The district court did not abuse its discretion in denying plaintiff leave to amend to bring in a new defendant and allege a new theory of liability when the motion was filed 8 months after the scheduling order’s deadline for amending the pleadings. The plaintiff was not diligent having waited several months after learning of the new defendant’s identity and after receiving the documents on which the new liability theory was based before moving for leave to amend. However, the district court erred in denying plaintiff’s motion to dismiss the case without prejudice and instead dismissing it with prejudice. Voluntary dismissal without prejudice may be denied only if the defendant will suffer legal prejudice from such a dismissal, and legal prejudice is rare. The mere fact that plaintiff plans to sue again–here on the legal theory it sought to plead by amending its existing complaint–is not legal prejudice. However, the district court may condition the dismissal on, for example, payment of a portion of the defendant’s legal fees which will be wasted.