Whether a plaintiff, who has imputed knowledge of the identity of a defendant, files an amended complaint to add the known defendant after a one-year statute of limitations, can “relate back” to the filing date of the original complaint through the application of Federal Rule of Civil Procedure 15(c)?
Wanda Krupski (“Krupski”) suffered an injury as a passenger on a cruise ship owned and operated by Costa Crociere S.p.A. (“Costa Crociere”). In the United States District Court of the Southern District of Florida, her lawyer filed suit against Costa Cruise, N.V., LLC, Costa Crociere’s booking agent. The parties dismissed that suit by stipulation, because the owner and operator of a cruise ship is subject to liability, not the booking agent. Krupski filed an amended complaint against Costa Crociere—the correct party. Costa Crociere filed a motion to dismiss. The district court granted the motion, finding that Krupski had not made a “mistake” within the meaning of Federal Rule of Civil Procedure 15(c) (“Rule 15(c)”) that would allow the amendment to relate back to the original filing of the complaint. The Eleventh Circuit affirmed. The Supreme Court’s decision will clarify what constitutes a “mistake” within the meaning of Rule 15(c).
Questions as Framed for the Court by the Parties
Fed. R. Civ. P. 15(c)(l)(C) Permits An Amended Complaint To "Relate Back", For Limitation Purposes, When The Amendment Corrects A, "Mistake Concerning The Proper Party's Identity". Other Circuit Courts of Appeal Construe The Rule As Applying To Substitution Of The Correct Defendant For A Related Corporation With A Similar Name. The Eleventh Circuit Has Concluded That There Can Be No Such "Mistake" Where The Plaintiff Had Imputed Knowledge Of The Identity Of The Added Defendant Prior To Filing Suit. Does The Eleventh Circuit Construction Of Rule 15(c)(l)(C) Undermine The Purpose Of The Rule And Is It Inconsistent With The Decisions In Other Circuits?
Wanda Krupski used a South Carolina-based travel agent to purchase a cruise from Costa Cruise Lines, N.V., LLC (“Costa Cruise”) in Hollywood, Florida. The travel documents listed Costa Cruise’s Florida address and an eleven-page passenger ticket, which stated that any suit must be filed “within one year of the date of any alleged injury.” The definition of the term “carrier” included “Costa Crociere S.p.A., an Italian corporation, all vessels and other ships owned, chartered, operated or provided by Costa Crociere S.p.A., and “various agents onboard the vessel and the ship’s manufacturer.” The ship left Florida on February 18, 2007, and on February 21, 2007, Krupski alleges she tripped over a camera cable in the ship’s theater and fractured her right femur. On July 2, 2007, Krupski’s attorney gave notice of the injury to Costa Cruise in Hollywood, Florida. Krupski filed suit against Costa Cruise on February 1, 2008, following unsuccessful pre-suit settlement discussions.
On February 25, 2008, Costa Cruise filed an answer stating that it was the North American sales and booking agent for the carrier/vessel operator, Costa Crociere. . The district court permitted Krupski to amend the complaint under Federal Rule of Civil Procedure 15(c) to dismiss the suit against Costa Cruise and add Costa Crociere as a defendant. Costa Crociere moved to dismiss the amended complaint, arguing that the one-year statute of limitations had passed, since the amended complaint was filed on July 11, 2007, and does not relate back to the original filing date under Rule 15(c)(1)(C). Krupski objected to the motion to dismiss arguing that the amended complaint does relate back to the original filing date and is not barred by the one-year statute of limitations. The United States District Court for the Southern District of Florida granted Costa Crociere’s motion to dismiss stating that the amended complaint does not relate back, because Krupski had “knowledge of the existence of the proper party or the identity of the proper party.” On June 22, 2009, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s ruling stating that Krupski knew the identity of Costa Crociere yet failed to include it as a defendant in the original complaint, and thus, the amended complaint does not relate back under Rule 15(c). On January 19, 2010, the Supreme Court granted certiorari.
The dispute in this case is over whether Petitioner Wanda Krupski’s (“Krupski”) amendment to her complaint “relates back” to the original filing date for the purposes of a one-year, contractual statute of limitations. If the amendment “relates back,” then the lawsuit may proceed as if Krupski had originally filed against the correct party—Costa Crociere S.p.A. (“Costa Crociere”). But if the amendment does not “relate back,” then the statute of limitations will have run, and Krupski’s lawsuit will fail.
The parties agree that, in deciding whether an amendment should “relate back” under Rule 15(c), courts should follow the three-prong test set out by the Supreme Court in Schiavone v. Fortune. This test creates three requirements for an amendment to “relate back” to the original filing date: “(1) the basic claim must have arisen out of the conduct set forth in the original pleading; (2) the party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense; [and] (3) that party must or should have known that, but for a mistake concerning identity, the action would have been brought against it.” The parties do not dispute that the first prong of the test—that the amended complaint must involve the same transaction or occurrence—has been met. The dispute arises over whether Costa Crociere had sufficient notice not to prejudice it from presenting a defense on the merits, from the second prong of the test, and over what constitutes a “mistake” in the third prong of the test.
The Second Prong—Did Costa Crociere Have Notice?
Krupski argues that Costa Crociere had notice such that it will not be prejudiced, or put at a disadvantage, in defending on the merits. Krupski argues that, according to established precedent, where the defendant being added to a complaint by an amendment had a substantial identity of interest with the original defendant, then there is such notice. Krupski argues that there is such a substantial unity of interest in this case, as Costa Crociere and Costa Cruise are corporate affiliates and federal courts have frequently considered corporate affiliates to have a unity of interest for the purposes of Rule 15(c). Furthermore, Krupski argues that, even if Costa Cruise is just an agent of Costa Crociere, and not an affiliate, the notice would still be sufficient as service on an agent gives notice to the principal.
Costa Cruise argues that it could not have been put on notice of the lawsuit because it believed that Krupski made a conscious decision, not a “mistake” under the third prong of the test, to sue a different defendant instead of Costa Crociere. Costa Crociere argues that it believed that Krupski made such a deliberate, conscious decision, because Krupski knew that Costa Crociere was the owner and operator of the cruise ship, because this information was printed on her ticket and was told to her in Costa Cruise’s answer to her complaint and later in a motion for summary judgment. Costa Crociere implies that it would be absurd to consider someone’s decision not to sue to give notice that they are going to sue.
The Third Prong—Did Krupski Make a “Mistake” Under Rule 15(c)?
Krupski argues that she made a “mistake” within the meaning of Federal Rule of Civil Procedure 15(c) (“Rule 15(c)”) that would allow the amendment to her complaint to “relate back” to the original filing date of the complaint. Costa Crociere argues that Krupski did not make a “mistake” within the meaning of Rule 15(c) because she had knowledge of the identity of the correct party. Rather, Costa Crociere asserts, she must have made a deliberate decision.
Krupski argues that under Supreme Court precedents like Schiavone v. Fortune, “mistake” should be construed broadly. This is because, Krupski argues, the Court in Schiavone reiterated the long recognized purpose behind the Rules of Civil Procedure embodied in Federal Rule of Civil Procedure 1, which is to help, not hinder, parties that have business before the court. The Court first established this guiding principle, Krupski notes, in Conley v. Gibson,where the Court held that pleading should not be a game of lawyering skill in which a meritorious claim might fail because of a minor procedural misstep. Applying this principle to the present case, Krupski argues that her claim should not be thrown out of court simply because her attorney thought that Costa Cruise, the booking agent for Costa Crociere, was the operator of the cruise liner.
Costa Crociere maintains, however, that the Schiavone Court emphasized that interpretation of “mistake” is not about adopting a “liberal” versus “technical” approach but rather about acknowledging or ignoring the plain language of Rule 15. According to Costa Crociere’s interpretation of the plain meaning of Rule 15’s language, the 120-day period after filing the complaint is the relevant period for determining whether the party brought into the lawsuit by amendment knew or should have known of the lawsuit against it but for the plaintiff’s mistake regarding the proper defendant’s identity. A plaintiff, Costa Crociere states, learns during these 120 days, upon receiving an answer or a motion to dismiss, whether or not she sued the proper party and has an opportunity, if she sued the incorrect party, to amend her complaint and sue the correct party. Costa Crociere asserts that during the relevant 120 days in this case, Krupski did not amend her complaint, even after receiving knowledge of the correct defendant through the answer that Costa Cruise filed to the complaint and a later motion for summary judgment.
Krupski argues that the Supreme Court should adopt a rule, followed in some lower courts, where any mistake concerning the identity of the defendant can be corrected with an amendment that “relates back” as long as the substantive rights of the parties are not affected. Only this formulation of the rule, Krupski argues, preserves the guiding principle behind the Federal Rules and serves the remedial purpose of Rule 15. Costa Crociere, on the other hand, argues that the Supreme Court should affirm the court below in its holding that a deliberate, conscious decision not to sue a defendant (during the 120 days after filing a complaint) is not a “mistake” under 15(c). Costa Crociere argues that Krupski’s formulation of the rule would change nothing, as the substantive rights of the parties would be affected by adding a defendant to a lawsuit when the defendant did not have notice—as no defendant could be put on notice by what appears to be a plaintiff’s deliberate and conscious decision to not sue them.
Rule 15(c)(1)(C) of the Federal Rules of Civil Procedure provides, in pertinent part, that an amended pleading “relates back” to the date of the original pleading when “the party to be brought in by amendment (i) received such notice of the action that it will not be prejudiced in defending on the merits; and (ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity.” Fed. R. Civ. Pro. 15(c)(1)(C). The question before the Supreme Court is what constitutes as a “mistake.” The Court’s answer will have a substantial impact on the ability of individual plaintiffs to bring suits against large corporate defendants.
A Supreme Court ruling affirming the Eleventh Circuit’s decision would mean that courts will impute the identity and knowledge of a potential party to a plaintiff and a failure to name that party in the original complaint would not be a “mistake” under Rule 15(c). Such a ruling might have several implications. First, Krupski argues that plaintiffs often do not know the names of the individual parties responsible for their injury and adopting the Eleventh Circuit’s narrow interpretation of “mistake” could limit the ability of plaintiffs to amend their complaints with actual defendants once their names are ascertained. A ruling in favor of Costa Crociere, Krupski maintains, could create an incentive for corporations to hide their true names.
Krupski asserts that the Court’s ruling will determine how burdensome it will be for plaintiffs to sue a corporation within the statute of limitations and the circumstances under which corporations can assert a limitations defense. A decision for Krupski would lower the burden on plaintiffs to have to ascertain the names of all possible defendants before filing their complaints and conversely limit the circumstances under which corporations could assert a statute of limitations defense. The Public Justice blog notes that a decision for Costa Crociere would “bar plaintiffs from the courts unless they obtain information before suit that is only accessible through discovery.”
While Krupski focuses on the fact that a Court decision in favor of Costa Crociere on the question of “mistake” could cause plaintiffs to lose substantive claims if an incorrect party is named in the lawsuit, Costa Crociere focuses on the fact that a decision in favor of Krupski could allow a plaintiff to bring an unsuspecting defendant into court without proper notice. Costa Crociere warns that “John Doe” claims, brought against unknown defendants, would proliferate without limitation if the Court rules in favor of Krupski. It states that the notice and prejudice provisions of Rule 15(c) would not protect John Doe defendants, because a plaintiff could argue that the unknown defendant received “informal notice” from general knowledge of the lawsuit, even if the defendant did not know that he himself was possibly an unknown defendant. Costa Crociere maintains that fair administration of law mandates a result in its favor, and that only a decision based on sympathy rather than law could result in a victory for Krupski. It states that Krupski “got herself into the predicament in which she finds herself,” by failing to sue the proper party within the statute of limitations period, and that her claim should fail because in an adversarial system, when a party fails to protect her own interests, she must suffer the consequences.
The Supreme Court’s decision will have important consequences regarding whether an amendment to a complaint “relates back” under Rule 15(c). If the Court finds for Krupski, it could significantly ease the burden for plaintiffs to bring claims against corporate defendants with multiple identities. A decision for Costa Crociere may make it easier for corporate defendants to raise a statute of limitations defense. Either way, the Supreme Court’s decision in this case will clarify the scope of “mistake” in Rule 15(c).