Anwar et al v. Fairfield Greenwich Limited et al

Filing 874

MEMORANDUM OF LAW in Opposition re: #858 MOTION for Reconsideration., #860 MOTION for Reconsideration re; (853 in 1:09-cv-00118-VM-THK, 853 in 1:09-cv-00118-VM-THK, 155 in 1:10-cv-00920-VM, 155 in 1:10-cv-00920-VM) Order on Motion for Leave to File Document, Order on Motion to Amend/Correct,,,, filed by Maridom, Caribe MOTION for Reconsideration re; (853 in 1:09-cv-00118-VM-THK, 853 in 1:09-cv-00118-VM-THK, 155 in 1:10-cv-00920-VM, 155 in 1:10-cv-00920-VM) Order on Motion for Leave to File Document, Order on Motion to Amend/Correct,,,, filed by Maridom, Caribe. Document filed by Standard Chartered Bank International (Americas) Limited, Standard Chartererd Bank. (Nelles, Sharon)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

PASHA S. ANWAR, et al.,
Plaintiffs,
v.
FAIRFIELD GREENWICH LIMITED, et al.,
Master File No. 09-CV-118 (VM) (THK)
Defendants.
This Document Relates To: Maridom, et al.
v. Standard Chartered Bank International
(Americas) Limited, No. 10-CV-920 and
Headway Investment Corporation v.
American Express Bank Ltd., et al.,
No. 09-CV-8500.
DEFENDANTS’ CONSOLIDATED MEMORANDUM OF
LAW IN OPPOSITION TO THE MOTIONS OF MARIDOM
LTD., CARIBETRANS, S.A., ABBOT CAPITAL INC., AND
HEADWAY INVESTMENT CORPORATION FOR RECONSIDERATION
Sharon L. Nelles
Bradley P. Smith
Patrick B. Berarducci
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Diane L. McGimsey
(Admitted Pro Hac Vice)
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Attorneys for Defendants
Standard Chartered Bank International
(Americas) Ltd. and
Standard Chartered Bank
May 11, 2012

Defendants Standard Chartered Bank International (Americas) Ltd. (“SCBI”) and
Standard Chartered Bank (“SCB,” and together “Standard Chartered”) respectfully submit this
consolidated memorandum in opposition to the motions brought by plaintiffs Maridom Limited,
Caribetrans, S.A. and Abbot Capital Inc. (“Maridom plaintiffs”) and Headway Investment
Corporation (“Headway,” and together with Maridom plaintiffs, “plaintiffs”) for reconsideration
of the Court’s April 13, 2012 Order denying them leave to file amended complaints. (Dkt. # 853
(the “Order”).)
BACKGROUND
On February 9, 2012, Maridom plaintiffs moved for leave to file a second
amended complaint, and on March 16, 2012, Headway sought similar relief. (Dkt. # 815, 837.)
Plaintiffs sought to add allegations “to establish greater particularity with respect to previously pled
and dismissed fraud and negligent misrepresentation claims” and to assert new claims under the

Florida Securities and Investor Protection Act (“FSIPA”). (Order at 6, 7-8.) Plaintiffs also
undertook “to buttress the factual allegations underlying their present claims,” which “contend
that SCBI failed to conduct adequate due diligence before recommending the investments in
Sentry and Sigma.” (Id. at 9-10.) Maridom plaintiffs separately requested permission to name
SCB and Standard Chartered International (USA) Ltd. (“SCI”) as new defendants. (Id. at 7.)
On April 13, 2012, the Court denied both motions. (Id. at 11.) The Court noted
that it had “set a deadline for amending the Complaints” by no later than October 25, 2010—
which was 21 days after the Court’s October 4, 2010 Order granting in part Standard Chartered’s
motion to dismiss—and that plaintiffs had failed to meet that deadline. (Id. at 3-5 (citing FED. R.
CIV. P. 16(b)(4).) The Court ruled that “there has been undue delay in seeking to amend the
Headway and Maridom Complaints and there has not been a showing of good cause for that
delay.” (Order at 6.) Nevertheless, the Court ruled that plaintiffs failed to satisfy even “the more

lenient standard” of Rule 15(a)(2) of the Federal Rules of Civil Procedure, which applies “when
there has been no prior deadline” for making amendments, because plaintiffs had inexcusably
waited “until what is essentially the completion of pretrial discovery” before seeking leave to file
amended pleadings. (Order at 8.)
In particular, the Court found that the proposed new allegations supporting
plaintiffs’ previously “dismissed fraud and negligent misrepresentation claims” were based on
“information known to Plaintiffs when this action was first filed and was certainly available to
Plaintiffs within the deadline set for amending the Complaints.” (Id. at 6.) Likewise, the Court
found that at a much earlier point in time plaintiffs could have pleaded claims under FSIPA (id.
at 7-8)—as other plaintiffs in related actions had done (although those claims were later
dismissed)—and that Maridom plaintiffs could have asserted claims against SCI and SCB “when
this action was first filed” (id. at 7). The Court thus concluded that permitting such amendments
at this late stage would trigger “a new round of motions to dismiss, leading to an unacceptable
delay in reaching the merits of Plaintiffs’ claims” (id. at 7), and similarly “would prejudice SCBI”
by generating “significant delay in resolving these complex, consolidated actions” (id. at 6).
Unhappy with the Court’s April 13 Order, plaintiffs now ask the Court to
reconsider its decision. Plaintiffs argue that the Court never actually set a deadline for them to
amend their complaints, that their proposed amendments would not delay the resolution of their
claims, and that there would be no prejudice to Standard Chartered. These arguments provide no
basis for the Court to reconsider its prior ruling.
ARGUMENT
Motions for reconsideration are not “a second bite at the apple for a party
dissatisfied with a court’s ruling.” Drapkin v. Mafco Consol. Grp., Inc., 818 F. Supp. 2d 678,
696-97 (S.D.N.Y. 2011) (citation omitted). Rather, a motion for reconsideration, which is
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governed by Local Civil Rule 6.3, may only be granted where the movant demonstrates that the
Court “overlooked controlling decisions or factual matters that were put before it on the
underlying motion.” In re Morgan Stanley Mortg. Pass-Through Certificates Litig., No. 09-CV2137, 2012 WL 1448796, *1 (S.D.N.Y. Apr. 24, 2012) (denying motion for reconsideration)
(citation omitted); see also Liberty Media Corp. v. Vivendi Universal, S.A., No. 03-CV-2175,
2012 WL 1203825, at *1-2 (S.D.N.Y. Apr. 11, 2012) (denying motion for reconsideration where
no controlling law contrary to prior ruling) (citations omitted). Motions for reconsideration thus
are “generally only granted on three grounds: (1) an intervening change of controlling law,
(2) the availability of new evidence, or (3) the need to correct a clear error or prevent a manifest
injustice.” In re McRay, Richardson, Santana, Wise, and Salaam Litig., No. 03-CV-9685, 2012
WL 1450428, at *2 (S.D.N.Y. Apr. 26, 2012) (quoting Virgin Atl. Airways, Ltd. v. Nat’l
Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)) (internal quotation marks omitted).
Plaintiffs fail to demonstrate that the Court overlooked controlling authority or facts, or that the
Court clearly erred in any respect in its April 13, 2012 Order.
I.

Plaintiffs’ Failure To File Amended Pleadings in Advance of the October 2010
Deadline Set by the Court Provides No Basis for the Court to Reconsider Its Denial
of Plaintiffs’ Motions for Leave To Amend.
Plaintiffs’ principal argument for reconsideration is that the Court improperly

required them to show “good cause” under Federal Rule of Civil Procedure 16(b)(4) to justify
their delay in seeking leave to file amended complaints. (April 27, 2012 Maridom Mem. in Supp.
of Mot. for Reconsideration (“Maridom Mem.”) at 3-4, Dkt. # 861; April 27, 2012 Headway
Mem. in Supp. of Mot. for Reconsideration (“Headway Mem.”) at 3-6, Dkt # 859.) This
argument misconstrues the Court’s Order and provides no basis for reconsideration.
First and foremost, the Court made clear that it was not relying exclusively on
Rule 16(b)(4)’s “good cause” standard when it refused to allow plaintiffs to file amended
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pleadings. Rather, the Court ruled that plaintiffs’ motions seeking leave to amend would be
denied “even under the more lenient standard” of Rule 15(a)(2). (Order at 6.) This fact alone
defeats plaintiffs’ motions for reconsideration on this issue.
Even if the Court had relied exclusively on Rule 16(b)(4)’s “good cause” standard,
its reasoning was sound. The Court correctly ruled that it had “issued a scheduling order and
established deadlines for amending the pleadings,” thus triggering the Rule 16 requirement that
the schedule only be modified “for good cause and with the judge’s consent.” FED. R. CIV.
P. 16(b)(4). In particular, in its October 4, 2010 Order, the Court granted Standard Chartered’s
motion to dismiss plaintiffs’ complaints in part, but gave them 21 days to seek leave to amend
their complaints. Anwar v. Fairfield Greenwich Ltd., 745 F. Supp. 2d 360, 379 (S.D.N.Y. 2010).
By their own admission, plaintiffs did not attempt to amend their complaints during that time
period. (Maridom Mem. at 3; Headway Mem. at 3-4.)1 The Court’s denial of plaintiffs’ motions
for leave to amend their complaints at this late stage therefore is entirely consistent with the
principle that “amendment of a pleading as a matter of course pursuant to Rule 15(a) is subject to
the district court’s discretion to limit the time for amendment of the pleadings in a scheduling
1

Headway is mistaken in its belief that the Court’s October 4, 2010 Order did not apply to
it because the Court (i) later reinstated Headway’s negligence claim and (ii) allowed for a longer
period of time for Headway to amend its unjust enrichment claim. (Headway Mem. at 3-6.)
First, among the claims and issues that the Court considered in its October 4, 2010 Order were
fraudulent and negligent misrepresentation claims—precisely the claims that Headway sought to
add in its proposed amended complaint 15 months later. The Court dismissed some of those
fraud-based claims, while allowing others to survive. Anwar, 745 F. Supp. 2d at 371-73. Second,
unlike its other claims, Headway’s unjust enrichment claim could “exist only if the subject
matter of that claim is not covered by a valid and enforceable contract.” Anwar, 745 F. Supp.
at 378 (quoting In re Managed Care Litig., 185 F. Supp. 2d 1310, 1337 (S.D. Fla. 2002)).
Because Headway’s complaint “explicitly or implicitly refer[s] to agreements between
[Headway] and Standard Chartered, the Court dismiss[ed] the unjust enrichment claim[]”
without prejudice “[i]n the event that discovery reveals that the agreements in question are not
valid or otherwise applicable . . . .” Anwar, 745 F. Supp. 2d at 378-79. The Court’s carve-out of
one claim, which Headway did not seek to replead, does not render the Court’s 21-day deadline
for other claims meaningless.
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order issued under Rule 16(b).” Kassner v. 2nd Ave. Delicatessen, Inc., 496 F.3d 229, 244 (2d
Cir. 2007).
Apart from the fact that the Court did not rely solely on Rule 16(b)(4) when it
refused to allow plaintiffs to amend their complaints, the arguments now advanced by plaintiffs
do not satisfy the standards on a motion for reconsideration. Plaintiffs do not argue that the
Court overlooked any “controlling decisions” applicable to their motions. Local Civil Rule 6.3.
Nor could plaintiffs make such an argument, given that the Court holds broad discretion with
regard to motions seeking leave to amend pleadings. (Order at 3-4 (citing Commander Oil Corp.
v. Barlo Equip. Corp., 215 F.3d 321, 333 (2d Cir. 2000).) Plaintiffs equally fail to identify any
new evidence or other factual matters supposedly overlooked by the Court. Instead, plaintiffs
reargue issues that the Court decided against them2 and make new arguments that were not
presented to the Court in their original moving papers.3 Such tactics are improper on a motion
for reconsideration. Drapkin, 818 F. Supp. 2d at 696 (denying reconsideration where plaintiff
“rehashes arguments previously rejected and presents several new arguments that could have
been, but were not, presented” in original motion).

2

See Maridom Mem. at 3-4; Headway Mem. at 3-4 (arguing Rule 15(a) applied to their
motions for leave to file amended complaints); Maridom Mem. at 4-9; Headway Mem. at 7-9
(arguing plaintiffs were “diligent” in conducting discovery and did not delay filing amendments);
Maridom Mem. at 10-12; Headway Mem. at 6-10 (arguing defendants would not be prejudiced
by plaintiffs’ delayed amendments); Maridom Mem. at 3-4 (arguing that the Court’s October
2010 deadline did not apply to them).
3

See Maridom Mem. at 4-9; Headway Mem. at 10-11 (arguing plaintiffs demonstrated
“good cause” for delay in filing amendments); Maridom Mem. at 11-12; Headway Mem. at 8-9
(arguing that delay resulting from plaintiffs’ amendments is “not a certainty” or is
“speculative”); Headway Mem. at 3-6 (arguing that the Court’s October 2010 deadline to amend
did not apply to Headway); Headway Mem. at 11-12 (arguing that Headway can amend as to
non-Standard Chartered defendants notwithstanding the Court’s March 11, 2009 Civil Case
Management Plan and Scheduling Order).
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II.

Plaintiffs Have No Basis for Challenging the Court’s Conclusion That Belated
Amendments to the Operative Pleadings Prejudice Standard Chartered.
Plaintiffs next argue that the Court erred in finding that their amendments, if

permitted, would unduly prejudice Standard Chartered. (Maridom Mem. at 10-12; Headway
Mem. at 6-10.) Again, however, plaintiffs fail to identify any controlling precedent or factual
matter overlooked by the Court. The Court correctly found that allowing plaintiffs to amend
their complaints just before the close of discovery in this MDL proceeding would cause
“significant[] delay” and prejudice to Standard Chartered. (Order at 6.) Specifically, the Court
found that plaintiffs’ proposed amendments, including the addition of new claims and new
defendants, would trigger a new round of motions to dismiss. (Id. at 7.) Plaintiffs argue that
allowing amendment of their complaints now would not cause significant delay in resolving their
cases because SCBI, SCB and SCI would not be required to file motions to dismiss under the
Federal Rules of Civil Procedure, and even if such motions were filed, it would only take a
month to resolve them. (Maridom Mem. at 10-11; Headway Mem. at 8-9.) Plaintiffs greatly
understate the likely delay. The briefing and resolution of Standard Chartered’s first unified
motion to dismiss plaintiffs’ currently operative complaints took nearly 7 months. Allowing
plaintiffs to amend their complaints now also would have opened the flood gates to amendments
by other plaintiffs in the MDL. In any event, there is no dispute that the Court is fully aware of
the procedural history of this litigation and of the prospect of delay raised by plaintiffs’ belated
efforts to amend their pleadings. Plaintiffs identify nothing new in their instant motions that
would justify revisiting the Court’s conclusions.
III.

Plaintiffs’ Arguments Regarding Discovery Conduct Are Not Relevant to their
Motions for Reconsideration.
Finally, plaintiffs argue that they were “diligent” in conducting discovery and that

the Court erred in stating that “[t]he discovery deadline has been extended several times.”
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(Maridom Mem. at 4-5 (quoting Order at 2); see also Headway Mem. at 7-8.) These are red
herrings. Neither plaintiffs’ asserted diligence in pursuing discovery, nor the number of times
discovery was extended have any bearing on plaintiffs’ decision to wait until the end of fact
discovery before seeking leave to file amended pleadings.
Maridom plaintiffs’ reference to Bridgeport Music, Inc. v. Universal Music
Group, Inc., 248 F.R.D. 408 (S.D.N.Y. 2008), in particular, does not justify reconsideration. In
that case, unlike here, the plaintiff sought to amend its complaint to add a defendant and certain
allegations just three weeks after a deposition revealed the proposed new defendant’s role in the
events at issue in the case. 248 F.R.D. at 413-14. In addition, the defendant in that case had
consented to some of the additional allegations asserted in plaintiff’s proposed amended
complaint. Id. at 415. Bridgeport Music plainly is not controlling authority overlooked by the
Court.
Likewise, Headway’s reliance on Litton Industries, Inc. v. Lehman Brothers Kuhn
Loeb Inc., 734 F. Supp. 1071 (S.D.N.Y. 1990) is misplaced. The plaintiff in Litton sought leave
to amend its complaint during the course of discovery (not at the end) and only sought to add a
putative damages claim and drop three substantive claims dismissed by a prior decision of the
district court. 734 F. Supp. at 1078. Notably, the proposed amended complaint in Litton
“contain[ed] no new factual allegations,” no new substantive claims and no new defendants. Id.
By contrast, plaintiffs here seek to add new factual allegations, new claims and new defendants,
all of which the Court found to be either substantive changes that should have been done long
ago or non-substantive revisions that provide no basis for any further relief. Litton is thus
inapposite.

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CONCLUSION
Because plaintiffs have not demonstrated that the Court overlooked controlling
decisions or factual matters that were raised in their original motions for leave to amend their
complaints, or that the Court clearly erred in any other way in its April 13 Order, plaintiffs’
motions for reconsideration should be denied.
Dated: May 11, 2012
New York, New York
/s/ Sharon L. Nelles
Sharon L. Nelles
Bradley P. Smith
Patrick B. Berarducci
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Diane L. McGimsey
(Admitted Pro Hac Vice)
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Attorneys for Defendants
Standard Chartered Bank
International (Americas) Ltd. and
Standard Chartered Bank

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