Fisher v. Kadant, Inc.

• Decision Date: 23 December 2009
• Docket Number: No. 09-1495.,09-1495.
• Citation: 589 F.3d 505
• Parties: Terrence FISHER et al., Plaintiffs, Appellants, v. KADANT, INC., et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

589 F.3d 505

Terrence FISHER et al., Plaintiffs, Appellants, v. KADANT, INC., et al., Defendants, Appellees.

No. 09-1495.

United States Court of Appeals, First Circuit.

Heard November 3, 2009.

Decided December 23, 2009.

Kevin P. Roddy, with whom Lynne M. Kizis, Daniel R. Lapinski, Wilentz, Goldman & Spitzer, P.A., Scott R. Shepherd, Natalie Finkelman Bennett, Nathan C. Zipperian, James E. Miller, Laurie Rubinow, Shepherd, Finkelman, Miller & Shah, LLP, Robert T. Naumes, and Thornton & Naumes LLP were on brief, for appellants.

James W. Prendergast, with whom John G. Fabiano, Christopher B. Zimmerman, Adam J. Hornstine, and Wilmer Cutler Pickering Hale and Dorr LLP were on brief, for appellees Kadant, Inc. and Liberty Diversified Industries, Inc.

Edward W. Little, Jr., and McCarter & English, LLP on brief for appellee Kadant Composites LLC.

Before BOUDIN and SELYA, Circuit Judges, and LAPLANTE,^* District Judge.

SELYA, Circuit Judge.

This appeal grows out of an action brought by four purchasers of allegedly defective products. Their complaint, filed in the United States District Court for the District of Massachusetts, sought class certification and the recovery of class-wide damages against the manufacturer, its parent, and a firm that had acquired its assets.

Confronted by dispositive motions, Fed. R.Civ.P. 12(b)(6), the district court dismissed the complaint for failure to state a claim upon which relief could be granted. The court entered judgment accordingly. The plaintiffs twice moved unsuccessfully to set aside the judgment and file an amended complaint. They now appeal only from the denial of the second of these post-judgment motions.¹

This appeal requires us to decide what legal standard obtained with respect to the motion under review. That, in turn, requires us to decide an antecedent question: what effect, if any, does a passing reference to a possible future motion to amend, contained in an opposition to a motion to dismiss, have on the district court's authority to allow amendment of a dismissed complaint after the entry of judgment?

We hold that such a passing request is without effect in these circumstances. Thus, the plaintiffs must carry the burden of showing that they are entitled to relief from the previously entered judgment. They have not done so. Accordingly, we affirm the denial of their post-judgment motion (albeit on grounds different than those relied on by the lower court).

I. BACKGROUND

The plaintiffs filed their original complaint on December 27, 2007. They alleged that Kadant Composites LLC (Composites) manufactured and sold defective decking and railing products and failed to honor its concomitant warranty obligations. In addition, the complaint sought to pierce the corporate veil and recover against Composites's corporate parent, Kadant, Inc. (Kadant). Among other things, Kadant allegedly had attempted to deflect liability by (i) using Composites as its alter ego; (ii) selling Composites's assets to a subsidiary of Liberty Diversified Industries, Inc. (LDI) in a purportedly fraudulent transaction; and (iii) helping to set up a deliberately underfunded pool for paying out warranty claims. Finally, the complaint set forth breach-of-warranty claims against LDI.

Each defendant moved to dismiss the complaint for failure to state an actionable claim. Fed.R.Civ.P. 12(b)(6). The plaintiffs opposed the motions. They did not, however, avail themselves of their vested opportunity to amend as of right. See Fed.R.Civ.P. 15(a) (providing that a plaintiff may amend his complaint once, as a matter of right, before an answer is filed); see also Connectu LLC v. Zuckerberg, 522 F.3d 82, 91, 95-96 (1st Cir.2008) (illustrating operation of the rule). Nor did the plaintiffs file a motion for leave to amend their complaint. Instead, in the last line of their opposition to the motions to dismiss, they stated: "If and to the extent that this Court finds the Complaint deficient in any respect, Plaintiffs request leave to amend to plead additional facts to cure any deficiency."

In due course, the district court granted the Rule 12(b)(6) motions and dismissed the case. Fisher v. Kadant, Inc., No. 07-12375 (D.Mass. Nov. 19, 2008) (unpublished order). As to Composites, the court concluded that the plaintiffs had not sufficiently pleaded any of the asserted causes of action. As to Kadant, the court concluded that the plaintiffs had failed to plead facts sufficient to pierce Composites's corporate veil. And as to LDI, the court concluded that the plaintiffs had failed to plead facts sufficient to establish successor liability. In the absence of any pending motion for leave to file an amended complaint, the court entered judgment for the defendants. The plaintiffs have not appealed from the entry of this judgment and, thus, the correctness of the order of dismissal is not before us.

On December 4, 2008, the plaintiffs moved to reconsider the judgment and for leave to file an amended complaint. The defendants objected. The court denied the motion without prejudice on January 12, 2009, explaining that the plaintiffs had failed to proffer a proposed amended complaint along with their motion. Fisher v. Kadant, Inc., No. 07-12375 (D.Mass. Jan.12, 2009) (unpublished order). The plaintiffs have not appealed from the denial of this motion and, thus, the correctness of this order is not before us.

On January 27, 2009, the plaintiffs filed a renewed motion seeking the same relief. This time, however, they annexed a proposed amended complaint to their motion. The defendants again objected. The district court analyzed this motion under the liberal pleading standard of Fed.R.Civ.P. 15(a) and found it wanting. With respect to Kadant, the court determined that the proposed amended complaint did not adequately plead facts anent veil-piercing (alter ego liability). Further, in the proposed amended complaint the plaintiffs dropped their claims against LDI but added claims against its subsidiary, LDI Composites Co. (the acquirer of Composites's assets). The district court determined that, notwithstanding the change in parties, the proposed amended complaint did not adequately plead successor liability. As to all of these claims, the court made an explicit finding that any further attempt to amend would be futile.

The court also rejected the plaintiffs' importuning that they should be allowed to assert new warranty claims against Composites, noting that those claims were not supported by any new facts and, accordingly, should have been raised earlier in the litigation. Because the proposed amended complaint stated no actionable claim against any defendant, the court denied the plaintiffs' motion with prejudice. Fisher v. Kadant, Inc., No. 07-12375 (D.Mass. Mar.3, 2009) (unpublished order).

The plaintiffs took a timely appeal from this order. In the appeal, the plaintiffs argue that the court below abused its discretion by denying their renewed motion for post-judgment relief. The defendants counter that the district court reached the right result even though the court applied too generous a legal standard in evaluating the motion. In this regard, the defendants reason that because the district court entered judgment before the filing of the motion, the court should not have looked to Rule 15(a) for guidance, but rather to the rules governing relief from judgment.

II. ANALYSIS

As said, the plaintiffs have appealed only a single order: the district court's denial of the second motion for reconsideration. To determine the soundness of that order, we first must identify the governing legal standard. In undertaking that task, we are mindful that identifying the proper legal standard to be applied in ruling on a particular matter presents a question of law and, thus, the district court's identification of the standard is subject to de novo review. Vinick v. United States, 205 F.3d 1, 7 (1st Cir.2000); Inmates of Suffolk County Jail v. Rufo, 12 F.3d 286, 291 (1st Cir.1993).

Ordinarily, Rule 15(a) governs a motion to amend a complaint. That rule directs that "[t]he court should freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a)(2). If, however, a motion to amend is filed after the entry of judgment, the district court lacks authority to consider the motion under Rule 15(a) unless and until the judgment is set aside. See Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir.2006); Maldonado v. Dominguez, 137 F.3d 1, 11 (1st Cir.1998). As long as the judgment remains in effect, Rule 15(a) is inapposite.

A good statement of this black-letter law is found in Acevedo-Villalobos v. Hernández, 22 F.3d 384 (1st Cir.1994), in which we wrote: "Unless postjudgment relief is granted, the district court lacks power to grant a motion to amend the complaint under Rule 15(a)." Id. at 389. The rationale for the principle is unassailable: once judgment has entered, the case is a dead letter, and the district court is without power to allow an amendment to the complaint because there is no complaint left to amend. Mirpuri v. ACT Mfg., Inc., 212 F.3d 624, 628-29 (1st Cir. 2000).

In the instant case, the plaintiffs did not file a motion to amend their complaint until December 4, 2008. That was well after November 19, 2008, when the district court entered judgment. Consequently, the district court lacked authority to entertain the motion to amend under the aegis of Rule 15(a) without first setting aside the judgment under some rule geared to the accomplishment of that task, say, Rule 59(e) or Rule 60(b).

This court's reasoning in James v. Watt, 716 F.2d 71 (1st Cir.1983) (Breyer, J.), is especially instructive. There, the plaintiffs waited until after judgment had entered before moving for leave to amend their complaint. The court upheld a denial of the motion, explaining:

To require the district court to permit amendment here would allow plaintiffs to pursue a case to judgment and then, if they lose, to...