Hedgeye Risk Management, LLC v. Dale

Background

Hedgeye Risk Management, LLC asked the court to amend or consolidate case numbers 21-cv-03687 and 22-cv-01113, and separately asked to stay, or pause, the proceedings. The first action was captioned against Darius Dale et al.; the second was captioned against Nadine Terman and Solstein Capital, LLC.

Court’s analysis

Under Federal Rule of Civil Procedure 15(a)(2), courts generally allow a party to amend a pleading when justice requires. The court explained that, absent prejudice or bad faith, amendment ordinarily should be allowed. It found that the defendants had not shown that prejudice outweighed the efficiency benefits of amendment. The court determined that the two actions involved substantially similar facts, legal issues, and discovery, and that adding Terman and Solstein to the Dale action would not cause significant delay or require significant additional resources. The court also stated that a three-month period between filing a complaint and requesting consolidation or amendment was not significant delay.

Rulings

The court denied Hedgeye’s motion to consolidate. It granted Hedgeye’s motion to amend and allowed Hedgeye to file an amended complaint in the Dale action naming Terman and Solstein as defendants. It denied Hedgeye’s motion to stay as moot. The court granted the Dale defendants’ motion to seal. In light of the amendment, it denied the Terman and Dale defendants’ motions to dismiss without prejudice, with leave to refile after the amended complaint was filed.

Judge Andrew L. Carter, Jr. ordered Hedgeye to file the amended complaint by July 27, 2022. The order set August 24, 2022, for defendants’ opening brief and September 7, 2022, for Hedgeye’s reply. The clerk was directed to terminate the specified motions in both actions.