NCI Group, Inc. v. Cannon Services, Inc. et al

Filing 260

ORDER granting in part and denying in part 232 Plaintiff's Motion for Leave to Amend. The motion is GRANTED as to the proposed allegations of general and specific jurisdiction over the Goldins and supporting facts. The motion is also GRANTED a s to the amendments dropping Plaintiff's negligence claims and removing the dismissed Defendants from the complaint. The motion is DENIED as to all other proposed amendments-namely, the proposed additional RICO count and additional facts in supp ort of the alleged Goldin Secondary Scheme. Plaintiff's Rule 56(d) Motion 221 is DENIED. Plaintiff's Motion to Correct Scrivener's Errors 252 is DENIED as moot. The Goldin Defendants' Motion for Summary Judgment 217 is DENIE D with the right to refile. Plaintiff is DIRECTED to file its Second Amended Complaint within fourteen (14) days from the date of entry of this Order and, concurrently with the Second Amended Complaint, a Notice specifically identifying the paragraph s of the Second Amended Complaint containing the permitted amendments. The Goldins shall have fourteen (14) days from the date the Second Amended Complaint and Notice are filed within which to file an Amended Answer. Signed by Judge Richard W. Story on 11/16/11. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
NCI GROUP, INC., d/b/a METAL
COATERS OF GEORGIA and
d/b/a METAL COATERS OF
MISSISSIPPI,
Plaintiff,
v.
CANNON SERVICES, INC., and
d/b/a SEQUOYAH METAL
SYSTEMS, et al.,
Defendants.

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CIVIL ACTION NO.
1:09-CV-0441-RWS

ORDER
This case comes before the Court on Defendants Goldin Industries, Inc.,
Goldin Metals, Inc., Martin Goldin, Alan Goldin, and Steven Goldin’s
(collectively, the “Goldin Defendants” or “Goldins”) Motion for Summary
Judgment [217], Plaintiff’s Rule 56(d) Motion and Brief in Response to the
Goldin Defendants’ Motion for Summary Judgment [221], Plaintiff’s Motion
for Leave to Amend the First Amended Complaint [232], and Plaintiff’s Motion
to Correct Scrivener’s Errors [252]. After a review of the record, the Court
enters the following order.

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Background
Plaintiff filed this action on February 19, 2009 against Goldin Industries,
Inc., Jack Goldin,1 and Martin Goldin,2 asserting claims under the federal
Racketeering Influenced Corrupt Organizations Act (“RICO”) and the Georgia
Racketeer Influenced and Corrupt Organizations Act (“Georgia RICO”); for
fraud, conversion, aiding and abetting breach of fiduciary duty, and negligence;
as well as for injunctive relief under Georgia law. Compl., Dkt. [1]. Plaintiff
alleged subject matter jurisdiction on the basis of its federal RICO claim and on
the basis of diversity of citizenship. Id. ¶ 1. Plaintiff alleged personal
jurisdiction over the three Goldins under RICO, which provides for nationwide
service of process. Id. ¶¶ 6-8. On March 31, 2009, the three original Goldin
Defendants moved to dismiss the Complaint for lack of personal jurisdiction
and for failure to state a claim upon which relief can be granted, pursuant to
Federal Rule of Civil Procedure 12(b)(2) and (b)(6). Dkt. [48].
1

Although still named as a Defendant, Jack Goldin passed away in January of
2011. Brief in Supp. of Defs.’ Mot. for Summ. J., Dkt. [217-1] at 4 n.1.
2

In addition to these three Defendants, Plaintiff also brought this suit against
Cannon Services, Inc., Gary M. Goff, Lorri M. Coker, Lonnie A. Carroll, Steven R.
Byers, Darrell L. Coots, and Randy W. Froehlich (collectively the “non-Goldin
Defendants”). Compl., Dkt. [1] at 1-2. Carroll, Byers, Coots, and Froehlich are
referred to collectively as the “NCI Employees.” Id. at 2. The Court will refer to the
non-Goldin Defendants only as necessary, as the motions currently before the court
affect only Plaintiff and the Goldin Defendants.
2
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On May 1, 2009, Plaintiff moved to amend its Complaint and to add
Goldin Metals, Inc., Alan Goldin, and Steven Goldin as defendants. Dkt. [77].
The three named Goldin Defendants moved to dismiss the Amended Complaint
on June 3, 2009. Dkt. [99]. On August 4, 2009, Judge Beverly Martin, who
originally presided over the case, denied the motion to dismiss the original
Complaint as moot, denied the motion to dismiss the Amended Complaint, and
granted Plaintiff’s motion to amend, allowing it to add the remaining three
Goldins as defendants. Dkt. [118]. Like the original Complaint, the Amended
Complaint raises claims against the Goldin Defendants under RICO and
Georgia RICO and for various torts under state law. Dkt. [119]. In addition,
and like the original Complaint, Plaintiff alleges federal question and diversity
of citizenship as the bases for subject matter jurisdiction, and alleges personal
jurisdiction over the Goldin Defendants solely under RICO. Id. ¶¶ 1, 6-11.
Central to the parties’ motions currently before the Court is Plaintiff’s
federal RICO claim. In the original Complaint, Plaintiff alleged that the Goldin
and non-Goldin defendants engaged in a single scheme to defraud Plaintiff,
under which the NCI employee-Defendants would provide prime metal coils to
Goldin Industries and Cannon Services for below-market value in exchange for
kickbacks (the “Scheme”). Dkt. [1] ¶¶ 19-22. By acting in concert to carry out
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this Scheme, the Defendants were alleged to constitute a single “enterprise”
under RICO. Id. ¶ 53.
In the Amended Complaint, Plaintiff alleges that the Goldin and nonGoldin Defendants acted in concert to defraud the Plaintiff through a single
overarching scheme, which it now calls the “NCI-Targeted Scheme.” Dkt.
[119] ¶ 108. As in the original Complaint, Plaintiff alleges that because all
Defendants acted in concert to defraud Plaintiff through a single scheme, the
Defendants together–both Goldin and non-Goldin–constitute a single RICO
“enterprise.” Id. Plaintiff’s theory concerning the Goldins, however, changed.
Plaintiff alleges that the NCI-Targeted Scheme consisted of four separate
sub-schemes, only one of which involved the Goldin Defendants–the “Goldin
Secondary Scheme.” Id. ¶¶ 23, 24, 32, 42, 52, 59. Under the Goldin Secondary
Scheme, the Goldin Defendants allegedly obtained below-market prices for the
coating of secondary-quality metal coil in exchange for paying kickbacks to
Carroll. Id. ¶¶ 42-51. This scheme is alleged to have taken place at Metal
Coaters of Mississippi (“MCM”), Plaintiff’s Jackson, Mississippi division. Id.
¶ 42. The remaining three schemes alleged to form the NCI-Targeted Scheme
involve the sale of metal coils at fraudulently low prices, consistent with the
allegations of the original Complaint, but are alleged to involve only the non4
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Goldin Defendants. Id. ¶¶ 24-31 (the “Downgraded Prime Scheme”), 32-41
(the “RAW/RAC/RRS Scheme”), 52-58 (the “Cannon Mississippi Scheme”).
On May 24, 2011, the Goldin Defendants moved for summary judgment,
advancing two central arguments in support. Br. in Supp. of Defs.’ Mot. for
Summ. J., Dkt. [217-1], [217-2]. First, the Goldins argue that Plaintiff’s RICO
claim must fail because the only RICO “enterprise” alleged–i.e., all Defendants
acting in concert to perpetrate the NCI-Targeted Scheme–did not exist. Dkt.
[217-1] at 12-20. Specifically, the Goldins contend that the alleged Goldin
Secondary Scheme had no connection to the other three schemes, thus refuting
the argument that the four schemes together constituted a single RICO
“enterprise.” Id. at 12-20, 28-30. Furthermore, while maintaining that the
Goldin Secondary Scheme never existed, the Goldins argue that even if such a
scheme had existed, Plaintiff’s RICO claim still must fail because Plaintiff
never alleged that the Goldin Secondary Scheme constituted its own RICO
“enterprise.” Id. at 6 n.2, 20-23, 29-30. Second, the Goldins argue that as
Plaintiff’s RICO claim must fail, the Court must dismiss the remaining claims
against the Goldins for lack of personal jurisdiction, as Plaintiff’s allegation of
personal jurisdiction over the Goldins relies exclusively on RICO’s provision
for nationwide service of process. Dkt. [217-2] at 42-43.
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On July 1, 2011, in response to the Goldins’ Motion for Summary
Judgment, Plaintiff filed a Rule 56(d) motion3 styled, “Plaintiff’s Rule 56(d)
Motion and Brief in Response to The Goldin Defendants’ Motion for Summary
Judgment.” Dkt. [221].4 Plaintiff argues that it should be permitted to obtain
further discovery before having to respond to the Goldins’ Motion for Summary
Judgment, in particular, the opportunity to depose the Goldin Defendants and
Carroll. Id. at 9. The Goldins oppose this motion on several grounds. First,
they contend that Plaintiff has failed to specify with particularity the facts
Plaintiff seeks to discover and how those facts would raise a genuine issue of
material fact, as required under Rule 56(d). Defs.’ Resp. to Pl.’s Rule 56(d)
Mot., Dkt. [226] at 18-21. They further argue that Plaintiff has been dilatory in
failing to take advantage of the discovery mechanisms that have been at its
disposal. Id. at 20, 22.
On August 8, 2011, Plaintiff filed a Motion for Leave to Amend the First
Amended Complaint. Dkt. [232]. Plaintiff seeks leave to amend to do the

3

By the Court’s April 25, 2011 Order, Plaintiff was permitted to file a
substantive response to the Goldins’ Motion for Summary Judgment or a motion
pursuant to Federal Rule of Civil Procedure 56(d). Dkt. [213] at 2.
4

As explained in footnote 11, infra, the Court will only consider the portions of
this submission that pertain to Plaintiff’s Rule 56(d) motion and will not consider any
substantive responses to the Goldins’ motion for summary judgment.
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following: (1) add newly-discovered facts concerning the Goldin Secondary
Scheme; (2) add an additional claim under RICO based on the Goldin
Secondary Scheme; (3) allege additional grounds for personal jurisdiction,
namely, general and specific jurisdiction; (4) remove its negligence claims; and
(5) remove Defendants Coker, Coots, and Froehlich from the Complaint as they
have been dismissed from the suit. Id. at 4-6.5 In support of this motion,
Plaintiff cites Federal Rule of Civil Procedure 15 and its mandate that leave to
amend shall be freely given “when justice so requires.” Id. at 7. In addition,
Plaintiff argues that the proposed amendments will not prejudice the Goldin
Defendants, as the new personal jurisdiction allegations will keep the case in
the same court; the new factual averments merely clarify and supplement the
existing factual averments; and the conduct underlying the new RICO claim is
the Goldin Secondary Scheme, which is already the subject of discovery. Id. at
8-9.
In their opposition brief, the Goldin Defendants argue that Plaintiff
should not obtain leave to amend because Plaintiff cannot show “good cause” as

5

In its motion to amend, Plaintiff also sought to remove Jack Goldin from the
Complaint given that he is now deceased. Dkt. [232] at 6. Plaintiff withdrew this
request in its reply brief, however, stating its intention to separately move to substitute
Jack Goldin’s estate as a party. Dkt. [253] at 2 n.1.
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is required under Federal Rule of Civil Procedure 16, which governs the
analysis in this case given that Plaintiff seeks leave to amend after the
Scheduling Order deadline.6 Dkt. [246] at 12-15. In addition, the Goldins
argue that the proposed amendments run afoul of Rule 15, as they follow undue
delay, are prejudicial to Defendants, and are futile. Id. at 15-24.
The final motion currently before the Court is Plaintiff’s Motion to
Correct Scrivener’s Errors. Dkt. [252]. Plaintiff seeks to correct an error
contained in the Declaration of Marc C. Williams, attached as Exhibit A to its
Rule 56(d) Motion, and in its Proposed Second Amended Complaint. Id. The
Court will consider each motion in turn.
Discussion
I.

Plaintiff’s Motion for Leave to Amend [232]
In its Proposed Second Amended Complaint [232-1], Plaintiff seeks to

(1) add a new RICO claim based on the alleged Goldin Secondary Scheme; (2)
allege new facts supporting the alleged Goldin Secondary Scheme; (3) allege

6

According to the Court’s March 28, 2011 Scheduling Order [208],
amendments to pleadings submitted later than thirty days after the Joint Preliminary
Report and Discovery Plan is filed will not be accepted. The Joint Preliminary Report
and Discovery Plan [207] was filed on March 25, 2011, giving Plaintiff until April 25,
2011 to seek leave to amend. As stated above, Plaintiff filed its Motion for Leave to
Amend on August 8, 2011.
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additional bases of personal jurisdiction; (4) remove its negligence claims; and
(5) drop Defendants Coker, Coots, and Froehlich from the Complaint, as they
have been dismissed from the suit. However, the Court’s Scheduling Order of
March 28, 2011 limited the amendment period to thirty days after the filing of
the Joint Preliminary Report and Discovery Plan, or to April 25, 2011.
Plaintiff’s motion to amend was filed on August 8, 2011, over three months
after the expiration of the Scheduling Order deadline.
When a motion to amend is filed after a scheduling order deadline,
Federal Rule of Civil Procedure 16 is the proper guide for determining whether
a party's delay may be excused. S. Grouts & Mortars, Inc. v. 3M Co., 575 F.3d
1235, 1241(11th Cir. 2009) (citing Sosa v. Airprint Sys., 133 F.3d 1417, 1418
n.2 (11th Cir. 1998)). A scheduling order may be modified only for good cause
and with the Court's consent. FED. R. CIV. P. 16(b)(4). The key to good cause
is diligence. Sosa, 133 F.3d at 1419.
The Eleventh Circuit has found three factors which warrant consideration
when evaluating diligence: “(1) [whether] the plaintiff failed to ascertain facts
prior to filing the complaint and to acquire information during the discovery
period; (2) [whether] the information supporting the proposed amendment was
available to the plaintiff; and (3) even after acquiring information, [whether] the
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plaintiff delayed in asking for amendment.” Auto-Owners Ins. Co. v. Ace Elec.
Serv., Inc., 648 F. Supp. 2d 1371, 1375 (M.D. Fla. 2009) (citations omitted).
Additionally, if Plaintiffs survive the Rule 16(b)(4) challenge, they still
must satisfy Federal Rule of Civil Procedure 15. Rule 15 directs the Court to
"freely give leave when justice so requires." FED. R. CIV. P. 15(a)(2). Despite
an instruction that leave should be freely given when justice so requires, leave
to amend is "by no means automatic." Layfield v. Bill Heard Chevrolet Co.,
607 F.2d 1097, 1099 (5th Cir. 1979).7 The trial court has "extensive discretion"
in deciding whether to grant leave to amend. Campbell v. Emory Clinic, 166
F.3d 1157, 1162 (11th Cir. 1999). A trial court may choose not to allow a party
to amend "when the amendment would prejudice the defendant, follows undue
delays or is futile." Id. The Court will consider each of Plaintiff’s proposed
amendments under this framework.
A.

Additional RICO Claim Based on Goldin Secondary Scheme

With respect to the proposed addition of a second RICO count based on
the Goldin Secondary Scheme, the Court agrees with the Goldin Defendants
that Plaintiff has failed to show good cause under Rule 16. As stated above, the
7

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en
banc), the court adopted as binding precedent all decisions of the former Fifth Circuit
decided before October 1, 1981.
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key to whether an amendment will be allowed under Rule 16(b)(4) is diligence.
Factors that are relevant to the “diligence” inquiry are whether the information
supporting the proposed amendment was available to the plaintiff, and whether
the plaintiff delayed in seeking leave to amend after obtaining that information.
In this case, Plaintiff conceded in its reply brief that the additional RICO
count is “based on facts that were included in its initial complaint . . . .” (Id. at
6.) Thus, this is not a case where previously hidden or unknown facts came to
light, revealing to Plaintiff the availability of a new claim for relief. Instead, the
proposed RICO count is based on the already-alleged Goldin Secondary
Scheme, the underlying facts of which Plaintiff has known at least since the
time of its Amended Complaint. Accordingly, it appears that Plaintiff is merely
trying to supplement its existing RICO theory to cover its bases in the event the
Court agrees with the Goldins on summary judgment that the alleged RICO
“enterprise,” the NCI-Targeted Scheme, did not exist. This is not a proper use
of Rule 16(b)(4).
Indeed, the Eleventh Circuit has held, “It is not an abuse of discretion for
a district court to deny a motion for leave to amend a complaint when such a
motion is designed to avoid an impending adverse summary judgment.”
Lowe’s Home Centers, Inc. v. Olin Corp., 313 F.3d 1307, 1315 (11th Cir. 2002)
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(citation omitted). The Eleventh Circuit summarized the facts of Lowe’s as
follows:
Apparently, after recognizing the likelihood of an adverse
summary judgment ruling, Lowe’s attempted to amend its
complaint to remove its negligent design and negligent supervision
and training claims and to add two additional claims: (1) negligent
misrepresentation and (2) fraud. The record in this case reveals
that despite numerous scheduling orders and joint stipulations
regarding deadlines, Lowe’s did not file its motion for leave to
amend its first amended complaint until well after all such
deadlines had expired and not until over two months following the
filing of Olin’s motion for summary judgment. In fact, Lowe’s did
not file its motion for leave to amend until over a month had
elapsed from the filing of its response to Olin’s motion for
summary judgment.
Id. at 1314. The procedural posture of this case is different from Lowe’s in that
Plaintiff substantively has not responded to the Goldins’ motion for summary
judgment and thus certainly is not facing any “likelihood of an adverse
summary judgment ruling.” Nonetheless, the substance and timing of
Plaintiff’s motion does suggest that the motive behind the attempted
amendment is to cure what Plaintiff perceives to be, or fears are, potential
weaknesses in its RICO case. This motivation does not constitute good cause.
Furthermore, even if Plaintiff had good cause under Rule 16, leave to
amend still should be denied under Rule 15. Despite Rule 15(a)(2)’s mandate
that leave be given freely “when justice so requires,” a trial court may choose
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not to allow a party to amend when the amendment would prejudice the
defendant or follows undue delay. Allowing the additional RICO count at this
point in the litigation would prejudice the Goldins, who for more than two years
now have developed a defense strategy around the RICO theory set forth in
Plaintiff’s Amended Complaint.8 This prejudice would be compounded by the
fact that the Goldins have now moved for summary judgment,9 which motion
would be mooted by the proposed amendment.10 As Plaintiff has failed to show
8

As the Goldins point out in their opposition brief, Plaintiff’s motion to amend
comes over two years after Plaintiff moved to amend the original complaint, on May
1, 2009, and two years after the First Amended Complaint was filed, on August 4,
2009.
9

The Eleventh Circuit has expressed particular concern regarding amendments
that follow motions for summary judgment. In Freeman v. Continental Gin Co., 381
F.2d 459, 469 (5th Cir. 1967), the court stated: “A busy district court need not allow
itself to be imposed upon by the presentation of theories seriatim. Liberality of
amendment is important to assure a party a fair opportunity to present his claims and
defenses, but equal attention should be given to the proposition that there must be an
end finally to a particular litigation. . . . Much of the value of summary judgment
procedure . . . would be dissipated if a party were free to rely on one theory in an
attempt to defect [sic] a motion for summary judgment and then, should that theory
prove unsound, come back long thereafter and fight on the basis of some other
theory.”
10

Although the Court is denying the Goldins’ Motion for Summary Judgment
with a right to refile (see Part IV, infra), given their right to refile, the Court
anticipates that the Goldins will renew their motion and reassert the same RICO
defense as that raised in the motion currently before the Court. Thus, allowing
Plaintiff leave to amend to raise an additional RICO count would prejudice the
Goldins by precluding them from simply reasserting their existing RICO defense
when they renew their motion for summary judgment. In sum, the fact that the Court
is dismissing the Goldins’ Motion for Summary Judgment (with the right to refile)
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good cause under Rule 16, and as the proposed amendments would be
prejudicial to the Goldins, the Court hereby DENIES Plaintiff’s motion for
leave to amend to add a new RICO count.
B.

Additional Facts Supporting the Goldin Secondary Scheme

With respect to Plaintiff’s proposed amendments adding new facts in
support of the Goldin Secondary Scheme as alleged in the Amended Complaint,
the Court again agrees with the Goldins that Plaintiff has failed to show good
cause. Plaintiff argues that the good cause standard is met because Plaintiff
does not seek to add any facts that were not already raised in its Rule 56(d)
Motion, and thus that the Goldins will not be prejudiced by allowing the
amendments since they already have had an opportunity to respond to these
facts. Reply in Supp. of Pl.’s Mot. to Amend Am. Compl., Dkt. [253] at 5.
This argument, however, conflates Rules 15 and 16 and fails to make any
showing of good cause. As stated above, the focus of the Rule 16 analysis in
this case is on whether Plaintiff has been diligent in seeking leave to amend, not
on whether Defendants will be prejudiced by allowing the amendment.

does not diminish the prejudice that would result if Plaintiff were permitted to add a
new RICO theory to its complaint.
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In this case, all of the proposed factual amendments are contained in the
declarations of Marc C. Williams, Plaintiff’s employee, and Jeremy O. Chrislip,
Plaintiff’s former employee. Pl.’s Mot. to Amend Am. Compl., Dkt. [232] at 6.
Williams currently serves as Plaintiff’s Vice President of Internal Audit
Services and since 1996 has had a central role in Plaintiff’s investigation of the
alleged Goldin Secondary Scheme. Decl. of Marc C. Williams, Dkt. [221-1] at
3. Chrislip was employed by Plaintiff from June 1997 until January 2008,
serving as Sales Manager and then National Accounts Manager at MCM. Decl.
of Jeremy O. Chrislip, Dkt. [221-10] at 1-2. Chrislip worked under the direct
supervision of Carroll and, by his own admissions, was intimately familiar with
the Goldins’ transactions with Plaintiff and business relationship with Carroll.
Id. at 2.
Plaintiff argues that it should be permitted to amend its complaint to add
the factual averments contained in these declarations because its internal
investigation “could not have been completed all at once.” Reply in Supp. of
Pl.’s Mot. to Amend Am. Compl., Dkt. [253] at 3. The facts Plaintiff seeks to
add by amendment, however, were or should have been known to Plaintiff
before this point. At all relevant times Williams and Chrislip have occupied
key positions within the Plaintiff’s organization that put them in close proximity
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to the alleged Goldin Secondary Scheme. Discovery of any facts known to
them was also under Plaintiff’s complete control. Accordingly, the Court
would expect Plaintiff to have fully uncovered the facts known to such
important witnesses early in its investigation or at least within the time frame
allowed in the Scheduling Order for amending pleadings. Allowing these
amendments solely on grounds that Plaintiff’s own internal investigation took
longer than the scheduling order permitted would eviscerate the concept of
scheduling orders and the usual requirement that parties adhere to them. In
short, because Plaintiff has failed to show any cause other than the need for
more time, the Court hereby DENIES Plaintiff’s motion for leave to amend to
add additional facts supporting the alleged Goldin Secondary Scheme.
C.

Additional Allegations of Personal Jurisdiction and Supporting
Facts

The Court, however, will grant Plaintiff leave to amend to allege general
and specific jurisdiction over the Goldins and facts in support of these
jurisdictional allegations. Despite the seemingly rigid good cause requirement
of Rule 16, the Eleventh Circuit has “widely recognized that Rule 16 must be
read in light of Rule 15, and that in some circumstances the policy of Rule 15
should moderate the strictures of Rule 16.” Wallin v. Fuller, 476 F.2d 1204,

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1209 (11th Cir. 1973) (citations omitted). This is because “[u]nbending
adherence to the strictures of Rule 16 would . . . frustrate another broad policy
of the Federal Rules favoring liberality of amendment.” Id.
The latter policy compels the Court to allow Plaintiff leave to amend to
assert additional jurisdictional allegations, given that Plaintiff has already
alleged a proper basis, under RICO, for the Court’s exercise of personal
jurisdiction over the Goldins. Allowing the additional jurisdictional allegations
will have no effect on this proceeding other than to prevent the Goldins, in the
event the Court finds Plaintiff’s federal RICO claim to be without merit, from
escaping this litigation purely on the technical ground that Plaintiff failed to
plead personal jurisdiction outside of RICO, even though such jurisdiction may
exist. The Court finds that depriving the Goldins of this potential technical
defense is less unfair than depriving Plaintiff of the opportunity to allege
additional grounds of personal jurisdiction, albeit at this late date. The Court
further finds that allowing these jurisdictional amendments will not unduly
prejudice the Goldins, who will remain free to defend on the ground that
personal jurisdiction outside of RICO, despite Plaintiff’s allegations, does not
exist. Accordingly, Plaintiff’s motion is GRANTED as to the proposed

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amendments alleging general and specific jurisdiction over the Goldin
Defendants and facts in support thereof.
D.

Remaining Proposed Amendments

The Court also GRANTS Plaintiff leave to amend to drop its negligence
claims and to remove the dismissed Defendants (Coker, Coots, and Froehlich)
from the Complaint. Allowing such amendments clearly will not prejudice the
Goldins or interfere with the Court’s management of this case.
E.

Conclusion

Plaintiff’s Motion to Amend the Amended Complaint is GRANTED as to
the proposed jurisdictional allegations and facts in support of those allegations.
The Motion is also GRANTED as to the amendments dropping Plaintiff’s
negligence claims and removing dismissed Defendants Coker, Coots, and
Froehlich from the complaint. The Motion is DENIED as to all other proposed
amendments, in particular, the additional RICO count and the additional facts in
support of the alleged Goldin Secondary Scheme.
II.

Plaintiff’s Rule 56(d) Motion [221]11
11

Plaintiff styled this motion, “Plaintiff’s 56(d) Motion and Brief in Response
to the Goldin Defendants’ Motion for Summary Judgment.” Dkt. [221] (emphasis
added). By Court order, however, Plaintiff was permitted to file either a Rule 56(d)
motion or respond substantively to the Goldins’ motion for summary judgment. Dkt.
[213] at 2. Having elected to move under Rule 56(d) for more time to obtain
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As stated in the Background above, Plaintiff moves the Court under
Federal Rule of Civil Procedure 56(d) to grant it more time to take discovery
before having to respond to the Goldins’ motion for summary judgment. In
support of this Motion, Plaintiff argues that it should have the right to depose
the Goldins and Carroll before having to respond to the motion, and that it
needs additional written discovery to explain the content of documents Plaintiff
has received from the Goldins. Dkt. [221] at 9, 12; Decl. of Gary S. Freed, Dkt.
[221-14] ¶¶ 4-5. The Goldins argue that Plaintiff is not entitled to further
discovery under Rule 56(d) because it has failed to identify, with particularity,
the facts it seeks to discover, and because Plaintiff has not been diligent in
pursuing discovery thus far. Defs.’ Resp. to Pl.’s Rule 56(d) Mot., Dkt. [226] at
21-23.
Under Rule 56(d), “If a nonmovant shows by affidavit or declaration that,
for specified reasons, it cannot present facts essential to justify its opposition,
the court may: (1) defer considering the motion or deny it; (2) allow time to . . .

discovery, the Court will not consider Plaintiff’s substantive responses to the Goldins’
motion for summary judgment at this time. Instead, the Court will consider only
Plaintiff’s Rule 56(d) arguments, which appear primarily at pages 9-12 of Plaintiff’s
brief, and the supporting Declaration of Gary S. Freed, attached thereto as Exhibit C.
The other exhibits clearly are intended to oppose the Goldins’ motion for summary
judgment substantively and will not be considered.
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take discovery; or (3) issue any other appropriate order.” A Rule 56(d) motion
must be supported by an affidavit “which sets forth with particularity the facts
the moving party expects to discover and how those facts would create a
genuine issue of material fact precluding summary judgment.” Harbert Int’l,
Inc. v. James, 157 F.3d 1271, 1280 (11th Cir. 1998) (emphasis added). “The
party seeking to use Rule 56[(d)] may not simply rely on vague assertions that
additional discovery will produce needed, but unspecified, facts, but rather he
must specifically demonstrate how postponement of a ruling on the motion will
enable him, by discovery or other means, to rebut the movant’s showing of an
absence of a genuine issue of material fact.” Reflectone, Inc. v. Farrand Optical
Co., Inc., 862 F.2d 841, 843 (11th Cir. 1989) (internal quotations and citations
omitted).
The Court finds that Plaintiff has failed to show under Rule 56(d) that it
is entitled to further discovery before being required to the Goldins’ motion for
summary judgment. The affidavit of Gary S. Freed that Plaintiff files in support
of its motion does not state which facts Plaintiff seeks to discover and how
those facts will create a genuine issue of material fact precluding summary
judgment. Instead, the affidavit merely professes Plaintiff’s intention to serve
additional written discovery on the Goldins “to seek explanations of documents
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received,” and states that “no depositions have been taken,” that the depositions
of Carroll and Alan Goldin have been scheduled, and that “[Plaintiff] is seeking
to depose additional witnesses around that time.” Decl. of Gary S. Freed, Dkt.
[221-14] ¶¶ 3-5. These assertions are insufficient to show that Plaintiff is
entitled to further discovery under Rule 56(d) and suggest that Plaintiff has
failed to take advantage of the discovery mechanisms that have been available
to it since discovery resumed in this case on September 20, 2010. Because
Plaintiff has failed to show with particularity the facts it seeks to obtain through
additional discovery, Plaintiff’s Rule 56(d) motion is hereby DENIED.
III.

Plaintiff’s Motion to Correct Scrivener’s Errors [252]
In light of the above rulings, the Court hereby DISMISSES as moot

Plaintiff’s motion to correct scrivener’s errors in the Proposed Second
Amended Complaint and in the Declaration of Marc C. Williams.12

12

The Declaration of Marc C. Williams appears as Exhibit A to Plaintiff’s
“Rule 56(d) Motion and Brief in Response to the Goldin Defendants’ Motion for
Summary Judgment.” Dkt. [221-1] at 1-17. The declaration clearly is offered to
oppose substantively the Goldins’ motion for summary judgment. Because, as stated
in footnote 11, the Court will not consider Plaintiff’s substantive responses to the
Goldins’ summary judgment motion at this time, it will not consider the factual
averments contained in the Williams declaration. Accordingly, the motion to correct
any scrivener’s errors in this declaration is moot.
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IV.

The Goldin Defendants’ Motion for Summary Judgment [217]
In light of the Court’s ruling allowing Plaintiff leave to amend the

Amended Complaint, the Goldins’ Motion for Summary Judgment is DENIED
with a right to refile.13
Conclusion
Plaintiff’s Motion for Leave to Amend [232] is GRANTED in part and
DENIED in part. The motion is GRANTED as to the proposed allegations of
general and specific jurisdiction over the Goldins and supporting facts. The
motion is also GRANTED as to the amendments dropping Plaintiff’s
negligence claims and removing the dismissed Defendants from the complaint.
The motion is DENIED as to all other proposed amendments–namely, the
proposed additional RICO count and additional facts in support of the alleged
Goldin Secondary Scheme. Plaintiff’s Rule 56(d) Motion [221] is DENIED.
Plaintiff’s Motion to Correct Scrivener’s Errors [252] is DENIED as moot.

13

Based on the rulings herein, a response to the Goldins’ motion for summary
judgment as to the RICO claim would now be required. By denying the motion with a
right to refile, the Court is affording the Goldin Defendants an opportunity to evaluate
whether they wish to proceed with their motion as to the RICO claim as it presently
stands or include the jurisdictional issue following the filing of Plaintiff’s Second
Amended Complaint.
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The Goldin Defendants’ Motion for Summary Judgment [217] is DENIED
with the right to refile.
Plaintiff is DIRECTED to file its Second Amended Complaint within
fourteen (14) days from the date of entry of this Order and, concurrently with
the Second Amended Complaint, a Notice specifically identifying the
paragraphs of the Second Amended Complaint containing the permitted
amendments. The Goldins shall have fourteen (14) days from the date the
Second Amended Complaint and Notice are filed within which to file an
Amended Answer.
SO ORDERED, this 16th day of November, 2011.

________________________________
RICHARD W. STORY
United States District Judge

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