Abraham et al v. Entrepreneur Media, Inc.

Filing 8

AFFIDAVIT/DECLARATION in Opposition re 4 MOTION to Dismiss and Request for Continuance filed by A.W. Management Services, Inc., Ilan Abraham, Allen Akers, Mary L. Akers, Jimmy Aleman, Nieves Aleman, Marcus Alonso, Lucia Alva, Jose Alvarez, John Appelt, Darren Aquino, John Aquino, Susan Asaro, Stephen Belluardo, Nicole Benton, John Bierl, Michele Bierl, William Bierl, Liron Binshtoch, James Bombolevicz, Bernadatte Burns, David Burns, Kevin Butler, Mario Capuano, Dominick Casazza, Frank Caserta, Jerry Castaldo, Craig Colluzzi, James Cooke, Joseph Cravotta, Patricia Cravotta, Louis D'Errico, Vincent D'Onofrio, Maria Delgado, Kappa Farid, James Ferraiolo, Rosie Ferraiolo, Rossi Ferraiolo, Stanley Ferraiolo, Kathleen Ferrante, Nina Fitzmaurice, Joseph Galletti, Edgardo Acosta Garcia, Ildefonso Acosta Garcia, Christopher Gravagna, Lauren Gunsel, Janine Haufi, Ioannis Karagiannis, Luis Lara-Rivas, Ricky Lee, Shyvonne Lopez, Thomas P. Lucey, Paul J. Lukasik, Russell Martin, Joseph Martino, Thomas Maughan, Debroah McGlone-Baluch, Robert McKenna, Daliana Badillo Mercado, Lucas Moeller, Ray Moeller, Benvendo Neves, William K. Ng, Alfred Pappalardi, Kalpesh Patel, Ramash B. Pitti, Gennaro Prudente, Richard Racioppi, Jr, Kathleen Ray, Marjorie Rodriguez, Maryanne Rotella, Larry Samuels, John Scherillo, Gila Schiowitz, Robert Schwabb, Kathleen Smith, Joseph Stemberger, Kathryn Sulek, Michael Sulek, Randy Tejada, Avi Trope, Hillil Trope, Arthur Tyler, Mark Tyler, Angel Vasquez, Konstantinos Vassiliou, Adam Wysocki, Jan Wysocki. (Attachments: # 1 Affirmation in Opposition part 2) (Bloom, Eliot)

LINITED S ATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

INdCXNO.: O9-CV-2496
District Judge Joanna Seybert

----------------x
ILAN ABRAHAM, EDGARDO ACOSTA GARCIA,
ILDEFONSO ACOSTA GARCIA, ALLEN AKERS, MARY L.
AKERS, JIMMY ALEMAN, NIEVES ALEMAN, MARCUS
ALONSO, LUCIA ALVA, JOSE ALVAREZ, JOHN APPELT,
DARREN AQUINO, JOHN AQUINO, SUSAN ASARO, A.W.
MANAGEMENT SERVICES, INIC., DEBROAH MCGLONEBALUCH, STEPHEN BELLUARDO, NiCOLE BENTON, JOHN
BIERL, MICHELE BIERL, WILLIAM BIERL, LIRON
BINSHTOCH, JAMES BOMBOLEVTCZ, BERNADATTE
BURNS, DAVID BURNS, KEVIN BUTLER, MARIO

CAPUANO, DOMINICK CASAZZA, FRANK CASERTA,
JERRY CASTALDO, CRAIG COLLUZZT, JAMES COOKE,
JOSEPH CRAVOTTA, PATRICIA CRAVOTTA, MARIA
DELGADO, LOUIS D'ERzuCO, VINCENT D'ONOFRIO,

KAPPA FARID, KATHLEEN FERRANTE,

ROSIE
FERRAIOLO, ROSSI FERRAIOLO, JAMES FERRAIOLO,
STANLEY FERRAIOLO, NINA FITZMAURICE, JOSEPH
GALLETTI, CHRISTOPHER GRAVAGNA, LAUREN GIINSEL,

JANINE HAUFI, IOANNIS KARAGIANNIS, LUIS LARARIVAS, zuCKY LEE, SHYVONNE LOPEZ, THOMAS P.
LUCEY, PAUL J. LUKASIK, RUSSELL MARTIN, JOSEPH
MARTINO" THOMAS MAUGHAN, ROBERT MCKENNA,
DALIANA BADILLO MERCADO, LUCAS MOELLER, RAY
MOELLER, BENVENDO NEVES, WILIAM K. NG, ALFREI)
PAPPALARDI, KALPESH PATEL, RAMASH B. PITTI,
GENNARO PRUDENTE, RICHARD RACIOPPI, JR.,
KATHLEEN RAY, MARJORIE RODRIGUEZ, MARYANNE
ROTELLA, LARRY SAMTJE,LS, GILA SCHIOWITZ, ROBERT
SCHWABB, JOFil\J SCHERILLO, KATHLEEN SMITH, JOSEPH
STEMBERGER, MICHAEL SULEK, KATHRYN SULEK,
RANDY TEJADA, AVI TROPE, HiLLIL TROPE, ARTHUR
TYLER, MARK TYLER, ANGEL VASQUEZ,
KONSTANTINOS VASSILIOT,T, ADAM WYSOCKI, JAN
WYSOCKI,
Plaintiffs,
-againstENTREPRENEUR. IVIEDIA. INC..

::::i:::

....x

AFFIRMATION IN
OPPOSITION TO
DEFENDANT'S
MOTION TO
DISMISS AND
REQUEST FOR
CONTINUANCE
UNDER RULE 56(fl

ELIOT F. BLOOM (9423), an attomey duly licensed to practice larv before the Courts of
this State, hereby affirms the following to be irue under penalties of perjury:

1.

I am the attorney of record for Plaintiffs, and, as such, am fully familiar with the

facts and circumstances herein.

2,

This Affirmation is respectfully submined in opposition to I)efendant's Motion to

Dismiss all counts of Plaintiffb' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).

Additionally, Plaintiffs respectfully request a continuance under Federal Rule of Civil Procedure
56(f) so that they may conduct discovery in this matter.

AncunnnNT

I.

Rule 12(b)(6) Motion to Dismiss and Rule 56 Motion for Summary Judgment
Standard

Disnrissal of a complaint for "failure to state a claim is a 'drastic step."' Davidson

Citicorp, 1990 WL 176426 (S.D.N.Y. 1990) (quoting Meyer v. Oppenheimer

v.

Management,

Corp., 7 64 F .2d I6, 80 (2d Cir. 1 985)). In evaluating a motion to dismiss under Rule 12(b)(5), a
court must "accept as true all factual statements alleged in the complaint and draw all reasonabie
inferences in favor of the non-moving

pafy."

Vietnam

Ass'nfor Victims of Agent Orange v. Dow

Chem. Co.,517 F.3d t04 (2d Cir.2008) (quoting Gormanv. Consol. Edison Carp.,488 F.3d
586, 591-92 (2d Cir.2007);). Thus, because the complaint is to be liberally construed in favor

of

Plaintiff. Jenkins v. McKeithen, 395 U.S. 41I, 421(1969), a motion to dismiss must be assessed
in light of liberal pleading standards, which require only "a short and plain statement of the claim
showing that the pleader is entitled to relief." Fed.R.Civ.P. 8. Plaintiffmay survive dismissal if it

is demonstrated that a cognizable claim would exist under the alleged facts.

See generally

Boddiev. Schnieder. 105 F.3d 857 (2d Circ. I99l).
However, Rules 12(b) and (c) of the Federal Rules of Civil Procedule provide that "if, on

a motion to dismiss under Rule 12(b)(6) or a motion for judgment on the pleadings, matters
outside the plea<iings are presented to and not excluded by the court, the motion must be treated
as one

for summary judgment and disposed of

as

provided in Rule 56." 138 A.L.R. Frp. 393. It

is well estabiished that the "party seeking summary judgment bears the burden of establishing
that no genuine issue of, material fact exists and that the undisputed facts establish her right to
judgment as a matter of law.." Florange! Rodriguez v. City of New York,72 F.3d 1051, 1060-61.
In evaluating a summary judgment motion, the Court "is required to draw ali factual inferences in

favor of, and take all factual assertions in the light most favorable to, the parly opposing
summary judgment." Rule v. Brine, Inc., 85 F.3d 1002, i011 (2d
summar:y judgment is

Cir. 1996). Nevertheless,

wholly inappropriate until the non-movant has had an adequate opportunity

to conduct discovery. See Crystalline H20, Inc. v. Orminiski,105 F.Supp.2d3,7-8 (N.D.N.Y.

2000). In other words, the non-moving party "must have

. . the opportunity to discover

inforrnation that is essential to [its] opposition to the motion for summary judgment." Id. at 8.

II.

Flaintiffs' Complaint States A Cognizable Cause Of Action And Must
Survive Rule 12(b)(6) Dismissal

Defendant asks that this Court dismiss the within matter because Plaintiffs' allegations
are insufficient to establish that Defendant acted w-ith gross negligence and in disregard for the

rights of Plaintiffs. As discussed at length infra"prior to Defendant's within motion Plaintiffs had
not been afforded the opportunity to conduct discovery in this matter, as Defendant has answered
by rvay of Rule 12(bX6) motion to dismiss.

When deciding a motion to dismiss, "the Court must accept the plaintiffs allegations of
fact as true, together with such reasonabie inferences as may be drawn in [its] favor." Davidson
v. Citicorp/Citibank,1990 WL 176426 (S.D.N.Y. 1990). Accordingly, the factual allegations of

the complaint-which Plaintiffs have not yet had the opportunity to further refine and develop
through the discovery process-highlight Defendantos reckless and grossly negligent conduct,
thereby allowing for a reasonable inference that Defendant had reason to doubt the veracify" of the

Agape World. Inc. (hereinafter "Agape") information prior to its publication of the article at
issue,

"Hot 100: America's Top Fast-Growth Businesses and the Entrepreneurs Who Built Them"

(hereinafter "Hot 100"). Far from constituting a mere suspicion of a right of action, the facts

set forth

in Plaintiffs'

complaint raises plausible allegations

as

of misconduct on the part of

Defendant to the detriment of Plaintiffs herein.

m.

Defendant's Motion to Dismiss All Counts of Plaintiffs' Complaint Under
Federal R.ule of Civil Procedmre 12(bX6) Is In Fact A Motion for Summary
Judgment Pursuant Federal Rule of Civil Procedure 56

While Defendant labeis its motion as a "motion to Dismiss All Counts of the Complaint
Under Federal Rules of Civil Procedure 12(bX6)", Defendant's instant motion is in fact a Motion

for Summary Judgment pursuant to Federal Rules of Civil Procedure 56. Although Defendant
subrnits that Plaintiffs have failed to state a claim upon which relief may be granted, Defendant's
argument disputes issues of fact that pertain to Plaintiffs' theories of law.

For example, in its Argument section of its Motion to Dismiss Def,endant recites what it
purports to be the entirety of its Hot 100 publication for Agape. Based on the nature and length

of this entry-which Defendant describes as a "brief reference" consisting of Agape "contact
information and data"-Defendant asserts that this entry falls short of providing a basis for

Plaintiffs' gross negligence action.
However, Plaintiffs' claim of Defendant's gross negligence is not confined to the text that
appeared on the face

of its Hot 100 article, but also includes the circumstances surrounding its

publication placing Agape in a particularly positive financial light. Indeed, it is the manner in

which Defendant conducted itself and the knowledge Defendant possessed as to Agape's
financial strength prior to the Hot 100 publication that is of principal importance to Plaintiffs'
claim that Defendant acted with gross negligence. These considerations are factual in nature, and

Plaintiffs have not yet had the opportunity to discover information in support of their claim.
Nevertheless, the factual statements as recited by Plaintiffs in their Verified Complaint, when
accepted as true by the Court, as required, constitute a cognizable claim of gross negligence as
asainst Defendant.

IV.

Defendant's Motion For Summary Judgment Should Be Stayed And NonMovant Plaintiffs' Request For A Continuance To Allow Plaintiffs To
Conduct Discoverv Granted

As discussed above, Defendant's Motion to Dismiss is in actuality

a

motion for summary

judgment pursuant to Rule 56, as it seeks to infuse questions of fact rather than deal exclusively

with questions of law. As stated in the text of Rule 56, "discovery and disclosure materials on

file" are a chief component in the consideration of a motion fcrr surnmary

judgment.

Fed.R.Civ.P. 56(c). Indeed, is well established that, pursuant to Rule 56(f), "summary judgment
may be inappropriate where the party opposing

it

shows . . . that

[it] cannot

at the time present

facts essential to justify [its] opposition." Trebor Sportswear Co. v. The Ltd. Stores, Inc., 865

F.2d 5A6, 511 (2d Cir. 1989). Because Defendant answered Plaintiffs' complaint by the within

Motion to Dismiss rather than by answer, the parties have not yet commenced discovery and