970 F.3d 133
2d Cir.2020Background
- Putative securities class action by Metzler Asset Management and Construction Laborers Pension Trust alleging Chipotle and executives misled investors about food-safety controls after Chipotle shifted produce processing from centralized commissaries to in-restaurant prep.
- Plaintiffs allege multiple 2014–2015 food-borne illness outbreaks (Salmonella, E. coli, Norovirus) and insufficient traceability/testing that harmed sales and stock price.
- Plaintiffs filed successive complaints; the district court dismissed the amended complaints and denied leave to file a proposed third amended complaint, then entered judgment for defendants.
- Plaintiffs moved under Fed. R. Civ. P. 59(e) and 60(b) to vacate the judgment and for leave to file the third amended complaint, citing newly obtained evidence; the district court denied relief, finding the evidence was not newly discovered (except one immaterial fact) and that amendment would be futile.
- The Second Circuit affirmed, holding the district court applied the correct post-judgment standards (Rules 59(e)/60(b)) and did not abuse its discretion in denying relief; the court did not reach the district court’s alternative futility holding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper legal standard for post-judgment leave to amend | Only Rule 15(a)(2) applies; leave should be freely given | Post-judgment relief requires vacating judgment under Rules 59(e)/60(b) before Rule 15 consideration | Court: Rules 59(e)/60(b) govern; Rule 15's liberality does not override finality concerns |
| Whether plaintiffs presented newly discovered evidence to vacate judgment | FOIA materials and unsealed pleadings produced new facts that would cure pleading defects | Most evidence was available earlier or not shown to be newly discoverable with diligence | Court: Plaintiffs failed to meet the multi-prong newly discovered-evidence test; one alleged new fact was immaterial |
| Whether Rule 60(b)(6) (manifest injustice/extraordinary circumstances) justified vacatur | Ordinarily courts should resolve claims on the merits; extraordinary relief appropriate to avoid manifest injustice | No extraordinary circumstances; plaintiffs had multiple prior opportunities to amend | Court: No extraordinary circumstances; four previous chances to plead sufficed; no abuse of discretion denying 60(b)(6) relief |
| Whether further amendment would be allowed / futility question | PTAC would cure defects identified by district court and should be allowed | Amendment would be futile and would prejudice defendants and prolong litigation | Court: Did not reach the district court’s alternative futility ruling on appeal because denial under Rules 59/60 was proper; affirmed dismissal |
Key Cases Cited
- Foman v. Davis, 371 U.S. 178 (1962) (Rule 15 factors and admonition that outright denial to amend without justification is abuse of discretion)
- Williams v. Citigroup Inc., 659 F.3d 208 (2d Cir. 2011) (post-judgment motions must balance finality and Rule 15; plaintiffs get at least one opportunity to replead)
- Indiana Pub. Ret. Sys. v. SAIC, Inc., 818 F.3d 85 (2d Cir. 2016) (Rule 60(b) may permit consideration of proposed amendment; courts assess futility de novo)
- Nat'l Petrochemical Co. of Iran v. M/T Stolt Sheaf, 930 F.2d 240 (2d Cir. 1991) (dicta that nature of proposed amendment can bear on whether to vacate judgment)
- Ruotolo v. City of New York, 514 F.3d 184 (2d Cir. 2008) (party seeking to amend post-judgment must first obtain relief under Rules 59/60)
- United States v. Int'l Bhd. of Teamsters, 247 F.3d 370 (2d Cir. 2001) (standard for newly discovered evidence under Rule 60 applies to dispositive proceedings)
- Nemaizer v. Baker, 793 F.2d 58 (2d Cir. 1986) (Rule 60(b)(6) is a catch-all requiring extraordinary circumstances)