Saveria JFK, Inc. et al v. Flughafen Wien, AG
ORDER ADOPTING REPORT AND RECOMMENDATIONS AND REMANDING THIS ACTION TO STATE COURT: After de novo review of Chief Magistrate Judge Manns thorough and well-reasoned R&R, the factual and procedural record upon which it is based, and VIEs objecti ons, the R&R (Doc. No. 27 ) is adopted in its entirety.Accordingly, plaintiffs motion to remand (Doc. No. 21) is granted and the Court declines to consider VIEs proposed motions to dismiss, without prejudice to VIEs filing such motions in state cour t. This case is hereby remanded to the Supreme Court of the State of New York, Queens County, the court from which this action was removed. The Clerk of Court is directed to immediately remand this action to the Supreme Court of the State of New York, Queens County, and to close the file in this Court. Ordered by Judge Roslynn R. Mauskopf on 3/30/2017. (Taronji, Robert)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
SAVERIA JFK, INC.; SAVERIA USA, INC.; and
- against -
REPORT AND RECOMMENDATION
AND REMANDING THIS
ACTION TO STATE COURT
FLUGHAFEN WIEN, AG a/k/a VIENNA
INTERNATIONAL AIRPORT PLC,
ROSLYNN R. MAUSKOPF, United States District Judge.
Plaintiffs Saveria JFK, Inc. (“Saveria JFK”), Saveria USA Inc. (“Saveria USA”), and
Rakesh Sardana (“Sardana”) (collectively, “plaintiffs”) commenced this action in the Supreme
Court of the State of New York, Queens County on September 9, 2015. (See Notice of Removal
Ex. A-1 (“Compl.”) (Doc. No. 1-1).) Plaintiffs assert three New York common-law claims: (1)
fraudulent concealment; (2) tortious interference with prospective economic advantage regarding
business at JFK; and (3) tortious interference with prospective economic advantage regarding
business at the Aruba, Miami, and Dublin airports. (See id. at 22–28.)1 On October 28, 2015,
defendant Flughafen Wien, AG, a/k/a Vienna International Airport PLC (“VIE”), removed the
case from state court to this Court. (See Notice of Removal (Doc. No. 1).) Although the
complaint does not reflect complete diversity of citizenship, VIE contends that Sardana – the
lone diversity-destroying plaintiff – should be disregarded under the doctrine of fraudulent
joinder. (See Notice of Removal at 2–6.)
For ease of reference, citations to Court documents utilize the Electronic Case Filing System (“ECF”) pagination.
Plaintiffs seek to remand this action to state court, arguing that VIE has not met the high
burden required for establishing fraudulent joinder. (Pls.’ Mot. Remand (Doc. No. 21).) VIE
opposes plaintiffs’ motion and seeks leave to move to dismiss based on lack of personal
jurisdiction, failure to state a claim, and forum non conveniens. (Def.’s Opp’n to Mot. Remand
(Doc. No. 23).) By Order entered February 23, 2016, this Court referred those motions to the
assigned Magistrate Judge, the Honorable Roanne L. Mann, for a Report and Recommendation
(“R&R”). Chief Magistrate Judge Mann received full briefing on the issues and heard extensive
oral arguments from the parties on March 4, 2016. (See 3/4/16 Tr. of Proceedings (Doc. No.
On May 3, 2016, Chief Magistrate Judge Mann issued an R&R recommending that
plaintiffs’ motion to remand be granted and VIE’s motions to dismiss be denied without
prejudice. (R&R (Doc. No. 27) at 20.) Chief Magistrate Judge Mann found that VIE has not
shown by clear and convincing evidence that the complaint – when properly viewed in the light
most favorable to the non-diverse Sardana – fails to assert at least one cause of action brought by
Sardana, suing in his personal capacity. (See R&R at 11–16.) Chief Magistrate Judge Mann
further found that VIE’s statute of limitations defense does not provide a basis for disregarding
the non-diverse Sardana because VIE has not met its heavy burden of showing that every claim
that Sardana has arguably asserted would be time-barred. (See R&R at 16–20.) On May 20,
2016, VIE filed timely objections to the R&R. (Def.’s Obj. (Doc. No. 28).) On June 1, 2016,
plaintiffs filed a memorandum in opposition to VIE’s objections. (Pls.’ Opp’n to Obj. (Doc. No.
The Court has reviewed de novo Magistrate Judge Mann’s thorough and well reasoned
R&R, as well as VIE’s objections and Sardana’s opposition to those objections, and reasons set
adopts the R&R in its entirety for all of the reasons set forth in the R&R.
STANDARD OF REVIEW
When reviewing an R&R, a 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)(C).
When a party raises an objection to an R&R, the district court “shall make a de novo
determination of those portions of the Report and Recommendation to which objection is made.”
28 U.S.C. § 636(b)(1); see Thomas v. Arn, 474 U.S. 140, 149–50 (1985); Pizarro v. Bartlett, 776
F. Supp. 815, 817 (S.D.N.Y. 1991). However, if a party “simply reiterates [its] original
arguments, the Court reviews the Report and Recommendation only for clear error.” Libbey v.
Vill. Of Atl. Beach, 982 F. Supp. 2d 185, 199 (E.D.N.Y. 2013) (internal quotation marks and
citation omitted). Moreover, portions to which no party has objected are reviewed for clear
error. See Morritt v. Stryker Corp., 973 F. Supp. 2d 177, 181 (E.D.N.Y. 2013); Price v. City of
New York, 797 F. Supp. 2d 219, 223 (E.D.N.Y. 2011). The Court will find clear error only
where, upon a review of the entire record, it is left with the definite and firm conviction that a
mistake has been committed. See Fed. R. Civ. P. 72(a); Regan v. Daimler Chrysler Corp., No.
07-CV-1112 (RRM) (JO), 2008 WL 2795470, at *1 (E.D.N.Y. July 18, 2008); Nielsen v. New
York City Dep’t of Educ., No. 04-CV-2182 (NGG) (LB), 2007 WL 1987792, at *1 (E.D.N.Y.
July 5, 2007).
The Court assumes familiarity with the facts, procedural history, and background of this
matter as set forth in the R&R, none of which is in dispute. (See R&R at 2–8.) At the outset, it
is important to note that neither party objects to the Magistrate Judge’s articulation of the
applicable fraudulent joinder standards. (See R&R at 8–13.) Moreover, the Court notes VIE’s
objections are largely a “second bite at the apple,” as they merely reiterate the arguments made
before and rejected by the Magistrate Judge. (See generally Def.’s Opp’n Mot. to Remand;
VIE asserts the following objections: (1) the R&R erroneously found that the complaint
alleges a personal injury to Sardana, because any injury to Sardana’s ability to do business
“using any entity” would be a derivative injury belonging to the entity; (2) the R&R erroneously
applied the common defense rule to find that it could not consider VIE’s statute of limitations
argument because it was not specific to Sardana; (3) the R&R erroneously found that the oneyear defamation statute of limitations might not apply to Sardana’s claims or that tolling or
estoppel might apply; and (4) the R&R erroneously declined to consider VIE’s proposed motions
to dismiss for lack of personal jurisdiction and forum non conveniens. (See Def.’s Obj. 8–9.)
Here, the Court briefly addresses each objection in turn.
Whether the Complaint Alleges an Injury to Sardana Personally
First, VIE rehashes its argument that Sardana has “no possibility of stating a claim”
because the complaint does not allege an injury to Sardana personally, but rather an injury to
Saveria JFK or other entities. (See Def.’s Obj. at 18–19.) Under the applicable standards of
fraudulent joinder applied by the magistrate judge – standards that the parties do not dispute –
VIE has the heavy burden of showing by clear and convincing evidence that the complaint, when
properly viewed in the light most favorable to Sardana, and under the liberal pleading standards
of New York’s Civil Practice Law and Rules, fails to “colorably assert” at least one cause of
action brought by Sardana, suing in his personal capacity. See Pampillonia v. RJR Nabisco, Inc.,
138 F.3d 459, 461 (2d Cir. 1998); see also Intershoe, Inc. v. Filanto S.P.A., 97 F. Supp. 2d 471,
474 (S.D.N.Y. 2000). As the Magistrate Judge properly concluded, the complaint alleges facts
that, if taken to be true, create the possibility that Sardana may recover in his individual capacity
for tortious interference with prospective economic advantage. (See R&R at 11–16.)
Specifically, the complaint alleges that Sardana had business relationships with various airport
partners – including a relationship with JFKIAT that began before Saveria JFK was created –
and those relationships were founded on Sardana’s own reputation as an entrepreneur. (See
Compl. at ¶¶ 31–32, 64, 67, 70, 76.) The complaint further alleges that VIE and its agents knew
of Sardana’s relationships and intentionally undertook a campaign – motivated by animus against
Sardana’s Indian ethnicity – to destroy Sardana’s ability to do any business with these partners
through any entity, including entities that Sardana might hope to form in the future. (See Compl.
at ¶¶ 42, 50–60, 97–99, 115–18.) Finally, the complaint alleges that Sardana was personally
injured by VIE’s actions, in that he was unable to enter into business relationships of any kind –
irrespective of whether he might wish to enter into those relationships using a corporate vehicle
or in a personal capacity. (See id. ¶¶ 108–12, 114–17, 125.)
Contrary to VIE’s objection, and as the magistrate judge properly concluded, the mere
fact that Sardana may choose to use one or more corporate vehicles to pursue business
opportunities does not mean that his personal business opportunities belonged to those future
entities; Sardana was free to pursue those opportunities, which he developed based on his
personal reputation as a businessman, “using any entity” or none at all. In any event, even if
Sardana pursued his personal business opportunities through Saveria JFK or another entity,
claims of tortious interference with prospective economic advantage do not require the existence
of a contractual relationship. See NBT Bancorop Inc. v. Fleet/Norstar Fin. Grp., Inc., 87 N.Y.2d
614, 621 (1996); see also Brown v. AXA RE, No. 02-CV-10138 (LTS) (AJ), 2004 WL 941959, at
*8 (S.D.N.Y. May 3, 2004) (finding that the plaintiff film producers who had negotiated
financing to pursue their film suffered a personal injury of tortious interference even though their
names did not appear on the face of the interfered with contract).
VIE’s objection that the complaint does not contain specific allegations about future
entities or even the possibility of such entities being formed is immaterial. (See Def.’s Obj. at
21.) Even assuming that is true, the complaint specifically alleges that various airports rejected
Sardana’s business proposals because they believed Sardana “was deceitful and untrustworthy”
after reading about his disputes with VIE, thereby denying Sardana personally the possibility of
future business relationships. (See Compl. at ¶¶ 115–17.) This is sufficient to give rise to a
Likewise, as the magistrate judge properly concluded, Sardana’s claims are not derivative
of Saveria JFK’s claims. The complaint does not allege that Sardana is suing on behalf of
Saveria JFK for injuries suffered by the corporation. Instead, the complaint alleges injuries
suffered to Sardana in a personal capacity, namely that VIE interfered with Sardana’s “separate
and distinct” ability to conduct his own business “using any entity” or none at all. See PI, Inc. v.
Ogle, No. 95-CV-1723 (JGK), 1997 WL 37941, at *3 (S.D.N.Y. Jan. 30, 1997) (“An individual
shareholder can sue for an injury which is separate and distinct from that suffered by other
shareholders, such as the right to vote, or to assert majority control, which exists independently
of the corporation.”); see also TVT Records v. Island Def Jam Music Group, 279 F. Supp. 2d
366, 383–84 (S.D.N.Y. 2003), rev’d on other grounds, 412 F.3d 82 (2d Cir. 2005) (finding that a
wholly owned subsidiary of a company could pursue an action for tortious interference). In its
objections, VIE relies on Alexander & Alexander of N.Y. Inc. v. Fritzen, 114 A.D.2d 814, 815
(1985), aff’d, 68 N.Y.2d 968 (1986) to argue that a plaintiff cannot sue for interference with a
relationship that belonged to a related corporate entity. (See Def.’s Obj. at 19.) However, the
facts in Alexander are distinguishable from the case at hand. The court in Alexander found that
the plaintiff parent corporation could not claim tortious interference in its subsidiary
corporation’s contractual relationships without demonstrating “complete dominion or control”
over the subsidiary corporation. See Alexander, 114 A.D.2d at 815. Here, however, Sardana
alleges that VIE interfered with the separate and distinct ability to conduct his own business that
he developed – in part based on his own reputation – using any entity or none at all.
VIE thus raises objections that reiterate the arguments previously rejected by the
Magistrate Judge. Thus, after de novo review, the Court adopts in full the reasoning and
conclusions of Chief Magistrate Judge Mann regarding the viability of a personal claim brought
by Sardana. Accordingly, the Court finds that VIE has not shown by clear and convincing
evidence that the complaint, when properly viewed in the light most favorable to Sardana, and
under the liberal pleading standards of New York’s Civil Practice Law and Rules, fails to
“colorably assert” at least one cause of action brought by Sardana, suing in his personal capacity.
See Pampillonia, 138 F.3d at 461; see also Intershoe, 97 F. Supp. 2d at 474.
The Common Defense Rule
VIE goes on to claim that the Magistrate Judge improperly invoked what is referred to as the
“common defense rule” to its statute of limitations argument, as the rule has not been recognized
by the Second Circuit. VIE’s objection in this regard is without merit.
Put briefly, the common defense rule prevents a defendant from removing a case to
federal court under the basis of fraudulent joinder and then asserting a defense – in this case
VIE’s statute of limitations defense – that defeats the all of the plaintiffs’ claims, not just that of
the diversity-destroying plaintiff. See, e.g., Intershoe, 97 F. Supp. 2d at 474–75; see also
Chesapeake & Ohio Railway Co. v. L.B. Cockrell, 232 U.S. 146, 153 (1914); Smallwood v.
Illinois Cent. R. Co., 385 F.3d 568, 575 (5th Cir. 2004) (en banc). Rather, where the invocation
of fraudulent joinder is, in essence, a challenge to the viability of all claims, “the proper remedy
is to move to dismiss in state court, not to remove the action to federal court.” Intershoe, 97
F.Supp.2d at 475.
VIE is correct that the Magistrate Judge makes brief reference to the common defense
rule in a brief passage musing as to whether the Court should even entertain VIE’s statute of
limitations defense on this remand motion (See R&R at 10, 17–18.) However, the Magistrate
Judge’s recommendation with respect to VIE’s statute of limitations defense in no way turns on
that rule. Rather, the Magistrate Judge addressed the merits of VIE’s statute of limitations
claims and properly concluded that VIE has not met its burden of showing that all of Sardana’s
claims would be time-barred, as discussed below. Thus, VIE’s objection relating to the common
defense rule fails.
Statute of Limitations, Tolling, and Estoppel
Next, VIE reiterates the arguments made before the Magistrate Judge that any claim by
Sardana is time-barred by the one-year statute of limitations pertaining to defamation claims.
However, as the Magistrate Judge correctly found, VIE “has not shown that all of Sardana’s
claims would necessarily be governed by the one-year statute of limitations for defamation.”
(R&R at 18–19); see, e.g., Mahmud v. Kaufmann, 454 F. Supp. 2d 150, 162 (S.D.N.Y. 2006)
(declining to apply a one-year statute of limitations on a motion to dismiss, which would apply to
claims for damages for “an injury to reputation,” because plaintiff “define[d] her damages as
injuries to her ‘business relationships’”); Eisenberg v. Yes Clothing Co., No 90-CV-8280 (JFK),
1991 WL 107432, at *4 (S.D.N.Y. June 7, 1991) (applying New York’s three-year statute of
limitations – applicable to actions to recover damages for injury to property – to a tortious
interference claim, even where the alleged interference “consisted of words”); Amaranth LLC v.
J.P. Morgan chase & Co., 71 A.D.3d 40, 48 (1st Dep’t 2009) (“The three-year statute of
limitations for tortious interference applies when the gravamen of a complaint is economic
injury, rather than merely reputational harm.”).
Contrary to VIE’s objection, the cases cited above do not stand for the proposition that a
plaintiff claiming tortious interference must allege that defendant specifically reached out to third
parties to dissuade them from doing business with plaintiff. (See Def.’s Obj. at 21–22.) Rather,
in those cases, tortious interference occurred where, as here, the complaint alleged prospective
contracts and business relationships, which were affected by the defendant’s intentional actions.
See Eisenberg, 1991 WL 107432, at *4 (“Although . . . defendants’ actions injured [plaintiff’s]
reputation, plaintiff also claims that her economic interests . . . were injured by defendants’
intentional acts.”); Amaranth, 71 A.D.3d at 48 (finding that the complaint alleged a tortious
interference claim because it contained allegations that a specific business relationship had been
harmed); see also Lesesne v. Brimecome, 918 F. Supp. 2d 221, 227 (S.D.N.Y. 2013) (dismissing
a tortious interference claim because the plaintiff did not allege any prospective relationship with
which the defendant interfered).
Likewise, VIE’s rehashed argument that equitable tolling and estoppel do not apply to
Sardana’s claims is unavailing. Under New York law, the doctrines of equitable tolling and
equitable estoppel “may be invoked to defeat a statute of limitations defense when the plaintiff
was induced by fraud, misrepresentations or deception to refrain from filing a timely action.”
Abbas v. Dixon, 480 F.3d 636, 642 (2d Cir. 2007) (internal quotation marks omitted). As the
Magistrate Judge properly concluded, where, as here, there are factual disputes concerning the
timeliness of claims and applicability of these equitable doctrines, the statute of limitations does
not provide a basis for disregarding the non-diverse plaintiff. See, e.g., Steele v. Anderson, No.
03-CV-1251 (TJM), 2004 WL 45527, at *1 (N.D.N.Y. Jan. 8, 2004). Here, as the Magistrate
Judge noted, the parties’ dueling submissions reveal disputes concerning the state of Sardana’s
knowledge, prior to September 2013, as to the scope of VIE’s alleged scheme, as well as the
reasonableness of Sardana’s reliance on an assurance from VIE’s alleged agent that VIE’s
campaign to destroy Sardana did not extend to business opportunities in New York. (Compare
Def.’s Opp’n to Mot. Remand at 24–27, with Pls.’ Reply (Doc. No. 26) at 5–8, and Compl. ¶¶ 1,
60, 80.) Thus, the Magistrate Judge correctly concluded that Sardana has potentially viable
claims of equitable tolling or estoppel that could be asserted in state court to save any claim that
arguably would fall outside of any statute of limitations. See Ehrenreich v. Black, 994 F. Supp.
2d 284, 289 (E.D.N.Y. 2014) (“Any possibility of recovery, even if slim, militates against a
finding of fraudulent joinder . . . .”); see also MBIA Ins. Corp. v. Royal Bank of Canada, 706 F.
Supp. 2d 380, 396 (S.D.N.Y. 2009) (“[T]he inquiry remains whether [p]laintiffs have a
possibility of asserting such claims, not whether [p]laintiffs are likely to succeed on these claims
on the merits.”).
VIE’s Cross-Motions to Dismiss
Finally, in its objections to the R&R, VIE once again requests that the Court address the
issues of personal jurisdiction and forum non conveniens before determining if the Court has
subject matter jurisdiction. (See Def.’s Obj. at 24; Def.’s 12/3/15 Letters.) As Chief Magistrate
Judge Mann properly noted, while a trial court is not barred from considering personal
jurisdiction or forum non conveniens before determining that it has subject matter jurisdiction,
“Article III generally requires a federal court to satisfy itself of its jurisdiction over the subject
matter before it considers the merits of the case.” Ruhrgas AG v. Marathon Oil Co., 526 U.S.
574, 583 (1999) (citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101–02 (1998)); see
Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 432 (2007). Where, as here,
subject matter jurisdiction “involves no arduous inquiry . . . both expedition and sensitivity to
state courts’ coequal statute should impel the federal court to dispose of that issue first.”
Ruhrgas, 526 U.S. at 587–88. VIE will have its opportunity to address these issues in state court,
the forum that properly has jurisdiction over this action
After de novo review of Chief Magistrate Judge Mann’s thorough and well-reasoned
R&R, the factual and procedural record upon which it is based, and VIE’s objections, the R&R
(Doc. No. 27) is adopted in its entirety.
Accordingly, plaintiffs’ motion to remand (Doc. No. 21) is granted and the Court declines
to consider VIE’s proposed motions to dismiss, without prejudice to VIE’s filing such motions in
state court. This case is hereby remanded to the Supreme Court of the State of New York,
Queens County, the court from which this action was removed.
The Clerk of Court is directed to immediately remand this action to the Supreme Court of
the State of New York, Queens County, and to close the file in this Court.
Roslynn R. Mauskopf
ROSLYNN R. MAUSKOPF
United States District Judge
Dated: Brooklyn, New York
March 30, 2017
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