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FOREMOST-MCKESSON INC. v. ISLAMIC REPUBLIC OF IRAN

March 7, 1991

FOREMOST-McKESSON INC., et al., Plaintiffs,
v.
THE ISLAMIC REPUBLIC OF IRAN, et al., Defendants



The opinion of the court was delivered by: FLANNERY

 THOMAS A. FLANNERY, UNITED STATES DISTRICT JUDGE

 This matter comes before the Court on Plaintiffs' Motion for Leave to Amend the Complaint and Defendants' Motion for Leave to File Discovery Concerning Personal Jurisdiction. Upon consideration of plaintiffs' motion, defendants' opposition thereto, plaintiffs' reply, defendants' motion, plaintiffs' reply thereto, defendants' reply, argument in open court, the entire record herein, and for the reasons stated in this memorandum, this Court will grant plaintiffs' Motion for Leave to Amend the Complaint and deny defendants' Motion for Leave to File Discovery Concerning Personal Jurisdiction.

 I.

 Foremost-McKesson ("McKesson") is suing the Islamic Republic of Iran ("Iran") for losses connected with McKesson's partial ownership interest in Sherkat Sahami Labiniat Pasteurize Pak (hereafter "Pak Dairy"). *fn1" Specifically, McKesson alleges that Iran illegally expropriated McKesson's equity interest in Pak Dairy and that Iran owes McKesson cash and stock dividends up to the judicially determined date of expropriation.

 McKesson and Overseas Private Investment Corporation ("OPIC") brought the action in 1982. The action was stayed while plaintiffs presented their claims to the Iran-United States Claims Tribunal. The Tribunal ruled in 1986 that no expropriation had occurred by January 19, 1981 (the last date of the Tribunal's jurisdiction). The Tribunal also ruled that Iran owed McKesson damages for failure to deliver cash and stock dividends. In April 1988, McKesson filed a Motion for Partial Summary Judgment, thereby reactivating this suit. This Court held that motion in abeyance. In response, Iran filed a motion to strike its 1982 answer, and a motion to stay proceedings. Both of Iran's motions were denied. Iran then filed motions to amend its answer and to dismiss for lack of jurisdiction under the Foreign Sovereign Immunities Act ("FSIA"). The Court allowed Iran to amend its answer, but denied Iran's motion to dismiss. Iran then filed an interlocutory appeal.

 On June 15, 1990, the Court of Appeals affirmed in part and remanded in part. Foremost-McKesson, Inc. v. Islamic Republic of Iran, 284 U.S. App. D.C. 333, 905 F.2d 438 (D.C. Cir. 1990). The Circuit affirmed all of this Court's holdings, except one. The Circuit remanded on the issue of "whether the government of Iran exercised the necessary degree of control over the other defendants to create a principal/agent relationship and thus permit the district court to deem Iran responsible for their actions." Id. at 445. (quoting this Court's November 8, 1988 memorandum opinion). The Circuit agreed that this Court had correctly framed the issue. The Circuit, however, remanded the case back to this court to make further factual determinations regarding Iran's control over the other defendants.

 Following the remand, McKesson filed a Motion for Leave to Amend the Complaint on December 13, 1990. Iran filed its opposition on January 10, 1991, and McKesson replied on January 25, 1991.

 Iran filed a Motion for Leave to File Discovery Concerning Personal Jurisdiction on January 11, 1991. McKesson filed its opposition on January 25, 1991.

 II.

 McKesson moves to amend its complaint to include pertinent events that have occurred since the original complaint was filed in 1982. Iran opposes two of the amendments suggested by McKesson: 1) an amendment which would increase the amount of damages claimed by plaintiffs to cover McKesson's full 31% percent ownership interest in Pak Dairy, whereas the original complaint sought recovery for only 19.84% percent of McKesson's ownership interest (that portion of the equity in Pak Dairy in which both McKesson and its co-plaintiff, OPIC, have an interest); and 2) an amendment that would state another cause of action (based on the same facts) alleging that Iran tortiously interfered with McKesson's rights and interests as a minority shareholder in Pak Dairy. Iran opposes these two amendments on the grounds of: 1) undue delay; 2) prejudice; and 3) as to the tortious interference claim, futility of the proposed amendment.

 Fed. R. Civ. R. 15(a) states that leave to amend a complaint "shall be freely given when justice so requires." Id. The Supreme Court has stated

 
In the absence of any . . . reason -- such as undue delay, . . . undue prejudice, . . [or] futility of the amendment . . . the leave [to Amend] sought should, as the rules require, be 'freely given.'

 Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962). Moreover, "it is common ground that Rule 15 embodies a generally favorable policy toward amendments." Davis v. Liberty Mutual Ins. Co., 276 U.S. App. D.C. 394, 871 F.2d 1134, 1136-37 (D.C. Cir. 1989). ...


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