United States District Court, S.D. New York
June 20, 2005.
IN RE CURRENCY CONVERSION FEE ANTITRUST LITIGATION. THIS DOCUMENT RELATES TO: GILBERT SCHRANK, individually and on behalf of all others similarly situated, Plaintiff,
CITIBANK (SOUTH DAKOTA), N.A., Defendant.
The opinion of the court was delivered by: WILLIAM PAULEY, District Judge
MEMORANDUM AND ORDER
This class action concerns foreign currency conversion fees
imposed by defendant Citibank (South Dakota), N.A. ("Defendant"
or "Citibank") on its credit cardholders. Plaintiff Gilbert
Schrank ("Plaintiff" or "Schrank") asserts claims pursuant to New
York consumer protection statutes and the common law of New York
and other states.
Plaintiff moves for reconsideration of this Court's Memorandum
and Order, dated December 2, 2004, certifying a class of New York
state residents suing under the New York Personal Property Law.
For the reasons set forth below, Plaintiff's motion is granted in
part and denied in part. BACKGROUND
The relevant facts are described in detail in this Court's
prior Memoranda and Orders. See Schrank v. Citibank (South
Dakota), N.A., No. 03 Civ. 2843, 2004 WL 2750091 (S.D.N.Y. Dec.
2, 2004); Schrank v. Citibank (South Dakota), N.A., No. 1409,
21-95, 2003 WL 22097502 (S.D.N.Y. Sept. 10, 2003); see also In
re Currency Conversion Fee Antitrust Litig., No. 1409, 21-95,
2005 WL 1405993 (S.D.N.Y. June 16, 2005) ("Currency Conversion
IV"); In re Currency Conversion Fee Antitrust Litig.,
361 F. Supp. 2d 237 (S.D.N.Y. 2005) ("Currency Conversion III"); In
re Currency Conversion Fee Antitrust Litig., 224 F.R.D. 555
(S.D.N.Y. 2004) ("Currency Conversion II"); In re Currency
Conversion Fee Antitrust Litig., 265 F. Supp. 2d 385 (S.D.N.Y.
2003) ("Currency Conversion I").
Schrank asserts six claims in his Complaint: (1) violation of
New York Personal Property Law ("NYPPL"), Article 10, §
413(3)(a); (2) violation of New York General Business Law § 349
("Section 349"); (3) common law fraud; (4) unconscionable fees
under the common law and UCC § 2-202; (5) violation of the duty
of good faith and fair dealing pursuant to common law and UCC §
1-203; and (6) unjust enrichment. Following the removal and
transfer of this action to this Court, Plaintiff sought
certification of two classes, a New York class for New York
statutory claims and a national class for common law claims. This
Court certified a New York class consisting of "[a]ll New York
State residents issued Citibank, Visa or MasterCard credit cards
who did not agree to arbitrate their claims and were assessed a
foreign currency conversion fee in violation of the New York
Personal Property Law." Schrank, 2004 WL 2750091, at *9.
Schrank moves for reconsideration arguing that this Court
should have certified a New York class with respect to all
claims. (Plaintiff's Memorandum in Support of Motion for Reconsideration ("Pl. Mem.") at 4-10.) In addition, Schrank
contends that a national class is appropriate for his claims of
breach of good faith and fair dealing and unjust enrichment. (Pl.
Mem. at 10-12.) Plaintiff also asserts that Citibank has waived
its right to compel arbitration by litigating the action in this
forum and benefiting from discovery not available in arbitral
proceedings. (Pl. Mem. at 12-17.)
Defendant counters that Plaintiff's motion is an improper
attempt to reargue issues that this Court has already decided and
raise new arguments not addressed in the initial motion papers.
(Defendant's Memorandum in Opposition to Reconsideration ("Def.
Mem.") at 2-3.) Citibank also contends that it has not waived its
right to compel arbitration. (Def. Mem. at 7-8.)
I. Motion for Reconsideration Standard
"A motion for reconsideration should be granted only where the
moving party demonstrates that the Court has overlooked factual
matters or controlling precedent that were presented to it on the
underlying motion and that would have changed its decision."
Colodney v. Continuum Health Partners, Inc., No. 03 Civ. 7276
(DLC), 2004 WL 1857568, at *1 (S.D.N.Y. Aug. 18, 2004) (internal
quotation marks and citation omitted). Such a motion "should not
be granted where the moving party seeks solely to relitigate an
issue already decided." Shrader v. CSX Transp., Inc.,
70 F.3d 255, 257 (2d Cir. 1995). Indeed, reconsideration is not an
opportunity to take "a `second bite at the apple' for a party
dissatisfied with a court's ruling." Pannonia Farms, Inc. v. USA
Cable, No. 03 Civ. 7841 (NRB), 2004 WL 1794504, at *2 (S.D.N.Y.
Aug. 10, 2004). In addition, "a motion for reconsideration cannot
assert new arguments or claims which were not before the court on
the original motion." Koehler v. Bank of Bermuda, Ltd., No. M18-302 (CSH), 2005 WL 1119371, at *1
(S.D.N.Y. May 10, 2005); accord Am. Hotel Int'l Group v.
OneBeacon Ins. Co., No. 01 Civ. 0654 (RCC), 2005 WL 1176122, at
*1 (S.D.N.Y. May 18, 2005). Under Local Rule 6.3, "[t]he standard
for granting such a motion is strict, and reconsideration will
generally be denied unless the moving party can point to
controlling decisions or data that the court overlooked."
Shrader, 70 F.3d at 257. Whether reconsideration is appropriate
is "within the sound discretion of the district court."
Colodney, 2004 WL 1857568, at *1.
II. Class Certification
Plaintiff does not point to any "controlling decisions or data"
that this Court overlooked in rendering its class certification
decision. Instead, Schrank reiterates arguments previously
addressed by this Court or presents entirely new arguments, both
impermissible grounds for reconsideration.
This Court considered and rejected Plaintiff's argument with
respect to certification of his Section 349 claim. That section
requires proof of causation, which this Court previously
concluded "entails individual inquiries" not appropriate for
class certification under Rule 23(b)(3). See Schrank, 2004 WL
2750091, at *6-7. In addition, this Court held that Plaintiff's
claims were not typical of the claims of other class members.
Schrank's claims may be subject to certain defenses not
applicable to the rest of the class and as such, unique and
ineligible for class certification under Rule 23(a)(3).
Schrank, 2004 WL 2750091, at *4.
Similarly, this Court previously decided that Schrank's unjust
enrichment claim is not amenable to national class certification.
Variations in the laws of fifty different states eviscerate any common issues that may exist in this regard. See
Schrank, 2004 WL 2750091, at *7-8.
Because Schrank cannot demonstrate that this Court overlooked
any determinative matters or controlling decisions, his motion on
the Section 349 and unjust enrichment claims is denied as an
impermissible attempt to take a second bite at the apple. See
United States Underwriters Ins. Co. v. Falcon Constr. Corp.,
No. 02 Civ. 4179 (KTD), 2005 WL 497792, at *1 (S.D.N.Y. Mar. 3,
2005) (reconsideration inappropriate upon mere disagreement with
ruling); Colodney, 2004 WL 1857568, at *2 (reconsideration not
opportunity to rehash previously asserted arguments).
Schrank also impermissibly advances two new arguments in
support of reconsideration. First, he contends that his good
faith claim qualifies for national class certification as a
breach of contract claim. (Pl. Mem. at 10-12.) To buttress that
novel argument, Plaintiff attaches a survey reflecting the
uniform elements of a breach of contract claim across the United
States. (Pl. Mem., Ex. 1.) Second, Schrank proposes certification
of a New York class encompassing both statutory and common law
claims. (Pl. Mem. at 8-10.)
Reconsideration is not open season for new argument. See
Koehler, 2005 WL 1119371, at *1 (Local Rule 6.3 implicitly
provides that new arguments may not be asserted on
reconsideration); Pannonia Farms, Inc, 2004 WL 1794504, at *3
(reconsideration "is not occasion for a party to craft new and
previously untested legal theories"). Indeed, the narrow scope of
reconsideration under Local Rule 6.3 is necessary "to ensure
finality and prevent the rule from becoming a vehicle by which a
losing party may examine a decision `and then plug? the gaps of
a lost motion with additional matters.'" Valentine v. Met. Life
Ins. Co., No. 85 Civ. 3006 (CSH), 2005 WL 1278524, at 2 (S.D.N.Y. May 31, 2005)
(quoting Carolco Pictures, Inc. v. Sirota, 700 F. Supp. 169,
170 (S.D.N.Y. 1988)); accord Am. Hotel, 2005 WL 1176122, at
Finally, Schrank asserts that this Court did not consider his
argument that Citibank waived its right to compel arbitration.
(Pl. Mem. at 12-14; Plaintiff's Reply Memorandum in Support of
Reconsideration ("Pl. Reply Mem.") at 1-3; Plaintiff's
Supplemental Response Memorandum in Support of Class
Certification ("Pl. Supp. Mem.") at 1-5.) Following the grant of
class certification in this case, this Court had occasion to
consider whether Citibank waived its arbitration rights in MDL
No. 1409 (the "MDL Proceeding"). See Currency Conversion III,
361 F. Supp. 2d at 257-58. For the same reasons that Citibank
waived its right to compel arbitration in the MDL Proceeding,
Citibank has waived its right here.
As this Court explained in Currency Conversion III, "a party
may impliedly waive its right to enforce a contractual
arbitration clause when it `engages in protracted litigation that
results in prejudice to the opposing party.'"
361 F. Supp. 2d at 257 (quoting S & R Co. of Kingston v. Latona Trucking,
159 F.3d 80, 83 (2d Cir. 1998) and citing Manos v. Geissler, BRG,
321 F. Supp. 2d 588, 593 (S.D.N.Y. 2004)). In determining whether a
party has waived its arbitration rights, courts consider the
following factors: "(1) the time elapsed from the commencement of
litigation to the request for arbitration; (2) the amount of
litigation (including the exchanges of pleadings, any substantive
motions, and discovery); and (3) proof of prejudice, including
taking advantage of pre-trial discovery not available in
arbitration, delay, and expense." Coca-Cola Bottling Co. of
N.Y., Inc. v. Soft Drink & Brewery Workers Union Local 812,
242 F.3d 52, 57 (2d Cir. 2001) (internal quotation marks and citation
omitted). This inquiry is individualized and turns on the
particular facts of each case. See Thyssen, Inc. v. Calypso Shipping Corp., 310 F.3d 102, 104-05 (2d Cir. 2002); Cotton v.
Slone, 4 F.3d 176, 179 (2d Cir. 1993).
In Currency Conversion III, this Court concluded that
Citibank waived its arbitration rights based on its delay in
asserting those rights and the advanced stage of the MDL
Proceeding. 361 F. Supp. 2d at 257-58. Citibank has similarly
waived its right to compel arbitration in this case. First, like
Currency Conversion III, Citibank never moved to compel
arbitration in this action.*fn1 Second, Defendant elected to
proceed in a federal forum when it removed this case from the
state court in 2002. (Notice of Removal, dated Dec. 11, 2002.)
For more than two years, Citibank has defended this action and
availed itself of discovery coordinated with the MDL Proceeding.
(Defendant's Memorandum in Opposition to Remand; Answer; Pl.
Supp. Mem. at 3; MDL Scheduling Order No. 6, dated October 10,
2003; Conference Tr., dated September 16, 2003 at 31-32.)
Finally, discovery is now closed and the parties are briefing a
summary judgment motion. (Scheduling Order, dated May 18, 2005.)
Thus, Citibank has "actively litigated" this case and secured
pretrial discovery, an avenue often closed to arbitrating
parties. Cotton, 4 F.3d at 179-80; accord Apollo Theater
Found., Inc. v. W. Int'l Syndication, No. 02 Civ. 10037 (DLC),
2004 WL 1375557, at *3-4 (S.D.N.Y. June 21, 2004). Having reaped
the benefits of litigating in this forum, Schrank would be
unfairly prejudiced if Citibank was permitted to exercise its
arbitral rights at this late stage. Accordingly, Citibank has
waived its right to compel arbitration. CONCLUSION
For the reasons set forth above, Schrank's motion for
reconsideration is granted in part and denied in part. To the
extent reconsideration is granted, this Court holds that Citibank
waived its right to compel arbitration and modifies the class
previously certified as follows:
All New York state residents issued Citibank Visa or
MasterCard credit cards who were assessed a foreign
currency conversion fee in violation of the New York
Personal Property Law.