Brentlor, Ltd. v. Schoenbach et al

Filing 201

MEMORANDUM OPINION AND ORDER re: 189 MOTION to Dismiss for Lack of Jurisdiction MOTION to Dismiss filed by Lawrence H. Schoenbach, Lawrence H. Schoenbach, PLLC. In sum, the plaintiff had the capacity to sue at the commen cement of this litigation and - having been restored to the Irish Register of Companies such that it now enjoys normal corporate status - it retains that capacity now. The motion to dismiss is therefore denied. The Clerk is directed to close ECF No. 189. Trial will begin on April 17, 2017 at 9:00 a.m. (As further set forth in this Order.) (Signed by Judge John G. Koeltl on 3/24/2017) (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
BRENTLOR, LTD.,
13-cv-6697 (JGK)
Plaintiff,
- against -

MEMORANDUM OPINION AND
ORDER

LAWRENCE H. SCHOENBACH, ET AL.,
Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
This is another motion to dismiss for lack of subject
matter jurisdiction. In their prior motion to dismiss, the
defendants argued that the plaintiff lost standing to bring this
case when it was dissolved in late 2013. The Court denied the
motion because the plaintiff, an Irish corporation, was
reincorporated during the pendency of the motion. Now, in their
second motion to dismiss, the defendants argue that under Irish
law, when Brentlor was dissolved, its assets –- including all
“chose-in actions” –- became the property of the Republic of
Ireland, and that although the corporation was reinstated, the
action itself has not been restored to Brentlor. All of this is
based on the reading of Irish law by the defendants’ counsel.
In response, the plaintiff relies upon the opinion of an
Irish barrister, who opines that Brentlor was restored to full
status in Ireland and thus maintains the right to bring this

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action. 1 The Irish barrister refers to a letter from the Revenue
Solicitor indicating that an order directing that outstanding
tax documentation be submitted was not required in this
instance. See Perri Decl. in Opp. to Mot., Ex. A p. 2 (opinion
of Irish barrister Brian Walker); p. 9 (letter sent on behalf of
the Revenue Solicitor). The Irish High Court restored Brentlor
to full status “as if it had not been struck off the register”
in the first place. Perri Decl. Ex. A p. 5 (January 18, 2017
Order of the High Court). Speculation by defendants’ counsel is
simply contrary to the documents provided by Brentlor, which
reflect that the company’s status is “normal” and is the same as
it was before its dissolution. Perri Decl. Ex. A p. 6 (Brentlor
Limited Company Report). The defendants’ unsupported speculation
that the right to the chose-in action remains with the Republic
of Ireland therefore fails. Moreover, as the Court explained

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A determination of foreign law is a “ruling on a question of
law.” Fed. R. Civ. P. 44.1. Although the defendants have not
raised the issue, the Court notes that opinions regarding the
interpretation of foreign law are generally offered in affidavit
form. See, e.g., Biocon Ltd. v. Abraxis Bioscience, Inc., 2016
WL 5817002, at *3 (S.D.N.Y. Sept. 26, 2016) (noting that
“[g]enerally [expert] affidavits are the minimal formal
requirements” for the interpretation of foreign law) (quoting
Application of Chase Manhattan Bank, 191 F. Supp. 206, 209
(S.D.N.Y. 1961), aff’d, 297 F.2d 611 (2d Cir. 1961)); NML
Capital, Ltd. v. Republic of Argentina, 2013 WL 491522, at *3
(S.D.N.Y. Feb. 8, 2013) (“Generally, sworn testimony or
affidavits are preferable to support an argument” regarding
foreign law.). The plaintiff should submit the opinion of its
Irish barrister in the form of an affidavit or equivalent
attestation by March 31, 2017.
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when dismissing the defendants’ prior motion, the defendants’
reliance on cases regarding a party’s ability to remedy a
standing deficiency under Rule 17 of the Federal Rules of Civil
Procedure by substituting one party for another is misplaced
because no such substitution is necessary here. 2
In their reply brief, the defendants –- still without an
opinion from an authority on Irish law –- abandon any claim that
Brentlor’s assets, including this action, were not restored to
it when the company was restored to normal status. Instead, the
defendants shift positions yet again, arguing that Brentlor must
still submit back tax filings and that its restoration is
therefore “subject to retroactive rescission.” Defs. Reply Brief
p. 2. In other words, the defendants argue that because the
company’s status might be revoked at some point in the future,
it lacks standing to pursue the action.

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In Cortlandt St. Recovery Corp. v. Hellas Telecommunications I,
S.á.r.l., the Court of Appeals considered whether the district
court abused its discretion in denying substitution of the real
party in interest under Rule 17 where the plaintiff lacked title
to the notes which formed the basis of the suit. 790 F.3d 411,
416 (2d Cir. 2015). Similarly, Advanced Magnetics, Inc. v.
Bayfront Partners, Inc. involved an insufficient assignment of
claims to the plaintiff and, in any event, the Court there
concluded that the district court had erred in denying leave to
amend to add the real party in interest as to those claims. 106
F.3d 11, 18 (2d Cir. 1997); see also Tech-Sonic, Inc. v. Sonics
& Materials, Inc., 2016 WL 3962767, at *1 (D. Conn. July 21,
2016) (considering a plaintiff who had not been granted a valid
assignment and therefore was not the real party in interest).
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The documentation plainly establishes that Brentlor has
been restored to full and normal status. The opinion of the
Irish barrister explains that, in the event that Brentlor fails
to submit such documents (which are allegedly being prepared),
the Registrar of Companies “may commence enforcement proceedings
against the Company.” Perri Decl. Ex. A p. 3. That does not mean
that Brentlor lacks standing to sue. Rather, it appears
analogous to the position of any company in the United States
which, if it fails to comply with filing requirements, could be
the subject of an enforcement proceeding. The defendants cite no
authority for the proposition that the possibility of future
enforcement proceedings deprives a company of its standing to
sue.
The defendants also argue that the Court should order
discovery on the issue of standing. There is no need for
discovery on this or any other issue. The Court may limit
discovery if the Court determines that “the party seeking
discovery has had ample opportunity by discovery in the action
to obtain the information sought.” Fed. R. Civ. P. 26(b)(2)(C).
The defendants had every opportunity to collect Irish court
documents and to retain their own expert on Irish law. They
chose not to seek out such an expert. Moreover, the defendants
muddle the current dispute regarding standing with allegations
regarding the manner in which Brentlor obtained the funds that
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it entrusted to the defendants. The defendants also had ample
opportunity to explore that issue during the course of
discovery, and it does not serve as a basis for reopening
discovery now.
In sum, the plaintiff had the capacity to sue at the
commencement of this litigation and –- having been restored to
the Irish Register of Companies such that it now enjoys normal
corporate status –- it retains that capacity now. The motion to
dismiss is therefore denied. The Clerk is directed to close ECF
No. 189. Trial will begin on April 17, 2017 at 9:00 a.m.
SO ORDERED.
Dated:

New York, New York
March 24, 2017

_____/s/______________________
John G. Koeltl
United States District Judge

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