Private Jet Services Group, LLC, Plaintiff v. Tauck, Inc., Defendant

2024 DNH 049

• Court: District Court, D. New Hampshire
• Decided: June 12, 2024
• Docket: 20-cv-1015-SM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Private Jet Services Group, LLC, Plaintiff

v. Case No. 20-cv-1015-SM Opinion No. 2024 DNH 049

Tauck, Inc., Defendant

O R D E R

Private Jet Services Group (“PJS”) is a New Hampshire-based

private aircraft booking agent. It brought this breach-of-

contract action against Tauck, Inc., a Connecticut-based

provider of high-end domestic and international guided tours.

In general, the parties’ contracts contemplated that PJS would

provide, and Tauck would use, a dedicated aircraft to conduct a

minimum of fifty (50) tours of New Zealand for each of the 2019-

2022 tour seasons. On May 28, 2020, Tauck cancelled the parties

contracts and this litigation followed. In its complaint, PJS

alleges that Tauck breached those contracts in each of two

seasons: 2019 (count one) and 2020 (count two).

Pending before the court is PJS’s motion to amend its

complaint to add a new claim for unjust enrichment (arising out of Tauck’s conduct that began sometime after July 31, 2022 -

more than two years after the parties’ contracts had been

cancelled). For the reasons discussed, that motion is denied.

Background

I. Factual Background.

The facts giving rise to PJS’s claims against Tauck, as

well as the details of the parties’ contractual agreements, are

set forth at length in the court’s order dated September 30,

2022 (document no. 56). Those details need not be recounted.

It is sufficient to note the following.

In 2017, Tauck was looking for an aircraft charter agent to

arrange air transportation for the New Zealand portions of its

Australia/New Zealand tours. Tauck and PJS eventually reached

an agreement and, in January of 2018, the parties executed an

“Air Charter Services Blanket Purchase Agreement” (the “BPA”)

(document no. 21-3). That contract established the general

terms under which Tauck would book air transportation through

PJS for its clients. The BPA also contemplated that before

Tauck actually reserved any aircraft through PJS, the parties

would execute one or more “Statements of Work” which would

address the details of the parties’ relationship, payment terms,

and scheduling with respect to particular flight operations.

2 PJS and Tauck executed the Statement of Work (document no. 21-4)

in May of 2018 (the “SOW”). Among other things, the SOW

required Tauck to guarantee a minimum of fifty tours per year

and obligated it to pay PJS an agreed-upon sum for each “missed”

tour below that threshold. The contract’s term ran from January

13, 2019, through January 14, 2023, and applied to “2019-2022

Tauck Australia-New Zealand Grand Tour (NZ portion only) and

2019-2022 Tauck New Zealand Spotlight Tour.” Id. at 1.

On May 28, 2020, in the midst of the worldwide COVID-19

pandemic, Tauck invoked the “Adverse Economic Conditions”

provision contained in the Statement of Work and cancelled the

parties’ contracts in their entirety. This litigation ensued.

In count one of its complaint, PJS alleges that Tauck

employed its services for only 48 tours during the 2019 tour

season – two fewer than the parties’ agreed-upon minimum. In

count two of its complaint, PJS says Tauck breached the parties’

agreements during the 2020 tour season by using PJS’s services

for only 23 tours – 27 fewer that the 50-tour seasonal minimum.

PJS claims that it is owed roughly $265,000 in damages for the

2019 tour season and nearly $1.7 million in damages for the 2020

season. Tauck denies that it breached either of the parties’

contracts and says it is excused from performing under those

3 contracts, either because PJS breached first or because its

performance was rendered impossible by external events (i.e.,

the COVID-19 pandemic and New Zealand’s related decision to

close its borders to foreign travelers).

In short, then, the conduct about which PJS complains is

all confined to the 2019 and 2020 tour seasons and is based upon

the language of the parties’ contracts. As noted above, PJS now

seeks leave to amend its complaint to add a claim for unjust

enrichment, arising from Tauck’s alleged conduct following New

Zealand’s decision to reopen its borders to foreign travelers,

beginning in August of 2022.

II. Procedural Background.

PJS filed suit against Tauck on October 7, 2020. The

original scheduling order (document no. 10, approved on December

29, 2020) provided that PJS would be afforded until April 1,

2021 to amend its complaint. The dates for the close of

discovery, submission of summary judgment motions, and trial

were all subsequently extended. See First Amended Scheduling

Order (document no. 14); Second Amended Scheduling Order

(document no. 20). However, the date for amending the complaint

has remained consistent: April 1, 2021 - that is to say, more

4 than three years ago. Discovery closed roughly two and one-half

years ago, on November 10, 2021.

In September of 2022, the parties submitted cross-motions

for summary judgment that highlighted an unresolved question of

state common law. Those motions were denied, without prejudice,

and shortly thereafter the court certified the potentially

dispositive question of state law to the New Hampshire Supreme

Court. See Certification Order (document no. 58). That

question focused on whether the common law defenses of

impossibility, impracticability, and frustration of commercial

purpose were available to Tauck, given that the parties’

contracts contained a “force majeure” clause that protected only

PJS. The question presented was whether, by agreeing to that

one-sided force majeure clause, Tauck implicitly waived those

common law contract defenses.

Earlier this year, on April 23, 2024, the New Hampshire

Supreme Court answered the certified question. Private Jet

Services v. Tauck, Inc., 2024 WL 1725219 (N.H. Apr. 23, 2024).

In its opinion, the court held that the common law defenses of

impossibility, impracticability, and frustration of commercial

purpose remain available to contracting parties unless expressly

waived. It also concluded that a force majeure clause

5 protecting only one party to a contract does not, standing

alone, operate as such a waiver and, therefore, its presence in

a contract does not preclude the other party from raising those

fundamental common law contract defenses.

Roughly three weeks later, PJS filed its motion seeking

leave to amend its complaint to add a claim for unjust

enrichment. That claim has nothing to do with the 2019 or 2020

travel seasons, nor is it in any way related to the certified

question presented to the New Hampshire Supreme Court. Instead,

it relates entirely to Tauck’s allegedly improper conduct after

July 31, 2022 (according to PJS, after New Zealand reopened its

borders to foreign travelers, Tauck resumed its travel

operations there - PJS does not specify when - and it secured

air transportation services through a party other than PJS).

Standard of Review

The precise standard of review governing a motion to amend

a complaint varies depending upon its timing. A plaintiff is

permitted to amend its complaint once as a matter of right -

either within 21 days of filing it or within 21 days after the

defendant has filed a responsive pleading. Fed. R. Civ. P.

15(a). After that, permission of the court or the consent of

the opposing party is required. Nevertheless, Rule 15(a)(2)

6 provides that the court should “freely give leave when justice

so requires.”

As time passes, however, the burden on a plaintiff seeking

to amend its complaint becomes more onerous - particularly (as

is the case here) if the court has entered a scheduling order

that includes a deadline for the amendment of pleadings.

As a case progresses, and the issues are joined, the burden on a plaintiff seeking to amend a complaint becomes more exacting. Scheduling orders, for example, typically establish a cut-off date for amendments (as was apparently the case here). Once a scheduling order is in place, the liberal default rule is replaced by the more demanding “good cause” standard of Fed. R. Civ. P. 16(b).

Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004)

(citations and footnotes omitted). It also bears noting that,

“Regardless of the context, the longer a plaintiff delays, the

more likely the motion to amend will be denied, as protracted

delay, with its attendant burdens on the opponent and the court,

is itself a sufficient reason for the court to withhold

permission to amend.” Id. See also Miceli v. JetBlue Airways

Corp., 914 F.3d 73, 86 (1st Cir. 2019) (“Such an elevated

standard makes perfect sense: without it, scheduling orders

would be little more than aspirational statements, to be

7 disregarded by the parties whenever compliance proves

inconvenient.”) (citations and internal punctuation omitted).

Discussion

I. PJS’s Proposed New Claim.

PJS says the only way for it to secure (on behalf of Tauck)

an aircraft registered in New Zealand was through a New Zealand

individual or entity. Accordingly, it entered into an agreement

with a company called Air Chathams, which agreed to serve as the

New Zealand-based owner and operator of the plane. Air Chathams

purchased the aircraft - which PJS calls “the PJS plane” - for

$4.8 million. PJS says it provided twenty-five percent of the

purchase price ($1.2 million) and Air Chathams financed the

balance ($3.6 million). Once Tauck cancelled the parties’

contracts, PJS says it lost the anticipated income stream with

which it had planned to recover its investment in the plane and,

therefore, suffered a significant loss.

When Tauck canceled the PJS-Tauck Agreement, PJS negotiated a settlement and release from its continued payments to Air Chathams, pursuant to the terms of its agreement with Air Chathams.

The release and settlement included PJS walking away from the repayment of its $1.2 million USD advance to Air Chathams in exchange for a release from all future payments to Air Chathams.

That release was in line with PJS’s agreement with Air Chathams which, in the event of termination, required

8 PJS to either (1) forfeit the remaining funds it advanced to Air Chathams, or (2) purchase and take ownership of the PJS Plane outright.

In August 2022, New Zealand reopened its borders to foreign travelers.

Upon information and belief, when Tauck restarted its tours in New Zealand, it contracted directly with Air Chathams for use of the PJS Plane at a rate lower than Tauck paid under the PJS-Tauck Agreement.

[Since some time after July 31, 2022,] Tauck has been operating its tours in New Zealand with use of the PJS Plane for almost two years without PJS as the broker, and, upon information and belief, will continue to do so for the foreseeable future, retaining the full benefit of the PJS-Tauck Agreement without benefit to PJS.

Affidavit of Greg Raiff, CEO, Private Jet Services (document no.

67-10), at paras. 17-22 (emphasis supplied). Those facts, says

PJS, give rise to a viable common law claim against Tauck for

unjust enrichment.

The legal merits of such a claim seem questionable, at

best. But, at this juncture, that is not an issue. The

question presented is whether PJS should be permitted to amend

its complaint to add a new claim at this late stage. It should

not.

9 II. PJS has not Shown Good Cause.

As noted above, the date for amending the complaint passed

more than three years ago (April 1, 2021) and discovery closed

approximately two and one-half years ago (November 10, 2021).

Since then, both Tauck and PJS have filed dispositive motions,

final pretrial statements, proposed jury instructions, and

motions in limine. Consequently, PJS must show “substantial and

convincing evidence” of “good cause” to amend its complaint at

this juncture. Steir, 383 F.3d at 12. See also Miceli, 914

F.3d at 86 (“The ‘good cause’ standard focuses on both the

conduct of the moving party and the prejudice, if any, to the

nonmovant. In the decisional calculus, the moving party’s

diligence or lack of diligence serves as the dominant criterion.

‘The longer a plaintiff delays, the more likely the motion to

amend will be denied, as protracted delay, with its attendant

burdens on the opponent and the court, is itself a sufficient

reason for the court to withhold permission to amend.’”)

(quoting Steir, 383 F.3d at 12). PJS has not shown good cause

to amend its complaint at this late stage of the litigation.

Most importantly, PJS has not explained why it waited until

now to seek to add a claim relating to conduct Tauck allegedly

undertook nearly two years ago. While PJS points to the court’s

certification order to the New Hampshire Supreme Court as an

10 explanation for its delay, that is not an excuse. There was no

obstacle to filing its motion to amend at any time while the

certified question was pending in state court. This action was

not stayed during that period, nor did the court impose any bar

to the parties filing pleadings. Given that, it would be

difficult to conclude that PJS acted promptly and diligently in

filing its motion to amend the complaint. Instead, PJS seems to

have waited until the New Hampshire Supreme Court issued its

response to the certified question (perhaps hoping the court

would eliminate Tauck’s common law contract defenses). It

appears that only after the New Hampshire Supreme Court made

clear that Tauck’s common law defenses remain viable, did PJS

decide to seek leave to add a new (and largely unrelated) claim

to its complaint.

Moreover, PJS itself acknowledges that if it were to amend

its complaint, the court would be required to reopen discovery.

That would add significant additional delay to a case: (a) that

has been pending for nearly four years; (b) in which discovery

closed long ago; and (c) that is now ready for trial (or, at a

minimum, another round of dispositive motions). Amending the

complaint at this late stage would also impose upon Tauck

additional financial burdens and require it to revise its trial

tactics to defend against a novel claim, covering a previously-

11 unaddressed time period. See generally Steir, 383 F.3d at 12

(1st Cir. 2004) (“Particularly disfavored are motions to amend

whose timing prejudices the opposing party by ‘requiring a re-

opening of discovery with additional costs, a significant

postponement of the trial, and a likely major alteration in

trial tactics and strategy.’”) (quoting Acosta–Mestre v. Hilton

Int’l of P.R., Inc., 156 F.3d 49, 52 (1st Cir. 1998)).

Conclusion

For the foregoing reasons, as well as those set forth in

defendant’s memorandum in opposition (document no. 68), Private

Jet Service’s Motion for Leave to Amend Complaint (document no.

67) is denied.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

June 12, 2024

cc: Counsel of Record