Norex Petroleum Limited, Appellant,v.Leonard Blavatnik, et al., Respondents.

Brief

N.Y.May 6, 2014

To Be Argued By: BARRY R. OSTRAGER Time Requested: 30 Minutes APL-2013-00263 New York County Clerk’s Index No. 650591/11 Court of Appeals STATE OF NEW YORK NOREX PETROLEUM LIMITED, Plaintiff-Appellant, -against- LEONARD BLAVATNIK, VICTOR VEKSELBERG, SIMON KUKES, ACCESS INDUSTRIES, INC., ALFA GROUP CONSORTIUM, RENOVA, INC., OAO TYUMEN OIL COMPANY, TNK-BP LIMITED and BP PLC, Defendants-Respondents. BRIEF FOR PLAINTIFF-APPELLANT d BARRY R. OSTRAGER MARY KAY VYSKOCIL JONATHAN M. WEISS HIRAL D. MEHTA SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue New York, New York 10017 (212) 455-2000 bostrager@stblaw.com mvyskocil@stblaw.com hmehta@stblaw.com -and- SIMPSON THACHER & BARTLETT LLP 1999 Avenue of the Stars, 29th Floor Los Angeles, California 90067 (310) 407-7500 jweiss@stblaw.com Attorneys for Plaintiff-Appellant REPRODUCED ON RECYCLED PAPER i STATEMENT PURSUANT TO 22 NYCRR § 500.1(F) Pursuant to Rule 500.1(f) of the Rules of Practice of the Court of Appeals of the State of New York, Plaintiff-Appellant Norex Petroleum Limited (“Norex”) states that it has no parent company, subsidiaries or affiliates, and that no publicly held corporation owns 10% or more of its stock. ii TABLE OF CONTENTS Page PRELIMINARY STATEMENT ...............................................................................1 QUESTIONS PRESENTED....................................................................................10 JURISDICTIONAL STATEMENT ........................................................................11 NATURE OF THE CASE .......................................................................................12 PROCEDURAL HISTORY ....................................................................................13 ARGUMENT...........................................................................................................16 I. NOREX’S CLAIMS ARE TIMELY UNDER CPLR 205(A)................16 A. Both CPLR 205(a) and CPLR 202 Serve the Purpose of the Statute of Limitations to Ensure that Plaintiffs Put Defendants on Notice in a Timely Manner ............................17 B. The First Department’s Holding that Norex Is Not Entitled to the Remedial Benefit of CPLR 205(a) Is Manifestly Incorrect......................................................................23 1. The First Department’s Reading Voids the Purpose of 205(a) and Fails to Give Effect to Both Statutes in Contravention of Basic Cannons of Construction........................................................................26 2. This Court Implicitly Rejected the First Department’s Construction of the Interplay of CPLR 205(a) and CPLR 202 in Global Financial .............30 3. Respondents’ Argument that Norex is Not Entitled to 205(a)’s Grace Period Ignores the Fact that 205(a) is Qualitatively Different from the Other Tolling Provisions that Courts Have Borrowed Under 202. .........................................................32 4. 205(a) Inherently Safeguards the Purpose of 202 to Prevent Forum Shopping................................................34 iii II. NOREX’S CLAIMS ARE TIMELY UNDER 28 U.S.C. § 1367(D)....................................................................................................40 A. The First Department’s Holding that § 1367(d) Does Not Apply to Norex’s Claims Is Contrary to the Plain Language, Purpose and Legislative History of § 1367(d) ..........................................................................................42 B. The First Department’s Holding that § 1367(d) Does Not Apply to Norex’s Claims Is Contrary to Controlling Court of Appeals and U.S. Supreme Court Precedent.............................................................................46 C. Norex’s Claims Were Timely Filed Under § 1367(d) ..................49 1. Section 1367(d) Tolled Norex’s Supplemental Non-Federal Claims While Pending in Federal Court and for an Additional 30 Days After the Federal Action’s Conclusion ..............................................49 2. Norex’s Supplemental Non-Federal Claims Are Timely Under the Plain Language of the Statute ...............52 3. Norex’s New York Claims Are Timely Under the Relation-Back Doctrine ......................................................54 CONCLUSION........................................................................................................57 iv TABLE OF AUTHORITIES Page(s) Cases 39 Coll. Point Corp. v. Transpac Cap. Corp., 27 A.D.3d 454 (2d Dep’t 2006)..........................................................................56 390 W. End Assocs. v. Nelligan, 35 A.D.3d 306 (1st Dep’t 2006) .........................................................................55 Antone v. Gen. Motors Corp., 64 N.Y.2d 20 (1984).....................................................................................20, 34 Architectronics, Inc. v. Control Sys., Inc., 935 F. Supp. 425 (S.D.N.Y. 1996) .....................................................................39 Baker v. Cohn, 266 A.D. 236 (1st Dep’t 1943) ...........................................................................32 Baker v. Commercial Travelers Mut. Accident Ass’n, 3 A.D.2d 265 (4th Dep’t 1957).....................................................................22, 38 Baker v. McNeil, 439 F. App’x. 786 (11th Cir. 2011)....................................................................50 Bank of New York v. Midland Ave. Dev. Co., 248 A.D.2d 342 (2d Dep’t 1998)........................................................................56 Besser v. E. R. Squibb & Sons, Inc., 146 A.D. 2d 107 (1st Dep’t 1989), aff’d, 75 N.Y.2d 847 (1990)...........27, 28, 29 Bonifield v. County of Nevada, 114 Cal. Rptr. 2d 207 (Ct. App. 2002) .........................................................52, 53 Bournias v. Atl. Mar. Co., 220 F.2d 152 (2d Cir. 1955) ...............................................................................40 Burnett v. New York Cent. R.R., v 380 U.S. 424 (1965)............................................................................................17 Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704 (2d Cir. 2002) ...............................................................................39 Carrick v. Cent. Gen. Hosp. (“Carrick”), 51 N.Y.2d 242 (1980).....................................................................................6, 21 City of Los Angeles v. County of Kern, 154 Cal. Rptr. 3d 122 (Ct. App. 2013) ...............................................................53 Conn. Nat’l Bank v. Germain, 503 U.S. 249 (1992)............................................................................................44 Fitzgerald v. Thompson, 187 A.D.2d 557 (1992).......................................................................................37 Gaines v. City of New York, 215 N.Y. 533 (1915).......................................................................................7, 19 George v. Douglas Aircraft Co., 332 F.2d 73 (2d Cir. 1964), cert denied 379 U.S. 904 (1964) ...........................34 George v. Mt. Sinai Hosp. (“Mt. Sinai”), 47 N.Y.2d 170 (1979).........................................................................6, 18, 19, 34 Global Financial Corp. v. Triarc Corp. (“Global Financial”), 93 N.Y.2d 525, 527 (1999)..........................................................................passim GML, Inc. v. Cinque & Cinque, P.C. (“GML”), 9 N.Y.3d 949 (2007)...............................................................................24, 35, 36 Goldstein v. New York State Urban Dev. Corp. (“Goldstein”), 13 N.Y.3d 511 (2009)..................................................................................passim Goodman v. Best Buy, Inc., 755 N.W.2d 354 (Minn. Ct. App. 2008) ......................................................52, 53 Greenblatt v. New York Sur. Co., 246 A.D.2d 385 (1st Dep’t 1998) .......................................................................50 vi Guice v. Charles Schwab & Co., 89 N.Y.2d 31 (1996).............................................................................................9 HCA Health Servs. of Fla., Inc. v. Hillman, 906 So. 2d 1094 (Fla. Dist. Ct. App. 2004)........................................................31 Icelandic Airlines, Inc. v. Canadair, Ltd., 104 Misc. 2d 239 (N.Y. Sup. Ct. 1980)..............................................................31 In re Coudert Bros. LLP, 673 F.3d 180 (2d Cir. 2012) ...............................................................................40 In re Countrywide Fin. Corp. Mortgage-Backed Sec. Litig., 834 F. Supp. 2d 949 (C.D. Cal. 2012)................................................................20 In re Vertrue Inc. Mktg. & Sales Prac. Litig., 712 F. Supp. 2d 703 (N.D. Ohio 2010), aff’d, 719 F.3d 474 (6th Cir. 2013) ............................................................................................................53 Jennings-Purnell v. Jennings, 107 A.D.3d 513 (1st Dep’t 2013) ......................................................................56 Jinks v. Richland County, S.C. (“Jinks”), 538 U.S. 456 (2003).....................................................................................passim Jones v. Greyhound Bus Lines, 73 Misc. 2d 109 (N.Y. Sup. Ct. 1973)................................................................35 Kahn v. Commercial Union of Am., Inc., 227 A.D. 82 (1929).............................................................................................34 Kat House Prods., LLC v. Paul, Hastings, Janofsky & Walker, LLP, 71 A.D.3d 580 (1st Dep’t 2010) .........................................................................31 Kendrick v. City of Eureka, 98 Cal. Rptr. 2d 153 (Ct. App. 2000) .................................................................49 Kendrick v. City of Eureka, No. C-95-0424-VRW, 1997 WL 338544 (N.D. Cal. June 10, 1997) ................49 Krupski v. Crosta Crociere S.p.A, vii 560 U.S. 538, 130 S. Ct. 2485 (2010) ................................................................54 Ledwith v. Sears, Roebuck & Co., 231 A.D.2d 17 (1st Dep’t 1997) .........................................................................23 Lehman Bros., Inc. v. Hughes Hubbard & Reed, LLP, 245 A.D.2d 203 (1st Dep’t 1997), aff’d, 92 N.Y.2d 1014 (1998) ...............22, 39 Lehman Bros., Inc. v. Hughes Hubbard & Reed, LLP, 92 N.Y.2d 1014 (1998).......................................................................................39 Lucas v. Muro Pharm., Inc., No. 944052, 1994 WL 878820 (Mass. Super. Dec. 2, 1994) .............................49 Marco v. Dulles, 177 F. Supp. 533 (S.D.N.Y. 1959) .......................................................................5 McCleod v. Travelers Indemnity Co., No. 12 Civ. 176, 2012 WL 5210945 (S.D.N.Y. Oct. 19, 2012)...................22, 39 Morrison v. Nat’l Australia Bank, Ltd., 561 U.S. 247, 130 S. Ct. 2869 (2010) ..........................................................14, 44 Nat’l Sur. Co. v. Ruffin, 242 N.Y. 413 (1926).....................................................................................20, 35 Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146 (2d Cir. 2005) ...............................................................2, 13, 14, 50 Norex Petroleum Ltd. v. Blavatnik, 105 A.D.3d 659 (1st Dep’t 2013) .......................................................................42 Oleski v. Dep’t of Pub. Welfare, 822 A.2d 120 (Pa. Commw. Ct. 2003) ...............................................................53 Pendleton v. City of New York, 44 A.D.3d 733 (2d Dep’t 2007)..........................................................................55 People v. Lane, 56 N.Y.2d 1 (1982).............................................................................................48 viii People v. Walker, 81 N.Y.2d 661 (1993).........................................................................................44 Portfolio Recovery Assocs., LLC v. King, 14 N.Y.3d 410 (2010).............................................................................20, 23, 33 Pye v. NuAIRE, Inc., No. A12-0734, 2012 WL 6652618 (Minn. Ct. App. Dec. 24, 2012) .................53 Rescildo v. R.H. Macy’s, 187 A.D.2d 112 (1993).......................................................................................37 Roballo v. Smith, 63 N.Y.2d 485 (1984).........................................................................................27 Schiavone v. Fortune, 477 U.S. 21 (1986)..............................................................................................55 Schutz v. Finkelstein Bruckman Wohl Most & Rothman, 247 A.D.2d 460 (2d Dep’t 1998)........................................................................56 Secore v. Allen, 27 A.D.3d 825 (3d Dep’t 2006)..........................................................................55 Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001)............................................................................................21 Sheehan v. New York State Dep’t of Transp., 18 N.Y.3d 61 (2011)...........................................................................................45 Tompkins County Support Collection Unit ex rel. Chamberlin v. Chamberlin, 99 N.Y.2d 328 (2003).........................................................................................26 Turner v. Kight, 406 Md. 167 (2008) ......................................................................................49, 53 United Mine Workers v. Gibbs, 383 U.S. 715 (1966)............................................................................................43 United States Fid. & Guar. Co. v. Delmar Dev. Partners, LLC, ix 22 A.D.3d 1017 (3d Dep’t 2005)........................................................................55 United States v. Rivera, 844 F.2d 916 (2d Cir. 1988) ...............................................................................49 United States v. Young, 657 F.3d 408 (6th Cir. 2011) ..............................................................................50 Winnett v. Saline County Jail, 372 F. App’x. 688 (8th Cir. 2010)......................................................................50 Winston v. Freshwater Wetlands Appeals Bd., 224 A.D.2d 160 (1996).......................................................................................23 Wultz v. Bank of China Ltd., No. 11 Civ. 1266, 2013 WL 1641179 (S.D.N.Y. Apr. 16, 2013) ......................39 Yatauro v. Mangano, 17 N.Y.3d 420 (2011).........................................................................................26 Statutes 28 U.S.C. § 1331......................................................................................................43 28 U.S.C. § 1367(d) ..........................................................................................passim 28 U.S.C. §1332.......................................................................................................43 N.Y. C.P.L.R. (“CPLR”) 5602(a)(l)(i) ....................................................................11 N.Y. C.P.L.R. 202.............................................................................................passim N.Y. C.P.L.R. 203(f)..........................................................................................18, 54 N.Y. C.P.L.R. 205(a) ........................................................................................passim Fed. R. App. P. 41 advisory committee’s note (1998 Amendments)......................49 Fed. R. Civ. P. 15(c) ..........................................................................................54, 55 N.Y. Navig. § 74 ......................................................................................................29 Other Authorities H.R. Rept. No. 101-734, at 30 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6876 ..........................................................................................................46 x Karen N. Moore, The Supplemental Jurisdiction Statute: An Important But Controversial Supplement To Federal Jurisdiction, 41 Emory L.J. 31 (1992)......................................................................................................48 N.Y. Civ. Prac. Law, practice commentary 202:3 (McKinney 1993).....................37 N.Y. Civ. Prac. Law, practice commentary 202:3 (McKinney 1999).....................20 Siegel, N.Y. Prac. § 52 (5th ed.) ..............................................................................19 U.S. Const. art. VI, cl. 2.............................................................................................9 1 APPELLANT’S OPENING BRIEF Plaintiff-Appellant Norex Petroleum Limited (“Appellant” or “Norex”) respectfully submits this opening brief. The First Department erroneously held that Norex could not timely re-file its non-federal claims in New York state court after a non-merits dismissal by a New York federal court. It is undisputed that Norex filed its original federal RICO action a month after its claims had accrued, which was timely under any applicable statute of limitations. Consequently, Norex’s New York state court action was timely pursuant to both state and federal “savings” statutes. PRELIMINARY STATEMENT The First Department failed to give effect to the clearly applicable state and federal savings statutes, CPLR 205(a) and 28 U.S.C. § 1367(d), in direct contravention of the plain language of both statutes and controlling decisions of this Court and the United States Supreme Court. If allowed to stand, the First Department’s decision would nullify a centuries old principle of New York law- that timely asserted claims should be determined on the merits. CPLR 205(a) guarantees every litigant their rightful day in court by allowing a plaintiff six months within which to re-file an action that was dismissed 2 in any New York court for reasons unrelated to the merits of the case.1 CPLR 205(a) plainly applies to Norex’s case. Norex timely filed suit in New York federal court just weeks after the Defendants unlawfully appropriated its majority interest in a company that the parties jointly owned. Far from coming to New York “shopping” for favorable limitations periods,2 Norex chose New York because the two principal Defendants are New York residents and not amenable to jurisdiction in Alberta, Canada (Norex’s home) and Norex could not, and decidedly still cannot, get justice in the courts of Tyumen, Siberia-courts that Defendant BP’s own internal documents recognize have been thoroughly corrupted by its co-Defendants. (R. 1195) (“Alfa Group is believed to be very much in control of the entire government system and judiciary in its ‘home region’ of Tyumen . . . .”) (emphasis added). After Norex filed suit in federal court in New York, there was an unanticipated, intervening change in federal law, which narrowed the reach of the federal statute Norex had relied upon, leaving Norex with only its supplemental 1 In addition, the federal savings statute, 28 U.S.C. § 1367(d), provides that the limitations period on any non-federal claim “shall be tolled” while pending in federal court “and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.” 2 According to the Second Circuit, “the totality of circumstances suggests that Norex’s decision to sue in New York was informed by genuine convenience” and “the district court did not ascribe any forum-shopping motives to Norex’s choice of a New York forum.” Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 155-57 (2d Cir. 2005) (emphases added). 3 non-federal claims, which the federal court declined to entertain. These non- federal claims have never been adjudicated on the merits. Norex timely re-filed its claims in New York Supreme Court within the six months required by CPLR 205(a) and, indeed, even before the federal appeals court had issued its mandate, marking the federal action’s conclusion. Because Norex’s original federal action was timely filed and dismissed based on a reason other than the merits, the only relevant inquiry is whether Norex’s subsequently filed state court action satisfied CPLR 205(a) (or its federal counterpart, 28 U.S.C. § 1367(d)). There is no question that it did. The First Department adopted an unprecedented, narrowing construction of CPLR 205(a) (New York’s “savings” statute) by subordinating it to CPLR 202 (New York’s “borrowing” statute). CPLR 202 requires non-resident plaintiffs whose claims accrue outside of New York to satisfy the applicable statute of limitations of both the jurisdiction in which the claims accrued and New York. Thus, CPLR 202 “borrows” a foreign statute of limitations if that statute’s limitations period is shorter than New York’s. The First Department incorrectly held that Norex, as a non-resident plaintiff, could not avail itself of the six-month savings provision of CPLR 205(a) because Norex was, pursuant to CPLR 202, subject to Alberta’s tolling rules to the 4 exclusion of New York’s savings statute.3 But CPLR 202 cannot and should not be read to trump the clear language and purpose of CPLR 205(a). The First Department’s decision to read CPLR 205(a) out of the law for non-resident plaintiffs like Norex contradicts this Court’s decision in Global Financial, which applied CPLR 205(a) to a claim by a non-resident plaintiff without regard to whether a relevant foreign jurisdiction had a comparable savings statute (and in that case Florida did not). The First Department’s decision also misunderstands the purposes of, and interplay between, CPLR 202 and CPLR 205(a), which are entirely complementary. CPLR 202 concerns the circumstances under which a non-resident may bring suit in New York in the first instance. CPLR 202 is intended to prevent a non-resident plaintiff from forum shopping in New York courts to take advantage of a longer statute of limitations. This statutory policy was fully served when Norex filed its original complaint in New York federal district court within weeks of the events that give rise to its claims, putting defendants on notice and making those claims timely under any statute of limitations, including the Alberta statute of limitations that the First Department held must be borrowed under CPLR 202. 3 The First Department also incorrectly held that § 1367(d) did not apply to Norex’s claims. See infra at Section II. 5 Because Norex was manifestly not forum shopping when it filed its first action in New York, Norex cannot be forum shopping by re-filing that action in New York in accordance with CPLR 205(a) (and 28 U.S.C. § 1367(d)). By contrast, CPLR 205(a) serves the remedial function of providing an opportunity to the diligent plaintiff to re-file its claims that were timely filed but were dismissed for reasons unrelated to the merits of the claims. There is neither tension nor conflict between CPLR 205(a) and CPLR 202. If a non-resident plaintiff like Norex timely files a case in New York in the first instance-in compliance with all applicable statutes of limitations-that initial filing gives the defendant notice and satisfies the borrowing provisions of CPLR 202 and its anti- forum shopping purpose. CLPR 205(a) merely permits the diligent plaintiff to move its timely filed lawsuit across the street, from one courthouse to the other. See Marco v. Dulles, 177 F. Supp. 533, 550 (S.D.N.Y. 1959) (New York’s savings statute “reinstate[s], in practical effect, the [timely filed] dismissed action”).4 The First Department’s illogical construction of these statutes would severely limit the 4 Similarly, the U.S. Supreme Court has expressly held that § 1367(d) must be applied by all state courts to toll non-federal claims pending in federal court so that they may be timely re-filed in state court after a non-merits dismissal of the federal action. See Jinks v. Richland County, S.C., 538 U.S. 456, 459 (2003). 6 application of 205(a) on the grounds that the complementary policy of 202 to discourage forum shopping somehow renders 205(a) a nullity. Neither the text of CPLR 205(a), nor its legislative history, nor the long line of Court of Appeals precedent interpreting the scope and application of CPLR 205(a) restricts CPLR 205(a)’s “vitally important” (Goldstein), “ameliorative” (Mt. Sinai), “remedial” (Mt. Sinai, Goldstein) and “resuscitat[ive]” (Carrick) function in the manner the First Department held. By holding that CPLR 202 displaces CPLR 205(a), the First Department ignored this Court’s express instruction that the “sound premise” of CPLR 205(a) should not be sacrificed by any cramped interpretation of the statute. Goldstein v. New York State Urban Dev. Corp., 13 N.Y.3d 511, 521 (2009) (citing Carrick v. Cent. Gen. Hosp., 51 N.Y.2d 242, 252 (1980)) (internal quotation marks and citations omitted). The First Department’s decision should be reversed because the decision: • fails to recognize that CPLR 205(a)’s important remedial purpose is perfectly compatible with the wholly complementary policy of CPLR 202 to discourage forum shopping; • does violence to principles of statutory construction long recognized by this Court that require two statutes to be given full effect if they can be harmonized; 7 • contradicts this Court’s decision in Global Financial, which applied CPLR 205(a) to a claim by a non-resident plaintiff without regard to whether its home jurisdiction had a comparable savings provision; and • conflicts with this Court’s decision in Goldstein “declin[ing] to subordinate CPLR 205(a).” Accordingly, this Court should reaffirm the vitality of Judge Cardozo’s nearly century old interpretation of New York’s savings statute, whose purpose he admonished should not “be frittered away by any narrow construction.” Gaines v. City of New York, 215 N.Y. 533, 539 (1915) (Cardozo, J.). The First Department also erred in holding that the federal savings statute, 28 U.S.C. §1367(d), does not apply in New York. The federal savings statute tolls the statute of limitations for all non-federal claims through the federal action’s conclusion and for an additional thirty days thereafter, unless state law provides for a “longer tolling period.” 28 U.S.C. §1367(d). The U.S. Supreme Court has held that § 1367(d) is binding on the conduct of litigation in all state courts of every state under the Necessary and Proper Clause of the U.S. Constitution. Jinks v. Richland County, S.C., 538 U.S. 456, 459 (2003). Indeed, this Court, in Goldstein, recently recognized that § 1367(d) applies in New York to 8 toll the statute of limitations for supplemental claims even if CPLR 205(a) does not apply. Goldstein, 13 N.Y.3d at 522. Thus, even if, as is manifestly not the case, CPLR 205(a) did not provide Norex six months to re-file in New York state court, § 1367(d) would still save Norex’s state court action because Norex initiated its state court suit well before the expiration of thirty days from the disposition of the federal action, as § 1367(d) provides. The First Department’s refusal to follow federal law was plain error-indeed, so plain that Respondents did not even attempt to defend the trial court’s reasoning that the First Department ultimately adopted. The First Department held that § 1367(d) did not toll the statute of limitations for Norex’s non-federal claims because New York provides for a “longer tolling period” (i.e., six months instead of thirty days). However, the First Department simultaneously rejected the application of CPLR 205(a)’s “longer” six-month tolling period to Norex’s action, holding that it provided for zero tolling of Norex’s claims. This tortured logic defies common sense, the plain language and purpose of both statutes, and controlling U.S. Supreme Court and Court of Appeals precedents. It also renders the federal savings statute entirely inapplicable in New York-for on paper, the six-month period provided by CPLR 205(a) will 9 always be longer than the thirty days afforded by 28 USC § 1367, even for plaintiffs who for some reason are not protected by CPLR 205(a). The First Department’s decision nullifying § 1367(d) disregarded controlling federal law in violation of the United States Constitution. This Court has recognized that the “Supremacy Clause of the United States Constitution . . . vests in Congress the power to supersede not only State statutory or regulatory law but common law as well . . . when the state law . . . stan[ds] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Guice v. Charles Schwab & Co., 89 N.Y.2d 31, 39 (1996) (internal quotation marks and citations omitted).5 Nonsuiting Norex under these circumstances undermines the respect for federalism that § 1367 embodies. By assuring that supplemental non-federal claims will not become time barred while pending in federal court, § 1367(d) safeguards every litigant’s right “to litigate their federal claims in federal court and to include in their federal action a supplemental state law cause of action.” Goldstein, 13 N.Y.3d at 522. In short, the First 5 The Supremacy Clause states in relevant part: “This Constitution, and the laws of the United States which shall be made in pursuance thereof . . . shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.” U.S. Const. art. VI, cl. 2. 10 Department’s decision disrupts a carefully balanced framework for accommodating concurrent jurisdiction. Both CPLR 205(a) and 28 U.S.C. § 1367(d) make clear that Norex cannot be foreclosed from pursuing its meritorious non-federal claims simply by virtue of the fact that time passed while it “was fruitlessly pursuing them in federal court.” Jinks, 538 U.S. at 459. The decisions below should be reversed and this case remanded so that Norex can, at long last, prosecute its claims. QUESTIONS PRESENTED 1. Did the Appellate Division err by holding that Norex’s claims were not timely under CPLR 205(a), New York’s “savings” statute, and by holding in violation of well-established cannons of statutory construction that CPLR 205(a) does not apply to non-residents like Norex because CPLR 202, New York’s “borrowing” statute, applies to the exclusion of CPLR 205(a), thereby: • ignoring the “vitally important” remedial purpose of CPLR 205(a), which has long been recognized by this Court to be perfectly compatible with the wholly complementary policy of CPLR 202 to discourage forum shopping; and 11 • failing to follow this Court’s decision in Global Financial, which applied CPLR 205(a) to a claim by a non-resident plaintiff like Norex without regard to whether its home jurisdiction had a comparable savings provision? (R. lii-liii). 2. Did the Appellate Division err by holding that Norex’s claims were not timely under the federal savings statute, 28 U.S.C. § 1367(d), and that § 1367(d) does not apply in the state of New York, in direct conflict with the plain language, purpose, and legislative history of the statute as well as the U.S. Supreme Court’s decision in Jinks and this Court’s decision in Goldstein? (R. lii-liii). JURISDICTIONAL STATEMENT This Court has jurisdiction under CPLR 5602(a)(l)(i). This action originated in the Supreme Court, New York County. On September 17, 2012, the Office of the County Clerk entered the trial court’s Order granting Respondents’ motions to dismiss the Complaint. (R. 13). Appellant timely appealed to the Appellate Division, First Department. (R. 31). On April 25, 2013, the First Department affirmed the dismissal. (R. xlvii). Appellant timely sought leave to appeal from this Court. On September 12, 2013, this Court granted Appellant’s motion for leave to appeal. (R. xlv). 12 NATURE OF THE CASE6 Norex, an oil company based in Alberta, Canada, partnered with a Russian company, Chernogorneft, to form a joint venture (Yugraneft) to develop a lucrative oil field. (R. 3490). Norex had a 60% equity stake in the joint venture based on a capital contribution of $1.2 million and valuable cold-weather oil field technology and know-how. Chernogorneft had a 40% stake based on a capital contribution of $800,000 and valuable oil field rights. (R. 3491). In 2001, in an effort managed by and for the benefit of individuals who are residents of New York, Defendants unlawfully seized control of Yugraneft. Defendants filed suit in Tyumen, Western Siberia claiming that Norex’s 60% share of Yugraneft was based on over-valued technical “know-how” and should be declared invalid (the “Know-How Case”). Norex was never properly served with the complaint in the Know-How Case (see R. 3496), and the Defendants corrupted the proceedings to ensure a favorable result. (R. 3496-97). The Tyumen court accepted Defendants’ false representations regarding service of process and issued an ex parte interim order barring Norex from voting most of its shares, effectively giving Defendants majority control over Yugraneft. Soon thereafter, Defendants’ private militia members dressed in fatigues and carrying 6 Norex respectfully refers the Court to its brief on the merits in the trial court below for a complete recitation of the facts. (R. 3490-3502). 13 AK-47 machine guns forcibly entered Yugraneft’s corporate offices and took control of Yugraneft’s oil field, causing Yugraneft’s foreign employees to flee the country. (R. 3497). PROCEDURAL HISTORY On February 26, 2002, almost immediately after Respondents misappropriated Norex’s majority interest in the valuable Yugraneft oil field worth in excess of $1 billion, Norex filed suit in New York federal court, alleging claims under RICO (18 U.S.C. §§ 1961-68), and supplemental non-federal claims under Russian law (in its First Amended Complaint).7 (R. 101). In 2004, the district court granted Respondents’ motion to dismiss Norex’s complaint on the basis of forum non conveniens. Id. The Second Circuit vacated and remanded in July 2005, holding that “Norex’s decision to sue in New York was informed by genuine convenience.” See Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 150, 156-57 (2d Cir. 2005). On remand, the district court found that RICO, as a matter of statutory construction, did not have extraterritorial application and again dismissed the case without reaching the underlying merits, declining to exercise supplemental jurisdiction over Norex’s non-federal supplemental claims. (R. 102). The Second 7 Norex’s supplemental claims are claims for tort liability and unjust enrichment under Russian law. 14 Circuit affirmed based on a recent U.S. Supreme Court decision on extraterritoriality. See Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29, 33 (2d Cir. 2010).8 Thus, neither federal court reached the underlying merits of Norex’s claims. On January 25, 2011, shortly after the Second Circuit issued an Order denying Norex’s Petition for Rehearing En Banc, Norex filed a Motion for Stay of Issuance of Mandate in the Second Circuit. Norex specifically requested the stay “to avoid potentially triggering the running of relevant ‘savings action statutes’ which permit Norex to re-file th[e] matter in an alternative forum,” including CPLR 205(a), which the motion expressly referenced as “permit[ting Norex] to refile th[e] action in New York state court so long as the refiling occurs within six months of the litigation’s termination which may accrue from the date of the issuance of the mandate.” (R. 1304).9 The Second Circuit granted Norex’s Motion for Stay of Issuance of Mandate. 8 While Norex’s appeal of the dismissal was pending, the U.S. Supreme Court issued Morrison v. Nat’l Australia Bank, Ltd., 561 U.S. 247, 130 S. Ct. 2869, 2883 (2010), holding that federal securities fraud statutes generally have no extraterritorial reach. Based on Morrison, the Second Circuit overruled its prior RICO precedents and affirmed the dismissal of Norex’s RICO claims, holding that RICO has no extraterritorial application. See Norex Petroleum Ltd. v. Access Indus., Inc., 622 F.3d 148 (2d Cir. Sept. 28, 2010), amended by 631 F.3d 29 (2d Cir. Dec. 8, 2010). 9 Norex also filed a Petition for Certiorari to the U.S. Supreme Court, seeking review of the Second Circuit’s decision, which Norex ultimately withdrew so that the state court case could move forward. (R. 102). 15 Shortly thereafter and long before the Second Circuit issued its mandate, Norex re-commenced its action in New York Supreme Court on March 7, 2011. (R. 102). Norex filed its First Amended Complaint on June 23, 2011, alleging New York and Russian law claims and seeking more than $1 billion in compensatory damages. (R. 96). On September 16, 2011, Respondents moved to dismiss the Complaint. (R. 317).10 On September 17, 2012, the Office of the County Clerk entered the trial court’s Order granting Defendants’ motions to dismiss the Complaint as “barred by the applicable statute of limitations.” (R. 13-14). On September 27, 2012, Norex timely filed notice of appeal. (R. 31). On April 25, 2013, the First Department affirmed the trial court’s decision. Later that same day, Respondents filed notice of entry of the First Department’s decision. On May 28, 2013, Norex timely filed a motion for leave to appeal with this Court, which this Court granted on September 12, 2013. This appeal followed. 10 On January 24, 2012, Norex brought a Motion to Supplement the Record to Include Controlling U.S. Supreme Court and New York Court of Appeals Case Law Adverse to Defendants’ Contentions That Defendants Failed to Cite in Their Moving Papers and to Correct Misstatements of Law Made by Defendants During Oral Argument, which the Court denied on September 17, 2012. (R. 4423). 16 ARGUMENT I. NOREX’S CLAIMS ARE TIMELY UNDER CPLR 205(A) This Court should reverse the First Department’s decision holding that CPLR 205(a) does not apply to Norex’s claims based on the First Department’s erroneous construction of the interplay of CPLR 205(a) and CPLR 202. The First Department held that “CPLR 205(a) could not save plaintiff’s claims” because Alberta law, which the First Department held must be borrowed under CPLR 202, “does not have a provision [like CPLR 205(a)] that would toll the limitations period in favor of a previously filed action.” (R. at lii-liii). The First Department thus ignored the overarching purpose of the statutory framework of CPLR 202 and 205(a) and misapplied both of these statutes in this case. New York’s statute of limitations was enacted to assure that defendants receive timely notice of claims against them. CPLR 202 and 205(a) fit perfectly together into this “notice” framework. CPLR 202 prevents non-resident plaintiffs from circumventing the stricter notice requirements prescribed by their home jurisdiction’s statute of limitations; it does so by requiring that any action initiated in New York be timely under the limitations period of the foreign jurisdiction as well as New York. CPLR 205(a) further reinforces the incentive to initiate claims, and put defendants on notice, in a timely manner. CPLR 205(a) does so by providing the diligent plaintiff-who has duly put her adversary on 17 notice by timely filing his claims in the first instance-with a short grace period to re-file any claims dismissed for a reason unrelated to the merits. There is no question that Norex’s federal court filing in 2002 was timely under Alberta’s two-year statute of limitations and consequently timely when filed under New York’s borrowing statute, CPLR 202. Because Norex diligently filed its initial action well within the notice periods prescribed by New York or any other jurisdiction’s statute of limitations, Norex was entitled to the benefit of 205(a)’s six-month grace period to re-file in New York state court. Norex’s construction of the interplay of CPLR 205(a) and CPLR 202 respects the complementary ways in which these two provisions further the overarching goal of New York’s statute of limitations, while the First Department’s construction manifestly does not. A. Both CPLR 205(a) and CPLR 202 Serve the Purpose of the Statute of Limitations to Ensure that Plaintiffs Put Defendants on Notice in a Timely Manner “Statutes of limitations are primarily designed to assure fairness to defendants.” Burnett v. New York Cent. R.R., 380 U.S. 424, 428 (1965). The overarching aim of a statute of limitations is “to put the adversary on notice to defend within the period of limitations,” recognizing that “the right to be free of stale claims in time comes to prevail over the right to prosecute them.” Id. CPLR § 205(a) provides in relevant part: 18 If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff . . . may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period. CPLR 205(a) instructs a court to look at the date an original action was filed. If the original action was timely, the plaintiff has six months from a non-merits dismissal to re-file a second action arising out of the same transaction or occurrence. The benefit of this “grace period” is thus conditioned upon satisfying the underlying purpose of the statute of limitations, “[to give] the defendant . . . timely notice of the claim being asserted by or on behalf of the injured party.” George v. Mt. Sinai Hosp., 47 N.Y.2d 170, 177 (1979). Once an action has been timely filed in the first instance, “notice” has been given to the defendant, and “at least one of the fundamental purposes of the Statute of Limitations has in fact been served.” Id.11 11 As evidence of the “notice” considerations underpinning this statute, the “same transaction or occurrence” language of 205(a) is exactly the language that appears in the relation back statute for amended pleadings. See CPLR 203(f). And the same policy considerations apply here-so long as a party has notice of the claims against it, the purpose of the statute of limitations is served. 19 This Court has repeatedly recognized that the benefit of CPLR 205(a) tracks the important notice function of a statute of limitations. When the prior action is dismissed-for a reason unrelated to the merits-CPLR 205(a) applies to “ameliorate the potentially harsh effect of the Statute of Limitations . . . [because] the defendant has [already] been given timely notice of the claim being asserted by or on behalf of the injured party.” Id. (emphasis added). Indeed, the “important consideration is that by invoking judicial aid, a litigant gives timely notice to his adversary of a present purpose to maintain his rights before the courts.” Gaines, 215 N.Y. at 596 (emphasis added); see also Siegel, N.Y. Prac. § 52 (5th ed.) (“key inquiry” is whether the first action provided “the defendant [with] notice within the applicable period of limitation”). There is no question that Norex, by filing its initial action in federal court a month after its claims accrued, provided Respondents notice within any applicable limitations period. CPLR 202 provides in relevant part that for a non-resident plaintiff: “An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued . . . .” CPLR § 202. CPLR 202 makes clear that an action cannot initially be commenced after the expiration of a shorter applicable foreign statute of limitations. Id. 20 CPLR 202 was enacted to prevent forum shopping for a more favorable notice period in New York-be it in New York state or federal court. As this Court long ago recognized, “[t]he obvious purpose of the [predecessor to CPLR 202] is to prevent a non-resident claimant from coming into this State and prosecuting a claim . . . under our Statutes of Limitations if they are more favorable to him than the statutes prevailing in the State where the cause of action arose.” Nat’l Sur. Co. v. Ruffin, 242 N.Y. 413, 417 (1926) (emphasis added); Antone v. Gen. Motors Corp., 64 N.Y.2d 20, 27-28 (1984) (“The primary purpose of CPLR 202 and its predecessors is to prevent forum shopping by a nonresident seeking to take advantage of a more favorable Statute of Limitations in New York.”).12 Whereas CPLR 202 discourages plaintiffs from shopping between New York and foreign courts for an initial forum, the question of what happens 12 See also Global Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 528 (1999) (“CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued. . . . [to] prevent[ ] nonresidents from shopping in New York for a favorable Statute of Limitations” (emphasis added)); Portfolio Recovery Assocs., LLC v. King, 14 N.Y.3d 410, 417-18 (2010) (“This holding is consistent with one of the key policies underlying CPLR 202, namely, to prevent forum shopping by nonresidents attempting to take advantage of a more favorable statute of limitations in this state.” (emphasis added)); In re Countrywide Fin. Corp. Mortgage-Backed Sec. Litig., 834 F. Supp. 2d 949, 957 (C.D. Cal. 2012) (“The goal of the statute is to prevent foreign claimants from flooding into New York courts to take advantage of New York’s favorable limitations period.” (emphasis added)); N.Y. Civ. Prac. Law, practice commentary 202:3 (McKinney 1999) (“[T]he primary purpose of CPLR 202 [is] to discourage forum-shopping by nonresident plaintiffs seeking to sue in New York to take advantage of a longer statute of limitations.” (emphasis added)). 21 when a plaintiff timely files in New York in the first instance but chooses the wrong New York court, and has to re-file within New York, is an entirely different matter governed by CPLR 205(a), not CPLR 202. As this Court’s decision in Global Financial makes clear, a court looks to CPLR 202 to determine whether a suit by a non-resident plaintiff was timely filed in the first instance and then, pursuant to CPLR 205(a), uses that earlier filing date to determine whether a second suit filed in New York is timely. Global Financial Corp. v. Triarc Corp., 93 N.Y.2d 525, 527 (1999). By the plain text of CPLR 205(a), Norex’s “new action” in state court is timely: • Norex’s new action “would have been timely commenced” at the time Norex commenced the prior action in federal court on February 26, 2002; • Norex’s federal action was dismissed because the Second Circuit determined that the federal RICO statute has no extraterritorial application-a basis for termination other than the ones specifically excluded by CPLR 205(a), (R. 102);13 and 13 The Second Circuit’s decision was based purely on a construction of the federal RICO statute and did not in any way address the underlying merits of the claims Norex asserted in its federal court pleading. As the U.S. Supreme Court and this Court have recognized, an adjudication “on the merits” is one that “passes directly on the substance of a particular claim.” Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 501-02 (2001); Carrick, 51 N.Y.2d at 252 (for purposes 22 • Norex commenced its state court action, which included both Norex’s supplemental non-federal claims as well as other claims arising out of “the same transaction or occurrence” (CPLR 205(a)), within six months of the conclusion of its federal action. Id.14 Finally, there is no question that Norex fulfilled the notice function embodied by CPLR 205(a). Defendants were given “timely notice” of Norex’s claims, which were brought well within the limitations period of both New York and Alberta, or any other possibly applicable statute of limitations-including Cyprus, Norex’s place of incorporation.15 As Norex has met all the statutory and common law requirements to be “deserving of the benefits of CPLR 205(a),” there is no basis for depriving of applying CPLR 205, “a ‘final judgment upon the merits’ does not necessarily result every time a cause of action is dismissed for want of a formal, albeit essential, element of the claim”). After holding that Norex’s claims were time barred, pursuant to CPLR 202 under Alberta law, and that 28 U.S.C. § 1367 did not apply, the First Department opined that the federal dismissal was on the merits. 14 Norex also met the additional requirement found within New York case law and discussed infra at 38, that the original action be filed in a New York state or federal court. See McCleod v. Travelers Indemnity Co., No. 12 Civ. 176, 2012 WL 5210945 (S.D.N.Y. Oct. 19, 2012); Lehman Bros., Inc. v. Hughes Hubbard & Reed, LLP, 245 A.D.2d 203, 203 (1st Dep’t 1997); Baker v. Commercial Travelers Mut. Accident Ass’n, 3 A.D.2d 265, 266 (4th Dep’t 1957). 15 See Goldstein, 13 N.Y.3d at 521 (citations omitted) (205(a) “remed[ies] what might otherwise be the harsh consequence of applying a limitations period where [the purpose of the Statute of Limitations has been satisfied, namely,] the defending party has had timely notice of the action”). 23 Norex of a hearing on the merits of its claims. See Winston v. Freshwater Wetlands Appeals Bd., 224 A.D.2d 160, 164 (1996). B. The First Department’s Holding that Norex Is Not Entitled to the Remedial Benefit of CPLR 205(a) Is Manifestly Incorrect Respondents contended below, and the First Department accepted, that CPLR 202 displaces CPLR 205(a), so that non-residents like Norex may not benefit from 205(a).16 Respondents cite to language from New York decisions, insisting that New York courts borrow all foreign extensions and tolling rules under CPLR 202, to the exclusion of CPLR 205(a).17 But none of those decisions remotely stands for this proposition. Respondents reason that because (1) 205(a) has sometimes been described as a “toll”; and (2) dicta from this Court says tolls must be borrowed under CPLR 202;18 (3) this Court must borrow a foreign 16 The First Department below held that because Alberta, Canada (where it held the “cause of action accrued” for purposes of CPLR 202) does not have a savings statute analogous to CPLR 205(a), CPLR 205(a) does not apply to save Norex’s claims. See Norex, 963 N.Y.S.2d at 645. 17 See Respondents’ Appellate Div. Brief at 15-16 (citing Portfolio Recovery, 14 N.Y.3d at 416; Smith Barney, Harris Upham & Co. v. Luckie, 85 N.Y.2d 193, 207 (1995); and Ledwith v. Sears, Roebuck & Co., 231 A.D.2d 17, 24 (1st Dep’t 1997)). 18 Respondents rely upon dicta in the Smith Barney, 85 N.Y.2d at 207. The Smith Barney court did not borrow any statute of limitation or toll under 202, let alone hold that any such statute or toll must be borrowed. The Smith Barney court merely held that it was proper for a trial court to make a determination on the statute of limitations issue before sending a dispute to arbitration under the Federal Arbitration Act, and remanded for the lower court to make such a determination under New York law, including CPLR 202. In remanding to the lower court to consider the question of the proper application of CPLR 202, the Court referred the lower court to a non-binding practice commentary from 1995 referring to 1911 and 1965 Appellate Division cases construing CPLR 202’s application. That practice commentary, quoted by the Court, 24 jurisdiction’s savings statute (or lack thereof) to the exclusion of CPLR 205(a). But even if one accepts Respondents’ flawed premise that 205(a) should be lumped in with other “tolling” provisions despite the inherent differences between 205(a) and other conventional tolling provisions (see infra at 31), Respondents’ argument fails because this Court has refused to borrow a tolling provision under CPLR 202 when doing so would lead to absurd results. Respondents’ construction of CPLR 205(a) and CPLR 202 is incorrect for at least the following reasons. First, the First Department’s failure to give “due regard” to the underlying purposes behind CPLR 205(a) and CPLR 202 contravenes well- established cannons of construction long recognized by this Court. Second, the First Department’s construction cuts directly against this Court’s decision in Global Financial, in which this Court recognized that a nonresident plaintiff may benefit from 205(a)’s grace period notwithstanding that its claims accrued outside of New York. contained broad remarks about the need to borrow “all” tolling provisions under CPLR 202. This Court, in 2007, in GML, discussed infra at 35, expressly rejected the blind application of 202 when doing so would work a result contrary to what “the Legislature intended . . . in enacting CPLR 202.” GML, 9 N.Y.3d at 951. 25 Third, the First Department adopted Respondents’ argument that CPLR 202 requires courts to borrow all the “tolls” of a foreign statute of limitations to the exclusion of CPLR 205(a). But the First Department’s decision ignores the fact that 205(a) is qualitatively different from the few tolling provisions Respondents point to that courts have borrowed under 202. Those tolling provisions (e.g., the absent defendant toll, which suspends the running of a statute of limitations during a defendant’s absence from the state) all generally serve to expand the time within which a plaintiff may timely file suit in the first instance, and put defendant on notice of a claim, while 205(a) serves the remedial function of providing a second opportunity to the diligent plaintiff to re-file its initially timely filed claims. Hence, the cases referring to these distinguishable tolling provisions are inapposite. Finally, New York courts do not borrow under 202 blindly. Because 205(a) inherently safeguards the purpose underlying 202 by virtue of the fact that it only applies to cases already initially timely filed in the state of New York, borrowing the non-existent Alberta savings provision to the exclusion of 205(a) would be entirely perverse. 26 1. The First Department’s Reading Voids the Purpose of 205(a) and Fails to Give Effect to Both Statutes in Contravention of Basic Cannons of Construction Under well-established cannons of statutory construction, in interpreting the interplay of statutes, courts must (1) pay heed to the statutes’ plain language; (2) give both statutes full effect if they can be harmonized; and (3) be faithful to the underlying legislative intent of both statutes. Yatauro v. Mangano, 17 N.Y.3d 420, 426-27 (2011) (“Courts must harmonize the various provisions of related statutes and . . . construe them in a way that renders them internally compatible.” ) Respondents’ statutory construction of 202 and 205(a), adopted by the First Department, violates each of these cannons. First, Respondents’ interpretation, adopted by the First Department, disregards the plain language of the statutes and should therefore be rejected. See Tompkins County Support Collection Unit ex rel. Chamberlin v. Chamberlin, 99 N.Y.2d 328, 335 (2003). When CPLR 202 and 205(a) are read together, it is clear that an action cannot initially be commenced after the expiration of a shorter applicable foreign statute of limitations (CPLR 202). But, as long as the action is initially timely filed under the statutes of limitation of both New York and the applicable foreign jurisdiction (CPLR 202), claims alleged “upon the same transaction or occurrence” may be re-filed within six months of the prior action’s termination (CPLR 205(a)). 27 Second, notwithstanding Respondents’ attempt to complicate matters, the question that this Court must decide is quite straightforward. This Court must decide whether, as Respondents maintain, CPLR 202 entirely trumps 205(a) or, as Norex contends, CPLR 205(a) and CPLR 202 are perfectly compatible. Respondents provide a reading of the interplay of these two provisions that not only fails to harmonize them, but also would give rise to an extremely flawed precedent that would deprive an entire class of litigants of the benefit of CPLR 205(a). In contrast, Appellant’s reading of CPLR 202 and CPLR 205(a) is the interpretation that gives effect to both statutes, as courts are compelled to do under traditional canons of statutory construction. See Roballo v. Smith, 63 N.Y.2d 485, 489 (1984) (“The courts should strive to avoid an interpretation of a statute where the literal application of one section will nullify the effect of another, especially when this produces an absurd result.”). Finally, Respondents’ contention that non-resident plaintiffs like Norex should not benefit from 205(a) cuts against basic principles of statutory construction regarding legislative intent articulated in Besser v. E. R. Squibb & Sons, Inc., 146 A.D. 2d 107 (1st Dep’t 1989), aff’d, 75 N.Y.2d 847 (1990)-a case relied upon by Respondents below. (Respondents’ Appellate Div. Brief at 16-17 (citing Besser)). As set forth in Besser, the best construction of two interlocking 28 statutes is the one which gives meaning to both statutes by affording “the policies of each statute . . . due regard.” Id. at 115. In Besser, the court looked to the legislative purpose behind the Toxic Tort Revival Statute and CPLR 202 in arriving at a construction of the two statutes’ interaction. The Toxic Tort Revival Statute was intended to provide relief to plaintiffs who suffered the latent effects of toxic exposure and whose tort claims had thus lapsed because of the long delay in the onset of their symptoms. The statute provided a onetime, one-year window period in which to sue for otherwise time barred toxic tort claims even if such causes had been previously dismissed on statute of limitations grounds. The Court noted that the legislature intended the remedial benefit of the statute to “provide relief to injured New Yorkers” only- “not the entire world”-and accordingly applied CPLR 202 to the exclusion of the Toxic Tort Revival Statute for non-New York residents. Besser, 146 A.D. 2d at 110, 117 (emphasis added). Ultimately, the Court held that applying CPLR 202 (which was designed to prevent forum shopping on the part of non-residents) to the exclusion of the Toxic Tort Revival Statute (which was designed to provide relief only to New York residents) was the only construction that was faithful to the policies behind both statutes. Id. at 116-17. 29 Precisely because the revival statute at issue in Besser-unlike 205(a)- applies only to New York residents, allowing 202 to trump the Toxic Tort Revival statute for non-New York residents does nothing to compromise the remedial purpose of the Revival statute. Id. at 114-15. The same absolutely cannot be said with respect to 205(a), whose remedial benefit extends to resident plaintiffs and non-resident plaintiffs alike. Indeed, nowhere in either the text of CPLR 205(a), its legislative history, or the long line of cases that have explored its purpose, is there anything that suggests CPLR 205(a) was intended for the exclusive benefit of New York residents. In fact, this Court’s own precedent recognizes the availability of CPLR 205(a) to non-New York plaintiffs who initiate actions in New York federal or state courts. Global Financial, 93 N.Y.2d at 527.19 It is thus Norex’s interpretation, not Respondents’, which is faithful to the principle articulated in Besser that “two statutes should be construed, if possible, to accommodate the polices underlying each.” Besser, 146 A.D.2d at 115. 19 Moreover, whereas numerous provisions in both the CPLR and state law place limits related to residence (see, e.g., N.Y. Navig. § 74 (regulating service of summons and complaint on non- residents)), CPLR 205(a), by contrast, manifestly does not. Though 205(a) contains several explicit exceptions to its application-such as in the instance of a voluntary dismissal-it contains no exception for non-residents either in its text or its legislative history. Under broad interpretive principles mandated for the interpretation of 205(a), where no explicit limitation exists, and no limitation is voiced in legislative history, such a statutory limitation may not be imputed by the courts. 30 2. This Court Implicitly Rejected the First Department’s Construction of the Interplay of CPLR 205(a) and CPLR 202 in Global Financial In Global Financial, the Court of Appeals adopted Norex’s construction of the interplay of CPLR 205(a) and CPLR 202 in addressing the question of whether a non-resident plaintiff’s claims accrued in New York, where most of the relevant events occurred, or whether they accrued in plaintiff’s foreign state of residence, where it sustained the economic injury. In resolving this issue and assessing the timeliness of the plaintiff’s claims, this Court never questioned that the operative date for applying the “borrowed” statute of limitations under CPLR 202 was the date on which the plaintiff filed its initial complaint in federal court in Manhattan-and that once the initial complaint was timely, the second action in New York state court “across the street” was automatically timely under CPLR 205(a). Global Financial, 93 N.Y.2d at 527 (“The parties do not dispute that this action is timely if the Federal action was timely when commenced on November 9, 1995 (CPLR 205).”) (citation in original). The only question was whether the prior federal action was timely under various foreign statutes of limitations-Delaware, Pennsylvania and Florida. Significantly, this Court did not deem it relevant whether the laws of other states, whose statutes of limitations might be borrowed, had savings statutes different from CPLR 205. For example, one of the candidate foreign statutes of 31 limitations to be borrowed in Global Financial-viz., Florida-like Alberta, Canada in this case, did not have a savings statute at all. See id. at n.1.20 Rather, this Court simply applied CPLR 205 to determine that the relevant date for the statute of limitations analysis under CPLR 202 was the filing of the original federal complaint. Global Financial, 93 N.Y.2d at 527 & n.1; see also Icelandic Airlines, Inc. v. Canadair, Ltd., 104 Misc. 2d 239, 244 (N.Y. Sup. Ct. 1980) (“[F]or Statute of Limitation purposes, plaintiff’s [second] action in the State Supreme Court is deemed to have been commenced on November 30, 1973 [i.e., the commencement date of the initial federal action].”); Kat House Prods., LLC v. Paul, Hastings, Janofsky & Walker, LLP, 71 A.D.3d 580, 580-81 (1st Dep’t 2010) (dismissing claim as untimely under foreign jurisdiction’s statute of limitations because original federal action was not timely commenced under the laws of that jurisdiction). Similarly, the Court in Baker v. Cohn concluded that CPLR 205(a)’s predecessor statute, Civil Practice Act § 23, would apply to “revive” a non-resident plaintiff’s cause of action so long as the initial action was timely under both the 20 See HCA Health Servs. of Fla., Inc. v. Hillman, 906 So. 2d 1094, 1098 (Fla. Dist. Ct. App. 2004) (“Florida has chosen not to adopt a ‘savings statute’ that allows a plaintiff whose case has been dismissed otherwise than on the merits to pursue the action even though the statute of limitation has run.”). 32 law of the place where it accrued and New York. Baker v. Cohn, 266 A.D. 236, 240 (1st Dep’t 1943) (citing predecessor to CPLR 202). The Court reiterated the purpose underlying § 23-to give a “diligent suitor” the opportunity to have his claim heard on the merits. And the court held that because New York’s statute of limitations had already expired by the time the original suit was brought, the initial suit was not “timely” under New York’s statute of limitations, and hence no grace period could be granted under § 23. Id. As in Global Financial and Baker, the only question for this Court is whether Norex’s original filing in the Southern District of New York in February 2002 was timely. It is indisputable that Norex’s original federal court filing was timely under any potentially applicable statute of limitations-under New York law, Alberta law, or Cyprus law. 3. Respondents’ Argument that Norex is Not Entitled to 205(a)’s Grace Period Ignores the Fact that 205(a) is Qualitatively Different from the Other Tolling Provisions that Courts Have Borrowed Under 202. CPLR 205(a), unlike the tolling provisions that New York courts have borrowed under CPLR 202, does not extend the time within which a plaintiff may initially commence an action. Rather, CPLR 205(a) instructs a court to look at the date that an original action was filed-and if the original action was timely, gives the plaintiff six months after a non-merits dismissal to re-file a second action. 33 Marco, 177 F. Supp. at 550 (“The strict and piercing truth is that the purpose of a ‘new action’ authorized by [CPRL 205(a)] is to reinstate, in practical effect, the dismissed action by permitting the plaintiff to resume litigating the ‘same cause.’”). By contrast, the cases Respondents rely on involve the application of tolling provisions that have the effect of allowing the plaintiff “the benefit of additional time to bring the action” in the first instance. See, e.g., Portfolio Recovery, 14 N.Y.3d at 416-17 (tolling period of limitation for filing initial action for out-of-state defendant). The other tolling provisions of the CPLR similarly function to extend the period in which a plaintiff may timely file a claim in the first instance. See, e.g., CPLR 208 (tolling period of limitation for filing initial action due to infancy/insanity); CPLR 209 (tolling period of limitation for filing initial action due to war); CPLR 210 (tolling period of limitation for filing initial action due to death of claimant). But CPLR 205(a), unlike the traditional “tolling provisions” in Article 2 of the CPLR-as the Court of Appeals has repeatedly emphasized-serves a “remedial function” which “provide[s] a second opportunity to the claimant who has failed the first time around because of some error pertaining neither to the claimant’s willingness to prosecute in a timely fashion nor to the merits of the 34 underlying claim.” George v. Mt. Sinai Hosp., 47 N.Y.2d 170, 178-79 (1979) (emphasis added). Hence, all of Respondents’ cases regarding the borrowing of other statutory provisions are inapposite.21 4. 205(a) Inherently Safeguards the Purpose of 202 to Prevent Forum Shopping New York courts have long held that the borrowing statute must be interpreted (1) so as to be aligned with other aspects of the code relating to New York’s statute of limitations,22 and (2) so that the basic legislative intent of the statute is satisfied. See Antone, 64 N.Y.2d at 30 (rejecting an application of CPLR 202 “which would hardly be consistent with the statute’s purpose”). Norex chose New York as its forum and gave notice of its suit well within any potentially applicable statute of limitations period. Thus, “to mechanically apply the [borrowing] statute under these unique circumstances, 21 In George v. Douglas Aircraft Co., the court explained the legislative purpose behind C.P.A. § 13, the precursor to CPLR 202. George v. Douglas Aircraft Co., 332 F.2d 73, 78 (2d Cir. 1964), cert. denied 379 U.S. 904 (1964). Section 13 was “necessitated by [New York’s absent defendant toll which required] that the [statute of limitation] period is interrupted by absence of the defendant from the forum [of New York] whether the cause of action arose in [New York] or in a foreign jurisdiction against a nonresident defendant.” Id. By adopting a rule that said you had to “borrow” the absent defendant toll of the jurisdiction where the claim accrued, the legislature was able “to protect a non-resident defendant against an action in New York,” which was tolled indefinitely against the non-resident defendant under New York’s absent defendant toll, “but had become barred elsewhere.” Id. This history is reflected in the fact that the tolling rule borrowed under 202 by the Court of Appeals has almost exclusively been the absent defendant toll. 22 See Kahn v. Commercial Union of Am., Inc., 227 A.D. 82, 83 (1st Dep’t 1929) (New York’s borrowing statute “must be read with other [statutes] relating to the same subject”). 35 when there is no question of forum shopping and no evidence of prejudice to defendant would be unjust and contrary to the Legislative intent.” Jones v. Greyhound Bus Lines, 73 Misc. 2d 109, 111 (N.Y. Sup. Ct. 1973); see also Ruffin, 242 N.Y. at 417 (“The obvious purpose of the [predecessor to CPLR 202] is to prevent a non-resident claimant from coming into this State and prosecuting a claim . . . under our Statutes of Limitations if they are more favorable to him than the statutes prevailing in the State where the cause of action arose.”). In GML, Inc. v. Cinque & Cinque, P.C., 9 N.Y.3d 949, 951 (2007), this Court confirmed that courts must not apply the borrowing statute in a way that works an absurdity to the underlying purpose of the statute. In GML, this Court held that Tennessee plaintiffs’ New York action was barred by Tennessee’s one- year statute of limitation, borrowing Tennessee’s notice period under CPLR 202. The Court then separately considered whether plaintiffs should get the benefit of Tennessee’s absent defendant toll (i.e., whether the tolling provision should be borrowed along with Tennessee’s limitations period under 202). In deciding this question, the Court looked to “the purpose of a tolling statute,” which “is to allow a plaintiff additional time to serve a defendant where defendant’s absence from the jurisdiction has made service a practical impossibility.” Id. at 951. The Court then pointed out that the articulated purpose 36 was not at all relevant in the present case, because “[t]his action was commenced in New York and, as such, it was not necessary to toll the statute of limitations since defendants-residents of New York-were amenable to suit in New York for the entire period of Tennessee’s statute of limitations” and “whether defendants are also subject to suit in Tennessee” is “irrelevant.” Id. The Court recognized that neither the underlying purpose of CPLR 202 nor the intent behind the Tennessee tolling statute would have been served by applying 202 in this case to “borrow the foreign [Tennessee] statute” with “[a]ll the extensions and tolls.”23 To the contrary, the Court observed that importing the absent defendant tolling statute would have “cause[d] the statute of limitations to be tolled indefinitely against these [New York] defendants,” an absurd result. This Court accordingly refused to apply 202 to import the Tennessee absent defendant toll, consistent with the underlying intent of 202. Id. (“We do not believe that the Legislature intended this result in enacting CPLR 202.”). Other courts have similarly rejected a bright-line application of CPLR 202, where doing so leads to absurd results. For example, the First Department declined to apply 202 where it dictated borrowing a foreign statute of limitations, only to have the law of the foreign state itself “prescribe use of the forum State’s 23 Cf. Smith Barney, 85 N.Y.2d at 207. 37 [i.e., New York’s] statute of limitations.” Rescildo v. R.H. Macy’s, 187 A.D.2d 112, 116-17 (1993).24 The Court rejected borrowing “the entire foreign statute of limitations”25 because doing so would “defeat[] the purpose of the borrowing statute and its underlying policy-to prevent forum shopping by nonresident plaintiffs seeking a longer statute of limitations,” in that the New York statute of limitations would nevertheless apply. Id. (citations omitted); see also Fitzgerald v. Thompson, 187 A.D.2d 557, 558 (1992) (rejecting renvoi in the context of CPLR 202 for the same reasons); N.Y. Civ. Prac. Law, practice commentary 202:3 (McKinney 1993) (explaining that Rescildo court rejected renvoi because it “defeats the purpose of CPLR 202, i.e., to prevent forum shopping by nonresident plaintiffs seeking a longer statute of limitations”). Thus, this Court in GML and the First and Second Departments in Rescildo and Fitzgerald, respectively, refused to borrow under 202 where a strict and mindless application of the statute would have led to an absurd outcome that was not aligned with the underlying purpose of 202. Similarly here, the Court should refuse to borrow under 202 in wholesale fashion so as to render CPLR 24 The principle directing a forum court that looks to the statute of limitations of a foreign jurisdiction to apply the statute of limitations of the forum instead of the foreign jurisdiction is called “renvoi” (from the French, meaning “send back”). 25 Cf. Smith Barney, 85 N.Y.2d at 207. 38 205(a) a nullity for Norex and other non-resident plaintiffs. Doing so wildly prejudices Norex and the judicial system in precisely the ways that the U.S. Supreme Court identified in explaining the rationale of the federal counterpart to CPLR 205(a)-28 U.S.C. §1367(d)26-without in any way furthering the anti- forum-shopping purposes underlying 202. And because the operation of 205(a) perforce safeguards the purpose of 202, blindly applying 202 to the exclusion of 205(a) needlessly vitiates the legislative purpose of 205(a), whose “vitally important remedial function” this Court has repeatedly emphasized.27 CPLR 205(a), by its very operation, preserves the purpose underlying 202 to prevent forum shopping for favorable limitations periods in New York. CPLR 205(a) applies only if the prior action was timely filed in a New York state or federal court. Baker v. Commercial Travelers Mut. Accident Ass’n, 3 A.D.2d 265, 266 (4th Dep’t 1957) (“Commencement of suit in another state will not toll or otherwise affect the provisions for limitation of actions in the state of the forum.”); see also Lehman Bros., Inc. v. Hughes Hubbard & Reed, LLP, 245 A.D.2d 203, 26 See discussion of Jinks infra at 40. 27 In Goldstein, this Court “declined to subordinate CPLR 205(a) . . . even where the effect . . . was, as it is here, to toll for a substantial period a designedly brief limitations period.” Goldstein, 13 N.Y.3d at 521. 39 203 (1st Dep’t 1997) (“Plaintiff’s prior Texas State court action is not a ‘prior action’ within the meaning of CPLR 205(a).”), aff’d, 92 N.Y.2d 1014 (1998).28 As such, CPLR 205(a) comes into play only after a plaintiff has already chosen the state of New York as his or her forum. Allowing the savings statute to apply to non-New York residents after they have already timely filed in a New York state or federal court consistent with CPLR 202 obviously does not encourage plaintiffs to forum shop in New York courts for favorable limitations periods. Indeed, federal courts sitting in New York will apply New York’s statute of limitations law, including CPLR 202, to all non-federal claims. See Wultz v. Bank of China Ltd., No. 11 Civ. 1266, 2013 WL 1641179, at *1-2 (S.D.N.Y. Apr. 16, 2013) (applying CPLR 202 to pendent Chinese law tort claim); see also Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 709 (2d Cir. 2002) (“As all parties acknowledge, it is well established that in diversity cases state law governs not only the limitations period but also the commencement of the limitations period.”); Architectronics, Inc. v. Control Sys., Inc., 935 F. Supp. 425, 431 (S.D.N.Y. 1996) 28 “Each court that has considered the scope of § 205(a) has concluded that an action filed in another state is not a ‘prior action’ within the meaning of the statute, including two courts of the Appellate Division [and numerous federal district courts].” McCleod, 2012 WL 5210945, at *3. This Court has “chosen not to disturb” this holding in its ruling in Lehman Bros., Inc. v. Hughes Hubbard & Reed, LLP, 92 N.Y.2d 1014 (1998) (when it affirmed an Appellate Division decision holding that a prior suit commenced in a Texas state court was not a ‘prior action’ within the meaning of 205(a)). Id. at *2-3. 40 (“New York [federal] courts treat statutes of limitations as part of the forum’s procedure, and therefore apply New York statutes of limitations . . . .”); Bournias v. Atl. Mar. Co., 220 F.2d 152, 154 (2d Cir. 1955) (same); In re Coudert Bros. LLP, 673 F.3d 180, 189-90 (2d Cir. 2012) (noting that “[t]o mitigate against abusive statute-of-limitations shopping, some states have created mechanisms- binding on the local federal courts . . . that discriminate against claims accruing out of state” and rejecting the notion that “New York’s anti-forum shopping borrowing statute would be applied to defeat the claim of a party that did not shop for New York as a forum” (emphasis added)). CPLR 205(a)’s remedial safeguard against the capricious, unfair deprivation of a valuable claim for a plaintiff, like Norex, who has already proven itself diligent, must be respected. The First Department advanced precisely the “narrow construction” of CPLR 205(a) that this Court has cautioned against and the First Department’s cramped interpretation of the interplay of CPLR 202 and CPLR 205(a) should not be allowed to stand. II. NOREX’S CLAIMS ARE TIMELY UNDER 28 U.S.C. § 1367(D) Even if CPLR 205(a) did not save Norex’s non-federal claims, the federal savings statute, 28 U.S.C. § 1367(d), does. See Jinks, 538 U.S. at 459; Goldstein, 13 N.Y.3d at 522-23. Section 1367(d) provides in relevant part: 41 The period of limitations for any claim asserted under subsection (a) [i.e. any supplemental non-federal claim] . . . shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period. Id. (emphases added). The U.S. Supreme Court held in Jinks that § 1367(d)’s tolling “must be applied by all state courts.” Jinks, 538 U.S. at 459. The Supreme Court provided the following rationale in support of its holding: Prior to enactment of § 1367(d), [plaintiffs] had the following unattractive options: (1) They could file a single federal-court action, which would run the risk that the federal court would dismiss the state-law claims after the limitations period had expired; (2) they could file a single state-law action, which would abandon their right to a federal forum; (3) they could file separate, timely actions in federal and state court and ask that the state- court litigation be stayed pending resolution of the federal case, which would increase litigation costs with no guarantee that the state court would oblige. Section 1367(d) replaces this selection of inadequate choices with the assurance that state-law claims asserted under § 1367(a) will not become time barred while pending in federal court. Jinks, 538 U.S. at 463-64 (emphases added). In accord with the Supreme Court’s mandate, this Court has recognized the applicability of § 1367(d) in New York in cases where New York’s savings statute, CPLR 205(a), does not apply. See Goldstein, 13 N.Y.3d at 522-23. 42 Notwithstanding this controlling U.S. Supreme Court and Court of Appeals precedent, the First Department held that the thirty-day tolling provision of § 1367(d) does not apply in New York. More specifically, the First Department held that “because New York law provides for a tolling period of six months (see CPLR 205[a]),” it falls within the exception to § 1367(d) for cases where “State law provides for a longer tolling period.” See Norex Petroleum Ltd. v. Blavatnik, 105 A.D.3d 659, 660 (1st Dep’t 2013). But the First Department also held that CPLR 205(a)’s six-month grace period does not apply to Norex’s claims. Id. This is plainly incorrect. The clear legislative purpose of § 1367(d) is to give litigants the longest possible tolling period, but no less than a thirty-day tolling period. As a result of the First Department’s erroneous holding, Norex was deprived its rightful day in court. Because the First Department’s interpretation of § 1367(d) is contrary to the plain language, purpose, and legislative history of the statute, and is in direct conflict with Court of Appeals and U.S. Supreme Court precedent, it must be reversed. A. The First Department’s Holding that § 1367(d) Does Not Apply to Norex’s Claims Is Contrary to the Plain Language, Purpose and Legislative History of § 1367(d) It is well-established that federal courts are courts of limited jurisdiction and generally exercise jurisdiction only where there is a federal claim 43 or diversity of citizenship between the parties. See 28 U.S.C. § 1331; 28 U.S.C. §1332. But because a single transaction or occurrence may give rise to multiple legal claims, including federal and non-federal claims, federal courts have historically exercised “pendent” or “ancillary” jurisdiction over supplemental non- federal claims. See United Mine Workers v. Gibbs, 383 U.S. 715, 724 (1966). Recognizing the difficulty that may befall plaintiffs if their non- federal claims became stale while pending in federal court, Congress enacted § 1367(d). Section 1367(d) tolls the statute of limitations for non-federal claims during the pendency of the federal action and for an additional thirty-day period after the federal action’s conclusion to ensure that plaintiffs, like Norex, are not prejudiced by initially bringing all of their claims (federal and non-federal) in federal court. The procedural history of Norex’s claims serves as a case in point. Norex properly filed suit in federal court in February 2002, almost immediately after Defendants reduced Norex’s majority interest in a valuable oil field to 20%, the misappropriation of which forms the basis of Norex’s complaint. Norex’s complaint asserted a federal civil RICO cause of action against Defendants.29 Norex amended its complaint in December 2005 to include supplemental non- 29 Norex amended its complaint in December 2005 to include BP PLC. 44 federal claims under Federal Rule of Civil Procedure 15(c), which allows those claims to relate back to the filing of the original complaint. Based on the intervening U.S. Supreme Court decision in Morrison v. National Australia Bank, Ltd., the Second Circuit held that civil RICO claims do not apply extraterritorially and dismissed Norex’s federal claim. With the federal claim dismissed as a threshold matter of RICO’s territorial application, and without any resolution of the merits of its non-federal claims, Norex re-filed in New York state court in order to get its day in court. Under §1367(d), Norex’s non-federal claims were tolled while pending in federal court. The plain language of 1367(d) makes clear that the tolling period in the federal savings statute “shall” apply “unless State law provides for a longer tolling period.” 28 U.S.C § 1367(d) (emphasis added).30 Here, based on its erroneous interpretation of the interplay of CPLR 202 and CPLR 205(a), the First Department held that CPLR 205(a) did not apply and thus did not “provide for a longer tolling period.” And yet the First Department held that because CPLR 30 “Where a statute is plain on its face, we need only apply it in accordance with its meaning.” People v. Walker, 81 N.Y.2d 661, 666 (1993); see also Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (holding that in “interpreting a statute a court should always turn first to one, cardinal canon before all others. . . courts must presume that a legislature says in a statute what it means and means in a statute what it says there”). 45 205(a) nominally provides for a longer tolling period (six months instead of thirty days), § 1367(d) does not apply in New York. The First Department’s erroneous construction clearly defeats the purpose of § 1367(d). The qualification in § 1367(d) that the federal savings statute applies “unless State law provides for a longer tolling period” ensures only that § 1367(d) does not deprive litigants of a more favorable tolling period. But where operation of state law does not afford a longer tolling period, the thirty-day tolling rule of § 1367(d) must be applied. The First Department’s interpretation of § 1367(d) also runs contrary to the statute’s legislative history.31 Congress enacted § 1367(d) on the recommendation of the Federal Courts Study Committee.32 Congress stated that the “purpose [of § 1367(d)] is to prevent the loss of claims to statutes of limitations where state law might fail to toll the running of the period of limitations while a 31 This Court may consider the legislative history of § 1367(d) for purposes of statutory interpretation. See Sheehan v. New York State Dep’t of Transp., 18 N.Y.3d 61, 65 (2011) (looking to legislative history of the statute to support plain language interpretation). 32 The House of Representatives Committee on the Judiciary expressly thanked Professors Thomas Mengler, Thomas Rowe and Stephen Burbank “for their considerable efforts in connection with the Subcommittee’s subsequent revisions of the section.” H.R. Rept. No. 101- 734, at 27 n.11 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6876. Professors Mengler, Rowe, and Burbank submitted an amicus brief in support of Norex’s Motion for Leave, in which they characterized the First Department’s reading of § 1367(d) as an “intolerable Catch-22” that “robs the valid federal statute of all its intended preservative effect” and “subverts the purpose of § 1367(d).” Amici Curiae Br. of Rowe, Burbank & Mengler at 2-3. 46 supplemental claim was pending in federal court.” H.R. Rept. No. 101-734, at 30 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6876 (emphasis added). Here, the First Department erroneously held that state law failed to toll the statute of limitations. Congress clearly intended for § 1367(d) to apply in exactly the circumstances of this case. The First Department’s decision, which renders § 1367(d) inapplicable in New York, directly contravenes Congressional intent. B. The First Department’s Holding that § 1367(d) Does Not Apply to Norex’s Claims Is Contrary to Controlling Court of Appeals and U.S. Supreme Court Precedent The First Department’s decision conflicts with this Court’s decision in Goldstein, which held that § 1367(d) applies to toll the statute of limitations for supplemental claims even if New York’s state savings clause, CPLR 205(a), does not apply. See Goldstein, 13 N.Y.3d at 522-23. Petitioners in Goldstein had challenged the Empire State Development Corporation (ESDC)’s exercise of eminent domain power over their homes. Id. at 517. After initially timely filing and then having their case dismissed in federal court, petitioners re-filed their supplemental non-federal claim in state court within CPLR 205(a)’s six-month grace period. Id. at 518-19. Respondent contended that because petitioners’ pendent claim was governed by Eminent Domain Procedure Law (“EDPL”) 207, which requires a party to seek review of an ESDC determination within thirty days in state court, CPLR 205(a) did not apply to save 47 petitioners’ claims. According to the respondent, the action was therefore time- barred, notwithstanding that petitioners originally filed their pendent EDPL claim in federal court within the thirty days prescribed by EDPL 207. The Court rejected this argument and held that CPLR 205(a) applied to save the petitioners’ non- federal claim. Id. Significantly, in holding that the application of CPLR 205(a) did not improperly impair the “Legislature’s comprehensive plan for prompt adjudication of [condemnation] determinations,” this Court reasoned that “it is not in the main the availability of CPLR 205(a) that has delayed this condemnation, but the availability of a federal forum.” Id. at 522. In so holding, this Court made clear that “even without a state tolling provision, petitioners would have had the right under federal law to recommence their unadjudicated pendant state law claim in state court at the federal action’s conclusion (28 U.S.C. § 1367(d)).” Id. at 522-23 (citation in original) (emphasis added). This Court concluded that not only did the “vitally important” remedial purpose of CPLR 205(a) prevent the EDPL’s displacement of 205(a), but also that binding federal law would mandate the same result even if 205(a) did not apply. Accordingly, the Court reasoned, respondents should not “cavil about the frustration of the state legislative design.” Id. at 522. Thus, the First Department’s 48 construction of § 1367(d) is in direct conflict with this Court’s holding in Goldstein. The First Department’s decision is also contrary to the U.S. Supreme Court’s decision in Jinks, 538 U.S. at 459. In Jinks, the Supreme Court squarely held that § 1367(d)’s tolling rule “must be applied by state courts.” Id. at 459. Norex did exactly what Congress envisioned § 1367(d) would enable plaintiffs to do: Norex properly filed claims (federal and non-federal) in federal court without the risk “that the federal court would dismiss the [unadjudicated] state-law claims after the limitations period had expired.” Id. And Norex should not be punished, as Respondents contend, for properly-albeit, as it turned out, “fruitlessly”- pursuing its claims in federal court. 33 33 The First Department’s decision requires the prudent plaintiff to file duplicative protective actions in state court. Plaintiffs, faced with the equally unattractive options of forgoing a federal forum, forsaking one set of claims entirely, or risking dismissal of their pendent non-federal claims as untimely, will now “feel compelled to file concurrent [protective] actions in state court” in order to preserve their right to litigate their non-federal claims. See Karen N. Moore, The Supplemental Jurisdiction Statute: An Important But Controversial Supplement To Federal Jurisdiction, 41 Emory L.J. 31, 64 (1992). And yet, as this Court has recognized, “avoiding duplicative, lengthy, and expensive trials” is in “the public interest.” People v. Lane, 56 N.Y.2d 1, 8 (1982). 49 C. Norex’s Claims Were Timely Filed Under § 1367(d) 1. Section 1367(d) Tolled Norex’s Supplemental Non-Federal Claims While Pending in Federal Court and for an Additional 30 Days After the Federal Action’s Conclusion Norex’s supplemental non-federal claims are timely under 28 U.S.C. § 1367(d). Section 1367(d) tolls claims through the “federal action’s conclusion.” Goldstein, 13 N.Y.3d at 522. In federal court, if an appeal is taken as of right, the action’s conclusion is marked by the issuance of the circuit court of appeals’ mandate. See Fed. R. App. P. 41 advisory committee’s note (1998 Amendments) (“A court of appeals’ judgment or order is not final until issuance of the mandate; at that time the parties’ obligations become fixed.”). Therefore, § 1367 suspends the statute of limitations until thirty days after the issuance of the federal appellate court’s mandate if appeal is taken as of right. See, e.g. Turner v. Kight, 406 Md. 167, 189 (Md. 2008).34 As the Second Circuit has expressly held, the “issuance of the mandate is an event of considerable institutional significance.” United States v. Rivera, 844 F.2d 916, 921 (2d Cir. 1988). Until the mandate issues, the court of appeals’ decision is not final, and the court retains jurisdiction to amend its opinion 34 Indeed, numerous courts have held that claims are “pending” in federal court for the purposes of § 1367(d) for the entire federal appellate process (where an appeal is taken as of right). See, e.g., Kendrick v. City of Eureka, 98 Cal. Rptr. 2d 153, 157 (Ct. App. 2000); Kendrick v. City of Eureka, No. C-95-0424-VRW, 1997 WL 338544, at *1 (N.D. Cal. June 10, 1997); Lucas v. Muro Pharm., Inc., No. 944052, 1994 WL 878820, at *2-3 (Mass. Super. Dec. 2, 1994). 50 or judgment, including reversing its earlier decision to affirm dismissal. See id.; see also United States v. Young, 657 F.3d 408, 412 (6th Cir. 2011) (noting that appellate court’s jurisdiction over the case did not terminate until the issuance of the mandate); Baker v. McNeil, 439 F. App’x. 786, 788 (11th Cir. 2011) (noting, in context of whether a motion was timely under a Florida statute, that the issuance of mandate concludes the direct appeal); Winnett v. Saline County Jail, 372 F. App’x. 688, 690 (8th Cir. 2010) (explaining “issuance of mandate formally marks end of appellate jurisdiction”). Indeed, in Norex’s case, the Second Circuit issued an amended decision three months after its initial decision, which it was free to do because it had not yet issued its mandate. See Norex Petroleum Ltd. v. Access Indus., Inc., 622 F.3d 148 (2d Cir. Sept. 28, 2010), amended by 631 F.3d 29 (2d Cir. Dec. 8, 2010). That is precisely why, in determining when a prior federal action concluded for purposes of applying CPLR 205(a), the First Department held that “usually the issuance of the mandate by [a Federal Court of Appeals] means that the litigation has come to an end.” Greenblatt v. New York Sur. Co., 246 A.D.2d 385, 386 (1st Dep’t 1998) (citation omitted) (emphasis added). 51 Here, Norex’s non-federal claims are timely because they were re- filed in state court within thirty days of the Second Circuit’s mandate, marking the federal action’s conclusion.35 The federal dismissal here was effected when the Second Circuit issued its mandate on July 26, 2011, months after Norex filed the instant action on March 7, 2011. And no party contends, nor could credibly maintain, that Norex’s filing in federal court was untimely under any applicable statute of limitations. As Goldstein recognized, Norex “had every right to litigate [its] federal claim[] in federal court and to include in [its] federal action” supplemental non-federal causes of action. 13 N.Y.3d at 523. Norex should suffer no prejudice for properly pursuing its non-federal claims in federal court. See Jinks, 538 U.S. at 459. Because the Second Circuit stayed the issuance of its mandate at Norex’s request-a request which put Defendants on notice that Norex planned to re-file its non-federal claims across the street in state court-Norex was able to file its state court action both within the period allowed by CPLR 205(a) and well before the expiration of § 1367(d)’s thirty-day tolling period. 35 Indeed, Norex, which at the time was pursuing certiorari in the U.S. Supreme Court, requested that the Second Circuit stay issuance of the mandate “to avoid potentially triggering the running of relevant ‘savings action statutes’ which permit Norex to refile [the] matter in an alternative forum.” (R. 1304). 52 2. Norex’s Supplemental Non-Federal Claims Are Timely Under the Plain Language of the Statute Even if one were to accept Respondents’ erroneous position that § 1367(d) only tolls the statute of limitations through issuance of the appellate decision, and that this Court should ignore the Second Circuit’s deliberate decision to stay its mandate to enable Norex to file a Petition for Certiorari while preserving its ability to re-file its non-federal claims in state court-Norex’s supplemental claims were still timely filed by the plain terms of § 1367(d). The statute states in relevant part: “The period of limitations for any claim asserted under subsection (a) [i.e. any supplemental non-federal claim] . . . shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.” 28 U.S.C. § 1367(d) (emphases added). As numerous courts have held, “[t]he ‘shall be tolled’ language is read to mean that the state limitations period is suspended -i.e., the clock is stopped and the time is not counted-while the federal court is considering the claim and for thirty days after the claim is dismissed.” E.g., Goodman v. Best Buy, Inc., 755 N.W.2d 354, 359 (Minn. Ct. App. 2008) (emphasis added).36 36 As the Bonifield court explained, “[§1367(d)] tolling may be analogized to a clock that is stopped and then restarted,” and that “whatever period of time that remained when the clock is stopped is available when the clock is restarted.” Bonifield v. County of Nevada, 114 Cal. Rptr. 53 This interpretation of the statute-where § 1367(d) operates to “suspend” the statute of limitations while the claims are pending in federal court- best “comports with the plain meaning of the statute.” In re Vertrue Inc. Mktg. & Sales Prac. Litig., 712 F. Supp. 2d 703, 724 (N.D. Ohio 2010), aff’d, 719 F.3d 474 (6th Cir. 2013). It is the only interpretation that would apply in all cases and thus respects the statute’s use of the imperative formulation, “shall be tolled”37-“by essentially ‘stopping the clock’ during the pendency of the federal lawsuit, all claims receive a tolling benefit and the statute is uniformly applied.” Id.; see also City of Los Angeles v. County of Kern, 154 Cal. Rptr. 3d 122, 134 (Ct. App. 2013), appeal pending (holding that § 1367(d) suspends the statute of limitations for claims pending in federal court, which is the “natural interpretation” of the statute). 2d 207, 211 (Ct. App. 2002); Turner v. Kight, 406 Md. 167 (2008) (same); Oleski v. Dep’t of Pub. Welfare, 822 A.2d 120, 126 (Pa. Commw. Ct. 2003) (same); Pye v. NuAIRE, Inc., No. A12- 0734, 2012 WL 6652618 (Minn. Ct. App. Dec. 24, 2012) (same). 37 As Maryland’s highest court explained in Turner, “Tolling, if defined [as merely “extending” the statute of limitations after dismissal], would occur only when a particular condition is met- expiration of the limitations period during the pendency of the Federal action,” but “the tolling provided for in § 1367(d) is not conditional. The statute says that the period of limitations ‘shall be tolled’ and thus requires tolling in every case.” Turner, 406 Md. at 180. Therefore, the only interpretation that gives effect to the plain language of § 1367(d) is that the statute of limitations is suspended while the claim is pending in federal court and for an additional thirty days after dismissal. Id.; Goodman, 755 N.W.2d at 359. 54 Here, Norex initiated its federal action on February 26, 2002,38 only a month after Defendants reduced its majority equity interest in the valuable Yugraneft oil field. Because the federal court action began just a few weeks into the running of any applicable limitations period, the balance of time “that remained when the clock stopped” on the applicable limitations period is more than sufficient here. Regardless of whether the clock restarted in September 2010 (when the Second Circuit first issued its decision), December 2010 (when the Second Circuit issued its amended decision), or July 2011 (when the Second Circuit issued its mandate), Norex still had months left on the “clock” to re-file its non-federal claims in New York state court pursuant to § 1367(d). 3. Norex’s New York Claims Are Timely Under the Relation- Back Doctrine Norex’s supplemental non-federal claims were timely filed in New York state court in March 2011 under § 1367(d). Norex’s timely-filed New York state court action gave notice to Defendants of the “transactions, occurrences, or series of transactions or occurrences, to be proved,” CPLR 203(f)-the very same 38 Norex amended its complaint in December 2005 to include its supplemental non-federal claims. Those claims arose out of the same transactions and occurrences as the claims asserted in the original federal pleading and relate-back to the filing of the February 2002 complaint for statute of limitations purposes. Fed. R. Civ. P. 15(c); Krupski v. Crosta Crociere S.p.A, 560 U.S. 538, 130 S. Ct. 2485, 2489 (2010) (“Rule 15(c) of the Federal Rules of Civil Procedure governs when an amended pleading ‘relates back’ to the date of a timely filed original pleading and is thus itself timely even though it was filed outside an applicable statute of limitations.”). 55 transactions and occurrences that gave rise to its earlier, timely-filed action in federal court across the street. Norex then amended its complaint as of right in June 2011. Because all of the claims in the amended complaint clearly arise from the same facts and occurrences as the claims timely filed in Norex’s initial state court complaint, they are timely under the relation-back doctrine embodied in CPLR 203(f). The crux of the relation-back doctrine is notice. Pendleton v. City of New York, 44 A.D.3d 733, 736 (2d Dep’t 2007) (“The sine qua non of the relation- back doctrine is notice.”); see also 390 W. End Assocs. v. Nelligan, 35 A.D.3d 306 (1st Dep’t 2006); Secore v. Allen, 27 A.D.3d 825 (3d Dep’t 2006); United States Fid. & Guar. Co. v. Delmar Dev. Partners, LLC, 22 A.D.3d 1017 (3d Dep’t 2005).39 Where the allegations in the original complaint gave notice to the defendant of the facts and occurrences that give rise to the new claim, the new claim may be asserted in an amended complaint even if it would otherwise be barred by the applicable statute of limitations. See Schutz v. Finkelstein Bruckman 39 Likewise, the crux of the federal relation-back doctrine is notice. See Fed. R. Civ. P. 15(c); Schiavone v. Fortune, 477 U.S. 21, 31 (1986) (“The linchpin [of the federal relation-back doctrine] is notice, and notice within the limitations period.”). 56 Wohl Most & Rothman, 247 A.D.2d 460, 460-61 (2d Dep’t 1998). 40 The new claim “relates back” to the date on which the original complaint was filed. Here, given that Norex’s supplemental non-federal claims were timely filed in state court under both CPLR 205(a) and § 1367(d), and Norex’s additional non-federal claims (under New York law) clearly arise from the same facts and occurrences, Norex is entitled under the relation-back doctrine to assert the New York state law claims at issue in its amended complaint. Indeed, because Defendants acknowledge that the New York state law claims are “repetitive” of Norex’s other supplemental non-federal claims (R. 186), which were timely filed, there can be no doubt that Norex satisfied CPLR 203(f)’s statutory purpose of notice. 40 New York state courts consistently apply the relation-back doctrine to allow a plaintiff to assert a new claim in an amended complaint where the defendant had notice of the facts and occurrences that gave rise to the new claim. E.g., Jennings-Purnell v. Jennings, 107 A.D.3d 513, 514 (1st Dep’t 2013); 39 Coll. Point Corp. v. Transpac Capital Corp., 27 A.D.3d 454, 455 (2d Dep’t 2006); Bank of New York v. Midland Ave. Dev. Co., 248 A.D.2d 342, 343-44 (2d Dep’t 1998). 57 CONCLUSION This Court should reverse the decision of the First Department and remand to the New York Supreme Court so that Norex can, at long last, proceed with discovery in pursuit of its meritorious legal claims. Dated: New York, New York November 12, 2013 SIMPSON THACHER & BARTLETT LLP By:/s/ Barry R. Ostrager Barry R. Ostrager Mary Kay Vyskocil Jonathan M. Weiss Hiral D. Mehta SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue New York, New York 10017 Telephone: (212) 455-2000 bostrager@stblaw.com mvyskocil@stblaw.com hmehta@stblaw.com -and- 1999 Avenue of the Stars, 29th Floor Los Angeles, California 90067 jweiss@stblaw.com Attorneys for Plaintiff-Appellant Norex Petroleum Limited