Sanders v. Venture Stores, Inc.

• Decision Date: 23 May 1995
• Docket Number: No. 94-3779,94-3779
• Parties: 66 Empl. Prac. Dec. P 43,574, 32 Fed.R.Serv.3d 1010 Denise SANDERS, et al., Plaintiffs-Appellants, v. VENTURE STORES, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 771

56 F.3d 771

66 Empl. Prac. Dec. P 43,574, 32 Fed.R.Serv.3d 1010

Denise SANDERS, et al., Plaintiffs-Appellants, v. VENTURE STORES, INCORPORATED, Defendant-Appellee.

No. 94-3779.

United States Court of Appeals, Seventh Circuit.

Argued April 14, 1995.

Decided May 23, 1995.

Patricia E. Bender (argued), Washington & Bender, Chicago, IL, for plaintiffs-appellants.

John S. Schauer and Anthony B. Byergo (argued), Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for defendant-appellee.

Before ALDISERT, ^* BAUER and FLAUM, Circuit Judges.

ALDISERT, Circuit Judge.

Long after receiving "right to sue" letters from the Equal Employment Opportunity Commission ("EEOC"), three black women filed a complaint in federal court against their former employer, Venture Stores, Inc., asserting violations of Title VII. Venture filed a motion for summary judgment on the ground that Plaintiffs' complaint was untimely filed and the district court, after the close of discovery, referred the matter to a magistrate judge for determination. Plaintiffs then filed a motion to amend their complaint to add additional claims and parties, which the district court took under advisement pending the magistrate judge's determination on the summary judgment motion. When the magistrate judge concluded Plaintiffs' Title VII claim was time-barred, the district court accepted the magistrate judge's recommendation, granted Venture's motion for summary judgment and denied Plaintiffs' motion to amend as moot. Plaintiffs appeal the denial of their motion to amend as moot. We affirm, but on alternate grounds.

Jurisdiction was proper in the district court based on 28 U.S.C. Sec. 1331 and 42 U.S.C. Sec. 2000e-5. This court has jurisdiction under 28 U.S.C. Sec. 1291. The appeal was timely filed under Rule 4(a) of the Federal Rules of Appellate Procedure.

I.

On April 8, 1992, shortly after they were terminated from their positions at Venture Stores, Inc., Plaintiffs filed charges of race discrimination concurrently with the Illinois Department of Human Rights and the EEOC. On September 3, 1993, the EEOC issued "right to sue" letters to each of the three Plaintiffs, faxing and mailing the letters directly to their attorney, Patricia Bender, thereby triggering the 90-day filing requirement under 42 U.S.C. Sec. 2000e-5(f)(1). Plaintiffs did not file an action against Venture until February 24, 1994, 175 days after the "right to sue" letters were issued, asserting claims only under Title VII.

On April 6, 1994, Venture filed its answer and affirmative defenses, including an argument that Plaintiffs' action was time-barred. The parties then filed their Joint Plan of Discovery. The district court ordered discovery closed on July 1, 1994. On June 29, Plaintiffs moved to extend the discovery date because they had not yet noticed depositions for any agents or representatives of Venture.

On July 7, 1994, Venture filed a motion for summary judgment on the ground that all three Plaintiffs were time-barred under 42 U.S.C. Sec. 2000e-5(f)(1). The following day, the district court established a schedule for remaining briefing on Venture's motion and granted Plaintiffs' motion to extend discovery until August 15, 1994. It further ordered that the joint pre-trial order be submitted to it on August 26, 1994.

On August 24, 1994, nine days after the extended discovery cut-off date, the district court voiced serious concerns about Plaintiffs' ability to withstand Venture's motion for summary judgment. Nevertheless, the court referred the motion to a magistrate judge for an evidentiary hearing. One week later, while the motion was pending, Plaintiffs moved to amend their complaint under Rule 15(c)(2) to add counts under 42 U.S.C. Secs. 1981 and 1985(3), and a state wrongful discharge claim. The motion also sought to add four new individual defendants, agents and officers for Venture. It will be noted that Plaintiffs' August 31 motion to amend was filed 16 days after the extended discovery cut-off date, and two months after the initial discovery cut-off date. The court took the motion to amend under advisement on September 2, pending the magistrate judge's ruling on Venture's summary judgment motion.

On September 30, the magistrate judge conducted an evidentiary hearing and issued its Report and Recommendation, finding Plaintiffs failed to commence their action within 90 days of receipt of their "right to sue" letters and advising that Venture's motion for summary judgment be granted. On October 24, the district court issued an order adopting the magistrate judge's recommendation, granting Venture's motion for summary judgment and denying Plaintiffs' motion to amend their complaint as moot. Plaintiffs appeal that order, contending the district court erred in denying the motion to amend their complaint as moot after it granted Venture's motion for summary judgment.

II.

Under the Federal Rules of Civil Procedure, leave to amend a complaint "shall be freely given when justice so requires." Fed.R.Civ.P. Rule 15(a). "In the absence of any apparent or declared reason--such as undue delay, ... undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.--the leave sought should, as the rules require, be 'freely given.' " Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1298 (7th Cir.1993) (quoting Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).

Generally, "the grant of leave to amend the pleadings pursuant to Rule 15(a) is within the discretion of the trial court." Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971); J.D. Marshall Intern. Inc. v. Redstart, Inc., 935 F.2d 815, 819 (7th Cir.1991). Thus, in a typical appeal we review the denial of a motion for leave to amend a complaint for abuse of discretion. Cleveland v. Porca Co., 38 F.3d 289, 297 (7th Cir.1994). Moreover, "the denial will be overturned only if there was no justifying reason for it." Johnson v. Methodist Medical Center of Illinois, 10 F.3d 1300, 1303 (7th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2102, 128 L.Ed.2d 664 (1994). However, in this case the district court did not indicate that its denial of Plaintiffs' motion for leave to amend their complaint resulted from an exercise of its discretion. Rather, the court's minute order stated:

The court adopts magistrate judge Pallmeyer's report and recommendation. Accordingly, defendants' motion for summary judgment [11-1] is granted and plaintiffs' objections to the magistrate judge's report and recommendation are overruled. Plaintiffs' motion to amend their complaint to add counts and individual defendants [31-1] is denied as moot ...

We conclude that the district court's decision to deny as moot Plaintiffs' motion to amend in light of its granting Venture's motion for summary judgment is a legal issue we review de novo.

III.

This court may affirm the district court's judgment " 'on any ground that is supported by the record.' " Crane by Crane v. Indiana High School Athletic Assn., 975 F.2d 1315, 1319 (7th Cir.1992) (quoting LaSalle Nat'l Bank v. General Mills Restaurant Group, Inc., 854 F.2d 1050, 1052 (7th Cir.1988)). We conclude that, although the court did not expressly state that there would be undue delay and prejudice if leave to amend were granted, such delay and prejudice was "apparent." See Thompson v. Boggs, 33 F.3d 847, 853 (7th Cir.1994) ("Leave to amend the pleadings may be denied for 'apparent or declared reasons.' ") (quoting J.D. Marshall, 935 F.2d at 819); see also Perrian v. O'Grady, 958 F.2d 192, 195 (7th Cir.1992) ("Although the district court's reason for the denial of the motion would have been more helpful if it were expanded, it passes muster.... We have reviewed the record and find that it supports a justifying reason of undue delay and prejudice to the judicial system if not also to [defendant]."). Because we affirm on other grounds, we do not meet the question of whether a motion to amend is moot following summary judgment.

Here we conclude from the record that granting Plaintiffs' motion for leave to amend clearly would result in undue delay, as well as prejudice to Venture and the four new defendants, forcing Venture to re-litigate the dispute on new bases (the new state breach of contract count in particular) and to incur new rounds of additional and costly discovery, and depriving it of the meaningful value of obtaining summary judgment. This conclusion is supported by our case law uniformly advising that a plaintiff's leave to amend, when filed after discovery has been closed and after a defendant's motion for summary judgment has been filed, is considered unduly delayed and prejudicial.

A.

Consistently, we have affirmed denials of a motion for leave to amend under circumstances similar to those presented here, specifically where a plaintiff has sought leave to amend after the defendant filed a successful motion for summary judgment. In Johnson v. Methodist Medical Center of Illinois, we stated:

When confronted by [defendant's] motion for summary judgment, plaintiff realized that she would lose based on the specific claims contained in the second amended complaint. She therefore asked for leave to add a large number of new specific claims ...

[I]t seems likely that [defendant] would have to engage in substantial additional discovery and thus be prejudiced if plaintiff's proposed complaint were accepted. If amendment were permitted, [defendant's] success in defeating all the claims in the second amended complaint would not end the lawsuit, and it would have to engage in a new contest on different issues--four years after the action was started.

There must be a point at which a plaintiff makes a commitment to the theory of its case. Here, the proposed complaint attempts to add a whole new theory of the case four years after this action was commenced, with no explanation as to why amendmen...