Zhang et al v. The City of New York et al
Filing
251
OPINION & ORDER re: 202 MOTION to Set Aside , Objection to Honorable MJ Wang's Opinion and Order pursuant to Rule 72(a) filed by Chunman Zhang, Man Zhang, 236 MOTION to Set Aside 234 Memorandum & Opinion, Ru le 72(a) Objection to Hon. Wang's August 17, 2020 Order filed by Chunman Zhang, Man Zhang, 221 LETTER MOTION for Conference Rule 72(a) objection to Hon. Wang's 10/29/2019 Oral Order addressed to Judge John F. Keenan f rom David Yan dated 11/12/2019 filed by Chunman Zhang, Man Zhang. For the reasons set forth above, Plaintiffs' objections to Magistrate Judge Wang's oral and written orders of August 20, 2019, October 29, 2019, and August 17, 2020, are OVERRULED, and their motions to set aside the orders are DENIED. The Clerk of Court is directed to terminate the motions docketed at ECF Nos. 202, 221, and 236. (Signed by Judge John F. Keenan on 3/24/2021) (mro)
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USDC SDNY
UNITED STATES DISTRICT COURT
DOCUMENT
SOUTHERN DISTRICT OF NEW YORK
ELECTRONICALLY FILED
------------------------------- X
DOC #: _________________
MAN ZHANG and CHUNMAN ZHANG,
:
DATE FILED: 03/24/2021
UNITED STATES and as
individually, DISTRICT COURT
:
SOUTHERN DISTRICT the estate
ADMINISTRATORS of OF NEW YORK of :
-----------------------------------------------------------x
ZHIQUAN ZHANG, deceased,
:
In re FANNIE MAE 2008 SECURITIES
08 Civ. 7831 (PAC)
::
No. 17 Civ.(PAC) (JFK)
LITIGATION
09 MD 2013 5415
Plaintiffs,
::
::
OPINION & ORDER
OPINION & ORDER
-against::
-----------------------------------------------------------x
:
THE CITY OF NEW YORK, et al.,
:
:
Defendants.
:
------------------------------- X District Judge:
HONORABLE PAUL A. CROTTY, United States
APPEARANCES
BACKGROUND1
FOR PLAINTIFFS:
David Yan
The OFFICES this decade YAN
LAW early years ofOF DAVID saw a boom in home financing which was fueled, among
other things, by low interest rates and lax credit conditions. New lending instruments, such as
FOR DEFENDANTS:
Gabrielle L. Apfel
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
Joseph E. Shmulewitz
HEIDELL, PITTONI, MURPHY & BACH, LLP
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
JOHN F. KEENAN, United States District Judge:
assumption that the market would continue to rise and that refinancing options would always be
Plaintiffs Man Zhang and Chunman Zhang, individually and as
available in the future. Lending discipline was lacking in the system. Mortgage originators did
Administrators of the estate of their father, Zhiquan Zhang
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
(“Mr. Zhang”), (collectively, “Plaintiffs”) bring suit against
originators sold their loans into the secondary mortgage market, often as securitized packages
the City of New York and certain other entities and individuals
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
(collectively, “Defendants”) for Mr. Zhang’s wrongful death
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
while he was a pretrial detainee at Rikers Island prison.
and home prices began to fall. In light of the changing housing market, banks modified their
Before the Court are Plaintiffs’ motions pursuant to Federal
lending practices and became unwilling to refinance home mortgages without refinancing.
Rule of Civil Procedure 72(a) objecting to and requesting this
Court set aside the following three orders by Magistrate Judge
1
Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.
1
1
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Wang, who is supervising discovery in this protracted, nearly
four-year-old action: (1) Magistrate Judge Wang’s August 20,
2019 Opinion & Order which granted in part and denied in part a
motion by Plaintiffs for sanctions for spoliation of evidence
(ECF No. 190); (2) Magistrate Judge Wang’s October 29, 2019
ruling during a conference with the parties that Defendants did
not have a duty to preserve 90 days of video footage from all
approximately 2,000 cameras at Rikers Island prison (ECF No.
228); and (3) Magistrate Judge Wang’s August 17, 2020 Opinion &
Order which granted Defendants’ motion for reconsideration of
her August 20, 2019 decision and denied Plaintiffs’ motion for
sanctions in its entirety (ECF No. 234).
For the reasons set forth below, Plaintiffs’ objections are
OVERRULED and their motions to set aside are DENIED.
I.
Background
A.
Factual Allegations
The Court assumes familiarity with the facts of this case
as stated in the Court’s June 28, 2018 Opinion & Order which
granted in part and denied in part Defendants’ motion to dismiss
the Complaint, Man Zhang v. City of New York, No. 17 Civ. 5415
(JFK), 2018 WL 3187343 (S.D.N.Y. June 28, 2018) (“Zhang I”), and
the Court’s September 19, 2019 Opinion & Order which denied
Plaintiffs’ motion for leave to file an amended complaint, Man
Zhang v. City of New York, No. 17 Civ. 5415 (JFK), 2019 WL
2
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4513985 (S.D.N.Y. Sept. 19, 2019) (“Zhang II”).
To briefly
summarize, following his arrest in April 2015 on unspecified
charges, Mr. Zhang was detained at Rikers Island to await trial.
Over the next year, Mr. Zhang—who had a history of hypertension
and coronary disease—frequently complained of pain in his chest,
left arm, and lower back.
Tragically, on April 18, 2016, Mr.
Zhang died while still in pretrial custody of what an autopsy
later determined was hypertensive and atherosclerotic
cardiovascular disease.
B.
Procedural History
On July 17, 2017, Plaintiffs initiated this action against
Defendants by filing a complaint asserting causes of action for
violations of the Fifth, Eighth, and Fourteenth Amendments to
the United States Constitution; wrongful death; deprivation of
Mr. Zhang’s society, services, and parental guidance;
discrimination; negligence and malpractice; negligent
supervision; intentional and negligent infliction of emotional
distress; and fraudulent concealment.
Defendants subsequently
moved to dismiss, and on June 28, 2018, this Court granted in
part Defendants’ motion, dismissing all of Plaintiffs’ claims
except for their wrongful death, negligence, and malpractice
claims against all defendants, and their Fourteenth Amendment
due process claim against the City of New York, Corizon Health,
3
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Inc., and certain of the City’s and Corizon’s departments,
employees, and agents. See Zhang I, 2018 WL 3187343, at *13.
On October 8, 2018, Plaintiffs filed a motion for leave to
amend their complaint to reinstate their Fourteenth Amendment
due process claim against certain individuals and their
negligent supervision and fraudulent concealment claims against
all defendants.
On September 19, 2019, however, this Court
denied Plaintiffs’ motion as futile, Zhang II, 2019 WL 4513985,
at *6, and on July 20, 2020, it denied Plaintiffs’ subsequent
motion for reconsideration, Man Zhang v. City of New York, No.
17 Civ. 5415 (JFK), 2020 WL 4059939, at *3 (S.D.N.Y. July 20,
2020).
As relevant here, contemporaneous to the parties’ motion
practice over the viability of Plaintiffs’ claims, the parties
engaged in discovery under the pretrial supervision of
Magistrate Judge Wang.
On August 20, 2019, Magistrate Judge
Wang granted in part and denied in part a motion by Plaintiffs
seeking sanctions for Defendants’ alleged failure to preserve
certain documents and information, including video surveillance
footage and telephone recordings. See Man Zhang v. City of New
York, No. 17 Civ. 5415 (JFK) (OTW), 2019 WL 3936767, at *1
(S.D.N.Y. Aug. 20, 2019).
Magistrate Judge Wang denied
Plaintiffs’ request for entry of a default judgment or an
adverse inference instruction because nothing in the record
4
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suggested that Defendants destroyed evidence in bad faith or
with an intent to deprive, but she granted Plaintiffs’ request
for sanctions in the form of the attorneys’ fees and costs they
incurred litigating their spoliation motion because, Magistrate
Judge Wang concluded, Defendants had a duty to preserve certain
video surveillance footage and telephone recordings. See id. at
*5, *10.
On September 3, 2019, Plaintiffs sought leave from this
Court to file a motion pursuant to Federal Rule of Civil
Procedure 72(a) to set aside Magistrate Judge Wang’s August 20,
2019 decision.
(ECF No. 193.)
The following day, this Court
set a briefing schedule for such a motion.
(ECF No. 194.)
Plaintiffs’ motion to set aside was fully submitted on November
15, 2019.
(ECF Nos. 202–05, 217–18, 222–23.)
On September 6, 2019, however, Defendants filed a motion
addressed to Magistrate Judge Wang seeking reconsideration of
her findings regarding Defendants’ duty to preserve and her
award of Plaintiffs’ attorneys’ fees and costs.
(ECF No. 196.)
On October 29, 2019, the parties appeared for a conference
before Magistrate Judge Wang during which she explained that
Defendants’ motion for reconsideration raised new facts that
were not included in their original opposition to Plaintiffs’
motion for sanctions, but which would have been helpful to her
analysis of Defendants’ duty to preserve.
5
(Tr. at 3:6–15, ECF
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No. 228.)
During the conference, Magistrate Judge Wang ruled
that, contrary to Plaintiffs’ argument opposing reconsideration,
Defendants did not have a duty to preserve 90 days of video
footage from all approximately 2,000 cameras at Rikers Island
prison.
(Tr. at 34:5–35:4; Opinion & Order at 2 n.2, 12, ECF
No. 234.)
Magistrate Judge Wang ordered the parties to provide
supplemental briefing.
(Tr. at 27:22–29:1; Order, ECF No. 219.)
Defendants’ motion for reconsideration was fully submitted on
February 13, 2020.
(ECF Nos. 196–97, 200, 230–32.)
On November 12, 2019, Plaintiffs filed a letter motion
addressed to this Court objecting to Magistrate Judge Wang’s
ruling during the October 29, 2019 conference that Plaintiffs’
filing of a so-called “notice of claim” did not automatically
impose a duty on Defendants to preserve all surveillance videos
at Rikers Island prison for a 90-day retention period.
221.)
(ECF No.
Plaintiffs’ November 12, 2019 letter motion appears to be
an effort to sidestep Magistrate Judge Wang’s clear warning to
Plaintiffs’ counsel during the conference that if he moved for
reconsideration of this finding of hers regarding Defendants’
duty to preserve, and if that request was subsequently denied,
she would assess costs and attorneys’ fees against him for
bringing a wholly meritless motion. 1
1
(Tr. at 35:16–37:8.)
This Court agrees that such costs and fees would be warranted against
Plaintiffs’ counsel. See generally Int’l Techs. Mktg., Inc. v. Verint
6
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On August 17, 2020, Magistrate Judge Wang granted
Defendants’ motion for reconsideration. See Zhang v. City of New
York, No. 17 Civ. 5415 (JFK) (OTW), 2020 U.S. Dist. LEXIS
148031, at *2 (S.D.N.Y. Aug. 17, 2020). 2
Magistrate Judge Wang
concluded that “[i]t would be manifestly unjust to require
Defendants to reimburse Plaintiffs’ counsel for causing years of
litigation over video and audio recordings that were destroyed
in the normal course, where Plaintiffs failed to give sufficient
and reasonable notice to Defendants at any time before the
[electronically stored information] was destroyed.” Id. at *16.
Accordingly, Magistrate Judge Wang denied Plaintiffs’ spoliation
motion in its entirety. See id.
The following day, August 18, 2020, Plaintiffs filed a
notice of appeal to the Second Circuit challenging Magistrate
Judge Wang’s spoliation reconsideration decision as well as four
other decisions to which Plaintiffs objected: (1) this Court’s
June 28, 2018 decision granting in part and denying in part
Defendants’ motion to dismiss; (2) Magistrate Judge Wang’s
Sys., Ltd., --- F.3d ---, No. 19-1031, 2021 WL 968819, at *5 (2d Cir.
Mar. 16, 2021) (explaining that a party’s “prosecution of a knowingly
frivolous claim” which multiplies the proceedings or causes a court to
expend considerable time and effort that could have been devoted
elsewhere is “plainly serious enough to support a discretionary award
of sanctions”). However, as there is no indication that any action
was taken by Defendants in response to Plaintiffs’ meritless letter
motion to this Court, this Court will not impose such sanctions
against Plaintiffs’ counsel at this time.
2
This decision does not appear in the Westlaw database.
7
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original spoliation decision issued on August 20, 2019; (3) this
Court’s September 19, 2019 decision denying Plaintiffs’ motion
for leave to file an amended complaint; and (4) this Court’s
July 20, 2020 decision denying Plaintiffs’ motion for
reconsideration.
(ECF No. 235.)
Apparently undeterred by their pending request to the
Second Circuit to overrule Magistrate Judge Wang’s August 17,
2020 decision (among others), on August 31, 2020, Plaintiffs
moved this Court to set aside that same order pursuant to
Federal Rule of Civil Procedure 72(a).
(ECF Nos. 236–38.)
Defendants opposed Plaintiffs’ motion on October 14, 2020.
No. 239.)
On October 28, 2020, Plaintiffs filed a letter
objecting to the timeliness of Defendants’ opposition.
240.)
(ECF
(ECF No.
Two days later, Defendants filed a letter arguing that
their opposition was timely or, in the alternative, requesting
that this Court accept their response because Plaintiffs were
not prejudiced by the delayed filing and Defendants’ objections
warranted consideration.
(ECF No. 241.)
On November 2, 2020, this Court ordered the parties to file
letters addressing whether Plaintiffs’ spontaneous appeal
divested this Court of jurisdiction to decide any of Plaintiffs’
outstanding motions.
(ECF No. 242.)
On November 25, 2020,
Plaintiffs filed a letter explaining that they intended to
withdraw their appeal.
(ECF No. 246.)
8
Plaintiffs did so, and
Case 1:17-cv-05415-JFK-OTW Document 251 Filed 03/24/21 Page 9 of 11
on December 3, 2020, the Second Circuit remanded the case.
(ECF
No. 247.)
On March 10, 2021, this Court granted Defendants’ request
to deem their opposition as timely filed.
(ECF No. 248.)
The
following week, Plaintiffs filed a reply in further support of
their motion to set aside Magistrate Judge Wang’s August 17,
2020 decision.
II.
(ECF No. 250.)
Discussion
“Federal Rule of Civil Procedure 72(a) governs a district
judge’s review of a magistrate judge’s non-dispositive pretrial
rulings.” Sec. & Exch. Comm’n v. Rio Tinto PLC, No. 17 Civ. 7994
(AT) (DCF), 2021 WL 807020, at *1 (S.D.N.Y. Mar. 3, 2021).
Pursuant to Rule 72(a), when a party objects to a magistrate
judge’s non-dispositive order, “[t]he district judge in the case
must consider timely objections and modify or set aside any part
of the order that is clearly erroneous or is contrary to law.”
Fed. R. Civ. P. 72(a).
“A district court evaluating a
magistrate judge’s order with respect to a matter not
dispositive of a claim or defense may adopt the magistrate
judge’s findings and conclusions as long as the factual and
legal bases supporting the ruling are not clearly erroneous or
contrary to law.” Pegoraro v. Marrero, 281 F.R.D. 122, 125
(S.D.N.Y. 2012) (citing 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ.
P. 72(a); Thomas v. Arn, 474 U.S. 140, 149 (1985)).
9
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Upon review of the factual record in this litigation,
including the parties’ respective papers and arguments submitted
in connection with Plaintiffs’ request for sanctions for
spoliation of evidence and Defendants’ request for
reconsideration; Magistrate Judge Wang’s thoughtful and wellreasoned Opinions & Orders dated August 20, 2019, (ECF No. 190)
and August 17, 2020, (ECF No. 234); the transcript of the
parties’ October 29, 2019 conference before Magistrate Judge
Wang (ECF No. 228); and applicable legal authorities, this Court
concludes that the findings, reasoning, and legal support for
Magistrate Judge Wang’s denial of Plaintiffs’ motion for
sanctions are not clearly erroneous or contrary to law and are
thus warranted.
Accordingly, for substantially the same reasons
set forth in Magistrate Judge Wang’s written decisions and her
statements on the record, this Court adopts Magistrate Judge
Wang’s oral order of October 29, 2019, and her written orders
dated August 20, 2019, and August 17, 2020, in their entirety.
Plaintiffs’ request to set aside Magistrate Judge Wang’s
decisions are DENIED; Plaintiffs’ request for sanctions for
alleged spoliation of evidence is DENIED; and each side is to
bear their own costs.
III.
Conclusion
For the reasons set forth above, Plaintiffs’ objections to
Magistrate Judge Wang’s oral and written orders of August 20,
10
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2019, October 29, 2019, and August 17, 2020, are OVERRULED, and
their motions to set aside the orders are DENIED.
The Clerk of Court is directed to terminate the motions
docketed at ECF Nos. 202, 221, and 236.
SO ORDERED.
Dated:
New York, New York
MarchL
2021
9,
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United States District Judge
11
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