U.S. District Judge Brendan A. Hurson granted FTI Consulting’s motion to file a third amended complaint, ruling that the firm did not cause undue delay by expanding its lawsuit against Orszag and three other parties. The judge rejected the argument that the amendment would prejudice the case, noting the motion was filed on the scheduling order’s deadline.
The ruling also denied a motion for judgment on the pleadings filed by Orszag and co-defendants Steven Gunby, Dr. Mark Israel, and Econic Partners LLC. This keeps alive Orszag’s counterclaim for tortious interference with business relations, which the defendants had argued was barred by the Noerr-Pennington doctrine.
FTI originally sued Orszag for breach of contract and breach of fiduciary duty of loyalty. Orszag counterclaimed, alleging breach of contract, tortious interference, and unjust enrichment.
In its proposed third amended complaint, FTI seeks to join Compass Lexecon LLC as a plaintiff and add Israel and Econic Partners LLC as defendants. The amended filing introduces 15 new counts, including claims for misappropriation of trade secrets under the Defend Trade Secrets Act, fraud, and civil conspiracy.
Orszag opposed the amendment, arguing it came too late and would require him to spend "substantial sums and great effort" to address new issues. He claimed the delay was prejudicial because it would "blow up the current schedule" and push discovery into late summer.
Hurson rejected the prejudice argument, noting that FTI filed its motion on the scheduling order’s deadline of Jan. 2, 2026. The court also observed that discovery deadlines had already been extended by 60 days and depositions were still ongoing.
"Delay alone is an insufficient reason to deny leave to amend," Hurson wrote, citing Fourth Circuit precedent. "Rather, the delay must be accompanied by prejudice, bad faith, or futility."
The judge found that FTI provided a reasonable explanation for the timing, citing "critical information" obtained through document production in late November 2025. He also noted that judicial economy favored allowing the amendment rather than forcing FTI to file a separate, likely consolidated action.
On the counterclaim, Hurson denied the defendants’ motion for judgment on the pleadings regarding Orszag’s tortious interference claim. The defendants argued the Noerr-Pennington doctrine, which protects the right to petition the government, barred the claim.
However, Hurson found that Orszag’s allegations raised the possibility of the "sham exception" to Noerr-Pennington, which applies when litigation is objectively baseless. Because this determination requires facts beyond the face of the pleadings, the court declined to dismiss the counterclaim at this stage.
The court also granted several motions to seal, keeping the third amended complaint and related filings under seal due to confidential corporate and financial information.
Orszag’s counterclaims remain active as the case moves toward further discovery.