Compagnie des Grands Hotels d'Afrique S.A. v. Starwood Capital Group Global I LLC et al

Filing 131

MEMORANDUM OPINION. Signed by Judge Sherry R. Fallon on 9/27/2019. (lih)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
COMPAGNIE DES GRANDS HOTELS
D' AFRIQUE S.A.,
Plaintiff,

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V.

Civil Action No. 18-654-RGA

STARWOOD CAPITAL GROUP
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GLOBAL I LLC and STARMAN HOTEL )
HOLDINGS LLC,
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Defendants.

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MEMORANDUM OPINION
I.

INTRODUCTION
The present action concerns an enforcement of a foreign arbitration award arising from

an alleged breach of a management contract for a luxury hotel in Morocco. (D.I. 1) Plaintiff
Compagnie des Grands Hotels d' Afrique S.A. ("CGHA'') filed a motion to extend the deadline
for amending pleadings and joining parties in the scheduling order. 1 (D.I. 125) Defendant
Starman Hotel Holdings LLC ("Starman")2 opposes any extension. (D.I. 128) For the reasons
that follow, the court DENIES plaintiffs motion without prejudice.
II.

BACKGROUND

a. Factual and Procedural History
The breach of contract matter was arbitrated before the ICC International Court of
Arbitration in London, England (the "ICC"). On May 6, 2015, the ICC issued an Arbitration

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On September 17, 2019, the court entered an oral order setting an expedited briefing schedule.
The briefing for the pending motion is as follows: plaintiffs opening brief (D.I. 125) and
defendant's answering brief (D.I. 128).
2
Starwood Capital Group Global I LLC ("Starwood") was dismissed from the suit on January 9,
2019. (DJ. 38)

Award against Woodman Maroc S.a.r.l. ("Woodman"), a former subsidiary of defendant. (D.I. 1
at ,r,r 58, 73) A thorough recitation of the factual background of this action is included in Judge
Andrews' Memorandum Order, issued on July 15, 2019. (D.I. 103)
The instant litigation was filed by plaintiff on April 30, 2018 against Starman and
Starwood, one of Starman's indirect corporate parents. (D.I. 1) The complaint initially alleged
that Starman and Starwood were liable for payment of the arbitration award based upon an
agency theory. (Id.) By Order of January 9, 2019, the court dismissed the agency claim against
Starman and Starwood. (D.I. 38) Consequently, the only claim remaining is based upon an alter
ego theory of liability asserted against the only remaining defendant, Starman.
The court held a scheduling conference on March 5, 2019 and entered the scheduling
order on March 12, 2019, which included a September 30, 2019 deadline for amending pleadings
and joining other parties. (D.I. 48) On September 13, 2019, plaintiff filed the present motion to
amend the scheduling order, limited to a request for an extension of the date for amendment of
pleadings andjoinder from September 30, 2019 to January 31, 2020. (D.I. 125)

III.

LEGAL STANDARD
Federal Rule of Civil Procedure 16 governs pretrial management and scheduling orders.

Under Rule 16(b)(4), a scheduling order "may be modified only for good cause and with the
judge's consent." Fed. R. Civ. P. 16(b)(4). The burden is on the moving party to "demonstrate
good cause and due diligence." Race Tires America, Inc. v. Hoosier Racing Tire Corp., 614 F.3d
57, 84 (3d Cir. 2010). Good causes exists "when the schedule cannot reasonably be met despite
the diligence of the party seeking the extension." Dickerson v. KeyPoint Gov't Sols., Inc., C.A.
No. 16-657-RGA-MPT, 2017 WL 2457457, at *4 (D. Del. June 7, 2017). This good cause
standard under Rule 16(b) "turns on the diligence of the movant." Id. In its considerations, the

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court should remain cognizant that "scheduling orders are at the heart of case management. If
they can be disregarded without a specific showing of good cause, their utility would be severely
impaired." Koplove v. Ford Motor Co., 795 F.2d 15, 18 (3d Cir. 1986). In any event, however,
the court retains authority to modify case schedules to entertain motions resolving questions of
law concerning which the facts are undisputed in order to "secure the just, speedy, and
inexpensive determination of every action and proceeding." Fed. R. Civ. P. 1.

IV.

DISCUSSION
CGHA argues that good cause exists to modify the deadline to amend the pleadings for

three reasons: (1) CGHA has diligently pursued the deposition of non-party Mr. Stemlicht, (2)
CGHA has diligently pursued foreign discovery, and (3) CGHA is diligently reviewing
productions from Starman, Starwood, and Lehman. (D.I. 125 at 6-8)

a. Deposition of Mr. Sternlicht
CGHA argues that it has diligently pursued the deposition of Barry Stemlicht3 ("Mr.
Stemlicht"), a key non-party witness. (Id. at 6) CGHA served the Stemlicht subpoena on July
23, 2019, setting a deposition date of August 14, 2019. (Id.; D.I. 107, Ex. 1) Mr. Stemlicht, a
resident of Connecticut, opposed the subpoena on the basis that such testimony would be
"unreasonably cumulative or duplicative, or [could] be obtained from some other source that is
more convenient, less burdensome, or less expensive." (D.1. 128 at 4-5) (quoting Fed. R. Civ. P.
26(b)(2)(C)(i)) On September 4, 2019, CGHA filed a motion to compel Mr. Stemlicht's
compliance with the deposition subpoena in the United States District Court for the District of
Connecticut. (D.I. 125, Ex. B) CGHA estimates that Mr. Stemlicht's deposition will not likely

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Mr. Stemlicht is a non-party to this action, who was allegedly a manager of Starman from its
formation in 2005 through November 2011. (D .I. 107, Ex. 1)
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occur before November 2019, as the District Court of Connecticut has not issued a decision on
the motion to compel the deposition. (D.I. 125 at 6) CGHA argues that Mr. Sternlicht's bad
faith refusal to appear for his deposition constitutes good cause for an extension of the deadline
to amend the pleadings. (Id.)
Plaintiff states in a conclusory fashion that Mr. Sternlicht refused to appear for his
deposition in bad faith. However, whether the witness has opposed the deposition subpoena in
"bad faith" is a matter yet to be decided by the District of Connecticut. It is presently unknown
whether the deponent will be compelled to give a deposition. Consequently, the plaintiff has not
demonstrated that good cause exists to modify a scheduling order deadline based upon the
contingent outcome of a motion pending before another District Court.

b. Foreign Discovery
CGHA contends that although it filed motions for issuance of letters rogatory to obtain
evidence in Morocco and the United Kingdom of Great Britain and Northern Ireland in May and
August of 2019, respectively, the process of obtaining foreign discovery is lengthy and time
consuming. (D.I. 125 at 6-7; D.I. 82; D.I. 117) As a result, none of the entities from which
documents are sought have yet made productions to CGHA. 4 (D.1. 125 at 7)
Plaintiffs argument regarding the outstanding foreign discovery requests hinges upon the
assumption that such discovery may reveal information necessitating amendment of the
complaint or joinder of another party. However, the present action concerns the enforcement of
a foreign arbitration award arising from alleged mismanagement of a hotel in Morocco. The

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CGHA also notes that the deposition of U .K. witness Sarah Purdy will not occur until late
October 2019, but does not explain who this witness is or her relevance to the pending action.
(D.I. 125 at 7) A review of the complaint reveals that CGHA learned of Starman's sale of
Woodman through a July 2, 2014 letter from "Sarah Purdy ofMaquay." (D.I. 1 at ,r 60)
However, there is no other mention or identification of Sarah Purdy elsewhere in the complaint.
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parties reasonably should have been aware at the outset that foreign discovery might be needed
and should have factored reasonable time estimates for accomplishing it when drafting the
scheduling order. The plaintiff is now asking the court to reconsider a deadline that was jointly
proposed in a scheduling order on the contingency that discovery which has yet to be produced
may possibly reveal new information necessitating amendment or joinder. The court declines to
revisit the deadlines on this basis, as good cause has not been demonstrated.

c. Document Production
CGHA asserts that it worked diligently to review document productions made by
Starman, Starwood, and Lehman on August 16 and 30, 2019, which total approximately 35,000
pages of documents. (D.I. 125 at 7) Therefore, plaintiff contends, it had only approximately one
month to review the productions prior to the current deadline to amend the pleadings. (Id)
CGHA cites Home Semiconductor Corp. to bolster its assertion that diligence is found when a
party seeks leave to amend within three months of learning new information. (Id) See Home

Semiconductor Corp. v. Samsung Electronics Co., Ltd., C.A. No. 13-2033-RGA, 2019 WL
2135858, at *5 (D. Del. May 16, 2019) (citing Logan v. Bd. of Educ. ofSch. Dist. of Pittsburgh,
2017 WL 1001602, at *6 (W.D. Pa. Mar. 15, 2017)).
The current scheduling order has a document production deadline of November 29, 2019
and a deadline for amendment of the pleadings of September 30, 2019. (D.1. 48) When the
parties jointly proposed the deadlines in the scheduling order, it was apparent from the dates
proffered that they would not complete substantial document production prior to the deadline for
amending the pleadings. Plaintiff has not supported its request with any "new information" it
has gathered in its review of the documents. Rather, plaintiff asks the court to reconsider the
scheduling order deadline based upon time pressures of its own making rather than good cause.

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Because plaintiff has failed to show good cause, its motion to amend the scheduling order
is denied without prejudice.

V.

CONCLUSION
For the foregoing reasons, plaintiffs motion to amend the scheduling order is denied

without prejudice. (C.A. No. 18-654, D.I. 125) An Order consistent with this Memorandum
Opinion shall issue.
This Memorandum Opinion is filed pursuant to 28 U.S.C. § 636(b)(l)(A), Fed. R. Civ. P.
72(a), and D. Del. LR 72.l(a)(2). The parties may serve and file specific written objections
within fourteen (14) days after being served with a copy of this Memorandum Opinion. Fed. R.
Civ. P. 72(a). The objections and responses to the objections are limited to ten (10) pages each.
The parties are directed to the court's Standing Order For Objections Filed Under Fed. R. Civ. P.
72, dated October 9, 2013, a copy of which is available on the court's website,
www.ded.uscourts.gov.

Dated: September

11, 2019

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