United States District Court, Southern District of New York
August 20, 2003
MULTI-JUICE, S.A., SNAPPLE HELLAS, S.A., AND NEW AGE BEVERAGE HELLAS, PLAINTIFFS, AGAINST SNAPPLE BEVERAGE CORP., MISTIC BRANDS, INC. AND TRIARC COMPANIES, INC., DEFENDANTS
The opinion of the court was delivered by: Robert Patterson, Senior District Judge
OPINION AND ORDER
Plaintiffs Multi-Juice, S.A. ("Multi-Juice"), Snapple Hellas, S.A. ("Hellas"), and New Age Beverage Hellas ("New Age") (collectively, "Plaintiffs") move 1) for reargument of the motion to disqualify Plaintiffs' counsel, Louis F. Burke, filed by Defendants Snapple Beverage Corp. ("Snapple"), Mistic Brands, Inc. ("Mistic") and Triare Companies, Inc. ("Triare") (collectively, "Defendants"); or 2) in the alternative for leave to file an interlocutory appeal with regard to the same. Defendants ask this Court to consider imposing sanctions sua sponte on Plaintiffs, pursuant to Rule 11 of the Federal Rules of Civil Procedure, for the fees and expenses incurred by Defendants with regard to preparing their response to Plaintiffs' motion.
For the forgoing reasons, Plaintiffs' motion is denied. This Court declines to impose Rule 11 Sanctions on Plaintiffs.
The underlying facts detailed in the Complaint in this case are restated in this Court's [ Page 2]
Opinion and Order dated April 25, 2003*fn1, Multi-Juice, S.A. v. Snapple Beverage Corp., 2003 WL 1961636, *1-*3 (S.D.N.Y. 2003).
Defendants brought a motion on September 6, 2002, 1) to dismiss certain causes of action enumerated in the Complaint, pursuant to Fed.R.Civ.P. 12(b)(6); 2) to dismiss all causes of action against Defendant Triare; and 3) to disqualify Plaintiffs' counsel, Louis F. Burke, pursuant to Disciplinary Rule 5-102 of the New York Rules of Professional Responsibility. Oral argument was held on February 19, 2003. In an Opinion and Order dated April 25, 2003, this Court granted Defendants' motion in its entirety.
On May 8, 2003, Plaintiffs brought the current motion for reargument of the motion to disqualify counsel only and, in the alternative, for leave to file an interlocutory appeal, again only on the disqualification motion.
I. Motion For Reargument
A motion for reargument is appropriately granted when a "[c]ourt has overlooked controlling decisions or factual matters that were put before it on the underlying motion . . . and which, had they been considered, might have reasonably altered the result before the court." Range Road Music, Inc. v. Music Sales Corp., 90 F. Supp.2d 390, 392 (S.D.N.Y. 2000) (internal quotations and citations omitted). A motion for reargument may also be granted in order to "correct a clear error or prevent manifest injustice." Griffin Industries, Inc. v. Petrojam. Ltd., 72 F. Supp.2d 365, 368 (S.D.N.Y. 1999) (internal quotations and citations omitted). Nonetheless, "a [ Page 3]
motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided." Shrader v. CSX Transportation, Inc., 70 F.3d 255, 257 (2d Cir. 1995).
In its motion for reargument, Plaintiffs do not point to any additional "controlling decisions or factual matters" that this Court did not consider originally. Range Road, 90 F. Supp.2d at 392. Nor have they shown that the Opinion of April 25, 2003 represents "clear error" or "manifest injustice." Griffin Industries, 72 F. Supp.2d at 368. Although in their supporting memorandum of law, Plaintiffs re-emphasize sworn statements by Mr. Arthur Tavantzis and Mr. Burke that "negotiations as to the terms of the Distribution Agreement with Ms. Bimbo were conducted through Arthur Tavantzis" and that "Burke's negotiations and communications were with the counsel for Snapple" (Plaintiffs' Memorandum of Law in Support of Reargument at 3 (citing Nov. Tavantzis Decl. ¶ 4; Burke Decl. ¶¶ 7-8))*fn2, Plaintiffs' citations to the record are not entirely accurate. The Tavantzis Declaration stated, "Essentially, the negotiation of the Distribution Agreement proceeded on two intertwined tracks, one by the attorneys and one by Ms. Bimbo and me. Most, if not all, of the substantive decisions made by Hellas as to the terms of the Distribution Agreement were made by me." (Nov. Tavantzis Decl. ¶ 4 (emphasis added).). Similarly, the Burke Declaration acknowledged participation in the drafting of the Distribution Agreement and stated that "my role was mostly limited to acting as a scribe and conduit of information flowing between the parties." (Burke Decl. ¶ 7 (emphasis added).) These declarations were made in response to the Affidavit of Gary Lyons, dated September 5, 2002 (the "Lyons Affidavit") stating "Burke was also the chief, if not sole, [ Page 4]
negotiator on behalf of the Tavantzises in the negotiations between Multi-Juice and Snapple over the terms of the Multi-Juice Distribution Agreement and was extensively involved in drafting that Agreement." (Lyons Aff. ¶ 8.) Accordingly, Plaintiffs' Declarations did not deny that at times Mr. Burke was the sole negotiator of the Distribution Agreement on behalf of Plaintiffs. Ms. Bimbo's Affidavit, submitted in reply and dated December 6, 2002 (the "Bimbo Affidavit"), stated, "Based on my own involvement with the negotiations of the Distribution Agreement, I know that Burke was involved in all aspects of that negotiation, including but not limited to proposing and commenting on draft language. On several occasions, Burke was the sole representative of Multi-Juice in these negotiations." (Bimbo Aff. ¶ 10.) When one considers Bimbo's definitive statement against the Burke and Tavantzis Declarations' use of "mostly," "[m]ost" and "[e]ssentially," the Court's finding was correct. Such is the case, particularly when considered with reference to Mr. Burke's letter to Ms. Bimbo dated December 6, 1997 in which Mr. Burke enclosed "draft 4 of the Distribution Agreement" making proposed changes in Article 11 (the termination provision), referred to a telephone conversation with Ms. Bimbo and stated "[w]e have agreed on all other issues." (Lyons Aff, Exh. H at 2-3.)
Furthermore, Plaintiffs' claim that, because Ms. Bimbo's statement was contained in Defendants' reply papers, they did "not have an opportunity to put in a response," is also misleading. (Pls. Mem. of Law in Sup. of Rearg. at 6, n. 1.) Mr. Tavantzis did in fact put in a further response taking no issue with Ms. Bimbo's statement (see Declaration of Arthur Tavantzis dated January 17, 2003 (the "January Tavantzis Declaration")) nor was any issue raised about her statement at the time of oral argument. Indeed, at oral argument, counsel for Plaintiffs seemingly admitted that Mr. Burke was sole representative at the negotiations stating [ Page 5]
that any representations of Ms. Bimbo if made to Mr. Burke directly were conveyed to Plaintiffs. (Transcript at 64-65.)
Plaintiffs are not claiming a written contract, but rather that Defendants breached the terms of an oral distribution agreement entered into by Ms. Bimbo during the negotiation and drafting of the terms of the written Multi-Juice Distribution Agreement. Since Plaintiffs did not deny that at times Mr. Burke was the sole negotiator for Plaintiffs, the Court's reliance upon Ms. Bimbo's uncontested statement and Mr. Burke's letter of December 6, 1997 stating "[w]e have agreed on all other issues [except for the provision on termination]" (Lyons Aff, Exh. H at 3) was appropriate, and the finding that Mr. Burke was a necessary witness under Disciplinary Rule 5-102 was correct.
The Court also relied on the fact that Plaintiffs did "not claim that any of the stated exceptions within the New York Rules of Professional Responsibility appl[ied]." Multi-Juice, S.A., 2003 WL 1961636 at *7. This Court recognizes that Plaintiffs claimed in a footnote in their brief in opposition to Defendants' original motion that, in the alternative, Mr. Burke's testimony "fits the exceptions of Disciplinary Rule 5-102(a) . . . [and] (c) because the testimony will relate solely to `an uncontested issue' or `a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony." (Plaintiffs' Memorandum of Law in Opposition to Motion to Disqualify Counsel at 8, n. 2.) Nonetheless, Plaintiffs offered no analysis, facts or caselaw to substantiate this conclusory argument and said nothing beyond the recitation of the language of Rule 5-102. Accordingly, the Court's original ruling stands; Plaintiffs' conclusory statement and failure to articulate the basis of the claim that Mr. Burke's testimony would fit into the exceptions of Disciplinary Rule 5-102 rendered its [ Page 6]
original claim insufficient.
Mr. Burke is a necessary witness based on sufficient facts placed before the Court. Accordingly, Defendants' original motion to disqualify and this Court's subsequent ruling were not premature.
Plaintiffs' motion for reargument is denied.
II. Motion for Leave to File an Interlocutory Appeal
A. The Standard
Pursuant to 28 U.S.C. § 1292(b),
When a district judge, in making in a civil action an
order not otherwise appealable under this section,
shall be of the opinion that such order involves a
controlling question of law as to which there is
substantial ground for difference of opinion and that
an immediate appeal from the order may materially
advance the ultimate termination of the litigation, he
shall so state in writing in such order.
Id. Permission to file an interlocutory appeal is granted in "only in exceptional cases" when such a course of action "may avoid protracted and expensive litigation." Telectronics Proprietary, Ltd. v. Medtronic, Inc., 690 F. Supp. 170, 172 (S.D.N.Y. 1987). In this case, there does not exist a "controlling question of law as to which there is substantial ground for difference of opinion" and a situation where "an immediate appeal from the order [for interlocutory appeal] may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b).
A "controlling question of law" exists when "reversal of the district court's order would terminate the action." Klinghoffer v. S.N.C. Achule Lauro, 921 F.2d 21, 23-24 (2d Cir. 1990). Although not required, courts in this district have also found that a question of law may be "`controlling' if it substantially affects a large number of cases." Genentech, Inc. v. Novo Nordisk A/S, 907 F. Supp. 97, 99 (S.D.N.Y. 1995) (a patent case). [ Page 7]
This case does not present a situation in which the reversal of this Court's opinion will result in the dismissal of the action. Klinghoffer, 921 at 24. Furthermore, similar to Genentech, reversal of this Court's opinion would not have precedential value for a large number of cases, because this Court's determination was based on a fact-specific analysis that would likely not apply in future cases. See Genentech at 99 (noting that "when the controlling issues are factual rather than legal . . ., section 1292(b) certification is unavailable").
Plaintiffs cite no conflicting caselaw in this Circuit regarding differing standards for attorney qualification, and this Court could find none.*fn3 To this end, there is not a "substantial ground for difference of opinion" regarding law that governs attorney disqualification. See Genentech, 907 F. Supp. at 99-100 (noting that the requirement relates to the existence of "conflicting legal authority" such that "there exists substantial doubt about the law").
In the event that this Court's opinion were to be overturned on an interlocutory appeal, it [ Page 8]
is true that Plaintiffs would avoid any costs associated with retaining new counsel. However, this reduction in expenses is entirely unrelated to whether or not such an appeal will "materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b). To the contrary, the potential delay caused by Plaintiffs' obligation to retain new counsel would be no greater than the time it would take for the Second Circuit to entertain and decide an interlocutory appeal, and certainly Mr. Burke would remain accessible to Plaintiffs as a witness, providing the relevant knowledge he has with respect to the meetings in which he participated as Plaintiffs' sole representative. An immediate appeal would not "literally accelerate the action as a whole." Genentech, 907 F. Supp. at 100.
Plaintiffs' motion is denied.
III. Rule 11 Sanctions
A motion for sanctions, initiated by a party, can only be made "separately from other motions or requests and shall describe the specific conduct alleged to violate [Rule 11]." Fed.R.Civ.P. 11 (c)(1)(A). Defendants' request for Rule 11 sanctions does not comply with these requirements, and this Court declines to impose sanctions sua sponte. Defendants' request for sanctions is denied. [ Page 9]
For the forgoing reasons, Plaintiffs' motion is denied. This Court declines to impose Rule 11 sanctions on Plaintiffs.
IT IS SO ORDERED.