541 F.Supp.3d 231
D.R.I.2021Background
- Plaintiffs (City of Miami Fire Fighters’ & Police Officers’ Retirement Trust and IU of Operating Engineers Pension Fund) filed a securities-fraud suit against CVS Health and several officers; an Amended Complaint was dismissed under the PSLRA on February 11, 2021.
- Judgment entered dismissing the action and the court denied leave to amend; plaintiffs had included a contingent, last-paragraph request to amend in their opposition brief but did not attach a proposed complaint.
- Twenty-eight days after judgment, plaintiffs moved for partial reconsideration under Rule 59(e), seeking to have dismissal converted to without prejudice and asking leave to file a Proposed Second Amended Complaint (PSAC) based on new confidential-witness information appearing in a different CVS suit.
- The court analyzed (1) whether the pre-judgment, contingent request to amend in the opposition was a proper motion, and (2) whether post-judgment amendment was permissible without vacating judgment.
- The court denied reconsideration and the post-judgment motion to amend, concluding the contingent request had no legal effect and plaintiffs gave no adequate reason to vacate judgment to permit amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contingent, passing request to amend in an opposition brief constitutes a proper motion to amend | The passing reservation in the opposition preserved a right to amend if dismissal were granted | A contingent, tag‑on paragraph is not a proper motion and fails Local Rule 15 requirements | Denied: such contingent request is ineffective; First Circuit precedent treats it as not a motion (Fisher; Abiomed) |
| Whether post-judgment leave to amend can be granted without vacating judgment | Move under Rule 59(e) to alter judgment to allow amendment; new PSAC relies on CWs revealed in another suit | Judgment must be vacated first; plaintiffs delayed and could have sought leave earlier | Denied: post-judgment amendment improper absent vacatur; plaintiffs failed to show basis to vacate; delay discouraged |
| Adequacy of newly discovered confidential-witness evidence to justify vacatur and amendment | New CW information emerged after initial filings and was unavailable until a different complaint was filed in Sept. 2020 | Plaintiffs could have moved to amend after learning of evidence but before dismissal; their five-month wait was unreasonable | Denied: late discovery does not excuse failure to move earlier; First Circuit discourages "repeated bites" (Biogen; Abiomed) |
| Whether Rule 15’s liberal amendment policy applies to PSLRA actions | Plaintiffs suggest the court misapplied Rule 15 to PSLRA pleading | Court acknowledges PSLRA does not alter Rule 15 but found no proper motion to which Rule 15 would apply | Held: Rule 15 applies to PSLRA claims, but it was inapplicable here because no proper pre-judgment motion and no vacatur for post-judgment amendment |
Key Cases Cited
- Fisher v. Kadant, Inc., 589 F.3d 505 (1st Cir.) (contingent, passing request in opposition is not a motion to amend)
- Fire & Police Pension Ass'n of Colo. v. Abiomed, Inc., 778 F.3d 228 (1st Cir.) (denying post-dismissal amendment when plaintiffs waited to seek leave)
- In re Biogen Inc. Sec. Litig., 857 F.3d 34 (1st Cir.) (discourages seeking vacatur months after learning of new information to gain another chance to amend)
- ACA Fin. Guar. Corp. v. Advest, 512 F.3d 46 (1st Cir.) (PSLRA does not alter Rule 15’s liberal amendment policy)
- Emmanuel v. Int’l Broth. of Teamsters, Loc. Union No. 25, 426 F.3d 416 (1st Cir.) (denial of reconsideration where plaintiffs waited until after judgment to present new publicly available evidence)
- Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir.) (Rule 15’s liberal amendment standard applies in PSLRA cases)