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HOLOCAUST VICTIMS FOR ARTWORK v. AUSTRIA CREDITANSTALT

November 16, 2005.

ASSOCIATION OF HOLOCAUST VICTIMS FOR RESTITUTION OF ARTWORK AND MASTERPIECES, a/k/a "AHVRAM," ET AL., Plaintiff
v.
BANK AUSTRIA CREDITANSTALT AG, ET AL. Defendants.



The opinion of the court was delivered by: SHIRLEY KRAM, Senior District Judge

OPINION & ORDER

In May 2004, the Association of Holocaust Victims for Restitution of Artwork and Masterpieces ("AHVRAM") and several individuals (collectively "Plaintiffs") filed a $6.8 billion lawsuit against various corporations, governmental entities, and financial institutions, including Bank Austria Creditanstalt AG ("Bank Austria"), alleging the theft, retention, and sale of artwork looted during the Holocaust. On August 19, 2005, this Court dismissed Plaintiffs' complaint ("August 19 Order"). Ass'n of Holocaust Victims for Restitution of Artwork & Masterpieces v. Bank Austria Creditanstalt AG, No. 04 Civ. 3600, 2005 U.S. Dist. LEXIS 17411, at *7 (S.D.N.Y. Aug. 19, 2005). In addition, the Court granted Bank Austria's request for sanctions against Plaintiffs' counsel, Edward D. Fagan, ordered Mr. Fagan to pay Bank Austria's fees and costs, and fined him $5,000. Id.

Plaintiffs now move for reconsideration of the August 19 Order, leave to amend their complaint, and a stay of the Court's judgment.*fn1 For the reasons set forth below, the Court denies or dismisses all motions. In addition, the Court establishes the amount of fees and costs due to Bank Austria, and orders Mr. Fagan to pay his fine to the Court immediately.

  I. Plaintiffs' Moving Papers

  On September 16, 2005, Plaintiffs filed a "Notice of Motion Pursuant to FRCP Rule 60," requesting reconsideration of the August 19 Order, leave to amend their complaint, and a stay of the Court's judgment ("Notice of Motion for Reconsideration"). (Pls.' Notice of Mot. Pursuant to FRCP Rule 60, Sept. 16, 2005.) Additionally, Plaintiffs submitted an affidavit signed by Edward D. Fagan ("Fagan Affidavit"). (Fagan Aff. September 16, 2005.) However, Plaintiffs failed to submit a memorandum of law in support of their motion. The Court recognized the omission and, on September 28, 2005, granted Plaintiffs until October 7, 2005 to supplement the motion. As of this Opinion, Plaintiffs have neither submitted supplemental materials nor requested a further extension. Consequently, the Court decides Plaintiffs' motion on the basis of the papers currently before it.

  A. Plaintiffs' Motion for Reconsideration is Denied*fn2

  Plaintiffs move for reconsideration of the August 19 Order "based upon newly discovered evidence and for other equitable reasons" pursuant to Federal Rule of Civil Procedure 60. (Pls.' Notice of Mot. Pursuant to FRCP Rule 60, at 2.) Although Plaintiffs do not specify the subsections of Rule 60 that they believe are applicable, their moving papers only appear relevant to part (b), subsections (2) and (6).

  Under Rule 60(b) (2), a party may move the court to reconsider an order when the party presents "newly discovered evidence which by due diligence could not have been discovered" prior to the order. Fed.R.Civ.P. 60 (b) (2). "In order to succeed on a motion pursuant to Rule 60 (b) (2), the movant must present evidence that is `truly newly discovered or . . . could not have been found by due diligence.'" See United States v. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d Cir. 1983) (quoting Westerly Elecs. Corp. v. Walter Kiddie & Co., 367 F.2d 269, 270 (2d Cir. 1966)), cert denied, 462 U.S. 1144 (1983). New evidence offered in support of the motion must be "highly convincing." Kotlicky v. United States Fid. & Guar. Co., 817 F.2d 6, 9 (2d Cir. 1987) (citation omitted).

  In support of their motion, Plaintiffs rely on the Fagan Affidavit, which is largely a personal narrative recounting the formation of AHVRAM, clarifying the organization's goals, and restating the merits of the complaint. (Fagan Aff. ¶¶ 3-23, 29-39, 76-82.) These portions of the affidavit present no newly discovered evidence, and are more naturally read as a long overdue response to Bank Austria's motion for sanctions, which challenged the existence of AHVRAM and the validity of the complaint. (Mot. to Impose Sanctions, Mar. 7, 2005.) Because this "evidence" is in no sense newly discovered, it clearly does not comprise proper grounds for reconsideration.

  The Fagan Affidavit also alleges that evidence relating to the substance of their complaint has been discovered "since late 2003/2004" (Fagan Aff. ¶ 40) and "in the last few weeks, months, and years" (Fagan Aff. ¶ 69). However, the Affidavit fails to distinguish evidence that was "truly newly discovered" after the Court's August 19 Order from evidence that Plaintiffs discovered in the "months" and "years" before that Order. Even assuming that the Fagan Affidavit alleges any evidence not in Plaintiffs' possession prior to the Court's Order, the Fagan Affidavit fails to explain why any of the allegedly new evidence "could not have been found by due diligence" other than to suggest, without documentation, the existence of "a conspiracy at the highest levels of government." (Fagan Aff. ¶¶ 50, 71-75.) Plaintiffs' vague explanations for why evidence was not offered earlier are unconvincing and unsubstantiated, leading this Court to "reject the explanations and to consider the `evidence' not newly discovered." Potamkin Cadillac Corp., 697 F.2d at 493.

  Moreover, the Fagan Affidavit's "unsubstantiated conclusory allegations" of new evidence are not "highly convincing," and warrant no change from the Court's prior ruling.*fn3 Long v. Carberry, 151 F.R.D. 240, 244 (S.D.N.Y. 1993). Plaintiffs' new evidence fails to cure the complaint's "`fundamentally preliminary' defect[:] lack of subject matter jurisdiction." Fidenas AG v. Compagnie Internationale Pour L'Informatique CII Honeywell Bull S.A., 606 F.2d 5, 6 (2d Cir. 1979). To warrant reconsideration of their complaint, Plaintiffs must present new evidence providing some indication of the action's jurisdictional basis. Not a single paragraph of the Fagan Affidavit bears upon the complaint's jurisdictional deficiency. In short, even if newly discovered, "the evidence presented in the [Fagan Affidavit] itself would not justify overturning the prior decision." In re Joint E. & S. Dist. Asbestos Litig., 774 F. Supp. 116, 120 (S.D.N.Y. 1991).

  Under Rule 60 (b) (6), a court also has discretion to grant reconsideration of an order for "any other reason justifying relief." Fed.R.Civ.P. 60 (b) (6). Relief under Rule 60 (b) (6) "is properly invoked where there are extraordinary circumstances, or where the judgment may work an extreme and undue hardship." Matarese v. LeFevre, 801 F.2d 98, 106 (2d Cir. 1986) (citations omitted), cert. denied, 480 U.S. 908 (1987). Plaintiffs' submissions provide no support for reconsideration under either of these exceptional grounds. Accordingly, reconsideration under this subsection is inappropriate.

  In light of Plaintiffs' failure to present "highly convincing," newly discovered evidence within the meaning of Rule 60 (b) (2), and because the Court finds no other reasons justifying reconsideration of its previous Order, Plaintiffs' motion for reconsideration is denied.

  B. Plaintiffs' Request for Permission to File a Second Amended Complaint Is Dismissed ...


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