United States District Court, S.D. New York
August 18, 2004.
Leo James, on behalf of himself and all others similarly situated, Plaintiff,
AT&T CORPORATION; COX COMMUNICATIONS, INC.; COMCAST CABLE COMMUNICATIONS, INC.; KLEINER PERKINS CAUFIELD & BYERS; C. MICHAEL ARMSTRONG; MARK McEACHEN; GEORGE BELL; FRANK IANNA; MOHAN GYANI; CHARLES H. NOSKI; DANIEL H. SOMERS; MUFIT CINALI; JOHN C. PETRILLO; L. JOHN DOERR; THOMAS A. JERMOLUK; WILLIAM R. HEARST, III; RAYMOND LIGUORI; JOHN C. MALONE; BRIAN L. ROBERTS; EDWARD S. ROGERS; DAVID W. WOODROW; HOSSEIN ESLAMBOLCHI, and AT HOME CORP., Defendants.
The opinion of the court was delivered by: LOUIS STANTON, District Judge
OPINION AND ORDER
Defendants move to dismiss this action on the grounds that it
is duplicative of Leykin v. AT&T Corp., 02 Civ. 1765 (LLS),
which is also pending in this court. They move, in the
alternative, to dismiss the portions of this James complaint
which were previously dismissed from the Leykin complaint.
Finally, defendants C. Michael Armstrong and Comcast Cable
Communications, Inc. move to dismiss the complaint under F.R.C.P.
12(b)(5) for improper service upon them. 1.
"As part of its general power to administer its docket, a
district court may stay or dismiss a suit that is duplicative of
another federal court suit." Curtis v. Citibank, N.A.,
226 F.3d 133, 138 (2nd Cir. 2000). "The complex problems that can arise
from multiple federal filings do not lend themselves to a rigid
test, but require instead that the district court consider the
equities of the situation when exercising its discretion." Id.
"The power to dismiss a duplicative lawsuit is meant to foster
judicial economy and the `comprehensive disposition of
litigation.'" Id. "[T]hough no precise rule has evolved, the
general principle is to avoid duplicative litigation." Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800,
817, 96 S. Ct. 1236, 1246 (1976).
The putative classes in Leykin and James are composed of
the same members, and are organized to vindicate the same rights.
Mr. Leykin and Mr. James represent precisely the same interests,
and each is a member of the putative class in both Leykin and
James. Except for the addition as a defendant of At Home Corp.,
a bankrupt whose principals and controlling interests are already
defendants in Leykin, the defendants in both cases are the
same. Aside from immaterial corrections, the claims in the
Leykin and James complaints are identical. The issues and
facts to be determined, the witnesses and evidence required, and the relief requested, are exactly the same.
"[G]enerally, a suit is duplicative if the `claims, parties, and
available relief do not significantly differ between the two
actions.'" Serlin v. Arthur Andersen & Co., 3 F.3d 221, 223
(7th Cir. 1993) (quoting Ridge Gold Standard Liquors, Inc. v.
Joseph E. Seagram & Sons, Inc., 572 F. Supp. 1210, 1213 (N.D.
Ill. 1983)); see also Northern Assur. Co. of America v. Square D
Co., 201 F.3d 84, 89 (2nd Cir. 2000) (adopting the same
standard). The James complaint includes no claims or facts that
have arisen subsequent to the filing of Leykin. See Curtis,
226 F.3d at 140-41 (dismissing duplicative claims brought in
order to circumvent a ruling denying leave to amend, but allowing
claims based on actions that post-dated the original action to
Plaintiffs concede that the James action was filed for
tactical purposes, stating that it was filed "out of an excess of
caution in response to (a) defendants' argument *fn1 in the
Leykin action which plaintiff thought was meritless but could
perhaps be mooted or `eliminated' by filing this James action
in order to name At Home as a defendant, (b) an argument by
defendant Bell that he had not been served properly, and (c) an
argument by defendants that Leykin did not qualify for by
[sic] the longer statute of limitations applicable under the
Sarbanes-Oxley Act because Leyken [sic] was filed before
same." Pl. Opp. at 3-4.
Filing a second identical action is not the proper procedure
for correcting improper service or adding additional parties.
Neither is it an appropriate way to gain a more advantageous
statute of limitations. See Serlin, 3 F.3d at 224 ("the rules
nowhere contemplate the filing of duplicative law suits to avoid
the statutes of limitations"); Fiore v. McDonald's Corp., 1996
WL 331090, at *11-12 (S.D.N.Y. June 12, 1996) (dismissing second
action where "[p]laintiffs have stated that the second action was
filed `for one reason and one reason only,' to take advantage of
New York's six year statute of limitations, which is two years
longer than the statute of limitations applicable under Texas
law"); Newby v. Enron Corp. (In re Enron Corp. Sec., Derivative
& "ERISA" Litig.), 2004 WL 405886, at *16 n. 42 (S.D. Tex. Feb.
25, 2004) ("to permit a plaintiff to file a new second suit or a
new claim or add a new party in order to circumvent a statute of
limitations and expand his legal rights, especially where the
clear language of the statute reflects Congress' intent not to
permit such expansion, as here, would create legal chaos"). The
Second Circuit has stated that "plaintiffs may not file duplicative complaints in
order to expand their legal rights." Curtis, 226 F.3d at 140.
Even if it were proper to bring a duplicative action in order
to take advantage of a better statute of limitations, the longer
statute of limitations in James seems of little use to
The only issue involving the statute of limitations relates to
when plaintiffs were on inquiry notice of the wrongs of which
they complain. Under the pre-Sarbanes-Oxley Act rule, securities
laws claims were barred one year after the plaintiff had inquiry
notice of them. See Lampf, Pleva, Lipkind, Prupis & Petigrow v.
Gilbertson, 501 U.S. 350, 111 S. Ct. 2773 (1991).
The Sarbanes-Oxley Act of 2002 (Pub.L. No. 107-204) extended
the one-year period to two years for proceedings commenced on or
after July 30, 2002 so thereafter plaintiffs on inquiry notice
of a wrong had two years within which to bring suit.
The Leykin complaint was filed on March 5, 2002. The James
complaint was filed on July 3, 2003. Although the James
complaint may be governed by an extra year's limitation after
inquiry notice of the wrong, it was filed almost sixteen months
after Leykin. Thus; it appears that a claim which was
discoverable a year before Leykin was filed, was discoverable two years and four months before James was filed. Plaintiffs
offer no argument or reason not to conclude that because James
was filed over a year after Leykin, its extra one year within
which to sue, after notice of the wrong, is of no help to
Accordingly, defendants' motion is granted and this James
action is dismissed without prejudice as duplicative.