Opinion
Civil Action No. 99-2332 SECTION "N"
July 20, 2000
ORDER AND REASONS
Before the Court is Defendant Dr. Christopher E. Kalmus' Motion for Reconsideration on Motion to Dismiss Plaintiffs' Fraud and RICO Claims with Prejudice. For the following reasons, Defendant's Motion is DENIED.
BACKGROUND
Plaintiffs Dhanpot Mohnot, Surendra Purohit and Sunil Purohit ("Plaintiffs") filed this action against Defendants Rajeev Bhansali ("Bhansali") and Dr. Christopher E. Kalmus ("Kalmus"), alleging fraud, breach of fiduciary duty, and Racketeer Influenced and Corrupt Organizations ("RICO") violations. On June 23, 2000, this Court granted Kalmus' motion to dismiss Plaintiffs' fraud and RICO claims for failure to meet the particularity requirements of Fed.R.Civ.P. 9(b), but gave Plaintiffs leave to reassert their allegations.
LAW AND ANALYSIS
Federal Rule of Civil Procedure 59(e) allows motions to alter or amend judgment to be filed within ten days of entry of judgment. See FED. R. Civ. P. 59(E). A district court enjoys considerable discretion in granting or denying a motion for reconsideration under Rule 59(e). See Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir. 1993). However, reconsideration of a previous order is an extraordinary remedy which should be used sparingly. See Rottmund v. Continental Assur. Co., 813 F. Supp. 1104, 1107 (E.D.Pa. 1992). In the case at bar, Kalmus asks the Court to reconsider its June 23, 2000 Order allowing Plaintiffs to reassert their fraud and RICO allegations.
The Court granted the Plaintiffs leave to amend in its ruling on Kalmus' "Motion to Dismiss Plaintiffs' Supplemental and Amending Complaint for Damages Pursuant to Fed.R.Civ.P. 12(B)(6) andAlternative Motion for More Definitive Statement Pursuant to Fed.R.Civ.P. 12(E) Based on Plaintiffs' Failure to Plead Fraud with Particularity Pursuant to Fed.R.Civ.P. 9(B)." (Emphasis added). Despite his previous motion, Kalmus now claims that the Plaintiffs are not entitled to make a more definitive statement of their fraud or RICO claims "as a matter of law." Mem. at 4.
However, while a Court may dismiss inadequate fraud allegations with prejudice, it does not have to. See Hart v. Bayer Corp., 199 F.3d 239, 248 n. 6 (5th Cir. 2000) (noting that "although a court may dismiss a claim, it should not do so without granting leave to amend, unless the defect is simply incurable or the plaintiff has failed to plead with particularity after being afforded repeated opportunities to do so"). In fact, the Fifth Circuit has stated that a "plaintiff's failure to meet the specific pleading requirements should not automatically or inflexibly result in dismissal of the complaint with prejudice to refiling." Id. See also Luce v. Edelstein, 802 F.2d 49, 57 (2nd Cir. 1986) (holding that dismissal of a complaint without granting Leave to amend was an abuse of discretion),O'Brien v. Nat'l Property Analysts Partners, 936 F.2d 674, 676 (2d Cir. 1991) (allowing plaintiffs to file a third amended complaint).
In the case at bar, the Court's June 23 Order has been the only dismissal of the Plaintiffs' complaint under Rule 9(b). Kalmus offers no authority barring this Court from granting the Plaintiffs leave to amend. Accordingly, Defendant Kalmus' Motion for Reconsideration on Motion to Dismiss Plaintiffs' Fraud and RICO Claims with Prejudice is DENIED.