I. Background

Von Roll manufactures and distributes insulation products for electrical machinery for various industrial applications. Am. Compl. (Docket No. 53) at ¶ 13. Von Roll USA is located in Schenectady, New York and Von Roll Austral, the wholly-owned subsidiary of Von Roll USA, is located in Georgia. Id. at ¶¶ 3, 4. The five individual defendants are all former officers or employees of Von Roll. Id. at ¶¶ 5-9. Von Roll alleges that the defendants wrongfully obtained trade secrets from Von Roll concerning products, customers, and operations in anticipation of leaving Von Roll to establish defendant Craig Wire Products, LLC, a competing company. Id. at ¶¶ 26-43. Von Roll asserts ten causes of action for wrongfully taking trade secrets and related claims. Id. at ¶¶ 50-100. Von Roll seeks compensatory, punitive, and injunctive relief. Id. at 20-21.,

Defendants answered, a scheduling order was entered, and discovery commenced. Docket Nos. 54, 55, 62.[1] On June 2, 2008, plaintiffs completed production of approximately 240,000 pages of documents and electronic information in response to defendants’ discovery demands. Willis Aff. (Docket No. 69-4) at ¶ 5. On June 7, 2008, defendants’ review of those materials revealed a letter dated April 1, 2008[2] from the Chief Executive Officer of Von Roll’s parent company, Thomas Limberger, sent by electronic mail to all Von Roll employees throughout the world. Id. at ¶ 7 & Ex. A; Ganz Aff. (Docket No. 70-2) at ¶¶ 5-6 & Ex. A (“Limberger letter”). The letter states that Von Roll has recently suffered instances of employees acting dishonestly to the detriment of Von Roll, cites three such instances, expresses Von Roll’s intent to address such conduct by all legal means available, and urges employees to report any such conduct they observe to superiors. The first instance cited in the letter is the alleged conduct of the defendants in this case:

Willis Aff. at Ex. A; Ganz Aff. at Ex. A. The letter did not mention any defendant by name. Willis Aff. at Ex. A; Ganz Aff. at Ex. A. These motions followed.

II. Discussion

*2 Both motions seek leave to file amended answers to add counterclaims for defamation based on the Limberger letter. Von Roll opposes both motions on the grounds that the motions are futile and, in the alternative, as permissive counterclaims, they should be denied.

Rule 15(a) requires that leave to amend be “freely given when justice so requires.” Freely granting leave to amend a pleading “facilitate[s] a proper decision on the merits” and identifies the material issues of the case. Foman v. Davis, 371 U.S. 178, 182 (1962). “Absent undue delay, bad faith, dilatory tactics, undue prejudice to the party to be served with the proposed pleading, or futility, the motion should be freely granted.” Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir. 1995).

As to futility, “where a claim contained in a proposed amended complaint would be vulnerable in the face of a Rule 12(b)(6) motion, then allowing amendment would be an act of futility which should not be countenanced.” Deal v. Yurack, No. 04-CV-0072 (LEK/DEP), 2007 WL 2789615, at *5 (N.D.N.Y. Sept. 24, 2007) (citing Saxholm AS v. Dynal, Inc., 938 F. Supp. 120, 124 (E.D.N.Y. 1996) and In re Boesky Sec. Litig., 882 F. Supp. 1371, 1379 (S.D.N.Y. 1995)). However, where a proposed amended pleading alleges facts which may warrant relief, the proposed amendment is not futile. Deal, 2007 WL 2789615, at *5; Allstate Ins. v. Administratia Asigurarilor De Stat, 875 F. Supp. 1022, 1029 (S.D.N.Y. 1995).

Rule 12(b)(6) authorizes dismissal of a complaint that states no actionable claim. When considering a motion to dismiss, “a court must accept the allegations contained in the complaint as true, and draw all reasonable inferences in favor of the non-movant.” Sheppard v. Beerman, 18 F.3d 147, 150 (2d Cir. 1994). However, “a ‘complaint which consists of conclusory allegations unsupported by factual assertions fails even the liberal standard of Rule 12(b)(6).” Gilfus v. Adessa, No. 5:04-CV-1368 (HGM/DEP), 2006 WL 2827132, at *3 (N.D.N.Y. Sept. 30, 2006) (citing De Jesus v. Sears, Roebuck & Co. 87 F.3d 65, 70 (2d Cir. 1996) (internal quotations omitted)). Thus, dismissal is only warranted if it appears, beyond a reasonable doubt, that the non-moving party cannot prove a set of facts which would support his or her claim or entitle him or her to relief. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Harris v. City of N.Y., 186 F.3d 243, 247 (2d Cir. 1999).

A. Futility

1. Von Roll’s Claim of Privilege

Von Roll argues first that the proposed amendments are futile because the Limberger letter was a privileged communication and, therefore, cannot serve as a basis for a defamation claim. The privilege asserted by Von Roll for the letter generally requires proof that the communication was made in good faith, it concerned an interest or duty of the declarant, the statement was limited in scope to that purpose, the statement was appropriate to the occasion, and publication of the statement was appropriate to its purpose both in manner and scope. See generallyDavis v. Sherwin-Williams Co., 531 S.E.2d 764, 765 (Ga. Ct. App. 2000); Kuwik v. Starmark Star Marketing & Admin., Inc., 619 N.E.2d 129, 132 (Ill. 1993). However, the parties do not dispute that the precise dimensions of the privilege are governed by state law, the dimensions of the privilege may vary in material ways from state to state, and, thus, the choice of law applicable here may have a significant effect on Von Roll’s claim of privilege.

*3 In any event, there is presented here a threshold question whether Von Roll may assert this privilege at the pleading stage to bar the proposed amendments as futile. As the party claiming a privilege, Von Roll bears the burden of establishing the applicability of the privilege. See In re Grand Jury Subpoenas Dated Mar. 19, 2002 and Aug. 2, 2002, 318 F.3d 379, 385 (2d Cir. 2003) (gathering cases); see also In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d 180, 183 (2d Cir. 2007) (work product); In re County of Erie, 473 F.3d 413, 418 (2d Cir. 2007)(attorney-client); United States v. Jiminez, 789 F.2d 167, 170 (2d Cir. 1986) (informant privilege); MacNamara v. City of N.Y., 249 F.R.D. 70, 88 (S.D.N.Y. 2008 (law enforcement privilege); Nnebe v. Daus, No. 06-CV-4991 (KMK)(AJP), 2007 WL 1310140, at *2 (S.D.N.Y. May 3, 2007) (deliberative process).

Because this burden rests with Von Roll, defendants bear no burden to allege that the Limberger letter was unprotected by privilege to state a counterclaim for defamation. Under the standards of Rule 12(b)(6), the sufficiency of the allegations supporting the proposed counterclaim must be determined solely from the four corners of the proposed pleading, any documents attached thereto, and any documents incorporated therein by reference. See McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). To establish that the letter is protected by privilege, Von Roll must demonstrate that, inter alia, the letter was communicated in good faith, the purpose for which it was sent, the letter was appropriate to achieve that purpose, and its publication was limited to those necessary to achieve the purpose. See Davis, 531 S.E.2d at 765; Kuwik, 619 N.E.2d at 132. These elements, particularly good faith and the scope of publication, cannot be determined from the four corners of the proposed counterclaim and incorporated documents but by their nature require extrinsic evidence for determination. To consider Von Roll’s privilege claim at this stage would effectively shift the burden to defendants to disprove its applicability. Thus, Von Roll’s claim of privilege for the Limberger letter underlying the proposed counterclaims cannot be considered at this stage.

While not controlling in this Court, the decision of a New York Appellate Division is persuasive here. In Demas v. Levitsky, 291 A.D.2d 653 (3d Dep’t 2002), the plaintiff asserted a defamation claim against the defendant for comments allegedly made by the defendant during a speech at a conference sponsored by his employer. The defendant moved to dismiss the claim on the ground that the communication containing the allegedly defamatory statements was protected by the common interest privilege, the trial court denied the motion, and the defendant appealed. The Appellate Division affirmed, reasoning that because the defendant bore the burden of demonstrating the applicability of the privilege, assertion of the privilege “does not lend itself to a preanswer motion to dismiss ....” Id. at 661 (citations omitted). The court further stated that

*4 Id. Accordingly, Von Roll’s objection to the proposed counterclaims on the ground that they are predicated on a privileged communication must be denied at this stage.

2. Jason Craig’s Proposed Counterclaim

Von Roll makes one argument as to the facial sufficiency of the allegations of the counterclaims. Von Roll contends that the Limberger letter is not “of and concerning” Jason Craig as required to sustain a claim of defamation. Von Roll Mem. of Law (Docket No. 71-1) at 4-6. The Limberger letter refers to “a former manager [and] several leading employees at our production site in Douglasville, [Georgia] ....” Willis Aff. at Ex. A; Ganz Aff. at Ex. A. In the amended complaint, Von Roll alleges that Jason Craig is Jack Craig’s son and that he was employed at Von Roll’s facility in Schenectady, New York as a salesman until his termination on November 15, 2007. Am. Compl. at ¶ 6. In his answer Jason Craig admits this allegation. Jason Craig Ans. (Docket No. 54) at ¶ 1; see also Jason Craig Proposed Amended Ans. to First Am. Compl. with Counterclaim (Docket No. 70-3, Ex. B) at ¶ 1. Thus, from the four corners of Jason Craig’s proposed pleading itself and documents incorporated therein, Jason Craig acknowledges that he did not work at the Douglasville site referenced in the Limberger letter and was not a “former manager.” Thus, even viewing the letter in the light most favorable to Jason Craig’s proposed counterclaim, the letter contains no assertions from which a finder of fact could reasonably conclude that the allegedly defamatory statements refer in any way to Jason Craig.

Jason Craig contends in this regard that a claim for defamation need not allege that the defamatory statement identified the claimant by name. Jason Craig Mem. of Law (Docket No. 70-3) at 8-9 (citing Brown & Williamson Tobacco Corp. v. Jacobson, 644 F. Supp. 1240 (N.D. Ill. 1987) and Desnick v. ABC, Inc., 27 Media L. Rep. 1673 (N.D. Ill.)). However, there must exist some identifiable basis in the allegedly defamatory statement or its context for a finder of fact reasonably to conclude that it referred to the claimant. See, e.g., Brown & Williamson, 644 F. Supp. at 1246. Here, viewing the allegations of Jason Craig’s proposed counterclaim in the light most favorable to him and drawing all reasonable inferences in his favor, no such basis exists. In fact, the description in the Limberger letter of those to whom it refers excludes any possibility that it referred to Jason Craig.

Accordingly, Jason Craig’s motion must be denied as futile.[3]

B. Permissive Counterclaims

*5 Finally, Von Roll contends that the proposed counterclaims are permissive rather than compulsory, do not arise from the same core factual questions as Von Roll’s claims, would unduly prolong discovery, and the Court should exercise its discretion to deny the motions. Von Roll Mem. of Law at 18-19. It is assumed arguendo that the proposed counterclaims are permissive and not compulsory under Rule 13. The proposed counterclaims arise from an event occurring after those giving rise to the amended complaint and after this action was commenced. Nevertheless, the proposed defamation claims relate directly to Von Roll’s claims and the facts on which the defamation claims would rest substantially overlap those underlying Von Roll’s claims. Thus, there exists a sufficient nexus between the allegations in the amended complaint and those in the proposed counterclaims to conclude that the separate claims should fairly be joined.

Von Roll principally contends, however, that adding the proposed counterclaims at this stage will “derail” the progress of discovery. Von Roll Mem. of Law at 19. The parties appear to have completed the bulk of fact discovery to date and adding the proposed counterclaims will necessitate certain additional depositions or the re-depositions of certain witnesses. However, a brief extension to complete that discovery would not be unduly burdensome to any party, particularly where those same depositions would inevitably be conducted if defendants were to bring their defamation claims in a separate action. Moreover, certain economies may still be achieved by combining the claims in a single action, including motion practices and trials. On balance, therefore, the considerations bearing on a permissive counterclaim militate strongly in favor of allowing the counterclaims here.

Accordingly, Von Roll’s objection to defendants’ motions on this ground is denied.

III. Conclusion

For the reasons stated above, it is hereby

ORDERED that:

1. Defendants’ motion (Docket No. 69) is GRANTED and defendants shall file their proposed amended answer with counterclaim on or before August 15, 2008; and

2, Jason Craig’s motion (Docket No. 70) is DENIED.

IT IS SO ORDERED.