Legal Memorandum: Denial of a Motion to Amend for Futility

Issue: Did a Virgin Islands trial court abuse its discretion when it denied a motion to amend on the grounds of futility where the complaint states a claim upon which relief may be granted?

Area of Law: Litigation & Procedure
Keywords: Motion to amend; Abuse of discretion; Futility
Jurisdiction: Federal, Virgin Islands
Cited Cases: 503 F.3d 319; 372 F.3d 137
Cited Statutes: Fed. R. Civ. P. 15(a), Rule 12(b)(6); Wrongful Discharge Act, 24 V.I. Code § 76
Date: 09/01/2008

The appellate standard of review for denial of a motion to amend is for abuse of discretion.  In re Burlington Factory Secs. Litig., 114 F.3d 1410, 1434-35 (3d Cir. 1997).

Generally, an appellate court reviews the trial court’s denial of a motion to amend the complaint for abuse of discretion.  In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997); see In re Alpharma Inc. Secs. Litig., 372 F.3d 137, 153 (3d Cir. 2004).  Rule 15 provides that leave to amend shall be freely granted when justice so requires.  Fed. R. Civ. P. 15(a).  The Supreme Court cautions that in exercising discretion, the court’s failure to permit the requested amendment without providing a valid reason constitutes an abuse of discretion.  Foman v. Davis, 371 U.S. 178, 182 (1962).

Among the grounds frequently cited as providing a sufficient basis for denying a motion to amend the complaint are (1) undue delay, (2) bad faith, (3) dilatory motive, (4) prejudice, and (5) futility.  See In re Burlington, 114 F.3d at 1434.  The last stated ground, “futility,” means that the complaint, as amended, would fail to state a claim upon which relief could be granted.  Id.  Thus, “in assessing futility, the district court applies the same standard of legal sufficiency that applies under Rule 12(b)(6).  Id.  In other words, “[t]he District Court determines futility by taking all pleaded allegations as true and viewing them in a light most favorable to the plaintiff.”  Winer […]

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