32 | January/February 2023 | BAEC Bulletin close question.
In N.Y. Cent. Mut. Fire Ins. Co. v. Electrolux Home Prods., Inc., 18-cv-00294-FPG-LGF (Mar. 31, 2022)—a products liability action concerning an allegedly defective clothes dryer—defendant moved for leave to reopen discovery two months prior to the scheduled jury trial, and two-and-a- half years after the close of discovery, contending that it “recently” uncovered evidence that was highly relevant to the issue of causation. Analyzing the motion under Fed. Rule Civ. P. 16(b)(4), which requires “good cause” and “the judge’s consent,” the Court noted that the party seeking to reopen disclosure also bears the burden of showing the absence of ample opportunity to pursue the evidence during the discovery phase of the action. The Court then applied the six-part test used in the Second Circuit, and found that reopening discovery for limited purposes was warranted. While the first two factors (imminence of trial and whether the request is opposed) favored plaintiff, the remaining four factors (prejudice, diligence, foreseeability, and relevance) weighed “strongly” in favor of reopening discovery. In reaching this conclusion, the Court found that any lack of diligence was mutual; the new evidence is, potentially, highly relevant to the central dispute in the case; and defendant would be penalized and plaintiff would be rewarded for their shared misunderstanding regarding the recently discovered evidence. As a result, the Court issued a scheduling order that would allow the parties to fully investigate the newly discovered evidence without the need to adjourn the trial. Negligence In Wright v. Target Corp., 19-cv-6556-FPG-MWP (April 8, 2022), plaintiff sued defendant for negligence, alleging that she was injured after slipping and falling on a wet metal grate after entering defendant’s store. According to the proof submitted to the Court, plaintiff did not see any water on the floor until after she fell, when she noticed her coat and slacks were wet; she had no idea where the water came from or how long it had been on the floor before she allegedly slipped and fell on it; before the fall, an employee of defendant placed a “caution wet floor” cone in the vicinity of where plaintiff fell because of a recent snow storm but not because the floor was wet; another employee inspected the area prior to the store opening; after plaintiff fell, other employees examined the area and confirmed by sight and touch that the ground was clean and dry; and, finally, an employee took several photos of the area after the fall showing that there was no wetness visible. The Court granted defendant’s motion for summary judgment, finding that plaintiff failed to provide evidence of either actual or constructive notice. The Court noted first that, while New York State’s summary judgment standard required the moving party to put forth evidence in support of its motion, the federal standard does not and instead “a strong inference that specific false claims were submitted to the government”
Class Action Fairness Act In Zona et al. v. Arnot Health, Inc. et al., 20-cv-6902- FPG (April 15, 2022) —a class action alleging improper compensation practices for “non-exempt” nurses— plaintiffs moved for class certification and defendants cross-moved for dismissal under Rule 12(b)(1) or alternatively for summary judgment. Under the Rule 12(b) (1) motion, defendants argued that the local controversy exception to federal jurisdiction under the Class Action Fairness Act (“CAFA”) applied and deprived the Court of subject matter jurisdiction. The Court agreed, finding that more than two-thirds of the class members were New York citizens, at least one key defendant was a New York resident, the alleged conduct causing injury occurred in New York State, and no other action had been filed during the last 3-year period. With all elements of the local controversy exception established by a preponderance of the evidence, the Court concluded that it was required to decline to exercise jurisdiction over the case. Qui Tam Claims In United States v. Canzoneri et al., 20-cv-505-LJV (Mar. 22, 2022), plaintiff-relator commenced a lawsuit alleging that defendants violated the False Claims Act (“FCA”) and the New York False Claims Act (“NYFCA”) based on alleged schemes to improperly solicit payments from plaintiff when he performed surgical procedures, and to reuse single-use medication vials for which claims for reimbursement were made to the state and federal governments. Defendants moved to dismiss the qui tam claims under the FCA and NYFCA because plaintiff had alleged only “upon information and belief” and without sufficient particularity that false claims were submitted to the governments. The Court agreed, finding that, although plaintiff was not required to allege particular false claims in order to state a viable cause of action, plaintiff’s allegations still must give rise to “a strong inference that specific false claims were submitted to the government,” which the amended complaint did not do. The Court also dismissed plaintiff’s retaliation claims brought under the FCA and NYFCA based on the allegation that plaintiff was fired after reporting that defendant insisted plaintiff pay a sum of money to defendants for every procedure that plaintiff performed, even if defendant was not involved. Because the complaint failed to connect the demand for improper payments from plaintiff to the false claims submitted to the government for the improper reuse of single-use medication vials, the retaliation claims under the FCA and the NYFCA were not plausible. The Court also granted summary judgment dismissing a common law fraud claim that plaintiff asserted on behalf of the two governments, on grounds that there is no common law right to bring a qui tam action. Rather, a statute must authorize a private party to bring suit on behalf of the government and, without such a statute, plaintiff did not have standing to bring a qui tam common law fraud claim. Reopening Discovery
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