Summary
The United States District Court for the District of South Dakota granted Plaintiffs’ motion for leave to file an amended complaint after the scheduling-order deadline. The court found good cause under Federal Rule of Civil Procedure 16(b)(4), concluding that Plaintiffs acted diligently and that amendment would not unduly prejudice Defendant. The court also determined that the proposed claims for promissory estoppel and breach of the implied covenant of good faith and fair dealing were not futile under South Dakota law.
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Practice areas
Questions Presented
- Whether Plaintiffs established good cause under Rule 16(b)(4) to modify the scheduling order and seek amendment fourteen days after the deadline.
- Whether allowing the amendment would unfairly prejudice Fastenal.
- Whether the proposed claim for breach of the implied covenant of good faith and fair dealing was futile under South Dakota law.
- Whether the proposed promissory-estoppel claim was futile under South Dakota law.
Holdings
- Plaintiffs demonstrated sufficient diligence and good cause to modify the scheduling order and file their motion to amend after the deadline.
- The proposed amendment would not cause undue prejudice to Fastenal.
- The proposed claim for breach of the implied covenant of good faith and fair dealing was not futile under South Dakota law.
- The proposed promissory-estoppel claim was plausible and therefore not futile.
Key quotations
“Federal Rule of Civil Procedure 15(a)(2) directs courts to “freely give leave [to amend] when justice so requires.”” (at 2)
“When a Rule 15 motion is brought after the court-ordered deadline, the court must also apply the “good cause” analysis under Rule 16(b).” (at 3)
“The primary measure of good cause is the movant’s diligence in attempting to meet deadlines.” (at 6)
“The application of this implied covenant allows an aggrieved party to sue for breach of contract when the other contracting party, by his lack of good faith, limited or completely prevented the aggrieved party from receiving the expected benefits of the bargain.” (at 9)
Factual background
Fastenal conducted an employee Super Bowl contest promising the winning team an all-expenses-paid trip to the Super Bowl for each team member and one guest. Fastenal initially announced that Plaintiffs were the winning team, but later retracted the announcement, accused Plaintiffs of cheating, and terminated their employment. Plaintiffs sought to amend their complaint to add promissory-estoppel and implied-covenant claims based on the contest announcement, alleged reliance, and revocation of the prize.
Procedural history
Plaintiffs filed the action in South Dakota state court asserting claims arising from Fastenal's employee Super Bowl contest. Fastenal removed the action to the District of South Dakota, which entered a Rule 16 scheduling order setting May 30, 2025, as the deadline to amend pleadings. Plaintiffs filed their motion to amend on June 13, 2025; the court found good cause, lack of undue prejudice, and nonfutility, and granted the motion.