Schiavone v. Fortune
91 L. Ed. 2d 18, 1986 U.S. LEXIS 106, 477 U.S. 21 (1986)
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Rule of Law:
Under Federal Rule of Civil Procedure 15(c) (as it existed in 1986), an amendment to a pleading that changes the party against whom a claim is asserted relates back to the date of the original pleading only if the new party received notice of the action within the applicable statute of limitations period.
Facts:
- A cover story titled “The Charges Against Reagan’s Labor Secretary” appeared in the May 31, 1982, issue of Fortune magazine, which petitioners believed libeled them.
- “Fortune” is a trademark and an internal division of Time, Incorporated (Time), not a separate legal entity capable of being sued.
- The masthead of the magazine issue in question clearly identified Time, Inc. as the publisher.
- On May 9, 1983, the petitioners filed diversity libel complaints in federal court, naming only “Fortune” as the defendant.
- Under the applicable New Jersey law, the one-year statute of limitations for libel expired no later than May 19, 1983.
- On May 20, 1983, one day after the statute of limitations expired, petitioners' counsel mailed the complaints to Time's registered agent.
- Time's agent received the complaints on May 23, 1983, but refused service because Time was not named as a defendant.
- On July 18, 1983, petitioners amended their complaints to name “Fortune, also known as Time, Incorporated” as the defendant.
Procedural Posture:
- Petitioners filed three separate libel actions in the United States District Court for the District of New Jersey.
- Time, Incorporated moved to dismiss the amended complaints on the grounds that they were barred by the statute of limitations.
- The District Court granted the motions to dismiss.
- Petitioners' motion for reconsideration was denied by the District Court.
- Petitioners, as appellants, appealed the dismissals to the United States Court of Appeals for the Third Circuit, which consolidated the cases.
- The Court of Appeals affirmed the District Court's judgment in favor of Time, Incorporated, the appellee.
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Issue:
Does an amended complaint that corrects a defendant's name relate back to the date of the original complaint under Federal Rule of Civil Procedure 15(c) if the newly named defendant did not receive notice of the lawsuit until after the statute of limitations had expired, but within the time allowed for service of process?
Opinions:
Majority - Justice Blackmun
No, an amendment changing a party relates back under Rule 15(c) only if the new party received notice of the action within the original statute of limitations period. The plain language of Rule 15(c) requires that for an amendment to relate back, the party being added must receive notice 'within the period provided by law for commencing the action against him.' This phrase refers to the applicable statute of limitations, not the statute of limitations plus the time allowed for service of process under Rule 4. The Court's reasoning is based on a four-factor test derived from the rule: (1) the claim must arise from the same conduct, (2) the new party must have received notice so it will not be prejudiced, (3) the new party must have known it was the intended defendant, and (4) the second and third requirements must be fulfilled within the limitations period. Since Time did not receive notice of any kind until after the one-year limitations period had expired, the amendment did not relate back, and the claims are time-barred. The Advisory Committee's Note accompanying the 1966 amendment to the rule confirms this interpretation, stating the phrase means 'within the applicable limitations period'.
Dissenting - Justice Stevens
Yes, the amendment should relate back because the failure to include Time, Inc.'s full corporate name was a technical misdescription, not a true 'changing of the party,' and Time, Inc. had adequate notice within the period allowed for service of process. The majority’s strict construction creates a procedural trapdoor and revives a 'sporting theory of justice' that the Federal Rules were designed to eliminate. The phrase 'period provided by law for commencing the action against him' should reasonably be interpreted to include both the time for filing the complaint and the time allowed for serving it. Since Time, Inc.'s agent received the complaint and understood that Time, Inc. was the intended defendant well within the 120-day service period, and there was no prejudice, the purpose of Rule 15(c) is met. The majority’s holding frustrates the liberalizing purpose of the 1966 amendment to the rule, which was meant to prevent dismissals based on harmless pleading errors.
Analysis:
This decision established a strict, literal interpretation of Rule 15(c)'s notice requirement, creating a bright-line rule that notice to a newly-added party must occur within the statute of limitations itself. The ruling was widely criticized for producing harsh results contrary to the liberal pleading philosophy of the Federal Rules, as highlighted by the dissent. In direct response to this decision and the criticism it generated, Rule 15(c) was amended in 1991 to explicitly provide that the notice period includes the time for service of process under Rule 4(m), effectively overruling this case and adopting the dissent's position for future litigation.
