United States District Court, N.D. New York
JOSEPH STERN, SHAUL STERN, SHIMSON STERN, YOCHEVED KUSHNER, LAW OFFICE OF RICHARD B. ANCOWITZ, and LAW OFFICE OF SANFORD ROSENBLUM, Plaintiffs,
WESTERMAN BALL EDERER MILLER & SHARFSTEIN, LLP; NITSANA DARSHAN-LEITNER & ASSOCIATES, a/k/a Nitsana Darshan-Leitner & Co.; MINTZ LEVIN, LLP; MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO, P.C.; and ROBERT TOLCHIN, Defendants.
OFFICE OF RICHARD B. ANCOWITZRICHARD B. ANCOWITZ, ESQ.
Attorneys for Plaintiffs
ROSENBLUM & PARTNERS, LLPSANFORD ROSENBLUM, ESQ.
Attorneys for Plaintiffs
WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP
LAURA A. GILLEN, ESQ JEFFREY A. MILLER, ESQ. Attorneys for
Defendant Westerman Ball Ederer Miller Zucker &
LEVIN COHN FERRIS GLOVSKY AND POPEO, P.C. Attorneys for
Defendants Mintz Levin, LLP and Mintz Levin Cohn Ferris
Glovsky and Popeo, P.C.
BERKMAN LAW OFFICE, LLC ROBERT J. TOLCHIN, ESQ. Attorneys for
Defendant Robert Tolchin
MEMORANDUM-DECISION AND ORDER
Frederick J. Scullin, Jr. Senior United States District Judge
before the Court is Magistrate Judge Peebles' Report and
Recommendation, in which he recommended that the Court grant
Plaintiffs' motion to remand, see Dkt. No. 12,
and deny Defendant Tolchin's motion to transfer venue,
see Dkt. No. 5, as moot, see Dkt. No. 37.
Only Defendant Tolchin submitted objections to these
recommendations. See Dkt. No. 38.
in this action seek guidance regarding entitlement to
attorney's fees related to various lawyers' efforts
to litigate and enforce a judgment against the Republic of
Iran for damages, pursuant to the Foreign Sovereign
Immunities Act, ("FSIA") of 1976, 28 U.S.C.
§§ 1602-1611, resulting from the death of Leah
Stern in 1997 during a terrorist attack. Largely due to a
recently enacted statute, Plaintiffs have now recovered more
than $1, 000, 000 from a fund established to compensate
victims of terrorist acts. See Justice for United
States Victims of State Sponsored Terrorism Act
("VSST"), 42 U.S.C. § 10609. Under the VSST,
attorneys representing victims eligible for compensation from
the fund are entitled to charge a fee of up to twenty-five
percent of the amount recovered. It is the recovery of this
attorney's fee that forms the basis for the instant
tragic event giving rise to this lawsuit occurred nearly 20
years ago when Leah Stern was killed in a terrorist bombing
in a market in Jerusalem, Israel on July 30, 1997. In
response, Plaintiffs filed a wrongful death and personal injury
action against the Republic of Iran. See Stern v. Islamic
Republic of Iran, 271 F.Supp.2d 286 (D.D.C. 2003). To
that end, Plaintiffs retained a law firm, Westerman Ball
Ederer Miller & Sharfstein, LLP ("Westerman"),
which engaged Nitsana Darshan-Leitner & Associates
("Darshan-Leitner"), an Israeli law firm, to help
it litigate Plaintiffs' claim. See Dkt. No. 12-5
at ¶ 9. In the underlying lawsuit, the Republic of Iran
and the other defendants "failed to answer or enter an
appearance"; and, thus, "the Court on February 13,
2002, pursuant to 28 U.S.C. § 1608(e) and Fed.R.Civ.P.
55(a)" entered default in Plaintiffs' favor.
Stern, 271 F.Supp.2d at 288.
the defendants' apparent willful default, to prevail,
Plaintiffs had to "establish [their] claim or right to
relief by evidence that is satisfactory to the Court."
28 U.S.C. § 1608(e). Therefore, Plaintiffs submitted
affidavits and evidence that compelled the court to award
Plaintiffs $13, 000, 000 in compensatory damages and $300,
000, 000 in punitive damages. See Stern, 271
F.Supp.2d at 302. (hereinafter referred to as the "FSIA
around November 2003, Defendant Westerman withdrew from
representation of Plaintiffs after certain conflicts of
interest between Defendants Darshan-Leitner and Westerman
surfaced and could not be resolved. See Dkt. No. 2
at ¶¶ 39-41. Thereafter, the FSIA judgment
languished for a period of nearly five years. See
id. at ¶ 45.
in May 2008, Plaintiffs retained Defendant Darshan-Leitner
and the law firm Jaroslawicz and Jaros, to provide legal
services to enforce their unsatisfied judgment against UBS
AG, a multinational bank that purportedly provided funds to
Iran and Saddam Hussein. See id. at ¶¶ 45,
46; see also Rothstein v. UBS AG, 708 F.3d 82 (2d
Cir. 2013). Defendant Tolchin signed the retainer agreement
on behalf of Jaroslawicz and Jaros. See Dkt. No. 2
at ¶ 47. Ultimately, Defendants Darshan-Leitner and
Tolchin's attempt to collect the debt was unsuccessful.
See id. at ¶ 51.
to Plaintiffs, the only activity they authorized Defendant
Tolchin to complete on their behalf was to litigate the
above-mentioned case against UBS AG. See id. at
¶ 49. Nonetheless, Plaintiffs contend that Defendant
Tolchin attempted to serve the FSIA judgment on the Republic
of Iran pursuant to 28 U.S.C. § 1608(e). See
Id. at ¶ 54. However, Plaintiffs assert that
Defendant Tolchin did so incorrectly. See id.
on April 2, 2015, Plaintiffs retained Kreindler &
Kreindler, LLP and Silverman Law Firm as their attorneys to
help them collect on the FSIA judgment. See id. at
¶ 52. These firms then engaged the Perles Firm to assist
them. See Id. at ¶ 53. The Perles
Firm "then re-served the 2003 judgment upon the
judgment-debtor Republic of Iran and related defendants in
that action, given that the prior service of same by
[Defendant Tolchin] had been done incorrectly." See
id. at ¶ 54. Plaintiffs subsequently discharged
Kreindler & Kreindler, LLP and Silverman Law Firm in June
2016. See Id. at ¶ 61. Plaintiffs, then
retained the Plaintiff law firms, Law Office of Richard B.
Ancowitz ("Ancowitz") and Rosenblum & Partners,
LLP ("Rosenblum"), to represent them. See
Id. at ¶ 57.
meantime, the VSST was enacted into law on December 18, 2015,
"which set up a special fund designed to compensate the
victims of State Sponsored (i.e., Iranian)
terrorism." See Id. at ¶ 67 (citing 42
U.S.C. § 10609). On October 6, 2016, Plaintiffs, through
their newly retained counsel, applied for compensation
through the VSST. See Id. at ¶ 85. Plaintiffs
have recovered more than $1, 000, 000 from the fund.
See Dkt. No. 37 at 2.
recounted above, the VSST allows attorneys to charge up to
twenty-five percent of the amount recovered as a fee.
Plaintiffs initiated this action in New York Supreme Court,
Albany County, on December 14, 2016, to determine to whom
that fee should be distributed. Generally, Plaintiffs argue
that the Court should bar their previous attorneys,
Defendants in this action, from receiving any fee in
connection with their work. In that regard, Plaintiffs make
various arguments for why Defendants should not prevail, each
of which is animated in large part by New York Judiciary Law
§ 475, because the fundamental issue in this case is
whether Defendants have a valid lien on Plaintiffs'
Tolchin removed the matter to this District on January 10,
2017. See Dkt. No. 1. Thereafter, on January 12,
2017, Defendant Tolchin filed a motion seeking to transfer
this action to the United States District Court for the
District of Colombia. See Dkt. No. 5. On January 18,
2017, Plaintiffs moved for an order remanding the action to
New York Supreme Court. See Dkt. No. 12.
Court referred the motion to remand to Magistrate Judge
Peebles, who also considered the motion to change venue.
See Dkt. No. 37. Magistrate Judge Peebles
recommended that the Court grant Plaintiffs' motion to
remand on the ground that the parties' dispute did not
present a federal question and consequently recommended that
the Court deny Defendant's motion to transfer venue as
moot. See Dkt. No. 37. Defendant Tolchin filed
objections only with respect to Magistrate Judge Peebles'
recommendation that this Court remand the case to state court
for lack of subject matter jurisdiction. See Dkt.
Standard of review
party submits a timely objection to a report and
recommendation, the court will review the parts of the report
and recommendation to which the party objects under a de
novo standard of review. See 28 U.S.C. §
636(b)(1)(C) (stating that "[a] judge of the court shall
make a de novo determination of those portions of
the report or specified proposed findings or recommendations
to which objection is made"); see also Fed. R.
Civ. P. 72(b)(3) (stating that "[t]he district judge
must determine de novo any part of the magistrate judge's
disposition that has been properly objected to"). In
reviewing a report and recommendation, the 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).
other hand, where none of the parties have filed a timely
objection, a district court need only find that "there
is no clear error on the face of the record" to accept a
magistrate judge's report and recommendation. Nelson
v. Smith, 618 F.Supp. 1186, 1189 (S.D.N.Y. 1985)
(citation omitted); see also Mario v. P & C Food
Mkts., Inc., 313 F.3d 758, 766 (2d Cir. 2002) (stating
that, "[w]here parties receive clear notice of the
consequences, failure timely to object to a magistrate's
report and recommendation operates as a waiver of further
judicial review of the magistrate's decision"
(citing Small v. Sec'y of Health & Human
Servs., 892 F.2d 15, 16 (2d Cir. 1989) (per curiam)).
Plaintiffs' motion to remand
1. Removal was procedurally proper
Judge Peebles initially found that Defendant Tolchin properly
removed this case to federal court despite lacking Defendant
Dashan-Leitner's consent because Defendant
Darshan-Leitner was not properly served. See
generally Dkt. No. 37 at 11-15. The parties do not
object to Magistrate Judge Peebles' recommendation, and
the Court has not identified an error in his analysis.
Therefore, the Court accepts Magistrate Judge Peebles'
recommendation that removal was procedurally proper.
Federal question ...