Seventh Circuit Affirms Dismissal with Prejudice Under Rule 12(b)(6)

Federal district courts are supposed to grant leave to amend a complaint “freely … when justice so requires.” Fed. R. Civ. P. 15(a)(2). The Seventh Circuit has construed this directive to require, in most cases, that a plaintiff whose complaint has been dismissed under Fed. R. Civ. P. 12(b)(6) be given at least one opportunity to amend the complaint. See Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw. Ind., 786 F.3d 510, 519 (7th Cir. 2015). Dismissal with prejudice may be appropriate when it is clear from the face of the complaint that amendment would be futile, but the Seventh Circuit has emphasized that “[s]uch cases of clear futility at the outset of the case are rare” and denial of leave to amend at least once “will be reviewed rigorously on appeal.” Id. at 520.

The court’s recent decision in Haywood v. Massage Envy Franchising, LLC, No. 17-2402 (7th Cir. Apr. 10, 2018), is noteworthy for its seeming less-than-rigorous review of the dismissal with prejudice of a complaint alleging violations of Illinois and Missouri consumer fraud statutes. The plaintiffs in Haywood claimed that the defendant had violated both acts by advertising and selling one-hour massages that in fact lasted only 50 minutes. The defendant moved to dismiss the complaint for failure to state a claim, and the district court granted the motion with prejudice.

The Seventh Circuit affirmed, in an opinion by Judge William Bauer, joined by Judge Ilana Rovner, holding that the complaint was deficient under both the statutes and Fed. R. Civ. P. 9(b)’s heightened pleading standard. The court further held, with relatively little discussion, that the district court had not abused its discretion by dismissing the complaint with prejudice because the plaintiffs had not explicitly asked for leave to amend. Acknowledging Rule 15(a)(2)’s liberal approach to allowing amendment, the court explained that “[n]othing in Rule 15, nor in any of our cases, suggests that a district court must give leave to amend a complaint where a party does not request it or suggest to the court the ways in which it might cure the defects.” Slip Op. 10.

Judge Diane Sykes, who dissented on the merits, did not address whether dismissal with prejudice was warranted.

The takeaway from Haywood is clear: When opposing a Rule 12(b)(6) motion to dismiss, be sure to ask for leave to amend the complaint should the motion be granted and to describe the nature of the proposed amendments. The district court is likely to grant leave to amend in most cases, and, if it does not, its decision will be closely scrutinized on appeal. But, without an explicit request for leave to amend, don’t be surprised if the Seventh Circuit upholds the district court’s decision.

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