Kevin M. Hogan, Sean C. McPhee, Western District Case Notes, Jan 2019

Western District Case Notes

Personal jurisdiction

In Winner v. Tryko Partners, LLC, No. 17-CV-6857-FPG-JWF (Sept. 12, 2018), an action for sex-based discrimination and retaliation, the New Jersey-based defendant moved to dismiss, arguing that the court lacked personal jurisdiction over it. To resolve that question, the court first examined New York’s long-arm statute and observed that personal jurisdiction exists over a non-domiciliary where that defendant “transacts business” in New York, so long as the claims arise from that transaction of business.

Next, the court recognized that an out-of-state employer transacts business in New York for purposes of the long-arm statute when it creates an ongoing relationship with a New York employee in order to further its own business in the state. The court then determined that plaintiff sufficiently alleged that defendant transacted business in New York by alleging that defendant provided her with a company laptop so that she could work on defendant’s behalf from her home in New York. The court also found that plaintiff ’s claims of discrimination and retaliation arose from defendant’s transaction of business in New York because — by definition — those claims related to her employment, which occurred in New York.

Finally, the court held that, because there was a sufficient relationship between defendant’s New York contacts and plaintiff ’s claims, the court’s exercise of personal jurisdiction over defendant comported with the Due Process Clause of the Constitution, notwithstanding defendant’s generalized complaints of inconvenience. As a result, defendant’s motion to dismiss was denied.

Copyright infringement

In Joseph v. Buffalo News, Inc., No. 17-CV-814-FPG (Aug. 22, 2018), plaintiff authored an article, received a copyright registration, and submitted it to defendant for publication. After publication, plaintiff demanded payment, but defendant refused. Plaintiff then sued for copyright infringement. Defendant moved to dismiss or, in the alternative, for summary judgment, and plaintiff moved for leave to amend the complaint.

Although plaintiff appeared pro se, the court declined to liberally construe his pleadings, as is custom, because he was a seasoned attorney. The court also excluded matters presented outside the complaint, except for certain emails exchanged between the parties, because they were integral to the complaint, and thus treated defendant’s motion solely as one to dismiss under Rule 12(b)(6). Turning to the merits of the motion, the court found that plaintiff owned a valid copyright in the published work but determined defendant’s publication was authorized because, when plaintiff submitted the article to defendant for publication, he granted defendant the “privilege” to do so absent an express agreement mandating otherwise.

The court thus granted the motion to dismiss and, because any amendment would be futile, denied the motion for leave to amend the complaint.

Discovery

In Strike 3 Holdings, LLC v. John Doe, No. 18-CV-569-EAW (Aug. 28, 2018), plaintiff alleged that defendant downloaded and distributed plaintiff ’s motion pictures in violation of the United States Copyright Act of 1976. With an ex parte motion, plaintiff sought leave to serve a third party subpoena on defendant’s internet service provider prior to the Rule 26(f) conference, so that plaintiff might discover the identity of defendant and serve it with the complaint. Parties normally may not serve discovery before a Rule 26(f) conference, except upon a showing of good cause.

The court granted the motion, though, finding that plaintiff ’s allegations established a prima facie case of copyright infringement against defendant, its discovery requests were sufficiently specific, the defendant could not otherwise be identified and the litigation could not proceed without the discovery, and expediting the discovery was necessary to prevent the requested information from being lost forever. The court also held that plaintiff ’s interest in obtaining the information outweighed any privacy interest of defendant.

Discovery

In Rodriguez v. United States, No. 17-CV-251-WMS-JJM (Aug. 23, 2018), plaintiff, a police officer, sought to recover under the Federal Tort Claims Act for injuries sustained when his police vehicle was struck from behind by defendant’s vehicle. Plaintiff moved for a protective order, and defendant cross moved to compel, after defendant served plaintiff with discovery demands directed at an unrelated criminal case in which plaintiff ’s testimony had been suppressed on grounds it was not truthful.

The court permitted the discovery directed at the prior suppression hearing, holding that discovery seeking information with which to impeach a witness is commonly allowed. The court ruled that the subject of the suppression hearing did not need to relate to the substantive issues in the current litigation, and that plaintiff ’s credibility will be directly at issue because he is expected to testify concerning the extent of his injuries. In addition, whether the probative value of the credibility evidence would be outweighed by its prejudicial impact was an issue for trial, and not for resolution in this pretrial motion.

Case management extension

In Rupp v. City of Buffalo, No. 17-CV-1209-WMS-JJM (Nov. 5, 2018), plaintiff ’s attorney requested an extension of the discovery deadlines in the court’s Case Management Order (CMO) by e-mailing the magistrate judge on the deadline for completion of fact discovery. In support of the request, plaintiff ’s attorney noted that defendants’ attorney was on medical leave; that his firm recently lost the associate that was assisting with the matter; and that the parties were engaged in mediation.

After pointing out the CMO’s directive that any application for an extension shall be made at least one week prior to the deadline sought to be extended, the magistrate judge observed that Fed. R. Civ. P. 16(b)(4) requires good cause in order to modify a discovery schedule and, under Second Circuit precedent, good cause exists only where the moving party is unable to comply with a required deadline despite the exercise of due diligence. The magistrate judge then found that, even if the request had been timely, good cause was lacking because plaintiff ’s attorney failed to identify when defendant’s attorney’s medical leave began or why defendant’s co-counsel was unavailable to participate in discovery. In addition, the loss of an associate was not persuasive because plaintiff ’s law firm has several capable attorneys who could assist.

Finally, both the CMO and the court’s ADR plan make clear that mediation does not furnish good cause for an extension of discovery deadlines. As a result, the court was constrained to deny the request, and cautioned other practitioners that “parties may not safely assume that scheduling orders will be modified simply upon request.”

Motion for reconsideration

In McCracken v. Verisma Systems, Inc., No. 14-CV-6248-MAT-JWF (Aug. 28, 2018), a class action alleging that defendant systematically overcharged patients for copies of their medical records in violation of New York Public Health Law, defendant moved for reconsideration of an order denying its motion for partial summary judgment. Defendant argued that a recent decision from the Southern District of New York constituted a controlling or significant change in the law.

The court denied the motion, holding first that only a change in controlling law will justify such a motion. While bound by decisions from the United States Supreme Court or the Second Circuit Court of Appeals, the court also ruled that it was not bound by decisions from other District Courts nor even other Circuit Courts of Appeals. Thus, the Southern District of New York decision did not constitute an intervening change of controlling law.

Motion to stay

In McCracken v. Verisma Systems, Inc., No. 14-CV-6248-MAT-JWF (Sept. 6, 2018), a class action alleging that defendants systematically overcharged patients for copies of their medical records in violation of New York Public Health Law, defendants moved to stay the action pending the resolution of an appeal before the Second Circuit in a similar case that originated in the Southern District of New York.

Recognizing first that it is within the sound discretion of a district court to enter a stay pending the outcome of independent proceedings that are likely to affect a cause on its calendar, the court applied the five-factor test that is routinely used in the Second Circuit. In doing so, the court found that a stay was warranted because: neither plaintiffs nor defendants would be prejudiced by holding the proceeding in abeyance; the Second Circuit’s decision in the related matter will provide clarification on key issues in this case; judicial efficiency will be promoted by minimizing the possibility of conflicts between different district courts; and possible interests of nonparties would be better served by awaiting the Second Circuit’s “invaluable guidance” on “key trial issues in this case.” As a result, defendants’ motion was granted.

Kevin M. Hogan is the Managing Partner at Phillips Lytle LLP. He concentrates his practice in litigation, intellectual property and environmental law. He can be reached at khogan@ phillipslytle.com or (716) 847-8331. Sean C. McPhee is a partner with Phillips Lytle LLP where he focuses his practice on civil litigation, primarily in the area of commercial litigation. He can be reached at smcphee@phillipslytle.com or (716) 504-5749.