ORDER AND OPINION GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT, AND GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS Plaintiff Boyer Works USA, LLC (“Plaintiff”) instituted this suit on September 7, 2021, against Defendants Rubik’s Brand Limited (“RBL”), Spin Master Corporation (“SMC”), Spin Master Toys UK Limited (“SMTUK”), and Spin Master, Inc. (“SMI”), asserting claims under the Lanham Act, 15 U.S.C. §1119, and Sherman and Clayton Antitrust Acts, 15 U.S.C. §§1, 2, 15 (ECF No. 1). On September 23, 2021, Plaintiff filed an amended complaint (“FAC”), as of right (ECF No. 23), and on October 22, 2021, Defendants moved to dismiss the FAC for improper service of process against Defendants RBL, SMC, and SMTUK (R. 12(b)(5)); lack of personal jurisdiction over all Defendants (R. 12(b)(2)); failure to state a claim against Defendants RBL, SMC, and SMI (R. 12(b)(6); and lack of subject matter jurisdiction (R. 12(b)(1)) (ECF No. 29). Rather than filing an opposition, on November 5, 2021, Plaintiff instead attempted to file a second amended complaint (“SAC”), without Defendants’ consent and without seeking leave of Court, to cure the deficiencies identified in Defendants’ motion. The SAC would have added new substantive and jurisdictional allegations, corrected the names of existing defendants, and named new Spin Master-related defendants (ECF No. 35). The district court Clerk rejected the filing, however, for failure to comply with Fed. R. Civ. P. 15 (ECF No. 41). Plaintiff failed to oppose Defendants’ motion within the 14 days permitted under Local Rule 6.1(b). Defendants nevertheless filed a Reply on November 12, 2021, urging me to grant their unopposed motion (ECF No. 50). Thereafter, on November 16, 2021, Plaintiff moved for leave of Court to file its proposed second amended complaint (“SAC”). Accordingly, before me now are two motions: Plaintiff’s motion to amend or correct the FAC pursuant to Fed. R. Civ. P. 15(a)(2) (ECF No. 51), and Defendants’ pending motion to dismiss (ECF No. 29). I address each of the motions in turn, and for reasons provided below, the motion for leave is granted, and the motion to dismiss is granted in part and denied in part. I. Motion for Leave to Amend A. Legal Standard Rule 15 of the Federal Rules of Civil Procedure permits a party to amend a pleading once as a matter of course, and in all other cases, a party may “amend its pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(1), (2). However Rule 15(a)(2) further provides that the “court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). Although leave to amend should be liberally granted, district courts nevertheless “should generally…den[y leave] in instances of futility, undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, or undue prejudice to the non-moving party.” Banco Safra S.A.-Cayman Islands Branch v. Samarco Mineracao S.A., 849 Fed. Appx. 289, 295-96 (2d Cir. 2021) (quoting United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 28 (2d Cir. 2016)). B. Analysis Plaintiff argues that it should be granted leave because it seeks to file its SAC in direct response to Defendants’ MTD, and no prejudice, undue delay, or futility warrants denying leave. See Motion to Amend/Correct First Amended Complaint (“Mot.”), at 13-15, ECF No. 52. It further argues that Defendants’ motion to dismiss be deemed moot. Id. Plaintiff states that “[i]t is Second Circuit law that in these exact circumstances, leave to amend a complaint pursuant to Fed. R. Civ. P. 15(a) should be granted.” Id. at 13. For this proposition, Plaintiff cites Pettaway v. Nat’l Recovery Sols., LLC, 955 F.3d 299, 303 (2d Cir. 2020). Pettaway requires no such thing because this case does not present the “exact [same] circumstances.” To begin, in Pettaway, the plaintiff had filed an amended complaint as of right in response to a motion to dismiss; however, the district court Clerk refused to docket the amended complaint due to form defects. See id. Here, in contrast, Plaintiff exhausted its amendment as of right when it filed its FAC. The docket Clerk correctly rejected Plaintiff’s attempt to file its SAC because it had obtained neither Defendants’ consent nor leave of Court. Pettaway also is distinguishable because the primary issue on appeal was whether a district court is required to deem a pending motion to dismiss moot after an amended complaint is filed as of right. See id. The Second Circuit held that a district court is not so required, stating that district courts have “the option of either denying a pending motion to dismiss as moot or evaluating the motion in light of the facts alleged in the amended complaint” because “[t]his is a sound approach that promotes judicial economy by obviating the need for multiple rounds of briefing addressing complaints that are legally sufficient.”1 Pettaway is inapposite and does not require that I accept Plaintiff’s untimely amendment, nor does it require me to deem Defendants’ motion moot, if I exercise discretion to allow the amendment. As to the merits of Plaintiff’s request for leave, Plaintiff is correct that Rule 15′s liberal spirit generally favors amendments because they “tend to facilitate a proper decision on the merits[,]” See, e.g., Cmty. Ass’n Underwriters of Am. v. Main Line Fire Prot. Corp., No. 18-CV-4273, 2020 U.S. Dist. LEXIS 156882, at *11 (S.D.N.Y. Aug. 28, 2020) (quoting and citing Foman v. Davis, 371 U.S. 178, 181-82 (1962)). That said, it remains “ within the sound discretion of the district court whether to grant or deny leave to amend.” Zahra v. Town of Southold, 48 F.3d 674, 685 (2d Cir. 1995). District courts may deny leave to amend where there is a showing a undue delay or bad motive, prejudice, or futility. See id. Accordingly, I consider whether there is any basis for denying Plaintiff’s motion. Undue Delay or Bad Motive Plaintiff’s motion before the Court undoubtedly is delayed; however, “mere delay,…absent a showing of bad faith or undue prejudice, does not provide a basis for the district court to deny the right to amend.” Richardson Greenshields Securities, Inc. v. Lau, 825 F.2d 647, 653 n.6 (internal citations omitted). Plaintiff contacted Defendants seeking consent shortly after Defendants filed their motion to dismiss. Plaintiff therefore did not delay in providing Defendants with notice of its intentions. Defendants refused to consent, citing nonfrivolous grounds of futility. To be sure, Plaintiff offers no explanation for its subsequent delay in moving for leave of Court; however, I find this delay immaterial and not cause for denying the motion. I further find no evidence of bad motive, given that the SAC aims to cure the deficiencies identified in the motion to dismiss. Prejudice In addition, Defendants will not be prejudiced in any legally relevant respect. “[P]rejudice alone is insufficient to justify a denial of leave to amend; rather, the necessary showing is ‘undue prejudice to the opposing party.’” A.V. by Versace, Inc. v. Gianni Versace S.p.A., 87 F. Supp. 2d 281, 299 (S.D.N.Y. 2000) (emphasis in original) (internal citations omitted); see also Agerbrink v. Model Serv. LLC, 155 F. Supp. 3d 448, 454 (S.D.N.Y. 2016). In determining what constitutes prejudice, a court considers whether an amendment would “(i) require the opponent to expend significant additional resources to conduct discovery and prepare for trial; (ii) significantly delay the resolution of the dispute; or (iii) prevent the plaintiff from bringing a timely action in another jurisdiction.” Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993) (citations omitted). “But mere allegations that an amendment will require the expenditure of additional time, effort, or money do not constitute ‘undue prejudice.’” Cardwell v. Davis Polk & Wardwell LLP, No. 19-CV-10256, 2021 U.S. Dist. LEXIS 183277, at *41 (S.D.N.Y. Sept. 23, 2021) (internal quotation marks and alteration omitted) (quoting A.V. by Versace, Inc. v. Gianni Versace, 87 F. Supp. 2d 281, 299 (S.D.N.Y. 2000)). None of the Block factors are implicated by Plaintiff’s proposed SAC. This litigation is in its infancy, heretofore comprised of attempts to properly file pleadings on the docket and pre-answer motion practice. The parties have not engaged in any discovery or even appeared before me. Allowing the amendment will not require the parties to expend any additional resources or delay resolution of the dispute, because as discussed below, I will consider the merits of Defendants’ motion in light of the new allegations. Finally, I know of no other pending litigation that would be impeded or impacted by allowing the amendment. Futility Finally, with respect to futility, an amendment to a pleading is futile if the proposed claim could not withstand a motion to dismiss under Fed. R. Civ. P. 12(b)(6). State St. Global Advisors Trust Co. v. Visbal, 431 F. Supp. 3d 322, 334 (S.D.N.Y. 2020) (citing Lucente v. Int’l Bus. Machines Corp., 310 F.3d 243, 258 (2d Cir. 2002)). To assess whether Plaintiff’s amendment would be futile effectively requires me to address the merits of Defendants’ pending motion to dismiss. Accordingly in the interest of judicial economy, I grant Plaintiff’s motion for leave and consider Defendants’ motion in light of the allegations in the proposed SAC. See Pettaway, 955 F.3d at 303. II. Motion to Dismiss Defendants move to dismiss the FAC (now SAC) for improper service of process against Defendants RBL, SMC, and SMTUK (R. 12(b)(5)); lack of personal jurisdiction over all Defendants (R. 12(b)(2)); failure to state a claim against Defendants RBL, SMC, and SMI (R. 12(b)(6); and lack of subject matter jurisdiction (R. 12(b)(1)). Plaintiff obviously has not served, nor attempted to serve, the SAC. The motion to dismiss under R. 12(b)(5) is denied as moot. Subject matter jurisdiction is a threshold question, which must be addressed before the merits, see Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (rejecting the “doctrine of hypothetical jurisdiction” — assuming jurisdiction for the purposes of deciding the merits — because “it carries courts beyond the bounds of authorized judicial action and thus offends fundamental principles of separation of powers”). However, the Supreme Court has stated that in certain circumstances, it may be appropriate and permissible for a district court to address challenges to personal jurisdiction prior to subject matter jurisdiction, particularly where the former are simple and the latter complex, because both go to the ultimate question of a court’s power to entertain and decide a case. See Ruhrgas Ag v. Marathon Oil Co., 526 U.S. 574, 588 (1999) (holding that a district court does not abuse its discretion by disposing of a case on personal jurisdiction grounds without first establishing subject-matter jurisdiction because personal jurisdiction is “an essential element of the jurisdiction of a district…court without which the court is powerless to proceed to an adjudication”) (cleaned up). Accordingly, I exercise my discretion to address the challenge to personal jurisdiction, and grant the motion to dismiss on these grounds. RELEVANT FACTS The nub of the instant dispute is simple: Defendants, or their predecessors-in-interest, held a patent on a toy called the Rubik’s Cube. Although the patent has since expired, one or more Defendants holds a trademark registration pertaining to that toy. Plaintiff sells a markedly similar product, the Boyer’s SpeedRipper Puzzle, and primarily does so on Amazon.com. Plaintiff claims that one or more of the Defendants caused Amazon to remove Plaintiff’s product listing for trademark infringement, preventing Plaintiff from selling its toy on Amazon, and thereby depriving Plaintiff of substantial profits. Because of the limited basis for my decision, I include only the allegations of the SAC (ECF No. 53-1) that are relevant to whether I have personal jurisdiction over the Defendants named in the SAC. The Defendants Defendant Rubik’s Cube Limited is a limited liability company organized under the laws of the United Kingdom, with its principal place of business at 7 Lambton Place, London, England W11 2SH. Rubik’s sells the famous “Rubik’s Cube” and related merchandise. SAC 6. RBL’s predecessor-in-interest registered the mark at issue in 1984, and it was renewed in 2014. Id.
77-78. Defendant Spin Master Products is a large, multinational toy and entertainment company started in 1994 that designs and sells children’s lifestyle products and toys (“Spin Master Products”) under their well-known brands, as well as under their licensed properties, such as Flutterbye Fairy, Bunchems, Hatchimals, Paw Patrol, Twisty Petz, Air Hogs, and Rubik’s Cube. Id. 7. It is located at 225 King Street West, Suite 200, Toronto, Ontario M5V 3M2. Id. 8. Defendant Spin Master Corp. is a limited liability company organized in Canada located at 225 King Street West, Suite 200, Toronto, Ontario M5V 3M2. Id. 9. It is also a multinational public company listed on the Canadian stock exchange. Spin Master Corp. generates upwards of $1.5 billion annually. Spin Master Corp. has over 1,800 employees in 28 offices globally and distributes products in more than 190 countries. Spin Master Corp. is a children’s entertainment company best known for brands such as PAW Patrol®, Bakugan®, Kinetic Sand®, Air Hogs®, Hatchimals® and GUND®, and is the toy licensee for other popular properties. Spin Master Corp.’s division, Spin Master Entertainment, creates and produces multiplatform content for children, including the preschool television show PAW Patrol, which airs regularly on Nickelodeon, and which recently was featured in a full-length movie shown across the United States, including in New York. Additionally, Spin Master Corp. has an Activities, Games & Puzzles and Plush Division which sells highly popular toys both online and in retail stores globally, and which are sold to consumers in New York. Spin Master Corp. also has an established digital presence anchored by the Toca Boca® and Sago Mini® brands, which combined have more than 25 million monthly active users.
