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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`In re: Refrigerant Compressors
`Antitrust Litigation
`
`Case No. 2:09-md-02042
`
`Honorable Sean F. Cox
` United States District Court
`
`___________________________/
`
`MEMORANDUM OPINION
`REGARDING THE COURT’S JUNE 7, 2012 ORDER
` (D.E. NO. 294)
`
`On June 7, 2012, this matter came before the Court on “Defendants’ Motion To Dismiss
`
`The Indirect Purchaser Plaintiffs’ Consolidated Amended Complaint” (D.E. No. 162). The
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`motion had been fully briefed by the parties some time ago. While the motion makes numerous
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`challenges to the Indirect Purchasers’ (“IP”) Plaintiffs’ current operative complaint, at the June
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`7, 2012 hearing, the Court addressed only the issue of whether the IP Plaintiffs’ current operative
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`complaint sufficiently alleges an antitrust conspiracy under Twombly.1
`
`Following the hearing, this Court ruled that the IP Plaintiffs’ Second Consolidated
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`Amended Complaint fails to state a claim under Twombly, except as to the claims against
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`Defendants Panasonic Corporation and Embraco North America, Inc., for the approximately
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`three-year period set forth in their respective plea agreements. Moreover, while the IP Plaintiffs’
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`response brief contained a footnote making a blanket statement that IP Plaintiffs “reserve the
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`right to amend” their complaint “should any portion of Defendants’ motion be granted,” they
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`have not properly requested leave to file an amended complaint and it is not the Court’s role to
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`1Bell Atl Corp. v. Twombly, 550 U.S. 544 (2007).
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`initiate amendments or give legal advice to the parties. Thus, the Court dismissed the claims
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`asserted in the IP Plaintiffs’ Second Consolidated Amended Complaint as to all Defendants with
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`the exception of Defendants Panasonic Corporation and Embraco North America, Inc.
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`Procedural Background
`
`BACKGROUND
`
`Beginning in February 2009, Direct Purchaser (“DP”) Plaintiffs and Indirect Purchaser
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`(“IP”) Plaintiffs filed complaints in various jurisdictions asserting claims against Defendants
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`based on an alleged price-fixing conspiracy. Those actions were consolidated for pretrial
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`proceedings by the United States Judicial Panel on Multidistrict Litigation. While both the DP
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`and IP Plaintiffs’ claims are based on the same alleged antitrust price-fixing conspiracy, they
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`assert different claims. The DP Plaintiffs assert federal antitrust claims, while the IP Plaintiffs
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`assert state-law claims only
`
`On November 2, 2009, the Court entered orders appointing Interim Lead Counsel for
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`both the DP and IP Plaintiffs. (Docket Entry Nos. 113 & 114).
`
`On May 26, 2012, the Court issued Case Management Order No. 1, which was agreed to
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`by counsel for the parties. (Docket Entry No. 152). It provides that the Direct and Indirect
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`Purchaser Plaintiffs shall separately file Master Amended Complaints including each Defendant
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`no later than June 30, 2012. (Id. at 8). It also provides that Defendants may thereafter file
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`motions to dismiss the master amended complaints. (Id. at 9-10).
`
`The DP Plaintiffs filed their “Master Amended Complaint” (“MAC”) (D.E. No. 155) on
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`June 30, 2010, asserting putative class action claims under the federal antitrust laws. The DP
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`Plaintiffs’ MAC asserted specific allegations as to the role of various Defendants in the alleged
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`conspiracy. (See MAC at 14-18).
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`On June 30, IP Plaintiffs filed their “Consolidated Amended Complaint” (“CAC”)
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`(Docket Entry No. 154), also alleging an antitrust price-fixing conspiracy but asserting claims
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`under state laws. The IP Plaintiffs’ CAC contains far less detailed factual allegations than the
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`DP Plaintiffs’ MAC and it refers to “Defendants” as a whole, rather than including allegations
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`specific to the various Defendants. (See CAC at 15-16).
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`In response to the DP and IP Plaintiffs’ respective complaints, Defendants filed several
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`motions to dismiss on August 30, 2010. As to the IP Plaintiffs, Defendants filed a joint motion
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`seeking to dismiss the CAC on multiple grounds, including that it fails to state a claim under
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`Twombly. (D.E. No. 162). That joint motion specifically challenged the IP Plaintiffs’ complaint
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`as failing to state a claim under Sixth Circuit precedent because it generically referred to
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`“Defendants” without alleging specific conduct undertaken by the seventeen different defendants
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`in this case. (See D.E. No. 162 at 8 where Defendants assert that “fatal to Plaintiffs’ claims is
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`their failure to allege any specific conduct undertaken by any particular Defendant. For
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`example, Plaintiff do not identify which Defendants purportedly attended any of the alleged
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`meetings. Instead, Plaintiffs just lump together all seventeen named defendants. Such
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`allegations are insufficient as a matter of law.”).
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`Whirlpool Corporation filed its own Motion to Dismiss, also asserting that neither the DP
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`or IP Plaintiffs’ operative complaints state a claim as to it under Twombly. (D.E. No. 165).
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`On August 20, 2010, the IP Plaintiffs’ filed a motion seeking leave to file a Second
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`Consolidated Amended Complaint, in order to modify a single paragraph alleging the type of
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`products that one Defendant manufactures. (D.E. No. 159). The IP Plaintiffs did not seek to
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`include any other allegations at that time. The IP Plaintiffs attached a copy of their proposed
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`pleading to that motion. (Id.).
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`On September 9, 2010, Defendants stipulated to allowing the IP Plaintiffs to file their
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`Second Consolidated Amended Complaint (“SCAC”). The IP Plaintiff filed their SCAC on
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`September 21, 2010. (Docket Entry No. 174).
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`On October 29, 2010, the IP Plaintiffs filed their brief in opposition to the Defendants’
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`Joint Motion to Dismiss. (D.E. No. 189). In opposing the Twombly challenge in that motion, IP
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`Plaintiffs asked the Court to consider the factual allegations in the DP Plaintiffs’ complaint. In a
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`footnote on the last page of that brief, the IP Plaintiffs stated that they “respectfully reserve the
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`right to amend” their complaint “should any portion of Defendants’ motion be granted.” (Id. at
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`49 n.60). The IP Plaintiffs filed their response to Whirlpool Corporation’s motion on that same
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`date and, in a footnote on page nine of their brief, stated that if the Court concludes they have not
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`stated a claim as to Whirlpool, they “would request leave to amend the [S]CAC to include more
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`specific Whirlpool-related allegations.” (D.E. No. 188).
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`Although buried in footnotes, those blanket statements were not overlooked by
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`Defendants. Defendants objected. For example, Whirlpool Corporation’s Reply Brief directed
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`the Court – and thus the IP Plaintiffs and their Counsel – to authority providing that the Sixth
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`Circuit disfavors such bare requests and they are not a substitute for a properly filed motion for
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`leave to file an amended complaint. (D.E. No. 206 at 10) (citing Begala v. PNC Bank, Ohio,
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`N.A., 214 F.3d 776 (6th Cir. 2000); D.E. & J. Ltd. P’ship v. Conaway, 284 F.Supp.2d 719 (E.D.
`
`Mich. 2003); La. Sch. Emps.’ Ret. Sys. v. Ernst & Young, LLP, 622 F.3d 471, 486 (6th Cir.
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`2010)). It also advised that the IP Plaintiffs had failed to comply with Local Rule 15.1 by not
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`filing a formal motion and attaching a copy of their proposed pleading.
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`Nevertheless, IP Plaintiffs did not file a motion seeking leave to file an amended
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`complaint either during or after the briefing of the motions.
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`The Court addressed the Defendants Joint Motion to Dismiss the DP Plaintiffs’ claims
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`first. It issued an Opinion & Order regarding that motion on June 13, 2011.
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`Due to other matters on this Court’s docket,2 a hearing on the remaining motions was
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`delayed. On April 3, 2012, the Court issued a notice advising that it would hear the pending
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`motions on June 7, 2012. The Court’s docket manager advised counsel that, due to the number
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`and complexity of the motions, the hearings would held over a number of days. Counsel were
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`advised that, at the June 7, 2012 hearing, the Court would be addressing the Twombly challenge
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`asserted in the Defendants’ Joint Motion to Dismiss the IP Plaintiffs’ SCAC.
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`No motion seeking leave to amend was filed prior to the June 7, 2012 hearing.
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`At the June 7, 2012 hearing, the Court addressed the Twombly challenge to the IP
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`Plaintiffs’ operative complaint. Counsel for the IP Plaintiffs indicated that various allegations in
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`the DP Plaintiffs’ June 30, 2010 Master Amended Complaint relate to specific meetings of the
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`various defendants and that, although those allegations are not in the IP Plaintiffs’ complaint,
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`“that’s something we intend to cure.” (Hrg. Tr. at 6). Counsel further stated that “we have an
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`amended complaint that we intend to add a number of allegations to.” (Id.). In support of IP
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`Plaintiffs’ argument that their complaint survives a Twombly challenge, Counsel then attempted
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`to discuss a document that was not referenced in either the IP Plaintiffs’ briefs or its complaint.
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`When asked when IP Plaintiffs had filed a motion seeking leave to file an amended
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`2This Court currently has two MDL actions.
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`complaint, Counsel responded, “I am today asking the Court for leave to amend my pleadings.”
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`(Id. at 8). The Court noted that IP Plaintiffs have not filed a motion seeking leave to file an
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`amended complaint, have not submitted a proposed amended complaint, and are asking the Court
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`to consider allegations in another party’s complaint to determine whether the IP Plaintiffs’ own
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`complaint meets the applicable pleading standard:
`
`THE COURT:
`
`MR. BATTIN:
`
`THE COURT:
`
`MR. BATTIN;
`
`. . . .
`
`I heard about the negotiations. But I mean you haven’t
`filed a motion for leave to file an amended complaint. And
`you’re telling me that in examining your complaint as to
`whether or not it meets the Twombly standard, I should
`incorporate Mr. Fink’s complaint and then evaluate
`whether or not your complaint meets the Twombly
`standard.
`
`Certain of the allegations in Mr. Fink’s complaint as well
`as the guilty pleas, your Honor. As well as the fact that the
`Courts already decided – we have the exact same
`allegations – I mean, the exact same underlying harm we’re
`alleging as the direct purchasers, your Honor. And the
`Court has already ruled –
`
`You don’t have the exact same allegations as Mr. Fink does
`in his complaint.
`
`We don’t currently have the exact same allegations, your
`Honor. One question I would ask the Court is; every time
`there is an event in the case should we as indirect
`purchasers move to amend our complaint to add each
`individual allegation as it arises or should we assume that
`the Court will take judicial notice of guilty pleas and
`amendments in the direct purchasers’ case?
`
`THE COURT:
`
`So you’re asking me how you should proceed?
`
`(6/7/12 Hrg. Tr.).
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`The Allegations In The SCAC
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`The SCAC, filed on September 21, 2010, is the operative complaint on behalf of the IP
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`Plaintiffs. (D.E. No. 174). Based on the alleged antitrust price-fixing conspiracy, IP Plaintiffs
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`assert claims under state law antitrust and consumer protections acts, and assert unjust
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`enrichment claims.
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`The SCAC describes the nature of the case as follows. This case arises from “a long-
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`running, world-wide conspiracy” among Defendants “to fix, raise, maintain, and/or stabilize the
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`prices of, and to allocate customers and markets for, Hermetic Compressors,” thus artificially
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`raising the prices for Hermetic Compressors and products containing Hermetic Compressors.”
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`(SCAC at ¶ 1). The IP Plaintiffs allege that the conspiracy was effective and that “end-payor
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`purchasers of Hermetic Compressor Products were among its many victims.” (SCAC at ¶ 2).
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`“The Hermetic Compressor is the critical engine in refrigeration products.” (SCAC at ¶ 3).
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`“Defendants sold Hermetic Compressors through a number of channels, including in the
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`refrigerator and freezer channel (the ‘R&F’ channel or ‘R&F Market’), which is dominated by a
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`few large Original Equipment Manufacturers (‘OEMs’), including Electrolux and General
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`Electric.” (SCAC at ¶ 4). “Sales of Hermetic Compressors in the R&F channel involve a yearly
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`bidding process by which the OEMs invite Defendants to compete for each OEM’s yearly
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`compressor needs. The OEMs invite all the manufacturers of Hermetic Compressor to
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`participate in the bidding at a location and time of the OEM’s choosing. These negotiations are
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`critical for buyers and sellers alike as the prices at which Hermetic Compressors are sold to the
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`OEMs for the entire year are determined in the course of a few days. All five Defendants
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`actively participated in these meetings.” (SCAC at ¶ 5). “Defendants, however, created a sham
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`bidding system, secretly meeting before the annual contract negotiations, sharing bids with one
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`another and agreeing upon prices. In addition, Defendants allocated among each other
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`respective shares of the OEM market.” (SCAC at ¶ 6). As a result, “prices between 1996 and
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`2009 were artificially inflated. This overcharge was then passed on to end payors in the form of
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`inflated prices for Hermetic Compressors and products containing them, such as refrigerators and
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`freezers.” (SCAC at ¶ 7).
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`The SCAC asserts the following counts: 1) “Violation of State Antitrust Statutes” (Count
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`I), which asserts antitrust claims under the laws of 25 different states; 2) “Violation of State
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`Consumer Protection and Unfair Competition Statutes” (Count II), which asserts claims under
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`the consumer protection acts of 11 different states; and 3) “Unjust Enrichment” (Count III).
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`The SCAC states that the IP Plaintiff seek to bring a class action on behalf of the
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`following class:
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`All persons and entities that purchased Hermetic compressors (“Hermetic
`Compressors”) or products that contained Hermetic Compressors as an end payor,
`and not for resale, in the states of Arizona, Arkansas, California, District of
`Columbia, Florida, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts,
`Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New
`Mexico, New York, North Carolina, North Dakota, Puerto Rico, Rhode Island,
`South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin at any
`time from January 1, 1996 through December 31, 2009 from any Defendant or
`any current or former subsidiary or affiliate thereof, or any co-conspirator.
`
`Excluded from the Class are Defendants, their parent companies, subsidiaries and
`affiliates, any co-conspirators, federal governmental entities and instrumentalities
`of the federal government, states and their subdivisions, agencies, and
`instrumentalities, person who purchased Hermatic Compressors directly, and
`persons who purchased Hermetic Compressors indirectly for resale.
`
`(SCAC at ¶ 130). The SCAC further states that “[i]n the alternative, Plaintiffs may seek the
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`certification of subclasses.” (SCAC at ¶ 131).
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`In the SCAC, the IP Plaintiffs allege the following factual allegations as to the alleged
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`antitrust price-fixing conspiracy:
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`67.
`
`68.
`
`69.
`
`In an effort to increase revenues, Defendants banded together to rig bids
`made to OEMs prior to negotiations.
`In effectuating the conspiracy, the Defendants met secretly in order to
`conceal their bid rigging from the OEMs and the market. Throughout the
`Class Period, Defendants regularly met to agree on pricing of, and market
`allocation strategies for, Hermetic Compressors.
`These conspiratorial meetings often occurred directly before contract
`negotiations with the OEMs and, for obvious reasons, were not disclosed
`to the OEMs or the public. During the course of these meetings,
`Defendants discussed general strategies in negotiating the coming years’
`contracts with the OEMs, and shared their proposed bids.
`In 2004 and 2005, for example, Defendants’ including Tecumseh and
`Embraco, met in Europe prior to negotiations with the OEMs. Defendants
`also engaged in telephone conversations to facilitate their bid rigging and
`market allocation scheme.
`In 2006, Defendants met again in Europe to discuss prices for Hermetic
`Compressors for 2007.
`72. Many of Defendants’ top executives participated in these meetings. A
`document from the Brazilian investigatory authority shows the following
`five executives, among others, were instrumental in furthering
`Defendants’ conspiracy:
`•
`Gerson Verissimo, the head of Defendant Tecumseh Brasil;
`•
`Ernesto Henzelmann, CEO and President of Embraco;
`•
`Valter Taranzano, CEO and President of ACC;
`•
`Lars Snitkjaer, Director of Sales and Marketing for
`Danfoss; and
`Kaisha Masuda, Sales and Marketing Associate at
`Panasonic.
`
`70.
`
`71.
`
`•
`
`73.
`
`74.
`
`In addition to fixing prices for Hermetic Compressors, Defendants also
`agreed to allocate market share.
`A further indication that Defendants were not vigorously competing
`against each other is the torpid manner in which they improved their
`products or responded to changing market conditions. According to an
`industry publication, “[c]ompared with air conditioning, the refrigeration
`industry has been slower with changes, both in terms of a shift towards
`scroll units, and also in terms of a shift towards efficiency and
`environmental protection.”
`
`(SCAC at ¶¶ 67-74).
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`LEGAL STANDARD
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`When ruling on a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6), the court must
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`construe the complaint in a light most favorable to the plaintiff and accept all the well-pleaded
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`factual allegations as true. Evans-Marshall v. Board of Educ., 428 F.3d 223, 228 (6th Cir. 2005).
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`However, “the tenet that a court must accept as true all of the allegations contained in a
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`complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
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`Although a heightened fact pleading of specifics is not required, the plaintiff must bring forth
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`“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
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`550 U.S. 544, 570 (2007).
`
`In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the
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`allegations in the complaint, although certain matters of public record, orders, exhibits attached
`
`to the complaint may also be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502
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`(6th Cir. 2001) (citing Nieman v. NLO, Inc., 108 F.3d 1546, 1554 (6th Cir. 1997)).
`
`ANALYSIS
`
`I.
`
`The IP Plaintiffs’s SCAC Fails To State A Claim Under The Applicable Pleading
`Standard, Except As To Two Defendants, For The Approximately Three-Year
`Period Set Forth In Their Respective Plea Agreements.
`
`The issue before the Court is whether the IP Plaintiffs’ operative complaint, the SCAC,
`
`sufficiently alleges an antitrust conspiracy under the pleading standard set forth in Twombly and
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`Iqbal.
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`Defendants contend that it does not. They contend that IP Plaintiff’s complaint
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`essentially contains two sets of allegations: 1) allegations regarding government investigations;
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`and 2) conclusory allegations that Defendants “conspired.”
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`Defendants first assert that the IP Plaintiffs’ allegations regarding government
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`investigations are irrelevant. Defendants contend that allegations about government
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`investigations carry no weight in pleading an antitrust conspiracy claim. Defendants cite several
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`cases wherein district courts have found such allegations immaterial or irrelevant to whether a
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`complaint sufficiently alleged a conspiracy claim. See, e.g, In re Graphics Process Units
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`Antitrust Litig, 527 F.Supp.2d 1011, 1024 (N.D. Cal. 2007) (Stating that an investigation by the
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`Antitrust Division of the DOJ “carries no weight in pleading an antitrust conspiracy claim,” and
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`explaining “it is unknown whether the indictment will result in indictments or nothing at all.”).
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`Defendants also contend that the remaining allegations in the SCAC do not satisfy the
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`applicable pleading standard. Defendants assert that IP Plaintiffs are required to allege the
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`specific time, place or person involved in the alleged conspiracy and that the Sixth Circuit has
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`dismissed antitrust complaints were plaintiffs failed to allege any specifics about the alleged
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`conspiracy. They direct the Court to In re Travel Agent Comm’n, Antitrust Litigation, 583 F.3d
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`896, 905 (6th Cir. 2009) and Total Benefits Planning Agency, Inc. v. Anthem Blue Cross and
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`Blue Shield, 552 F.3d 430, 438 (6th Cir. 2008). Defendants contend that IP Plaintiffs’ failure to
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`allege any specific conduct undertaken by any particular Defendant is fatal. They direct the
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`Court to Total Benefits, supra, and this Court’s decision in Mich. Div. – Monument Builders of
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`N. Am. v. Mich. Cemetery Ass’n, 458 F.Supp.2d 474, 485 (E.D. Mich. 2006).
`
`In response, IP Plaintiffs assert that the Court should consider their allegations as to
`
`governmental investigations. They also note that since SCAC was filed, two Defendants have
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`entered criminal guilty pleas: 1) Panasonic Corporation; and 2) Embraco North America, Inc.
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`They assert that the Court should take judicial notice of those guilty pleas.
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`The IP Plaintiffs also assert that in evaluating whether their complaint meets the
`
`applicable pleading standard, the Court should consider the more specific and detailed factual
`
`allegations in the DP Plaintiffs’ MAC. (IP Pls.’ Br. at 28; 6/7/12 Hrg. Tr.).
`
`In their Reply Brief, Defendants state that, taking into account that the Court can take
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`judicial notice of their plea agreements, Defendants Panasonic and Embraco North America, Inc.
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`no longer dispute that IP Plaintiffs meet the applicable pleading standard for the approximately
`
`three-year period set forth in their respective plea agreements. (D.E. No. 204 at 2 & 3 n.2).
`
`Having considered the parties briefs, and oral argument on this issue, the Court concludes
`
`that the IP Plaintiffs’ SCAC fails to state a claim under Twombly, except as to the claims asserted
`
`against Defendants Panasonic Corporation and Embraco North America, Inc., for an
`
`approximately three-year period.
`
`“In the antitrust context, the Supreme Court has noted that although district courts must
`
`be ‘cautious before dismissing an antitrust complaint in advance of discovery,’ they must not
`
`forget that ‘proceeding to antitrust discovery can be expensive.” Michigan Division-Monument
`
`Builders of N.A. v. Michigan Cemetery Assoc., 524 F.3d 726, 731 (6th Cir. 2008) (quoting
`
`Twombly, 550 U.S. at 558)). “It specifically commented that ‘a district court must retain the
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`power to insist on some specificity in pleading before allowing a potentially massive factual
`
`controversy to proceed.’” Id.
`
`Where claims are based upon an alleged antitrust conspiracy, in order to survive a motion
`
`to dismiss, the allegations in the complaint “must be specific enough to establish the relevant
`
`‘who, what, where, when, how, or why.’” Carrier Corp., 673 F.3d at 445 (citing Total Benefits,
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`552 F.3d at 437)). “Furthermore, they must ‘specify how [each] defendant [was] involved in the
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`alleged conspiracy.’” Carrier Corp., 673 F.3d at 445 (citing In re Travel Agent Comm’n
`
`Antitrust Litig., 583 F.3d at 905)).
`
`The Court rejects the IP Plaintiffs’ position that this Court can consider the allegations in
`
`another party’s complaint in considering whether their own complaint satisfies the applicable
`
`pleading standard. This Court must evaluate whether the allegations in the IP Plaintiffs’ current
`
`operative complaint satisfies the applicable pleading standing.
`
`Unlike the DP Plaintiffs, the IP Plaintiffs’ operative complaint alleges a conspiracy but
`
`its allegations are vague and reference “Defendants” without specific factual allegations as to the
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`numerous individual defendants named in this case. (See SCAC at ¶¶ 67-74). Such “[g]eneric
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`pleading, alleging misconduct against defendants without specific as to the role each played in
`
`the alleged conspiracy” is insufficient to allege an antitrust conspiracy claim. Total Benefits, 552
`
`F.3d at 436-37; Michigan Division-Monument Builders of N.A. v. Michigan Cemetery Assoc.,
`
`458 F.Supp.2d 474, 485 (E.D. Mich. 2006) (dismissing antitrust conspiracy claim where
`
`plaintiffs used the term “defendants” to apply to numerous parties without specific allegations as
`
`to the individual defendants).
`
`While the IP Plaintiffs’ SCAC does not contain factual allegations specific as to the
`
`alleged wrongdoing by Defendants Panasonic Corporation and Embraco North America, Inc.,
`
`the Court concludes it is appropriate to take judicial notice of their plea agreements. Moreover,
`
`those two Defendants have withdrawn their Twombly challenge as to the approximately three-
`
`year period set forth in those plea agreements. Accordingly, the Court concludes that IP
`
`Plaintiffs have stated a claim against these two Defendants for the approximately three-year
`
`period set forth in their respective plea agreements.
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`2:09-md-02042-SFC Doc # 300 Filed 06/11/12 Pg 14 of 16 Pg ID 6813
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`II.
`
`The IP Plaintiffs Have Not Properly Requested Leave To File An Amended
`Complaint.
`
`At this stage of the litigation, IP Plaintiffs may amend their complaint “only with the
`
`opposing party’s written consent or the court’s leave. The court should freely give leave when
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`justice so requires.” Fed. R. Civ. P. 15(a). “The party requesting leave to amend must ‘act with
`
`due diligence if it wants to take advantage of the Rule’s liberality.’” D.E. & J Limited
`
`Partnership v. Conaway, 284 F.Supp.2d 719, 751 (E.D. Mich. 2003) (quoting Parry v. Mohawk
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`Motors of Mich., Inc., 236 F.3d 299,306 (6th Cir. 2000)). “Eastern District of Michigan Local
`
`Rule 15.1 further requires that a party seeking leave to amend a pleading provide the Court with
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`a copy of its proposed amended pleading.” D.E. & J Limited Partnership, 284 F.Supp.2d at 751.
`
`Here, the IP Plaintiffs have not filed a motion for leave to amend their SCAC, nor have
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`they presented the Court with any proposed amendments of their claims. Rather, in a footnote
`
`on the last page of their response brief, the IP Plaintiffs stated that they “respectfully reserve the
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`right to amend” their complaint “should any portion of Defendants’ motion be granted.” (Id. at
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`49 n.60).
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`The Sixth Circuit’s “disfavor of a such a bare request in lieu of a properly filed motion
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`for leave to amend was made clear in Begala v. PNC Bank, Ohio, N.A., 214 F.3d 776, 784 (6th
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`Cir. 2000).” Alliance for Children, Inc. v. City of Detroit Public Schools, 475 F.Supp.2d 655,
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`669 (E.D. Mich. 2007).
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`“What plaintiffs may have stated, almost as an aside,” to this Court in their brief in
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`opposition to the Defendants’ Joint Motion to Dismiss is not the proper procedure for requesting
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`leave to amend. Begala, 214 F.3d at 784; see also Louisiana Sch. Emp. Ret. Sys. v. Ernst &
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`Young, LLP, 622 F.3d 471, 486 (6th Cir. 2010). “”As the Begala decision stated in affirming the
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`2:09-md-02042-SFC Doc # 300 Filed 06/11/12 Pg 15 of 16 Pg ID 6814
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`district court’s dismissal of the plaintiff’s complaint with prejudice:
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`Had plaintiffs filed a motion to amend the complaint prior to th[e] Court’s
`consideration of the motions to dismiss and accompanies that motion with a
`memorandum identifying the proposed amendments, the Court would have
`considered the motions to dismiss in light of the proposed amendments to the
`complaint . . . Absent such a motion, however, Defendant was entitled to a review
`of the complaint as filed pursuant to Rule 12(b)(6). Plaintiffs were not entitled to
`an advisory opinion from the Court informing them of the deficiencies of the
`complaint and then an opportunity to cure those deficiencies.
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`Louisiana Sch. Emp. Ret. Sys., 622 F.3d at 486 (quoting Begala, 214 F.3d at 784) (emphasis in
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`original).
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`The IP Plaintiffs’ Counsel’s verbal request, at the June 7, 2012 hearing, to file an
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`amended pleading, without filing a motion for leave to amend and attaching a proposed pleading,
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`is also not the proper procedure for requesting leave to amend. Presumably, IP Plaintiffs’
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`Counsel knows this, as IP Plaintiffs’s Counsel actually followed the proper procedure when they
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`sought to leave to file the SCAC (i.e., the IP Plaintiffs filed a motion for leave to file an amended
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`complaint and attached their proposed amended complaint as an exhibit to that motion.).
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`Moreover, Defendants raised the impropriety of IP Plaintiffs’ bare request for leave to amend in
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`their briefs.
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`In sum, IP Plaintiffs never requested leave for additional amendments, and it is not the
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`district court’s role to initiate amendments. Total Benefits Planning Agency, Inc., 552 F.3d at
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`438. Nor is it appropriate for the Court to give Counsel legal advice as to when and how they
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`should seek to file an amended complaint. (See 6/7/12 Hrg. Tr.) (“One question I would ask the
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`Court is; every time there is an event in the case, should we as indirect purchasers move to
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`amend our complaint to add each individual allegation as it arises or should we assume that the
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`Court will take judicial notice of guilty pleas and amendments in the direct purchasers’ case?”).
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`2:09-md-02042-SFC Doc # 300 Filed 06/11/12 Pg 16 of 16 Pg ID 6815
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`S/Sean F. Cox
`Sean F. Cox
`United States District Judge
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`Dated: June 11, 2012
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`I hereby certify that a copy of the foregoing document was served upon counsel of record on
`June 11, 2012, by electronic and/or ordinary mail.
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`S/Jennifer Hernandez
`Case Manager
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`16
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