O'Gorman v. Mercer Kitchen L.L.C. et al

Filing 69

OPINION AND ORDER re: 60 MOTION to Amend/Correct 1 Complaint, 59 LETTER MOTION to Seal addressed to Judge Lewis J. Liman from Counsel for Plaintiff dated 1/20/2021. . filed by P. O'Gorman, 37 MOTION t o Dismiss for failure to exhaust administrative remedies. filed by Mercer Hotel Corporation, 51 MOTION to Amend/Correct 1 Complaint . filed by P. O'Gorman, 17 MOTION to Dismiss the Complaint. filed by Mercer Hotel Corporation. The motion to amend GRANTED. Dkt. Nos. 51, 60. Plaintiff shall file the redacted amended complaint within seven (7) days of this Opinion and Order. Accordingly, Mercer Hotel Corp.'s motions to dismiss for failure to s tate a claim and for failure to exhaust administrative remedies are DENIED AS MOOT. Dkt. Nos. 17, 37. Mercer Hotel Corp. is dismissed without prejudice from the action as a party. The new defendants may either answer or move within the time period permitted by the Federal Rules of Civil Procedure after they are served. The Clerk of Court is respectfully directed to close Dkt. Nos. 17, 37, 51, and 60 and to terminate Mercer Hotel Corp. from the action as a defendant., Mercer Hotel Corporation terminated. (Signed by Judge Lewis J. Liman on 2/16/2021) (rj)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
P. O’GORMAN,
:
:
Plaintiff,
:
:
-v:
:
MERCER KITCHEN L.L.C., MERCER HOTEL
:
CORPORATION n/k/a BD PRINCE MANAGER
:
CORP., and JEAN-GEORGES MANAGEMENT LLC, :
:
Defendants.
:
:
---------------------------------------------------------------------- X

2/16/2021

20-cv-1404 (LJL)
OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge:
Three motions are currently pending before the Court. Defendant Mercer Hotel
Corporation (“Mercer Hotel Corp.”) moves to dismiss the complaint for failure to state a claim
and also for failure to exhaust administrative remedies. Dkt. No. 17, 37.1 Plaintiff P. O’Gorman
moves, pursuant to Fed. R. Civ. P. 15(a), to amend the complaint. Dkt. Nos. 51, 60. The
amended complaint would dismiss Mercer Hotel Corp. as a defendant and add three new
defendants: Mercer I, LLC, Mercer Operating, LLC, and Andre Balazs. The Court addresses
Plaintiff’s motion first. The answer to that motion also resolves Mercer Hotel Corp.’s motions.
Although framed as a motion under Rule 15(a), Plaintiff’s motion is properly analyzed
under Rule 21 which addresses the joinder of parties. Under Rule 21, a court may allow a party
to be added or removed “at any time, on just terms.” Fed. R. Civ. P. 21. “In deciding whether to

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Mercer Hotel Corp. moved to dismiss for failure to state a claim on May 1, 2020. Dkt. No. 17.
It filed a second motion to dismiss on October 7, 2020 for failure to exhaust administrative
remedies. Dkt. No. 37. Plaintiff argued that this second motion was untimely, foreclosed by
Fed. R. Civ. P. 12(g)(2) and Fort Bend Cnty., Texas v. Davis, 139 S.Ct. 1843 (2019), and made
in bad faith. See Dkt. No. 47. The Court need not address the propriety of this second motion as
it dismisses Mercer Hotel Corp. as a defendant from the action.

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permit joinder, courts apply the same standard of liberality afforded to motions to amend
pleadings under Rule 15.” New York Wheel Owner LLC v. Mammoet Holding B.V., 2020 WL
4926379, at *21 (S.D.N.Y. Aug. 21, 2020) (quoting Bridgeport Music, Inc. v. Universal Music
Grp., Inc., 248 F.R.D. 408, 412 (S.D.N.Y. 2008)); see also Tarr v. Acto Techs., Inc., No. 19-cv7703 (S.D.N.Y. Dec. 29, 2020), Dkt. No. 50 at 3. In addition, Rule 20(b) provides that
“[p]ersons . . . may be joined in one action as defendants if: (A) any right to relief is asserted
against them jointly, severally, or in the alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or
fact common to all defendants will arise in the action.” Fed. R. Civ. P. 20(b).
DISCUSSION
Mercer Hotel Corp. does not dispute that the requirements of Rule 20(b) are satisfied by
the proposed amendment. The claims against the new defendants plainly arise out of the same
transaction and raise common questions of law and fact. Mercer Hotel Corp. opposes the
amendment on the grounds that it is untimely and that the claims are futile. Those arguments are
not persuasive.
Plaintiff’s motion to amend is consistent with this Court’s orders and the Case
Management Plan in this case. The Case Management Plan required Plaintiff to move to join
additional parties no later than December 30, 2020. Dkt. No. 49. On that date, Plaintiff sought
leave to file its motion to amend but to do so under seal because it was based on documents as to
which Defendants claimed confidentiality. The Court denied the motion to file under seal
without prejudice to Plaintiff refiling the motion to amend, proposed amended complaint and
supporting memorandum with proposed redactions by January 20, 2021. Dkt No. 56. On that
date, Plaintiff submitted the proposed redactions and moved again to file the motion to amend
and supporting papers under seal. Dkt. Nos. 59, 60. After hearing from Mercer Hotel Corp., the
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Court granted that motion. Dkt. Nos. 61, 64. Plaintiff’s motion is timely. Indeed, to the extent
there was delay, such delay is of Defendants’ manufacture—for claiming confidentiality with
respect to the documents on which Plaintiff bases this motion. See Dkt. Nos. 57-1, 63.
Mercer Hotel Corp. also asserts that the claims against the three new defendants would be
futile both for failure to state a claim for relief and for failure to exhaust administrative remedies.
“In general, however, ‘current parties unaffected by the proposed amendment do not have
standing to assert claims of futility on behalf of proposed defendants.’” New York Wheel Owner,
2020 WL 4926379, at * 22 (quoting Custom Pak Brokerage, LLC v. Dandrea Produce, Inc.,
2014 WL 988829, at *2 (D.N.J. Feb. 27, 2014)). Mercer Hotel Corp. does not assert it will be
affected by the proposed amended complaint in anything other than a positive manner—the
proposed amended complaint drops Mercer Hotel Corp. as a defendant. Rather it argues that its
counsel anticipates being retained to represent the new defendants after Mercer Hotel Corp. is
dropped from the action and the new defendants are added. Dkt. No. 66 at 8. Counsel’s
assertion is insufficient to manufacture standing on the part of Mercer Hotel Corp. See, e.g.,
Custom Pak Brokerage, 2014 WL 988829, at *2 (holding that current defendant does not have
standing to make futility arguments on behalf of proposed new defendant even though the same
counsel would be retained).2 On this record, a decision to entertain the futility arguments

Mercer Hotel Corp. also cites to New York Wheeler Owner for the proposition that “some
courts have allowed a defendant to assert futility on behalf of a prospective defendant, but in
these cases there was usually ‘a close legal relationship’ between the two.” New York Wheel
Owner, 2020 WL 4926379, at *22 (quoting Agri Star Meat & Poultry, LLC v. Moriah Cap., L.P.,
2011 WL 1743712, at *7 (N.D. Iowa May 6, 2011)); see Dkt. No. 66 at 8. The proposed
amended complaint alleges that Mercer I, LLC is the landlord to Mercer Operating, LLC as
tenant under an operating lease for Mercer Hotel, and that Andre Balazs has an ownership
interest in both Mercer I, LLC and Mercer Operating, LLC. But Mercer Hotel Corp. has
maintained in the litigation that it does not own, operate, or manage the Mercer Hotel, see Dkt.
No. 18 at 2; Dkt. No. 18-1, and it has not made any arguments in its papers regarding the
relationship between itself and the new defendants, much less that it would have a relationship
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coming from the mouth of Mercer Hotel Corp. but not being made with authority on the behalf
of the new defendants would give those new defendants the best of both worlds, permitting them
to enjoy a favorable ruling without suffering the consequences of an adverse ruling, all to the
detriment also of judicial efficiency. See Tarr, No. 19-cv-7703 (S.D.N.Y. Dec. 29, 2020), Dkt.
No. 50 at 4-5 (refusing to decide futility argument on behalf of new defendant because
defendants were “trying to have the best of both words, seeking to enjoy a ruling from the Court
that it lacks personal jurisdiction over [the new defendant] without the risk of [the new
defendant] suffering a binding ruling”). The Court will entertain any arguments made by and
against the new defendants make “on a clean slate.” New York Wheel Owner, 2020 WL
4926379, at *22.
The motion to file an amended complaint is granted and Mercer Hotel Corp. is dismissed
without prejudice. Because Mercer Hotel Corp. is dismissed from the action, its two motions to
dismiss are denied as moot.
CONCLUSION
The motion to amend GRANTED. Dkt. Nos. 51, 60. Plaintiff shall file the redacted
amended complaint within seven (7) days of this Opinion and Order.
Accordingly, Mercer Hotel Corp.’s motions to dismiss for failure to state a claim and for
failure to exhaust administrative remedies are DENIED AS MOOT. Dkt. Nos. 17, 37. Mercer
Hotel Corp. is dismissed without prejudice from the action as a party. The new defendants may
either answer or move within the time period permitted by the Federal Rules of Civil Procedure
after they are served.

that would permit it to make arguments on behalf of the new defendants.
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The Clerk of Court is respectfully directed to close Dkt. Nos. 17, 37, 51, and 60 and to
terminate Mercer Hotel Corp. from the action as a defendant.

SO ORDERED.

Dated: February 16, 2021
New York, New York

__________________________________
LEWIS J. LIMAN
United States District Judge

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