United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON PLAINTIFF'S OBJECTION TO MAGISTRATE
JUDGE'S DENIAL OF PLAINTIFF'S MOTION FOR LEAVE TO
FILE SECOND AMENDED COMPLAINT (DKT. 47)
EVANS BARKER, JUDGE
Agrolipetsk (“Agrolipetsk”), a Russian limited
liability company, sued Defendants Dow AgroSciences
(“Dow”), a Delaware limited liability company,
and Agrigenetics (doing business as “Mycogen
Seeds”), a Delaware corporation, both having their
principal places of business in Indiana, in connection with
the sale by Defendants to Agrolipetsk of an allegedly
defective variety of hybrid sunflower seed, “Variety
341.” Dkt. 12. Following dismissal without prejudice of
its first amended complaint on Defendants' motion for
judgment on the pleadings, see Fed. R. Civ. P.
12(c), Agrolipetsk moved for leave to file a second amended
complaint. Dkt. 36. See Fed. R. Civ. P. 15(a)(2).
referred the motion to Magistrate Judge Matthew P. Brookman,
who found that Agrolipetsk's proposed complaint
(“Proposed Complaint” or “PC”) would
not survive a motion to dismiss for failure to state a claim
on which relief could be granted, see Fed. R. Civ.
P. 12(b)(6). He therefore denied the motion as futile. Dkt.
46 (“Entry”). Agrolipetsk has now appealed from
that ruling by timely objection. Dkt. 47. See Fed.
R. Civ. P. 72.
reasons explained below, Agrolipetsk's objections are
sustained in part and overruled in part.
factual background of this case is fully set out in our order
on Defendants' motion for judgment on the pleadings, Dkt.
35, and in Judge Brookman's ruling. We will address
particulars as necessary below.
magistrate judge's ruling on nondispositive matters will
not be set aside by the district judge unless clearly
erroneous or contrary to law. Fed.R.Civ.P. 72(a). A
magistrate judge's report and recommendation on a
dispositive motion is reviewed by the district judge de
novo. Fed.R.Civ.P. 72(b)(3).
contends that the Seventh Circuit has held that a motion for
leave to file an amended complaint is a nondispositive matter
for these purposes, and the magistrate judge's ruling on
such motion is therefore entitled to deferential review under
Rule 72(a), even if denial will end the case as a practical
matter for want of live claims to prosecute. Br. Opp. 6-7
(citing Hall v. Norfolk S. Ry. Co., 469 F.3d 590,
596 (7th Cir. 2006); Elder Care Providers of Ind., Inc.
v. Home Instead, Inc., No. 1:14-cv-01894-SEB-MJD, 2017
WL 4250107, at *1 (S.D. Ind. Sept. 26, 2017) (Barker, J)).
unaware of such a holding. Hall affirmed a
magistrate judge's denial of a motion for leave to file
an amended complaint which had been reviewed by the district
judge under Rule 72(a). The court of appeals pointed out that
denial “did not terminate [plaintiff's] existing
lawsuit against [defendant], it merely prevented him from
adding [a second defendant].” 469 F.3d at 595.
Similarly, in Elder Care, we applied Hall
to a case where denial did not end the lawsuit; it merely
prevented plaintiff from adding a new claim. 2017 WL 4250107,
at *1. In Schur v. L.A. Weight Loss Centers, Inc.,
the Seventh Circuit left open “whether a motion to join
a nondiverse defendant whose joinder would destroy the
court's diversity jurisdiction is
‘dispositive[.]'” 577 F.3d 752, 760 n.6 (7th
Cir. 2009). The question appears to be open still. See
Clymer v. Wal-Mart Stores, Inc., No.
1:15-cv-00300-JTM-SLC, 2016 WL 3580487, at *1 n.1 (N.D. Ind.
May 20, 2016). In other words, it is far from settled that a
formal, rather than a functional, approach governs the choice
between Rule 72(a) and Rule 72(b).
choice will not make a difference in this case, though, and
so we need not pursue it to conclusion. Assuming Rule 72(a)
supplies the correct standard, “[r]egarding legal
issues, the language ‘contrary to law' appears to
invite plenary review.” 12 Charles Alan Wright &
Arthur R. Miller et al., Federal Practice and
Procedure § 3069 (3d ed. 2014). “‘[F]or
questions of law there is no practical difference between
review under Rule 72(a)'s contrary to law standard and a
de novo standard.'” CertusView Techs., LLC v. S
& N Locating Servs., LLC, 107 F.Supp.3d 500, 504
(E.D. Va. 2015) (quoting Bruce v. Hartford, 21
F.Supp.3d 590, 594 (E.D. Va. 2014)). See also Elder
Care, 2017 WL 4250107, at *2 (quoting Pain Ctr. of
SE Ind., LLC v. Origin Healthcare Sols. LLC, No.
1:13-CV-00133-RLY-DKL, 2014 WL 958464, at *3 (S.D. Ind. Mar.
12, 2014)) (“An order is contrary to law when it
‘fails to apply or misapplies relevant
statutes, case law, or rules of procedure.'”
(emphasis added)). And Judge Brookman's ruling that the
Proposed Complaint would not survive a Rule 12(b)(6) motion
clearly presents a question of law. E.g., Agnew v.
Nat'l Collegiate Athletic Ass'n, 683 F.3d 328,
334 (7th Cir. 2012). We will therefore review it as such.
Proposed Complaint contains two counts for breach of warranty
under the Uniform Commercial Code as adopted by Indiana
(“UCC”), one each against Dow and Mycogen Seeds
(Counts I, II), and two counts for incurable deceptive acts
under Indiana's Deceptive Consumer Sales Act
(“Deceptive Sales Act”), similarly allocated
(Counts III, IV). There is also one count for uncured
deceptive acts under the Deceptive Sales Act against Dow only
Brookman ruled that Counts III and IV as pleaded would not
meet the applicable pleading standards, see Fed. R.
Civ. P. 8(a), 9(b), except for one specific theory of
liability, the “quiet recall” theory, which
Defendants had not challenged and therefore survived the Rule
8 and Rule 9 analyses by default. See Entry 14.
Judge Brookman ruled further that Count V would necessarily
fail for lack of statutorily required notice. Finally, as to
Counts I, II and the “quiet recall” theory of
Counts III and IV, Judge Brookman ruled that “this
case's nexus with Indiana is too thin to overcome the
presumption against extraterritoriality and to satisfy the
requirements of due process[, ]” barring the
application of Indiana law to the conduct complained of.
objects to Judge Brookman's Rule 8 and Rule 9 analyses in
several particulars, and to the entirety of Judge