Zsa Zsa Jewels, Inc. v. BMW of North America, LLC et al

Filing 133

ORDER denying 116 Motion to Reopen Discovery. Ordered by Judge I. Leo Glasser on 6/18/2020. (Schneyer, David)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ZSA ZSA JEWELS, INC.,
Plaintiff,

MEMORANDUM AND ORDER

-against15-CV-6519 (ILG)
BMW OF NORTH AMERICA, LLC,
Defendant.
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GLASSER, Senior United States District Judge:
On April 1, 2020, Plaintiff moved to reopen discovery pursuant to Fed. R. Civ. P. 16(b)(4).
(ECF No. 116). Specifically, Plaintiff seeks to add a new expert witness to testify on a new theory
of damages based on the loss of value of its business. (Id. at 1). For the reasons stated below, the
motion is DENIED.
BACKGROUND
Plaintiff, a jewelry company, alleges that an automobile manufactured and designed by
Defendant caught fire and damaged its merchandise. The first amended complaint sought damages
for lost profits, in the amount of $5,677,114. (ECF No. 32 at 37–38). That figure was derived from
the alleged retail value of the goods. (ECF No. 104-5 at 2).
Extensive discovery was completed on February 1, 2018. On October 11, 2019 this Court
issued a Memorandum and Order granting Defendant’s motion to preclude the testimony of
Plaintiff’s expert witness, and partially granting Defendant’s motion for summary judgment. (ECF
No. 97).
Following the Court’s order, Plaintiff further amended its complaint to remove all claims
for lost profits, which it conceded had no basis in law. (ECF No. 115; ECF No. 109 at 5). It also
moved to reopen discovery “to allow for the disclosure of a new expert witness to testify as to the
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plaintiff’s damages, specifically, the lost value of its business resulting from the fire which
destroyed virtually all of the plaintiff’s inventory.” (ECF No. 116 at 1). Defendant characterizes
this motion as vexatious and dilatory, and argues that it reflects a strategy of “anchoring Plaintiff’s
claim in the millions of dollars regardless of the merits.” (Def’s Opp’n 3, 10) (internal quotation
marks omitted).
DISCUSSION
“As a general rule, discovery should only be re-opened for good cause, depending on the
diligence of the moving party.” Moroughan v. Cty. of Suffolk, 320 F. Supp. 3d 511, 515 (E.D.N.Y.
2018) (citing Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003)). Courts may consider
the following factors: (1) whether trial is imminent; (2) whether the request is opposed; (3) whether
the non-moving party would be prejudiced; (4) whether the moving party was diligent in obtaining
discovery within the guidelines established by the court; (5) the foreseeability of the need for
additional discovery in light of the time allowed for discovery by the district court; and (6) the
likelihood that the discovery will lead to relevant evidence. New York v. Mountain Tobacco Co.,
No. 12-CV-6276 JS SIL, 2015 WL 3455080, at *13 (E.D.N.Y. 2015). A balancing of these six
factors weighs overwhelmingly against Plaintiff.
Reopening discovery would unduly prejudice Defendant, by upending the virtue of finality
in litigation. Discovery was completed over two years ago, after this Court granted multiple
extensions. (ECF Nos. 32, 68). It was followed by an order of partial summary judgment. (ECF
No. 97). Plaintiff’s motion is “simply untimely.” Garcia v. U.S. Postal Ser., No. 98 CIV. 9152
WHP HBP, 2000 WL 1201391, at *1 (S.D.N.Y. Aug. 22, 2000); see also Gotlin v. Lederman, No.
04-CV-3736 (ILG), 2009 WL 2843380, at *4 (E.D.N.Y. Sept. 1, 2009) (“Given that expert

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discovery closed over a year ago and dispositive motions have already been decided, it is simply
too late in the day [to reopen discovery].”).
Furthermore, a claim for loss of value to the business was foreseeable long before discovery
closed in February 2018. Plaintiff offers no compelling justification for why it had to wait until
now to pursue this new damages theory. Indeed, Plaintiff concedes that its business “started
dwindling” in early 2016, and then “caved in completely” during June or July of that year.
(Pl’s Reply 4). But it did not assert a claim for lost business value at that time, because it was still
hoping to prevail on a claim for lost profits. (Id.). The Court is unmoved by this explanation for
Plaintiff’s lengthy delay. At the very least, Plaintiff could have asserted a lost business value claim
as an alternative theory of relief. Furthermore, the claim for lost profits was not merely misguided.
It was meritless to the point of being sanctionable.1 Plaintiff should have known all along that the
lost profits claim had no chance of success as a matter of law, and so this cannot serve as the excuse
for its delay. (See Def’s Opp’n 11) (“Plaintiff now appears to believe that it should be rewarded
for being on the wrong side of the law on the Rule 11 motion, by being given a fresh start on the
issue of damages.”).
At best, all this this suggests a lack of diligence on Plaintiff’s part. See Gem Fin. Serv., Inc.
v. City of New York, No. 13-CV-1686 (MKB) (RER), 2019 WL 8014411, at *4 (E.D.N.Y. Apr.
18, 2019) (noting that “diligence is entwined with foreseeability, because whether Plaintiff
exercised sufficient diligence depends on whether the need for a new expert witness was
foreseeable.”) At worst, Plaintiff’s motion to reopen discovery is a dilatory tactic stemming from
its dissatisfaction with its “potential damages when calculated in accordance with the law.” (Def’s

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In a Memorandum and Order dated April 2, 2020, the Court sanctioned Plaintiff’s counsel under
Fed. R. Civ. P. 11(b)(2) for seeking lost profits in the first amended complaint. (ECF No. 119).
The Court found that such a claim was entirely without basis in the law. (Id.).
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Opp’n 1, 3). Either way, there is nothing in the balance of factors which weighs in favor of
reopening discovery.2
CONCLUSION
Accordingly, Plaintiff’s motion is DENIED. Mindful that partial summary judgment was
entered over eight months ago, the Court strongly encourages the parties to schedule a trial.
SO ORDERED.
Dated: Brooklyn, New York
June 18, 2020

/s/
I. Leo Glasser

U.S.D.J.

Plaintiff also argues, without further elaboration, that reopening discovery to permit “expert
opinion as to the lost value of its business destroyed as a result of the negligence of BMW would
certainly result in the development of relevant evidence.” (Pl’s Reply 5). The Court does not afford
any weight to this conclusory assertion.
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