Gowanus Industrial Park, Inc. v. Arthur H. Sulzer Associates, Inc.

Filing 94

ORDER ADOPTING REPORT AND RECOMMENDATIONS. For the reasons stated in the attached Order, the court overrules AHS's objections, adopts Judge Orenstein's Report and Recommendation, and supplements Judge Orenstein's well-reasoned analysis as set forth in the attached Order. Accordingly, the court denies the parties' cross-motions for summary judgment and dismisses AHS's pending counterclaims. In addition, the court grants AHS leave to amend its Answer to plead sufficient counterclaims that articulate a specific legal theory supported by the undisputed facts within thirty days of this Order, or by April 29, 2013. Following AHS's filing of such counterclaims, the parties may file final dispositive motions without seeking further discovery. Ordered by Judge Kiyo A. Matsumoto on 3/29/2013. (Tolentino, Raymond)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------X
GOWANUS INDUSTRIAL PARK, INC.
Plaintiff/CounterDefendant,
- against ARTHUR H. SULZER ASSOCIATES, INC.

NOT FOR PUBLICATION
ORDER ADOPTING REPORT AND
RECOMMENDATION___________
06-CV-105 (KAM) (JO)

Defendant/CounterClaimant.
--------------------------------X
MATSUMOTO, United States District Judge:
On May 21, 2012, Plaintiff/Counter-Defendant Gowanus
Industrial Park, Inc. (“Gowanus”) and Defendant/Counter-Claimant
Arthur H. Sulzer Associates, Inc. (“AHS”) filed post-remand
cross-motions for summary judgment on the counterclaims of AHS,
pursuant to Federal Rule of Civil Procedure 56. (ECF No. 82,
Gowanus’ Post-Remand Motion for Summary Judgment dated 2/27/12;
ECF No. 83, Gowanus’ Memorandum in Support (“Gowanus Mem.”); ECF
No. 85, AHS’s Opposition to Gowanus Mem.; ECF No. 86, Gowanus’
Reply; ECF No. 87, AHS’s Post-Remand Motion for Summary Judgment
dated 3/26/12 (“AHS Mem.”); ECF No. 89, Gowanus’ Opposition to
AHS Mem.; ECF No. 91, AHS’s Reply.)

By Order dated May 21,

2012, the court referred the cross-motions to Magistrate Judge
James Orenstein for a Report and Recommendation. (See Order
Referring Cross-Motions dated 5/21/12.)

On March 7, 2013, Judge

Orenstein issued a Report and Recommendation recommending that

the court deny both motions for summary judgment, dismiss AHS’s
pending counterclaims, and grant AHS leave to file amended
counterclaims within thirty days of this court’s Order. (ECF No.
92, Report and Recommendation dated 3/7/13 (“R&R”) at 1, 15.)
Judge Orenstein notified the parties of the right to file
written objections within fourteen days of receipt of the R&R.
(R&R at 15.)

On March 25, 2013, AHS timely filed objections to

the R&R. (See ECF No. 93, AHS’s Objections to R&R dated 3/25/13
(“AHS Obj.”).)
R&R.

Gowanus, however, did not file objections to the

Although Gowanus has yet to file its response to AHS’s

objections, the court overrules AHS’s objections, adopts Judge
Orenstein’s R&R, and supplements Judge Orenstein’s well-reasoned
analysis as set forth below.
FACTUAL BACKGROUND
The court presumes familiarity with the lengthy
procedural history and detailed facts of this case, which have
been set forth comprehensively in Judge Orenstein’s R&R. (R&R at
4-6.)

Because a recital of the facts is unnecessary to address

AHS’s objections, the court foregoes a summary of the facts.
DISCUSSION
In reviewing a Report and Recommendation, the district
court “may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1).

Where a party makes specific and timely

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objections to a magistrate judge’s findings or recommendations,
the district court must apply a de novo standard of review to
the portions of the R&R to which the objection is made. Mazzei
v. Abbott Labs. & Co., No. 10-CV-1011, 2012 WL 1101776, at *1
(E.D.N.Y. Apr. 2, 2012) (citing Arista Records, LLC v. Doe 3,
604 F.3d 110, 116 (2d Cir. 2010)); see also 28 U.S.C.
§ 636(b)(1).
Where no proper objection to a Report and
Recommendation has been timely made, the district court “‘need
only satisfy itself that that there is no clear error on the
face of the record.’” Jarvis v. N. Am. Globex Fund, L.P., 823 F.
Supp. 2d 161, 163 (E.D.N.Y. 2011) (quoting Wilds v. United
Parcel Serv., Inc., 262 F. Supp. 2d 163, 169 (S.D.N.Y. 2003));
see also Urena v. New York, 160 F. Supp. 2d 606, 609-10
(S.D.N.Y. 2001).

In addition, where “the objecting party makes

only conclusory or general objections, or simply reiterates the
original arguments, the [c]ourt will review the report and
recommendation strictly for clear error.” Zaretsky v. Maxi-Aids,
Inc., No. 10-CV-3771, 2012 WL 2345181, at *1 (E.D.N.Y. June 18,
2012) (internal quotation marks omitted); see also Soley v.
Wasserman, 823 F. Supp. 2d 221, 228 (S.D.N.Y. 2011); Vega v.
Artuz, No. 97-CV-3775, 2002 WL 31174466, at *1 (S.D.N.Y. Sept.
30, 2002) (noting that “objections that are merely perfunctory
responses argued in an attempt to engage the district court in a

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rehashing of the same arguments set forth in the original
[papers] will not suffice to invoke de novo review”).
Here, AHS lodges three objections to Judge Orenstein’s
R&R, only one of which warrants de novo review.

The court

addresses each objection in turn.
I.

AHS’s First “Objection”: Disponent Owner
AHS’s first “objection” does not constitute a formal

objection to the R&R as it does not challenge any of the
findings made by Judge Orenstein. (AHS Obj. at 1-2.)

Instead,

AHS clarifies one difference in terminology between the parties’
Rule 56.1 statements. (Id.)

Specifically, AHS explains that its

Rule 56.1 Statement refers to CDS Marine Construction LLC
(“CDS”) as the “disponent owner,” whereas Gowanus’ Rule 56.1
Statement refers to CDS as the “effective owner.” (Id.)

AHS

states that “disponent owner” is a term of art in maritime law
which carries with it certain implications as to the rights and
responsibilities of the disponent owner to the vessel, but does
not explain the implications, rights, or responsibilities that
are relevant to the issues before the court. (Id. at 2.)

AHS

therefore expresses its assumption that both terms are
“identical in meaning.” (Id.)

Because AHS concedes that “no

objection is made by AHS,” (id.), the court need not formally
rule on AHS’s first objection but duly notes AHS’s
clarification.

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II.

AHS’s Second Objection: Viability of Counterclaims
In its second objection to the R&R, AHS challenges

Judge Orenstein’s recommended finding that AHS again has failed
to articulate a viable theory of liability on its counterclaims
in its post-remand summary judgment motion. (See AHS Obj. at 24; R&R at 7-10.)

Specifically, AHS maintains that it has

identified three cognizable theories of counterclaim liability:
(1) the “general maritime law”; (2) “equity”; and (3) “common
sense.” (AHS Obj. at 2-4.)

AHS’s second objection, however,

consists entirely of the arguments AHS already raised before
Judge Orenstein and does not warrant de novo review.
Indeed, AHS expressly acknowledges the repetitive
nature of its second objection.

For example, in objecting to

Judge Orenstein’s rejection of the “general maritime law” theory
of liability, AHS cites to this court’s prior June 23, 2010
Memorandum and Order and then concedes that “its post-remand
brief in support of the instant motion for summary judgment”
referenced and discussed the same June 23, 2010 Memorandum and
Order. (Compare AHS Obj. at 2-3, with AHS Mem. at 8.)

More

conspicuously, in objecting to Judge Orenstein’s adverse finding
as to the “equity” theory of counterclaim liability, AHS repeats
verbatim an argument already presented in its post-remand
summary judgment motion. (Compare AHS Obj. at 3, with AHS Mem.
at 8-9.)

In addition, with respect to Judge Orenstein’s

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rejection of its “common sense” theory of liability, AHS again
raises the same arguments presented to Judge Orenstein and
refers this court to the cases and arguments included in its
post-remand summary judgment motion. (See AHS Obj. at 4 (citing
to AHS Mem. at 10).)
Furthermore, Judge Orenstein thoroughly addressed and
rejected all of the arguments reiterated in AHS’s second
objection to the R&R regarding each of AHS’s three theories of
counterclaim liability. (See R&R at 7-10 (discussing and
rejecting AHS’s arguments as to its three purported theories of
counterclaim liability against Gowanus).)

Accordingly, AHS’s

second objection constitutes an explicit attempt to relitigate
arguments already raised and considered by Judge Orenstein.

The

court will thus review the portions of Judge Orenstein’s R&R
challenged in AHS’s second objection strictly for clear error.
Caldarola v. Town of Smithtown, No. 09-CV-272, 2011 WL 1336574,
at *1 (E.D.N.Y. Apr. 4, 2011) (“[G]eneral or conclusory
objections, or objections which merely recite the same arguments
presented to the magistrate judge, are reviewed for clear
error.” (internal quotation marks omitted)); see also Zaretsky,
2012 WL 2345181, at *1; Soley, 823 F. Supp. 2d at 228.
Upon careful review of the relevant portions of Judge
Orenstein’s thorough and well-reasoned R&R, the record in this
case, and the relevant case law, the court finds no clear error

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in Judge Orenstein’s recommended findings regarding AHS’s
failure to identify or articulate a cognizable theory of
counterclaim liability in its summary judgment motion.
Moreover, even under a de novo review, the court would affirm
and adopt Judge Orenstein’s recommended finding that AHS has
failed to establish a viable legal theory on which it may
recover damages for its counterclaims.

Under both standards of

review, AHS has failed to identify and plead a specific maritime
or tort theory, with specific elements supported by sufficient
undisputed facts.

Consequently, AHS’s second objection is

respectfully overruled.
III. AHS’s Third Objection: Punitive Damages
In its third and final objection to the R&R, AHS
objects to Judge Orenstein’s finding that AHS has forfeited any
further opportunity to seek an award of punitive damages on its
counterclaims. (See AHS Obj. at 4; R&R at 10-11.)

In his R&R,

Judge Orenstein found that AHS neither objected to his 2010
Report and Recommendation recommending denial of AHS’s punitive
damages request nor sought appellate review of this court’s
subsequent adoption of that 2010 Report and Recommendation. (R&R
at 11.)

AHS now acknowledges that it failed to object to the

denial of punitive damages in Judge Orenstein’s 2010 Report and
Recommendation and thereby waived that issue on cross-appeal.
(AHS Obj. at 4.)

Nevertheless, AHS maintains that because the

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Second Circuit vacated the district court’s Order, it reserves
the right to seek punitive damages on remand. (Id.)
Upon de novo review of the record and the relevant
case law, the court finds this argument unavailing.

“The law-

of-the-case doctrine ‘posits that when a court decides upon a
rule of law, that decision should continue to govern in
subsequent stages of the same case.’” In re Northern Telecom
Ltd. Sec. Litig., 42 F. Supp. 2d 234, 239 (S.D.N.Y. 1998)
(quoting Sagendorf-Teal v. Cnty. of Rensselaer, 100 F.3d 270,
277 (2d Cir. 1996)); see also Cnty. of Suffolk v. Stone &
Webster Engineering Corp., 106 F.3d 1112, 1117 (2d Cir. 1997)
(“[A] decision made at a previous stage of litigation, which
could have been challenged in the ensuing appeal but was not,
becomes the law of the case; the parties are deemed to have
waived the right to challenge that decision . . . .”); In re PCH
Assocs., 949 F.2d 585, 592 (2d Cir. 1991) (“[A] decision on an
issue of law made at one stage of a case becomes binding
precedent to be followed in subsequent stages of the same
litigation.”).

The court is mindful that this “rule is somewhat

different after a case has gone up on appeal.” Am. Hotel Int’l
Grp., Inc. v. OneBeacon Ins. Co., 611 F. Supp. 2d 373, 378
(S.D.N.Y. 2009).

That is, “‘[w]hen an appellate court has once

decided an issue, the trial court, at a later stage in the
litigation, is under a duty to follow the appellate court’s

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ruling on that issue.’” Id. (quoting United States v. Uccio, 940
F.2d 753, 757 (2d Cir. 1991)).

If, however, “the trial court’s

decisions were not ruled on by the higher court, the trial
court’s decision remains the law of the case.” Id.

In other

words, “[t]his means[] that if an appellate court reviewed a
trial court’s decision, but did not address an issue that the
trial court decided, the trial court’s decision remains the law
of the case.” Id.; Scottish Air Int’l, Inc. v. British
Caledonian Grp., PLC, 152 F.R.D. 18, 25 (S.D.N.Y. 1993) (“Where
matters are not expressly or implicitly decided by the appellate
court, however, the appellate court’s decision does not
establish the law of the case for those issues.”).
In this case, because AHS did not appeal the first
judgment, the Second Circuit’s remand order did not rule upon,
address, or even discuss this court’s previous denial of AHS’s
request for punitive damages. See Gowanus Indus. Park, Inc. v.
Arthur Sulzer Assocs., Inc., 436 F. App’x 4, 4-7 (2d Cir. 2011). 1
Rather, the Second Circuit vacated this court’s prior judgment
on the ground that the court failed to “identify the legal basis
for imposing liability on Gowanus” and improperly computed AHS’s
compensatory damages. Id. at *6-7.

In doing so, the Second

Circuit did not reach, must less disturb, this court’s prior
1

As set forth in AHS’s third objection to the current R&R, AHS
did not object to the first Order adopting the 2010 Report and
Recommendation’s denial of punitive damages and did not, and could not, raise
that issue on appeal. (AHS’s Obj. at 4.)

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determination that punitive damages were unavailable to AHS. Id.
Accordingly, notwithstanding the vacatur of this court’s prior
judgment as to counterclaim liability and compensatory damages,
the court’s previous determination that punitive damages are
unavailable to AHS remains the law of the case because the
Second Circuit did not address punitive damages. See OneBeacon
Ins. Co., 611 F. Supp. 2d at 378.
Notably, the court “on remand has the discretion to
reconsider an issue that was not decided by the Court of
Appeals,” although “the law of the case doctrine counsels
against doing so.” Id. at 379 (citing Uccio, 940 F.2d at 758).
The court’s “decision on whether to apply the law of the case
doctrine turns principally on whether ‘reconsideration is
necessary to avoid injustice.’” Id. (quoting Scottish Air Int’l,
Inc., 152 F.R.D. at 25).

Indeed, the Second Circuit has

“advised that a court should adhere to its own prior rulings,
‘absent cogent or compelling reasons to deviate, such as an
intervening change of controlling law, the availability of new
evidence, or the need to correct a clear error or prevent
manifest injustice.’” Id. (quoting Uccio, 940 F.2d at 758).

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AHS has failed to point to any cogent or compelling
reason for this court to deviate from its prior denial of
punitive damages.

AHS has provided no additional evidence or

clear error sufficient to warrant reconsideration of the
punitive damages issue.

Nor has AHS specifically identified any

intervening change of controlling law.

Although AHS broadly

alludes to “significant Supreme Court cases concerning punitive
damages in the admiralty,” (AHS Obj. at 4), AHS has not cited or
discussed those controlling cases in its objection.

Moreover,

in its post-remand summary judgment motion, AHS cites to only
two cases in support of its renewed request for punitive
damages: (1) Williams v. City of New York, 508 F.2d 356 (2d Cir.
1974) and (2) Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008).
(AHS Mem. at 11-12.)

Neither of those cases represents an

intervening change of controlling law.

Both the Second

Circuit’s opinion Williams and the Supreme Court’s opinion in
Exxon were available to the parties and the court prior to Judge
Orenstein’s 2010 Report and Recommendation denying punitive
damages and this court’s subsequent Order adopting that 2010
Report and Recommendation.

Accordingly, the court, in its

discretion, adheres to the law of the case and therefore
declines AHS’s invitation to now reconsider its request for
punitive damages, after AHS previously failed to challenge in

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any manner the court’s 2010 decisions on the issue.

AHS’s third

objection is respectfully overruled. 2
IV.

Clear Error Review
Upon careful review of the R&R, the record before the

court, and the relevant case law, the court finds no clear error
in the portions of the R&R to which no objection has been made.
CONCLUSION
For the reasons set forth above and in Judge
Orenstein’s thorough and well-reasoned R&R, the court denies the
parties’ cross-motions for summary judgment and dismisses AHS’s
pending counterclaims.

The court grants AHS leave to amend its

Answer to plead sufficient counterclaims that articulate a
specific legal theory supported by the undisputed facts within
thirty days of this Order, or by April 29, 2013.

Following

AHS’s filing of such counterclaims, the parties may file final
dispositive motions without seeking further discovery.
SO ORDERED.
Dated:

March 29, 2013
Brooklyn, New York
____________/s/_____________
KIYO A. MATSUMOTO
United States District Judge
Eastern District of New York

2
In holding that AHS is not entitled to punitive damages, the
court need not find that AHS has “forfeited” its right to pursue punitive
damages, as stated in Judge Orenstein’s R&R. Instead, the court overrules
AHS’s objection on the ground that the law of the case doctrine counsels
against reconsideration of AHS’s renewed request for punitive damages. In so
holding, the court reaches the same result recommended by Judge Orenstein.

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