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Little River Seafood, Inc. v. CMA CHM (America) LLC

United States District Court, E.D. Virginia, Norfolk Division

March 13, 2019

LITTLE RIVER SEAFOOD, INC., Plaintiff,
v.
CMA CGM (AMERICA), LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          REBECCA BEACH SMITH UNITED STATES DISTRICT JUDGE.

         This matter comes before the court on the Motion to Amend and accompanying Memorandum in Support filed by Plaintiff Little River Seafood, Inc. ("Little River") on February 6, 2019. ECF Nos. 27, 28. Defendant ECT Transport, Ltd. d/b/a Seaquest Line ("ECT") filed a response to the Motion to Amend on February 20, 2019, addressing both Little River's proposed amendment, and the effect that Little River's amendment would have on ECT's Crossclaim. ECF No. 31. Little River did not file a reply.

         I.

         On June 29, 2018, Little River filed its Complaint in this court against Defendants ECT; CMA CGM (America), LLC ("CMA CGM (America)"); and CMA CGM, S.A. ("CMA CGM"). ECF No. 1. On July 6, 2018, Little River filed an Amended Complaint, in which it added claims against Defendants Teucarrier No. 2 Corporation and Danaos Corporation. ECF No. 7. On September 4, 2018, Defendant ECT filed its Answer to Little River's Amended Complaint, as well as a Crossclaim against Defendants CMA CGM (America) and CMA CGM, in which ECT seeks indemnity in the event it is found liable for Little River's injury. ECF No. 21.

         Little River has not yet served Defendants CMA CGM (America), CMA CGM, Teucarrier No. 2 Corporation, or Danaos Corporation with a copy of its Complaint. ECT has not yet served Cross-Defendants CMA CGM (America) or CMA CGM with a copy of its Crossclaim. On January 17, 2019, this court entered two Show Cause Orders. ECF Nos. 23, 24. The court directed Little River to show cause why this action should not be dismissed without prejudice as to the Defendants Little River has not yet served, pursuant to Federal Rule of Civil Procedure 4(m), given that Little River has not served these Defendants within ninety (90) days of the Complaint being filed in this case. ECF No. 23. The court also directed Cross-Claimant ECT to show cause why its Crossclaim should not be dismissed without prejudice as to the Cross-Defendants it has not yet served, pursuant to Rule 4(m), given that ECT has not served these Cross-Defendants within ninety (90) days of filing its Crossclaim. ECF No. 24.

         Little River filed a response to this court's Show Cause Order on February 6, 2019, in which it represented that three of the four Defendants that Little River has not served are foreign Defendants, and Little River has had difficulty effecting service on these foreign Defendants. ECF No. 26.[1] Little River advised the court that it does not actually wish to pursue its claims against the unserved Defendants, and asked the court to allow Little River to amend its pleading to remove the unserved Defendants rather than having the court dismiss the unserved Defendants pursuant to Rule 4(m). Id.

         On February 6, 2019, Little River filed a Motion to Amend and accompanying Memorandum in Support. ECF Nos. 27, 28. Little River seeks leave to amend its pleading to pursue claims only against Defendant ECT. ECF No. 28. Little River submitted a proposed Second Amended Complaint as an attachment to its Motion to Amend. ECF No. 27-1. The proposed Second Amended Complaint makes no substantive changes to Little River's claims against ECT, and removes all mention of the four unserved Defendants from Little River's Amended Complaint. Id.

         On February 20, 2019, ECT filed a response to Little River's Motion to Amend, in which it argues that it will be prejudiced, if Little River is permitted to amend its pleading. ECF No. 31. ECT argues that its pending Crossclaim against CMA CGM and CMA CGM (America) could become time-barred, if ECT does not prosecute the claim in the instant suit. Id. at 4. ECT requests that, if the court allows Little River to amend its pleading, ECT be allowed to convert its Crossclaim into a third-party complaint, and be allowed time to serve its third-party complaint on CMA CGM and CMA CGM (America), so that ECT's indemnity claim will continue to "relate back" to the date of filing of Little River's Complaint and will therefore not be time-barred. Id.

         II.

         Federal Rule of Civil Procedure 15(a) provides that, although a party may amend its pleading once as a matter of right within twenty-one (21) days of serving the pleading, or within twenty-one (21) days of receiving service of a responsive pleading, "[i]n all other cases a party may amend its pleading only with the opposing party's written consent or the court's leave." Id. Rule 15(a) (2) provides that the "court should freely give leave when justice so requires." Id. The court should only deny leave to amend a pleading when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would be futile. Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)) .

         III.

         There has been no bad faith on the part of Little River, and the amendment is not futile. See Johnson, 785 F.2d at 509. The issues here involve the element of prejudice claimed by ECT. See id. The first issue is whether Little River should be permitted to amend its pleading despite ECT's claim that the proposed amendment will prejudice ECT. The second issue is whether ECT should be permitted to persist in its indemnity claim against CMA CGM (America) and CMA CGM as part of this case, given that Little River wishes to abandon its claims against CMA CGM (America) and CMA CGM, and given the significant difficulty both parties have had in serving CMA CGM (America) and CMA CGM. For the reasons below, Little River's Motion to Amend is GRANTED, and ECT's Crossclaim is DISMISSED WITHOUT PREJUDICE. ECT's request to convert its Crossclaim into a third-party complaint is DENIED.

         A. Little River's Proposed Amendment

         Little River argues that its proposed amendment is proper because it would not prejudice ECT, and it would solve the service-of-process problems in this case. ECF No. 28 at 1. ECT argues that Little River's amendment will prejudice ECT because, if ECT does not bring its indemnity claim against CMA CGM and CMA CGM (America) in the instant suit, then ...


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