Sunday, January 29, 2006

Amend Away

Looks like the Plaintiffs in the long running Adams Golf securities class action will get to file a second amended complaint. Judge Kent A. Jordan (D. Del.) (remember the famous Money Race quote) listened to Defendants position "that they will be unduly prejudiced by the proposed amendments unless the case schedule is amended to allow sufficient time for additional discovery" and "that the proposed amendments are futile."

Judge Jordan rejected Defendants’ prejudice argument since "discovery would be stayed pending decision on Defendants' motion to dismiss." As for futility, he recognized that Defendants themselves "believe that it may be more appropriate to fully address the new claims' shortcomings on a motion to dismiss rather than in an opposition to Plaintiffs' motion." OK then. So, "since Defendants do no more than outline a basic sense for the proposed amendment's futility" in preparation for such a motion to dismiss, the issue will not be decided here."

You can read In re Adams Golf, issued January 24, 2006, at 2006 U.S. Dist. LEXIS 2542.

Nugget: "According to the Federal Rules of Civil Procedure, leave to amend shall be freely given by the court when justice so requires. A policy of favoring decisions on the merits, rather than on the technicalities, underlies this Rule."

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