Opinion
07 Civ. 1745.
November 29, 2007
Pro se, Manuel J. Funcia, Jersey City, NJ.
Attorneys for Defendant, MILBANK, TWEED, HADLEY McCLOY LLP, New York, NY, By: Douglas W Henkin, Esq., Manuel Yanez, Esq.
WHITE CASE, New York, NY, By: Sharon A. Parella, Tal Marnin, Alison R. Kirshner.
OPINION
Defendants NYSE Group, Jerome Levy, Jeanne Miller, and David Carey, (collectively, the "NYSE Defendants"), as well as Defendant ABN AMRO, Inc., have moved under Rule 12(b)6, Fed.R.Civ.P., to dismiss the complaint filed against them by Plaintiff Manuel J. Funcia, appearing pro se. For the reasons set forth below, the motions to dismiss are granted.
I. Facts
On or about June 9, 2005, Plaintiff commenced an action against Defendants William Billy Hackett, Mark Hill and "ING Furman Selz successor in interest ABN AMRO, Inc." (the "First Action"). His complaint alleged "`fraudulent inducement, fraudulent concealment, unjust enrichment, egregious misconduct, malice and reckless indifference, failure to supervise reasonably, abuse of power and out right Discrimination[,]' arising out of what appear[ed] to be an employment agreement between Plaintiff and the Defendants."Funcia v. Hackett, No. 05 Civ. 8805 (MBM), Order at 1 (S.D.N.Y. Oct. 17, 2005). Plaintiff also submitted a "motion" to vacate an arbitration award dated April 4, 2005 (the "Arbitration"), which was the result of Plaintiff's unsuccessful arbitration action against Defendants Hackett and ING Furman Selz in the New York Stock Exchange. Id.
On October 17, 2005, the Honorable Michael B. Mukasey directed Plaintiff to submit an amended complaint, as his initial complaint failed to convey his claims in compliance with the pleading requirement of Rule 8, Fed.R.Civ.P., did not adequately set forth the court's subject matter jurisdiction, and did not establish the Plaintiff's right to sue under Title VII of the Civil Rights Act of 1964 ("Title VII"). Id. The amended complaint was submitted was submitted on December 16, 2005.
On February 7, 2005, Judge Mukasey dismissed the First Action, concluding that the only cognizable claims raised under the court's federal question subject matter jurisdiction, those based on alleged racial discrimination in a contractual relationship under 42 U.S.C. § 1981, were barred by the statute of limitations, and that the state law claims were necessarily dismissed for failure to demonstrate diversity subject matter jurisdiction. Having concluded that Plaintiff's claims "lack[ed] an arguable basis in either law or in fact,"Funcia v. Hackett, No. 05 Civ. 8805 (MBM), Order of Dismissal at 6 (S.D.N.Y. Feb. 7, 2005) (citation and footnote omitted), Judge Mukasey certified, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal would not be taken in good faith. Plaintiff appealed to the Second Circuit and on October 18, 2006, the court dismissed the appeal. Funcia v. Hackett, No. 06-2266, Mandate (2d Cir. Aug. 31, 2006).
On November 14, 2006, Plaintiff filed a motion seeking "summary [judgment] or full legal proceedings v. William James Hackett. . . . Punishment by the court not to exceed 5 years and [Plaintiff's] compensation not to exceed 15,000,00. [sic] Dollars," and asking the court to "move it's [sic] gavel" and "[p]unish Mr. Hackett." On December 21, 2006, the court denied the motion and certified, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal from that denial would not be taken in good faith. Funcia v. Hackett, No. 05 Civ. 8805 (KMW), Order at 3 (S.D.N.Y. Dec. 21, 2006).
On February 28, 2007, Plaintiff commenced this action, bringing claims against the defendants included in the First Action, as well as against the NYSE Group and the individual arbitrators involved in the Arbitration, in connection with their handling of the Arbitration. The Complaint alleges, in non-specific terms, "violations of the Federal Arbitration Acts, failure of due process, [and] tainting if not out right [sic] poison of the arbitration process." Funcia alleges that as a member of the Arbitration panel, Defendant Miller was "prejudicial towards the defendant" and asserts that "the NYSE should be held responsible for [Defendant Miller] and the failure to prosecute [Defendant Hackett]." In addition to $30 million in damages, Plaintiff seeks to vacate the Arbitration award.
While the Complaint does not clearly outline the role of each individual defendant in the arbitration, several of the documents contained in a stack of unnumbered, unidentified documents appended to the Complaint shed light on the roles of the various defendants. A memorandum dated December 10, 2004, from Defendant David L. Carey of the NYSE to Funcia indicates that Carey was the Chief Arbitration Counsel for NYSE during the Arbitration, and Defendant Jeanne Miller was a member of the Arbitration panel, although she recused herself from the proceedings in December 2004. Another memorandum from Carey, dated December 16, 2004, indicates that Defendant Jerome Levy was a member of the Arbitration panel that granted the ultimate award for the Arbitration Respondents on April 4, 2005.
II. Standard of Review on a Motion to Dismiss
In considering a motion to dismiss pursuant to Rule 12(b)(6), Fed.R.Civ.P., the Court construes the complaint liberally, "accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor,"Chambers v. Time Warner, 282 F.3d 147, 152 (2d Cir. 2002) (citingGregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001)), although mere "conclusions of law or unwarranted deductions" need not be accepted. First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 771 (2d Cir. 1994) (quotation marks and citation omitted).
"The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974)). In other words, "`the office of a motion to dismiss is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'"Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of New York, 375 F.3d 168, 176 (2d Cir. 2004) (quoting Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980)). "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1969 (2007).
The pleadings of pro se plaintiffs are liberally construed and held "to less stringent standards than formal pleadings drafted by lawyers," Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007) (citing Estelle v. Gamble, 429 U.S. 97, 106 (1976)). See also Boddie v. Schnieder, 105 F.3d 857, 860 (2d Cir. 1997). Courts interpret pro se pleadings "to raise the strongest arguments that they suggest." Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir. 2000) (internal quotation marks and citation omitted). However, pro se plaintiffs are not exempt from the relevant rules of procedural and substantive law, including the pleading standards outlined in the Federal Rules of Civil Procedure. See Ally v. Sukar, 128 Fed. Appx. 194, 195, 2005 U.S. App. LEXIS 6578, at *3 (2d Cir. Apr. 19, 2005) (citing Traguth v. Zuck, 710 F.2d 90, 95 (2d Cir. 1983)). The "duty to liberally construe a plaintiff's complaint [is not] the equivalent of a duty to re-write it." 2 Moore's Federal Practice § 12.34[1][b], at 12-61. Therefore, "[d]ismissal under Rule 12(b)(6) is proper if the complaint lacks an allegation regarding an element necessary to obtain relief," Id., § 12.34[4][a], at 12-72.7 (2004), as "[a] plaintiff's obligation to provide the `grounds' of his `entitlement to relief' require more than labels and conclusions." Twombly at 1964-65 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).
On a motion to dismiss, the Court may consider documents attached to the complaint or incorporated by reference, as well as other documents that are integral to the complaint, so long as the pleader has given notice of them or refers to them. See Chambers, 282 F.3d at 152-53 (2d Cir. 2002). The Court may also take judicial notice of records and reports of administrative bodies, items in the record of the case, and matters of general public record. See Calcutti v. SBU, Inc., 224 F. Supp. 2d 691, 696 (S.D.N.Y. 2002).
III. The NYSE Defendants are Immune from Suit
Arbitrators and organizations that sponsor arbitration have absolute immunity from claims for damages arising from acts within the scope of the arbitral process. See Barbara v. New York Stock Exch., 99 F.3d 49, 58 (2d Cir. 1996) (citing Austern v. Chicago Bd. Options Exch, Inc., 898 F.2d 882, 886 (2d Cir. 1990),cert. denied, 498 U.S. 850 (1990); see also Prudential Bache-Securities, Ltd. v. Nat'l Ass'n of Sec. Dealers Dispute Resolution, Inc., 289 F. Supp. 2d 438, 440 (dismissing claims against arbitrator on the basis of arbitral immunity).
In Austern, the court elaborated on the purpose behind arbitral immunity: "The functional comparability of the arbitrators' decision-making process and judgments to those of judges and agency hearing examiners generates the same need for independent judgment, free from the threat of lawsuits. . . . [A]rbitral immunity is essential to protect the decision-maker from undue influence and protect the decision-making process from reprisals by dissatisfied litigants." Austern, 898 F.2d at 886 (quotingCorey v. New York Stock Exchange, 691 F.2d 1205, 691 F.2d 1205, 1208-11 (6th Cir. 1982)).
In Yadav v. New York Stock Exchange, Inc., No. 91 Civ. 2256 (CSH), 1992 WL 197409, at *3 (S.D.N.Y. Aug. 4, 1992), the court dismissed arbitration-related claims against the New York Stock Exchange, stating that under Austern, "the doctrine of arbitral immunity extends to boards, exchanges and other entities that sponsor and administer arbitrations." Because Funcia's claims are against the NYSE as the Arbitration sponsoring organization and against Defendants Carey, Levy, and Miller as administrators of the Arbitration, those defendants are immune and, therefore, the claims against them must be dismissed.
IV. Plaintiff's Vacatur Claims are Time-Barred
Funcia seeks to vacate the Arbitration award, however, the Federal Arbitration Act requires that motions to vacate arbitral awards be filed within 90 days of the date that the award is filed or delivered. 9 U.S.C. § 12. There is no exception to this requirement and failure to comply with this requirement waives the right to seek vacatur. See Kruse v. Sands Brothers Co., Ltd., 226 F. Supp. 2d 484, 486 (S.D.N.Y. 2002) ("The Second Circuit has made clear that there is no exception this three month limitation period.") (citing Florasynth v. Pickholz, 750 F.2d 171, 175 (2d Cir. 1984)). Because the instant action was commenced on or about February 28, 2007, nearly two years after the April 4, 2005, award was rendered, Funcia's motion must be dismissed as untimely.
V. The Claims Against Defendants Hackett, Hill, and ABN AMRO are Dismissed
i. Plaintiff's Claims Against Defendants Hackett, Hill, and ABN AMRO are Barred by Res Judicata
In addition to the NYSE Defendants, Funcia named as defendants in the instant action the defendants of the First Action, William Billy Hackett, Mark Hill and "Furman Selz successor in interest ABN AMRO." It is unclear from the face of the Complaint why Funcia included these defendants in this action, as the Complaint does not appear to raise any specific allegations against those three defendants. However, the Court infers from Funcia's request for "$15 Million from the Hackett incident where we have not yet seen justice" that Funcia is asking the Court to review the merits of the underlying claim that was the subject of both the Arbitration and the First Action. To the extent that Funcia is seeking such a review, his claims against Hackett, Hill, and ABN AMRO are barred by the doctrine of res judicata and are therefore dismissed.
The doctrine of res judicata provides that "`once a final judgment has been entered on the merits of a case, that judgment will bar any subsequent litigation by the same parties, or those in privity with them concerning the transaction, or series of connected transactions, out of which the [first] action arose.'" Cieszkowska v. Gray Line New York, 295 F.3d 204, 205 (2d Cir. 2002) (quoting Maharaj v. Bankamerica Corp., 128 F.3d 94, 97 (2d Cir. 1997)). To determine whether res judicata bars a subsequent action, courts consider whether: "(1) the prior decision was a final judgment on the merits; (2) the litigants were the same parties; (3) the prior court was of competent jurisdiction; and (4) the causes of action were the same."Corbett v. MacDonald Moving Servs., Inc., 124 F.3d 82, 87-88 (2d Cir. 1997). The doctrine of res judicata, "`precludes the parties or their privies from re-litigating issues that were or could have been raised'" in a prior action. St. Pierre v. Dyer, 208 F.3d 394, 399 (2d Cir. 2000) (quoting Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394 (1981)).
In determining whether a suit is barred by res judicata, a court must determine whether the second suit involves the same nucleus of operative facts as the first suit. See Waldman v. Village of Kiryas Joel, 207 F.3d 105, 108, 110-11 (2d Cir. 2000). It is not a prerequisite to the application of res judicata that the legal theories asserted in both cases be identical; rather, the claims need arise from the same transaction. See id. (citing Woods v. Dunlop Tire Corp., 972 F.2d 36, 39 (2d Cir. 1992)). In the interest of judicial efficiency, res judicata can be raised and considered on a pre-trial motion to dismiss. Gitnik v. Home Depot U.S.A., No. 07 Civ. 1244 (MDF), 2007 U.S. Dist. LEXIS 69189, at *9-10 (S.D.N.Y. Sept. 18, 2007) (citing Sassower v. Abrams, 833 F. Supp. 253, 264 n. 18 (S.D.N.Y. 1993)).
To the extent that Funcia pleaded cognizable claims of racial discrimination in a contractual relationship under 42 U.S.C. § 1981 in the First Action, the Court dismissed those claims as untimely, Funcia v. Hackett, No. 05 Civ. 8805 (MBM), slip op. at 4 (S.D.N.Y. Feb. 7, 2006), and the dismissal was affirmed by the Second Circuit. A dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) constitutes a "judgment on the merits." Moitie, 452 U.S. at 399. Because Funcia's claims in the instant case appear to arise out of the same facts as those in the First Action, they are barred by the prior decisions of the court under the doctrine of res judicata.
ii. The Complaint Does Not Adequately Allege Claims Against ABN AMRO
In order to withstand a motion to dismiss, a complaint must set forth "either direct or inferential allegations respecting all the material elements." Invamed, Inc. v. Barr Labs., Inc., 22 F. Supp. 2d 210, 216 (S.D.N.Y. 1998) (granting motion to dismiss where complaint stated no allegations showing particular defendants were involved in the conduct that formed the basis of plaintiff's claims). Here, Funcia fails to allege any facts or claims, either direct or indirect, regarding ABN AMRO, or to establish ABN AMRO's relationship to or liability for any claims properly held against any of the other defendants.
While it is a matter of general public record that ABN AMRO is a successor firm of ING Furman Selz, Funcia has not made any cognizable claims against ING Furman Selz, nor, beyond naming ABN AMRO as "successor in interest," has he asserted any theory of successor liability.
VI. The Complaint is Dismissed with Prejudice
Under Federal Rule of Civil Procedure 15, leave to amend a complaint should be "freely given when justice so requires." Fed.R.Civ.P. 15(a). However, leave to amend a complaint need not be granted when amendment would be futile. Iwachiw v. Port Auth. of N.Y. N.J., 151 Fed. Appx. 93, 95 (2d Cir. 2005) (citing Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003)) (quotation marks omitted). For the reasons stated above in support of dismissal, amendment would be futile.
Furthermore, in view of Funcia's history of litigation on this matter in this district, he is hereby advised that the filing of a new, duplicative, and frivolous action arising out of the underlying subject matter in the instant action may lead to the imposition of an injunction barring him from filing further actions in this district without permission.
The authority of a district court to enjoin a plaintiff who engages in a pattern of duplicative and vexatious litigation from continuing to do so is well established. See Safir v. United States Lines, Inc., 792 F.2d 19, 23 (2d Cir. 1986) (citing, inter alia, 28 U.S.C. § 1651(a)); see also In re Martin-Trigona, 9 F.3d 226, 228 (2d Cir. 1993) ("The Supreme Court and numerous courts of appeals have recognized that courts may resort to restrictive measures that except from normally available procedures litigants who have abused their litigation opportunities."). A court's power to enjoin such individuals is used to protect judicial resources, the finality of judgment and the integrity of the courts from those plaintiffs who abuse the court system. See, e.g., Villar v. Crowley Maritime Corp., 990 F.2d 1489, 1499 (5th Cir. 1993), cert. denied, 510 U.S. 1044 (1994). As the Second Circuit has explained, a district court "not only may but should protect its ability to carry out its constitutional functions against the threat of onerous, multiplicitous, and baseless litigation." Abdullah v. Gatto, 773 F.2d 487, 488 (2d Cir. 1985) (per curiam).
VII. Conclusion
For the foregoing reasons, the motion to dismiss of NYSE Defendants and ABM AMRO is granted.
So ordered.