Joint Stock Company Channel One Russia Worldwide v. Infomir LLC

Background

The plaintiffs are six Russian television broadcasters. They sued Infomir LLC, S.K. Management of New York Inc., and other defendants, alleging that the defendants pirated and resold the broadcasters’ programming to Russian-speaking consumers in the United States. The First Amended Complaint asserted claims under the Federal Communications Act, the Digital Millennium Copyright Act, the Lanham Act, the Copyright Act, New York General Business Law § 349, New York common law, and for declaratory relief.

The plaintiffs sought permission under Federal Rule of Civil Procedure 15(a)(2) to file a Second Amended Complaint. The proposed pleading would drop eight unserved or previously dismissed defendants and four claims; add V-Net Inc. doing business as Infomir USA, Advanced Business Integration Network Corp., and Samuel Katsman as defendants; and add or expand factual allegations against Infomir. The motion was filed more than three years after the action began and nearly ten months after the close of fact discovery.

Legal standards

Rule 15(a)(2) generally allows amendment with the court’s permission when justice requires, but courts may deny leave because of undue delay, bad faith, repeated failure to cure deficiencies, undue prejudice, or futility. The court also applied Rule 16(b)(4), which requires good cause to modify a case schedule after a relevant deadline has passed. Good cause depends on the moving party’s diligence.

The court concluded that Rule 16 applied because the parties had proposed April 17, 2017, as the deadline for joining parties or further amending the pleadings, and the plaintiffs had already filed their First Amended Complaint by April 5, 2017. The court also reasoned that adding three defendants after discovery closed would require modification of the case schedule and likely additional discovery.

Analysis

As to Katsman and Advanced Business Integration Network Corp., the court found that the plaintiffs had not shown good cause for their delay. The plaintiffs relied on Katsman’s deposition testimony and documents that they had possessed or used well before seeking amendment. Even assuming a February 2019 transaction record alerted the plaintiffs to the alleged conduct, the court found that they waited more than two months before bringing it to the court’s attention.

The court separately found that adding Katsman and Advanced Business Integration Network Corp. would cause undue prejudice because the amendment would require reopening discovery. It therefore denied that portion of the request under both Rule 16(b)(4) and Rule 15(a)(2), without reaching the opposing parties’ arguments concerning futility and bad faith.

The court reached the same result for V-Net. The plaintiffs had known about V-Net and had access to relevant evidence before their request to add it as a defendant. Because V-Net was described as defunct and its sole known principal was deceased, the court found that adding it would likely create service, successor-liability, and additional discovery issues, producing further delay and expense.

The court also denied leave to add the proposed factual allegations against Infomir. It found that many allegations repeated existing allegations or merely supplied additional detail. Because the plaintiffs asserted no new legal claims against Infomir, the court concluded that denying amendment would not prevent them from presenting the same facts in later summary-judgment or trial proceedings. The proposed pleading also relied on the Vidulich affidavit and related materials that had been excluded by an earlier sanctions order, creating a risk of further motion practice.

Finally, the court held that the proposed deletion of eight defendants and four claims did not justify filing the lengthy Second Amended Complaint. Some defendants had already been dismissed, other defendants had never been served, and the plaintiffs could take steps to remove the unwanted claims through other procedures.

Disposition

The court denied the plaintiffs’ motion for leave to file the proposed Second Amended Complaint. The order did not decide the underlying claims concerning alleged piracy, copyright infringement, or related statutory violations. The court directed the parties to confer about dismissing the remaining unserved defendants and unwanted causes of action and to submit any required notices or stipulations by April 17, 2020.