Giorgio Foods, Inc. v. U.S., Slip Op. 07-127,

• Citation: 515 F.Supp.2d 1313
• Decision Date: 21 August 2007
• Docket Number: Slip Op. 07-127,,Court No. 03-00286.
• Parties: GIORGIO FOODS, INC., Plaintiff, v. UNITED STATES, Defendant, and L.K. Bowman Company, Monterey Mushrooms, Inc., and Mushroom Canning Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

515 F.Supp.2d 1313

GIORGIO FOODS, INC., Plaintiff, v. UNITED STATES, Defendant, and L.K. Bowman Company, Monterey Mushrooms, Inc., and Mushroom Canning Company, Defendant-Intervenors.

Slip Op. 07-127,

Court No. 03-00286.

United States Court of International Trade.

August 21, 2007.

COPYRIGHT MATERIAL OMITTED

Arnold & Porter LLP, (Michael T. Shor) for Plaintiff Giorgio Foods, Inc.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Paul D. Kovac and David Silverbrand), for Defendant United States Customs and Border Protection; and David A.J. Goldfine and Neal J. Reynolds, Office of the General Counsel, for Defendant U.S. International Trade Commission.

Kelley Drye Collier Shannon, (Michael J. Coursey and R. Alan Luberda) for Defendant-Intervenors L.K. Bowman Company, Monterey Mushrooms, Inc., and Mushroom Canning Company.

OPINION

WALLACH, District Judge.

I INTRODUCTION

Plaintiff Giorgio Foods, Inc. ("Giorgio") has filed a Motion for Leave to Amend the Complaint seeking to amend its Complaint in five ways. First, it requests to drop its statutory claim that the United States International Trade Commission's ("ITC" or "the Commission") decision to deny it status as an "affected domestic producer" was in violation of the Continued Dumping and Subsidy Offset Act, 19 U.S.C. 1675(c) ("CDSOA"). Memorandum of Law in Support of Plaintiff's Motion for Leave to Amend the Complaint ("Plaintiffs Motion") at 1. Second, Giorgio seeks to add a claim that the CDSOA's support requirement violates the Equal Protection Clause of the United States. Id. Third, Plaintiff requests the addition of Sunny Dell Foods, Inc. ("Sunny Dell") as a defendant, and the addition of a claim for restitution/unjust enrichment against the Government, Defendant-Intervenors and Sunny Dell. Id. Fourth, Giorgio wants to "update" its claims and add "factual allegations" to account for developments since the case was filed and stayed in 2003 pending resolution of cross motions for judgment upon the agency record in P.S. Chez Sidney v. U.S. Tel Trade Comm'n, Court No. 02-00635. Id.; Giorgio Foods, Inc. v. United States, Court No. 03-00286 (CIT October 10, 2003). Finally, Plaintiff seeks to clarify its requested relief. Plaintiff's Motion at 1.

For the reasons stated below, Giorgio's Motion is granted in part and denied in part. As to its first, second, fourth and fifth requests, its Motion is granted. As to its third, its request to add Sunny Dell as a defendant is denied, and its request to add an unjust enrichment/restitution claim is granted.

II BACKGROUND

This case was commenced on May 23, 2003. After the Complaint and Answer were filed, the court issued an Order staying this case pending the resolution of cross motions for judgment upon the agency record in PS Chez Sidney LLC v. U.S. Int'l Trade Comm'n. Giorgio Foods, Inc. v. United States, Court No. 03-00286 (CIT October 10, 2003). On July 13, 2006, this court issued its decision in PS Chez Sidney, holding the support requirement of the Continued Dumping and Subsidy Offset Act¹ unconstitutional as violative of the First Amendment right to free speech. PS Chez Sidney, 442 F.Supp.2d 1329, 1333 (CIT 2006).

III STANDARD OF REVIEW

USCIT R. 15(a), which parallels Rule 15(a) of the Federal Rules of Civil Procedure, governs amendments to a party's complaint. When a party seeks to amend its pleading more than 20 days after service of the pleading, amendments may be granted only by leave of the court or by written consent of the adverse party. USCIT R. 15(a). "Leave shall be given freely when justice so requires." Id.; Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). The granting of a motion for leave to amend the pleadings is within the sound discretion of the court. Intrepid v. Pollock, 907 F.2d 1125, 1129 (Fed.Cir.1990). Absent any dilatory motive, undue cause for delay, repeated failures to cure deficiencies by amendments, futility of amendment, or undue prejudice to the opposing party, leave to amend should be liberally given. Foman, 371 U.S. at 182, 83 S.Ct. 227. In exercising its discretion, the court will consider a variety of factors including, but not limited to, "1) the timeliness of the motion to amend the pleadings; 2) the potential prejudice to the opposing party; 3) whether additional discovery will be necessary; 4) the procedural posture of the litigation; 5) whether the omitted counterclaim is compulsory; 6) the impact on the court's docket; and 7) the public interest." Tomoegawa (U.S.A.), Inc. v. United States, 15 CIT 182, 186, 763 F.Supp. 614 (1991) (citing Budd Co. v. Travelers Indem. Co., 109 F.R.D. 561, 563 (E.D.Mich.1986)).

IV DISCUSSION

The USCIT R. 15(a) provision to file an amendment to the pleadings as of right clearly does not apply here because Plaintiff's Motion to Amend is well beyond the 20-day statutory limit, the original Complaint having been filed on May 23, 2003.

Both Defendant United States and the United States International Trade Commission object only to Plaintiff's request to add an unjust enrichment/restitution claim Sunny Dell as a defendant.

Defendant-Intervenors, the L.K. Bowman Company, Monterey Mushrooms, Inc., and Mushroom Canning Company, do not oppose Plaintiff's first request to drop its statutory claim against the ITC and Plaintiffs request to update the facts it deems relevant to its claims. They take no position on Plaintiffs request to add an equal protection argument based on the court's opinion in SKF USA Inc. v. United States, 451 F.Supp.2d 1355 (CIT 2006) and object to the remaining amendments proposed by Plaintiff. Partial Opposition to Plaintiffs Motion for Leave to Amend Complaint ("Def.-Intervenors' Response") at 2.

Plaintiff May Drop its Statutory Claim Against the ITC

Plaintiff seeks to drop its statutory claim against the ITC, in which it claimed that the ITC's decision to deny it "affected domestic producer" status was in violation of the CDSOA. Defendant and Defendant-Intervenors having no objections to dropping this claim, and the court seeing no reason not to grant Giorgio's Motion to Amend to drop this claim, Plaintiffs request is granted.

Plaintiff May Add a Claim Alleging that the Support Requirement is in Violation of the Equal Protection Clause, Based on the Outcome in SKF USA Inc., 451 F.Supp.2d 1355

Plaintiff may amend its Complaint to add a claim alleging that the support requirement in the CDSOA violates the Equal Protection Clause because the issue is a legal one and no undue prejudice will result to the opposing parties if the amendment is permitted. See Timken Co. v. United States, 15 CIT 658, 659, 779 F.Supp. 1402 (1991).

Plaintiff seeks to add this claim because the CDSOA was held unconstitutional on equal protection grounds in SKF USA Inc., 451 F.Supp.2d 1355. The ruling is relevant to this case and Defendant United States and the ITC would not be prejudiced by including this issue, since they have already encountered it before. In Rhone Poulenc S.A. v. United States, 7 CIT 133, 583 F.Supp. 607 (1984), the court based its decision to allow Plaintiff to amend its Complaint on the court's reasoning in Silver Reed America, Inc. v. United States, 7 CIT 23, 581 F.Supp. 1290 (1984), which held that Plaintiff could amend its pleadings when an opinion of this court, relevant to its case, was issued after all the responsive pleadings were served. The court in Rhone Poulenc, S.A. also stated that since the issue was one of law which did not require either additional fact-finding or a new trial there was no undue prejudice to the Government. Rhone Poulenc, 583 F.Supp. 607, 7 CIT at 136; but see Saarstahl AG v. United States, 20 CIT 1413, 1420-21, 949 F.Supp. 863 (1996) (finding that granting Plaintiff's motion for leave to amend would "necessitate opening up the record and would create undue delay and expenditure of scarce party time and resources;" such delay constitutes prejudice).

Defendant-Intervenors argue that Giorgio could have raised this claim in its original Complaint, and does not explain why it "waited until the Court's decision in the SKF case." Def.-Intervenors' Response at 2. The fact that Giorgio did not originally raise this issue does not preclude it from seeking the addition of the claim now. "[P]arties `have been permitted to amend their pleadings to assert new claims long after they acquired the facts necessary to support those claims.'" ResQNET.com, Inc. v. Lansa, Inc., 382 F.Supp.2d 424, 450 (S.D.N.Y.2005) (quoting Richardson Greenshields Secs., Inc. v. Lau, 825 F.2d 647, 653 n. 6 (2d Cir.1987)). The stay in this case was lifted when the decision in PS Chez Sidney was issued, two months before the decision in SKF USA Inc., 451 F.Supp.2d 1355. Less than one month later, Plaintiff filed motions for a temporary restraining order and a preliminary injunction. Three weeks after those motions were decided by the court, Plaintiff filed its Motion to for Leave to Amend Complaint. While "[a] litigant's failure to assert a claim as soon as he could have is properly a factor to be considered in deciding whether to grant leave to amend," Giorgio filed its motion in a reasonable amount of time. Te-Moak Bands of W. Shoshone Indians of Nev. v. United States, 948 F.2d 1258, 1262 (Fed. Cir.1991) (quoting Carson v. Polley, 689 F.2d 562, 584 (5th Cir.1982)).

Although Plaintiff could have brought this claim in its original motion, absent prejudice to the opposing parties, and given that the opposing parties do not object to this amendment, the liberal position of the federal rules for granting amendments weighs in favor of Plaintiff here. Thus, Plaintiff's request to add a claim is granted.

Plaintiff May Add a Claim for Restitution/Unjust Enrichment Against the Government and Defendant-Intervenors, But Not Sunny Dell

Plaintiff seeks to add Sunny Dell, a domestic mushroom producer, as a...