HERAEUS MEDICAL GMBH v. ESSCHEM, INC., 2:14-cv-05169

Background

Heraeus Medical GmbH (German) develops bone cements (Palacos); Biomet was a former distributor and later competitor after 2005.
Biomet contracted Esschem (Pennsylvania) in 2004 to develop copolymers (R262, R263) used in Biomet’s bone cement; Esschem sold those copolymers to Biomet.
Heraeus sued Esschem (2014) alleging Esschem knowingly misappropriated Heraeus trade secrets to develop copolymers for Biomet; Heraeus sought to add Biomet as a defendant.
Motion to amend to add Biomet was filed more than two years after the original complaint and about one month before the close of discovery.
Esschem and Biomet opposed amendment, arguing undue delay and prejudice (additional discovery, motions, and repeat of transnational discovery), and Biomet would lack participation as a newly named defendant.
The Court denied leave to amend, concluding amendment would be prejudicial and unduly delayed; it declined to reach futility or dilatory motive and rejected joinder under Rule 19.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether leave to amend complaint to add Biomet should be granted under Fed. R. Civ. P. 15(a)	Heraeus: Justice requires amendment; Biomet’s prior involvement and discovery mitigates prejudice; German judgment uncertainty justified timing	Esschem/Biomet: Motion is too late; adding Biomet would cause substantial prejudice, extra discovery, new motions, and delay	Denied — amendment would prejudice defendants and unduly delay litigation
Whether Heraeus’s delay in moving to amend was excusable	Heraeus: Believed German judgment might have preclusive effect; withholding of certain evidence justified delay	Defs: Heraeus knew Biomet’s role from the start and previously sued Biomet elsewhere; no adequate explanation for late amendment	Denied — Heraeus failed to justify nearly two-plus years' delay and five-month waiting after preclusion ruling
Whether joinder of Biomet is required under Rule 19	Heraeus: Biomet indemnifies Esschem and its interests would be impaired if not joined	Biomet: Did not assert an interest claiming inability to protect itself; joinder typically invoked by defendants	Denied — Rule 19 not applicable; absent party has not claimed an interest necessitating joinder
Whether amendment would be futile or reflect bad faith/dilatory motive	Heraeus: Did not primarily argue futility; sought to correct parties sued	Defs: Suggested motions to dismiss likely and added burden; raised prejudice and delay	Court did not decide futility or bad faith because prejudice/undue delay dispositive

Key Cases Cited

Long v. Wilson, 393 F.3d 390 (3d Cir. 2004) (factors for denying leave to amend)
Lundy v. Adamar of N.J., Inc., 34 F.3d 1173 (3d Cir. 1994) (standard for amendment and denial factors)
Foman v. Davis, 371 U.S. 178 (U.S. 1962) (leave to amend should be freely given but may be denied for prejudice, undue delay, bad faith, or futility)
Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267 (3d Cir. 2001) (denial of amendment for prejudice and undue delay)
Berger v. Edgewater Steel Co., 911 F.2d 911 (3d Cir. 1990) (late amendment after discovery close can unfairly burden court and parties)
Bjorgung v. Whitetail Resort, LP, 550 F.3d 263 (3d Cir. 2008) (delay becomes undue when prior opportunities to amend were available)
Langbord v. United States Dep’t of Treasury, 832 F.3d 170 (3d Cir. 2016) (courts focus on reasons for not amending sooner)
CMR D.N. Corp. v. City of Philadelphia, 703 F.3d 612 (3d Cir. 2013) (significant unjustified delay may itself be prejudicial)
Glancy v. Taubman Centers, Inc., 373 F.3d 656 (6th Cir. 2004) (plaintiff generally chooses parties; Rule 19 often a defendant's tool)
Alpha Pro Tech, Inc. v. VWR Int’l LLC, 984 F. Supp. 2d 425 (E.D. Pa. 2013) (absent party must claim an interest to mandate joinder)