West v. Muller , 31 F. App'x 1 ( 2002 )

[NOT FOR PUBLICATION-NOT TO BE CITED AS PRECEDENT]
United States Court of Appeals
For the First Circuit
No. 01-1617
JERRY L. WEST,
Plaintiff, Appellant,
v.
DAVID F. MULLER, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Boudin, Chief Judge,
Selya and Lipez, Circuit Judges.
David J. Fine, with whom W. Mark McNair, Robert C. Schubert,
Juden Justice Reed, and Schubert & Reed, LLP were on brief, for
appellant.
James S. Dittmar, with whom Robert L. Kirby, Jr., William J.
Connolly III, and Hutchins, Wheeler & Dittmar were on brief, for
appellees Jeffrey A. Bernfield, Rajiv P. Bhatt, Kimberly A. Doney,
John G. Frantzis, Peter E. Litman, Richard F. Miller, John A.
Norris, Richard M. Traskos, and Summit Technology, Inc.
Timothy W. Mungovan, with whom Deborah L. Thaxter, John
Pagliario, and Nixon Peabody LLP were on brief, for appellee David
Muller.
March 19, 2002
PER CURIAM. Appellant Jerry West filed a derivative
action on behalf of appellee Summit Technologies, Inc. ("Summit")
in December, 1996, alleging misconduct by several of the
corporations's officers and directors. Roughly four years later,
Summit merged with Alcon Holdings, Inc., making Alcon the sole
holder of Summit stock. Summit then moved to dismiss the action on
the ground that West was no longer a shareholder, and therefore
lacked standing to pursue his derivative claims. West conceded as
much, but sought leave to file an amended complaint recasting his
derivative claims as direct ones, and adding several new claims
addressing the merger itself. The district court denied the motion
without explanation and dismissed the suit.
West appealed, arguing that the district court erred in
refusing to permit amendment. We entered an Order directing the
district court to state its reasons for denying West's motion. In
response, the district court explained that, given the history of
the litigation, the amended complaint "was untimely and sought to
engraft a totally new suit on the skeleton of a suit brought years
previously." We review that decision for an abuse of discretion,
Grant v. News Group Boston, Inc., 55 F.3d 1, 5 (1st Cir. 1995), and
affirm.
This is not a case where the newly-asserted claims were
in the case from the beginning but were not presented in a timely
fashion. In such circumstances, the party seeking to amend its
complaint may be barred from raising the new claims in subsequent
litigation. See Johnson v. SCA Disposal Servs., Inc., 931 F.2d 970-2-
(1st Cir. 1991) (holding that plaintiff was precluded from
asserting in a second suit claims that were part of the same cause
of action as claims adjudicated in an earlier action). Thus, the
district court must weigh the possible res judicata effect of its
ruling when deciding whether to permit amendment. See id. at 976
& n.19 (suggesting that district court may abuse its discretion in
denying a motion to amend when the newly-asserted claims should
have been raised in the original complaint, and so would be barred
in any subsequent litigation); Fed. R. Civ. P. 15(a) (stating that
leave to amend "shall be freely given when justice so requires").
Here, the claims set out in the proposed amended
complaint were prompted by an event -- the merger -- that occurred
long after West filed his original complaint. Following the
merger, West requested permission to amend his complaint and
substitute the new claims for the old. The district court rejected
his entreaty, concluding that the new claims were too far removed
from the original derivative claims to justify bringing them into
the case so late in the day. That decision will not preclude West
from asserting the merger-related claims in a new action. See N.
Assurance Co. v. Square D Co., 201 F.3d 84, 88 (2d Cir. 2000).
Accordingly, we hold that the district court did not abuse its
discretion in refusing to permit amendment.
Affirmed.
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