Many companies conduct business using several affiliates and subsidiaries at once. For example, one company may sign the contracts and provide project oversight, while employees of an affiliate actually staff the project and perform the work. When a dispute arises that necessitates the filing of litigation, it is critically important that you, as in-house counsel, ensure that your trial counsel understand your corporate structure and “who did what,” and that he or she names all of the potentially impacted companies as plaintiffs at the outset. If you realize midway through the case that one or more counts of the complaint should have been brought on behalf of a company other than the plaintiff you actually named, Pennsylvania and federal law may make it very difficult for you to bring that entity in later, leaving you with claims but no party in court to pursue them.
A motion for leave to amend a pleading in federal court is governed by Federal Rule of Civil Procedure 15(a). Rule 15(a)(2) makes clear that, although leave to amend should be liberally granted, it should only be granted “when justice so requires.” (A Rule 15(a)(2) motion is required except in the limited circumstances where amendment is permitted as “a matter of course,” as set forth in Rule 15(a)(1).) The counterpart in Pennsylvania’s state court system is Pa. R. Civ. P. 1033. Although Rule 1033 does not expressly specify the circumstances in which a court should permit an amendment to add a party, the courts have held that “the right to amend should be liberally granted at any stage of the proceedings unless there is an error of law or resulting prejudice to an adverse party,” as in Hill v. Ofalt, 85 A.3d 540, 557 (Pa. Super. 2014).
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