Opinion
No. 03 Civ. 3573 (LTS)(RLE).
July 14, 2006
MEMORANDUM ORDER
Defendant American Bureau of Shipping, Inc. ("Defendant" or "ABS") moves this Court pursuant to Local Civil Rule 6.3 for reconsideration of the Court's August 4, 2004, decision granting Plaintiff Reino de España's ("Plaintiff" or "Spain") Federal Rule of Civil Procedure 12(b)(1) motion to dismiss Defendant's counterclaims for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-11 (1994) ("FSIA"). See Reino de España v. Am. Bureau of Shipping, Inc., 328 F. Supp. 2d 489 (S.D.N.Y. 2004) (the "Memorandum Order"). In the alternative, Defendant requests leave to file amended counterclaims, or, in the further alternative, that the Court enter an order of final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.
Familiarity with the Memorandum Order is presumed.
The Court has considered thoroughly the parties' submissions relating to the instant motion and, for the following reasons, grants in part Defendant's motion for reconsideration and clarifies its decision dismissing ABS' counterclaims, and denies Defendant's request to enter a Rule 54(b) order of final judgment. Defendant has leave to replead its counterclaims as ones pursuant to Section 1607(c) of the FSIA.
DISCUSSION
Motion for Reconsideration
Motions for reconsideration "are committed to the sound discretion of the district court." Jordan v. Metro. Life Ins. Co., No. 03 Civ. 4110, 2004 WL 1752822, at *2 (S.D.N.Y. Aug. 4, 2004). Reconsideration "is `an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources.'" Montanile v. Nat'l Broad. Co., 216 F. Supp. 2d 341, 342 (S.D.N.Y. 2002) (quoting In re Health Mgmt. Sys. Inc. Secs. Litig, 113 F. Supp. 2d 613, 614 (S.D.N.Y. 2000)). Thus, the standard "must be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Hoffenberg v. Hoffman Pollok, 296 F. Supp. 2d 504, 505 (S.D.N.Y. 2003) (internal quotation marks omitted).
In the Southern District of New York, motions for reconsideration are governed by Local Civil Rule 6.3. Pursuant to Local Civil Rule 6.3, the party moving for reconsideration "must demonstrate controlling law or factual matters put before the court on the underlying motion that the movant believes the court overlooked and that might reasonably be expected to alter the court's decision." Montanile, 216 F. Supp. 2d at 342. "Alternatively, the [c]ourt may grant the motion to correct a clear error or prevent manifest injustice." Global View Ltd. Venture Capital v. Great Cent. Basin Exploration, L.L.C., 288 F. Supp. 2d 482, 483 (S.D.N.Y. 2003) (internal citations and quotation marks omitted). Here, ABS has identified an element of controlling law that the Court did not explicitly acknowledge in the Memorandum Order, thus warranting reconsideration in the interests of justice of a portion of the earlier decision in order to clarify the Court's analysis.
ABS argues that the Court's decision failed to consider the following four "matters or controlling decisions": (1) "In resolving a question of sovereign immunity under the [FSIA] on a motion to dismiss, the court must, in the absence of an evidentiary hearing, take the factual allegations of the party opposing the motion to be true;" (2) under the FSIA, Spain has the ultimate burden of persuasion; (3) "In the Amoco Cadiz case, the court held that the parties whose claims underlay the contribution and indemnity counterclaim did not need to be parties to the action in which the counterclaim was asserted;" and (4) the "transaction or occurrence" standard under the FSIA § 1607(b) should be construed liberally. (Mem. of Def. ABS in Supp. of Mot. for Recons. or, in the Alt., J. Pursuant to Rule 54(b) ("Def.'s Mem."), 1-2.)
The Court will first address ABS' second point. Defendant is correct in asserting that, although ABS does have a burden of production, Spain bears the ultimate burden of persuasion. The burden shifting analysis appropriate for determining whether proposed counterclaims fall within Section 1607(b) of the FSIA is: (1) the party purporting to be a foreign sovereign must present a prima facie case that it is indeed a foreign sovereign; (2) "the plaintiff has the burden of going forward with evidence showing that, under exceptions to the FSIA, immunity should not be granted"; and (3) the alleged foreign sovereign then bears "the ultimate burden of persuasion" to show that the proposed counterclaims are outside of the counterclaim exception of the FSIA. Cabiri v. Gov't of the Republic of Ghana, 165 F.3d 193, 196 (2d Cir. 1999) (citation omitted); see also City of New York v. The Permanent Mission of India to the United Nations, 446 F.3d 365, 369 (2d Cir. 2006); Virtual Countries, Inc. v. Republic of S. Africa, 300 F.3d 230, 241 (2d Cir. 2002).
In connection with its motion to dismiss ABS' counterclaims, Spain met its burden of demonstrating that the counterclaims do not fall within either Section 1607(b) or Section 1607(c) of the FSIA. Further, as the Court explained in the Memorandum Order, the required logical relationship between ABS' counterclaims and Spain's claims in the Complaint is lacking:
Although both sets of claims clearly relate to the Prestige oil spill, the relationship between the `core issues' presented by them is not sufficiently logical for them to arise from the same transaction within the meaning of the statutory exception. The issues presented by ABS' claims involve Spain's duties, if any, to ABS or others in connection with vessels in distress. Spain's claims, by contrast, involve whether ABS deviated from the proper practices of classification societies in its continuing certification of the Prestige. Those sets of issues are at least as unrelated as the non-contract counterclaims were to the eviction proceeding in Cabiri.
(Mem. Order, 8.) Accordingly, ABS' counterclaims were properly dismissed.
Defendant's other arguments in support of reconsideration are unavailing. The Court did not overlook controlling authority in its treatment of In re Oil Spill by the Amoco Cadiz, 491 F. Supp. 161 (N.D. Ill. 1979). The Amoco Cadiz decision is not controlling authority over this Court, as it is a District Court decision from Illinois. In addition, Amoco Cadiz remains readily distinguishable from the instant action because the claims underlying the contribution and indemnity counterclaims in that case had been asserted in that very case. The Court did not, and does not, find that the reasoning in Amoco Cadiz warrants a finding that ABS' counterclaims are within the scope of the Section 1607(b) sovereign immunity waiver or exception.
ABS also argues that the Court did not take the allegations of its counterclaims as true, and did not consider ABS' allegations that Spain's conduct caused the disaster. This contention is incorrect, as the Court did not overlook any factual matters and carefully examined each of ABS' counterclaims in connection with the Memorandum Order. (See Mem. Order, 3.) The Court accepted as true the factual allegations proffered in the counterclaims. The counterclaims do not, however, concern the same core issue as the claims contained in the Complaint.
Further, the Court explicitly acknowledged the rule stated inCabiri that the transaction or occurrence standard should be construed liberally. (Id. at 5.) However, the Cabiri Court did not construe the transaction or occurrence standard so liberally as to find a logical relationship between plaintiffs' claims in that case of abuse of trust, fraudulent misrepresentation, false imprisonment, and intentional infliction of emotional distress, and the eviction proceeding. See Cabiri, 165 F.3d at 198, 201. Similarly, this Court found no logical relationship between ABS' "counterclaims for indemnification, contribution and other relief" (ABS' Answer Counterclaims ¶ 118), arising, in part, from Spain's alleged duties to "citizens of the world, to prevent oil pollution to the coasts of Spain and other nations," (id. ¶ 120), and Spain's claims arising out of ABS' alleged failure to properly inspect and classify the Prestige tanker. ABS has failed to present the Court with any controlling authority, other than those already discussed in the Memorandum Order, to support its contention that its counterclaims and Spain's claims arise out of the same transaction or occurrence.
Accordingly, ABS' motion for reconsideration is granted to the extent ABS requests clarification of the Court's application of the burden shifting standard for exceptions to foreign sovereign immunity under the FSIA, and is denied in all other respects.
Request to Replead Counterclaims
ABS proffers a set of proposed amended counterclaims (see Coleman Decl. Ex. A) and seeks clarification or permission as to its ability to replead its counterclaims. ABS may replead its counterclaims pursuant to Section 1607(c) of FSIA. To the extent the proposed counterclaims go beyond the scope of that subsection, they are inconsistent with this Court's determinations under FSIA Section 1607(b). Rule 54(b) Motion
Federal Rule of Civil Procedure 54(b) provides in pertinent part that,
[w]hen more than one claim for relief is presented in an action, whether as a claim, [or] counterclaim, . . . the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.
Fed.R.Civ.P. 54(b). "[T]he ultimate decision to direct entry of judgment[,] given the permissive nature of rule 54(b) . . . `is left to the sound judicial discretion of the district court' and `is to be exercised "in the interest of sound judicial administration.'" Ginett v. Computer Task Group, Inc. 962 F.2d 1085, 1091 (2d Cir. 1992) (quoting Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980) (citation omitted)). A court should use its discretion to enter a Rule 54(b) final judgment "only in the infrequent harsh case . . . where there exists some danger or hardship or injustice through delay which would be alleviated by immediate appeal." Citizens Accord, Inc. v. The Town of Rochester, New York, 235 F.3d 126, 129 (2d Cir. 2000) (internal quotations and citations omitted).
Entry of final judgment pursuant to Rule 54(b) is unwarranted here because the Court will permit ABS to assert Section 1607(c) counterclaims. Issues related to the counterclaims may also be the subject of further litigation as defenses to Plaintiff's claims herein. Accordingly, ABS' motion in the alternative to enter final judgment is denied.
CONCLUSION
For the foregoing reasons, Defendant ABS' motion for reconsideration pursuant to Local Civil Rule 6.3 is denied. Defendant has leave to replead its counterclaims in connection with the instant action in a manner consistent with Section 1607(c) of the FSIA. The pending Motion for Leave to File Counterclaims, filed by Defendants ABS, ABSG Consulting Inc., and ABS Group of Companies, Inc., is hereby granted to the extent that Section 1607(c) counterclaims may be plead in response to the Amended Complaint. (See Docket Entry No. 53.)
SO ORDERED.