Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Stein

September 18, 2006

UNITED STATES OF AMERICA,
v.
JEFFREY STEIN, ET AL., DEFENDANTS.
IN RE UNITED STATES OF AMERICA,
v.
JEFFREY STEIN, ET AL., DEFENDANTS.
JEFFREY STEIN, ET AL., PLAINTIFFS,
v.
KPMG LLP, DEFENDANT.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

MEMORANDUM OPINION

In its recent opinion denying KPMG's motion to dismiss the complaint by the KPMG Defendants for advancement of defense costs in this action, the Court set the matter for trial and established a schedule for determination of any dispute about whether the matter would be tried to a jury.*fn1 KPMG filed a timely jury demand. The KMPG Defendants moved to strike the jury demand, arguing essentially that their claim is one for specific performance and therefore of an equitable nature. KPMG failed to file any opposition to the motion to strike its jury demand by the date directed by the Court or, for that matter, since.

Facts

As noted in Stein III, the KPMG Defendants sued on alleged express and implied in fact contracts as well, in some cases, as under California statutes. They seek an order directing KPMG to pay defense costs to be incurred in the future, to pay defense costs from the date of the indictment to date, and a declaratory judgment to the same effect. In substance, then, their contract claims seek specific performance of the alleged contracts. The California law claim asserted by some of them in substance seeks an injunction requiring KPMG to comply with the California statutes.

Discussion

Stein III required that any papers in opposition to the motion to strike the jury demand be served and filed on or before September 15, 2006. No such papers have been filed to date.

S.D.N.Y. Civ. R. 7.1(a), subd. 3, provides:

"The Court shall not consider any papers required under this Rule [including papers in opposition to motions] that are not timely filed . . . unless good cause is shown. Where a properly filed motion is unopposed and the Court determines that the moving party has met its burden to demonstrate entitlement to the relief requested therein, the non-moving party's failure to file or serve any papers as this Rule requires shall be deemed as consent to the granting or denial of the motion, as the case may be, unless good cause is shown."*fn2 Accordingly, if the KPMG Defendants' papers demonstrate that they are entitled to have the jury demand stricken, KPMG is deemed to have consented to that relief.

The Seventh Amendment by its terms applies only to "suits at common law."*fn3 This is a criminal case, not a suit at common law.*fn4 The advancement issue arises within the criminal case, premised on the Court's ancillary jurisdiction, because it is pertinent to the remedy for the government's unconstitutional actions. At first blush, therefore, the plain language of the Seventh Amendment is at odds with KPMG's position. Nevertheless, this is an unusual situation. Perhaps it could be argued that KPMG should not be deprived of any right it might have had to a jury trial if the KPMG Defendants had sued it in an ordinary civil action for the same relief. But it is unnecessary to resolve that question, as it is entirely plain that KMPG would not have been entitled to a jury even if that had occurred.

The Seventh Amendment provides in relevant part only that "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved."*fn5 It "was declaratory of the existing law, for it required only that jury trial in suits at common law was to be 'preserved.'"*fn6 "In order to ascertain the scope and meaning of the Seventh Amendment, resort must be had to the appropriate rules of the common law established at the time of the adoption of that constitutional provision in 1791."*fn7 Hence, in determining whether a party has a right to a jury trial:

"we ask, first, whether we are dealing with a cause of action that either was tried at law at the time of the founding or is at least analogous to one that was, see, e.g., Tull v. United States, 481 U.S. 412, 417, 107 S.Ct. 1831, 1835, 95 L.Ed.2d 365 (1987). If the action in question belongs in the law category, we then ask whether the particular trial decision must fall to the jury in order to preserve the substance of the common-law right as it existed in 1791."*fn8 In this case, the KPMG Defendants seek principally specific performance of KMPG's alleged contractual duty and an order requiring that it discharge its California statutory obligations to advance defense costs. Actions for specific performance and for injunctions always have been equitable in nature.*fn9 The Seventh Amendment therefore affords KMPG no right to a jury trial.

This result is not altered by the fact that the KMPG Defendants seek also to compel KPMG to reimburse them for what they have spent in defending this case since the indictment was returned. A court of equity determining an action for specific performance or an injunction "may also award damages or other relief."*fn10 The fact that a claimant seeks monetary relief incidental to specific performance or an injunction does not change the equitable character of the action and does not create a right to a jury trial.*fn11

This principle is well illustrated by Golden v. Kelsey-Hayes Co.*fn12 Plaintiffs there were retired employees of the defendant employer and the retirees' surviving spouses. They claimed that their former employer breached a collective bargaining agreement by requiring them to make certain co-payments and imposing a deductible prior to payment of benefits. They sought an order requiring the employer to provide the benefits without the disputed co-payments and deductibles as well as a monetary award to cover the injury they had sustained between the imposition of the employer's policy and the date of an order requiring it to alter its policy.

The Sixth Circuit held that there was no right to a jury trial because the monetary award was incidental to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.