United States District Court, Southern District of New York
May 22, 2001
MICHAEL P. LEWIS, PLAINTIFF,
ERIC D. ROSENFELD, ROBERT BERNSTEIN, ROBERT B. TANNENHAUSER, AND ROSENFELD, BERNSTEIN & TANNENHAUSER, L.L.P., DEFENDANTS. ERIC D. ROSENFELD, ROBERT BERNSTEIN, ROBERT B. TANNENHAUSER, AND ROSENFELD, BERNSTEIN & TANNENHAUSER, L.L.P., THIRD-PARTY PLAINTIFFS, V. AUERBACH, POLLACK & RICHARDSON, INC., JAMES P. SINCLAIR AND CONRAD HUSS, THIRD-PARTY DEFENDANTS.
The opinion of the court was delivered by: Scheindlin, District Judge
OPINION AND ORDER
On July 20, 2000, Michael Lewis filed an action against Eric
Rosenfeld, Robert Bernstein, Robert Tannenhauser (collectively
"Individual Defendants"), and Rosenfeld, Bernstein & Tannenhauser,
L.L.P. ("RBT"), the law firm in which the Individual Defendants were
general partners. Plaintiff asserts several state law claims arising out
of a $650,000 loan plaintiff made to Mad Martha's Ice Cream, Inc. ("Mad
Martha's") — a loan which was never repaid because Mad Martha's
filed for bankruptcy approximately eight months later. Defendants moved
to dismiss the Amended Complaint on several grounds,
one of which was
that the claims were time-barred. On March 8, 2001, this Court issued an
Opinion and Order which held, inter alia, that the claims were
timely-filed against all defendants. See Lewis v. Rosenfeld, No. 00 Civ.
5368, 2001 WL 228416, at *7 (S.D.N.Y Mar. 8, 2001) ("Opinion"). By letter
dated March 13, 2001, defendants moved for reconsideration of that
portion of the Opinion that held that the claims against Bernstein and
Tannenhauser are timely.*fn1 Because that portion of the Opinion hinged
on a "peculiar and remarkable" turn of events, the full implication of
which was not briefed by the parties, reconsideration is granted. Opinion
I. LEGAL STANDARD
"The standard for granting . . . a motion [for reconsideration] is
strict, and reconsideration will generally be denied unless the moving
party can 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, 257 (2d Cir. 1995). "Because the motion does not
afford the losing party the right to submit new evidence to bolster
relief, parties are not to submit affidavits in support of a [Local] Rule
6.3 motion for reconsideration `unless directed by the court.'" First
Fin. Ins. Co. v. Allstate Interior Demolition Corp., No. 96 Civ. 8243,
1998 WL 567900, at *3 (S.D.N.Y. Sept. 3, 1998) "`Motions for
reconsideration must be narrowly construed and the standard strictly
applied to discourage litigants from making repetitive arguments on issues
that have been thoroughly considered by the court, to ensure finality,
and to prevent the practice of a losing party examining a decision and
then plugging the gaps of the lost motion with additional matters.'"
Ackoff-Ortega v. Windswept Pac. Entm't Co., 130 F. Supp.2d 440, 443
(S.D.N.Y. 2000) (quoting Polar Int'l Brokerage Corp. v. Reeve,
120 F. Supp.2d 267, 268-69 (S.D.N.Y. 2000) (internal citations
omitted)); see also Shrader, 70 F.3d at 257 ("[A] motion to reconsider
should not be granted where the moving party seeks solely to religitate
an issue already decided.")
The underlying facts of this dispute were discussed extensively in the
Court's prior opinion and will not be repeated. See Opinion at *1-*4.*fn2
However, the procedural history of this case, also recited in detail in
the Opinion, is central to the issues being reconsidered.
On May 13, 1996, Lewis sued these defendants, among others, in Texas
state court asserting claims arising out of his loan to Mad Martha's. See
id. at *4 That case was removed to the United States District Court,
Southern District of Texas (the "Texas Lawsuit"). Each of the defendants
in this case was dismissed from the Texas Lawsuit for lack of personal
jurisdiction. See id. On January 13, 2000, the Fifth Circuit Court of
Appeals affirmed the district court's dismissals. See id. The Fifth
Circuit's unpublished opinion
stated that "[t]he several rulings by the
district court on the personal jurisdiction issue are manifestly
correct. The challenge thereto is frivolous." Id. On February 17, 2000,
the Fifth Circuit denied Lewis' petition for a rehearing en banc. The
Fifth Circuit's mandate issued on February 25, 2000.
Over nine months later, on December 1, 2000, the Fifth Circuit sua
sponte "recalled" the mandate and "annulled" the administrative dismissal
of the entire appeal, stating:
Various filings and the administrative handling thereof
have resulted in errors and anomalies, including the
inappropriate dismissal of the entire appeal. To correct
same the following is ordered and directed:
1. The mandate issued herein is RECALLED.
2. The administrative dismissal of the entire appeal
based on the order entered herein on January 13,
2000 is ANNULLED.
3. The dismissal of the appeal against Robert
Tannenhauser and Robert Bernstein is REAFFIRMED, as
is the grant of the bill of costs to them.
4. The appeals as against Eric Rosenfeld [and]
Rosenfeld, Bernstein & Tannenhauser, L.L.P.
are REINSTATED; and the grant of Rule 38 damages to
said appellees is VACATED AND ANNULLED.
Lewis v. Fresne, No. 99-20389 (5th Cir. Dec. 1, 2000), Ex. A to the
12/22/00 Letter of Michael Schneider, counsel for plaintiff.
Subsequently, on May 14, 2001, the Fifth Circuit reversed the district
court's dismissal of Rosenfeld and RBT, holding that there is sufficient
evidence of minimum contacts with Texas to justify personal jurisdiction
over these defendants. See Lewis v. Fresne, No. 00-20389, 2001 WL
506138, at *4-*5 (5th Cir. May 14, 2001). The Court of Appeals did not
address the dismissals of Bernstein and Tannenhauser.
In the Opinion, I concluded that plaintiff filed this action over four
years after the latest date on which the claims could have accrued
— May 13, 1996, the date on which plaintiff filed the Texas
Lawsuit. See Opinion at *5 Thus, plaintiff's claims would be barred
absent any tolling.*fn3 However, I also held that plaintiff had
satisfied his burden of establishing that the time between the filing of
the Texas Lawsuit and the filing of this suit should be tolled pursuant
to Texas's "wrong court" tolling statute, Tex. Civ. Prac. & Rem. Code
Ann. § 16.064(a) (Vernon 1986).*fn4 That statute states, in relevant
The period between the date of filing an action in a
trial court and the date of a second filing of the same
action in a different court suspends the running of the
applicable statute of limitations for the period if:
(1) because of lack of jurisdiction in the trial court
where the action was first filed, the action is dismissed
or the judgment is set aside or annulled in a direct
(2) not later than the 60th day after the date the
dismissal or other disposition becomes final, the action
is commenced in a court of proper jurisdiction.
Specifically, I held that the sixty-day grace period had not commenced
because the dismissal of the Texas Lawsuit was not yet final. See
Opinion at *7 This holding was based on the December 1, 2000 order of the
Fifth Circuit which "annulled" and "nullified" its January 13, 2000
See id. Moreover, although the December 1, 2000 order
"reaffirmed" the prior dismissal of the appeals as against Bernstein and
Tannenhauser, I held that this portion of the order was not "final" until
plaintiff's time to petition for a writ of certiorari to the Supreme Court
expired. See id. at *7 n. 13.
Defendants now seek reconsideration of the Court's ruling and advance
two arguments: first, under Texas law, where a district court's dismissal
is affirmed on appeal the dismissal becomes "final" when the district
court's determination is entered;*fn6 second, even under the most
generous definition of "final", plaintiff did not file this action within
sixty days after the dismissals of Bernstein and Tannenhauser became
B. When Does a Dismissal Become "Final"?*fn7
1. Is a District Court's Dismissal "Final" When It Is Entered?
Defendants contend that where a district court's dismissal is affirmed
on appeal the dismissal becomes final when the district court's decision
is entered. See Defendants' Memorandum of Law in Further Support of
Motion for Reconsideration and Certification Pursuant to
28 U.S.C. § 1292 (b) ("Def. Mem.") at 6. In support of this
proposition, defendants cite two cases, neither of which is persuasive.
First, defendants cite Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6
(Tex. 1986) for the proposition that "a judgment is final for purposes of
collateral estoppel even if an appeal is pending." Def. Mem. at 4.
However, "final is a word of many meanings." Opinion at *6 (quotation
marks and citation omitted). A decision can be "final" for collateral
estoppel purposes but not "final" for the purposes of the "wrong court"
tolling statute. Cf. Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80,
89 (2d Cir. 1962) (stating that a decision may be "final" in the context
of issue preclusion even though it is not yet "final" for purposes of
appeal under 28 U.S.C. § 1291). Second, defendants cite Kaplan v.
Clear Lake City Water Auth., No. C14-91-01344-CV, 1992 WL 383881, at *5
(Tex. App. Dec. 23, 1992), an unpublished opinion. Texas Rule of
Appellate Procedure 47.7, however, bars citation to that opinion because
unpublished opinions "have no precedential value and must not be cited as
authority by counsel or by a court."*fn8
Moreover, defendants' proposed interpretation disregards the language
spirit of section 16.064(a). If the statute's drafters had intended
to limit filing of the second action to sixty days from the district
court's dismissal, they would not have prescribed that the second action
be commenced within sixty days "after the date the dismissal . . .
becomes final."*fn9 In addition, section 16.064 is "`remedial in its
every essence [and] should therefore be given a liberal construction with
a view of effectuating its manifest objective — relief from [the]
penalty of [a] limitation bar to one who has mistakenly brought his action
in the wrong court.'" Opinion at *6 (quoting Griffen v. Big Spring
Indep. Sch. Dist., 706 F.2d 645, 651 (5th Cir. 1983) (quotation marks and
Practical considerations also militate against defendants'
interpretation of section 16.064(a). Providing a plaintiff only sixty
days from the date of dismissal to file a second action would force a
plaintiff into an untenable position. A plaintiff who needs the benefit of
section 16.064(a) would have to choose between foregoing his right to
appeal the district court's dismissal, and litigating on two fronts
— pursuing both the appeal and the new action — an option
which is both judicially inefficient and expensive for all parties.
Finally, although the Texas Court of Appeals has remained silent on
this issue, see Opinion at *6, other Texas courts have considered the
date that the dismissal is affirmed on appeal as the key date on which an
order of dismissal becomes "final". In Long Island Trust Co. v. Gemstone
Miners, Ltd., 394 N.Y.S.2d 407, 407 (1977), the New York Supreme Court
dismissed defendant Dicker for lack of personal jurisdiction on April
28, 1976. That decision was affirmed on May 16, 1977. See id. The
plaintiff subsequently re-filed suit against Dicker in Texas on June 23,
1977. See Long Island Trust Co. v. Dicker, 659 F.2d 641, 643 (5th Cir.
1981). Although the Texas action was filed over one year after the
dismissal by the New York Supreme Court, the Fifth Circuit held that
under Tex. Rev. Civ. Stat. Ann. art. 5539a (the predecessor statute to
section 16.064) the Texas suit was filed "well within sixty days after
the dismissal of Dicker from the New York suit became final".*fn10 Id.
(emphasis added). See also Republic Nat'l Bank of Dallas v. Rogers,
575 S.W.2d 643, 647-48 (Tex. App. 1979) (tolling statute of limitations
under article 5539a where second suit was filed more than one year after
first suit was dismissed by the federal district court, but less than
sixty days after the order of dismissal was affirmed by the Court of
Appeals). In short, the earliest date that a dismissal which is later
affirmed on appeal becomes "final" is the date of the appellate court's
2. Is a District Court's Dismissal "Final" Only After All Discretionary
Appeals are Exhausted?
This, however, does not end the inquiry because a dismissal can become
"final" either after it is affirmed on appeal or
discretionary appeals, such as petitions for a rehearing en banc or for a
writ of certiorari to the United States Supreme Court, are denied.
Notwithstanding this Court's holding that a dismissal is not "final"
until all discretionary appeals have expired, See Opinion at *6, upon
reconsideration I now conclude that such a broad interpretation is
unwarranted. "Although the saving[s] statute is to be liberally
construed, its reach is not limitless." Clary Corp. v. Smith,
949 S.W.2d 452, 461 (Tex. App. 1997). Section 16.064 must be interpreted
consistently with the policies behind statutes of limitations:
Statutes of limitations are primarily designed to assure
fairness to defendants. Such statutes promote justice by
preventing surprises through the revival of claims that
have been allowed to slumber until evidence has been
lost, memories have faded, and witnesses have
disappeared. The theory is that even if one has a just
claim it is unjust not to put the adversary on notice to
defend within the period of limitations and that the
right to be free of stale claims in time comes to prevail
over the right to prosecute them.
Griffen, 706 F.2d at 650 (quoting Dicker, 659 F.2d at 647 (quotation
marks and citation omitted)).
Permitting a plaintiff to repeatedly delay the sixty day limitations
period by filing multiple discretionary appeals would defeat both the
purposes of section 16.064 and of statutes of limitations generally. A
plaintiff would be able to indefinitely extend the limitations period by
filing successive discretionary appeals since the denial of each
successive appeal would continue tolling the sixty-day limitations
period. Such tactical maneuvers would be fundamentally unfair to
defendants and would exacerbate the problems associated with stale
claims, such as lost evidence, fading memories, and disappearing
witnesses. Section 16.064 was not intended to remedy such tactical
maneuvers. Cf. Hotvedt v. Schlemberger Ltd. (N.V.), 942 F.2d 294, 297
(5th Cir. 1991) ("[E]rrors in . . . [counsel's] tactical decisions were
not meant to be remedied by the savings statute."); Clary Corp., 949
S.W.2d at 461 (same).
Furthermore, by permitting only sixty days within which to re-file the
action in a court of proper jurisdiction, the Texas legislature evidenced
its intent to shorten the length of the toll afforded a plaintiff. By
comparison, the savings statutes in other states prescribe a considerably
longer limitations period during which a plaintiff may re-file the
action. See. e.g., Del. C. Ann. tit. 10, § 8117 (one year); Ga.
Code. Ann. § 9-2-61 (six months); 735 Ill. Comp. Stat. 5/13-217 (one
year); Ohio Rev. Code Ann. § 2305.19 (one year); Tenn. Code. Ann.
§ 28-1-105 (one year); N.Y. C.P.L.R. § 205(a) (McKinney 1990)
(six months); W. Va. Code § 55-2-18 (one year).
A plaintiff should not be permitted to extend the refiling period
beyond the limitations period fixed by section 16.064 by filing one or
more discretionary appeals which are later dismissed. Therefore, if
presented with the facts of this case, it is likely that the Texas Court
of Appeals would hold that a dismissal becomes "final" after it is
affirmed on appeal, not after discretionary appeals, such as petitions
for rehearing or a writ of certiorari, are denied. Cf. Glick v.
Ballentime Produce, Inc., 397 F.2d 590, 594 (8th Cir. 1968) (holding that
filing of petition for writ of certiorari did not prevent judgment from
becoming final for purposes of limitations period of Missouri savings
statute, which provided that plaintiff who suffers nonsuit in wrongful
death action may commence new action within one year thereafter); Lehman
Bros. v. Hughes Hubbard & Reed, L.L.P., 92 N.Y.2d 1014, 1016
(1998) ("It is not the purpose of CPLR 205(a) to permit a party to
continually extend the statutory period by seeking additional discretionary
appellate review. By contrast, where an appeal is taken as a matter of
right, or where discretionary appellate review is granted on the merits,
the six-month period does not commence since termination of the prior
action has not yet occurred."); Owens v. Hewell, 474 S.E.2d 740, 742
(Ga. App. 1996) ("[Plaintiffs'] unsuccessful pursuit of a discretionary
appeal to the United State Supreme Court did not extend their right to
renew their action under OCGA § 9-2-61 [Georgia's savings
statute] . . . and the six-month renewal period thus ran from the date
of the Eleventh Circuit Court of Appeals' affirmance of the trial court's
dismissal of their action.")
The District Court's orders of dismissal in the Texas Lawsuit were
affirmed by the Fifth Circuit on January 13, 2000. However, following the
December 1, 2000 order reinstating the appeals as against Rosenfeld and
RBT, the Fifth Circuit reversed the district court's order dismissing
Rosenfeld and RBT. Therefore, the statute of limitations for plaintiff's
claims against Rosenfeld and RBT have been tolled throughout the pendency
of the Texas Lawsuit.
By contrast, the December 1, 2000 order reaffirmed the prior January
13, 2000 order dismissing the appeals against Bernstein and
Tannenhauser. Therefore, the order dismissing Bernstein and Tannenhauser
became "final" on January 13, 2000.*fn11 Having failed to re-file his
action sixty days thereafter, plaintiff's claims against Bernstein and
Tannenhauser are timebarred.
C. Application Under the Liberal Definition of "Final"
Assuming, arguendo, that a dismissal is not "final" all discretionary
appeals — including a petition for a writ of certiorari — have
been exhausted, Lewis still failed to file this action less than sixty
days after the dismissal of Bernstein and Tannenhauser became "final".
Under 28 U.S.C. § 2101 (c), a party has ninety days "after entry of
. . . judgment or decree" to petition the Supreme Court for a writ of
certiorari. It is well-established that the ninety days run "from the
date of entry of the judgment or order sought to be reviewed, and not
from the issuance date of the mandate." 22 Moore's Federal Practice
§ 403.03[b][i], at 403-47 (Matthew Bender 3d ed. 2000). Moreover,
aside from time limitations, there are few technical restrictions on when
a party may file a petition for a writ of certiorari. "Cases in the
courts of appeals may be reviewed by the Supreme Court by . . . writ of
certiorari granted upon the petition of any party to any civil or
criminal case, before or after rendition of judgment or decree."
28 U.S.C. § 1254 (1). As summarized by leading scholars:
Once a case has come to be in the court of appeals, there
is power to issue certiorari without any limitation akin
to the much elaborated and significantly reduced
requirement of finality imposed on review of state court
judgments. Certiorari may be granted to review decisions
that do not dispose of the pending litigation, to examine
orders that go merely to procedural steps before the
court of appeals, or to decide a case that
has not even been considered by the court of appeals.
17 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction
2d § 4036, at 19 (1988)
Following the Fifth Circuit's January 13, 2000 order affirming the
dismissals of Bernstein, Tannenhauser, and RBT, plaintiff filed a timely
petition for a rehearing en banc. That petition was denied on February
17, 2000. Lewis' time to file a petition for certiorari expired ninety
days later, on May 17, 2000. See Young v. Harper, 520 U.S. 143, 147 n.l
(1997) ("A timely filed petition for rehearing will toll the running of
the 90-day period for filing a petition for certiorari until disposition
of the rehearing petition."). With respect to Bernstein and
Tannenhauser, this is the latest date on which the dismissals became
"final". Plaintiff, therefore, had until July 17, 2000 — sixty days
after Lewis' time to petition for a writ of certiorari expired — to
file this action. Having filed this action on July 20, 2000, plaintiff
failed to file within the statutory limitations period, even under the
most generous definition of the term "final".
Plaintiff, however, contends that he may still file a petition for
certiorari based on the Fifth Circuit's December 1, 2000 order
reaffirming the dismissal of the appeal against Bernstein and
Tannenhauser. Plaintiff is mistaken. The Supreme Court has long held
the mere fact that a judgment previously entered has been
reentered or revised in an immaterial way does not toll
the time within which review must be sought. Only when
the lower court changes matters of substance, or resolves
a genuine ambiguity, in a judgment previously rendered
should the period within which an appeal must be taken or
a petition for certiorari filed begin to run anew. The
test is a practical one. The question is whether the
lower court, in its second order, has disturbed or
revised legal rights and obligations which, by its prior
judgment, had been plainly and properly settled with
Federal Trade Commission v. Minneapolis-Honeywell Reoulator Co.,
344 U.S. 206
, 211-12 (1952). Because the December 1, 2000 order in no way
affected the portion of the January 13, 2000 order dismissing the appeals
against Bernstein and Tannenhauser, Lewis' time to petition for a writ of
certiorari did not restart with the December 1, 2000 order.*fn12
In sum, assuming, arguendo, that a dismissal is not "final" under
section 16.064(a) until all avenues of appellate review, including a
petition for a writ of certiorari, have expired, plaintiff failed to file
a second action within the sixty day limitations period prescribed by
section 16.064. Accordingly, the claims against Bernstein and
Tannenhauser are untimely.
For the reasons stated above, reconsideration is granted and the claims
against Bernstein and Tannenhauser are dismissed as time-barred.*fn13
The conference currently scheduled for August 16, 2001 is rescheduled for
May 31, 2001 at 4:30 p.m. to discuss how this case shall proceed in
light of the Fifth Circuit's May 14, 2001 opinion.