The opinion of the court was delivered by: Sweet, District Judge
Defendant law firm Weitz & Luxenberg ("W&L"), and individual defendants Perry Weitz ("Weitz") and Robert Gordon ("Gordon") (collectively, the "W&L Defendants") have moved pursuant to Federal Rule of Civil Procedure 12(b)(6) for an order dismissing Count XIII of the Fourth Amended Complaint (the "Complaint") of plaintiff G-I Holdings ("Holdings"). Holdings was given permission to replead Count XIII, which alleges common law fraud against the W&L Defendants on the basis of an alleged backdating of a complaint, after it was first pled in Holdings' Third Amended Complaint.
Although the W&L Defendants have done a remarkable amount of work to discredit Holdings' allegations, this Court is limited by the constructs of Rule 12(b)(6) from entertaining some, but not all, of their arguments. As a result, and for the following reasons, the W&L Defendants' motion is granted in part and denied in part.
This action was initiated by the filing of an action by Holdings against the Defendants on January 10, 2001, alleging violations of the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). The First Amended Complaint (the "FAC") was filed on April 30, 2001 and alleged inter alia that the Defendants engaged in a scheme to inundate the judicial system and Holdings with hundreds of thousands of asbestos cases without regard to their merit, and in various illegal acts in connection with such litigation including suborning false testimony. That complaint was dismissed in part on December 11, 2001, but leave was granted to replead.
In a Second Amended Complaint, filed on January 25, 2002, Holdings repled certain of its state law claims, asserted a cause of action against Baron & Budd for common law fraud, and amended the allegations with regard to its witness tampering theory. Defendants moved to dismiss the Second Amended Complaint. On March 18, 2002, however, Holdings filed a Third Amended Complaint, in which it, inter alia, added the common law fraud claim at issue here against the W&L Defendants. At a hearing on April 17, 2002, leave to file the Third Amended Complaint was granted, and the Defendants' motions to dismiss the Second Amended Complaint and strike certain allegations were denied inasmuch as they no longer targeted the current complaint. The Defendants were then given leave to renew their motions with regard to the Third Amended Complaint.
On July 17, 2002, Count XIII was dismissed with leave to replead. G-I Holdings v. Baron & Budd, 2002 WL 158328 (July 17, 2002) (the "July 17 Opinion"). That opinion directed Holdings to identify the universe of cases in which fraud was alleged to have occurred, by looking to the strictures of the New York Civil Practice Law and Rules as related to the timeline for serving complaints. Id. at *26. Holdings was instructed that if it "can identify the amended complaint that was backdated — or at least a potential group of cases — and can otherwise add greater specificity to the allegations, then Holdings may have a viable claim and should have the opportunity to replead it." Id. at *26.
On August 21, 2002, Holdings filed the Fourth Amended Complaint (the "Complaint"), which repled Count XIII in light of the July 17 Opinion. The W&L Defendants made the instant motion on October 4, 2002. Holdings responded in opposition on November 12, 2002, and the W&L Defendants replied on December 6, 2002. The motion was heard on December 11, 2002 and considered fully submitted at that time.
The Factual Allegations of the Complaint
The Complaint adopts most of the factual allegations of the Third Amended Complaint. These facts were described in greater detail in the July 17 Opinion, familiarity with which is presumed. Thus, this section will outline only the allegations that constitute the repled Count XIII. As befits a motion to dismiss under Rule 12(b)(6), the facts are assumed to be as alleged in the complaint for purposes of the instant motion and do not constitute findings of fact by the Court.
In order to pursue claims against asbestos defendants that would otherwise be time-barred, Weitz & Luxenberg has allegedly backdated documents filed in asbestos personal injury cases and tampered with and falsified records of the Supreme Court of the State of New York. (Complaint, ¶ 97.)
In the spring of 2000, Weitz & Luxenberg maintained an office at 120 Wall Street in Manhattan that oversaw the prosecution of asbestos personal injury cases on behalf of clients who had died. In May 2000, W&L attorneys recognized that they had failed to amend in a timely fashion a complaint filed in New York County. Holdings alleges that W&L remedied the problem by backdating the amended pleading, falsifying the filing stamp and altering the books and records of the New York County Supreme Court to reflect the fact that the amendment had been filed before it actually was filed. (Id., ¶ 98.)
All pleadings filed in the New York County Supreme Court bear an official court stamp, affixed by court employees, reflecting the date upon which the pleading was filed in the County Clerk's office (the "Filed Stamp"). The filing date, reflected in the Filed Stamp, is relied upon by both the Court and by litigants (including GAF) in calculating the timeliness of the filing. In the spring of 2000, GAF was a named defendant in all, or substantially all, of the asbestos liability actions brought in New York County by Weitz & Luxenberg on behalf of its clients. (Id., ¶ 99.)
Sometime after Weitz & Luxenberg discovered the error, W&L personnel, acting under the direction of senior W&L attorney Marie Ochigrossi, also known as Marie Ianniello ("Ochigrossi"), purportedly undertook to ensure that the amended complaint would be filed with a false backdated Filed Stamp and that the court's records would be falsely altered to reflect that the pleading had been filed before it actually was filed. Ochigrossi was a department head at W&L. The only other attorneys in the department were William Nugent and Marissa Cunningham, both of whom reported directly to Ochigrossi. The remainder of the department was comprised of paralegals. The two supervising paralegals in the department were Alisha Ostacher and Vanessa Ostacher, both of whom are daughters of Elba Aguilar ("Aguilar"). Mary Jo Sci, a third daughter of Aguilar, also worked as a W&L paralegal for some period of time.*fn1 While the average W&L paralegal was paid approximately $25,000 annually, Alisha Ostacher was paid approximately $65,000. (Id. ¶ 100.)
Aguilar is and was at that time a court employee at the New York County Supreme Court building at 60 Centre Street in Manhattan. Aguilar's duties at the courthouse are such that she has, and at all relevant times had, access to the New York County Clerk's Filed Stamp and New York County Supreme Court case records. (Id. ¶ 102.)
Holdings alleges that under the direction of Ochigrossi, W&L personnel first prepared a back-dated amended complaint. When the new papers were ready, Ochigrossi summoned a W&L paralegal to her office where paralegal Alisha Ostacher was also waiting. Ochigrassi instructed the paralegal that he was "to take something down to Alisha's mother" and "to follow Alisha's instructions." Ostacher handed the paralegal an envelope containing the amended complaint and indicated that she had called her mother who would be waiting to meet him at 60 Centre Street. (Id., ¶ 101.)
It is further alleged that Ostacher instructed the paralegal to meet her mother inside the entrance to the courthouse at 60 Centre Street. When the paralegal arrived, Aguilar told him to go downstairs to the records department of the courthouse ahead of her, to make a copy of the document he had brought with him and to fill out a request form for the case file. He did so. As he was being handed the case file, Aguilar appeared by his side and showed the filing clerk her badge so that the file could be removed from the clerk's view. Aguilar also requested a document log book, which the clerk gave her. (Id., ¶ 103.)
Aguilar and the paralegal took the file, the logbook, and the documents to a space near the copy machine. Aguilar purportedly stamped the amended complaint with the court's Filed Stamp to reflect falsely that it had been filed at an earlier date. Aguilar then added a false entry in the court's log book. The entry Aguilar placed in the log book falsely indicated that the amended complaint had been filed on the false filing date. At Aguilar's instruction, the paralegal then took the case file to the copy machine, copied a document in it (so as to suggest that was the reason he had requested it) and then placed the falsely stamped pleading in the case file. The log book and case file were then returned to the filing clerk. (Id., ¶ 104.)
Holdings claims that this incident was not isolated. On several other occasions, the paralegal was instructed by Ochigrossi or Ostacher to take blue-backed documents to Aguilar so that false Filed Stamps could be affixed on them. Once Aguilar took the paralegal upstairs at the courthouse at 60 Centre Street and made him wait on a bench. She then took the documents into another room and brought them back, all with back-dated Filed Stamps newly affixed. On another occasion, they met at the courthouse's rotunda on the first floor. At that time, Aguilar simply ducked behind a column and quickly stamped the documents with the earlier false filing dates. On yet another occasion, Aguilar met the paralegal outside the side entrance to 60 Centre Street to effectuate the falsification of filing stamps on case documents generated by W&L. On every occasion, Aguilar took steps to ensure that her conduct was not being observed by others. (Id., ¶ 105.)
Under Rule 3025 of New York's Civil Practice Law & Rules, amended complaints must be served on each party to the action, including each named defendant, and each named defendant must serve and file a response thereto. W&L's filing of fraudulently time-barred claims increased the litigation costs for all defendants in those cases. (Id., ¶ 106.)
Holdings has attempted to identify the particular action in which the above-described fraud occurred. Because a document back-dated in the fraudulent manner described herein would be indistinguishable from a document affixed with a Filed Stamp in a non-fraudulent manner, the nature of the fraud is such that mere review of the falsely affixed, yet genuine Filed Stamp is insufficient to reveal the fraud. Further, because the complaints filed by W&L and served on GAF did not in all instances provide information concerning the date of the claimant's discovery of his alleged injury or, where applicable, the claimaint's date of death, plaintiff cannot, without further discovery, accurately ascertain the deadlines at issue in each of the actions that may be implicated in this scheme. As such, Holdings admits that it is impossible to allege with absolute certainty the particular action or actions in which the fraud took place. (Id., ¶ 107.)
In an attempt to do so, Holdings, inter alia, sought to review in the New York County Clerk's Office the request forms for case files because the individual described in paragraph 101 herein made such application to obtain the case file of the action at issue. The records for the relevant time would have revealed the names of each case for which that individual made such a request and thereby would have defined a more limited universe of cases in which the fraud occurred. Holdings learned, however, that such records are retained for only three months and that no such records from the relevant time period are in existence. (Id., ¶ 107 n. 3.)
Holdings has identified 23 asbestos personal injury actions brought by Weitz & Luxenberg against GAF in which W&L served on GAF within 120 days after mid-May 2000 an amended complaint stamped with a filed date of fewer than 120 days prior to mid-May 2000. Based on these criteria, Holdings alleges, upon information and belief, that the back-dating incident occurred in one or more of the following cases, identified by the claimant name and index number:
• Alfred J. Filippelli, No. 11855998 (filed stamp
dated Feb. 22, 2000 and served on June 20, 2000);
• Michael Link, No. 98122001 (filed stamp dated Feb.
28, 2000 and served on June 27, 2000);
• George Owen, No. 99110974 (filed stamp dated Feb.
28, 2000 and served on June 26, 2000);
• Harry J. Bullock, Jr., No. 99115492 (filed stamp
dated March 3, 2000 and served on June 26, 2000);
• Robert Fiorillo, No. 99109515 (filed stamp dated
March 3, 2000 and served on June 19, 2000);
• Julius Paul Nosewicz, No. 98111486 (filed stamp
dated March 3, 2000 and served on June 22, 2000);
• Louis Peris, No. 98112132 (filed stamp dated March
3, 2000 and served on June 26, 2000);
• Francis J. Schaefer, No. 98111482 (filed stamp
dated March 3, 2000 and served on June 20, 2000);
• Tony Felice, No. 11855198 (filed stamp dated March
20, 2000 and served on June 28, 2000);
• Richard D. Keller, No. 99108181 (filed stamp dated
March 20, 2000 and served on July 12, 2000);
• Anthony Litterello, No. 99117281 (filed stamp dated
March 20, 2000 and served on June 28, 2000);
• Ralph Marsillo, No. 10001799 (filed stamp dated
March 20, 2000 and served on June 27, 2000);
• William J. Schuler, No. 10422599 (filed stamp dated
March 20, 2000 and served on July 11, 2000);
• Eugene P. Sullivan, No. 12427297 (filed stamp dated
March 20, 2000 and served on June 26, 2000);
• Joseph Sbuttoni, No. 99101612 (filed stamp dated
April 17, 2000 and served on May 17, 2000);
• Paul Townsley, No. 99123461 (filed stamp dated
April 17, 2000 and served on May 26, 2000);
• Carmen Trotta, No. 99123493 (filed stamp dated
April 19, 2000 and served on May 31, 2000);
• David F. Cameron, No. 99122330 (filed stamp dated
April 20, 2000 and served on May 26, 2000);
• Donald F. Mooney, No. 99122066 (filed stamp dated
April 20, 2000 and served on May 26, 2000);
• Rosamarie Elia, No. 00110184 (filed stamp dated May
15, 2000 and served on May 25, 2000);
• William J. Wright, No. 99119067 (filed stamp dated
May 15, 2000 and served on June 5, 2000);
• Robert C. Dick, No. 99118272 (filed stamp dated May
16, 2000 and served on May 26, 2000);
• Raymond J. Altrock, No. 00110561 (filed stamp dated
May 17, 2000 and served on May 25, 2000).
(Id., ¶ 107.) Holdings states that it is possible that the scheme involved other complaints in addition to the one or more of those listed above. (Id., ¶ 111.)
Determination of the purpose of the purported backdating scheme requires knowledge of the specific deadlines which Weitz & Luxenberg sought to avoid. The following deadlines apply to any asbestos action brought in New York State: (1) the three-year statute of limitations for personal injury actions under CPLR §§ 214 and 214-a; (2) the two-year statute of limitations for wrongful death actions under EPTL § 5-4.1; and (3) the one-year limitation imposed after the death of a claimant under CPLR § 210(a). In addition, asbestos actions commenced in New York County (as was each of the cases listed above) are subject to the restrictions imposed by the Amended Case Management Order in In re New York Asbestos Litigation (the "Order"). Section VI of the Order states that if an amendment to a complaint that adds ...