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AMERICAN TISSUE, INC. v. ARTHUR ANDERSEN

United States District Court, Southern District of New York


May 27, 2003

AMERICAN TISSUE, INC., A CHAPTER 11 BANKRUPTCY DEBTOR-IN-POSSESSION PLAINTIFF, AGAINST ARTHUR ANDERSEN, L.L.P., DEFENDANT.

The opinion of the court was delivered by: Shira A. Scheindlin, District Judge

ORDER

American Tissue, Inc. ("ATI") moves for reconsideration of this Court's Opinion and Order dated May 5, 2003, dismissing ATI's claims for lack of subject matter jurisdiction under the rule of Shearson Lehman Hutton, Inc. v. Wagoner, 944 F.2d 114 (2d Cir. 1991). See American Tissue, Inc. v. Arthur Andersen, L.L.P., No. 02 Civ. 7751, 2003 WL 21036233 (S.D.N.Y. May 6, 2003).

In the May 5 Opinion, I instructed ATI that its claims could be saved "only by showing that (a) Andersen's alleged malpractice was unrelated to the misconduct charged in the Insider Complaint, or (b) that the insiders' misconduct is not fairly attributable to ATI." 2003 WL 21036233 at *5. ATI now complains that it was "not given any chance to do so," and argues that the Court erred in refusing to grant leave to amend. Plaintiff's Motion for Reconsideration on Order Granting Motion to Dismiss at 6.

In fact, I dismissed the case "without prejudice." 2003 WL 21036233 at *5 (emphasis added). This dismissal implicitly permitted ATI to seek leave to file an amended complaint. ATI had not previously sought leave to file an amended complaint, and leave had never been denied. However, I am mindful of the difference between a dismissal "without prejudice" and one "with leave to amend." See Elfenbein v. Gulf & Western Indus. Inc., 590 F.2d 445, 448 (2d Cir. 1978) ("This circuit has clearly rejected the view that `without prejudice' means `with leave to amend.'"). To be clear: the May 5 Opinion dismissed ATI's case without prejudice. Now that ATI has specifically sought leave to amend, it may do so within 30 days of this Order.

I have reviewed ATI's remaining arguments and find them to be without merit. The Clerk is directed to close this motion.

SO ORDERED

20030527

© 1992-2003 VersusLaw Inc.



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