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Goldberg v. UBS AG

March 5, 2010


The opinion of the court was delivered by: Trager, J


Plaintiffs Karen Goldberg and her seven children, Chana Goldberg, Esther Goldberg, Yitzhak Goldberg, Shoshana Goldberg, Eliezer Goldberg, Yaakov Moshe Goldberg and Tzvi Yehoshua Goldberg, commenced this action against defendant bank UBS AG ("UBS") on January 28, 2008. Plaintiffs bring claims under the civil remedy provisions of the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333(a)*fn1 alleging that UBS is liable for: (1) aiding and abetting the murder or attempted murder of a United States citizen or causing the commission or attempted commission of physical violence upon United States Citizens in violation of 18 U.S.C. § 2332(a)-(c)*fn2 and 18 U.S.C. § 2333(a); (2) committing acts of international terrorism in violation of 18 U.S.C. § 2339B(a)(1)*fn3 and 18 U.S.C. § 2333(a); and (3) collecting and transmitting funds on behalf of a terrorist organization in violation of 18 U.S.C. § 2339C*fn4 and 18 U.S.C. § 2332(a).

On November 3, 2008, defendant UBS moved to dismiss plaintiffs' Complaint on grounds of (1) lack of standing; (2) forum non conveniens; (3) unconstitutionality of the ATA*fn5 as applied to UBS's conduct; and (4) failure to satisfy the pleading standards of Federal Rule of Civil Procedure 8. By Order dated September 24, 2009 ("the September 24th Order"), Judge Sifton*fn6 granted defendant UBS AG's motion to dismiss the first count of plaintiffs' Complaint (aiding and abetting a violation of 18 U.S.C. § 2332)*fn7 , and denied the motion in all other respects.

Two motions are currently pending before this court. On October 8, 2009, defendant UBS moved for reconsideration of the portion of Judge Sifton's September 24, 2009 Order declining to dismiss plaintiffs' Complaint on forum non conveniens grounds. On October 21, 2009, defendants moved to certify the September 24th Order for interlocutory appeal. For the reasons set forth below, both motions are denied.


Familiarity with the factual background of this matter is presumed based on the record of proceedings before Judge Sifton. For a description of the facts of this case, see Goldberg v. UBS AG, 660 F. Supp. 2d 410 (E.D.N.Y. 2009).


(1) Motion for Reconsideration

a. Standard for Reconsideration

Civil motions for reconsideration in this District are governed by the analogous standards imposed by Federal Rule of Civil Procedure 59(e) and Local Civil Rule 6.3. U.S. v. James, No. 02 CV 0778, 2007 WL 914242, at *3 (E.D.N.Y. Mar. 21, 2007). "The standard for granting [a motion for reconsideration] is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusions reached by the court." Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir. 1995). Reconsideration is also appropriate if there is an intervening change of controlling law, new evidence or the need to correct a clear error or prevent manifest injustice. Doe v. New York City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir. 1983); Bay Casino, LLC v. M/V Royal Empress, No. 98-CV-2333 (SJ), 1998 WL 566772, at *1 (E.D.N.Y. Aug. 21, 1998).

Local Civil Rule 6.3 is to be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been fully considered. See Caleb & Co. v. E.I. Du Pont De Nemours & Co., 624 F. Supp. 747, 748 (S.D.N.Y. 1985). In deciding a Local Rule 6.3 motion, courts will not allow a party to use the motion as a substitute for an appeal from a final judgment. See Morser v. A.T. & T. Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989); Korwek v. Hunt, 649 F. Supp. 1547, 1548 (S.D.N.Y. 1986). Accordingly, a party in its motion for reconsideration "may not advance new facts, issues or arguments not previously presented to the court." Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb, Inc., No. 86-CV-6447 (JMC), 1989 WL 162315, at *3 (S.D.N.Y. Aug. 4, 1989).

b. Merits of Motion for Reconsideration

Defendant UBS seeks reconsideration of Judge Sifton's denial of defendant's motion to dismiss on forum non conveniens ("FNC") grounds in the September 24th Order. Defendant principally contends reconsideration is warranted because Judge Sifton "overlooked [his] own ability to eliminate [] distinctions between the ATA and Israeli law," and "could have conditioned FNC dismissal on UBS stipulating that, if liability were established, Plaintiffs would be entitled to prove and recover emotional and non-economic damages akin to an award for 'loss of consortium' under U.S. law."*fn8 Defendant's Motion for Reconsideration ("Def. Rec. Br.") at 2.

Defendant specifically challenges the conclusion in the September 24th Order that UBS had not met its burden of showing that the proposed alternate forum, Israel, offers a remedy which is "substantially the same" as the one available in the U.S.*fn9

In the September 24th Order, Judge Sifton held that dismissal on FNC grounds was not warranted because there were at least two significant differences between the remedies available under Israeli and U.S. law: (1) while the ATA permits successful plaintiffs to recover treble damages plus the cost of bringing suit, including attorneys fees, Israeli law contains no provision for treble damages; and (2) Israel law lacks a mechanism by which plaintiffs could obtain compensation for their emotional or noneconomic injury.*fn10 Id. at 9. Because defendant offered to enter into a stipulation trebling any compensatory damage award determined by an Israeli court, Judge Sifton concluded that defendant had mitigated any effect of the first of these two distinctions, but that the latter distinction precluded the grant of FNC dismissal. Id. Defendant now contends that Judge Sifton overlooked the possibility of conditioning FNC dismissal on defendant UBS’s agreement to have an Israeli court determine and award damages for solatium or loss of consortium.*fn11 Defendant’s argument fails for three reasons.

First, by failing to timely raise such an argument during the briefing of its motion to dismiss, defendant waived its right to seek reconsideration on this point. The suggestion of conditioning FNC dismissal on defendant’s stipulating to solatium or loss of consortium damages was raised nowhere in defendant’s 85 pages of briefing on its motion to dismiss, or in the two declarations of its Israeli law expert, which contained 117 numbered paragraphs spanning 41 pages (excluding exhibits). It was also not mentioned in any communication to the court, including defendant's August 13, 2008 letter "to supplement" its motion to dismiss, and defendant does not allege that this option was raised with plaintiffs' counsel prior to the September 21, 2009 oral argument.*fn12 Rather, defendant raised the possibility of stipulating to solatium or loss of consortium damages for the first time in the last moments of its rebuttal on oral argument.*fn13

Because the possibility of a stipulation concerning non-pecuniary damages was not raised until this late point, defendant cannot raise it now. See Nobel Ins. Co. v. City of New York, No. 00-CV-1328 (KMK), 2006 WL 284812, at *16 (S.D.N.Y. Sept. 29, 2006) (alteration in original) ("Normally, [the Court] will not consider arguments raised for the first time in a reply brief, let alone [at or] after oral argument."); see also Halpert Enters., Inc. v. Harrison, No. 07-1144-cv, 2008 WL 4585466, at *3 (2d Cir. Oct. 15, 2008) ([G]iven [defendant's] failure to mention this argument [in its papers], raising any such claim even explicitly at oral argument would have been to no avail." (citing In re Monster Worldwide, Inc. Sec. Litig., 251 F.R.D. 132, 137 (S.D.N.Y. 2008) ("[T]his argument was raised for the first time at oral argument and so was waived in terms of this motion."))). In the absence of such a rule, parties would have an incentive to withhold certain claims or defenses until the last moment, lying in wait to spring onto their opponents unanticipated arguments in reply briefs or in the final moments of oral argument. Such an outcome would not only be inefficient, but also manifestly unjust. Castro v. U.S., 540 U.S. 375, 386, 124 S.Ct. 786, 794 (2003) ("Our adversary system is designed around the premise that the parties know what is best for them, and are responsible for advancing the facts and arguments entitling them to relief.").

Second, defendant has not pointed to any controlling law or evidence overlooked by Judge Sifton. On a motion for reconsideration, "the moving party [must] point to controlling decisions or data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusions reached by the court." New York v. Gutierrez, 623 F. Supp. 2d 301, 314 (E.D.N.Y. 2009). Defendant does not point to a single case in which FNC was granted with any condition similar to the one they belatedly propose, much less cite a case in which the denial of FNC dismissal was found to be improper in similar circumstances. The sole basis of defendant's motion, that "the Court appears to have overlooked its own ability to eliminate [] distinctions between the ATA and Israeli law," is controverted by the plain text of the September 24, 2009 opinion, in which Judge Sifton explicitly considered the possibility of imposing conditions on FNC dismissal, and indeed accepted one such condition proposed by defendant. See Goldberg, 660 F. Supp. 2d at 422 & n. 13 ("Such stipulations can assuage courts' concerns regarding potential deficiencies in the adequacy of a foreign tribunal, and a court may condition dismissal on the parties agreeing to such stipulations.").

Third, even if defendant had timely proposed "conditioning FNC dismissal on UBS stipulating that Plaintiffs could prove and recover U.S.-style lost consortium damages in an Israeli litigation," Def. Rec. Br. at 1, this request should be rejected. Unlike defendants proposed stipulation to pay treble the damages imposed Israeli court, which requires no judging or application of law by the foreign tribunal, the proposed stipulation would require an Israeli forum to actively take evidence and judge the emotional damages suffered by plaintiffs. Such a condition is unlike those typically imposed by courts, and raises distinct concerns of comity and enforceability. Indeed, courts are hesitant to impose U.S. law on foreign courts when such law is "an unwarranted intrusion on the [foreign] forum's policies governing its judicial system." Gross v. British Broadcasting Corp., 386 F.3d 224, 234 (2d Cir. 2004). For example, in Gross, the district court granted defendant BBC's motion to dismiss on FNC grounds only after the parties agreed to waive their statutory rights under British law relating to contingent fees and fee-shifting for prevailing parties. However, the Second Circuit reversed the district court's grant of FNC dismissal, emphasizing the importance of comity in FNC cases:

It is not uncommon for a district court to qualify a dismissal for forum non conveniens on the movant's acceptance of certain conditions to reduce the prejudice to the plaintiff. For example, if the district court is unsure that the defendant would in fact be amenable to suit in the proposed foreign forum, it may require the defendant to consent to jurisdiction in that forum before dismissing the case. . . . The conditions imposed in the case at bar are somewhat more troublesome to us because they are primarily institutional rather than personal in nature. . . . There is a point at which conditions cease to be a limitation on the defendant and become instead an unwarranted intrusion on the transferee forum's policies governing its judicial system. By applying conditions that implicate the British legal system's rules on fee-shifting and the availability of contingent fees, the district court effectively stepped into the middle of Britain's policy debate on those issues. Principles of comity demand that we respect those policies. We urge the district courts to be cognizant of the prudential choices made by foreign nations and not to impose conditions on parties that may be viewed as having the effect of undermining the considered policies of the transferee forum.

Id. at 234.

Furthermore, although courts have granted FNC dismissal conditioned on a foreign tribunal's application of U.S. procedural law, defendant has cited no case in which it was conditioned on the application of U.S. substantive law, nor is the Court aware of any such case. See Tim A. Thomas, Annotation, Validity and Propriety of Conditions Imposed Upon Proceeding in Foreign Forum by Federal Court in Dismissing Action Under Forum Non Conveniens, 89 A.L.R. Fed. 238 (1988) (collecting cases in which FNC dismissal has been conditioned on, inter alia, defendant consenting to the jurisdiction of the foreign court, agreeing to waive any applicable statute of limitations defense in the foreign forum, agreeing to satisfy any judgment that may be entered in the foreign forum, or making witnesses or documents available to the foreign tribunal). Imposition of such a condition is particularly problematic in this case because defendant has provided no evidence that an Israeli court would accept such a stipulation and agree to render an award of loss of consortium or non-economic damages.*fn14 Such a condition would impose a task upon Israeli courts to determine an issue that is does not confront in its work. While the Israeli judiciary is well-recognized for its quality and integrity, without a showing that it is willing to undertake this task, we should be reluctant to ask them to resolve the somewhat amorphous issue of loss of consortium-type damages - a remedy Israeli law does not provide. Counsel for defendant also failed to inform the court whether their client ...

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