Arthur v. Maersk Inc

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
1-13-2006
Arthur v. Maersk Inc
Precedential or Non-Precedential: Precedential
Docket No. 04-3670
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-3670
EDWARD ARTHUR,
Appellant
v.
MAERSK, INC.
d/b/a MAERSK LINE LTD.;
DYN CORP. TECHNICAL SERVICES
d/b/a DYN MARINE SERVICES;
THE UNITED STATES OF AMERICA
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cv-02931)
District Judge: Honorable Harvey Bartle, III
Argued December 5, 2005
Before: RENDELL, FISHER and VAN ANTWERPEN,
Circuit Judges.
(Filed: January 13, 2006)
Brian P. McCafferty (Argued)
Provost & Umphrey
1617 John F. Kennedy Boulevard
Suite 640
Philadelphia, PA 19103-1806
Attorney for Appellant
A. Robert Degen (Argued)
Fox Rothschild
2000 Market Street, 10th Floor
Philadelphia, PA 19103
Attorney for Appellees Maersk, Inc.
and United States of America
Michael B. Pullano
Weber, Gallagher, Simpson,
Stapleton, Fires & Newby
2000 Market Street, Suite 1300
Philadelphia, PA 19103
Henry A. King (Argued)
Michael L. Vincenzo
King, LeBlanc & Bland
201 St. Charles Avenue, 45th Floor
New Orleans, LA 70170
Attorneys for Appellee Dyn Corp.
Technical Services
2
OPINION OF THE COURT
FISHER, Circuit Judge.
From the high seas comes a question of federal civil
procedure. After suffering a series of injuries while working as
a merchant seaman, Edward Arthur sued his employers, Maersk,
Inc., and Dyn Marine Services of Virginia, Inc.,1 for negligence
under the Jones Act, 46 U.S.C. app. § 688. Only later did he
realize that, because the companies were operating as agents of
the United States Navy, the only proper defendant in the case
was the United States. He sought and was granted leave to file
an amended complaint naming the United States as a party, and
requested that this claim “relate back” to the original complaint
to avoid a statute of limitations bar. The District Court
acknowledged that the prerequisites for relation back under
Federal Rule of Civil Procedure 15(c) had been satisfied, but
nevertheless denied the request on the ground that Arthur had
unduly delayed in seeking leave to amend. We conclude that
this decision was in error, and will reverse.
1
Dyn Marine is incorrectly identified in the complaint and
caption of the case as “Dyn Corp. Technical Services.”
3
I.
From May 1999 through December 2000, Arthur worked
on four different ships and suffered four similar injuries. On
May 17, 1999, while employed by Maersk on board the
“U.S.N.S. Stalwart Tagos-1,” Arthur sustained a knee injury
when the ship “rolled” during a weekly lifeboat inspection. In
early October 1999, while working for Maersk on the “U.S.N.S.
Capable,” Arthur hurt his knee once again when the ship
“rolled.” On May 2, 2000, while employed by Dyn Marine
aboard the “U.S.N.S. Littlehales,” Arthur suffered yet another
knee injury when his foot became caught in a gap in the deck
matting. Finally, on or about December 19, 2000, while
employed by Maersk on the “U.S.N.S. Assertive,” Arthur
aggravated his condition by climbing ladders and performing
other tasks. These injuries resulted in significant medical
expenses and rendered Arthur unable to return to work.
The four ships on which Arthur worked were operated by
Maersk and Dyn Marine but were owned by the United States
Navy. Contracts between the companies and the United States
provided that the Navy would maintain control of the ships
while the companies would offer day-to-day personnel and
operational support. Maersk operated the Stalwart Tagos-1,
Capable, and Assertive; Dyn Marine operated the Littlehales.
The relationship between the companies and the Navy was
reflected by the designation “U.S.N.S.,” the official abbreviation
for “United States Naval Ships.”2
2
See 32 C.F.R. § 700.406(c) (“Civilian manned ships, of
the Military Sealift Command or other commands, designated
4
On May 16, 2002 – more than two years after he had
been injured on board the Stalwart Tagos-1, Capable, and
Littlehales but less than two years after the incident on the
Assertive – Arthur commenced a civil action against Maersk and
Dyn Marine in the United States District Court for the Eastern
District of Pennsylvania. He alleged that the companies, as the
owners “and/or” operators of the vessels, had failed to maintain
deck and other facilities and were liable for negligence under the
Jones Act, 46 U.S.C. app. § 688. He also raised claims of
unseaworthiness and for maintenance and cure.
The complaint was served in due course and answers
were filed by September 2002. Neither the answer of Maersk
nor that of Dyn Marine refers to the Navy’s ownership of the
vessels or the nature of the contracts under which the companies
operated the ships. The only statement suggesting the
government’s connection to the case appears in one of Dyn
Marine’s affirmative defenses: “Pursuant to the Suits in
Admiralty Act . . . [and] the Suits in Public Vessels Act [Arthur]
does not have a right of action against [Dyn Marine].” Both of
these Acts provide a remedy against the United States, to the
exclusion of all others, for a seaman injured on board a ship
owned by or operated on behalf of the Navy.3
‘active status, in service’ shall be called ‘United States Naval
Ship’ or ‘U.S.N.S.’”).
3
See 46 U.S.C. app. § 742 (“In cases where if such vessel
were privately owned or operated, or if such cargo were
privately owned or possessed, or if a private person or property
were involved, a proceeding in admiralty could be maintained,
5
A status conference was scheduled for October 15, 2002.
Prior to the conference, counsel for Maersk submitted a status
report indicating, as a “special comment,” that the “[c]ase arises
under Public Vessels Act.” The topic was explored in greater
detail during the conference itself. Counsel for Maersk and Dyn
Marine “clearly made known their views that the United States,
not their clients, was the proper defendant.” The District Court
urged the companies to file dispositive motions as soon as
possible to address the issue and avoid the costs of litigation. It
also established, upon agreement of the parties, a ten-day
deadline for initial disclosures under Federal Rule of Civil
Procedure 26(a)(1).
any appropriate nonjury proceeding in personam may be
brought against the United States . . . .”); id. § 781 (“A libel in
personam in admiralty may be brought against the United
States . . . for damages caused by a public vessel of the United
States . . . .”); In re United States, 367 F.2d 505, 511 (3d Cir.
1966) (holding that, if operator of ship acts as an agent of the
United States, exclusive remedy of person injured on ship is
against the United States), cited with approval in Favorite v.
Marine Pers. & Provisioning, Inc., 955 F.2d 382, 388 (5th Cir.
1992); see also 46 U.S.C. app. § 745 (“[W]here a remedy is
provided by this chapter it shall hereafter be exclusive of any
other action by reason of the same subject matter against the
agent or employee of the United States or of any incorporated or
unincorporated agency thereof whose act or omission gave rise
to the claim . . . .”).
6
Neither Maersk nor Dyn Marine complied with the
deadline.4 Dyn Marine did not produce its initial disclosures
until November 4, 2002, and Maersk did not make its
disclosures until December 16, 2002. There were other
problems as well. Dyn Marine’s disclosures did not include a
copy of the operational contract between the company and the
Navy. Maersk’s disclosures included the contract but were
initially misdirected to referring counsel, based in Mobile,
Alabama. They were not delivered to Arthur’s lead counsel, in
Philadelphia, Pennsylvania, until late December 2002, after the
statute of limitations for claims against the United States had
expired.
Within a month, Maersk and Dyn Marine filed separate
motions for summary judgment. Both were predicated on the
same argument: that, because the ships were owned by and
operated on behalf of the United States, Arthur’s exclusive
remedy for his injuries was an action against the United States.
Copies of the operational contracts between the companies and
the United States – including the one with Dyn Marine that had
not been previously disclosed – were attached in support of the
motions.
Soon thereafter, on February 19, 2003, Arthur filed a
motion to stay proceedings on summary judgment pending
further discovery pursuant to Federal Rule of Civil Procedure
4
Arthur’s initial disclosures were provided to opposing
counsel on October 22, 2002, within ten days of the status
conference.
7
56(f).5 His counsel asserted in an attached declaration that the
operational contracts had not been timely disclosed and that
additional discovery was required to determine whether the
contracts supported the claimed defense. The District Court
granted the request.
Depositions of company officials confirmed that the ships
were owned by the United States and operated by Maersk and
Dyn Marine under the operational contracts. The depositions
also revealed that the United States had received notice of the
action against Maersk and Dyn Marine in July 2002, soon after
the original complaint had been served.
On April 14, 2003, Arthur filed a motion for leave to
amend the complaint to add the United States as a party. The
motion was granted by the District Court on May 6, 2003, and
an amended complaint was filed on May 13, 2003. The
amended complaint substantially repeats the allegations of the
original complaint, but asserts that the United States is liable
under the Suits in Admiralty Act, 46 U.S.C. app. § 742, and the
Public Vessels Act, 46 U.S.C. app. § 781, for the negligence of
its “agents,” Maersk and Dyn Marine. Three days later, the
District Court granted the companies’ motions for summary
5
See Fed. R. Civ. P. 56(f) (“Should it appear from the
affidavits of a party opposing the motion that the party cannot
for reasons stated present by affidavit facts essential to justify
the party’s opposition, the court may refuse the application for
judgment or may order a continuance to permit affidavits to be
obtained or depositions to be taken or discovery to be had or
may make such other order as is just.”).
8
judgment on the ground that Arthur’s exclusive remedy was
against the United States.6
The United States, now the sole defendant, filed a motion
to dismiss the complaint as barred by the two-year statute of
limitations of the Suits in Admiralty Act, 46 U.S.C. app. § 745.
Following briefing, the District Court granted the motion. It
recognized that the new claim would be timely if the amendment
was deemed to relate back to the original complaint, filed in
August 2002, pursuant to Federal Rule of Civil Procedure 15(c).
It also recognized that all of the enumerated prerequisites for
6
Arthur had requested that the District Court exclude the
operational contracts from the record on summary judgment as
a sanction against Maersk and Dyn Marine for the late
disclosures. See Fed. R. Civ. P. 37(c)(1) (“A party that without
substantial justification fails to disclose information required by
Rule 26(a) . . . is not, unless such failure is harmless, permitted
to use as evidence at a trial, at a hearing, or on a motion any
witness or information not so disclosed.”). Without these
contracts, it is arguable that the companies would not have been
able to establish an agency relationship with the United States
and, thus, would not have been entitled to summary judgment.
See, e.g., In re United States, 367 F.2d at 511. The District
Court declined to exclude the contracts without explanation, and
Arthur challenges this decision on appeal. Based on our
conclusion that remand is warranted on other grounds, we need
not reach the issue.
9
relation back had been satisfied.7 Nevertheless, it held that
relation back should be denied because Arthur was “unduly
dilatory” in bringing his claim against the United States.
The District Court found that, as an “experienced
merchant seaman,” Arthur “knew or should have known” by the
“U.S.N.S.” designation that the ships were owned by and
operated on behalf of the United States Navy and, thus, should
have brought his claim against the United States originally. It
also noted that Maersk and Dyn Marine had raised the agency
issue during the status conference in October 2002 and in their
motions for summary judgment in January 2003 but that Arthur
had not filed a motion for leave to amend until April 2003. It
acknowledged that the companies may have been tardy in
producing their contracts with the Navy, but admonished that
Arthur should not have “wait[ed] until he ha[d] absolute
certainty before moving to amend.”
7
The District Court determined that the claim in the
amended complaint arose from the same transactions as those in
the original complaint, see Fed. R. Civ. P. 15(c)(2), found that
the United States had received notice of the action within the
period authorized for service and would not “be prejudiced in
maintaining a defense on the merits” if the case proceeded to
trial, see id. 15(c)(3)(A), and assumed that the United States
should have known that Arthur would have named it in the
original complaint but for his “mistake” concerning the agency
relationship between the private companies and the Navy, see id.
15(c)(3)(B).
10
The District Court concluded that “[a]ny mistake about
the United States was clearly no longer a mistake as of the . . .
status conference,” and that any delay thereafter could not be
justified. It stated: “[B]ecause Arthur’s motion to amend came
too late, we will grant the motion of the United States to dismiss
his . . . claim[] as barred by the two-year statute of limitations of
the Suits in Admiralty Act, 46 U.S.C. [a]pp. § 745.”8
This timely appeal followed. We have jurisdiction under
28 U.S.C. § 1291.
II.
Federal Rule of Civil Procedure 15 embodies a liberal
approach to pleading. See, e.g., Bensel v. Allied Pilots Ass’n,
387 F.3d 298, 310 (3d Cir. 2004), cert. denied, 125 S. Ct. 1976(2005). Subsection (a) allows a party to amend a complaint
upon leave of court and states that leave “shall be freely given
when justice so requires.” Fed. R. Civ. P. 15(a). Subsection (c)
8
The District Court had originally granted the motion on
grounds that the statute of limitations was “jurisdictional” and
that, because the United States had not been named as a party
until May 2003 – more than two years after Arthur’s final injury
in December 2000 – the lawsuit was barred notwithstanding
application of Rule 15(c). It subsequently reconsidered this
conclusion on motion by Arthur and held that, under Irwin v.
Department of Veterans Affairs, 498 U.S. 89 (1990), the
limitations period was not jurisdictional and did not necessarily
bar relation back of the amendment. Nevertheless, the District
Court affirmed its prior ruling based on undue delay.
11
provides that an amendment arising out of the same conduct as
that alleged in the original complaint will normally “relate back”
to the complaint for statute of limitations purposes. Id. 15(c).
Combined, these provisions ensure that an inadvertent error in
pleading will not preclude a party from securing relief on the
merits of a claim. See, e.g., Foman v. Davis, 371 U.S. 178, 182
(1962).
Leave to amend under subsection (a) and relation back
under subsection (c), while obviously related, are conceptually
distinct. Leave to amend should be granted whenever “justice
so requires.” Fed. R. Civ. P. 15(a). This standard encompasses
a broad range of equitable factors, including a party’s delay in
seeking leave to amend and any prejudice to the opposing party.
See Foman, 371 U.S. at 182. Only when these factors suggest
that amendment would be “unjust” should the court deny leave.
Id.The relation back inquiry is more circumscribed. Rule
15(c) enumerates three distinct prerequisites for an amendment
to relate back to the original complaint: (1) the claims in the
amended complaint must arise out of the same occurrences set
forth in the original complaint, (2) the party to be brought in by
amendment must have received notice of the action within 120
days of its institution, and (3) the party to be brought in by
amendment must have known, or should have known, that the
action would have been brought against the party but for a
mistake concerning its identity. Fed. R. Civ. P. 15(c). Once
these requirements are satisfied, Rule 15(c) instructs that the
“amendment . . . relates back to the date of the original
pleading.” Id.; see also Varlack v. SWC Caribbean, Inc., 550
12
F.2d 171, 174-75 (3d Cir. 1977); 6A Charles Alan Wright et al.,
Federal Practice and Procedure § 1498 (2d ed. 1990).
There is no allowance in Rule 15(c) for inquiry into a
party’s delay in moving for leave to amend. Such equitable
considerations are relevant to whether leave to amend should be
granted under Rule 15(a), see Foman, 371 U.S. at 182, but do
not relate to any of the enumerated conditions of Rule 15(c), see
Lundy v. Adamar of N.J., Inc., 34 F.3d 1173, 1196-97 (3d Cir.
1994) (Becker, C.J., concurring in part in the judgment and
dissenting in part); Anderson v. Deere & Co., 852 F.2d 1244,
1248 (10th Cir. 1988); 6A Wright et al., supra, § 1498. “Undue
delay” is a reason to deny leave to amend but not to deny
relation back. See Anderson, 852 F.2d at 1248; 6A Wright et al.,
supra, § 1498; see also Garvin v. City of Philadelphia, 354 F.3d
215, 220 (3d Cir. 2003); Varlack, 550 F.2d at 174-75.
The District Court did not recognize this distinction. It
assumed that all of the prerequisites under Federal Rule of Civil
Procedure 15(c) had been satisfied; yet, it denied relation back
based on “undue delay.” This was in error.9 The proper course
9
The District Court may have been led astray by dicta in
Nelson v. County of Allegheny, 60 F.3d 1010 (3d Cir. 1995), in
which we stated that relation back was properly denied when the
plaintiffs, who had delayed for three years in moving to amend
the complaint, could not establish that their failure to bring an
earlier amendment was due to “mistake.” Id. at 1014-15.
Although this conclusion, like that of the District Court in this
case, seems to import the “undue delay” factor of Rule 15(a)
into the elements of Rule 15(c), the holding in Nelson was
13
for the District Court, upon finding that Arthur had unduly
delayed in requesting leave to amend, would have been to vacate
its prior order granting leave to amend and then to strike the
amended complaint. Cf. Nieves-Luciano v. Hernandez-Torres,
397 F.3d 1, 4 (1st Cir. 2005) (noting that pre-trial orders from
which no interlocutory appeal may be taken “remain open to
trial court reconsideration” until the entry of judgment) (quoting
Geffon v. Micrion Corp., 249 F.3d 29, 38 (1st Cir. 2001)).
But it does not follow that the decision of the District
Court must be reversed. We could still affirm if we conclude
that the District Court’s findings would support denial of leave
to amend under Rule 15(a). Likewise, we may affirm if we
determine as a matter of law that the prerequisites for relation
back under Rule 15(c) have not been satisfied. See Cent. Pa.
Teamsters Pension Fund v. McCormick Dray Line, Inc., 85 F.3d
1098, 1107 (3d Cir. 1996) (“[W]e may affirm a correct decision
of the district court on grounds other than those relied upon by
the district court . . . .”).
otherwise justified because the plaintiffs had been aware of their
claims against the defendants at the time the case was
commenced, but had decided not to sue them in the original
complaint, id. at 1011. See Garvin, 354 F.3d at 221-22 (“[A]n
amended complaint will not relate back if the plaintiff had been
aware of the identity of the newly named parties when she filed
her original complaint and simply chose not to sue them at that
time.”); 3 James Wm. Moore et al., Moore’s Federal Practice
– Civil § 15.19[3][d] (3d ed. 1997) (“[A] conscious choice to sue
one party and not another does not constitute a mistake and is
not a basis for relation back.”).
14
A.
Leave to amend must generally be granted unless
equitable considerations render it otherwise unjust. Foman, 371
U.S. at 182; see also Lorenz v. CSX Corp., 1 F.3d 1406, 1414
(3d Cir. 1993). Among the factors that may justify denial of
leave to amend are undue delay, bad faith, and futility. Lorenz,
1 F.3d at 1414 (quoting Foman, 371 U.S. at 182). We have
consistently recognized, however, that “prejudice to the
non-moving party is the touchstone for the denial of an
amendment.” Id. (quoting Cornell & Co. v. Occupational Safety
& Health Review Comm’n, 573 F.2d 820, 823 (3d Cir. 1978));
see also 3 James Wm. Moore et al., Moore’s Federal Practice
– Civil § 15.15[2] (3d ed. 1997); 6 Wright et al., supra, § 1488.
The District Court determined that the amended
complaint presented a valid claim and that the United States
would not suffer any prejudice if amendment was permitted.
The District Court did not state, and the record does not suggest,
that Arthur acted in bad faith or with improper motive. The only
potential ground to deny leave to amend is undue delay.
Delay alone is not sufficient to justify denial of leave to
amend. Adams v. Gould Inc., 739 F.2d 858, 868 (3d Cir. 1984).
“[H]owever, at some point, . . . delay will become ‘undue,’
placing an unwarranted burden on the court . . . [and] an unfair
burden on the opposing party.” Id., quoted in Cureton v. Nat’l
Collegiate Athletic Ass’n, 252 F.3d 267, 273 (3d Cir. 2001).
When a party fails to take advantage of previous opportunities
to amend, without adequate explanation, leave to amend is
properly denied. Id.; see also Cureton, 252 F.3d at 273 (“[T]he
15
question of undue delay requires that we focus on the movant’s
reasons for not amending sooner.”).
Arthur’s delay was neither so egregious nor unexplained
as to warrant refusal of leave to amend. The original complaint
was filed in May 2002 and the proposed amendment was filed
in April 2003, less than a year later.10 Without discounting the
expense involved in litigating a case for eleven months, only one
appellate court uncovered in our research has approved of denial
of leave to amend based on a delay of less than one year. See
Wimm v. Jack Eckerd Corp., 3 F.3d 137, 141-42 (5th Cir. 1993)
(nine months); cf. Jones v. Robinson Prop. Group, L.P., 427
F.3d 987, 994-95 (5th Cir. 2005) (affirming denial of leave
based on delay of one year); Lewis v. Fresne, 252 F.3d 352, 360
(5th Cir. 2001) (same). There is, of course, no presumptive
period in which a motion for leave to amend is deemed “timely”
or in which delay becomes “undue.” However, a period of
eleven months from commencement of an action to the filing of
a motion for leave to amend is not, on its face, so excessive as
to be presumptively unreasonable. See Roberson v. Hayti Police
Dep’t, 241 F.3d 992, 996 (8th Cir. 2001) (stating that delay of
eleven months did not justify denial of leave to amend); see
also, e.g., Dubicz v. Commonwealth Edison Co., 377 F.3d 787,
793 (7th Cir. 2004) (delay of eight months); Tefft v. Seward, 689
10
It is immaterial that Arthur waited for almost two years
after the injuries at issue to file his complaint. See Boileau v.
Bethlehem Steel Corp., 730 F.2d 929, 939 (3d Cir. 1984) (“[T]he
delay exception in amending the complaint refers to delay in the
actual proceeding in which the complaint occurs, not delay in
bringing suit.”).
16
F.2d 637, 639-40 (6th Cir. 1982) (delay of four years); Buder v.
Merrill Lynch, Pierce, Fenner & Smithi Inc., 644 F.2d 690, 694
(8th Cir. 1981) (delay of two and a half years).
More importantly, Arthur has offered a justification for
the delay: he did not know that the ships on which he had been
injured were owned by and operated on behalf of the United
States Navy.11 This is borne out by the procedural history of this
case. The original complaint names only Maersk and Dyn
Marine as defendants, without suggesting the involvement of the
United States. The answers to the complaint do not mention the
agency relationship between the companies and the United
States; indeed, the issue was not raised until the October status
conference, when counsel for the companies suggested (without
proof) that the United States was the proper defendant. The
operational contracts confirming this allegation were not
disclosed to Arthur until December 2002, after the statute of
limitations had expired. Once Arthur’s counsel verified these
contracts and ensured that the United States had adequate notice
of the cause of action, he filed the motion for leave to amend.
That the vessels were designated “U.S.N.S.” does not,
contrary to the government’s position, necessarily mean that
11
See Adams, 739 F.2d at 867-68 (stressing importance of
a “colorable excuse” for not amending earlier); see also USX
Corp. v. Barnhart, 395 F.3d 161, 167-68 (3d Cir. 2004) (same),
cert. denied, 126 S. Ct. 420 (2005); 3 Moore et al., supra,
§ 15.15[2] (suggesting that amendment should be allowed if
party offers reason for delay); 6 Wright et al., supra, § 1488
(same).
17
Arthur should have been aware of the agency relationship at the
time the complaint was filed. Obviously, this designation
suggests that the vessel is being operated on behalf of the United
States, and would likely support a party’s decision to file suit
against the United States for injuries sustained thereon.
However, it does not conclusively establish agency. Cf.
Favorite v. Marine Pers. & Provisioning, Inc., 955 F.2d 382,
388 (5th Cir. 1992) (stating that designation of ship as “public
vessel” is not determinative of control by United States). The
only means by which a party can establish agency is through
evidence demonstrating that the United States exercised a
significant degree of control over the vessel’s operations. See
id.; see also Alexander v. United States, 63 F.3d 820, 823 (9th
Cir. 1995); Servis v. Hiller Sys. Inc., 54 F.3d 203, 207-09 (4th
Cir. 1995); Wilson v. United States, 23 F.3d 559, 561-62 (1st
Cir. 1994); In re United States, 367 F.2d 505, 511 (3d Cir.
1966). Such evidence most often takes the form of operational
contracts between the private company and the government.
See, e.g., Favorite, 955 F.2d at 388.
The contracts between the companies in this case and the
United States were not made available to Arthur until December
2002. Only through these contracts could Arthur finally credit
the allegations of opposing counsel and conclude that the United
States was indeed the proper party. Had the contracts been
produced in October 2002 – as they should have been – Arthur
would have had sufficient time to file his claim against the
United States before the expiration of the statute of limitations.
The late disclosure denied Arthur this opportunity and required
him to conduct additional discovery – and incur additional delay
– to support his request for relation back.
18
Nothing in the record bespeaks the dilatory motive or
repeated and unjustified failures to amend that we have
previously characterized as warranting denial of leave. See
Adams, 739 F.2d at 868. To the contrary, Arthur prosecuted his
case in a fairly diligent manner. He served the complaint in a
timely fashion, provided and requested discovery in accordance
with the Federal Rules of Civil Procedure, and, after the
operational contracts were disclosed, sought to confirm or deny
the relationship between the companies and the United States.
He filed the motion for leave to amend soon after he had secured
evidence supporting his request for relation back of the claim
against the United States. Compare Oran v. Stafford, 226 F.3d
275, 291 (3d Cir. 2000) (noting that failure to prosecute case
supported denial of leave to amend), with Adams, 739 F.2d at
867-68 (noting that plaintiff’s diligent efforts to prosecute case
supported grant of leave to amend). Even if Arthur, with the
benefit of hindsight, could have named the United States prior
to this time, his failure to do so cannot be viewed as so
egregious as to render amendment inequitable. Cf. Dubicz, 377
F.3d at 793 (finding that delay of eight months did not support
denial of leave to amend, even when attorney was negligent);
Tefft, 689 F.2d at 639-40 (same, but delay of four years); Buder,
644 F.2d at 694 (same, but delay of two and a half years).
The liberality of Rule 15(a) counsels in favor of
amendment even when a party has been less than perfect in the
preparation and presentation of a case. See Foman, 371 U.S. at
182; Boileau v. Bethlehem Steel Corp., 730 F.2d 929, 938-39
(3d Cir. 1984). It allows for misunderstandings and good-faith
lapses in judgment, so long as the party thereafter acts
reasonably and diligently. Adams, 739 F.2d at 868-69; see also
19
6 Wright et al., supra, § 1488 (stating that leave should be
granted if delay was due to “oversight or excusable neglect”).
Whether or not Arthur hypothetically could have deduced that
the United States was the proper party at the outset of the case,
the record demonstrates that he took affirmative steps soon
thereafter to determine the identity of the proper party and to
amend the complaint accordingly. His delay cannot be
considered “undue.”
We agree with the District Court that the United States
was not prejudiced by Arthur’s delay in seeking to amend the
complaint. The government has not argued that the delay
impaired its ability to defend against the suit or that it “was
unfairly disadvantaged or deprived of the opportunity to present
facts or evidence which it would have offered had the . . .
amendment[] been timely.” Bechtel v. Robinson, 886 F.2d 644,
652 (3d Cir. 1989) (quoting Heyl & Patterson Int’l, Inc. v. F.D.
Rich Hous., 663 F.2d 419, 426 (3d Cir.1981)). It received
prompt notice of the commencement of this case and could have
begun investigating Arthur’s claim soon after it was filed. A
“careless or myopic” decision on the part of the United States to
initiate only “superficial investigatory practices,” despite the
likelihood that Arthur would later name it as a defendant, does
not constitute prejudice for purposes of Rule 15(a). See 6
Wright et al., supra, § 1498; see also Lundy, 34 F.3d at 1189 n.8
(Becker, C.J., concurring in part in the judgment and dissenting
in part). In the absence of cognizable prejudice to the United
States, the District Court was obliged to grant Arthur leave to
file the amended complaint. See Adams, 739 F.2d at 867-69;
Boileau, 730 F.2d at 938-39; see also Cureton, 252 F.3d at 275.
20
B.
That the District Court was required to grant leave to
amend does not necessarily mean that dismissal of the claim
against the United States was improper. The original complaint
in this case, naming Maersk and Dyn Marine as defendants, was
filed in May 2002, and the amended complaint, naming the
United States as a party, was filed in May 2003. The statute of
limitations for the claim against the United States expired in
December 2002.12 See 46 U.S.C. app. § 745. As such, this
claim may proceed only if the amended complaint is deemed to
relate back to the original complaint.
Federal Rule of Civil Procedure 15(c) provides that an
amendment naming a new party will relate back to the original
complaint for statute of limitations purposes only if several
prerequisites are satisfied: (1) the claim in the amended
pleading must arise out of the “conduct, transaction, or
occurrence” set forth in the original pleading; (2) within 120
days of institution of the action, the party to be brought in by
amendment must have received “such notice of the . . . action
that the party will not be prejudiced in maintaining a defense on
the merits”; and, (3) within 120 days of institution of the action,
the party to be brought in by amendment must have known or
should have known that, “but for a mistake concerning the
12
This claim is the one related to Arthur’s injuries on
board the Assertive, in December 2000. The other injuries
occurred more than two years prior to the filing of the complaint
in this case and claims based thereon would not be timely even
if relation back is recognized. See 46 U.S.C. app. § 745.
21
identity of the proper party,” the action would have been
brought against that party. Fed. R. Civ. P. 15(c); see also
Garvin, 354 F.3d at 220-21; Varlack, 550 F.2d at 174; 3 Moore
et al., supra, § 15.19[3]; 6A Wright et al., supra, § 1498.
The District Court found, and the parties concede, that
the claim against the United States arises out of the same
transactions as the claims in the original complaint. It is also
undisputed that the United States received adequate notice of the
action within 120 days of commencement of the case and would
not be prejudiced if required to defend against the claim.
The sole question is whether the United States knew or
should have known that, but for a “mistake” concerning the
identity of the proper party, it would have been named in the
original complaint.13 See Fed. R. Civ. P. 15(c)(3)(B). The
District Court assumed that Arthur’s failure to name the United
States qualified as a mistake. On appeal, the United States
argues that, because Arthur was an experienced seaman who
should have recognized by the designation “U.S.N.S.” that the
ships were public vessels, there is no basis on which to find that
a “mistake” occurred.
13
The language of Rule 15(c) plainly implies that the
“mistake” must have occurred at the time the complaint was
filed. See Fed. R. Civ. P. 15(c)(3)(B) (defining the “mistake” as
one that affected the parties against whom the action would have
been “brought”); see also, e.g., Garvin, 354 F.3d at 220-21; 6A
Wright et al., supra, § 1498; cf. supra note 9 (discussing Nelson
v. County of Allegheny, 60 F.3d 1010 (3d Cir. 1995)).
22
This argument fails for the reasons previously discussed.
The designation “U.S.N.S.” is not dispositive as to the existence
of an agency relationship between the ship operators and the
United States. Cf. Favorite, 955 F.2d at 388 (stating that
designation of ship as “public vessel” is not determinative of
control by United States). At best, it simply suggests that
further investigation may be warranted. That the ships bore this
designation does not preclude a finding that Arthur was
reasonably mistaken regarding the identity of the potentially
liable party in this case.
Indeed, the procedural history of this case supports a
finding of mistake. The original complaint did not name the
United States as a party, even though it would have been in
Arthur’s interest to do so. The answers to the complaint did not
indicate that the United States owned the ships, and the
companies did not allege that the United States was the proper
defendant until October 2002. Documentary support for this
assertion was not forthcoming for another two months, at which
time Arthur sought additional discovery to support his claim
against the United States. The only reasonable conclusion that
can be gleaned from the record is that Arthur made a mistake as
to the proper party when he filed the original complaint and that
this mistake was not finally corrected until December 2002,
after expiration of the statute of limitations. Cf. 6A Wright et
al., supra, § 1498 (stating that a “plaintiff’s own inexcusable
neglect” in failing “to name the correct party,” although
“germane to the question of permitting an amendment,” is not
relevant to the satisfaction of the notice requirements of Rule
15(c)”).
23
It is of no consequence that Arthur’s mistake resulted
from lack of knowledge, rather than mere misnomer. Although
a majority of courts have held that only a “misnomer or
misidentification” of an existing party can constitute a “mistake
concerning the identity of the proper party” under Rule 15(c),
see, e.g., Barrow v. Wethersfield Police Dep’t, 66 F.3d 466, 469
(2d Cir. 1995), amended by 74 F.3d 1366 (2d Cir. 1996),14 there
is no linguistic basis for this distinction. See Pavelic & LeFlore
v. Marvel Entm’t Group, 493 U.S. 120, 123 (1989) (“We give
the Federal Rules of Civil Procedure their plain meaning.”). A
“mistake” is no less a “mistake” when it flows from lack of
knowledge as opposed to inaccurate description. See Webster’s
Third New International Dictionary 1446 (1981) (defining
“mistake” as “a wrong . . . statement proceeding from faulty
judgment, inadequate knowledge, or inattention”). Both errors
render the plaintiff unable to identify the potentially liable party
and unable to name that party in the original complaint. See 3
Moore et al., supra, § 15.19[3][d]. Thus, both errors constitute
a “mistake concerning the identity of the proper party” for
purposes of Rule 15(c). See Singletary v. Pa. Dep’t of Corr.,
266 F.3d 186, 200-01 & n.5 (3d Cir. 2001); Varlack, 550 F.2d
14See also Powers v. Graff, 148 F.3d 1223, 1226-27 (11th
Cir. 1998); Jacobsen v. Osborne, 133 F.3d 315, 320 (5th Cir.
1998); Cox v. Treadway, 75 F.3d 230, 240 (6th Cir. 1996);
Wilson v. United States, 23 F.3d 559, 563 (1st Cir. 1994) (citing
Worthington v. Wilson, 8 F.3d 1253, 1256 (7th Cir. 1993)); W.
Contracting Corp. v. Bechtel Corp., 885 F.2d 1196, 1201 (4th
Cir. 1989); Wood v. Woracheck, 618 F.2d 1225, 1229-30 (7th
Cir. 1980).
24
at 174-75; 3 Moore et al., supra, § 15.19[3][d]; 6A Wright et al.,
supra, § 1498.15
This interpretation accords with other provisions of Rule
15(c)(3), which authorize relation back of amendments that
either (1) “change[] . . . the naming of a party against whom a
claim is asserted” or (2) “change[] the party . . . against whom
a claim is asserted.” Fed. R. Civ. P. 15(c)(3). The first of these
clauses permits relation back when an amendment corrects a
misidentification of an existing party; the second applies when
an amendment substitutes or adds a new party. Lundy, 34 F.3d
at 1192-93 & n.13 (Becker, C.J., concurring in part in the
judgment and dissenting in part); 3 Moore et al., supra,
§ 15.19[3][d]. To limit relation back to cases involving
misnomer, excluding cases in which the amendment adds a new
party, would render the second clause of Rule 15(c)(3)
superfluous. A broader interpretation of “mistake” is necessary
15
See also Fed. R. Civ. P. 15 advisory committee’s
note–1966 (indicating that relation back is not limited to
situations in which amendment simply “correct[s] a misnomer
or misdescription of a defendant”); cf. Leonard v. Parry, 219
F.3d 25, 27-29 (1st Cir. 2000) (upholding relation back of
amendment naming the actual driver of the car as a defendant
when plaintiff had mistakenly believed that the owner of the car
was operating vehicle at time of accident); G.F. Co. v. Pan
Ocean Shipping Co., 23 F.3d 1498, 1504 (9th Cir. 1994)
(upholding relation back of amendment naming shipping
company as defendant when plaintiff had mistakenly believed
that a claims agent, rather than the shipping company, “owned,
operated, and controlled” the boat).
25
to give full effect to both of these provisions. See 3 Moore et
al., supra, § 15.19[3][d].
An amendment naming a new party will relate back to the
original complaint if the party had adequate notice of the action
and should have known that it would have been named in the
complaint but for a mistake – whether the mistake is based on
lack of knowledge or mere misnomer. Id.; see Varlack, 550
F.2d at 174-75.
These prerequisites are satisfied here. The United States
received notice within 120 days of commencement of the case
that Arthur had brought claims against private companies for
injuries sustained on public vessels. The reason that these
claims were not brought against the United States, the only
potentially liable party, was that Arthur did not recognize the
agency relationship between the companies and the Navy.
The United States should have known that it would have
been named in the complaint but for this mistake. There is no
basis to characterize Arthur’s decision to sue his statutorily
immune employers as litigation strategy, and nothing in the
record suggests that the government viewed it in this manner.
See 3 Moore et al., supra, § 15.19[3][d] (“[A] court . . . should
consider whether the new party knew that the failure to include
it in the original complaint was an error rather than a deliberate
strategy.”). The United States undoubtedly knew that the claims
in the complaint should have been brought against it; indeed, the
operational contracts (drafted by the United States) recognize
that Maersk and Dyn Marine “may become involved in . . .
litigation maintainable against the United States under the
26
Public Vessels Act . . . [and] the Suits in Admiralty Act” and
require that the companies provide immediate notice of such an
action and “cooperate with [g]overnment counsel [in]
maintaining the defense.” An employee of Dyn Marine
confirmed that, in these types of cases, it is common for a
private company to be named in the original complaint but later
replaced with the United States, as the proper defendant.
The only reasonable conclusion permitted by the record
is that the United States knew or should have known that, but for
a “mistake concerning the identity of the proper party,” it would
have been named in the original complaint. See Varlack, 550
F.2d at 174-75 (stating that whether satisfaction of conditions of
Rule 15(c) is a question of fact).
III.
Leave to amend the complaint to add the United States as
a party was warranted under Federal Rule of Civil Procedure
15(a), and, because the prerequisites under Federal Rule of Civil
Procedure 15(c) were satisfied, the amendment should have
been deemed to relate back to the original complaint for statute
of limitations purposes. The contrary decision of the District
Court was in error.
Accordingly, the order of the District Court will be
reversed and this case will be remanded for further proceedings
consistent with this opinion.
27
VAN ANTWERPEN, Circuit Judge, dissenting.
Because this case compels me to conclude that Arthur is
not entitled to relation back of his claim against the
Government, I cannot join in the Judgment of my colleagues.
Arthur received abundant notice that the United States would be
exclusively liable prior to the expiration of the statute of
limitations; it cannot reasonably be posited that the United
States knew or should have known that he was mistaken under
Federal Rule of Civil Procedure 15(c)(3)(B), nor should he have
had the opportunity to amend under Rule 15(a).
I.
Regarding Arthur’s motion to amend, filed April 14,
2003, the District Court noted that “[w]hen we were considering
whether to allow the amendment, the United States was not then
a party and thus not in a position to make its objections known.”
App. 28. In contrast to the majority, I read the District Court’s
opinion as reconsidering its grant to Arthur of leave to amend.
We review decisions on motions under Fed. R. Civ. P. 15 to
amend a complaint for abuse of discretion. Dandrea v.
Malsbary Mfg. Co., 839 F.2d 163, 166 (3d Cir. 1988). As the
majority notes, delay may become undue, and hence grounds for
denial of leave to amend, where it “plac[es] an unwarranted
burden on the court.” Cureton v. National Collegiate Athletic
Ass’n, 252 F.3d 267, 273 (3d Cir. 2001). I cannot conclude as
easily as they do that this case stripped the District Court of
discretion to deny leave to amend. Given that Arthur knew or
should have known that he had to sue the United States before
the statute of limitations expired, the District Court was under
28
no obligation to countenance his lack of diligence, and was
within its discretion to deny his motion to amend.
II.
Turning to the analysis under Rule 15(c), I am forced to
conclude that Arthur has no claim to mistake. Beginning with
the very name of the ship he worked aboard, the United States
Naval Ship Assertive, Arthur and his attorney were on notice of
its status as a Public Vessel within the Public Vessels Act
(“PVA”), 46 U.S.C. app. § 781, and the Suits in Admiralty Act
(“SAA”), 46 U.S.C. app. § 745. The Code of Federal
Regulations directs that “[c]ivilian manned ships, of the Military
Sealift Command or other commands, designated ‘active status,
in service’ shall be called ‘United States Naval Ship’ or
‘U.S.N.S.’” 32 C.F.R. § 700.406(c). Ships of “the Military
Sealift Command or other commands” could not but be “public
vessels” under any logical meaning of that term.16 See 46
U.S.C. app. § 781. In turn, it is settled that the exclusive remedy
for those injured aboard public vessels is against the United
16
The majority’s reliance on Favorite v. Marine
Personnel and Provisioning, Inc., 955 F.2d 382 (5th Cir. 1992),
for the proposition that the “U.S.N.S.” designation is not
dispositive of public vessel status is well-taken as a legal point.
As a practical matter, however, it is difficult at best to conceive
of a situation in which a ship with such a designation would not
fall within the PVA. Research revealed no such scenario. I can
only conclude that the designation all but guarantees public
vessel status.
29
States. E.g., In re United States, 367 F.2d 505, 511 (3d Cir.
1966). Nevertheless, Arthur filed a Complaint on May 16,
2002, naming Maersk and Dyn, but not the United States, as
defendants.
Arthur’s refusal to timely sue the United States endured
past any point where he could have been mistaken. At an
October 15, 2002 status conference, occurring at least a month
and a half before the statute of limitations ran in December
2002, Maersk and Dyn plainly asserted that they were the wrong
parties. Arthur’s attorney admits as much in his affidavit. App.
118, ¶ 7. Even earlier, Maersk’s Answer raised as an
affirmative defense that “Plaintiff’s Complaint is barred by
failure to join an indispensable party.” App. 87, ¶ 45. Likewise,
Dyn’s Answer raised the defense more specifically, citing both
the SAA and PVA as bars to its own liability. App. 96. Arthur
knew enough to conclude that he should sue the United States
before the expiration of the statute of limitations.
Rather than act to save his claims, however, Arthur sat by
while the statute of limitations ran out. To be sure, he was not
idle. He undertook an inexplicable course of discovery to
unearth the obvious: that the United States had an agency
relationship with Maersk and Dyn. He also notes that Maersk
and Dyn were untimely in providing their contracts, which, he
unconvincingly claims, were the sole means at that point of
ascertaining the relationship with any certainty.17 Even
17
After he obtained the contracts in January 2003, Arthur
inexplicably waited until April to file his motion to amend and
relate back. This is indeed a generous liberty to take with an
30
assuming that the Government’s exclusive liability was not
known by Arthur until he received the contracts and conducted
further discovery, he could have amended within the statute of
limitations.
At oral argument, Arthur’s counsel claimed that he would
not add the United States without certainty of its liability for fear
of Rule 11 sanctions. This rings hollow. His amendment would
not have run afoul of Rule 11 because it would have been
entirely proper based on what he knew prior to the expiration of
the limitations period. And even if it were improper, the rule
would have given him ample opportunity to correct any misstep
before sanctions would be imposed. See Fed. R. Civ. P.
11(c)(1)(A) (Rule 11 motion shall not be filed with court until
21 days have elapsed from service and the “challenged . . . claim
. . . is not withdrawn or appropriately corrected.”). I cannot see
what Arthur’s counsel had to fear from preserving his client’s
claim by timely adding the United States, even if he did lack
perfect certainty.
Further, assuming Arthur was actually unsure of the
Government’s liability, a ready means of preserving his claim
was available. Rather than naming the United States, he could
have amended the Complaint to include a “John Doe” or other
unnamed defendant. This Circuit has interpreted Rule
15(c)(3)(B) to permit claims against “John Doe” defendants to
relate back once a named party has been identified and added,
where the other requirements of Rule 15(c) have been met, and
the proper defendants are hard to ascertain. Singletary v.
already-expired statute of limitations.
31
Pennsylvania Dept. of Corr., 266 F.3d 186, 200-01 (3d Cir.
2001) (citing Varlack v. SWC Caribbean, Inc., 550 F.2d 171,
175 (3d Cir. 1977)). Contra, e.g., Barrow v. Wethersfield Police
Dept., 66 F.3d 466, 469 (2d Cir. 1995), amended by 74 F.3d
1366 (2d Cir. 1996). Thus, our interpretation of Rule 15(c)
would have allowed Arthur to insert a “placeholder” party in his
Complaint while he went about the task of assuaging whatever
doubt he harbored as to the United States’ amenability to suit.
He did not avail himself of that procedure, and I do not think we
can properly rescue him from his failure. Additionally, the
majority’s holding today undermines the holdings of this Court
in Singletary and Varlack: litigants who find it difficult to
ascertain the correct party to sue now need not even contemplate
the existence of such putative parties by adding a “John Doe.”
Unquestionably, we must construe the Federal Rules of
Civil Procedure liberally to allow parties their day in court.
Lundy v. Adamar of New Jersey, Inc., 34 F.3d 1173, 1186 n.5
(3d Cir. 1994). But as the Supreme Court has observed, “they
should not be expanded by disregarding plainly expressed
limitations.” Schlagenhauf v. Holder, 379 U.S. 104, 121 (1964).
Here, to hold that Arthur was actually mistaken as to the proper
party to sue, and entitled to relation back of his expired claim
under Rule 15(c), strains that provision beyond its proper
bounds. As the District of Columbia Circuit has written, “[i]n
the adversarial system of litigation the plaintiff is responsible for
determining who is liable for her injury and for doing so before
the statute of limitations runs out; if she later discovers another
possible defendant, she may not, merely by invoking Rule 15(c),
avoid the consequences of her earlier oversight.”
Rendall-Speranza v. Nassim, 107 F.3d 913, 919 (D.C. Cir.
32
1997). And as the majority rightly observes, its decision is at
odds with the other Courts of Appeals to have considered this
issue. See Ish Yerushalayim v. United States Dept. of Corr., 374
F.3d 89, 92 (2d Cir. 2004); Powers v. Graff, 148 F.3d 1223,
1227 (11th Cir. 1998); Rendall-Speranza, 107 F.3d at 919;
Wilson v. United States, 23 F.3d 559, 563 (1st Cir. 1994);
Worthington v. Wilson, 8 F.3d 1253, 1256 (7th Cir. 1993); In re
Kent Holland Die Casting & Plating, Inc., 928 F.2d 1448, 1449-
50 (6th Cir. 1991).
Furthermore, the prevailing – and contrary –
interpretation of Rule 15(c) held by our sister circuits does not
render inoperative a portion of Rule 15(c)(3), as my colleagues
claim. They note that their “interpretation accords with other
provisions of Rule 15(c)(3), which authorize the relation back of
amendments that either (1) ‘change[] . . . the naming of a party
against whom a claim is asserted’ or (2) ‘change[] the party . .
. against whom a claim is asserted.’” As noted above, Arthur
could easily have changed a “party against whom a claim is
asserted” by substituting the United States for an unnamed
defendant. My reading of Rule 15(c)(3)(B)’s mistake
requirement would permit changes to parties against whom
claims are asserted where the litigant seeking amendment was
actually mistaken.
For the foregoing reasons, I think the District Court’s
Order should be affirmed. I therefore respectfully dissent.
33