United States v. Atlas Lederer Co.
United States v. Atlas Lederer Co.
Opinion of the Court
This litigation arises out of the Comprehensive Environmental Response, Compensa
This litigation is now before the Court on the Plaintiffs Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. # 537). With that motion, the United States requests that the Court grant it leave to amend its Complaint to join as Defendants Larry Katz (“Katz”), general partner of Defendant Caldwell Iron & Metal; Alan Levine (“Levine”), sole proprietor of Ace Iron and Metal and of Defendant Norman’s Auto Wrecking;
It is axiomatic that leave to amend is to be “freely given when justice so requires.” Fed.R.Civ.P. 15(a). In Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962), the Supreme Court indicated that a District Court should deny leave to amend, only in instances when the proposed amendment would be futile, the moving party has acted in bad faith, the opposing party would be subjected to unfair prejudice or the moving party has unduly delayed. See also, Brooks v. Celeste, 39 F.3d 125, 130 (6th Cir. 1994).
Delay alone, however, does not justify the denial of leave to amend. Rather, the party opposing a motion to amend must make some significant showing of prejudice to prevail. “Delay that is neither intended to harass nor causes any ascertainable prejudice is not a permissible reason, in and of itself to disallow an amendment of a pleading [.]” Moore v. City of Paducah, 790 F.2d 557, 561 (6th Cir. 1986) (quoting Tefft v. Seward, 689 F.2d 637, 639 n. 2 (6th Cir. 1982)).
Senser Metal argues that the Court should deny the Plaintiffs request for leave to amend, because the proposed amendment would be futile, the United States has unduly delayed and permitting the Plaintiff to amend would cause Senser Metal and Saul Senser to suffer unfair prejudice. The Court finds it unnecessary to address those arguments at this time. After it had filed its Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. # 537), the Government filed a motion seeking leave to file an amended complaint. See Doc. # 566. With that amended pleading, the Government would set forth the same claims against Senser Metal and Saul Senser, as it requests to assert with its Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. # 537). Senser Metal has opposed that motion, raising the same arguments as it has set forth to oppose the Plaintiffs Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. #537). See Doc. #571. Accordingly, the Court concludes that the Government’s Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. # 537), as it relates to Senser Metal and Saul Senser, has been subsumed by its Motion for Leave to File a Second Amended Complaint (Doc. # 566), and Senser Metal’s opposition to that motion.
Based upon the foregoing, the Court overrules, as moot, the Plaintiffs Motion for Leave to Join Individual Defendants and to Amend the Complaint as Against Senser Metal, Inc. (Doc. # 537), as that motion relates to Plaintiffs request to join Saul Senser as a Defendant and to amend its claims against Senser Metal. The Court notes that the United States and Senser Metal have devoted a significant amount of time to arguing over the question of whether the Government delayed unduly, before seeking leave to join Saul Senser as a Defendant and to assert additional claims against Senser Metal. The statements in memoranda by counsel for both parties, concerning the issue of undue delay, lack evidentiary support. This Court is unwilling to resolve factual questions raised by a motion for leave to amend on the basis of statements of counsel in memoranda, unsupported by evidence. Accordingly, the Court will afford Senser Metal 14 days in which to supplement its memorandum in opposition to Plaintiffs recently filed request to amend (Doc. # 571), with evidentiary materials, such as affidavits, deposition transcripts, authenticated exhibits and citations to other record documents. The Government, in its reply memorandum, which is due to be filed within 14 days of receipt of Senser Metal’s submission, must also supply evidentiary support for the statements of counsel. The Court will then render a decision on this issue.
As is indicated, the Government proposes adding Katz and Levine as Defendants, in order to impose personal liability upon them as a result of their respective status as general partner of Defendant Caldwell Iron & Metal and sole proprietor of Ace Iron and Metal and of Defendant Norman’s Auto Wrecking. Katz and Levine argue that the Court should deny the Plaintiffs request for leave to amend to join them as Defendants, because they will suffer unfair prejudice if leave to amend is granted, since the Government unduly delayed seeking that relief and because the Plaintiff has acted in bad faith. For reasons which follow, this Court does not agree.
Katz and Levine also argue that the Government unduly delayed seeking leave to amend. They point out that this litigation was initiated in 1991 and that, therefore, approximately eleven years elapsed before the Government sought to join them as Defendants. While the Court cannot fault their math, the passage of approximately eleven years, between the initiation of this lawsuit and the filing of the Government’s motion seeking to join Katz and Levine as Defendants, does not cause the Court to conclude that the Plaintiff unduly delayed in seeking leave to amend. The Court entered a number of orders which stayed this litigation during the first seven years it was pending, while a ROD for the USL Site was selected and the parties attempted to negotiate a settlement. Moreover, even after the final stay expired, the parties have devoted significant energies to settling this litigation. Since this litigation was stayed during the majority of those eleven years and the parties have focused upon settlement during the remainder of that time, this Court cannot conclude that the passage of that amount of time constituted undue delay.
Alternatively, Katz and Levine argue that the passage of time between the date upon which the Court permitted the joinder of Caldwell Iron & Metal, Norman’s Auto Wrecking and Ace Iron and Metal, Inc., as Defendants, and that upon which the Government sought leave to join them as Defendants, constituted undue delay. On August
Accordingly, the Court concludes that the Government has not unduly delayed in seeking leave to amend to join Katz and Levine as Defendants.
Katz and Levine also argue that the Government is acting in bad faith by attempting to file an amended complaint, joining them as Defendants. They contend that Caldwell Iron & Metal and Ace Iron & Metal, Inc., were involved in settlement discussions with the Government, seeking to settle on the basis of their inability to pay. According to Katz and Levine, when the parties were unable to reach such settlements, the Government decided to request leave to amend, in order to “pressure them or their companies to succumb to [its] outrageous settlement demands.” Doc. # 543 at 10. Putting aside for a moment the fact that Katz and Levine have failed to submit evidence to support that assertion, the Court does not consider it to be an act of bad faith to seek leave to join a potentially responsible party in a cost reeovery/contribution action under CERCLA, who may have the financial wherewithal to contribute to the costs incurred to remediate the hazardous waste site. The alternative to permitting such joinder is to require the public and those PRPs which have agreed to be responsible for the cost of remediation to bear a greater share of the costs. Therefore, the Court rejects the assertion that the Government is acting in bad faith by attempting to join Katz and Levine as Defendants.
In sum, the Court rejects the assertions of Katz and Levine that granting leave to amend will cause them to suffer unfair prejudice, that the Government has unduly delayed in seeking leave to amend and that the Government is acting in bad faith. Accordingly, the Court sustains Plaintiffs Motion for Leave to Join Individual Defendants and to Amend the Complaint as against Senser Metal, Inc. (Doc. # 537), as it relates to Katz and Levine.
Based upon the foregoing, the Court sustains in part and overrules, as moot, in part Plaintiffs Motion for Leave to Join Individu
. Both Ace Iron & Metal and Norman’s Auto Wrecking are predecessors to Defendant Ace Iron & Metal, Inc., which was incorporated in 1980.
. In Foman, the Supreme Court also held that a District Court can deny a request for leave to amend when the moving party has repeatedly failed to cure the deficiencies by previous amendments. Herein, since no party contends that the Government has repeatedly failed to cure deficiencies with previous amendments, the Court does not address that question.
. Unlike Senser Metal, Katz and Levine have not opposed the Plaintiff's Motion for Leave to File a Second Amended Complaint (Doc. # 566). Katz, Levine and their companies are no longer represented by counsel in this litigation, since the Court has sustained the motion to withdraw filed by their attorneys. See Notation Orders Appearing on Docs. # 574 and # 575. Therefore, the Court does not anticipate receiving a memorandum from Katz and Levine, opposing Plaintiff's Motion for Leave to File a Second Amended Complaint (Doc. #566). Consequently, to ad
. The Court has divided this litigation into phases. See Amended Case Management Order (Doc. # 127); Second Amended Case Management Order (Doc. # 178). During the first phase, the question of the other PRPs’ liability to the United States and the Respondent Group will be determined. The second phase will focus upon the amount each PRP’s liability to the Plaintiff and the Respondent Group.
. It bears emphasis that Katz was the general partner of Defendant Caldwell Iron & Metal, while Levine was the sole proprietor of Defendant Norman's Auto Wrecking. There is no indication that Katz and Levine will not be able to take advantage of the discovery previously conducted by those entities.
. In so concluding, the Court rejects the Government’s argument that "any assessment of whether delay in ‘undue’ under F.R.C.P. 15(a) must give due deference to the United States' unbridled right to bring a cost recovery action at any time within the limitations period without regard to a laches defense." Doc. # 550 at 12-13. The Government points out that laches is not a defense to a cost recovery action under CERCLA. However, that point is irrelevant. Katz and Levine have argued that the Court should deny the Government’s request for leave to amend to join them as Defendants, because of its undue delay. To resolve that argument, this Court must apply settled principles applicable to all motions for leave to amend. Since Foman, undue delay has been a recognized reason for denying leave to amend. The Government has not cited any decision which held that Rule 15(a) and the cases interpreting it are inapplicable when it is the Government which seeks leave to amend. Indeed, if this Court denied the Government’s motion, it would not conclude that its claims against Katz and Levine were barred by laches. Laches would not prevent the Government from initiating a separate lawsuit seeking to recover from them.
Reference
- Full Case Name
- United States v. ATLAS LEDERER COMPANY
- Status
- Published