DR Distribs., LLC v. 21 Century Smoking, Inc., No. 12 C 50324, Slip Op. (N.D. Ill. Feb. 12, 2019) (Johnston, Mag. J.).

Magistrate Judge Johnston denied defendants’ motion to amend dismissing their defamation counterclaim in this Lanham Act dispute.

At the outset, the Court explained that these “bizarre” circumstances – a party opposing its opponent’s decision to drop a claim – were created by an ESI “donnybrook” involving the loss of apparently relevant emails and instant messages. While it was not expressly stated, the “obvious” purpose of dismissing the claim was to moot the ESI dispute. And plaintiff’s reason for opposing was similarly obvious, plaintiff’s desire to leverage defendants’ ESI “blunder.” The Court also noted that plaintiff had promised to file a 75-page brief, “longer than a CVS receipt” addressing the ESI issues and seeking sanctions.

The case was filed in 2012 with a January 2015 deadline to amend pleadings. Defendants sought leave to amend in October 2018, three years and eight months after the deadline to amend. As an initial matter, because the motion was filed after a case management order was entered, it was governed by Rule 16’s good cause standard, not Rule 15’s liberal leave. The fact that defendants were removing a claim, not adding material, did not warrant applying the Rule 15 standard. The clear language of Rule 16 requires its application for all motions to amend after a case management order, not just those seeking to add claims.

The primary consideration under the Rule 16 standard is the amending party’s diligence. Litigation the claim for four years, including ongoing discovery disputes, and then seeking dismissal nearly four years after the deadline to dismiss while maintaining the viability of the claim did not evidence diligence. In fact, the Court noted that it would likely have dismissed the claim had defendant sought dismissal pursuant to Fed. R. Civ. P. 41(b), instead of continuing to state that the counterclaim was viable and that defendants would prosecute the counterclaim through trial, should it not be dismissed.