Commercial Litigation and Arbitration

Appeals — Denial of Leave to Amend Reviewed De Novo If on Futility Grounds, Otherwise for Abuse of Discretion

HansaWorld USA, Inc. v. Carpenter, 2016 U.S. App. LEXIS 18950 (5th Cir. Oct. 20, 2016):


This court ordinarily reviews [*4]  a district court's denial of a motion for leave to amend a complaint for an abuse of discretion. City of Clinton v. Pilgrim's Pride Corp., 632 F.3d 148, 152 (5th Cir. 2010). If, however, the court below denied the motion "based solely on futility, we apply a de novo standard of review identical, in practice, to the standard used for reviewing a dismissal under Rule 12(b)(6)." Id. (citing Wilson v. Bruks-Klockner, Inc., 602 F.3d 363, 368 (5th Cir. 2010)). Under a Rule 12(b)(6) analysis, a complaint must allege enough facts that, if taken as true, "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A complaint that contains no more than "a formulaic recitation of the elements" or presents a "legal conclusion couched as a factual allegation" is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).

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