Post-Trial Amendment of Pleadings Permitted to Assert Alter-Ego Claim Against Bankrupt Defendant’s Individual Owners

Following a $30 million jury verdict and defendant's filing for bankruptcy, the court granted plaintiff's motion to amend its complaint to add defendant's co-owners as defendants along with alter ego and veil-piercing claims. "⁠[Plaintiff] explains that it learned of [defendant's] and the [defendant's owners'] alleged efforts to avoid liability only when it reviewed the bankruptcy filings.⁠ . . . [Defendant] counters that [plaintiff] was 'on clear notice before trial of the substantial risk that [defendant] would be unable to pay the enormous sums [plaintiff] was seeking. Had it wanted to hedge its bets by asserting claims against other entities, it should have sought leave to do so long before now.' But that argument entirely misses the point. Veil-piercing and alter-ego claims are not mere contingency plans for uncollectable defendants. They are specific theories of liability which, absent plausible grounds, would be frivolous to plead. [Plaintiff] argues that the alleged abuse of the corporate form -- the necessary fact that underlies veil-piercing and alter-ego claims -- only came to light later on. The Court certainly will not punish [plaintiff] for failing to assert a claim prior to having the evidence to back it up."

FieldTurf USA, Inc. et al v. Astroturf, LLC, 2-10-cv-12492 (MIED March 12, 2018, Order) (Murphy, USDJ)