754 F. Supp. 2d 527
E.D.N.Y2010Background
- Enzymotec sued NBTY for breach of agreements, misrepresentation as to exclusivity, and Lanham Act false advertising.
- Three motions were pending: Enzymotec to amend the complaint for Breach of Supply Agreement, NBTY for partial summary judgment dismissing Lanham Act claim, and Enzymotec for a sur-reply (denied as moot).
- The February 2006 Agreement allegedly bound NBTY to exclusively purchase PS-20 from Enzymotec; Lipogen’s PS-20 issues and subsequent renewals are disputed.
- Enzymotec alleged that, based on representations through 2006–2008, NBTY treated Enzymotec as its exclusive PS-20 supplier and even funded advertising and clinical trials for Neuro-PS.
- In 2006–2007 NBTY purchased PS-20 from Enzymotec and other suppliers; in 2007 Enzymotec contends an oral agreement extended exclusivity; by 2008 the relationship deteriorated and litigation commenced (July 1, 2008).
- The court granted the amendment, granted partial summary judgment for NBTY on the Lanham Act standing, and denied Enzymotec’s sur-reply as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether good cause exists to modify the scheduling order | Enzymotec delayed discovery due to settlement efforts and new facts surfaced late. | NBTY argued no good cause since February 2006 facts were known earlier. | Yes; good cause shown to modify scheduling order. |
| Whether Enzymotec may amend under Rule 15(a) | Amendment necessary to add Breach of Supply Agreement based on new discovery. | Prejudice and undue delay unless allowed. | Yes; amendment granted. |
| Lanham Act standing of Enzymotec | Enzymotec has reasonable interest and basis to show injury due to competition. | Enzymotec lacks direct competition or adequate causal basis. | Granted partial summary judgment dismissing Lanham Act claim for lack of standing. |
| Whether a sur-reply should be filed | Sur-reply needed to address new discovery arguments and damages theories. | Sur-reply unnecessary. | Denied as moot. |
Key Cases Cited
- Kassner v. 2nd Ave. Delicatessen, Inc., 496 F.3d 229 (2d Cir. 2007) (good cause for extending deadlines under Rule 16(b) and Rule 15(a) analysis)
- Grochowski v. Phoenix Construction, 318 F.3d 80 (2d Cir. 2003) (Rule 16(b) good cause standard governs scheduling-order modification)
- Foman v. Davis, 371 U.S. 178 (1962) (leave to amend freely absent undue prejudice or bad faith)
- United States v. Continental Illinois Nat'l Bank & Trust Co., 889 F.2d 1248 (2d Cir. 1989) (prejudice and burden shifting in amendment disputes)
- Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106 (2d Cir. 2010) (standing under Lanham Act depends on reasonable interest and basis; competition as indication)