Opinion
1:21-cv-07487 (AT) (SDA)
03-10-2022
Germosen-Vasquez, Plaintiff, v. Cohen, Frankel and Ruggiero, LLP et al., Defendants.
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE ANALISA TORRES, UNITED STATES DISTRICT JUDGE:
Pending before the Court is a motion by Defendants Cohen, Frankel and Ruggiero, LLP (“CF&R”) and Mark Cohen (“Cohen”) (collectively, the “Defendants”), pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Complaint of pro se Plaintiff Ariel Germosen-Vasquez (“Germosen-Vasquez” or “Plaintiff”). (Defs.' Not. of Mot., ECF No. 11.) For the reasons set forth below, the Court concludes that it lacks subject matter jurisdiction over this action and recommends that the Complaint be dismissed without prejudice.
Plaintiff's Complaint, which was filed at ECF No. 2, consists of a pro se form of Complaint, as well as certain allegations contained in numbered paragraphs beginning at PDF page 7. Citations herein to the Complaint are made to those numbered paragraphs.
BACKGROUND FACTS
On July 8, 2020, Germosen-Vasquez entered into a Retainer Agreement with CF&R, by which he retained Cohen to represent him in defense of criminal charges pending in this Court. (See Retainer Agmt. (Compl., Ex. A), ECF No. 2-1; Compl. ¶ 4.) Pursuant to the Retainer Agreement, CF&R was paid a retainer fee of $20,000.00. (See Compl. ¶ 4.)
Citations to documents filed in this case are made by using the ECF number of the document. Citations to documents filed in the related indicted criminal case are made using a prefix consisting of that criminal case number.
In two places in paragraph 4, Plaintiff erroneously states that the retainer agreement was presented and executed in July 2021. (See Compl. ¶ 4.) However, at the end of the paragraph, Plaintiff states the correct date (i.e., July 8, 2020) (see id.) and the Retainer Agreement itself contains the correct date. (See Retainer Agmt.)
The charges against Germosen-Vasquez were set forth in a criminal complaint filed in this Court in Case No. 20-MJ-06922. (See Compl. ¶ 4.) On February 22, 2021, an indictment was filed against Germosen-Vasquez in Case No. 21-CR-00115. (See 21-CR-0015 ECF No. 1.) His case was assigned to District Judge Roman in White Plains. At the arraignment held on March 8, 2021 before Magistrate Judge Krause in White Plains, Germosen-Vasquez discharged Defendants from their representation, and new counsel was appointed for him. (See Compl. ¶ 6; see also 21-CR-0015 ECF docket entries dated 3/8/21.)
Germosen-Vasquez had requested that Defendants provide him a “full accounting of fees and billable hours incurred as part of representation of the criminal matter.” (See Compl. ¶ 6.) On March 4, 2021, Defendants had sent him a statement for services rendered. (See Defs.' 3/4/21 Ltr. & Stmt. (Compl., Ex. B), ECF No. 2-2.) The statement reflected charges for time billed by Cohen during the period July 2020 through March 2021, in the amount of $24,843.75, but capped the fee at $20,000.00. (See id.)
On September 7, 2021, Germosen-Vasquez filed his Complaint in this action in which he seeks to recover $19,250.00. (See Compl. ¶ 21.) He asserts that that he is entitled to a refund since Cohen performed services that he never authorized, in violation of the Rules of Professional Conduct. (See id. ¶ 15.) Germosen-Vasquez asserts that he “fully objected to any cooperation plea agreement,” but that Cohen billed substantial amounts of time in “pressuring” Germosen-Vasquez, “his family, his significant other, and his associates” without his authority. (See id. ¶¶ 15-16.) Germosen-Vasquez further asserts that Cohen discussed confidential information about his case with others without having been given authority to do so, also in violation of the Rules of Professional Conduct, and that he was billed time for such discussions. (See id. ¶ 13-15.)
Prior to filing his Complaint in this Court, Germosen-Vasquez had filed a complaint with the New York Attorney Grievance Committee regarding the legal fees he was charged, but was advised that “the Committee did not have jurisdiction to resolve fee disputes.” (See 7/6/21 Att. Griev. Comm. Ltr. (Compl., Ex. D), ECF No. 2-4.)
On January 21, 2022, Germosen-Vasquez entered a plea of guilty before Magistrate Judge Davison in White Plains. (See 21-CR-0015 ECF No. 27.)
DISCUSSION
The first prong of Defendants' motion seeks dismissal of this case, pursuant to Rule 12(b)(1), for lack of subject matter jurisdiction. Defendants argue that the Court lacks subject matter jurisdiction over this case since Plaintiff does not meet the jurisdictional amount required for diversity jurisdiction and since the case does not raise a federal question. (See Defs.' Mem., ECF No. 14, at 6; Defs.' Reply, ECF No. 24, at 2-4.)
I. Legal Standard For Rule 12(b)(1) Motion
“A motion to dismiss an action under Federal Rule 12(b)(1) . . . raises the fundamental question whether the federal district court has subject matter jurisdiction over the action before it.” 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (3d ed. 2018). A motion under Rule 12(b)(1) is “analytically different” from a Rule 12(b)(6) motion; “the former determines whether the plaintiff has a right to be in the particular court and the latter is an adjudication as to whether a cognizable legal claim has been stated.” Id. Because Plaintiff is proceeding pro se, the allegations of his Complaint must be construed liberally and interpreted to raise the strongest arguments that they suggest. See Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474-75 (2d Cir. 2006).
II. Analysis
Because Plaintiff is pro se, the Court considers below all possible bases for subject matter jurisdiction.
A. Diversity Jurisdiction
Federal courts have jurisdiction over suits between citizens of different states if the amount in controversy requirement is met. See 28 U.S.C. § 1332(a). In the present case, although Plaintiff and Defendants are diverse, Plaintiff's Complaint does not meet the amount in controversy requirement for diversity jurisdiction since only $19,250.00 is in dispute. (See Compl. ¶ 21 (seeking refund of $19,250.00 from retainer paid).) For diversity jurisdiction to exist, the amount in controversy must exceed the sum of $75,000.00. See 28 U.S.C. § 1332(a).
B. Federal Question Jurisdiction
In opposition to Defendants' motion, Plaintiff argues that his breach of contract claim arises under the federal common law and thus that jurisdiction exists under 28 U.S.C. § 1331 (i.e., federal question jurisdiction). (See Pl.'s Opp. Mem., ECF No. 22, at PDF pp. 8-9.) There is, however, “no federal general common law.” Woodward Governor Co. v. Curtiss Wright Flight Sys., Inc., 164 F.3d 123, 126 (2d Cir. 1999) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)) (emphasis supplied by Woodward). The ability of federal courts to fashion federal common law is “severely limited.” In re Gaston & Snow, 243 F.3d 599, 606 (2d Cir. 2001); see also O'Melveny & Myers v. FDIC, 512 U.S. 79, 87 (1994) (“cases in which judicial creation of a special federal rule would be justified . . . are . . . few and restricted” (citation and internal quotation marks omitted)). Absent congressional authorization, see Texas Indus. v. Radcliff Materials, Inc., 451 U.S. 630, 641 (1981), courts only may create federal common law where the operation of state law would (1) “‘significant[ly] conflict'” with (2) “‘uniquely federal interest[s].'” See Boyle v. United Techs. Corp., 487 U.S. 500, 507, 508 (1988); see also O'Melveny, 512 U.S. at 87; Woodward, 164 F.3d at 127. Such interests arise only in limited areas, such as “(1) the obligations to, and rights of, the United States under its contracts; (2) the liability of federal officers for official acts; and (3) civil liabilities arising out of federal procurement contracts relating to national defense.” Woodward, 164 F.3d at 127 (citing Boyle, 487 U.S. at 504-06)).
The present case presents a fee dispute under a Retainer Agreement between a New York law firm and its client. There are no uniquely federal interests at stake. Thus, this case plainly arises under New York law, not federal common law. See Alderman v. Pan Am World Airways, 169 F.3d 99, 103 (2d Cir. 1999) (“Federal courts apply state law when ruling on the interpretation of contractual attorney fee provisions.” (citation omitted)). Thus, there is no federal question jurisdiction here.
C. Ancillary Jurisdiction
A court, in its discretion, may exercise ancillary jurisdiction over an attorneys' fee dispute that arises out of a federal criminal case pending before it. See Levitt v. Brooks, 669 F.3d 100, 103-04 (2d Cir. 2012). Factors to be weighed in deciding whether to exercise ancillary jurisdiction over a fee dispute include: “(1) familiarity with the subject matter of the suit, especially with the amount and quality of work performed by the attorneys; (2) a court's responsibility to protect officers of the court in such matters as fee disputes; (3) the convenience of the parties; and (4) judicial economy.” See id. at 104 (citing Cluett, Peabody & Co., Inc. v. CPC Acquisition Co., Inc., 863 F.2d 251, 256 (2d Cir. 1988)). However, none of these factors weigh in favor of the Court's exercise of ancillary jurisdiction in this case.
Here, the legal work that was done by Defendants was performed before the indictment was filed. Thus, no judge in this Court has familiarity with the amount and quality of that work. Moreover, exercising ancillary jurisdiction would not serve to protect Defendant Cohen, who is an officer of the court, as Cohen is seeking to have this case dismissed. In addition, this Court is no more convenient for the parties than a New York state court or other tribunal (such as an arbitral tribunal). Finally, judicial economy would not be served since the underlying criminal case is nearing conclusion following Plaintiff's guilty plea earlier this year. Thus, I recommend that the Court decline to exercise ancillary jurisdiction in this case. See Gov't Emps. Ins. Co. v. Grinberg, No. 12-CV-02448 (JG) (VMS), 2016 WL 11395004, at *5 (E.D.N.Y. Mar. 2, 2016), report and recommendation adopted, 2016 WL 1171587 (E.D.N.Y. Mar. 24, 2016) (declining ancillary jurisdiction on analogous facts).
Because the Court lacks subject matter jurisdiction over this case, I recommend that the Court decline to address that portion of Defendants' motion which seeks to dismiss the case for failure to state a claim, pursuant to Rule 12(b)(6). See MSP Recovery Claims, Series LLC v. Tech. Ins. Co., Inc., No. 18-CV-08036 (AT), 2020 WL 91540, at *5 (S.D.N.Y. Jan. 8, 2020) (“Because the Court lacks jurisdiction to adjudicate the merits of the case, the Court does not address Defendants' arguments to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).”).
CONCLUSION
For the foregoing reasons, the Court concludes that it lacks subject matter jurisdiction over this action and recommends that the Complaint be dismissed without prejudice.
As alternative relief, Plaintiff requests that this Court grant him leave to “remove the matter” to New York Supreme Court. (See Pl.'s Opp. Mem. at PDF pp. 16.) However, there is no procedure by which a case can be removed from federal court to state court. Plaintiff will need to refile his case in state court.
The Clerk of Court is respectfully requested to mail a copy of this Report and Recommendation to the pro se Plaintiff.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections, pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Torres.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).