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Current Developments in the Commercial Divisions of the
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Posted: August 3, 2018

Motion to Amend Brought at Close of Discovery Untimely

On July 24, 2018, Justice Schecter of the New York County Commercial Division issued a decision in SSC NY Corp. v. Inveshare, Inc., 2018 NY Slip Op. 31756(U), holding that a motion to amend brought at the close of discovery was untimely, explaining:

Though leave to amend is granted freely unless the proposed amendment is clearly devoid of merit, where there has been an extended delay in moving, the proponent of the amendment must establish a reasonable excuse for the delay. Delay coupled with prejudice warrants denial of the motion absent a reasonable excuse. Prejudice, in this context, is some special right lost in the interim, some change of position or some significant trouble or expense that could have been avoided had the original pleading contained what the amended one wants to add.

If the proposed amendment could have been asserted from the outset and discovery has been completed, amendment is properly denied regardless of its potential merit. Here, there is no reason–much less a compelling or even a reasonable one–that Inveshare did not include any confidentiality breach claim in its answer or move to amend before completion of discovery. Inveshare has been aware that its documents were publicly filed in this action for almost two years and for months before it even answered. All the while, Inveshare never once sought to have the filings sealed on confidentiality grounds: It was only at the very end of discovery, after depositions were completed and shortly before summary judgment briefing, that it first saw fit to attempt to assert this counterclaim. Since it proffers no excuse as to why this claim could not have been asserted from the outset before the parties engaged in extensive discovery, leave to amend is denied.

(Internal quotations and citations omitted).

In New York, the courts are very generous in allowing a party to amend its pleadings. However, as this decision shows, there are limits to this generosity. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding whether it is too late to amend your claims or answer.

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