307 F.R.D. 107
S.D.N.Y.2015Background
- Plaintiff Norman Blagman sued major digital retailers (Apple, Amazon, Google, Microsoft, eMusic) and aggregators (Orchard, others) alleging widespread copyright infringement by selling digital recordings without required licenses; he identified three personally owned works and alleged many others similarly affected.
- Case pursued as a putative class action; earlier complaints survived motions to dismiss and the court previously allowed a narrowed Second Amended Complaint that tied the class to labels listed on exhibits.
- Discovery revealed disputes over the class definition: defendants read the class as limited to works supplied directly by listed labels, while Blagman sought to include works supplied “directly or indirectly” (i.e., via aggregators/intermediaries).
- After a December 2014 conference where the court indicated amendment to add “directly or indirectly” would likely be permitted (with ascertainability caveats), Blagman proposed a Third Amended Complaint pairing 104 label names with specific aggregators and restricting covered works to pre-1998 registrations and statutory damages of $750 per infringement.
- Defendants opposed, arguing bad faith, undue delay, prejudice, and futility (challenging identification of works-in-suit, standing for some class members, and class certification prerequisites).
- The magistrate judge granted leave to file the Third Amended Complaint, finding no bad faith, no undue prejudice given ongoing discovery, and that defendants had not shown the amendment would be futile; class certification issues and ascertainability are reserved for the certification stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Leave to amend under Fed. R. Civ. P. 15 | Amendment refines and narrows class, pairs labels with aggregators, limits damages to statutory minimum, and adds "directly or indirectly" language per court suggestion | Amendment is untimely, tactical, self-serving, prejudicial, and adds many new labels/intermediaries | Granted: liberal amendment standard applies; no bad faith, undue prejudice, or futility shown at this stage |
| Bad faith (knowingly false allegations / tactical motive) | Changes reflect discovery and removal of labels shown to have licenses; not dishonest | Defendants say plaintiff asserted false allegations and seeks tactical advantage by dropping labels | Rejected: evidence defendants cite is insufficient to show plaintiff acted in bad faith; removing labels after discovery is permissible |
| Prejudice and delay | Amendment was proposed promptly after December conference; discovery ongoing; class motion months away | Amendment will force new discovery, undermine prior work, and comes after long delay | Rejected: burden of additional discovery alone is not undue prejudice; schedule can be adjusted; delay not dispositive here |
| Futility: identification, standing, and class certifiability | Works-in-suit and label/aggregator pairings are identifiable via available retailer data; standing and class issues are appropriate for certification stage | Proposed class is unascertainable, some class members lack injury (licenses obtained), and commonality/predominance fail | Rejected for futility: court accepts allegations as true for amendment motion; prior rulings support that naming all works is not required now; class-certification merits reserved for later |
Key Cases Cited
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (leave to amend should be freely given when justice so requires)
- Aetna Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566 (2d Cir. 2005) (standards for denying amendment: undue delay, bad faith, prejudice, futility)
- Williams v. Citigroup Inc., 659 F.3d 208 (2d Cir. 2011) (preference for deciding cases on merits informs liberal amendment policy)
- McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d Cir. 2007) (district court discretion over amendment decisions)
- Lans v. Digital Equipment Corp., 252 F.3d 1320 (Fed. Cir. 2001) (amendment denied where allegations are verifiably false)
- Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001) (futility inquiry focuses on whether plaintiff is entitled to offer evidence supporting the claims)
- Scheuer v. Rhodes, 416 U.S. 232 (U.S. 1974) (court must accept plaintiff's allegations as true when testing sufficiency)
- Authors Guild v. Google, Inc., 282 F.R.D. 384 (S.D.N.Y. 2012) (addressing class issues and viability of statutory damages for class claims)