Clean Coal Technologies, Inc. v. Leidos, Inc. et al
Filing
83
OPINION AND ORDER re: 73 MOTION for Reconsideration re; 71 Memorandum & Opinion, filed by Clean Coal Technologies, Inc., 72 MOTION for Reconsideration filed by Dilo Paul. For the reasons set forth in this Opinion, Dr. Paul's motion for reconsideration is DENIED; Dr. Paul's motion to strike is GRANTED IN PART and DENIED IN PART; Plaintiff's motion for reconsideration is DENIED; and Plaintiff's request for leave to amen d its pleadings is DENIED. The parties are hereby ordered to provide a joint letter and Case Management Plan, conforming with the requirements set forth in the Notice of Initial Pretrial Conference (Dkt. #9), on or before December 4, 2019. (Signed by Judge Katherine Polk Failla on 11/13/2019) (mro)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
CLEAN COAL TECHNOLOGIES, INC.,
Plaintiff,
-v.LEIDOS, INC., formerly known as SCIENCE
APPLICATIONS INTERNATIONAL CORP., and
DILO PAUL,
17 Civ. 9678 (KPF)
OPINION AND ORDER
Defendants.
KATHERINE POLK FAILLA, District Judge:
By Opinion and Order dated March 28, 2019, the Court granted in full
Defendant Leidos, Inc.’s (“Leidos”) motion to dismiss, and granted in part and
denied in part Defendant Dr. Dilo Paul’s motion to dismiss, the Amended
Complaint filed by Plaintiff Clean Coal Technologies, Inc. (“CCTI”). See Clean
Coal Techs., Inc. v. Leidos, Inc., 377 F. Supp. 3d 303 (S.D.N.Y. 2019) (“Clean
Coal I”). 1 Two of the three parties to this litigation now seek a do-over: Dr.
Paul has moved for reconsideration of the decision pursuant to Rule 6.3 of the
Local Rules for the United States District Courts for the Southern and Eastern
Districts of New York. In the alternative, Dr. Paul has moved to strike certain
1
Familiarity with the facts detailed, and conclusions reached, in the Court’s March 28,
2019 Opinion and Order is assumed. See Clean Coal Techs., Inc. v. Leidos, Inc., 377 F.
Supp. 3d 303 (S.D.N.Y. 2019). Dr. Paul’s memorandum of law in support of his motion
for reconsideration is referred to as “Paul Recon. Br.” (Dkt. #74); Dr. Paul’s
memorandum of law in support of his prior motion to dismiss is referred to as “Paul
MTD Br.” (Dkt. #53); and Dr. Paul’s reply memorandum of law in support of his prior
motion to dismiss is referred to as “Paul MTD Reply” (Dkt. #68). Plaintiff’s
memorandum of law in support of its motion for reconsideration is referred to as “Pl.
Recon. Br.” (Dkt. #74); Plaintiff’s reply memorandum of law in support of its motion for
reconsideration is referred to as “Pl. Recon. Reply” (Dkt. #79); and Plaintiff’s
memorandum of law in opposition to Defendant Leidos’s motion to dismiss is referred to
as “Pl. MTD Opp.” (Dkt. #61). The Amended Complaint is referred to as “Am. Compl.”
(Dkt. #43).
portions of Plaintiff’s Amended Complaint pursuant to Federal Rule of Civil
Procedure 12(f). Plaintiff, for its part, has moved pursuant to Local Rule 6.3
and Federal Rule of Civil Procedure 52(b) for reconsideration of the Court’s
decision dismissing the case as to Leidos. In the alternative, Plaintiff asks for
leave to amend its Amended Complaint to cure any identified defects. For the
reasons set forth in the remainder of this Opinion, Dr. Paul’s motion for
reconsideration is denied; Dr. Paul’s motion to strike is granted in part;
Plaintiff’s motion for reconsideration is denied; and Plaintiff’s request for leave
to amend is denied.
APPLICABLE LAW
A.
Motions for Reconsideration
“The decision to grant or deny a motion for reconsideration is within the
sound discretion of the district court.” In re Optimal U.S. Litig., 813 F. Supp. 2d
383, 403 n.6 (S.D.N.Y. 2011) (quoting Patterson v. United States, No. 04 Civ.
3140 (WHP), 2006 WL 2067036, at *1 (S.D.N.Y. July 26, 2006)). Under Local
Rule 6.3 and Federal Rule 52(b), 2 the moving party must “point to controlling
decisions or data that the court overlooked — matters, in other words, that
might reasonably be expected to alter the conclusion reached by the court.”
Shrader v. CSX Transp. Inc., 70 F.3d 255, 256-57 (2d Cir. 1995) (internal
citations omitted) (noting that the standard for granting motions for
2
“The standards governing motions for amendment of findings under Rule 52(b) … and
motions for reconsideration pursuant to Local Rule 6.3 are the same.” Osei v. Standard
Chartered Bank, No. 15 Civ. 3992 (LGS), 2015 WL 4557345, at *1 (S.D.N.Y. July 27,
2015).
2
reconsideration is “strict”); accord Van Buskirk v. United Grp. of Cos., Inc., 935
F.3d 49, 54 (2d Cir. 2019).
“A motion for reconsideration may not be used to advance new facts,
issues or arguments not previously presented to the Court, nor may it be used
as a vehicle for relitigating old issues already decided by the Court.” Davidson
v. Scully, 172 F. Supp. 2d 458, 462 (S.D.N.Y. 2001) (citing Shrader, 70 F.3d at
257). “Such a motion should not be made to reflexively [] reargue those issues
already considered when a party does not like the way the original motion was
resolved.” In re Optimal, 813 F. Supp. 2d at 387 (quoting Makas v. Orlando,
No. 06 Civ. 14305 (DAB) (AJP), 2008 WL 2139131, at *1 (S.D.N.Y. May 19,
2008) (internal quotation marks omitted)). “Compelling reasons for granting a
motion for reconsideration are limited to an intervening change of controlling
law, the availability of new evidence, or the need to correct a clear error or
prevent manifest injustice.” Abraham v. Leigh, No. 17 Civ. 5429 (KPF), 2018
WL 3632520, at *1 (S.D.N.Y. July 30, 2018) (internal quotation marks omitted)
(quoting Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255
(2d Cir. 1992)).
B.
Motions to Strike
Federal Rule of Civil Procedure 12(f) provides that a court “may strike
from a pleading … any redundant, immaterial, impertinent, or scandalous
matter.” Fed. R. Civ. P. 12(f). “Although motions to strike are generally
disfavored, allegations may be stricken if they have no real bearing on the case,
will likely prejudice the movant, or where they have criminal overtones.” Oram
3
v. SoulCycle LLC, 979 F. Supp. 2d 498, 511 (S.D.N.Y. 2013) (internal citation
and quotation marks omitted). The Second Circuit has urged that “neither a
district court nor an appellate court should decide to strike a portion of the
complaint on the grounds that the material could not possibly be relevant on
the sterile field of the pleadings alone.” Lipsky v. Commonwealth United Corp.,
551 F.2d 887, 893 (2d Cir. 1976); see generally GEOMC Co. v. Calmare
Therapeutics Inc., 918 F.3d 92, 94-102 (2d Cir. 2019).
C.
Motions for Leave to Amend
Federal Rule of Civil Procedure 15(a) provides that “a party may amend
the party’s pleading … by leave of court … and leave shall be freely given when
justice so requires.” Fed. R. Civ. P. 15(a); see generally Yamashita v. Scholastic
Inc., 936 F.3d 98, 107 (2d Cir. 2019). The Second Circuit “strongly favors
liberal grant of an opportunity to replead after dismissal of a complaint under
Rule 12(b)(6).” Porat v. Lincoln Towers Cmty. Ass’n, 464 F.3d 274, 276 (2d Cir.
2006). However, “leave may be denied for good reason, including futility, bad
faith, undue delay, or undue prejudice to the opposing party.” Abreu v.
Fairway Market LLC, No. 17 Civ. 9532 (VEC), 2018 WL 3579107, at *1
(S.D.N.Y. July 24, 2018) (internal quotation marks omitted) (quoting
TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014)). More
specifically, “a plaintiff need not be given leave to amend if it fails to specify
either to the district court or to the court of appeals how amendment would
cure the pleading deficiencies in its complaint.” TechnoMarine, 758 F.3d at
505. “Ultimately, the grant or denial of an opportunity to amend is within the
4
discretion of the District Court.” Abreu, 2018 WL 3579107, at *1 (internal
quotation marks omitted) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
DISCUSSION
A.
The Court Denies Dr. Paul’s Motion for Reconsideration
Dr. Paul identifies two grounds for reconsideration: (i) the Court
overlooked his argument that Plaintiff had failed to allege but-for causation in
its claim of tortious inference with prospective economic relations with the U.S.
Department of Energy (the “DOE”) (Paul Recon. Br. 1); and (ii) the Court
incorrectly found that it had personal jurisdiction over Dr. Paul as to this claim
(id. at 2). The Court will address each in turn.
1.
Plaintiff Did Not Fail to Allege But-For Causation
In moving to dismiss the Amended Complaint, Dr. Paul argued that
Plaintiff’s cause of action for tortious interference with prospective economic
relations should be dismissed because Plaintiff had failed to allege each of the
claim’s required elements: (i) that Plaintiff had a business relationship with the
DOE; (ii) that Dr. Paul knew of that relationship and intentionally interfered
with it; (ii) that Dr. Paul acted solely out of malice, or used dishonest, unfair, or
improper means; and (iv) that Dr. Paul’s interference caused injury to the
relationship. (Paul MTD Br. 23). In moving for reconsideration of the Court’s
decision in Clean Coal I, Dr. Paul argues that the Court erred in failing to
determine whether Plaintiff had properly alleged the fourth element: that
Plaintiff would have entered into an economic relationship but for Dr. Paul’s
wrongful conduct. (Paul Recon. Br. 1). After a careful review of Dr. Paul’s brief
5
in support of his motion to dismiss (Dkt. #53) and the Court’s prior opinion,
see Clean Coal I, 377 F. Supp. 3d at 323-24, the Court agrees that it did not
expressly find that Plaintiff had satisfied the but-for causation element of its
tortious interference claim. However, drawing all reasonable inferences in
Plaintiff’s favor and assuming all well-pleaded factual allegations to be true, see
id. at 315 (quoting Faber v. Metro. Life Ins. Co., 648 F.3d 98, 104 (2d Cir.
2011)), the Court finds that Plaintiff’s allegations easily satisfied the causation
element.
In its Amended Complaint, Plaintiff alleged that it had a relationship with
the DOE (Am. Compl. ¶¶ 27, 56); that Dr. Paul both provided the DOE with
false expectations as to what information it could expect from Plaintiff (id. at
¶ 91) and then told the DOE that Plaintiff was financially unstable (id. at ¶ 96);
that Dr. Paul prepared an “inaccurate and incomplete” report for Plaintiff (id. at
¶¶ 101-02) that Plaintiff had “little choice but to deliver” to the DOE (id. at
¶ 80); and that the DOE “stated its view that the ‘final report’ prepared by Dilo
contained either intentional inaccuracies or negligent inaccuracies” (id. at
¶ 82). The sum total of all these actions, Plaintiff alleges, was to damage
Plaintiff’s relationship with the DOE. (Id. at ¶¶ 91, 97). Dr. Paul contended in
his brief in support of his motion to dismiss that these allegations were
insufficient because they did not include an allegation that the DOE was
considering Plaintiff for a contract or grant with which Dr. Paul then interfered.
(Paul MTD Br. 25). In so doing, however, Dr. Paul overestimated the burden
that a plaintiff must meet on a motion to dismiss.
6
Even minimal allegations are sufficient to survive a motion to dismiss as
long as they state a claim “that is plausible on its face.” See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). Drawing all reasonable inferences in Plaintiff’s favor,
the Court finds that Plaintiff sufficiently alleged that it had an ongoing
correspondence with the DOE about its pilot plant and, further, that but for
Dr. Paul’s alleged interference, it would have entered into an economic
relationship with the DOE. Given the prevailing standard that Dr. Paul must
point to “controlling decisions or data” that might reasonably be expected to
alter the Court’s conclusion, Shrader, 70 F.3d at 256-57, Dr. Paul’s argument
for reconsideration falls short.
2.
The Court Did Not Err in Its Analysis of Personal Jurisdiction
Separately, Dr. Paul argues that the Court overlooked the effect that
dismissing all claims save the tortious interference with prospective economic
relations claim would have on the Court’s personal jurisdiction over Dr. Paul
(See Paul Recon. Br. 2). Specifically, Dr. Paul claims that the Court ignored its
own decision in Mali v. British Airways, No. 17 Civ. 685 (KPF), 2018 WL
3329858, at *6 (S.D.N.Y. July 6, 2018), in which the Court stated that a
plaintiff must establish specific jurisdiction over each individual claim. (Id. at
3 n.6). Dr. Paul contends that, with all other claims having been dismissed,
Plaintiff failed to allege facts pertaining to the remaining tortious interference
claim that would support specific jurisdiction as to that claim. (Id. at 2).
As preliminary points, it is worth noting that: (i) Dr. Paul’s citation to
Mali in his motion to dismiss papers is scarcely more than a footnote to his
7
argument about lack of personal jurisdiction under CPLR § 302(a)(3) (see Paul
MTD Reply 6 n.30); and (ii) the Court found that it had personal jurisdiction
over Dr. Paul pursuant to CPLR § 302(a)(1), see Clean Coal I, 377 F. Supp. 3d
at 313-14. Thus, the Court did not overlook Dr. Paul’s proposed point of law in
its decision. The Court instead found that Plaintiff had alleged facts necessary
to establish personal jurisdiction over Dr. Paul for each individual claim,
including the claim of tortious interference with prospective economic relations
with the DOE. See id.
Dr. Paul, in essence, seeks to reargue that there is no “articulable nexus”
between his alleged contacts with New York and Plaintiff’s claim. (Compare
Paul Recon. Br. 3-4, with Paul MTD Br. 3). In ostensible support, Dr. Paul
seizes on a phrase from Licci v. Lebanese Canadian Bank, 20 N.Y.3d 327, 341
(2012), in which the New York State Court of Appeals held that “where at least
one element arises from the New York contacts, the relationship between the
business transaction and the claim asserted supports specific jurisdiction
under [CPLR § 302(a)(1)].” (Paul Recon. Br. 3). Dr. Paul appears to overread
Licci to imply that CPLR § 302(a)(1)’s “arising from” prong requires Plaintiff to
draw a direct link between allegations of New York contacts and at least one
element of its claim. On the contrary, courts repeatedly cite to Licci for the
permissiveness of the standard that the Court of Appeals created in that case.
See, e.g., Wilson v. Dantas, 9 N.Y.S.3d 187, 195 (1st Dep’t 2015) (“The Court of
Appeals has consistently held that causation is not required, and that the
inquiry under the statute is relatively permissive.” (internal quotation marks
8
and brackets omitted)). All that the “arising from” prong requires, according to
Licci, is “a relatedness between the transaction and the legal claim such that
the latter is not completely unmoored from the former.” Licci, 20 N.Y.3d at
339. “A causal link between the defendant’s New York business activity and a
plaintiff’s injury” is not required. Licci ex rel. Licci v. Lebanese Canadian Bank,
SAL, 737 F.3d 161, 168 (2d Cir. 2013).
In its prior opinion, the Court noted that Dr. Paul’s allegedly tortious
actions were “closely related to, and indeed arose from, the breakdown of an
ongoing New York-based contractual relationship.” Clean Coal I, 377 F. Supp.
3d at 313. That finding remains true even when reviewing the tortious
interference with prospective economic relations claim in isolation. Even if
specific alleged acts of sabotage, such as the production of the incomplete and
inaccurate report, did not take place in New York (see Paul Recon. Br. 4), the
focal point for Dr. Paul’s relationship with Plaintiff, and thus the focal point for
how and why Dr. Paul allegedly sabotaged Plaintiff’s relationship with the DOE,
was in New York. “While the allegations do not demonstrate that Dr. Paul’s
allegedly tortious activities were caused by the New York transaction, they are
hardly ‘unmoored’ from it.” Id.
Moreover, the cases on which Dr. Paul relies are substantially different
from the instant case. (See Paul Recon. Br. 6 n.19). Dr. Paul cites to Pichardo
v. Zayas, 996 N.Y.S.2d 176, 179 (2d Dep’t 2014), but in that case “the alleged
duty owed … the alleged breach of that duty, and the plaintiff’s injury all arose
or occurred in New Jersey.” The only connection to New York was “that the
9
agreement to perform the subject work … was reached in New York.” Id. Dr.
Paul also cites to Thackurdeen v. Duke University, 130 F. Supp. 3d 792, 801
(S.D.N.Y. 2015), but there the only connection to New York was the fact that
the plaintiffs’ “claims … arise out of the contracts they signed, at home in New
York.” Unlike those cases, where the sole connection to the forum was that it
served as a one-time situs of contract, here “Dr. Paul is alleged to have
aggressively pursued a relationship with Plaintiff in New York, and then taken
retributive actions in response to the failure of that relationship.” Clean Coal I,
377 F. Supp. 3d at 313. Given the permissive inquiry that § 302(a)(1) allows, it
is clear that the Court’s original analysis of personal jurisdiction was correct.
In sum, the Court denies Dr. Paul’s motion for reconsideration on both
fronts, i.e., as to whether Plaintiff failed to allege “but-for” causation and as to
whether Plaintiff alleged facts sufficient for the Court to establish personal
jurisdiction over Dr. Paul.
B.
The Court Grants in Part and Denies in Part Dr. Paul’s Motion to
Strike
In the alternative, Dr. Paul moves to strike portions of Plaintiff’s
Amended Complaint that Dr. Paul believes to have been rendered immaterial
by the Court’s prior decision. (Paul Recon. Br. 6). Specifically, Dr. Paul moves
to strike Paragraphs 9, 13-16, 19, 22, 32-55, 61-63, 64-72, 84-85, 87-88, 10506, 108-10, 111-17, 118-24, 125-35; the references to “various investors” in
Paragraphs 137-40; Paragraph A of the Requested Relief; and the references to
“Leidos” and “CCTI’s contracts” in Paragraph B of the Requested Relief. (Id. at
7). In total, this amounts to striking over half of the Amended Complaint.
10
Dr. Paul contends that these selected portions relate solely to either a
dismissed party or previously-dismissed claims. (Id.).
Given the heavy standard counseling against motions to strike, see
Lipsky, 551 F.2d at 893, the Court declines to grant the entirety of Dr. Paul’s
request. The Court grants the motion as to Paragraphs 9 and 111-24,
Paragraph A of the Requested Relief, and the reference to “Leidos” in Paragraph
B of the Requested Relief, but denies the motion as to the remainder. In a case
such as this, where the allegations of the various parties and claims are
thoroughly intertwined with one another, it would be too difficult and too hasty
to excise portions that only superficially seem unrelated to the claims that
remain. The Court is unpersuaded by Dr. Paul’s citations to case law (Paul
Recon. Br. 6 n.20), one of which provides far too little information to provide
support for Dr. Paul’s motion, see Ruffino v. Murphy, No. 09 Civ. 1287 (VLB),
2009 WL 5064452 (D. Conn. Dec. 16, 2009) (granting a motion to strike
allegations against dismissed defendants without discussion of the nature of
the allegations), and another of which is inapposite to the instant case, see
Chivalry Film Prods. v. NBC Universal, Inc., No. 05 Civ. 5627 (GEL), 2006 WL
89944, at *4 (S.D.N.Y. Jan. 11, 2006) (striking “the vast bulk” of a pro se
complaint that consisted of “a series of repetitious and alternative allegations of
every conceivable description of each defendant, its addresses and offices, and
its potential relationship with every other defendant”). Moreover, the Court
finds support for its decision in Masters v. Wilhelmina Model Agency, Inc.,
No. 02 Civ. 4911 (HB), 2003 WL 1990262, at *4 (S.D.N.Y. Apr. 29, 2003)
11
(striking dismissed counts from amended complaint but retaining factual
allegations that “continue to serve as support in connection with the … claims
that remain”), on which Dr. Paul relies. (Paul Recon Br. 6 n.20). The Court is
also unconvinced that retaining the factual allegations will place a “substantial
and unnecessary burden” on Dr. Paul. (Id. at 6). If Dr. Paul encounters an
allegation so wholly irrelevant to him that he cannot adequately respond in his
Answer, he can simply respond that he lacks knowledge or information
sufficient to admit or deny the allegation. Similarly, Dr. Paul is under no
obligation to respond to discovery requests that are completely irrelevant.
Neither of these options imposes a significant burden on Dr. Paul. The motion
to strike is thus granted in part and denied in part.
C.
The Court Denies Plaintiff’s Motion for Reconsideration
Plaintiff identifies two grounds for reconsideration, both concerning the
Court’s finding that Plaintiff’s breach of contract claim against Leidos was
barred by res judicata: (i) the Court overlooked allegations pertaining to
breaches that occurred after Plaintiff and Leidos agreed to a Stipulation of
Settlement (the “Stipulation”) in March 2017; and (ii) the Court overlooked
specific allegations that would explain why Plaintiff did not learn about Leidos’s
prior breaches at the time of the Stipulation and from which the Court could
infer that Leidos concealed information about those breaches from Plaintiff.
The Court will address each in turn.
12
1.
The Court Did Not Overlook Plaintiff’s Allegations of Breaches
Post-Dating the Stipulation
In its prior opinion, the Court found that the entirety of Plaintiff’s breach
of contract claim was barred by res judicata, see Clean Coal I, 377 F. Supp. 3d
at 316-18. In making this finding, the Court relied on the principle that even
in the context of New York’s permissive counterclaim rule, “a party is not free
to remain silent in an action in which he is the defendant and then bring a
second action seeking relief inconsistent with the judgment in the first action
by asserting what is simply a new legal theory.” See id. at 317 (citing Henry
Modell & Co. v. Ministers, Elders & Deacons of the Reformed Protestant Dutch
Church, 68 N.Y.2d 456, 461 (1986)). Plaintiff now argues that the Court both
misapplied the standard of review on a Rule 12(b)(6) motion and overlooked
allegations showing that Plaintiff did not “remain silent” about two particular
breaches — Leidos’s failures to deliver the final report and to turn over the SD
Card, password, and carrier CDs — because those breaches occurred after
Plaintiff agreed to the Stipulation. (See Pl. Recon. Br. 3-4). These errors, it is
alleged, led the Court improperly to preclude claims based on those breaches.
(See id.). After a careful review of the Court’s prior opinion, the parties’
briefing, the Amended Complaint, the Stipulation, and the Complaint from the
New York State Action, the Court concludes that it neither overlooked the
13
allegation pertaining to the timing of the final report-related breach 3 nor
misapplied the standard of review.
To begin, Plaintiff contends that the Court overlooked allegations
demonstrating that Leidos, subsequent to the Stipulation, breached the
Services Agreement between the parties (the “Agreement”) by failing to deliver a
compliant final report as required by the Agreement. (See Pl. Recon. Br. 3-4).
Specifically, Plaintiff points to allegations that “unknown to CCTI at the time [of
the Stipulation], Leidos had apparently not intended to fulfill its obligations
under the Services Agreement” (Am. Compl. ¶ 108), and that Leidos did in fact
breach by failing to deliver a compliant final report (id. at ¶¶ 79, 128). In its
prior opinion, however, the Court expressly addressed Plaintiff’s argument: that
Plaintiff “discovered new facts after the stipulation was entered in the New York
State Action,” and thus did not “remain silent,” because it did not know enough
to speak of anything at the time of the Stipulation. See Clean Coal I, 377 F.
Supp. 3d at 317. Indeed, the Court observed that Plaintiff’s own Amended
Complaint undercut this argument by acknowledging that Plaintiff was aware
of deficiencies in the performance of the Construction Contract, such that it
would be unreasonable to infer (and thus implausible) that Plaintiff could not
have known of Leidos’s breaches at the time it agreed to the Stipulation. See
id.
3
The Court denies reconsideration as to Plaintiff’s claim that Leidos breached the
Agreement by failing to provide the SD Card, password, and carrier CDs. A review of
the Amended Complaint shows that Plaintiff included this allegation as evidence for its
tortious interference with the Construction Contract claim, and not as evidence for its
breach of contract claim. (See Am. Compl. ¶ 122). Therefore, there is no relevant
breach of contract claim pertaining to those facts that the Court could have overlooked.
14
This reasoning extends to the specific breach regarding the final report
that is discussed in Plaintiff’s reconsideration motion. Although the Amended
Complaint alleges that Leidos disputed its obligation to provide a final report in
May 2017 and then breached by providing a non-compliant report in August
2017 (Am. Compl. ¶¶ 77, 79), Plaintiff could and should have known about this
breach at the time it agreed to the Stipulation. After all, Benham informed
Plaintiff that it had completed testing — the results of which were to be the
subject of the final report — at the pilot plant in March 2016, a full year before
the Stipulation. (Id. at ¶¶ 18(i), 20). Given (i) the expanse of time between the
completion of testing and the Stipulation and (ii) Plaintiff’s acknowledged
awareness of Leidos’s deficiencies in that intervening period (id. at ¶ 33),
Plaintiff has not alleged facts to show that it could not have known about
Leidos’s failure to provide a report summarizing the test results at the time of
the Stipulation. Even drawing all reasonable inferences in Plaintiff’s favor, the
supposedly overlooked allegations merely indicate that Leidos’s breach
regarding its obligation to deliver a final report spanned the time frame before
and after execution of the Stipulation. As the Court previously noted,
“[e]lements of this dispute clearly existed prior to the stipulation.” Clean Coal I,
377 F. Supp. 3d at 317. Therefore, Plaintiff is not absolved of its responsibility
to have raised claims regarding Leidos’s failure to deliver the report during the
New York State Action.
15
2.
The Court Did Not Overlook Plaintiff’s Allegations Regarding
Concealment
Plaintiff’s second basis for reconsideration fares no better. In its briefing
opposing Leidos’s motion to dismiss, Plaintiff argued that it could not have
known about any of Leidos’s breaches — occurring before or after it agreed to
the Stipulation — because Plaintiff only regained access to its pilot plant (and
learned that Leidos had not performed the services it was obligated to perform)
after the Stipulation had been entered into. (See Pl. MTD Opp. 7). In its
motion for reconsideration, Plaintiff repeats its prior argument almost
verbatim. (Compare id. (“CCTI has plausibly pleaded that it … could not have
discovered that Leidos … had not performed under the Services Agreement
because it was not until after the Stipulation … that CCTI regained access to
the pilot plant and learned from another consulting company with special
expertise that those services had not in fact been performed.”), with Pl. Recon.
Br. 4-5 (“[I]t was not until CCTI regained access to the pilot plant and hired a
new consultant with the requisite expertise for performing the services
required … that CCTI learned of Leidos’[s] failure to perform material terms of
the Services Agreement.”)). As before, the Court finds this line of attack
unavailing.
Plaintiff previously relied on Mason Tenders District Council Pension Fund
v. Messera, No. 95 Civ. 9341 (RWS), 1996 WL 578048, at *3 (S.D.N.Y. Oct. 8,
1996), for the proposition that the Court could not give the New York State
Action preclusive effect over breaches of which Plaintiff was unaware at the
time of the Action. (See Pl. MTD Opp. 5-6). The Court, however, read Mason
16
Tenders to hold that “defendants are not entitled to preclusion where they have
concealed material giving rise to the claims at issue.” Clean Coal I, 377 F.
Supp. 3d at 317. In its motion for reconsideration, Plaintiff does not dispute
the Court’s reading of Mason Tenders. Instead, Plaintiff simply argues that the
Court overlooked allegations from which it could infer either that Plaintiff could
not have known about Leidos’s breaches prior to the Stipulation or that Leidos
concealed the facts of its breach from Plaintiff. (See Pl. Recon Br. 4). However,
Plaintiff once again does not point to any allegations that support either
scenario. The allegations to which Plaintiff points do not explain why Plaintiff
did not know about its inability to restart the pilot plant until over a year after
Leidos announced its agreement to sell Benham to the Haskell Company (Am.
Compl. ¶ 19); nor does it provide any evidence of active concealment, see Clean
Coal I, 377 F. Supp. 3d at 318. A motion for reconsideration is not to “be used
as a vehicle for relitigating old issues already decided by the Court.” Davidson,
172 F. Supp. 2d at 462 (citing Shrader, 70 F.3d at 257). In the absence of a
showing that the Court overlooked controlling law or data, see Shrader, 70
F.3d at 256-57, Plaintiff’s motion must fail.
In sum, the Court denies Plaintiff’s motion for reconsideration premised
upon the Court’s allegedly improper application of principles of res judicata to
Plaintiff’s breach of contract claim.
D.
The Court Plaintiff’s Request for Leave to Amend
In the alternative, Plaintiff asks the Court for leave to amend its
Amended Complaint. (Pl. Recon. Br. 5). In this regard, the Court notes that
17
Plaintiff already amended its complaint once, prior to the motions to dismiss
filed by Leidos and Dr. Paul. At no point during the briefing of those motions
did Plaintiff request leave to file a Second Amended Complaint, either formally
or informally. And in the opening brief of its reconsideration motion, Plaintiff
offered the Court no specifics as to how any amendment could cure the
identified deficiencies in its Amended Complaint. Instead, Plaintiff merely
stated that it “would be able to cure deficiencies identified by the Court in
connection with its breach of contract claim.” (Id.). Only in its reply brief does
Plaintiff suggest that it could “amend its pleadings to better articulate the
timing of certain breaches that occurred after the parties entered into the
Stipulation as explained in this Motion.” (Pl. Recon. Reply 5). Cf. ABN Amro
Verzekeringen BV v. Geologistics Americas, Inc., 485 F.3d 85, 97 n.12 (2d Cir.
2007) (“We decline to consider an argument raised for the first time in a reply
brief.”); id. at 100 n.16; accord Clubside, Inc. v. Valentin, 468 F.3d 144, 159 n.5
(2d Cir. 2006) (Sotomayor, J.).
Lacking a specific proposal from Plaintiff, the Court finds that leave to
amend would be futile. Even if the Court were to accept Plaintiff’s more
specific basis for amendment, as provided in its reply brief (see Pl. Recon.
Reply 5), the record before it does not suggest that a more detailed timeline
would allow Plaintiff to survive a motion to dismiss. The Court has found that
the breaches alleged in Plaintiff’s Amended Complaint all either occurred prior
to the Stipulation or span the time before and after the Stipulation. Thus,
further detail on the timing of certain breaches — facts that Plaintiff has
18
already alleged with a degree of specificity — would not appear to cure the
Amended Complaint’s deficiencies. The request for leave to amend is denied. 4
CONCLUSION
For the reasons set forth in this Opinion, Dr. Paul’s motion for
reconsideration is DENIED; Dr. Paul’s motion to strike is GRANTED IN PART
and DENIED IN PART; Plaintiff’s motion for reconsideration is DENIED; and
Plaintiff’s request for leave to amend its pleadings is DENIED. The parties are
hereby ordered to provide a joint letter and Case Management Plan, conforming
with the requirements set forth in the Notice of Initial Pretrial Conference (Dkt.
#9), on or before December 4, 2019.
SO ORDERED.
Dated:
4
November 13, 2019
New York, New York
__________________________________
KATHERINE POLK FAILLA
United States District Judge
The Court has taken note of Plaintiff’s footnote discussing its failure to file a formal
motion for leave to amend and its contemplated future motion practice. (See Pl. Recon.
Reply 6 n.2). In denying Plaintiff’s request for leave to amend, the Court is not deciding
the issue, not presently before it, of whether Plaintiff can file a motion to amend the
judgment pursuant to Rule 59(e) after, and because of denial of, a substantively similar
motion for reconsideration filed pursuant to Local Rule 6.3. Cf. Lavigne v. Michael’s
Stores, Inc., No. 14 Civ. 1717 (CSH), 2015 WL 1826169, at *6 (D. Conn. Apr. 22, 2015)
(denying a motion for leave to amend made contemporaneously with motion for
reconsideration); Air Espana v. O’Brien, No. 95 Civ. 1650, 1997 WL 803756, at *7
(E.D.N.Y. Nov. 26, 1997) (denying a motion for leave to amend made contemporaneously
with motion for reconsideration).
19
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