United States District Court, D. Kansas
NEONATAL PRODUCT GROUP, INC., Plaintiff/Counterclaim Defendant,
JANICE M. SHIELDS, PAUL W. SHIELDS, and ANGELE INNOVATIONS, LLC, Defendants/Counterclaimants,
CRECHE INNOVATIONS, LLC, MILLENNIUM MARKETING GROUP, LTD., and SCOTT A. NORMAN, Counterclaim Defendants.
MEMORANDUM AND ORDER
D. Crabtree United States District Judge
and Counterclaimants Janice M. Shields and Paul W. Shields,
individually and as trustees of the Shields Family Trust, and
Angele Innovations, LLC (collectively, “the Shields
Defendants”) have filed a Motion for Leave to File a
Second Amended Answer and Counterclaims to Add Party (Doc.
138). The Shields Defendants seek to add another party-
Ameda, Inc.-as a counterclaim defendant in this lawsuit. For
the reasons explained below, the court grants the Shields
Defendants' motion and orders them to file their Second
Amended Answer and Counterclaims within 10 days of the date
of this Memorandum and Order.
November 25, 2013, plaintiff Neonatal Product Group, Inc.
(“Neonatal”), doing business as Creche
Innovations, LLC (“Creche”) filed this lawsuit
against the Shields Defendants seeking a declaratory judgment
that it has not infringed U.S. Patent No. 6, 417, 498
(“the '498 Patent”) and that the Asserted
Claims of the '498 Patent are invalid. The device
disclosed in the '498 Patent is called the
“Neonatal Substrate Warmer.” The device
automatically warms and vibrates baby bottles containing
frozen or refrigerated breast milk so that the breast milk
thaws, warms, and mixes quickly and efficiently. Defendants
Janice M. Shields and Paul W. Shields invented the Neonatal
Substrate Warmer and procured the '498 Patent. Defendant
Angele Innovations, LLC currently owns the '498 Patent.
Shields Defendants responded to the lawsuit by filing an
Answer and Counterclaim (Doc. 30). The Shields Defendants
later filed an Amended Answer and Counterclaim (Doc. 58),
which is the current operative pleading. It asserts eight
counterclaims, including a claim for patent infringement,
against four counterclaim defendants: Neonatal, Creche,
Millennium Marketing Group, Ltd., and Scott Norman
(collectively, “the Counterclaim Defendants”).
The Shields Defendants now seek leave to add a fifth
counterclaim defendant to the lawsuit.
Shields Defendants assert that they just recently discovered
that Neonatal has transferred the allegedly infringing
product line to a third party-Ameda, Inc.
(“Ameda”). The Shields Defendants contend that
they first learned this information on December 5, 2016-more
than three years into the litigation and only nine days
before the Final Pretrial Conference. The Shields Defendants
explain that Ms. Shields “stumbled upon” a press
release announcing that Ameda bought the allegedly infringing
product line sometime before October 31, 2016. See
Doc. 138-3 (press release titled “Ameda Acquires
Penguin from Creche to Expand NICU Portfolio”). The
Shields Defendants now seek leave to file a Second Amended
Answer and Counterclaim to add Ameda as a counterclaim
Legal Standard Governing Motions for Leave to Amend
Civ. P. 15 governs the amendment of pleadings. Rule 15(a)(2)
provides that “[t]he court should freely give leave [to
amend the pleadings] when justice so requires.” But the
court may deny leave to amend on the grounds of undue delay,
bad faith or dilatory motive by the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party, or futility of the proposed
amendment. Minter v. Prime Equip. Co., 451 F.3d
1196, 1204 (10th Cir. 2006) (citing Foman v. Davis,
371 U.S. 178, 182 (1962)). As the Supreme Court has
explained, “[i]t is settled that 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 (1971)
(citing Foman, 371 U.S. at 182).
Shields Defendants assert that the court should grant them
leave to file their Second Amended Answer and Counterclaims
to add Ameda as a party under Rule 15. The Shields Defendants
argue that none of the reasons for denying leave to amend
exist here. They argue that they have not engaged in undue
delay, bad faith, or any dilatory motive. They contend that
allowing the amendment will not prejudice the Counterclaim
Defendants. And, they argue that the proposed amendment does
not seek to cure deficiencies of other amendments and are not
futile. So, the Shields Defendants contend, the court freely
should grant them leave to file their amended pleading.
Counterclaim Defendants respond that the Shields Defendants
first must satisfy the good-cause standard under Fed.R.Civ.P.
16 to obtain the relief they seek, but also concede that they
can clear this hurdle. The Counterclaim Defendants argue that
Rule 16 applies because the request for leave to amend comes
after the deadline for filing motions for leave established
by the court's Scheduling Order. See Doc. 40 at
7 (requiring the parties to file any motion for leave to join
additional parties or to otherwise amend the pleadings by
March 20, 2015). The good-cause standard requires the moving
party to show “that the deadline ‘could not have
been met with diligence.'” Simpson v. Home
Depot, Inc., 203 F.R.D. 643, 644 (D. Kan. 2001) (quoting
Denmon v. Runyon, 151 F.R.D. 404, 407 (D. Kan.
1993)). Here, the Shields Defendants could not have moved to
amend the pleadings to add Ameda before the March 20, 2015
deadline because Neonatal did not sell the allegedly
infringing product line until October 2016. So, the Shields
Defendants can establish good cause.
Counterclaim Defendants next assert that the Shields
Defendants cannot satisfy the Rule 15(a) standard for
granting leave to amend for two reasons. First, the
Counterclaim Defendants argue that the proposed amendment is
unnecessary. Second, the Counterclaim Defendants contend that
the proposed amendment needlessly delays resolution of this
lawsuit. The court rejects both arguments as a reason to deny
Counterclaim Defendants argue that Ameda is not a necessary
party because, if the Shields Defendants obtain the
injunctive relief they seek in this lawsuit, the injunction
also would bind Ameda. They contend that, under Fed.R.Civ.P.
65(d)(2)(C), an injunction binds not only the parties to the
litigation but also “other persons who are in active
concert or participation” with the parties or the
parties' officers, agents, servants, employees, and
attorneys. The Counterclaim Defendants thus argue that Ameda
would be bound by any injunction issued in this lawsuit
because they are acting in concert with the Counterclaim
Shields Defendants disagree. As they explain, they seek a
permanent injunction against the Counterclaim Defendants from
selling the allegedly infringing products. The Shields
Defendants argue that Neonatal's sale of the product line
to Ameda effectively has rendered their request for a
permanent injunction moot. And, they contend that they cannot
obtain injunctive relief against Ameda unless it is added as
a party to the litigation. They reject the Counterclaim
Defendants' argument about the ...