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General Linen Service, Inc. v. General Linen Service Co.

United States District Court, D. New Hampshire

February 4, 2015

General Linen Service, Inc.
v.
General Linen Service Co. No. 2015 DNH 021

ORDER

LANDYA McCAFFERTY, District Judge.

General Linen Service, Inc. ("GL Newburyport" or "GL-N") has sued its competitor, General Linen Service Co. ("GL Somersworth" or "GL-S"), under a variety of federal and state legal theories. Before the court is GL Newburyport's motion to amend its complaint to add five new defendants. GL Somersworth objects. For the reasons that follow, plaintiff's motion to amend is denied.

I. Background

The following facts are drawn from plaintiff's first amended complaint, document no. 26, which is the operative complaint in this case. GL Newburyport and GL Somersworth are competitors in the business of providing linens to commercial customers. GL-N provides services to its customers pursuant to contracts with them. It maintains customer information in digital format, as does GL Somersworth, and both companies use the same software vendor. In addition, GL-N allows its customers to access their accounts and transact business online, through a "web portal."

In April of 2010, one of GL Newburyport's customers, Hart House, reported to GL-N that it had received a sales pitch from a GL Somersworth representative who, during the course of his presentation, provided Hart House with a package of GL-N's invoices. GL-N then deduced that the GL-S representative could only have gotten GL-N receipts through the GL-N web portal. Through its software vendor, GL-N learned that its web portal had been accessed on several occasions by an unfamiliar username. GL-N's general manager traced that username to an IP address registered to GL-S. As a result of GL-S's use of GL-N's pricing information to solicit business, GL-N lost several customers entirely and was forced to lower the rates it charged several other customers.

This action followed. In its original complaint, filed on March 23, 2012, GL Newburyport asserted claims against GL Somersworth under the federal Computer Fraud and Abuse Act, New Hampshire's Consumer Protection Act, New Hampshire's Trade Secret Act, and New Hampshire common law.[1] GL-S was the only entity named as a defendant in GL-N's original complaint.

II. Discussion

In its motion to amend, GL Newburyport states that, based upon its examination of GL Somersworth's interrogatory answers, it has, "for the first time, identified [five] individuals who, upon information and belief, appear to have personally participated" in the conduct that underlies its claims. Mot. to Amend (doc. no. 34) 2. The purpose of GL-N's motion to amend is to add those five individuals, four GL-S employees and one former GL-S employee, as party defendants. See id. at 3. As noted, GL-S objects to GL-N's motion to amend.

Under the circumstances of this case, plaintiff needs either defendant's consent, which is not forthcoming, or leave of the court to amend its complaint. See Fed.R.Civ.P. 15(a)(2). "The court should freely give leave [to amend] when justice so requires." Id . Defendant, however, argues that the court should not grant leave because plaintiff: (1) filed its amended complaint after the limitation period on its claims had run; and (2) is not entitled to relief under the rules governing relation back. The court agrees.

It is undisputed that the limitation period had run on claims arising from GL Somersworth's alleged intrusion into GL Newburyport's electronic data by the time GL-N filed the motion to amend that is now before the court. Claims asserted in an amended complaint that is filed outside the limitation period are "time-barred as a matter of law unless the amended complaint relates back' to the original complaint." Coons v. Indus. Knife Co., 620 F.3d 38, 42 (1st Cir. 2010). "Under the doctrine of relation back, an amended complaint can be treated, for purposes of the statute of limitations, as having been filed on the date of the original complaint." Id. at 42 n.4 (quoting Pessotti v. Eagle Mfg. Co., 946 F.2d 974, 975 (1st Cir. 1991)).

With regard to the mechanics of relation back, the Federal Rules of Civil Procedure provide, in pertinent part:

(1) When an Amendment Relates Back. An amendment to a pleading relates back to the date of the original pleading when:
(A) the law that provides the applicable statute of limitations allows relation back;
(B) the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out - or attempted to be set ...

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