plaintiff may not recover tort damages”).
We will have to wait and see what U.S. District Court Judge Joan N. Ericksen (D. Minn.) and U.S. Mag. Judge Hildy Bowbeer (D. Minn.) to say.