Pearson Education, Inc. v. Does 1-100

Background

Pearson Education, Inc., Cengage Learning, Inc., and McGraw-Hill Global Education Holdings, LLC brought this action alleging copyright and trademark infringement involving counterfeit versions of their textbooks. The operative complaint alleged that entities imported, distributed, or sold counterfeit textbooks through online marketplaces.

The plaintiffs moved for two forms of relief. First, they sought certification under Rule 54(b) of the Federal Rules of Civil Procedure, which allows a court to make a judgment involving fewer than all claims or parties final and appealable when the legal requirements are met. The request concerned nine defendants for whom the court had adopted damages determinations.

Second, the plaintiffs sought permission to amend their complaint after the scheduling deadline. Their proposed complaint would add two plaintiffs, 76 defendants, and additional factual allegations. Heliosbooks, Inc., which had appeared after the motion was filed, opposed the amendment.

Rule 54(b) Certification

The court held that the requirements for Rule 54(b) certification were satisfied. Multiple defendants remained in the case, and the liability and remedies—including damages calculations and permanent injunctions—had been determined for each of the nine defendants.

The court also found no just reason to delay final certification. The claims involving the nine defendants concerned different counterfeit textbook sales and online storefronts from the pending claims against Heliosbooks. The court therefore found those claims sufficiently separable. It also noted that more than two years had passed since default judgments were entered against the defendants and that none had moved to set aside the defaults or otherwise objected to the outcome.

Amendment of the Complaint

Because the amendment motion was filed after the scheduling-order deadline, the court first applied Rule 16’s good-cause requirement for changing a case schedule. The court found that the plaintiffs had acted diligently. They had sought additional discovery before the deadline, pursued third-party discovery through the period authorized by the court, and moved to amend shortly after that discovery period ended.

The court then applied Rules 15 and 21. Rule 15 generally allows amendment of a complaint when justice requires, and Rule 21 governs adding parties under the same standard in this context. A court may deny amendment for reasons such as futility, bad faith, undue delay, or undue prejudice.

The court concluded that Heliosbooks had not carried its burden to show a sufficient reason to deny the motion. Heliosbooks did not claim that the proposed amendment was futile or made in bad faith, and the court attributed much of the delay to defendants’ failure to appear or participate in discovery. The court also found that Heliosbooks had not explained how it would be prejudiced. Its argument focused instead on Saurabh Aggarwal, whom the plaintiffs proposed to add as a defendant, but the court stated that prejudice to someone outside the litigation was not material to this analysis.

Disposition

The court GRANTED the plaintiffs’ motion to certify the judgments as final and appealable under Rule 54(b). It directed the clerk to enter final judgments against Siow Hong Chang, Oliver W. Chen, Hamid Khan, Manuj Oberoi, Bhagwat Prakash, Sharma Rajesh, Dilshad Saifi, YK Sharma, and Meng Zhang.

The court also GRANTED the plaintiffs’ motion for leave to amend the complaint and name additional parties. The plaintiffs were permitted to file the proposed complaint and its exhibits. The court stated that the parties would then be required to submit a proposed scheduling order and discovery plan.