Hill v. Equitable Bank, N.A.

In 1982, seven investors (investors) (plaintiffs) sued the Equitable Bank, N.A. (Equitable) (defendant) in the United States District Court for the District of Delaware, alleging state and federal fraud and securities law violations in the sale of their interest in two limited partnerships. During the next three years, the investors amended their complaint and Equitable filed several actions against them in the United States District Court for the District of Maryland. Those claims, including a Racketeer Influenced and Corrupt Organizations Act (RICO) counterclaim, were transferred to and consolidated with the investors’ case against Equitable. In September 1985, three months after the cutoff date for amending the pleadings and four months before the trial was to begin, the investors sought leave to amend under Federal Rules of Civil Procedure (FRCP) 15(a) to add a RICO claim. Equitable opposed the motion, alleging undue delay and prejudice. Equitable specifically alleged that the amendment would prejudice it because it was so close to trial; it would increase its potential liability (RICO claims have treble damages and attorney’s fees liability); it would give the investors a tactical advantage; and it would necessitate another motion to dismiss and more discovery. Thereafter, the district court extended the time for Equitable to complete discovery to the end of January 1986 and postponed the trial date indefinitely.