Barrett v. The Arena Group Holdings, Inc.

Background

At an initial pretrial conference, Barrett sought permission to amend his complaint. The proposed amendment would abandon his claims under the Fair Labor Standards Act and his claim against Bhargava for breach of the duty of good faith and fair dealing. It would also add a claim against Bhargava for tortious interference with contract. The defendants did not oppose abandoning the existing claims but opposed adding the new claim.

Court’s analysis

Federal Rule of Civil Procedure 15(a)(2) generally directs courts to freely allow amendments when justice requires. Courts may deny permission for reasons such as undue delay, bad faith, prejudice, repeated failure to correct defects, or futility—meaning the proposed amendment could not succeed as a matter of law.

The proposed claim alleged that Bhargava interfered with Barrett’s contract with Arena Group by directing Arena Group to terminate Barrett without board approval and in violation of Arena’s bylaws and Delaware law. The proposal also alleged that Bhargava said he would “never approve” the severance payment. The court noted that no earlier amendment had been made and relied on the general rule favoring permission to amend.

Ruling and next steps

The court GRANTS Plaintiff’s leave to amend his complaint. Barrett must file the amended complaint by May 31, 2024. The order does not decide the merits of the proposed tortious-interference claim.

Bhargava had stated that he intended to file a motion to dismiss that claim if amendment were allowed. The court limited Bhargava’s supporting memorandum and Barrett’s opposition to 10 pages each, and Bhargava’s reply to 5 pages.