United States District Court, S.D. New York
OPINION AND ORDER
LORNA G. SCHOFIELD, District Judge.
On July 23, 2013, this matter was referred to Magistrate Judge Frank Maas for general pretrial supervision and to resolve the objections of Defendants Bayrock Group LLC, Bayrock Spring Street LLC, Bayrock Whitestone LLC, Bayrock Camelback LLC, and Bayrock Merrimac LLC (collectively, "Bayrock") to the public filing of Plaintiffs' operative First Amended Complaint ("FAC"). Before the Court is Judge Maas' Report and Recommendation, dated January 14, 2015, (the "Report") recommending that each paragraph to which Bayrock has objected be struck. Both Plaintiffs and Bayrock, respectively, have filed objections to the Report. For the reasons that follow, the Report is adopted in its entirety.
I. LEGAL STANDARD
Federal Rule of Civil Procedure 72(a) governs review "[w]hen a pretrial matter not dispositive of a party's claim or defense is referred to a magistrate judge." Under Rule 72(a) a district court reviews a magistrate judge's orders for clear error. Here, even though no dispositive motion was referred to Judge Maas, the Report recommends exercising the Court's inherent powers to sanction Plaintiffs in a manner that may prove dispositive. Accordingly, and in the fullness of caution, the Report and its ultimate recommendation are reviewed under the de novo standard of Rule 72(b). A reviewing court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). The district court "may adopt those portions of the report to which no specific, written objection' is made, as long as the factual and legal bases supporting the findings and conclusions set forth in those sections are not clearly erroneous or contrary to law." Adams v. N.Y. State Dep't of Educ., 855 F.Supp.2d 205, 206 (S.D.N.Y. 2012) (citing Fed.R.Civ.P. 72(b), Thomas v. Arn, 474 U.S. 140, 149 (1985)).
Under Rule 72(b), the court must undertake a de novo review of any portion of the report to which a specific objection is made on issues raised before the magistrate judge. See 28 U.S.C. § 636(b)(1); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997). When a party makes only conclusory or general objections, or simply reiterates the original arguments made below, a court will review the report strictly for clear error. Feliciano v. Comm'r of Soc. Sec., No. 10 Civ. 3151, 2011 WL 6399512, at *3 (S.D.N.Y. Dec. 20, 2011). Finally, "an unsuccessful party is not entitled as of right to a de novo review by the judge of an argument never seasonably raised before the magistrate." Marache v. Akzo Nobel Coatings, Inc., No. 08 Civ. 11049, 2010 WL 3731124, at *3 (S.D.N.Y. Sept. 7, 2010) (quoting Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d 985, 990-91 (1st Cir. 1988)); accord Walker v. Stinson, 205 F.3d 1327, 2000 WL 232295, at *2 (2d Cir. 2000) (summary order) (noting the "district court did not abuse its discretion in refusing to consider" an argument where the objector failed to raise it before the magistrate judge).
Familiarity with this case and its procedural history, detailed in the Report and Judge Maas' opinion dated May 29, 2014, is assumed. See Kriss v. Bayrock Grp. LLC, No. 10 Civ. 3959, 2014 WL 2212063 (S.D.N.Y. May 29, 2014); see also Kriss v. Bayrock Grp. LLC, No. 13 Civ. 03905, 2014 WL 715660 (S.D.N.Y. Feb. 25, 2014). Facts are recounted only to the extent necessary to resolve the parties' objections to the Report.
A. Procedural Issues
This matter was referred to Judge Maas for, among other things, resolution of Bayrock's objections to the public filing of the FAC on the ground that it contains allegations based on information Plaintiffs' counsel obtained unlawfully from Joseph Bernstein, a former Bayrock employee. Because Plaintiffs repeatedly failed to comply with - even defied - Judge Maas' orders, he was unable to determine which contested allegations in the FAC, if any, may be filed publicly on the docket and form the basis for the action to proceed. The Report recommends exercising the Court's inherent powers to sanction Plaintiffs by striking from the FAC every allegation subject to an objection from Bayrock.
Pursuant to Rule 72(b), and as instructed in the Report, any objections to the Report were due no later than January 28, 2015. By letter dated January 21, 2015 (but filed on January 22, 2015), Plaintiffs requested an extension until February 18, 2015, because, among other reasons, "it will take much time to prepare our objections" and "we need time to coordinate with our First Amendment and ethics counsels in re issues to be addressed in the objections." Plaintiffs stated, however, that "we won't go over [page] limit." On January 22, 2015, Plaintiffs' application was granted, and the deadline for objections was extended to February 18, 2015, the date that Plaintiffs had requested. Bayrock timely filed objections on February 18, 2015 ("Bayrock's Objections"), but Plaintiffs did not.
At 11:49 p.m. on February 18, 2015, Plaintiffs filed a letter explaining that, given the "quasi-criminal" sanctions recommended by the Report, Plaintiffs had been in consultation with experts on privilege, sanctions, the First Amendment and ethics; each expert "must review the objections before they are submitted"; Plaintiffs had been unable to consult with one of their experts in time for the submission; and all experts were expected to complete their "review of the final papers" by February 20, 2015. An Order was issued on February 19, 2015, advising that "objections not docketed on ECF by 3 pm Eastern Time on February 20, 2015, will be disregarded as untimely." At 2:58 p.m. on February 20, 2015, Plaintiffs submitted a 33-page brief, which (contrary to the representation in their first request for extension) exceeded the 25pages permitted by the Court's Individual Rules. Further, the submission was via email, and not filed on ECF as had been ordered.
Later that day, Plaintiffs filed a letter on ECF explaining that the objections had been filed "under seal" pursuant to the Local Rules "out of caution and professional relations with" counsel for Bayrock, who Plaintiffs believe "should have a chance to read it before it's made public" because the submission may implicate other sealed documents. However, the Individual Rules require a party to seek the Court's leave before filing documents under seal. The letter also promised that if Plaintiffs did not hear otherwise from the Court or Bayrock by February 23, 2015, they would "upload the identical file, which may be confirmed by the/A metadata, at the end of the day."
On February 24, 2015, Plaintiffs filed their "Corrected" objections to the Report on ECF. Again contrary to their prior representation, this document was neither submitted on February 23, 2015, nor "identical" to their February 18 submission, and included an errata sheet purporting to correct certain "orhographic [sic] and lexical errors."
Finally, on February 25, 2015, Plaintiffs were granted leave to file a reply to Bayrock's objections no later than March 4, 2015, and not to exceed 5 pages. Plaintiffs' reply, timely filed on March 4, 2015, spanned 7 pages.
Plaintiffs' apparent defiance of the Court's orders and rules - continuing a pattern of such behavior detailed more fully in the Report - are sufficient cause to disregard Plaintiffs' objections in their entirety. Nevertheless, in the interests of justice, this Opinion considers the first 25 pages of Plaintiffs' February 20 submission ("Plaintiffs' Objections") and the first five pages of Plaintiffs' Reply, which are the portions within the Court's page limits.
Any objections contained in Plaintiffs' or Bayrock's Objections and not specifically addressed below have been considered de novo and rejected.
B. Bayrock's Objections
Bayrock objects to the Report's ultimate recommendation that the contested allegations in the FAC be struck. Bayrock argues that, instead, the FAC should be dismissed in its entirety. The ...