Pearson Education, Inc. v. Does 1-100

Background

The plaintiffs moved to amend the operative complaint and name new parties. Their proposed complaint would add two plaintiffs, 76 defendants, and various factual allegations. The court considered the request under Rule 16’s “good cause” standard and the more liberal standards in Rules 15 and 21 of the Federal Rules of Civil Procedure.

The court found that the docket’s procedural history created significant uncertainty. A prior order had separated Dann Divine and seven other defendants into a new action, but the separation had not been reflected by a new docket number. Filings in both matters had continued under docket number 17-CV-203. The court also concluded that the scheduling and discovery deadlines applied to both actions.

Reasons for clarification

First, the court determined that the prior orders in the Heliosbooks action did not create final dispositions for the remaining defendants. Heliosbooks had not received a final judgment because the plaintiffs had successfully requested its removal from the damages inquest. The court explained that an order deciding liability but leaving damages unresolved is not a final judgment. The court had also not directed entry of final judgment or found that there was no just reason for delay as to the other remaining defendants.

Second, the proposed amendment could substantially unsettle matters that had appeared resolved. Ten defendants who had defaulted on the First Amended Complaint would be added back, reopening the question of their liability despite a purportedly final judgment against them and damages determinations for nine of them. The proposed complaint would also omit 12 defendants named in the First Amended Complaint. The court stated that omitting claims from an amended complaint generally waives those claims, meaning the proposed amendment would effectively waive the plaintiffs’ claims against those 12 defendants.

Orders

The court ordered the plaintiffs to submit a letter by March 17, 2022, stating whether they wanted the court to consider their motion as written or wanted to withdraw it and file an updated motion with a revised proposed complaint. The letter also had to clarify the status and amounts of funds received from remaining defendants for whom damages determinations had been adopted. The court permitted a renewed motion and revised proposed complaint by April 18, 2022, and stated that the time between the original motion and a new motion would not count as undue delay or lack of diligence if the revised complaint used allegations and parties from the two existing complaints.

Judge Kimba M. Wood further directed the Clerk to assign a new docket number to the separated Divine action, mark it as related to docket number 17-CV-203, assign it to the same court, copy specified docket materials into it, terminate that newly opened case because final judgments had been entered against all eight defendants there, and change the caption of docket number 17-CV-203. The court also directed the Clerk to enter final judgment against Blue Rocket Books, Ltd. under Rule 54(b). The judgment was to match the previously stipulated order, and the court certified it as final and appealable because it found no just reason for delay.