Kriss et al v. BayRock Group LLC et al
Filing
198
OPINION AND ORDER re: 178 Report and Recommendations. For the foregoing reasons, the Report is ADOPTED in its entirety. Plaintiffs' application for leave to amend the FAC is granted. No later than November 23, 2015, Plaintiffs shall (i) file on ECF the SAC, redacting the agreed upon language in paragraphs 100, 248(b) and 248(d); and (ii) file an unredacted version of the SAC under seal. Plaintiffs shall serve the SAC promptly on each of the Defendants. The application to require a formal motion for leave to amend is denied. The application for attorneys' fees as a sanction for the delays in the filing of the Complaint is denied without prejudice and may be renewed, if appropriate, after discovery is complete. (As further set forth in this Order.) (Signed by Judge Lorna G. Schofield on 11/9/2015) (kgo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------X
:
JODY KRISS, et al.,
:
Plaintiffs,
:
:
-against:
:
BAYROCK GROUP, LLC, et al.,
:
Defendants. :
:
------------------------------------------------------------- X
11/9/2015
10 Civ. 3959 (LGS) (FM)
OPINION AND ORDER
LORNA G. SCHOFIELD, District Judge:
On July 23, 2013, this matter was referred to Chief Magistrate Judge Frank Maas for
general pretrial supervision. Before the Court is Judge Maas’ Report and Recommendation,
dated August 13, 2015, (the “Report”) recommending that the proposed Second Amended
Complaint, with certain redactions, (the “SAC”) be accepted for filing and that Plaintiffs be
required to serve it promptly on all Defendants. For the reasons that follow, the Report is
adopted in its entirety and appended hereto.
I.
BACKGROUND
Familiarity with this case and its procedural history is assumed. See Kriss v. Bayrock
Grp. LLC, No. 10 Civ. 3959, 2014 WL 2212063 (S.D.N.Y. May 29, 2014); see also Kriss v.
Bayrock Grp. LLC, No. 13 Civ. 3905, 2014 WL 715660 (S.D.N.Y. Feb. 25, 2014). The facts
relevant to this motion are as follows:
A.
Relevant Procedural History
This action was filed on May 10, 2010. No complaint has yet been publicly filed, and
Defendants have not been served because of the concern that the complaint -- most recently, the
First Amended Complaint (“FAC”) -- was based on privileged and confidential information
improperly obtained by Plaintiffs’ prior counsel. On May 9, 2013, Defendants Bayrock Group
LLC, Bayrock Spring Street LLC, Bayrock Whitestone LLC, Bayrock Camelback LLC, and
Bayrock Merrimac LLC (collectively, “Bayrock”) objected to the public filing of Plaintiffs’
FAC. Bayrock objected to specific paragraphs, stating that the FAC included on its face, and
was otherwise derived from, “misappropriated Bayrock attorney-client privileged
communications, attorney work product materials, [and] confidential and proprietary Bayrock
information.”
After several failed efforts to compel Plaintiffs to identify a public source for each
paragraph that Bayrock had challenged, Judge Maas issued a Report and Recommendation
(“R&R”) dated January 14, 2015, recommending that those paragraphs be struck and that
Plaintiffs be ordered to file and serve the redacted FAC. In an Opinion and Order dated March
23, 2015 (the “March 23 Order”), I adopted the Janaury 2015 R&R in its entirety and rejected
Plaintiffs’ request for leave to amend as premature before seeking leave to amend before Judge
Maas.
In March 2015, Plaintiffs discharged their previous lawyer and retained a new lawyer,
who requested that “in lieu of filing the existing [FAC] with Court ordered redactions, that we
have an opportunity to file a new vastly streamlined second amended complaint, which will
contain none of the objectionable paragraphs, footnotes and exhibits.” Judge Maas instructed
Plaintiffs to file under seal the proposed SAC. Plaintiffs filed a significantly revised complaint
and provided courtesy copies to Defendants with a chart identifying the origin of the information
to which Defendants had objected in 2013. Defendants expressed skeptisim that some of the
allegations were based on Plaintiff Kriss’s recollection, as Plaintiffs’ chart asserted. However,
Defendants merely identified information they believed to be from the FAC and derived from the
Bernstein hard drive, rather than identify any privileged information in the SAC. Plaintiffs
2
offered to redact from the SAC certain language in paragraphs 100, 248(b) and 248(d) to which
Defendants had objected.
B.
The Report and Objections
The Report recommends that the SAC be filed with the agreed-upon redactions. The
Report finds that Plaintiffs’ new counsel has “deconstructed the rather complex claims advanced
by his predecessors, returned any allegedly purloined documents in the plaintiffs’ possession,
drafted a clear (albeit lengthy) SAC, dismissed a related action [13 Civ. 3905] that also had been
stalled, and provided every indication that the plaintiffs are now prepared to prosecute this case
without further delay.” The Report further finds no reason to delay adjudication on the merits by
having the parties brief whether leave to amend the FAC should be granted. [Dkt. 178 at 4]. The
Report also recommends denying Plaintiffs’ fee application without prejudice to renewal.
On September 14, 2015, Defendant Felix Sater timely filed objections to the Report
requesting that the proposed SAC not be accepted for filing, that the action be dismissed with
prejudice as a sanction, or that Plaintiffs be required to make a formal motion for leave to amend
the pleadings, and that Defendants be awarded attorneys’ fees as a sanction. On September 29,
2015, Plaintiffs filed a response to Defendant Sater’s objections.
II.
LEGAL STANDARD
Whether the standard of review should be the “clearly erroneous or contrary to law”
standard or the de novo standard is unclear in this instance, which involves the lifting of a Rule
11 sanction. See Kiobel v. Millson, 592 F.3d 78, 79-80, 85 (2d Cir. 2010) (declining to decide
“whether the District Judge applied the correct standard of review [the “clearly erroneous or
contrary to law” standard] to the Magistrate Judge’s determination that Rule 11 sanctions were
warranted”); see generally 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72. Judge Maas chose to frame
his decision as an R&R, which must be adopted by the district court to be effective, rather than
3
as an order, which is effective on its own. In an abundance of caution, the Report is reviewed de
novo.
III.
DISCUSSION
Plaintiff is granted leave to file and serve the SAC with the agreed upon redactions.
“The court should freely give leave [to amend] when justice so requires.” Fed. R. Civ. P.
15(a)(2). “[T]he permissive standard of rule 15 is consistent with [the Second Circuit’s] strong
preference for resolving disputes on the merits.” Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo
Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015) (internal quotation marks and citations omitted); see
also Foman v. Davis, 371 U.S. 178, 182 (1962) (“If the underlying facts or circumstances relied
upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to
test his claim on the merits.”). However, courts have “considerable discretion to deny
amendment when there has been undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment, or futility of
amendment.” Knife Rights, Inc. v. Vance, 802 F.3d 377, 389 (2d Cir. 2015) (internal quotation
marks, brackets and citations omitted).
Defendants can make a colorable argument of at least undue delay -- if not bad faith and
dilatory motive; this case has been pending for more than 5 years, and the operative complaint
has not yet been publicly filed nor have Defendants been served. Nevertheless, Plaintiffs have
discharged their prior counsel and their new counsel seems intent on proceeding with the case,
instead of having it balance inert in some limbo. The parties dispute whether Plaintiffs
themselves (rather than their prior counsel) have been bad actors in the events that brought the
case to its current posture. “[T]he rule that the sins of the lawyer are visited on the client does
not apply in th[e] context [of sanctions], and a court must specify conduct of the [client] herself
4
that is bad enough to subject her to sanctions.” Gallop v. Cheney, 660 F.3d 580, 584 (2d Cir.
2011) (per curiam), vacated in part on other grounds, 667 F.3d 226, 231 (2d Cir. 2012) (quoting
In re Porto, 645 F.3d 1294, 1304 (11th Cir. 2011)). Rather than devote many more hours to
tangential matters, it is preferable in the exercise of the Court’s discretion to honor the
presumption of adjudication on the merits, grant leave to amend, and move forward with
exhortations to all to move as quickly as possible on the substance of the claims and defenses.
Sater objects to the Report’s recommendation to grant leave to amend on the ground that
to do so in effect reverses the sanction imposed in the March 23 Order requiring Plaintiffs to file
the FAC stripped of the offending allegations. He argues that such a reversal violates the law of
the case doctrine. Sater’s argument is unpersuasive.
“The doctrine [of law of the case] posits that when a court decides upon a rule of law,
that decision should [generally] continue to govern the same issues in subsequent stages of the
same case.” Rezzonico v. H&R Block, Inc., 182 F.3d 144, 148 (2d Cir. 1999) (alterations in
original). Law of the case is a discretionary doctrine and does not limit the court’s power.
Arizona v. California, 460 U.S. 605, 618-19 (1983). A court may modify its prior rulings in the
face of “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.” United States v. Uccio, 940 F.2d 753, 758 (2d Cir. 1991) (internal quotation marks
and citation omitted).
The March 23 Order was both a sanction and a case management tool based on the
circumstances at the time, specifically the need to advance the case despite the obstacle of
allegedly privileged information being disclosed in the complaint. Those circumstances have
changed. Plaintiffs’ prior counsel, who did not abide by Court orders to identify a public source
for each allegation in the FAC, has been removed as Plaintiffs’ counsel. New counsel has
5
proffered a significantly revised SAC, cited a permissible source for each allegation, conferred
with Defendants’ counsel about the sources, and agreed to redact certain allegations. Defendants
have not identified any privileged information in the SAC that can be substantiated. Finally, the
SAC provides a means for the case to proceed on the merits. In short, the case is now in a
posture to advance. These circumstances provide a compelling reason to deviate from the prior
ruling.
Sater also objects to the R&R because it would permit Plaintiffs to amend the complaint
without making a formal motion, allegedly in defiance of the March 23 Order. This argument
misconceives the Order and the applicable law. The March 23 Order denied the request for leave
to amend absent a motion in order to have the issue adjudicated first by Judge Maas, consistent
with the Order of Reference for general pretrial supervision, and not to require a “formal”
motion. Plaintiffs made an application by letter for leave to amend the FAC, which the Report
recommended granting. “[A] lack of a formal motion is not sufficient ground for a district court
to dismiss without leave to amend.” Porat v. Lincoln Towers Cmty. Ass’n, 464 F.3d 274, 276
(2d Cir. 2006).
Sater also objects that the R&R denied the request for attorneys’ fees without prejudice.
Sater is incorrect that “there are no outstanding issues with regard to Plaintiffs’ misconduct.”
Plaintiffs dispute that they have engaged in any misconduct relevant to this case. Further
proceedings at this juncture to resolve these factual issues would likely serve as a distraction
from the progress of the case when it is now finally poised to proceed. For that reason, the
request for a sanction of attorneys’ fees is denied without prejudice.
IV.
CONCLUSION
For the foregoing reasons, the Report is ADOPTED in its entirety.
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Plaintiffs’ application for leave to amend the FAC is granted. No later than
November 23, 2015, Plaintiffs shall (i) file on ECF the SAC, redacting the agreedupon language in paragraphs 100, 248(b) and 248(d); and (ii) file an unredacted
version of the SAC under seal.
Plaintiffs shall serve the SAC promptly on each of the Defendants.
The application to require a formal motion for leave to amend is denied.
The application for attorneys’ fees as a sanction for the delays in the filing of the
Complaint is denied without prejudice and may be renewed, if appropriate, after
discovery is complete.
SO ORDERED.
Dated: November 9, 2015
New York, New York
7
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------x
J.L. KRISS and MICHAEL “CHUDI”
EJEKAM,
USDC SDNY
DOCUMENT
ELECTRONICALLY
FILED 08/13/2015
:
:
Plaintiffs,
:
-against-
REPORT AND
RECOMMENDATION
TO THE HONORABLE
LORNA G. SCHOFIELD
:
BAYROCK GROUP LLC, et al.,
10cv3959-LGS-FM
:
Defendants.
----------------------------------------------------------x
FRANK MAAS, United States Magistrate Judge.
On January 14, 2015, after four years of dilatory and sometimes bizarre
conduct by the plaintiffs’ former counsel, I recommended to Your Honor that many
paragraphs of the plaintiffs’ first amended complaint (“FAC”) be stricken. (See ECF
No. 97) (“R&R”). The defendants had challenged the contents of those paragraphs as
based on information that was privileged and obtained improperly by one of the
plaintiffs’ attorneys, Frederick Oberlander, Esq. My recommendation, however, was not
predicated on a finding that the challenged paragraphs contained privileged information;
rather, it was an outgrowth of counsels’ abject disregard of several orders that were
intended to help determine whether there had, in fact, been any impropriety affecting
those paragraphs of the FAC. (See id. at 21 (observing that I could have used a less blunt
instrument “had there been compliance with my [o]rders” since “I would have been able
to consider, on a paragraph by paragraph basis, whether Bayrock’s challenges were
warranted”); see also ECF No. 140 at 43 (stating that my recommendation to redact the
FAC did not constitute a finding with respect to the issues of privilege or work
product”)).
In an Opinion and Order dated March 23, 2015, Your Honor adopted my
R&R, agreeing that the sanction imposed was a consequence of plaintiffs’ counsels’
decision to “repeatedly and vexatiously def[y] the Court’s orders.” (ECF No. 126
(“Order”) at 10). In response to the defendants’ argument that the plaintiffs should not be
afforded any opportunity to amend the FAC, (ECF No. 102 at 4-5), Your Honor held that
“[a]ny ruling on amending the FAC after striking the contested allegations [would be]
premature absent a motion seeking leave to amend.” (Id. at 5). Finally, Your Honor
directed that by March 30, 2015, the plaintiffs “file on ECF and serve on all Defendants
the FAC with the [stricken] paragraph, footnotes, and exhibits . . . redacted.” (Id. at 12).
On March 26, 2015, four days prior to the deadline for filing and serving
the redacted FAC, Mr. Oberlander notified the Court that the plaintiffs had discharged
him. (See ECF No. 134). That same day, Bradley D. Simon, Esq., filed a notice of
appearance on the plaintiffs’ behalf. (ECF No. 133). Mr. Simon then requested
additional time to comply with your Order, indicating that he hoped to file a “new vastly
streamlined second amended complaint [“SAC”],” devoid of any “objectionable
paragraphs, footnotes and exhibits.” (ECF No. 135). In light of these developments, I
scheduled a further conference for April 14, 2015, and directed that, “[i]n the interim, no
further papers shall be served or filed.” (ECF No. 139).
On April 14, I instructed Mr. Simon to file the proposed SAC under seal by
June 5, 2015, (see ECF Nos. 140 at 39-40, 142), and he agreed to furnish courtesy copies
of the SAC to counsel for defendants Bayrock and Sater, the only defendants who had
seen the FAC. Mr. Simon subsequently furnished the Court and defense counsel with a
copy of the SAC and, as directed, filed the original under seal. (ECF No. 160). In the
SAC drafted by Mr. Simon, the plaintiffs press four civil RICO claims, as well as state
law claims.
During a follow-up telephone conference on June 15, counsel for Sater and
Bayrock expressed continuing concern that the SAC might contain or be sourced from
privileged materials that Mr. Oberlander had obtained improperly from the Bernstein hard
drive. Accordingly, I afforded those defendants an opportunity to identify “specific
paragraphs” in the SAC that they believed had been “sourced from privileged
documents.” (ECF No. 171). I cautioned their counsel, however, that they would bear
the burden of demonstrating that the SAC improperly incorporated privileged
information.
On July 1, 2015, counsel for Sater and Bayrock identified a total of fortyeight paragraphs that they considered objectionable.1 Counsel for Bayrock also requested
an award of fees “for the nearly five years it was forced to litigate plaintiffs’ misuse of its
privileged and confidential information.” (Bayrock July 1 Letter at 2). Although their
continuing objections were narrower than those they previously had pressed, my
statement that the defendants had the burden of demonstrating the improper use of
privileged materials evidently fell on deaf ears. Rather than identifying paragraphs of the
SAC that allegedly contained privileged information, Bayrock’s counsel simply specified
paragraphs that they believed contained information from the FAC. (See Bayrock July 1
Letter at 1) (“As a review of the paragraphs [alleged to be objectionable] will
1
See letter to the Court from Walter A. Saurack, Esq., dated July 1, 2015
(“Bayrock July 1 Letter”) at 1; letter to the Court from Michael P. Beys, Esq., dated July 1, 2015
(“Sater July 1 Letter”) at 1.
2
demonstrate, they incorporate the same information that was stricken from the FAC.”).
Although Sater’s counsel purported to identify paragraphs “sourced from privileged
documents,” they cited no basis for asserting that the materials were privileged. It thus
appears that their true objection to those paragraphs again was simply that they were
“derived . . . from the purloined [Bernstein] hard drive.” (See Sater July 1 Letter at 1).
On July 8, 2015, in the plaintiffs’ responsive letter, Mr. Simon provided the
sort of information that the Court had been seeking from plaintiffs’ prior counsel for more
than one full year. (See letter from Bradley D. Simon to the Court dated July 8, 2015
(“Pls.’ July 8 Letter”)). Specifically, Mr. Simon furnished the Court with a chart
identifying an allegedly untainted source of information for the allegations in each
paragraph to which the defendants objected, and he also expressed a willingness to delete
certain language from paragraphs of the SAC that the defendants continued to challenge.
(See id. at 4-21).
Ultimately, in their portion of a joint letter to the Court dated July 17, 2015,
Bayrock’s counsel acknowledged that they could not “say at this time that the SAC was
directly sourced from privileged and confidential documents, absent extensive
discovery.” (Joint letter to the Court dated July 17, 2015 (“July 17 Joint Letter”) at 4).
Bayrock’s counsel nevertheless repeated what has by now become a familiar mantra,
complaining that the paragraphs to which they objected had been sourced from
paragraphs of the FAC that the Court previously had stricken. Bayrock’s counsel further
protested that the plaintiffs could not “simply wipe the slate clean after years of
misconduct simply by hiring new counsel.” (Id.). Sater’s counsel similarly maintained
that the SAC was tainted by plaintiffs’ prior counsels’ actions. Sater’s counsel also
joined in Bayrock’s application for fees. (Id. at 4-5). In a separate submission dated the
same day, Sater’s counsel also urged the Court to dismiss this case with prejudice based
upon the plaintiffs’ decision to file the SAC in lieu of compliance with the portion of your
Order that had directed them to “file on ECF and serve on all Defendants the FAC with
the [stricken] paragraphs, footnotes and exhibits . . . redacted.” (Letter to the Court from
Robert S. Wolf, Esq., dated July 17, 2015 (quoting Order at 12).
I am not wholly unsympathetic to the defendants’ views regarding the
conduct of this case. This lawsuit was filed more than five years ago, and for practically
that entire time the defendants have had to deal with a uniquely opaque and prolix opaque
complaint, as well as the antics of the plaintiffs’ prior counsel. It also is true that the
plaintiffs are, at least to some extent, attempting to wipe the slate clean by hiring new
counsel. Nevertheless, once the plaintiffs’s original lawyers withdrew, their new counsel
acted swiftly to redirect the course of this litigation. Among other things, over the past
five months, Mr. Simon has deconstructed the rather complex claims advanced by his
predecessors, returned any allegedly purloined documents in the plaintiffs’ possession,
3
drafted a clear (albeit lengthy) SAC, dismissed a related action that also had been stalled,
and provided every indication that the plaintiffs are now prepared to prosecute this case
without further delay. In light of these changed circumstances, the more equitable course
is that “[t]he sins of [prior] counsel . . . not be visited upon [their] client[s] so as to vitiate
the latter’s cause of action.” T. Grant Co. v. Haines, 531 F.2d 671, 677 (2d Cir. 1976);
see also Cody v. Mello, 59 F.3d 13, 15 (2d Cir. 1995) (noting the Second Circuit’s
“preference that litigation disputes be resolved on the merits,” with dismissal employed as
a remedy “only in extreme situations”).
There further does not appear to be any reason to delay adjudication of this
matter on the merits further by having the parties engage in extensive briefing as to
whether leave to amend the FAC should be granted. If discovery reveals that the
plaintiffs played a role in their prior counsels’ misconduct, or are pursuing this litigation
for improper purposes, the SAC could still be dismissed as a sanction. See El Ameen Bey
v. Stumpf, 825 F. Supp. 2d 537, 552-57 (D.N.J. Oct. 17, 2011); Jackson v. Microsoft
Corp., 211 F.R.D. 423, 430-33 (W.D. Wash. 2002). Here, such a determination cannot be
made without at least some discovery. Moreover, to pursue their RICO and other claims,
the plaintiffs will have to survive the inevitable motion to dismiss. An interim motion
would merely cause further delay. Accordingly, at this stage, the best course is to have
the SAC publicly filed and served on the numerous defendants who have yet to be served.
The defendants will then be able to contest the sufficiency of the complaint through a
motion to dismiss. I therefore recommend that Your Honor grant the plaintiffs leave to
file and serve the SAC. See Found. Ventures, LLC v. F2G, LTD., No. 08 Civ. 10066
(PKL), 2010 WL 3187294, at *11 (S.D.N.Y. Aug. 11, 2010) (“[T]he Court may grant
leave to amend sua sponte.”); S. Illinois Laborers’ & Employers Health & Welfare Fund
v. Pfizer Inc., No. 08 CV 5175 (KMW), 2009 WL 3151807, at *1 n.3 (S.D.N.Y. Sept. 30,
2009) (same); see also Fed. R. Civ. Pro. 15(a)(2) (“The court should freely give leave
when justice so requires.”).
Bayrock and Sater object to this course of action on the ground that it would
render “toothless” the Order striking multiple paragraphs from the FAC. (See July 17
Joint Letter at 4). As I have indicated both in this Report and Recommendation and
previously, I suggested that relief because of Mr. Oberlander’s repeated failures to
comply with my directions – not based on a finding that any of the allegations in the
stricken paragraphs were actually based upon privileged materials. The mere fact that
certain paragraphs of the SAC contain allegations that also were made in the FAC is
therefore neither surprising nor necessarily objectionable. Indeed, one would expect the
allegations of the SAC to at least resemble those previously set forth in the FAC.
I also am not persuaded that the plaintiffs flouted the Order by filing a
proposed SAC under seal, rather than filing a heavily-redacted FAC. In fact, it seems
4
clear that several subsequent events rendered that directive moot. First, several days
before the plaintiffs were required to comply with the Order, I directed that, in light of the
plaintiffs’ substitution of counsel, “no further papers . . . be served or filed,” until I had an
opportunity to confer with counsel. (ECF No. 139). It therefore is understandable that
the plaintiffs chose not to file a redacted version of the FAC on March 30, 2015. Second,
at the April 14 conference, I embraced plaintiffs’ counsel’s offer to draft an SAC, even
though I acknowledged that, but for Mr. Simon’s substitution, “what would [have]
happen[ed] next is a redacted version of the [FAC] presumably would [have been] the
subject of a motion to dismiss.” (ECF No. 140 at 23, 36-37). It therefore is apparent that
I had approved the plaintiffs’ decision to draft a new complaint, rather than simply filing
the previously-contemplated redacted FAC.
Finally, although the defendants have specifically identified forty-eight
allegedly objectionable paragraphs of the SAC, they have failed to meet their burden to
demonstrate that any of these paragraphs are based upon privileged communications. See
Beatie & Osborn LLP v. Patriot Scientific Corp., 431 F. Supp. 2d 367, 398 (S.D.N.Y.
2006) (“The Court is not convinced at this time that [the defendant] has satisfied its
burden of demonstrating grounds for striking certain pleadings. [Defendant] has offered
no case law or argument in support of its motion. Nor has it submitted any evidence, in
the form of a declaration or otherwise, that the allegations in the complaint contain
privileged information.”); Ali v. New York City Transit Authority, 176 F.R.D. 68
(E.D.N.Y. 1997) (“[P]laintiff has not met his burden in demonstrating to the court that
matter pled in the answers would be inadmissible at trial.”). In these circumstances, the
defendants’ request that this action be dismissed amounts to a suggestion that predecessor
counsel’s misconduct alone would justify this extreme relief. Absent a showing that the
plaintiffs aided and abetted Mr. Oberlander’s misconduct, that appears to be overkill. See
Nw. Nat. Ins. Co. v. Insco, Ltd., No. 11 Civ. 1124 (SAS), 2011 WL 4552997, at *8-10
(S.D.N.Y. Oct. 3, 2011) (disqualification of counsel is the appropriate sanction for party
whose counsel actions created a “serious risk of tainting the underlying proceedings.”);
Matter of Beiny, 129 A.D.2d 126, 143-44 (1st Dep’t 1987) (disqualification of counsel is
the appropriate sanction for party whose counsel acted in an improper manner to secure
discovery of confidential and privileged material from an adverse party).
In sum, the plaintiffs have consented to the removal of certain objectionable
language from the SAC. (See Pls.’ July 8 Letter at 8, 16-17; July 17 Joint Letter at 2). I
recommend that, subject to those redactions, the proposed SAC be accepted for filing and
that it be promptly served on each of the defendants named therein. Thereafter, if any of
5
the defendants wishes to challenge the sufficiency of the SAC, or raise other concerns,
they can seek a pre-motion conference with Your Honor.2
Notice of Procedure for Filing
Objections to this Report and Recommendation
The parties shall have fourteen days from the service of this Report and
Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule
72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a) and (d). Any
such objections shall be filed with the Clerk of the Court, with courtesy copies delivered
to the chambers of the Honorable Lorna G. Schofield and to my chambers at the United
States Courthouse, 500 Pearl Street, New York, N.Y. 10007, and to any opposing parties.
See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72(b). Any requests for an
extension of time for filing objections must be directed to Judge Schofield. The failure to
file these timely objections will result in a waiver of those objections for purposes of
appeal. See Thomas v. Arn, 474 U.S. 140 (1985); 28 U.S.C. § 636(b)(1); Fed. R. Civ. P.
6(a), 6(d), 72(b).
Dated:
New York, New York
August 13, 2015
_________________________
FRANK MAAS
United States Magistrate Judge
Copies to All Counsel via ECF
2
I further recommend that the fee application be denied without prejudice to its
renewal, if appropriate, at a later time.
6
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