Martin Nicholas John Trott v. Deutsche Bank, AG

Background

Martin Nicholas John Trott and Christopher James Smith brought the action on behalf of and solely in their capacities as the foreign representatives and joint official liquidators of Madison Asset LLC (in liquidation). Deutsche Bank had moved to dismiss the amended complaint. While that motion was pending, the plaintiffs asked for permission to file a second amended complaint. They said the proposed changes were based on a recently obtained transcript of deposition testimony given by a former Deutsche Bank employee in another proceeding. The plaintiffs did not submit a proposed second amended complaint, but their letter described the allegations they intended to add. Deutsche Bank opposed the request.

Court’s analysis

Federal Rule of Civil Procedure 15 generally requires courts to freely allow amendments when justice requires. The court explained that leave to amend is ordinarily allowed unless there is undue delay, bad faith, unfair prejudice to the opposing party, or futility—meaning the proposed amendment would still fail as a matter of law.

The court found no undue delay because the plaintiffs requested permission shortly after Deutsche Bank filed its motion to dismiss. It found no undue prejudice because the case was at an early stage: Deutsche Bank had not answered, no conference under Rule 16 had occurred, and no discovery deadlines had been set. The court also found no evidence of bad faith, noting the plaintiffs’ claim that they had only recently obtained the deposition testimony and that Deutsche Bank had previously denied the testimony’s existence.

Although the plaintiffs had not submitted a proposed amended complaint, the court concluded that this omission was not fatal because their request adequately explained the basis and nature of the proposed amendments. The court declined to analyze Deutsche Bank’s arguments that the amendment would be futile, stating that those arguments were better considered in a motion to dismiss directed at the new pleading. The court also warned that it would be reluctant to allow another amendment if Deutsche Bank successfully moved to dismiss the second amended complaint, because the plaintiffs were already on notice of alleged deficiencies in their pleading.

Disposition

The court granted the plaintiffs’ request for leave to amend. It denied Deutsche Bank’s pending motion to dismiss as moot, rather than deciding that motion based on the allegations in the existing amended complaint. The plaintiffs were ordered to file the second amended complaint on or before May 19, 2021. The court stated that, if Deutsche Bank wished to move to dismiss the second amended complaint, it had to submit a required pre-motion letter. The Clerk of Court was requested to terminate docket entries 25, 29, and 30.

What the ruling did not decide

The order did not decide the underlying claims or whether the proposed allegations would ultimately survive a motion to dismiss. It also did not decide Deutsche Bank’s futility arguments at this stage.