Newman v. Republic of Bulgaria

MOTION to Dismiss for Lack of Jurisdiction . Document

S.D.N.Y.January 17, 2017

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK EDWARD NEWMAN, Plaintiff, v. THE REPUBLIC OF BULGARIA, Defendant. : : : : : : : : : : CIVIL ACTION NO. 16-CV-9768 NOTICE OF MOTION AND MOTION TO DISMISS PLEASE TAKE NOTICE that pursuant to Rules 12 (b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure, Defendant Republic of Bulgaria (“Defendant”), by and through undersigned counsel, hereby moves this Court to dismiss the Complaint of Plaintiff Edward Newman (“Plaintiff”) for lack of personal and subject matter jurisdiction over the Defendant who is entitled to immunity from suit as to the claims asserted and for such other and further relief as the Court deems appropriate. A Memorandum of Law in Support of Defendant’s Motion to Dismiss, exhibits attached thereto, and a form of Order accompany this Motion. WHEREFORE, Defendant respectfully requests that this Court enter an ORDER DISMISSING Plaintiff’s Complaint. Respectfully submitted, FOLEY HOAG LLP /s / Christina Hioureas Christina Hioureas FOLEY HOAG LLP 1540 Broadway, 23rd Floor New York, NY 10036 Tel: 646 927 5507 Fax: 646 927 5599 Email: chioureas@foleyhoag.com Case 1:16-cv-09768-JFK Document 4 Filed 01/17/17 Page 1 of 2 CERTIFICATE OF SERVICE I, Christina Hioureas, certify that on this 17th day of January 2017, I electronically filed the foregoing document with the United States District Court for the Southern District of New York using the CM/ECF system, and, I will serve a copy of this document by U.S. mail to Plaintiff’s counsel: Thomas Joseph Foley Foley Griffin, LLP 666 Old Country Rd., Suite 305 Garden City, NY 11530 Phone: 516-741-1110 Email: tom@foleygriffin.com Dated: January 17, 2017 /s / Christina Hioureas Christina Hioureas Case 1:16-cv-09768-JFK Document 4 Filed 01/17/17 Page 2 of 2 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK EDWARD NEWMAN, Plaintiff, v. THE REPUBLIC OF BULGARIA, Defendant. : : : : : : : : : : : : CIVIL ACTION NO. 16-CV-9768 ECF CASE : MEMORANDUM IN SUPPORT OF MOTION TO DISMISS THE COMPLAINT Christina G. Hioureas FOLEY HOAG LLP 1540 Broadway, 23rd Floor New York, NY 10036 (646) 927-5507 chioureas@foleyhoag.com New York State Bar No. 5111794 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 1 of 26 i Table of Contents I. INTRODUCTION ...........................................................................................................1 II. PROCEDURAL HISTORY .............................................................................................3 III. STATEMENT OF FACTS ..............................................................................................3 IV. ARGUMENT ..................................................................................................................6 A. This Court Lacks Subject Matter And Personal Jurisdiction Because The Republic Of Bulgaria Is Immune From Suit Under The Foreign Sovereign Immunities Act. ................................................................................................... 6 B. No Exception To Bulgaria’s Sovereign Immunity Applies. .................................. 8 1. Section 1605(a)(2) Does Not Apply Because Plaintiff’s Claims Are Not Based on Any Commercial Activity by Bulgaria. ............................... 8 2. The Non-Discretionary Tort Exception Set Forth in §1605(a)(5) Does Not Apply Because No Tort is Actually Alleged or Actually Occurred. ................................................................................................ 13 V. CONCLUSION ............................................................................................................. 19 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 2 of 26 ii Table of Authorities Cases Af-Cap, Inc. v. Republic of Congo, 326 F. Supp. 2d 128 (D.D.C. 2004) ...................................................................................... 11 Anglo-Iberia Underwriting Mgmt. Co. v. P.T. Jamsostek (Persero), 600 F.3d 171 (2d Cir. 2010) .................................................................................................. 13 Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989) ...............................................................................................................6 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ......................................................................................................... 9, 10 Bank of N.Y. v. Yugoimport, 745 F.3d 599 (2d Cir. 2014) ................................................................................................. 14 Basso v. Miller, 40 N.Y.2d 233 (1976) ..................................................................................................... 15, 17 Cargill Int’l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012 (2d Cir. 1993) ............................................................................................. 6, 7 Compania del Bajo Caroni v. Bolivarian Rep. of Venezuela, 556 F. Supp. 2d 272 (S.D.N.Y. 2008), aff’d, 341 Fed. App’x. 722 (2d Cir. 2009) ...................7 Cusack v. Peter Luger, Inc., 909 N.Y.S.2d 532 (N.Y. App. Div. 2d Dep’t 2010) ........................................................ 14, 15 Di Ponzio v. Riordan, 89 N.Y.2d 578 (1997) ..................................................................................................... 15, 17 Early v. Hilton Hotels Corp., 73 A.D.3d 559 (N.Y. App. Div. 1st Dep’t 2010) ............................................................... 2, 14 Englewood v. Socialist People’s Libyan Arab Jamahiriya, 773 F.2d 31 (3d Cir. 1985) ................................................................................................... 11 Filetech S.A. v. Fr. Telecom S.A., 304 F.3d 180 (2d Cir. 2002) ................................................................................................. 14 Flatow v. Islamic Republic of Iran, 76 F. Supp. 2d 16 (D.D.C. 1999) .................................................................................... 11, 13 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 3 of 26 iii Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006) ................................................................................................. 13 Gordon v. American Museum of Natural History, 67 N.Y.2d 836 (N.Y. 1986) .................................................................................................. 15 Haley Paint Co. v. E.I. du Pont de Nemours & Co., 775 F. Supp. 2d 790 (D. Md. 2011) ........................................................................................9 Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004) ................................................................................................. 11 Kensington Int’l, Ltd. v. Itoua, 505 F.3d 147 (2d Cir. 2007) ............................................................................. 2, 6, 10, 12, 13 Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. N.Y. 1984) ................................................................................... 13 n.5 MacArthur Area Citizens Ass’n v. Republic of Peru, 809 F.2d 918 (D.C. Cir. 1987) ........................................................................................ 18, 19 OBB Personverkehr AG v. Sachs, 136 S. Ct. 390 (2015) ....................................................................................................... 6, 12 Olsen ex rel. Sheldon v. Gov’t of Mexico, 729 F.2d 641 (9th Cir. 1984) ................................................................................................ 18 Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748 (2d Cir. 1998) ............................................................................................... 7, 9 Reiss v. Societe Centrale du Groupe des Assurances Nationales, 235 F.3d 738 (2d Cir. 2000) ................................................................................................. 10 Robinson v. Gov’t of Malaysia, 269 F.3d 133 (2d Cir. 2001) .......................................................................................... passim S&S Mach. Co. v. Masinexportimport, 802 F. Supp. 1109 (S.D.N.Y. 1992) .......................................................................... 11, 12, 13 Salvador v. New York Botanical Garden, 71 A.D.3d 422 (N.Y. App. Div. 1st Dep’t 2010) ................................................................... 14 Saudi Arabia v. Nelson, 507 U.S. 349 (1993) ...............................................................................................................6 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 4 of 26 iv Schmidt v. Martec Indus. Corp., Civil Action, No. 07-5020, 2009 U.S. Dist. LEXIS 79315 (E.D.N.Y. Sept. 3, 2009) ................... 9, 10, 10 n.4 Simon v. Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016) ................................................................................ 1, 9, 10, 15 Sloane v. Costco Wholesale Corp., 49 A.D.3d 522 (N.Y. App. Div. 2d Dep’t 2008) ............................................................. 14-15 Tanton v. Lefrak SBN Ltd. Partnership, Case No. 106601/08, 2013 N.Y. Misc. LEXIS 261 (N.Y. Sup. Ct. Jan. 23, 2013), aff’d, 110 A.D.3d 441 (N.Y. App. Div. 1st Dep’t 2013)......................................................... 14 Thai Lao Lignite (Thailand) Co. v. Gov’t of the Lao People’s Democratic Republic, Case No. 10 Civ. 5256 (KMW), 2011 U.S. Dist. LEXIS 103378 (S.D.N.Y. Sept. 13, 2011)...................................................................................................... 12 United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797 (1984) ............................................................................................................. 18 Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230 (2d Cir. 2002) ...................................................................................................7 Statutory Authorities 22 U.S.C. §254a .................................................................................................................... 2 n.1 28 U.S.C. §1330 .................................................................................................................... 3, 19 28 U.S.C. §1330(a) .....................................................................................................................6 28 U.S.C. §1330(b) .....................................................................................................................6 28 U.S.C. §1441(d) .....................................................................................................................3 28 U.S.C. §1602 et seq. ..................................................................................................... 1, 2 n.1 28 U.S.C. §1603(d) .....................................................................................................................9 28 U.S.C. §1604 ...................................................................................................................... 3, 6 28 U.S.C. §1605(a)(2) ..................................................................................................... 8, 10, 13 28 U.S.C. §1605(a)(5) ........................................................................................................... 3, 13 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 5 of 26 v Treaties Vienna Convention on Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3327, 500 U.N.T.S. 95 ....................................................................................... 2 n.1 Rules and Regulations Fed. R. Civ. P. 12(b)(1) ......................................................................................................... 3, 19 Fed. R. Civ. P. 12(b)(2) ......................................................................................................... 3, 16 N.Y. Civ. Prac. L. & R. §301 .............................................................................................. 10 n.4 Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 6 of 26 1 I. INTRODUCTION Defendant the Republic of Bulgaria (“Bulgaria”) submits this Memorandum in support of its motion pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2) to dismiss this action filed by plaintiff Edward Newman (“Mr. Newman” or “Plaintiff”). The Court should dismiss this action because this Court lacks subject matter and personal jurisdiction over Bulgaria pursuant to the Foreign Sovereign Immunities Act, 28 U.S.C. §1602 et seq. (1976) (“FSIA”). Bulgaria, a sovereign State, is immune from suit in this Court unless an exception set out in the FSIA applies. 28 U.S.C. §§1604-1605. The Complaint attempts to ground jurisdiction on two of those exceptions: the commercial activity exception in FSIA §1605(a)(2) and the non- discretionary tort exception in §1605(a)(5). Plaintiff’s invocation of those exceptions is inappropriate for two main reasons. First, the Complaint’s allegations are on their face insufficient under both exceptions to overcome Bulgaria’s jurisdictional immunity. Second, even if the Complaint’s allegations were sufficient to sustain Plaintiff’s threshold burden, the permissible evidence supporting this motion to dismiss under Rules 12(b)(1) and (2) demonstrates that, as both a factual and a legal matter, there is no jurisdiction here. With regard to Plaintiff’s reliance on §1605(a)(2), the Complaint fails to identify any commercial activity in which Bulgaria is engaged at all, much less any commercial activity related to Plaintiff’s alleged tripping in front of the Bulgarian diplomatic residence at 325 E. 86th Street, New York, New York (the “Residence”). It merely asserts, in conclusory fashion, that Bulgaria engages in commercial activity and transacts business in New York City and in the United States. Dkt. No. 1, Ex. A, ¶¶ 26-29 (“Complaint”). Such conclusory allegations are insufficient to survive a motion to dismiss for lack of jurisdiction under the FSIA. Simon v. Republic of Hungary, 812 F.3d 127, 148 (D.C. Cir. 2016). Plaintiff also failed to adequately plead that the conduct on which Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 7 of 26 2 his claim is based-Bulgaria’s use of the Residence-has the required “significant nexus” to commercial activity. Kensington Int’l, Ltd. v. Itoua, 505 F.3d 147, 155 (2d Cir. 2007). Plaintiff’s failure to connect the Residence with any commercial activity is unsurprising because it is not used for or in connection with any commercial activity. As Plaintiff admits, see Complaint ¶ 10, the Residence houses diplomatic personnel who are part of the Permanent Mission of the Republic of Bulgaria to the United Nations (the “Mission”) and Consulate General. Bulgaria conducts no commercial activity there, nor are the residents engaged in commercial activity on behalf of Bulgaria or otherwise. Declaration of Lachezara Stoeva (“Stoeva Decl.”) ¶¶ 5-6; Declaration of Angel Angelov (“Angelov Decl.”) ¶ 4.1 In short, the Residence serves solely to enable Bulgaria to carry out diplomatic, i.e., inherently governmental functions. Plaintiff’s attempt to shoehorn his claim into the non-discretionary tort exception of the FSIA §1605(a)(5) fares no better. That section only provides jurisdiction over claims that state a tort cause of action. Bulgaria’s alleged conduct with respect to the incident of which Plaintiff complains was not tortious. On the contrary, a property owner can only be held liable for an injury caused by a condition on the abutting sidewalk if it created or had notice of the condition. Early v. Hilton Hotels Corp., 73 A.D.3d 559, 561 (N.Y. App. Div. 1st Dep’t 2010). Plaintiff offers only conclusory allegations that Bulgaria created or had notice of the alleged condition, which are insufficient to support jurisdiction. See Robinson v. Gov’t of Malaysia, 269 F.3d 133, 146 (2d Cir. 2001). In any case, Bulgaria did not create or have notice of the alleged condition prior to or when the injury occurred. Stoeva Decl. ¶¶ 8-9. 1 By submitting these declarations, neither the declarants nor the Republic of Bulgaria waive any immunity for the Republic of Bulgaria, the Permanent Mission of the Republic of Bulgaria or themselves under international law, the Foreign Sovereign Immunities Act (28 U.S.C. §1602 et seq.), the Vienna Convention on Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3327, 500 U.N.T.S. 95, or 22 U.S.C. §254(a) et seq., or any other applicable laws. Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 8 of 26 3 Even assuming arguendo that Bulgaria’s alleged actions could be construed as tortious, §1605(a)(5) would still not provide jurisdiction because the exception cannot be applied to claims based on discretionary conduct. 28 U.S.C. §1605(a)(5). The decision of a sovereign State to purchase property for the purpose of carrying out foreign relations, and the conduct of the State in carrying out or implementing that decision, are discretionary. For these reasons, neither of the exceptions to sovereign immunity that Plaintiff relies upon apply and Bulgaria is immune from this Court’s jurisdiction. 28 U.S.C. §1604. This Court lacks both subject matter jurisdiction over Plaintiff’s claims and personal jurisdiction over Bulgaria. 28 U.S.C. §1330; Fed. R. Civ. P. 12(b)(1), 12(b)(2). Accordingly, the action must be dismissed. II. PROCEDURAL HISTORY On September 16, 2016, Mr. Newman commenced this action in the Supreme Court of New York for New York County, Index No. 157794/2016.2 On December 19, 2016, Bulgaria timely exercised its right to remove Plaintiff’s action to this Court pursuant to 28 U.S.C. §1441(d). III. STATEMENT OF FACTS The Complaint alleges that Plaintiff tripped on an auxiliary pole extending from a canopy on the sidewalk in front of a diplomatic residence of the Republic of Bulgaria. Plaintiff asserts two causes of action: negligence “based upon the tortious conduct exception to FSIA” and negligence “based upon the commercial activity exception to the FSIA.” Complaint ¶¶ 10-24; ¶¶ 25-37. Plaintiff does not allege any facts regarding any commercial activity in which Bulgaria was involved or any commercial activity regarding the diplomatic residence. 2 Mr. Newman previously brought a case based on similar facts against the Republic of Bulgaria in the Supreme Court for the County of New York on May 19, 2016, Index No. 154256/2016. The parties stipulated to discontinue the action without prejudice on September 9, 2016. Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 9 of 26 4 The Residence is used solely to house members of the diplomatic and administrative staff of Bulgaria’s Mission and the office of the Consulate General. Stoeva Decl. ¶ 5; Angelov Decl. ¶ 4.3 Neither Bulgaria nor any resident of the property is engaged in any commercial activity, either on behalf of Bulgaria or on an individual basis. Stoeva Decl. ¶ 6; Angelov Decl. ¶ 4. Plaintiff alleges that on August 10, 2015, Bulgaria utilized the Residence for the purpose of housing diplomatic personnel employed at the Permanent Mission of the Republic of Bulgaria to the United Nations. Complaint ¶ 10. Plaintiff claims to have been injured on August 10, 2015 when he tripped and fell over an approximately five-foot-long “metal brace/support pole” allegedly extending from the canopy of the building and onto the sidewalk in front of the premises. Id. ¶¶ 13-14, 20-21. Plaintiff’s allegations include: 14. That the foregoing support brace was laying across the sidewalk in the path of pedestrians. 15. That the extention [sic] of the foregoing support brace onto the sidewalk and into the path of pedestrians constituted a dangerous and trap-like condition. 16. That the defendant, People’s Republic of Bulgaria, caused or created the foregoing dangerous and trap-like condition. 17. That the defendant, People’s Republic of Bulgaria, had notice of the foregoing dangerous and trap-like condition. 18. That the defendant, People’s Republic of Bulgaria, failed to remedy the foregoing dangerous and trap-like condition. Id. But Plaintiff provides no specific facts as to how Bulgaria allegedly caused or had notice of the condition. Plaintiff also does not assert that the alleged tort was based upon activity outside the exercise or performance or the failure to exercise or perform a discretionary function. 28 USC §1605(a)(5)(A); Complaint ¶¶ 1-37. As the accompanying declarations demonstrate, Bulgaria did 3 As detailed below, on a motion to dismiss for lack of jurisdiction under the FSIA, it is appropriate for the Court to consider evidence beyond the pleadings if resolution of a factual issue may result in a dismissal. Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 10 of 26 5 not create the condition Plaintiff alleges existed or have notice of the alleged condition prior to or at the time Plaintiff was allegedly injured. Stoeva Decl. ¶¶ 8-9; Angelov Decl. ¶ 5. The front entrance to the Residence is “covered by a canopy that extends outward from the building and covers the sidewalk in front of the entrance.” Stoeva Decl. ¶ 7. Two posts extend from the canopy to the curb and attached to them were two auxiliary poles extending at about a 30-degree angle to provide additional support. Id. These poles “did not extend into the pedestrian path between the curb and the building.” Id. Additionally, Bulgaria did not uninstall or disconnect any of the support posts or auxiliary poles on or before August 10, 2015 to create the alleged condition. Id. ¶ 8. Nor did it direct anyone to do so. Id. Ms. Lachevara Stoeva, Deputy Permanent Representative of the Mission and Mr. Angel Angelov, Second Secretary, both resided at the Residence at 328 E. 86th Street, New York, NY at the time the alleged events occurred. Stoeva Decl. ¶ 5; Angelov Decl. ¶ 4. Mr. Angelov and Ms. Stoeva served as Chargé d’affaires a.i. of the Mission while the Ambassador was unavailable, from July 21 to August 8, 2015 and from August 9 to September 3, 2015, respectively. Angelov Decl. ¶ 5; Stoeva Decl. ¶ 9. As part of standard protocol, Bulgaria has a policy of regularly monitoring and maintaining the outside of the Residence and any building maintenance issues were to be reported to the Chargé. Stoeva Decl. ¶ 8-9; Angelov Decl. ¶ 5. During the relevant period, approximately 15-20 people lived in the Residence. Stoeva Decl. ¶ 9. On the day of the alleged accident, August 10, 2015, and the weeks prior to it, neither Mr. Angelov nor Ms. Stoeva witnessed or received reports of a defect in front of the Residence. Stoeva Decl. ¶ 9; Angelov Decl. ¶ 5. On the evening of August 11, 2015, Bulgaria received a Notice of Violation and Hearing from the City of New York notifying Bulgaria of an auxiliary pole on the curb in front of the Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 11 of 26 6 Residence and requesting its removal within 41 days of the date of the notification, i.e. by September 21, 2015. Stoeva Decl. ¶ 10, Ex. A. Ms. Stoeva promptly acted. The next morning, she instructed her administrative staff to engage a contractor to remove the poles. Stoeva Decl. ¶ 11. The two auxiliary poles were removed that very same day. Id. IV. ARGUMENT A. This Court Lacks Subject Matter And Personal Jurisdiction Because The Republic Of Bulgaria Is Immune From Suit Under The Foreign Sovereign Immunities Act. Bulgaria moves to dismiss the Complaint for lack of subject matter and personal jurisdiction under the Foreign Sovereign Immunities Act. The FSIA “provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country.” OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 393 (2015) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989)); 28 U.S.C. §1330(a). Section 1604 of the FSIA states the bedrock presumption of foreign sovereign immunity: Subject to existing international agreements to which the United States is a party at the time of enactment of this Act, a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter. 28 U.S.C. §1604. The jurisdictional immunity provided in §1604 is unqualified; if none of the specific exceptions enumerated in §§1605-1607 apply, there is no subject matter jurisdiction and courts must dismiss the case. Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); Amerada Hess, 488 U.S. at 434-35. Moreover, personal jurisdiction over a foreign State exists only if there is both subject matter jurisdiction and valid service of process. 28 U.S.C. §1330(b); Cargill Int’l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir. 1993) (“Thus, if none of the exceptions to immunity applies, the court lacks both subject matter jurisdiction and personal jurisdiction.”). Once a defendant presents a prima facie case that it is a foreign State, the presumption of immunity attaches, and the plaintiff bears the burden of overcoming this presumption by proffering Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 12 of 26 7 evidence that an exception to immunity applies. Kensington Int’l Ltd., 505 F.3d at 153. If a plaintiff fails to meet its burden, its claim must be dismissed. Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230, 241-42 (2d Cir. 2002). When a defendant State moves for dismissal of a claim for lack of subject matter jurisdiction, it may challenge “either the legal or factual sufficiency of the plaintiff’s assertion of jurisdiction, or both.” Robinson, 269 F.3d at 140. Both are challenged here. In making a factual challenge, a defendant may rely on evidence outside the pleadings in support of its motion without converting it into one for summary judgment. Id. (defendant may present facts to disprove the existence of jurisdiction). If resolution of a factual issue may result in the dismissal of the complaint for want of jurisdiction, the court “must look beyond the pleadings and consider competent evidence submitted by the parties, including any affidavits.” Compania del Bajo Caroni v. Bolivarian Rep. of Venezuela, 556 F. Supp. 2d 272, 277 (S.D.N.Y. 2008), aff’d, 341 Fed. App’x. 722 (2d Cir. 2009); see also Robinson, 269 F.3d at 140-41; Cargill Int’l S.A., 991 F.2d at 1019. Courts should not allow a foreign State’s sovereign immunity to be abrogated on the basis of conclusory allegations alone. See Robinson, 269 F.3d at 146 (the purpose of the FSIA would be subverted if plaintiffs could obtain jurisdiction over a sovereign merely “by inserting vague and conclusory allegations of tortious conduct in their complaints.”). “[T]he goal of the FSIA [is] to enable a foreign government to obtain an early dismissal when the substance of the claim against it does not support jurisdiction.” Id. The FSIA codifies immunity not only from liability, but also from the burdens of litigation. See Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748, 756 (2d Cir. 1998). Bulgaria is indisputably a foreign State under the FSIA. See Complaint ¶ 2 (“the defendant, People’s Republic of Bulgaria, is a foreign sovereign country . . .”). Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 13 of 26 8 As demonstrated below, Mr. Newman’s allegations do not establish any exception to Bulgaria’s sovereign immunity. Accordingly, the Court lacks subject matter and personal jurisdiction over Bulgaria, and the Complaint must be dismissed. B. No Exception To Bulgaria’s Sovereign Immunity Applies. Neither of the two exceptions to immunity on which Plaintiff seeks to rely-the non- discretionary tort exception, 28 USC §1605(a)(5), and the commercial activity exception, 28 USC §1605(a)(2)-apply in this case. First, Plaintiff fails to allege facts to support either exception. Second, even assuming arguendo that the Complaint were not inadequate on its face, the evidence submitted by Bulgaria shows definitively that neither exception is satisfied. 1. Section 1605(a)(2) Does Not Apply Because Plaintiff’s Claims Are Not Based on Any Commercial Activity by Bulgaria. The Court lacks personal and subject matter jurisdiction because the commercial activity exception of the FSIA does not apply. That exception applies only where: the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. 28 U.S.C. §1605(a)(2). Plaintiff’s attempt to base jurisdiction on this exception fails because (a) the Complaint alleges neither any specific commercial activity in which Bulgaria has engaged nor the required nexus between any commercial activity and Plaintiff’s claim, and (b) Bulgaria’ ownership and use of the Residence to house diplomatic personnel is neither itself a commercial activity nor done in connection with any commercial activity. (a) Plaintiff’s conclusory allegations are insufficient to abrogate Bulgaria’s sovereign immunity pursuant to the commercial activity exception. For the commercial activity exception to sovereign immunity to apply, a complaint must contain more than mere conclusory statements that a defendant has engaged in commercial Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 14 of 26 9 activity. Simon, 812 F.3d at 148 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (citations omitted) (When jurisdiction is challenged under Rule 12(b)(1), a court’s “inquiry is similar to that of Rule 12(b)(6), under which ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice’”). The pleading standard set out by the Supreme Court in Iqbal, 556 U.S. at 679, by which conclusory allegations are insufficient to maintain a claim, applies to a complaint’s allegations regarding jurisdiction. See Schmidt v. Martec Indus. Corp., Civil Action No. 07-5020, 2009 U.S. Dist. LEXIS 79315, at *6-9 (E.D.N.Y. Sept. 3, 2009) (holding that the court lacked jurisdiction because the complaint contained only conclusory statements and “the court is not bound by conclusory statements, without supporting facts”); see also Haley Paint Co. v. E.I. du Pont de Nemours & Co., 775 F. Supp. 2d 790, 798-99 (D. Md. 2011) (holding that the Twombly/Iqbal pleading standard applies to the grounds for jurisdiction). Otherwise, any plaintiff could force a sovereign to bear the burden of litigating a case simply by including the magic words “commercial activity” in its complaint. This would be contrary to the purpose of the FSIA, which codifies immunity not only from liability, but also from the “burdens of litigation.” Rein, 162 F.3d at 756; see also Robinson, 269 F.3d at 146 (holding that conclusory statements are an insufficient basis for abrogating sovereign immunity). The Complaint contains merely conclusory allegations of commercial activity without specifying any nexus between the claim and commercial activity. The FSIA defines “commercial activity” as “either a regular course of commercial conduct or a particular commercial transaction or act.” 28 U.S.C. §1603(d). First, Plaintiff does not allege any specific “regular course of commercial conduct” or “particular commercial transaction or act” in which Bulgaria has engaged on the premises in question. In fact, Plaintiff makes no specific allegations regarding commercial activity whatsoever, but instead, merely alleges that Bulgaria “was engaged in commercial activity Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 15 of 26 10 in” and “transacted business in” the United States and in New York City. Complaint ¶¶ 26-29. No statements could be more conclusory. Plaintiff has “allege[d] precisely zero facts concerning what commercial activity, if any,” Bulgaria carried out. Simon, 812 F.3d at 148. The exception, therefore, does not apply. Id.; Schmidt, 2009 U.S. Dist. LEXIS 79315, at *8-9.4 Second, the Complaint is facially deficient because 28 U.S.C. §1605(a)(2) also requires that plaintiff’s claim be “based upon” the alleged commercial activity or on an act performed “in connection” therewith. The Second Circuit has held that this language requires a “significant nexus” between the commercial activity “upon which the exception is based and a plaintiff’s cause of action.” Kensington Int’l, Ltd., 505 F.3d at 155 (quoting Reiss v. Societe Centrale du Groupe des Assurances Nationales, 235 F.3d 738, 747 (2d Cir. 2000)). The Complaint contains no well-pleaded allegation of a nexus between Bulgaria’s purported commercial activity and the present action. It alleges only that Bulgaria erected the canopy in front of the Residence “in connection with” unidentified commercial activity in the United States and in New York City. Complaint ¶ 30. This is another wholly inadequate allegation, which merely parrots the language of the exception. See Iqbal, 556 U.S. at 681. The Complaint makes no specific factual allegations regarding how the canopy or the Residence are connected to any purported commercial activity. Because the Complaint fails to make more than conclusory allegations of a significant nexus between the claim and any commercial activity, the exception cannot apply. Kensington Int’l, Ltd., 505 F.3d at 155; Simon, 812 F.3d at 148. 4 In Schmidt, the court faced the analogous question of whether it had personal jurisdiction over a defendant under N.Y. Civ. Prac. L. & R. §301, which requires a defendant to be domiciled or conduct business in New York. It held that the plaintiffs had not made a prima facie showing of jurisdiction where the “complaint merely assert[ed], in conclusory fashion, that [the defendant] does business in New York,” and the plaintiffs failed to “allege any facts or proffer evidence suggesting that [the defendant] is ‘engaged in a continuous and systematic course of business in New York.’” Schmidt, 2009 U.S. Dist. LEXIS 79315, at *8-9. Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 16 of 26 11 (b) The commercial activity exception cannot be used to abrogate Bulgaria’s immunity under the FSIA because the evidence shows that Bulgaria does not use the Residence for or in connection with commercial activity. The commercial activity exception is inapplicable because the evidence shows that Bulgaria does not use the Residence for or in connection with commercial activity and even assuming that it did, there is no factual connection between any such activity and the alleged tort. The Residence is owned by Bulgaria and is used solely to house diplomatic personnel that represent Bulgaria. Stoeva Decl. ¶ 5; Angelov Decl. ¶ 4. Bulgaria does not collect rent from these personnel in exchange for housing, and the Residence houses no one else. Stoeva Decl. ¶ 5. Bulgaria does not use the Residence for any commercial activity whatsoever; nor do the resident diplomatic personnel engage in commercial activity on behalf of Bulgaria elsewhere. Id. ¶ 6. Under the FSIA, commercial and governmental (i.e., sovereign) activity are distinguished, with immunity applying to sovereign conduct. Kato v. Ishihara, 360 F.3d 106, 110 (2d Cir. 2004). Diplomacy is a quintessentially sovereign activity. S&S Mach. Co. v. Masinexportimport, 802 F. Supp. 1109, 1112 (S.D.N.Y. 1992); Flatow v. Islamic Republic of Iran, 76 F. Supp. 2d 16, 22-23 (D.D.C. 1999). A State’s provision of housing to its diplomatic personnel is part and parcel of carrying out diplomacy, as it enables them to perform their day-to-day work. The use of real property to house diplomatic staff is, therefore, not commercial activity. Englewood v. Socialist People’s Libyan Arab Jamahiriya, 773 F.2d 31, 37 (3d Cir. 1985) (a State’s use of a building as a residence for the Chief of its Mission to the United Nations was not commercial activity); Flatow, 76 F. Supp. 2d at 22-23 (Iran’s use of properties to house various diplomatic personnel “does not render them commercial for purposes of the FSIA”); see also Af-Cap, Inc. v. Republic of Congo, 326 F. Supp. 2d 128, 131 (D.D.C. 2004) (Congo’s embassy property could not be considered as being used for commercial activity). Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 17 of 26 12 These holdings are confirmed by the legislative history of the FSIA, which states that both “embassies and related buildings could not be deemed to be property used for a ‘commercial’ activity.” S&S Mach. Co., 802 F. Supp. at 1112 (quoting 1976 U.S. Code Cong. & Admin News 6604, 6628) (emphasis added); see also Thai Lao Lignite (Thailand) Co. v. Gov’t of the Lao People’s Democratic Republic, Case No. 10 Civ. 5256 (KMW), 2011 U.S. Dist. LEXIS 103378, at *8 (S.D.N.Y. Sep. 13, 2011) (“As a general matter, assets used exclusively to support diplomatic or consular functions are not considered assets used for a ‘commercial activity.’”). Bulgaria’s use of the Residence is not commercial activity because it is used solely to support the work of Bulgaria’s Mission and the Consulate General. Stoeva Decl. ¶¶ 5-6; Angelov Decl. ¶ 4. The facts also show that Plaintiff’s claim fails because it lacks the required “significant nexus” to purported commercial activity by Bulgaria, even assuming Bulgaria engaged in any. See Kensington Int’l, Ltd., 505 F.3d at 155. The FSIA inquiry as to whether the alleged conduct is “based upon” the specific commercial activity “first requires a court to identify the particular conduct on which the plaintiff’s action is based . . . by looking to the basis or foundation for a claim, those elements that, if proven, would entitle a plaintiff to relief.” OBB Personverkehr AG, 136 S. Ct. at 395 (internal quotation marks, citations, and alterations omitted). The particular conduct on which Plaintiff’s claim is based is Bulgaria’s installation of a canopy at the Residence, its alleged negligence in connection therewith, and Plaintiff’s alleged accident on August 10, 2015. See Complaint ¶¶ 3-23, 30. None of this conduct bears any relation to any purported commercial activity by Bulgaria. For the reasons set out above, Bulgaria’s use of the Residence (including the canopy) does not constitute commercial activity. Additionally, the Complaint makes clear that Plaintiff was not at the Residence for any commercial purpose, alleging only that Plaintiff “was lawfully walking in front of the premises located at 328 E. 86th Street, New Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 18 of 26 13 York, New York.” Complaint ¶ 19. Plaintiff’s claim is not based on any commercial activity carried out by Bulgaria in the United States. 28 U.S.C. §1605(a)(2). Moreover, because the Residence is used solely to provide housing for diplomatic personnel, whose work is inherently non-commercial, see S&S Mach. Co., 802 F. Supp. at 1112; Flatow, 76 F. Supp. 2d at 22-23, Bulgaria’s ownership and use of the Residence is not carried out “in connection with” any commercial activity. 28 U.S.C. §1605(a)(2). The commercial activity exception of the FSIA does not apply. Kensington, 505 F.3d at 155; Anglo-Iberia Underwriting Mgmt. Co. v. P.T. Jamsostek (Persero), 600 F.3d 171, 178 (2d Cir. 2010) (commercial activity exception held not to apply where a State did not engage in commercial activity, and assuming arguendo it did, claim was not “in connection with” such alleged activity); Garb v. Republic of Poland, 440 F.3d 579, 586-87 (2d Cir. 2006) (commercial activity exception held not to apply where claim based on sovereign activity was not done in connection with any commercial activity). 2. The Non-Discretionary Tort Exception Set Forth in §1605(a)(5) Does Not Apply Because No Tort is Actually Alleged or Actually Occurred. Section 1605(a)(5) of the FSIA, often referred to as the “non-discretionary tort exception,” also provides no basis for jurisdiction over Bulgaria.5 The section creates an exception to immunity for cases in which “money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortuous act or omission of that foreign state and of any official or employee of that foreign state while acting within the scope of his office or employment.” 28 U.S.C. §1605(a)(5). It also creates an exception to the exception; a foreign State retains immunity from “any claim based upon the exercise or 5 The commercial activity and the tortious activity exceptions are mutually exclusive-a court cannot find that both apply. Letelier v. Republic of Chile, 748 F.2d 790, 795 (2d Cir. N.Y. 1984). Neither applies here. Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 19 of 26 14 performance or the failure to exercise or perform a discretionary function regardless of whether the discretion is abused.” Id. The non-discretionary tort exception thus cannot be used to obtain jurisdiction over a foreign State where either (a) the State’s relevant acts or omissions were not tortious, or (b) that conduct was discretionary. Robinson, 269 F.3d at 142-43. To determine whether tortious conduct has occurred will often require a court to inquire into substantive state law. Id. at 143. That such an inquiry mirrors the inquiry a court would make on the merits does not obviate the need to make this determination for jurisdictional purposes. Id.; see also Filetech S.A. v. Fr. Telecom S.A., 304 F.3d 180, 182-83 (2d Cir. 2002). (a) The non-discretionary tort exception cannot apply because Bulgaria’s conduct was not tortious. Because the alleged conduct occurred in New York, see Complaint ¶¶ 3-9, New York law governs whether that alleged conduct was tortious. See Bank of N.Y. v. Yugoimport, 745 F.3d 599, 608-09 (2d Cir. 2014). Plaintiff has alleged only negligence. See Complaint at First and Second Causes of Action. To state a claim for negligence under New York law, a plaintiff must allege facts showing that the defendant owed him a duty, that the defendant breached that duty, that the breach proximately caused the plaintiff’s injury, and that the plaintiff sustained damages. Salvador v. New York Botanical Garden, 71 A.D.3d 422, 423 (N.Y. App. Div. 1st Dep’t 2010). To hold a property owner liable for a defect on an abutting sidewalk, a plaintiff must demonstrate the defendant either created the defect that caused his accident, or had actual or constructive notice of that defect. Hilton Hotels Corp., 73 A.D.3d at 561; Tanton v. Lefrak SBN Ltd. Partnership, Case No. 106601/08, 2013 N.Y. Misc. LEXIS 261, *20-21 (N.Y. Sup. Ct. Jan. 23, 2013), aff’d, 110 A.D.3d 441 (N.Y. App. Div. 1st Dep’t 2013); see also Cusack v. Peter Luger, Inc., 909 N.Y.S.2d 532, 533 (N.Y. App. Div. 2d Dep’t 2010); Sloane v. Costco Wholesale Corp., Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 20 of 26 15 49 A.D.3d 522, 522-23 (N.Y. App. Div. 2d Dep’t 2008). A property owner can also be held liable only for reasonably foreseeable accidents. Di Ponzio v. Riordan, 89 N.Y.2d 578, 583 (1997); Basso v. Miller, 40 N.Y.2d 233, 241 (1976). A defendant has actual or constructive notice of a defect only when it is visible and apparent and existed for a sufficient length of time prior to the accident so that it could have been discovered and corrected. Gordon v. American Museum of Natural History, 67 N.Y.2d 836, 838 (N.Y. 1986); Cusack, 909 N.Y.S.2d at 533 (finding no constructive notice because defendant followed a policy for inspecting the area and no one had reported a dangerous or hazardous condition). The Complaint recites the elements of negligence, asserting that Bulgaria created and had notice of the alleged defect, Complaint ¶¶ 16-17, but alleges no specific facts regarding how or when Bulgaria purportedly created the defect, or the manner and time at which it allegedly had notice of the alleged defect. The Complaint’s assertions consist of the sort of conclusory language that is insufficient to support the applicability of an exception to sovereign immunity, see Simon, 812 F.3d at 148, and as to which the Second Circuit has cautioned that courts should not subject a foreign sovereign to suit, see Robinson, 269 F.3d at 146. In any event, Bulgaria did not cause the alleged condition to which Plaintiff attributes his accident. The Complaint alleges that the “support brace” over which Plaintiff allegedly tripped “was laying across the sidewalk in the path of pedestrians.” Complaint ¶ 14. If this were true, it was not a condition created by Bulgaria. It would, moreover, have undoubtedly been a condition that was visible to Plaintiff. Prior to August 12, 2015, the canopy in front of the Residence was supported by two main poles, each of which was reinforced by a single smaller auxiliary pole. Stoeva Decl. ¶ 7. The auxiliary poles ran nearly vertically from the main pole to the sidewalk, and Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 21 of 26 16 did not lay across the sidewalk or in the path of pedestrians. Id. Bulgaria had taken no action to disconnect the auxiliary poles as of August 10, 2015, the date of the alleged accident. Id. ¶ 8. Nor did Bulgaria have actual or constructive knowledge of the defect Plaintiff alleges existed at or before the time of Plaintiff’s alleged incident. Ms. Stoeva, Deputy Permanent Representative of the Permanent Mission of the Republic of Bulgaria to the United Nations, from 9 August to September 3, 2015 served as Chargé d’affairs a.i. of the Mission while the Ambassador/Permanent Representative was out of the country. Mr. Angelov, Second Secretary, served as Chargé prior to this from July 21 to August 8, 2015. They both also lived at the Residence as of the date of the alleged events. Stoeva Decl. ¶ 9; Angelov Decl. ¶ 5. Neither saw or was notified of any defect on the sidewalk abutting the Residence prior to or at the time of Plaintiff’s alleged injury. Stoeva Decl. ¶ 9; Angelov Decl. ¶ 5. In their respective roles as Chargé, any building maintenance issues at the Residence were to be reported to them. Stoeva Decl. ¶ 9; Angelov Decl. ¶ 5. None were. No one reported any defect in front of the Residence to either of them on or before Plaintiff’s alleged injury. Stoeva Decl. ¶ 9; Angelov Decl. ¶ 5. Moreover, the canopy that is the object of Plaintiff’s assertions covers the main entrance to the Residence, which housed around 15-20 individuals, as of the date of the alleged incident. Stoeva Decl. ¶ 9. If there were a brace laying across the sidewalk in the path of pedestrians for any substantial length of time prior to Plaintiff’s alleged accident, it would have been seen by one of the many individuals entering or exiting the Residence, who would have reported it to the relevant Chargé. In short, Bulgaria had no notice of the condition Plaintiff alleges at or prior to the occurrence of Plaintiff’s alleged accident. Had Bulgaria received such notice of a defect, it would have remedied the defect. When on the evening of August 11, 2015, the Mission received a Notice of Violation and Hearing from Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 22 of 26 17 the City of New York relating to a detached support pole in front of the Residence, it acted immediately. Id. ¶¶ 10-11. Evidencing that the City did not find the condition to be urgent, the notice provided that the condition had a “cure date” of September 21, 2015, allowing Bulgaria 41 days for remedy. Id. ¶ 10. Despite this extended period provided, Bulgaria acted immediately. Id. ¶ 11. The morning after Bulgaria received the notice, August 12, 2015, Ms. Stoeva directed her administrative staff to engage a contractor who uninstalled both support braces the same day. Id. Ms. Stoeva makes clear that Bulgaria reasonably maintained the abutting sidewalk. Id. ¶ 8. Therefore, even if Plaintiff did trip in front of the Residence, Bulgaria cannot be liable because such an accident was not reasonably foreseeable. Basso, 40 N.Y.2d at 241; Di Ponzio, 89 N.Y.2d at 583. The Second Circuit addressed an analogous claim under Rule 12(b)(1) in Robinson, 269 F.3d at 135, one of the few cases to address the non-discretionary tort exception. There, a plaintiff who alleged he slipped and fell on property owned by the defendant foreign State was required to show that the defendant had created, or had actual or constructive notice of, the condition that caused plaintiff’s injury-just as Plaintiff must show here. Id. at 135, 144-45. As is the case here, the plaintiff could offer no more than vague, conclusory allegations that the defendant had created or had notice of the relevant defect, while the evidence before the Court showed otherwise. The Second Circuit affirmed dismissal of the claim, holding that the plaintiff had “neither pleaded nor come forward with evidence sufficient to show that his claim is for a ‘tortious act or omission’ caused by” the defendant State. Id. at 146. The same result is required here. (b) The non-discretionary tort exception cannot apply because Bulgaria’s conduct was discretionary. Even if Plaintiff had properly alleged, or there was evidence of, tortious conduct by Bulgaria, the non-discretionary tort exception would not apply, because the conduct on which Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 23 of 26 18 Plaintiff seeks to base the exception was discretionary. 28 USC §1605(a)(5) provides that the exception to immunity set out in that paragraph “shall not apply to . . . any claim based on the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused.” Thus, for the exception to apply, the Court must determine that even if a tort occurred, the acts that led to it were “non-discretionary.” Robinson, 269 F.3d at 142. “[A]cts or omissions of a fundamentally governmental nature” are considered discretionary under §1605(a)(5). See MacArthur Area Citizens Ass’n v. Republic of Peru, 809 F.2d 918, 921 (D.C. Cir. 1987) (quoting Olsen ex rel. Sheldon v. Gov’t of Mexico, 729 F.2d 641, 645 (9th Cir. 1984)). The Supreme Court has held that discretionary conduct is that based on “decisions grounded in social, economic, and political policy.” Id. at 922 (quoting United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814 (1984)). It is not only these primary policy decisions that give rise to immunity, but also “decisions made in the execution or implementation of a discretionary policy or activity.” Id. at 922-23 (holding the purchase of a building and adoption of security arrangements to be part of discretionary conduct). Plaintiff fails to allege any non-discretionary conduct on the part of Bulgaria. Both of the causes of action asserted in his Complaint are premised on the decision of Bulgaria to purchase and maintain the Residence to house its diplomatic personnel. See Complaint ¶¶ 2-10, 24. The evidence submitted by Bulgaria confirms that the sole purpose of the residence is to house diplomatic personnel and enable the work of the Mission and office of the Consulate General. See Stoeva Decl. ¶¶ 5-6; Angelov Decl. ¶ 7. Decisions regarding the establishment of a mission representing a State at the United Nations and Consulate General, and regarding the manner in which they will function and be supported, are plainly “grounded in . . . political policy.” See Varig Airlines, 467 U.S. at 814. Section 1605(a)(5) thus cannot serve as a basis of jurisdiction Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 24 of 26 19 over Bulgaria. See MacArthur Area Citizens Ass’n, 809 F.2d at 922 (holding that it was “beyond serious question” that foreign sovereign’s decision to purchase and use a building in the District of Columbia to conduct foreign relations was discretionary conduct, and that the non-discretionary tort exception, therefore, cannot apply where that decision “undergirds the specific acts” of which the plaintiff complains). In sum, the conduct upon which Plaintiff seeks to hale Bulgaria into court into the United States does not constitute the tortious conduct required by §1605(a)(5). Even if it did, the actions that allegedly led to it are within the scope of discretionary conduct. For each of these reasons, Bulgaria’s sovereign immunity is not abrogated under § 1605(a)(5). V. CONCLUSION For the reasons set forth above, neither of the FSIA’s exceptions to sovereign immunity that Plaintiff invokes is applicable. Therefore, the Court lacks subject matter jurisdiction and personal jurisdiction over Bulgaria, and should dismiss this action with prejudice. Id.; 28 U.S.C. §1330; Fed. R. Civ. P. 12(b)(1), 12(b)(2). Respectfully submitted this seventeenth day of January, 2016. /s/ Christina Hioureas Christina Hioureas FOLEY HOAG LLP 1540 Broadway 23rd Floor New York, NY 10036 Tel: 646 927 5507 Fax: 646 927 5599 Email: chioureas@foleyhoag.com Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 25 of 26 20 CERTIFICATE OF SERVICE I, Christina Hioureas, certify that on this 17th day of January 2017, I electronically filed the foregoing document with the United States District Court for the Southern District of New York using the CM/ECF system, and, I will serve a copy of this document by U.S. mail to Plaintiff’s counsel: Thomas Joseph Foley Foley Griffin, LLP 666 Old Country Rd., Suite 305 Garden City, NY 11530 Phone: 516-741-1110 Email: tom@foleygriffin.com Dated: January 17, 2017 /s/ Christina Hioureas Christina Hioureas Case 1:16-cv-09768-JFK Document 4-1 Filed 01/17/17 Page 26 of 26 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK EDWARD NEWMAN, Plaintiff, v. CIVIL ACTION NO. 16-CV-9768 THE REPUBLIC OF BULGARIA, Defendant. DECLARA TION OF LACHEZARA STO E V A Pursuant to 28 U.S.C. §1746, I, Lachezara Stoeva, hereby declare and state as follows: 1. I am over eighteen years of age and am otherwise qualified to testify to the facts set forth below. All ofthe facts rendered herein are based upon my personal knowledge. 2. I ama citizen ofthe Republic ofBulgaria, and I reside in the United States as a diploma! serving as Deputy Pennanent Representative ofthe Permanent Mission ofthe Republic of Bulgaria to the United Nations. 3. I submit this affidavit in suppo1t ofthe motion to dismiss the claim raised against the Republic ofBulgaria in this case. By submitting this declaration, Ido not waive any immunity for the Republic of Bulgaria, the Permanent Mission of the Republic of Bulgaria or myselfunder international law, the Foreign Sovereign Immunities Act (28 U.S.C. § 1602 et seq.), the Vienna Convention on Diplomatic Relations and 22 U.S.C. §254a et seq., or any other applicable laws. Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 1 of 6 4. The Republic of Bulgaria is a foreign sovereign and asserts its immunity from suit under the Foreign Sovereign Immunities Act. 5. I currently reside at the diplomatic residence for the Republic ofBulgaria at 328 E. 86111 Street, New York, New York 10028. This building is used sol el y for the purpose of housing members ofthe diplomatic staff, ofthe administrative staffand the technical staffofthe Permanent Mission ofthe Republic ofBulgaria to the United Nations and the Consulate General ofthe Republic ofBulgaria in New York, and their families. Bulgaria does not collect rent from the staff, but they pay their own utilities. 6. The building serves no commercial purpose. Neither Bulgaria nor any representative of Bulgaria carries out commercial activities there. Residents ofthe building are not engaged in any commercial activity on behalf ofBulgaria. 7. The front entran ce to the building is covered by a canopy that extends outward from the building and covers the sidewalk in front of the entrance. The canopy is supported by two primary support posts installed near the curb. Each ofthe primary support posts had attached to it, a single auxiliary pole that further supported the structure. From that point, the auxiliary poles extended down to the sidewalk at roughly a 30-degree angle, attaching to the sidewalk ata point roughly 5 feet from the base of the primary suppott post. Each auxiliary pole extended away from the primary support post in a direction parallel to the curb and did not extend into the pedestrian path between the curb and the building. 8. The Mission has a policy of regularly monitoring and maintaining the outside of the building. The Mission did not uninstall or disconnect any ofthe suppott posts or auxiliary poles on or before August I O, 2015. Neither did it direct anyone else to do so. Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 2 of 6 9. In the period August 9 to September 3, 2015, I served as Chargé d'a_[faires a.i. ofthe Permanent Mission of the Republic ofBulgaria to the United Nations, while the Ambassador was out of the country. During this time, approximately, 15-20 people were residing in the building. In this role, any building maintenance issues were to be reported to me. However, no one repotted to me any defect in front of the building at 328 E. 861h Street, New York, New York 10028 on or befare August 10, 2015. 10. Upan returning from work al around 7:00 pm on August 11, 2015, 1 found a Notice of Violation and Hearing from the City ofNew York issued to the Republic of Bulgaria concerning an auxiliary pote on the curb in front of the building at 328 E. 861h Street. The notice provided that the condition had a "cure date" of September 21, 2015. Attached as Exhibit A is a true and correct copy ofthe notice titled Notice of Violation and Hearing. 11. I immediately acted upon the notice and on the morning of August 12, 2015 requested that a member of our administrative staff contacta contractor to address the issue. The contractor removed tite two auxiliary pales tltat same day on August 12, 2015. I declare under penalty ofpetjury under tite laws ofthe United States of America that the foregoing is true and correct to the best of my recollection. \Dated: January ,4:., 2017 Lachezara Stoeva Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 3 of 6 A Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 4 of 6 Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 5 of 6 Case 1:16-cv-09768-JFK Document 4-2 Filed 01/17/17 Page 6 of 6 Case 1:16-cv-09768-JFK Document 4-3 Filed 01/17/17 Page 1 of 2 Case 1:16-cv-09768-JFK Document 4-3 Filed 01/17/17 Page 2 of 2 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK EDWARD NEWMAN, Plaintiff, v. THE REPUBLIC OF BULGARIA, Defendant. : : : : : : : : : : : : CIVIL ACTION NO. 16-CV-9768 COMPENDIUM OF UNPUBLISHED AUTHORITIES Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 1 of 30 A. Schmidt v. Martec Indus. Corp., Civil Action No. 07-5020, 2009 U.S. Dist. LEXIS 79315 (E.D.N.Y. Sep. 3, 2009) B. Tanton v. Lefrak SBN Ltd. Partnership, Case No. 106601/08, 2013 N.Y. Misc. LEXIS 261 (N.Y. Sup. Ct. Jan. 23, 2013), aff’d 110 A.D.3d 441 (N.Y. App. Div. 2d Dep’t 2013) C. Thai Lao Lignite (Thailand) Co. v. Gov’t of the Lao People’s Democratic Republic, Case No. 10 Civ. 5256 (KMW), 2011 U.S. Dist. LEXIS 103378 (S.D.N.Y. Sep. 13, 2011) Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 2 of 30 A Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 3 of 30 Positive As of: January 11, 2017 2:19 PM EST Schmidt v. Martec Indus. Corp United States District Court for the Eastern District of New York September 3, 2009, Decided; September 3, 2009, Filed Civil Action No. 07-5020 Reporter 2009 U.S. Dist. LEXIS 79315 *; 2009 WL 2883071 KEVIN J. SCHMIDT and EVELINE J. SCHMIDT, Plaintiffs, -against- MARTEC INDUSTRIES CORP and LONGDA TECHNOLOGIES CO., LTD., Defendants. Counsel: [*1] For Plaintiffs: Stanley J. Sanders, Esq., Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C., Mineola, New York. For Defendants: Edward V. Schwendemann, Esq., Goldberg Segalla LLP, Mineola, New York. Judges: Denis R. Hurley, Senior United States District Judge. Opinion by: Denis R. Hurley Opinion MEMORANDUM & ORDER HURLEY, Senior District Judge: Kevin Schmidt ("Plaintiff" or "Schmidt") and Eveline Schmidt (collectively "Plaintiffs") commenced this diversity action to recover monetary damages from Martec Industrial Corporation ("Martec") and Longda Technologies Corporation, Ltd., (collectively "Defendants"), for an injury suffered by Schmidt while he was riding a bicycle allegedly containing components negligently designed, manufactured, distributed, and sold by Defendants. Presently before the Court is Martec's motion pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the complaint for lack of personal jurisdiction and Plaintiffs' cross-motion for discovery on the issue of jurisdiction or, in the alternative, for a hearing on the issue of personal jurisdiction. For the reasons stated herein, Martec's motion is denied, and Plaintiffs' cross-motion for discovery is granted. BACKGROUND On December 4, 2007, Plaintiffs [*2] instituted this product liability action, alleging that Defendants were negligent in designing, manufacturing, selling, and/or distributing the component product which injured Schmidt. (Compl. P 25.) According to the complaint, on or about June 10, 2006, Schmidt, a 52 year old triathlete, was severely injured while riding a bicycle in New York. The bicycle allegedly contained reinforced carbon aranid fiber forks designed, manufactured and/or sold by Martec, a Taiwanese company. (Compl. P 3, 20-25.) It is claimed that fractures and cracks in the reinforced aranid carbon fiber front fork of the bicycle was responsible for its sudden stopping and the catastrophic injuries that Schmidt sustained. (Compl. at PP 24-27.) The personal jurisdiction allegations which Plaintiffs set forth in their complaint against Martec may be summarized as follows: (1) Martec committed a tortuous act within the State of New York, (2) Martec regularly does, or solicits business in the State of New York, and (3) Martec received substantial revenue from goods used or consumed, or services rendered in the State of New York. (Compl. PP 5, 7, 9.) Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 4 of 30 Page 2 of 5 In support of its motion, Martec submits the affidavit of Ivy Lin, the [*3] assistant to the Vice President of Martec. Lin's affidavit states in toto: 1. I am the Assistant to the Vice President of Martec Industrial Corp. and a shareholder of Martec Industrial Corp. ("Martec"). Martec is a privately owned corporation, that is not publicly traded. Martec has five shareholders. Martec is the English name of the corporation. It has no offices in the United States. It does not distribute any of its products within the United States. It does not have any employees within the United States. 2. Martec is a corporation registered for correspondence in Taiwan. It has thirty-five employees in Taiwan. It sells products under the Martec name. Martec does not manufacture any bicycle forks or components. It does not advertise its products for sale within the United States. 3. Martec does not have any physical presence outside of Taiwan. Martec takes orders for bicycle components based upon design specifications provided by other entities including bicycle manufacturers. Martec utilizes forwarding companies in Hong Kong. These companies then ship these components to the entities that ordered them. 4. Long Da Technologies is a manufacturing entity located in China. It has approximately [*4] 1,000 employees in China. Long Da has no physical presence outside of China. Martec is the sole shareholder of Long Da. Long Da only ships products through Martec to Hong Kong. (Dkt. No. 32, at 5-6.) In opposing the motion, Plaintiffs submit three documents. The first document purports to be an invoice in the amount of $ 5,250.00 for "bicycle parts" shipped from Martec to "Kestrel" in California. The second and third documents respectively are, according to Plaintiffs, "an internet printout evidencing shipment of Martec's products to New York ports" and "a printout from Import Genius, Inc. evidencing shipment of Martec's products to New York and other geographical areas within the Continental U.S.," (Pls.' Mem in Opp. to Martec's Motion and in Supp. of Cross-motion ("Pls.' Mem") at 7), 1 which show that Martec's shipments are routed from Hong Kong to New York, and that "Martec knew that its products were to be used in New York and other U.S. location." (Id.; Dkt. No. 32-1, Exhibits A-C.) These documents indicate shipments of Martec products originating in Hong Kong and Singapore to destinations throughout the United States, including New York, California, Washington, and Illinois, in [*5] addition to various distribution centers located within the United States. Also, Plaintiffs point out that Lin's affidavit fails to address other pertinent factors such as the regularity in which Martec takes and processes orders for bicycle components, with whom it contracts, where it negotiates such orders, and the level of solicitation Martec engages in, if any. DISCUSSION I. Standard On a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of establishing jurisdiction over the defendant. See Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Nevertheless, the plaintiff need only make a prima facie showing of jurisdiction until such time as an evidentiary hearing is held. See Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242 (2d Cir. 2007) ("'In order to survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists.'") (quoting Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir. 2006)); [*6] Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990); Hoffritz for Cutlery v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). "Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Metro. Life, 84 F.3d at 566. A plaintiff may rely also on affidavits, in addition to pleadings, to meet its burden of a prima facie showing. See In re Tamoxifen Citrate Antitrust Litig., 262 F. Supp. 2d 17, 21 (E.D.N.Y. 2003) (citing Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)). A court is not limited to the four corners of the complaint on a Rule 12(b)(2) motion. Sills v. The Ronald Reagan Presidential Found., Inc., 2009 U.S. Dist. LEXIS 44774, 2009 WL 1490852, * 5 (S.D.N.Y. May 27, 2009). Where, as here, no evidentiary hearing has been held, the court must view the pleadings in the light most favorable to the plaintiff, see id; when evidence is presented, "doubts are resolved in plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc., v. Petra Bank, 989 F.2d 76, 79-80 (2d 1 The Court notes that none of these documents are authenticated. In addition, no explanation is provided as to how the information purported to be shown in the latter two documents was gathered. 2009 U.S. Dist. LEXIS 79315, *2 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 5 of 30 Page 3 of 5 Cir. 1993); accord Bohn v. Bartels, 620 F. Supp. 2d 418, 424 (S.D.N.Y. 2007). However, the court [*7] is not bound by conclusory statements, without supporting facts. Jazini v. Nissan Motor Co, Ltd., 148 F.3d 181, 185 (2d Cir. 1998); see also Ashcroft v. Iqbal, U.S. , 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868 (2009) (courts considering a motion to dismiss should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth[;] [w]hile legal conclusions can provide the framework of a complaint, they must be supported by factual allegations."). II. Personal Jurisdiction Initially it should be noted that "New York law governs personal jurisdiction over nondomiciliaries in a diversity action brought in a district court sitting in New York." Guccione v. Harrah's Marketing Services Corp., 2009 U.S. Dist. LEXIS 65388, 2009 WL 2337995, at *3, (S.D.N.Y. July 29, 2009). "Under New York law, there are two bases for personal jurisdiction over out-of-state defendants: (1) general jurisdiction pursuant to N.Y. C.P.L.R. § 301, and (2) long-arm jurisdiction pursuant to N.Y. C.P.L.R. § 302." Blakeman v. The Walt Disney Co., 613 F. Supp. 2d 288, 301 (E.D.N.Y. 2009). Plaintiffs maintain that Martec is subject to jurisdiction pursuant to both N.Y. C.P.L.R. 301 and N.Y. C.P.L.R. 302(a)(3). [*8] (See Pls.' Mem. at 4-8; note 2 infra). The Court shall consider each basis in turn. A. General Jurisdiction Under CPLR 301 Under New York law, a defendant is subject to general personal jurisdiction in New York if they are a New York domiciliary or is deemed to be "doing business" in the State of New York. N.Y. C.P.L.R. § 301. "A foreign defendant is doing business in New York if it is engaged in continuous, permanent, and substantial activity in New York." Guccione, 2009 U.S. Dist. LEXIS 65388, 2009 WL 2337995, at *3 (internal quotations omitted) (citing Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990)). "When determining whether a foreign corporation is doing business in New York, courts consider factors including: (1) the existence of an office in New York; (2) the solicitation of business in New York; (3) the presence of bank accounts or other property in New York and (4) the presence of employees or agents in New York." Guccione, 2009 U.S. Dist. LEXIS 65388, 2009 WL 2337995, at *3. (citing Landoil, 918 F.2d at 1043). Neither the allegations in the complaint nor the documents submitted by Plaintiffs provide a basis for concluding that Plaintiffs have sustained their burden of making a prima facie [*9] case that Martec does business in New York. The complaint merely asserts, in conclusory fashion, that Martec does business in New York. Plaintiffs do not allege any facts or proffer evidence suggesting that Martec is "engaged in a continuous and systematic course of business in New York." Stutts v. De Dietrich Group, 465 F. Supp. 2d 156, 161 (E.D.N.Y. 2006) (internal citations omitted). Indeed, according to the Lin affidavit, Martec has no offices or employees in New York and does not advertise its products in the United States; in fact, it has no physical presence outside of Taiwan. Plaintiffs offer no facts to the contrary. Given the absence of factual allegations sufficient for even an inference that Martec is present in New York under C.P.L.R. 301, Plaintiffs have not met their burden of establishing a prima facie showing of jurisdiction. B. Long Arm Jurisdiction Under CPLR 302 C.P.L.R. § 302(a), New York's long-arm statute, provides, in pertinent part, that [A] court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent: (1) transacts any business within the state or contracts anywhere to supply goods or services in the state; or (2) [*10] commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or (3) commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or (4) owns, uses or possesses any real property situated within the state. N.Y. C.P.L.R. § 302(a). New York's long-arm statute does not extend to the limits of federal due process. See In re DES Cases, 789 F. Supp. 552, 569 (E.D.N.Y. 1992) (stating the section was "not intended to reach the limits of long arm jurisdiction allowed under the federal constitution"). 2009 U.S. Dist. LEXIS 79315, *6 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 6 of 30 Page 4 of 5 Plaintiffs rely upon CPLR 302(a)(3). (Pls' Mem. at 6.) 2 Accordingly, the Court shall limit its discussion to that provision. To establish a prima facie showing of jurisdiction [*11] under CPLR 302(a)(3), plaintiffs must show that (1) Martec committed a tortious act outside of New York that serves the basis for their claim; (2) the act caused injury in New York; (3) Martec should have foreseen that its conduct would have consequences in New York; and (4) Martec derives substantial revenue from interstate or international commerce. See Merck Eprova AG v. Gnosis S.P.A., 2008 U.S. Dist. LEXIS 104712, 2008 WL 5336587 (S.D.N.Y. 2008). There appears to be no dispute that the allegations of Martec's sale of a defective product 3 constitutes a tort or that the alleged injury occurred in New York. Nor does Martec dispute that it receives substantial revenue from international commerce. In fact, Lin's affidavit supports the conclusion that Martec receives substantial revenues from international commerce. Rather the force of Martec's argument is that there is no basis to conclude that Martec should have foreseen that its conduct would have [*12] consequences in New York. According to Martec, it could not foresee that the product it sells will have consequences in New York because the "components are sold by Martec in another country and forwarded by forwarding companies in Hong Kong. Those entities ship the components to the entities that ordered them." (Def.'s Mem. in Opp. to Cross-Mot. and in Reply to Mot. at 4). However, that Martec takes orders for its product from companies and arranges, pursuant to its customers' directions, for shipment of the product but uses a "forwarding company" to do so, rather than shipping the product itself directly, does not insulate it from foreseeing that its conduct would have consequences in the locale to which it was shipped. Here, drawing all inferences in favor of Plaintiffs, Martec's took orders for products and pursuant to its customers' instructions had the product shipped [*13] into New York; having directed its allegedly defective product to New York a trier of fact could conclude that Martec should have foreseen that its conduct would have consequences in New York. Cf. Merck Eprova, 2008 %336587, at *4 Asahi Metal Ind. Co., Ltd. v. Superior Court of Calif., 480 U.S. 102, 112, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987) (mere awareness that the stream of commerce may direct the product into the forum state is insufficient under the due process clause for the exercise of jurisdiction; rather there must be evidence that the party purposefully availed itself of the market in the jurisdiction in question such as that it created, controlled or employed the distribution system that brought its product into the jurisdiction). The Court recognizes that, as presented, the documents purporting to show that Martec shipped its product into the United States, including New York would not be admissible in evidence. However, their consideration is appropriate on the current motion given that a plaintiff can satisfy its burden of demonstrating a prima facie case of jurisdiction with allegations in its pleadings. See generally Metro. Life, 84 F.3d at 566. Moreover, the documents raise the specter of a jurisdictional [*14] issue which warrants the grant of Plaintiffs' request for discovery. "A district court has considerable procedural leeway when deciding a motion to dismiss for lack of personal jurisdiction and may permit discovery in aid of the motion." Stutts v. De Dietrich Group, 465 F. Supp. 2d 156, 169 (E.D.N.Y. 2006) (internal quotations omitted) (citing Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)). "District courts have the discretion to grant discovery to explore factual issues presented by [a] Rule 12(b)(2) motion." (888) Justice, Inc. v. Just Enterprises, Inc., 2007 U.S. Dist. LEXIS 61849, 2007 WL 2398504, at *3, (S.D.N.Y. Aug. 22, 2007) (citing Visual Sciences, Inc. v. Integrated Communications Inc., 660 F.2d 56, 58 (2d Cir. 1981)). Here, Plaintiffs maintains that Martec, in accordance with the orders its takes, arranges for its product to be shipped into New York. Having raised a jurisdictional issue of fact, e.g., whether Martec, either itself or through the forwarding companies it employs, ships aranid carbon fiber front forks for bicycles into New York, jurisdictional discovery is appropriate. Daventree Ltd. v. Republic of Azerbaijan, 349 F. Supp. 2d 736, 761 (S.D.N.Y. 2004) ("if a plaintiff [*15] has identified a genuine issue of 2 Plaintiffs' Memorandum specifically refers to the "exercise of jurisdiction over a non-domiciliary which 'commits a tortuous act without the state causing injury to person or property within the state . . .'", although erroneously citing the section as CPLR 302(a)(4). 3 In its papers Martec disputes the allegation that it manufactured the defective part at issue and maintains that it does not manufacture any bicycle forks or components but rather merely take orders for components. (Def.'s Mem in Supp. at 2). For present purposes, the Court assume the truth of Plaintiffs' allegation. 2009 U.S. Dist. LEXIS 79315, *10 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 7 of 30 Page 5 of 5 jurisdictional fact, jurisdiction discovery is appropriate"). Once jurisdictional discovery is completed, Martec may seek leave to move for summary judgment on the issue of personal jurisdiction. 4 Conclusion For the reasons set forth above, Martec's motion to dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure is denied and Plaintiff's cross-motion for jurisdictional discovery is granted. Martec shall serve and file an answer within twenty (20) days of the date hereof. Dated: Central Islip, New York September 3, 2009 /s/ Denis R. Hurley Senior District Judge End of Document 4 At that time, the Court will also address any due process arguments. 2009 U.S. Dist. LEXIS 79315, *15 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 8 of 30 B Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 9 of 30 Positive As of: January 13, 2017 3:17 PM EST Tanton v Lefrak SBN Ltd. Partnership Supreme Court of New York, New York County January 23, 2013, Decided; January 25, 2013, Filed 106601/08 Reporter 2013 N.Y. Misc. LEXIS 261 *; 2013 NY Slip Op 30126(U) ** [**1] HARVEY TANTON and MALENEA COLONNA, Plaintiff, - v - LEFRAK SBN LIMITED PARTNERSHIP, BAY LEAF ENTERPRISES, LTD., BENIHANA N.Y. RESTAURANTS CORP., NOBU 57, LLC, and TEMCO SERVICE INDUSTRIES, INC., Defendant. Index No.: 106601/08 Notice: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS. Subsequent History: Affirmed by Tanton v. Lefrak SBN LP, 2013 N.Y. App. Div. LEXIS 6377 (N.Y. App. Div. 1st Dep't, Oct. 3, 2013) Core Terms sidewalk, indemnification, summary judgment, garbage, expired, cleaning, argues, premises, greasy, cross claim, parties, notice, common-law, contractor, services, written contract, cross motion, grease, contractual, restaurant, stain, contends, constructive notice, abutting, lessee, terms, curb, no evidence, sequence, procure Judges: [*1] PRESENT: DEBRA A. JAMES, J.S.C. Opinion by: DEBRA A. JAMES Opinion Motion sequence numbers 004, 005, and 006 are consolidated for disposition. In this action for personal injuries, plaintiff Harvey Tanton alleges that, on June 28, 2007, he slipped and fell on grease on the sidewalk in front of 40 West 56th Street, New York, New York (the premises). Lefrak SBN Limited Partnership (Lefrak) is the owner of the premises. [**2] Bay Leaf Enterprises, Ltd. (Bay Leaf), Nobu 57 LLC (Nobu), and Benihana N.Y. Restaurants Corp. (Benihana) lease space for their restaurants within such premises. Lefrak retained Temco Service Industries, Inc.(Temco) to clean and maintain the subject premises and sidewalks abutting the premises. Pursuant to a written contract dated January 29, 1991 with Lefrak, Temco was required, among other things, to "[s]weep sidewalks and police during the day, including Plaza areas" and "[h]ose sidewalks as necessary". The written contract contains an indemnification provision and insurance procurement provision. It is undisputed that the written contract between Lefrak and Temco expired by its terms on December 31, 1992, and that Temco continued to provide services at the premises. On May 13, 2008, plaintiff [*2] commenced this action against Lefrak, Bay Leaf, Benihana, and Nobu. He asserts in his bill of particulars that defendants, inter alia, negligently maintained the sidewalk in the area where garbage was placed for collection and thereby caused a dangerous slippery condition upon which he slipped and fell and suffered a fractured left ankle. On November 3, 2009, Lefrak commenced a third-party action against Temco, seeking indemnification and contribution. Thereafter, plaintiff brought a separate action against Temco in this court under Index No. 118196/09. On July 21, 2010, the court consolidated the second action against Temco with this action. [**3] Defendants assert the following cross claims: (1) Lefrak asserts cross claims for contractual indemnification, common-law indemnification, contribution, and failure to procure insurance against Bay Leaf, and Temco asserts cross claims for common-law indemnification and contribution against Bay Leaf; (2) Lefrak pleads cross claims for contractual indemnification, common-law indemnification, contribution, and failure to procure insurance against Nobu, and Temco also seeks common-law indemnification and contribution from Nobu; and (3) Temco seeks [*3] common- law indemnification and contribution from Lefrak. Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 10 of 30 Page 2 of 9 In motion sequence number 004, Bay Leaf moves, pursuant to CPLR 3212, for summary judgment dismissing the complaint and all cross claims against it. In motion sequence number 005, Nobu moves, pursuant to CPLR 3212, for summary judgment dismissing all claims against it. In motion sequence number 006, Temco moves, pursuant to CPLR 3212, for summary judgment dismissing the complaint and all cross claims asserted against it. In motion sequence number 006, Lefrak cross-moves, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's complaint and all cross claims against it and for a conditional order of indemnification against Temco. In moving for summary judgment, Bay Leaf argues that it did not owe plaintiff a duty to maintain the sidewalk, and that it neither caused nor created the greasy condition of the sidewalk. [**4] Specifically, Bay Leaf maintains that it placed its garbage only in front of its restaurant, and not in the arcade where plaintiff fell. Bay Leaf further argues that though plaintiff contains the stain on the sidewalk is grease, there is no evidence that such so and therefore there is no evidence that Bay Leaf [*4] had notice of any greasy condition. Bay Leaf argues that plaintiff never saw anyone place garbage on the sidewalk, and thus does not know whose garbage created the greasy condition. Finally, Bay Leaf contends that it had no notice of the greasy condition. In opposition, plaintiff argues that there are triable issues of fact as to whether Bay Leaf created the greasy condition of the sidewalk, and in support submits an affidavit from Stanley F. Fein, P.E., who inspected the sidewalk on November 17, 2009. Fein opines, within a reasonable degree of engineering certainty, that: the sidewalk area where this accident occurred and the stain on the sidewalk area was due to an accumulation of oil and/or another greasy type substance which was coming from the garbage bags which were placed on the sidewalk by the owners of the building, Lefrak, the cleaning company Temco and the adjacent restaurants, Benihana, Bay Leaf, and Nobu 57 LLC restaurants. Fein explains that: [t]he sidewalk in the stained area was made of concrete and the stains that were in existence were definitely oil stains and not water stains. Concrete is absorbent and water would not stain the concrete. Only oil could have caused the [*5] stains on the sidewalk and therefore the only way the oil could have stained the sidewalk was if the garbage which had been leaking, would be placed along the sidewalk area. [**5] In support of his argument that Bay Leaf created the condition, plaintiff points out that he testified that he was unsure where exactly he fell. In addition, plaintiff argues that Bay Leaf had notice of the recurrent and defective condition of the sidewalk, given plaintiff's own deposition testimony that he previously noticed debris or garbage in the area, and that there is a stain on the sidewalk near where he fell. Plaintiff further contends that Bay Leaf may be liable for negligent maintenance of the sidewalk where Bay Leaf's employees cleaned the sidewalk in front of the restaurant two times per day. Plaintiff contends that Bay Leaf may have created the condition when it washed the sidewalk. It is undisputed that Bay Leaf is a lessee of space abutting the sidewalk near where plaintiff fell. With respect to the common law rule: Liability may only be imposed on the abutting owner or lessee for injuries sustained as a result of a dangerous condition in the sidewalk where the abutting owner or lessee 'either created [*6] the condition, voluntarily but negligently made repairs, caused the condition to occur because of some special use, or violated a statute or ordinance placing upon the owner or lessee the obligation to maintain the sidewalk which imposes liability upon that party for injuries caused by a violation of that duty' (Berkowitz v Spring Cr., Inc., 56 AD3d 594, 595-596, 868 N.Y.S.2d 682 [2d Dept 2008], quoting Lowenthal v Theodore H. Heidrich Realty Corp., 304 AD2d 725, 726, 759 N.Y.S.2d 497 [2d Dept 2003]). [**6] Administrative Code § 7-210, entitled "Liability of real property owner for failure to maintain sidewalk in a reasonably safe condition," provides that: a. It shall be the duty of the owner of real property abutting any sidewalk, including, but not limited to, the intersection quadrant for corner property, to maintain such sidewalk in a reasonably safe condition. b. Notwithstanding any other provision of law, the owner of real property abutting any sidewalk, including, but not limited to, the intersection quadrant for corner property, shall be liable for any injury to property or personal injury including death, proximately caused by the failure of such owner to maintain such sidewalk in a reasonably safe condition. Failure [*7] to maintain such sidewalk in a reasonably safe condition shall include, but not be limited to, the negligent failure to install, construct, reconstruct, repave, repair or replace defective sidewalk flags and the negligent failure to remove snow, ice, dirt or other material from the sidewalk. . . ." Here, Bay Leaf has shown that, as a lessee, it did not violate 2013 N.Y. Misc. LEXIS 261, *3; 2013 NY Slip Op 30126(U), **3 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 11 of 30 Page 3 of 9 any ordinance or statute or have a duty to maintain the sidewalk in a reasonably safe condition pursuant to Administrative Code § 7-210. Bay Leaf has also shown that it did not create the greasy condition on the sidewalk. Bay Leaf's president, Vijay Gupta, testified that Bay Leaf placed its garbage in front of its restaurant on 56th Street. Gupta also testified that all disposable food garbage was placed in large garbage bags and secured by tying a knot to the bag. Plaintiff marked the location of his accident on a schematic diagram of the area at his deposition, which shows the location to be in front [**7] of the arcade leading between 56th and 57th Streets and not in front of Bay Leaf's restaurant on 56th Street. Nor is there any evidence that Bay Leaf made a special use of the sidewalk at the location in question, let alone, some [*8] such use that caused the condition to occur. (see Lopez v City of New York, 19 AD3d 301, 797 N.Y.S.2d 490 [1st Dept 2005]). Nor does Fein's expert affidavit rescue plaintiff's cause of action against Bay Leaf. It is well settled that an expert's opinion "'must be based on facts in the record or personally known to the witness'" (Hambsch v New York City Tr. Auth., 63 NY2d 723, 725-726, 469 N.E.2d 516, 480 N.Y.S.2d 195 [1984], quoting Cassano v Hagstrom, 5 NY2d 643, 646, 159 N.E.2d 348, 187 N.Y.S.2d 1, rearg denied 6 NY2d 882 [1959]). Furthermore, the court may not accept the conclusion of an expert that assumes material facts not supported by the evidence, and may not guess or speculate in drawing a conclusion (Santoni v Bertelsmann Prop., Inc., 21 AD3d 712, 714-715, 800 N.Y.S.2d 676 [1st Dept 2005]; Quinn v Artcraft Constr., 203 AD2d 444, 445, 610 N.Y.S.2d 598 [2d Dept 1994]). Here, Fein cites no factual basis for his conclusion that the grease on the sidewalk was caused by an accumulation of oil and/or another greasy type substance which originated from Bay Leaf's garbage bags. Therefore, Fein's affidavit is insufficient to raise a triable issue of fact as to whether Bay Leaf created the grease on the sidewalk. [**8] Moreover, while plaintiff maintains that Bay Leaf had notice of the condition, absent creation, [*9] special use, or any of the other factors outlined above, a lessee of property abutting a public sidewalk may not be liable even if it had notice of the condition (see Berkowitz, 56 AD3d at 595-596). Therefore, Bay Leaf is entitled to summary judgment dismissing the complaint as against it. In moving for summary judgment, Nobu also argues that it did not cause or create the condition that caused plaintiff to fall. Specifically, Nobu maintains that plaintiff did not slip or fall in an area where Nobu placed its garbage - plaintiff testified that he fell between an orange cone and a garbage can in a photograph marked at his deposition- but that it placed its garbage between two trees in that photograph. In addition, Nobu asserts that its garbage was double-bagged and placed on top of clear plastic liners on the sidewalk. Nobu further contends that it did not owe plaintiff a duty to maintain or clean the sidewalk, and that plaintiff assumed the risk of his injury because he previously noticed debris or grease in the area. In opposing Nobu's motion, plaintiff argues that there are triable issues of fact as to whether Nobu created the greasy condition on the sidewalk. To support this argument, [*10] plaintiff maintains that he could not pinpoint the exact location where he fell, and that the area of the grease stain is significant and [**9] covers a large portion of the sidewalk where he fell. Plaintiff again relies on the affidavit from Stanley Fein, P.E., which concludes that the defective condition of the sidewalk was caused by an accumulation of oil and/or another greasy type substance which came from garbage bags which were placed on the sidewalk by Lefrak, Temco, Benihana, Bay Leaf, and Nobu. Plaintiff further contends that Nobu had notice of the recurrent, greasy condition of the sidewalk, and that comparative negligence is an issue of fact for the jury. As previously stated, a lessee of property abutting a public sidewalk, such as Nobu, may be held liable only if it "either created the [dangerous] condition, voluntarily but negligently made repairs, caused the condition to occur because of some special use, or violated a statute or ordinance placing upon the owner or lessee the obligation to maintain the sidewalk which imposes liability upon that party for injuries caused by a violation of that duty" (Berkowitz, 56 AD3d at 595-596 [*11] [internal quotation marks and citation omitted]). In this case, Nobu has demonstrated that, as a lessee, it did not have a duty to maintain the sidewalk where plaintiff fell (see Administrative Code § 7-210). Nobu has also made a prima facie showing that it did not create the greasy condition on the sidewalk. Plaintiff testified at his deposition that he fell on the sidewalk between an orange cone and a garbage can depicted in [**10] a photograph marked at his deposition. Nobu's back-of-the-house manager, Wilber Wever, testified that it placed its garbage between two trees, and that it double- bagged its garbage and placed it on top of clear plastic liners on the sidewalk. Though plaintiff again argues that there is an issue of fact as to where he fell, he testified that he fell between an orange cone and a garbage can. Nor has he disputed Nobu's garbage disposal regimen. In addition, there is no evidence that Nobu caused the condition to occur through a special use of the sidewalk (see Lopez, 19 AD3d at 301). As with Bay Leaf, Fein's opinion that "the sidewalk area 2013 N.Y. Misc. LEXIS 261, *7; 2013 NY Slip Op 30126(U), **6 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 12 of 30 Page 4 of 9 where this accident occurred and the stain on the sidewalk area was due to an accumulation of oil and/or another greasy type substance [*12] which was coming from the garbage bags which were placed outside on the sidewalk by the owners of the building, Lefrak, the cleaning company Temco and the adjacent restaurants, Benihana, Bay Leaf and Nobu 57 LLC restaurants", is speculative, conclusory, and unsupported by facts in the record, and thus insufficient to raise a triable issue of fact as to whether Nobu created the greasy condition. In view of the above, Nobu has established entitlement to summary judgment dismissing the complaint. Temco moves for summary judgment, arguing that it did not owe plaintiff a duty of care, because: (1) there is no evidence [**11] that it created the greasy condition, (2) plaintiff did not detrimentally rely on the continued performance of its contract, and (3) Temco did not entirely displace Lefrak's duty to maintain the premises safely. Temco contends that Lefrak hired many contractors to maintain the premises and that Temco was only hired to perform cleaning, and by affidavit of Peter Chace, Temco's Day Area Manager, states that Lefrak's property manager, Kevin Perdreaux, had exclusive authority and control over the work performed by Temco. Furthermore, Temco maintains that, even assuming that it [*13] owed a duty to plaintiff, it did not have actual or constructive notice of the condition. In addition, Temco argues that Fein's expert affidavit should be disregarded as speculative and conclusory. Temco also contends that it did not "launch a force or instrument of harm" because it cleaned the sidewalk every morning, and that the discolored portion of the sidewalk was not slippery, and therefore it did not have actual or constructive notice of the allegedly hazardous condition. In opposition, plaintiff argues that Temco had a comprehensive and exclusive obligation to maintain the premises. Plaintiff points out that Temco was the only party contracted to clean the premises where plaintiff fell. Plaintiff also argues that Temco failed to exercise reasonable care in the performance of its duties, and launched a force or instrument of harm, given [**12] Temco's day manager's testimony that the sidewalk area was discolored, that he did not know why the area was discolored, but that was where the garbage was put out. Alternatively, plaintiff contends that Temco had actual notice of the recurrent condition of the sidewalk, in view of his testimony that his clothes and hand were dirty after his [*14] fall, coupled with the testimony of his co-workers that there was always a residue left on the curb and that he was "covered with grease" after his accident. Generally, a contractual obligation, standing alone, does not give rise to tort liability in favor of a third party (Church v Callanan Indus., 99 NY2d 104, 111, 782 N.E.2d 50, 752 N.Y.S.2d 254 [2002]; Espinal v Melville Snow Contrs., 98 NY2d 136, 138, 773 N.E.2d 485, 746 N.Y.S.2d 120 [2002]). However, there are three exceptions to this general rule: (1) "where the promisor, while engaged affirmatively in discharging a contractual obligation, creates an unreasonable risk of harm to others, or increases that risk" (Church, 99 NY2d at 111); (2) "where the plaintiff has suffered injury as a result of reasonable reliance upon the defendant's continuing performance of a contractual obligation" (id.); and (3) "where the contracting party has entirely displaced the other party's duty to maintain the premises safely" (id. at 112 [internal quotation marks and citation omitted]). Plaintiff relies on the first and third exceptions to the general rule, arguing that Temco was the only contractor hired to clean the premises and that it may have created the condition. [**13] Under the third exception, a defendant may [*15] owe a duty of care where it has a "comprehensive and exclusive" contractual obligation to inspect and maintain the premises safely (Palka v Servicemaster Mgt. Servs. Corp., 83 NY2d 579, 588, 634 N.E.2d 189, 611 N.Y.S.2d 817 [1994]). Stated otherwise, the contractor must have entirely displaced the landowner's duty to maintain the premises safely (Espinal, 98 NY2d at 141). In Corrales v Reckson Assoc. Realty Corp. (55 AD3d 469, 868 N.Y.S.2d 2 [1st Dept 2008]), the plaintiff slipped and fell on an oily substance on the plaza outside an office building. The building owner and manager hired a maintenance contractor to provide cleaning services for the interior and exterior of the building. The Court held that the maintenance contractor did not owe a duty of care to the plaintiff, noting that the contractor's contract with the owner "was not comprehensive and exclusive as to preventative maintenance, inspection and repair, and that the [owner's] on-site property manager retained responsibility for and control over maintenance and safety of the premises" (id. at 470). In Jackson v Board of Educ. of City of N.Y. (30 AD3d 57, 812 N.Y.S.2d 91 [1st Dept 2006]), the plaintiff, a utility worker, slipped and fell on a food substance at a college and commenced an [*16] action, inter alia, against the college's janitorial services contractor. The First Department held that a janitorial services contractor did not owe a duty of care to plaintiff. Specifically, the Court [**14] held that the contractor's contract was not comprehensive because it did not assume a blanket responsibility for the entire college campus, and since the contractor's contract was not exclusive because plaintiff's employer was required to perform cleaning duties in that area (id. at 65-66). Here, Temco's limited contractual undertaking was not a 2013 N.Y. Misc. LEXIS 261, *11; 2013 NY Slip Op 30126(U), **10 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 13 of 30 Page 5 of 9 comprehensive and exclusive property maintenance obligation which entirely displaced Lefrak's duty to maintain the premises. It is undisputed that Temco's written contract with Lefrak expired, and that Temco continued to work at the premises pursuant to an oral agreement. Kevin Perdreaux, Lefrak's property manager, testified that, in June 2007, Temco was required to maintain the exterior and interior of the building in a clean fashion. Peter Chace, Temco's employee, indicates that Lefrak retained supervision and control over Temco's work. However, the court concludes that there are triable issues of fact as to whether Temco failed to exercise [*17] reasonable care in the performance of its cleaning duties, and launched a force or instrument of harm (see Moch Co. v Rensselaer Water Co., 247 NY 160, 168, 159 N.E. 896 [1928]; Espinal, 98 NY2d at 142 [a contractor who "creates or exacerbates" a harmful condition may be said to have "launched" it]). Plaintiff testified that "[o]ther than my clothes being dirty and my hand touching the - something, I didn't know what it was and my hand being dirty. I don't know [**15] what it was, but there was some substance on the sidewalk". Plaintiff's co- worker, Donald Hoffman, testified that when he saw plaintiff after his fall, plaintiff was "covered with grease". However, Temco's porter testified that Temco cleaned the sidewalk every day by 6:30 A.M. by washing the sidewalk with a hose, brushing it, and applying a degreaser. Therefore, Temco's motion for summary judgment dismissing the complaint must be denied (see Cornell v 360 W. 51st St. Realty Corp., 51 AD3d 469, 470, 857 N.Y.S.2d 124 [1st Dept 2008] [plaintiff's allegation that subcontractor negligently removed demolition debris from building fell within exception to general rule of negligent creation or exacerbation by launching a force or instrument of harm]). Lefrak cross-moves [*18] for summary judgment dismissing plaintiff's complaint and for a conditional order of indemnification against Temco. In so moving, Lefrak points out that, although its cross motion is untimely, it should be considered on the merits because its co-defendants made motions for summary judgment on nearly identical grounds and seek nearly identical relief. Lefrak further argues that there is no evidence that it created the greasy condition, and that the testimony of its building manager establishes that it had no notice of the condition. Lefrak points out that Temco's cleaning crew would have cleaned the sidewalk area sometime between 6:00 and 6:30 [**16] A.M., or about an hour-and-a-half before plaintiff fell. Lefrak argues that, even if plaintiff could establish notice, the evidence establishes that it cannot bear liability for plaintiff's injury pursuant to Administrative Code §§ 7-210 and 19-101, because his accident occurred in an area over which it had no duty of care. In support of this argument, Lefrak contends that plaintiff testified that he fell as he was "walking onto the curb," and that he did not know whether he had passed the curb. In opposition, plaintiff argues that Lefrak's cross [*19] motion must be denied because it was made 140 days after the note of issue was filed and Lefrak has not offered any good cause. Plaintiff also argues that Lefrak had notice of the recurrent, greasy/oily condition that caused his fall. In addition, plaintiff maintains that Lefrak's employees may have created the condition, since its employees cleaned the sidewalk with a power wash broom. Temco also opposes Lefrak's cross motion, inter alia, on the grounds that it is untimely and Lefrak has not shown good cause. Initially, the court must consider whether to entertain Lefrak's cross motion for summary judgment. It is well settled that a court may consider an untimely cross motion for summary judgment as long as the court is deciding a timely motion for summary judgment on "nearly identical" grounds (Lapin v Atlantic [**17] Realty Apts. Co., LLC, 48 AD3d 337, 851 N.Y.S.2d 543 [1st Dept 2008]; Filannino v Triborough Bridge & Tunnel Auth., 34 AD3d 280, 281, 824 N.Y.S.2d 244 [1st Dept 2006]; Altschuler v. Gramatan Mgt., Inc., 27 AD3d 304, 304-305, 811 N.Y.S.2d 379 [1st Dept 2006]). Courts have explained that an untimely cross motion for summary judgment may be considered, even in the absence of "good cause," because the court may search the record [*20] pursuant to CPLR 3212 (b), and grant summary judgment to any party even if a cross motion has not been made (see Filannino, 34 AD3d at 281). Here, although Lefrak's cross motion is indeed untimely, the cross motion addresses the same issues as the timely motions for summary judgment dismissing plaintiff's claims, i.e., lack of duty, creation, notice of the allegedly hazardous conditions, as well as the cross claims for indemnification asserted by Lefrak of which Temco seeks summary judgment. Accordingly, the court may consider the issues raised in Lefrak's cross motion. As indicated previously, Lefrak, as an owner, has a nondelegable duty to maintain the sidewalk abutting its premises in a reasonably safe condition (Administrative Code § 7-210; see also Spector v Cushman & Wakefield, Inc., 87 AD3d 422, 423, 928 N.Y.S.2d 9 [1st Dept 2011]; Cook v Consolidated Edison Co. of NY, Inc., 51 AD3d 447, 448, 859 N.Y.S.2d 117 [1st Dept 2008]). "A defendant who moves for summary judgment in a slip-and-fall action has the initial burden of making a prima facie demonstration that it neither created the hazardous condition, nor had actual or constructive notice of its [**18] existence. Once a defendant 2013 N.Y. Misc. LEXIS 261, *16; 2013 NY Slip Op 30126(U), **14 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 14 of 30 Page 6 of 9 establishes prima facie entitlement [*21] to such relief as a matter of law, the burden shifts to plaintiff to raise a triable issue of fact as to the creation of the defect or notice thereof" (Rodriguez v 705-7 E. 179th St. Hous. Dev. Fund Corp., 79 AD3d 518, 519, 913 N.Y.S.2d 189 [1st Dept 2010] [citation omitted]; see also Manning v Americold Logistics, LLC, 33 AD3d 427, 822 N.Y.S.2d 279 [1st Dept 2006]; Giuffrida v Metro N. Commuter R.R. Co., 279 AD2d 403, 404, 720 N.Y.S.2d 41 [1st Dept 2001]). "To constitute constructive notice, a defect must be visible and apparent and it must exist for a sufficient length of time prior to the accident to permit defendant's employees to discover and remedy it" (Gordon v American Museum of Natural History, 67 NY2d 836, 837, 492 N.E.2d 774, 501 N.Y.S.2d 646 [1986]). "The notice must call attention to the specific defect or hazardous condition and its specific location, sufficient for corrective action to be taken" (Mitchell v New York Univ., 12 AD3d 200, 201, 784 N.Y.S.2d 104 [1st Dept 2004]). Additionally, a general awareness that a dangerous condition may be present is legally insufficient to constitute constructive notice of the particular condition (Solazzo v New York City Tr. Auth., 6 NY3d 734, 735, 843 N.E.2d 748, 810 N.Y.S.2d 121 [2005]; Piacquadio v Recine Realty Corp., 84 NY2d 967, 969, 646 N.E.2d 795, 622 N.Y.S.2d 493 [1994]). As a preliminary matter, [*22] the court rejects Lefrak's contention that plaintiff slipped and fell in an area over which it had no duty of care. Administrative Code § 19-101 (d) defines a "sidewalk" as a "that portion of a street between the curb lines, or the lateral lines of a roadway, and the adjacent [**19] property lines, but not including the curb, intended for the use of pedestrians." Although Lefrak contends that plaintiff fell on the curb, there is contrary evidence in the form of plaintiff's testimony that "I stepped over the curb onto the sidewalk, my leg gave way and I fell". However, there is no evidence that Lefrak created the condition. Plaintiff has only offered speculation that Lefrak may have created the condition by cleaning the sidewalk. There is also no evidence that Lefrak had actual notice of the greasy condition. Kevin Perdraeux, Lefrak's building manager, testified that the sidewalks were not slippery when there was no garbage on them, and that Lefrak did not receive any complaints about the sidewalks. Thus, the issue is whether Lefrak can be charged with constructive notice of the condition. "A defendant may be charged with constructive notice of a hazardous condition if it is proven that there [*23] was a recurring condition of which the defendant has actual notice" (Roman v Met-Paca II Assocs., L.P., 85 AD3d 509, 510, 925 N.Y.S.2d 447 [1st Dept 2011]). In Batista v KFC Natl. Mgt. Co. (21 AD3d 917, 801 N.Y.S.2d 336 [2d Dept 2005]), the plaintiff slipped and fell on wood chips on a sidewalk adjacent to a restaurant. The Court held that there were issues of fact as to whether the owner had actual notice of a recurring condition, given that the manager of the restaurant which leased the property testified that her daily inspection of the premises [**20] frequently revealed the presence of wood chips on the sidewalk (id. at 917-918). "Under these circumstances, a trier of fact could reasonably infer that the defendant had actual notice of such a recurring condition" (id. at 918 [internal quotation marks and citation omitted]). In order to establish a recurring condition, plaintiff refers to his testimony that "there was some substance on the sidewalk", and to his co-worker's testimony that "[t]here was an area at the curb near a tree and a garbage can where the garbage - somebody's garbage is piled up there on a daily basis and there was always a residue left on the curb and the street in that area. Still remains today" and [*24] that "[plaintiff's] clothing was covered with grease". Additionally, plaintiff relies on another co-worker's testimony that "I don't know it's grease, but I know it's a black mark there.. It's black, so I would assume it's grease or oil or something", and Temco's supervisor's testimony that there was an area of the sidewalk that was discolored where the garbage was put out, that he did not know the cause of the discoloration, and that it smelled like garbage However, plaintiff has not pointed to any evidence that Lefrak had actual notice of grease or garbage on the sidewalk prior to the accident, and thus has failed to show that Lefrak had constructive notice of a recurring condition (see Early v Hilton Hotels Corp., 73 AD3d 559, 562, 904 N.Y.S.2d 367 [1st Dept 2010] ["to the extent [**21] that the record is bereft of any evidence that defendants had actual notice of any straps on the sidewalk prior to the accident, plaintiffs have failed to prove constructive notice of a recurring condition"]; see also Segretti v Shorenstein Co, E, 256 AD2d 234, 682 N.Y.S.2d 176 (1st Dept 1998); cf. Uhlich v Canada Dry Bottling Co. of N.Y., 305 AD2d 107, 758 N.Y.S.2d 650 [1st Dept 2003] [issue of fact as to whether tenant had notice of a recurring condition [*25] where plaintiff observed garbage, debris, potholes, broken asphalt and obstructive vehicles in parking lot and complained to tenant about garbage]). Accordingly, Lefrak is entitled to summary judgment dismissing the complaint as against it. Temco moves for summary judgment dismissing Lefrak's contractual indemnification and failure to procure insurance claims, arguing that its written contract with Lefrak expired 2013 N.Y. Misc. LEXIS 261, *20; 2013 NY Slip Op 30126(U), **18 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 15 of 30 Page 7 of 9 by its terms. In addition, Temco contends that the conduct of the parties does not indicate that they intended to incorporate any of its terms into any subsequent agreement. In opposition, and in cross-moving for a conditional order of indemnification against Temco, Lefrak argues that the parties' conduct evidences their intent to embrace the same provisions as the written contact.1 According to Lefrak, Temco continued to [**22] perform the same duties as outlined in its contract up to and including the time of plaintiff's accident. Lefrak submits an affidavit from Kevin Perdreaux, Lefrak's property manager, who states that, at the time of the accident, Temco provided supervisory staff; reported damage and security breaches; performed nightly services Monday through Friday; performed [*26] general and detailed cleaning services; supplied extermination services; removed snow from the sidewalk; provided an elevator starter six days per week; and provided a day porter five days per week. Lefrak argues that, although certain duties were added to Temco's responsibilities, its duties remained substantially unchanged, i.e., it was required to clean and maintain the building. Furthermore, Lefrak maintains that Temco has not disputed that it continued to owe Lefrak indemnification and insurance following the expiration of the contract. To support [**23] this assertion, Lefrak provides a certificate of insurance, which Temco provided, naming Lefrak as an additional insured in accordance with the terms of the expired contract. Finally, Lefrak argues that the indemnification provision does not require a showing of Temco's negligence, and that plaintiff's accident arises out of Temco's failure to police and clean the sidewalk. In response to Lefrak's cross motion, Temco relies on the affidavit from Peter Chace, its day manager, who states that there were significant changes in the parties' relationship that 1 Article 13.2 of the contract between Lefrak and Temco provides as follows: "[Temco] hereby agrees to indemnify and save harmless [Lefrak] from and against all liability claims and demands on account of injury to persons including death resulting therefrom, losses, [*27] damages, expenses (including attorney's fee), claims demands, payments, recoveries, judgements and damage to property arising out of or caused in any manner by the performance or the failure to perform any work under this contract by [Temco], [Temco's] employees and agents of [Temco] and [Temco's] property, except from and against such claims and demands which may arise out of the negligence of [Lefrak] or any of its subsidiaries. [Temco] shall at his or its own expense, defend any and all actions at law brought against [Lefrak] based thereon and shall pay all attorney fees and all other expenses, and promptly discharge any judgements arising therefrom" differed from the terms of the written contract. Specifically, Chace avers that the following services were eliminated: window washing, maintenance of marble items, and maintenance of metal trims outside the building, and the lobby cleaning duties outlined in Appendix A "Periodic Maintenance," while the "Nightly Maintenance" duties in Appendix A were reduced [*28] to sweeping and mopping only. In addition, Chace states that several services were added after the expiration of the written contract, including building security in 2001 and additional security services in 2005, pressure washing, maintenance of the lower parts of pillars in the plaza, regular work requests to perform extra work for tenants or perform other miscellaneous work, and carpet care. Additionally, Temco points out that, pursuant to the expired written contract, Lefrak was required to provide [**24] compensation increases; however, Temco's compensation actually decreased in 1993, 1994, 1995, 1996, 2003, and 2008. 'Where, after the expiration of a contract fixing the reciprocal rights and obligations of the parties, they continue to do business together, the conduct of the parties may at times permit, or even constrain, a finding that the parties impliedly agree that their rights and obligations in connection with such business should continue to be measured as provided in the old contract' (Twitchell v Town of Pittsford, 106 AD2d 903, 904-905, 483 N.Y.S.2d 524 [4th Dept 1984], affd 66 NY2d 824, 489 N.E.2d 250, 498 N.Y.S.2d 363 [1985], quoting New York Tel. Co. v Jamestown Tel. Corp., 282 NY 365, 371, 26 N.E.2d 295 [1940]). "[W]hen an agreement expires [*29] by its terms, if, without more, the parties continue to perform as theretofore, an implication arises that they have mutually assented to a new contract containing the same provisions as the old" (North Am. Hyperbaric Ctr. v City of New York, 198 AD2d 148, 149, 604 N.Y.S.2d 56 [1st Dept 1993], lv denied 83 NY2d 758, 639 N.E.2d 416, 615 N.Y.S.2d 875 [1994] [internal quotation marks and citation omitted]; see also Curreri v Heritage Prop. Inv. Trust, Inc., 48 AD3d 505, 506-507, 852 N.Y.S.2d 278 [2d Dept 2008]; Martin v Campanaro, 156 F2d 127, 129 [2d Cir], cert denied 329 U.S. 759, 67 S. Ct. 112, 91 L. Ed. 654 [1946] [in determining whether there is an implied contract, courts must follow an objective test, i.e., "whether a reasonable man would think the parties intended to make such a new binding agreement - whether they acted as if they so intended"]). However, the parties must continue to operate as if governed by the expired contract. In Curreri, supra, the plaintiff [**25] tripped on a pothole in a parking lot. The owner had a contract with a contractor to perform custodial work in the parking lot, which contained a contractual defense and 2013 N.Y. Misc. LEXIS 261, *25; 2013 NY Slip Op 30126(U), **21 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 16 of 30 Page 8 of 9 indemnification clause. At the time of the plaintiff's accident, the contract between the owner and the contractor had expired; however, the contractor [*30] continued to provide "essentially the same services" to the owner, and the owner continued to pay the same rate. The Court held that "despite the fact the original contract had expired, their conduct evidenced their mutual assent to a new contract embracing the same provisions and terms as their prior contract. Accordingly, the contracting obligating [the contractor] to defend and indemnify [the owner] was in effect at the time of the plaintiff's injury" (Curreri, 48 AD3d at 506-507). In Watts v Columbia Artists Mgt. (188 AD2d 799, 801, 591 N.Y.S.2d 234 [3d Dept 1992]), the Court stated, after a nonjury trial, that, "[w]e are of the view that the parties' conduct after the expiration of the written contract including defendant's continued rendition of services, plaintiff's acceptance of those services and plaintiff's payment of commissions in accordance with the terms of the written contract, clearly establish a contract implied in fact with substantially the same terms and conditions as embodied in the expired written contract between defendant and the Corporation." By contrast, in Twitchell, supra, the parties' conduct was insufficient to create an implied-in-fact contract. There, a school district entered [*31] into a contract with a town whereby the town was permitted to operate skating rink on the school [**26] district's property and was required to procure liability insurance to cover damages resulting from claims for personal injury. The plaintiff was injured when he fell on ice in the school district parking lot, which was caused by the town's use of a fire hydrant for resurfacing the rink on the day before the accident. The plaintiff sued the town, which then brought a third-party action against the school district. Although the written contract between the town and the school district expired, the town continued to maintain the skating rink after the expiration of the agreement. The school district sought indemnification from the town. On appeal, the Court held that "the mere conduct of the town herein, in continuing to use the skating rink, is insufficient to create a contract for indemnification" (Twitchell, 106 AD2d at 905). In Computerized Med. Imaging Equip. v Diasonics Ultrasound (303 AD2d 962, 758 N.Y.S.2d 228 [4th Dept 2003]), ongoing dealings between a manufacturer and a sales representative following the expiration of a written contract did not give rise to an implied-in-fact agreement. Notably, [*32] the parties expressly characterized their continuing business relationship as "terminable-at-will" (id. at 964). Here, the court finds that there are issues of fact as to whether the parties mutually assented to a new contract on the same terms as the expired contract (and thus agreed to be bound [**27] by the contractual indemnification and failure to procure insurance provisions of the expired contract). While Lefrak maintains that Temco's services remained substantially unchanged, Temco submits evidence that several services were added and removed after the expiration of the contract (including pressure washing, security, window cleaning, and periodic and nightly maintenance) and that Lefrak did not continue to pay Temco the rate increases required by the expired contract but in fact reduced Temco's compensation for six years. Whether performance after the expiration of a contract constitutes an implied-in-fact agreement generally presents a question of fact that involves an assessment of the parties' conduct, and the extent to which such conduct demonstrates a meeting of the minds to continue on the expired contract's terms (Monahan v Lewis, 51 AD3d 1308, 1310, 858 N.Y.S.2d 812 [3d Dept 2008]). "The fact [*33] that the parties continue to deal under some sort of informal arrangement does not, without more, mean that all of the terms of the expired formal contract continue to apply" (Twitchell, 106 AD2d at 904). Therefore, the branch of Temco's motion seeking dismissal of Lefrak's contractual indemnification and failure to procure insurance claims, and the branch of Lefrak's cross motion seeking a conditional order of indemnification against Temco, are denied. Temco moves for summary judgment dismissing the common-law indemnification and contribution claims asserted against it, [**28] because plaintiff alleges that its co- defendants were actively negligent rather than vicariously liable. Further, Temco argues that there is no evidence that it performed its work negligently or that its failure to act was a proximate cause of the accident. Lefrak opposes this portion of Temco's motion and cross- moves for conditional common-law indemnification over and against Temco. Lefrak argues that, to the extent that it bears any liability, it would be based upon principles of vicarious liability, and not based upon any active negligence, and that Temco would bear at least some percentage of fault. "To establish [*34] a claim for common-law indemnification, 'the one seeking indemnity must prove not only that it was not guilty of any negligence beyond the statutory liability but must also prove that the proposed indemnitor was guilty of some negligence that contributed to the causation of the accident'" (Perri v Gilbert Johnson Enters., Ltd., 14 AD3d 681, 684-685, 790 N.Y.S.2d 25 [2d Dept 2005], quoting Correia v Professional Data Mgt., 259 AD2d 60, 65, 693 N.Y.S.2d 596 [1st Dept 1999]; see also Martins v Little 40 Worth Assoc., Inc., 72 AD3d 483, 484, 899 N.Y.S.2d 30 [1st Dept 2010]). "Contribution is available where two or more 2013 N.Y. Misc. LEXIS 261, *29; 2013 NY Slip Op 30126(U), **25 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 17 of 30 Page 9 of 9 tortfeasors combine to cause an injury and is determined in accordance with the relative culpability" of the parties (Godoy v Abamaster of Miami, 302 AD2d 57, 61, 754 N.Y.S.2d 301 [2d Dept], lv dismissed 100 NY2d 614, 799 N.E.2d 619, 767 N.Y.S.2d 396 [2003] [internal quotation marks and citation omitted]; see also Mas v Two Bridges Assoc., 75 NY2d 680, 689-690, 554 N.E.2d 1257, 555 N.Y.S.2d 669 [1990]). [**29] As discussed above, there are questions of fact as to whether Temco created the condition which caused plaintiff's accident. Thus, summary judgment on the common-law indemnification and contribution claims against Temco is inappropriate (see Perri, 14 AD3d at 685 [conditional summary judgment for common-law [*35] indemnification is premature absent proof that the proposed indemnitor was either negligent or exclusively supervised or controlled the plaintiff's work]). Lefrak seeks summary judgment dismissing the cross claims for common-law indemnification and contribution against it. Temco argues, in opposition to this portion of Lefrak's motion, that there is a question of fact as to whether Lefrak breached its nondelegable duty to plaintiff to maintain the premises in a reasonably safe condition. The court has determined that Lefrak did not create or have notice of the grease on the sidewalk. Therefore, the cross claims for common-law indemnification and contribution asserted against Lefrak are dismissed. Bay Leaf and Nobu have also moved for summary judgment dismissing the cross claims for common-law indemnification and contribution against them. Lefrak and Temco oppose these portions of the motions, arguing that there are questions of fact as to whether Bay Leaf and Nobu created or had notice of the greasy condition. As indicated previously, Bay Leaf and Nobu have established that they were not negligent. Accordingly, the [**30] cross claims for common-law indemnification and contribution against [*36] Bay Leaf and Nobu are dismissed. Lefrak opposes the dismissal of its contractual indemnification and failure to procure insurance claims against Bay Leaf and Nobu, arguing that there are questions of fact as to their negligence.2 As noted above, Bay Leaf and Nobu have shown that they were not negligent. Moreover, Lefrak has not disputed that Bay Leaf and Nobu purchased all 2 Article 46 of the lease between Lefrak and Bay Leaf requires Bay Leaf to indemnify and save harmless Lefrak from all claims arising from, inter alia, any act, omission or negligence of Bay Leaf. Article 9 of the lease between Lefrak and Nobu requires Nobu to indemnify and hold the owner and managing agent harmless from any and all claims resulting from (i) any breach of the lease or (ii) Nobu's negligence. appropriate insurance. Accordingly, these claims are dismissed. Accordingly, it is hereby ORDERED that the motion (sequence number 004) of defendant Bay Leaf Enterprises, Ltd. for summary judgment dismissing the complaint and all cross claims against it is granted and the complaint and all cross claims are severed and dismissed as against said defendant with costs and disbursements as taxed by the Clerk of the Court, [*37] and the Clerk is directed to enter judgment accordingly; and it is further ORDERED that the motion (sequence number 005) of defendant Nobu 57 LLC for summary judgment dismissing all claims against it is granted and the complaint and all cross claims are severed and [**31] dismissed as against said defendant with costs and disbursements as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly; and it is further ORDERED that the motion (sequence number 006) of defendant Temco Service Industries, Inc. for summary judgment dismissing the complaint and all cross claims against it is denied; and it is further ORDERED that the cross motion of defendant Lefrak SBN Limited Partnership for summary judgment dismissing the complaint and all cross claims against it and for a conditional order of indemnification is granted to the extent of dismissing the complaint and the cross claims for common-law indemnification and contribution as against it, and is otherwise denied; and it is further ORDERED that the remaining parties are directed to appear for a status conference before this court on March 5, 2012, at 11:00 a.m. in Part 59, Room 103, 71 Thomas Street, New York, New [*38] York 10013. This is the decision and order of the court. Dated: January 23, 2013 ENTER: /s/ Debra A. James J.S.C. End of Document 2013 N.Y. Misc. LEXIS 261, *34; 2013 NY Slip Op 30126(U), **28 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 18 of 30 C Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 19 of 30 Positive As of: January 11, 2017 2:26 PM EST Thai Lao Lignite (Thailand) Co. v. Gov't of the Lao People's Democratic Republic United States District Court for the Southern District of New York September 12, 2011, Decided; September 13, 2011, Filed 10 Civ. 5256 (KMW) Reporter 2011 U.S. Dist. LEXIS 103378 *; 2011 WL 4111504 THAI LAO LIGNITE (THAILAND) CO., LTD. & HONGSA LIGNITE (LAO PDR) CO., LTD., Petitioners, -against- GOVERNMENT OF THE LAO PEOPLE'S DEMOCRATIC REPUBLIC, Respondent. Subsequent History: Related proceeding at In re Thai-Lao Lignite (Thail.) Co., 821 F. Supp. 2d 289, 2011 U.S. Dist. LEXIS 125464 (D.D.C., 2011) Related proceeding at Thai-Lao Lignite (Thailand) Co. v. Gov't of the Lao People's Democratic Republic, 2012 U.S. Dist. LEXIS 37915 (S.D.N.Y., Mar. 19, 2012) Later proceeding at Thai-Lao Lignite Thail. Co. v. Gov't of the Lao People's Democratic Republic, 2012 U.S. Dist. LEXIS 186681 (S.D.N.Y., May 29, 2012) Costs and fees proceeding at Thai-Lao Lignite (Thail.) Co. v. Gov't of the Lao People's Democratic Republic, 2012 U.S. Dist. LEXIS 164261 (S.D.N.Y., Nov. 14, 2012) Prior History: Thai-Lao Lignite (Thailand) Co. v. Gov't of the Lao People's Democratic Republic, 2011 U.S. Dist. LEXIS 87844 (S.D.N.Y., Aug. 3, 2011) Counsel: [*1] For Thai-Lao Lignite (Thailand) Co. Ltd., Hongsa Lignite (LAO PDR) Co. Ltd., Petitioners: James Evan Berger, LEAD ATTORNEY, Paul Hastings LLP (NY), New York, NY. For Government of the LAO People's Democratic Republic, Respondent: Anthony J. Hatab, LEAD ATTORNEY, Dressel & Hatab, New York, NY; David J. Branson, LEAD ATTORNEY, Sole Practitioner, Washington, DC. Judges: Kimba M. Wood, United States District Judge. Opinion by: Kimba M. Wood Opinion OPINION and ORDER KIMBA M. WOOD, U.S.D.J.: Thai Lao Lignite (Thailand) Co., Ltd. ("TLL"), a company organized under the laws of Thailand, and Hongsa Lignite (LAO PDR) Co., Ltd., ("HLL"), a company organized under the laws of the Lao People's Democratic Republic (collectively, "Petitioners"), moved for confirmation of an arbitral award (the "Award") pursuant to the United Nations Convention on the Recognition of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 53 (the "Convention"), as implemented by the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 201 et seq. The Government of the Lao People's Democratic Republic ("Respondent") opposed confirmation and moved to dismiss the petition. On August 3, 2011, the Court denied Respondent's motion to dismiss and granted [*2] Petitioners' petition to confirm the Award. (See Dkt. Entry No. 50.) Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 20 of 30 Page 2 of 11 Currently before the Court is Respondent's objection to a discovery order issued by Magistrate Judge Freeman on April 4, 2011 (the "April 4 Order") (See Dkt. Entry No. 25 (order); Dkt. Entry No. 29 (notice of objection)). Petitioners opposed Respondent's objection and moved for sanctions against Respondent and/or its counsel pursuant to Rule 37 of the Federal Rules of Civil Procedure ("Rule 37") , § 28 U.S.C. 1927, and the Court's inherent authority to impose sanctions. (See Dkt. Entry No. 30.) I. Background On October 14, 2010, while the petition for confirmation and motion to dismiss were pending, Petitioners served discovery requests and interrogatories on Respondent, principally to obtain information about Respondent's assets located in the United States, in anticipation of the enforcement of a judgment if this Court confirmed the Award. On November 15, 2010, Respondents submitted a letter to this Court requesting permission to file a motion for a stay of discovery and a protective order pursuant to Rule 26(c) of the Federal Rules of Civil Procedure. The Court denied this request and permitted Petitioners to seek [*3] discovery. The Court referred disputes about the scope of discovery to Magistrate Judge Freeman. (See Dkt. Entry No. 22.) The parties conferred in the ensuing weeks about limiting the scope of discovery, but no agreement was reached. On January 28, 2011, Respondent served responses to the Petitioners' discovery requests. The interrogatory responses were unsigned and unsworn. Respondent's counsel later informed Petitioners that two of the answers to those interrogatories were inaccurate. On February 8, 2011, Petitioners sought leave to move to compel compliance with their discovery requests. Respondents replied by letters dated March 8 and March 16, 2011. On March 18, 2011, Judge Freeman convened a telephonic conference during which the parties discussed their positions regarding the various outstanding discovery issues. One of the subjects discussed was whether Petitioners could seek discovery of documents related to Respondent's bank accounts in the United States. The parties disagree on exactly what each side (and Judge Freeman) said regarding these issues. (The conference was not recorded or transcribed by a court reporter.) According to Respondent, Petitioners raised the issue of [*4] the existence of U.S. bank accounts held by Respondent's embassy. Respondent's counsel states that he told Petitioners that those accounts were immune from attachment or discovery under the Foreign Sovereign Immunities Act of 1976 ("FSIA"), 28 U.S.C. § 1602 et seq., and the Vienna Convention on Diplomatic Relations, Apr. 18, 1962, 23 U.S.T. 3227, T.I.A.S. No. 7502 (the "Vienna Convention"). Petitioners then purportedly argued that they needed discovery of information about Respondent's U.S. bank accounts to ascertain whether the accounts were, in fact, immune under the FSIA. 1 According to Petitioners, Respondent's counsel affirmatively agreed to produce the records of those accounts. At the conclusion of the conference, Judge Freeman ordered the following, inter alia: 1) Respondent was to serve final, sworn responses to Petitioner's First Set of Interrogatories by March 28, 2011; 2) Respondent was to file and serve a letter brief in support of its objections [*5] by April 1, 2011. Petitioner was permitted to reply to this brief by April 8, 2011; and 3) Respondent was to produce by April 8, 2011 documents relating to bank accounts in the United States maintained by the Government of the Lao People's Democratic Republic. (See Dkt. Entry No. 25.) Petitioners' counsel requested that Judge Freeman's oral order be memorialized in writing, and Judge Freeman requested that the parties confer on a form order for her to enter. The parties conferred but were unable to reach agreement on the wording and scope of the order, so both parties separately submitted their own formulations. Judge Freeman entered Respondent's version of the order nunc pro tunc to March 18, 2011 on April 4, 2011. (See Dkt. Entry No. 25.) 1 According to Respondent, Judge Freeman stated: "That is not the test; the test is whether the information will lead to assets that could be attached." (Second Declaration of David J. Branson (hereinafter "Second Branson Decl.") ¶ 11.) 2011 U.S. Dist. LEXIS 103378, *2 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 21 of 30 Page 3 of 11 Respondent did not produce any documents by April 8, 2011. On April 12, 2011, Respondent's counsel sought from this Court an extension of time to object to the April 4 Order. (See Dkt. Entry No. 26.) Petitioners objected to the request for an extension. The Court granted Respondent's request. Respondent timely filed its objection to the April 4 Order on April 28, 2011. (See Dkt. Entry No. 29.) Petitioners opposed the objection and cross-moved for sanctions [*6] pursuant to Rule 37, § 28 U.S.C. 1927, and the Court's inherent authority to impose sanctions. (See Dkt. Entry No. 30.) On July 5, 2011, Judge Freeman sua sponte stayed the April 4 Order pending this Court's resolution of the instant objection. (See Dkt. Entry No. 42.) At that time, Judge Freeman also denied Petitioner's application for an Order to Show Cause for discovery sanctions against Respondent. (Id.) II. Respondent's Objections to the April 4 Order Respondent objects to the April 4 Order regarding discovery of its bank accounts, contending that those accounts are held by the embassy and consulate of Laos, and are thus immune from attachment and discovery under the FSIA and the Vienna Convention. For the following reasons, Respondent's objection to the April 4 Order is overruled. A. Standard of Review For non-dispositive matters, including discovery disputes, a district court shall reverse a magistrate's order only where it has been shown that the order is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A) (2002); see also Fed. R. Civ. P. 72(a); Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990). Courts in this Circuit have held that a magistrate's [*7] ruling on a discovery dispute should be overturned only for an abuse of discretion. Edmonds v. Seavey, No. 08 Civ. 5646, 2009 U.S. Dist. LEXIS 62548, 2009 WL 2150971, at *2 (S.D.N.Y. July 20, 2009) (noting that the fact that "reasonable minds may differ on the wisdom of granting [a party's] motion is not sufficient to overturn a magistrate judge's decision"). A "court has the discretion to deny discovery requests if it determines that . . . 'the burden or expense of the proposed discovery outweighs its likely benefit.'" World Wrestling Fed'n. Ent'mt., Inc. v. William Morris Agency, Inc., 204 F.R.D. 263, 265 (S.D.N.Y. 2001) (quoting Fed. R. Civ. P. 26(b)(2)). B. Applicable Law 1. FSIA Under 28 U.S.C. § 1609, "the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611" of Title 28. 28 U.S.C. § 1609. "As a general matter, it is widely recognized that the FSIA's immunity provisions aim to protect foreign sovereigns from the burdens of litigation, including the cost and aggravation of discovery." Rubin v. Islamic Republic of Iran, 637 F.3d 783, 795 (7th Cir. 2011) (citing, inter alia, Republic of Philippines v. Pimentel, 553 U.S. 851, 865, 128 S. Ct. 2180, 171 L. Ed. 2d 131 (2008); [*8] Dole Food Co. v. Patrickson, 538 U.S. 468, 479, 123 S. Ct. 1655, 155 L. Ed. 2d 643 (2003)). See also EM Ltd. v. Republic of Argentina, 473 F.3d 463, 486 (2d Cir. 2007) ("FSIA immunity is immunity not only from liability, but also from the costs, in time and expense, and other disruptions attendant to litigation." (quoting Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 849 (5th Cir. 2000))). Thus, if the bank accounts in question are immune from attachment under section 1609, they are also immune from discovery. Under section 1610, there is an exception to immunity from post-judgment attachment of property "used for a commercial activity in the United States . . . [if] . . . (1) the foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication . . . or . . . (6) the judgment is based on an order confirming an arbitral award rendered against the foreign state, provided that attachment in aid of execution, or execution, would not be inconsistent with any provision in the arbitral agreement." 28 U.S.C. § 1610(a). "Commercial activity" is defined as "either a regular course of commercial conduct or a particular commercial transaction or act." 28 U.S.C.A. § 1603(d). [*9] Further, "[t]he commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." Id. As a general matter, 2011 U.S. Dist. LEXIS 103378, *5 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 22 of 30 Page 4 of 11 assets used exclusively to support diplomatic or consular functions are not considered assets used for a "commercial activity." See Liberian E. Timber Corp. v. Gov't of Republic of Liberia, 659 F.Supp. 606, 610 (D.D.C. 1987). The mere fact that assets are held in an account used by a state's embassy does not per se render the entire account immune from attachment or discovery. If an account is used "primarily (if not exclusively) for commercial, rather than diplomatic, purposes," it can be subject to attachment. Hill v. Republic of Iraq, No. 99 Civ. 03346TP, 2003 U.S. Dist. LEXIS 3725, 2003 WL 21057173, at *2 (D.D.C. Mar. 11, 2003). See also Weston Compagnie de Finance Et D'Investissement, S.A. v. La Republica del Ecuador, 823 F. Supp. 1106, 1114 (S.D.N.Y. 1993) (holding that "the Court cannot agree that the mere placing of funds not used for a central banking function in an account of a foreign central bank will immunize such funds from attachment"); Birch Shipping Corp. v. Embassy of the United Republic of Tanzania, 507 F. Supp. 311, 312 (D.D.C. 1980) [*10] (holding that it may be "proper to attach an account which is not used solely for commercial activity"). Respondent has the initial burden of demonstrating immunity under the FSIA, but once immunity has been established under section 1609, the opposing party must show that an exception under section 1610 or section 1611 applies. EM Ltd., 473 F.3d at 470 ("[P]laintiffs would not be able to attach the funds under the FSIA unless they were able to demonstrate that the funds had become property of the Republic 'used for a commercial activity in the United States.'" (quoting 28 U.S.C. § 1610(a)(1))). 2. Vienna Convention Under Article 25 of the Vienna Convention, a "receiving State shall accord full facilities for the performance of the functions of the [diplomatic] mission" of another signatory state. 23 U.S.T. at 3238. Courts have held that bank accounts of a sovereign nation's embassy that are "used or intended to be used for purposes of the diplomatic mission are immune from attachment to satisfy a civil judgment." Liberian E. Timber Corp., 659 F.Supp. at 608 ("The Liberian Embassy lacks the 'full facilities' the Government of the United States has agreed to accord if, to satisfy a civil [*11] judgment, the Court permits a writ of attachment to seize official bank accounts used or intended to be used for purposes of the diplomatic mission."). See also Foxworth v. Permanent Mission of Republic of Uganda to United Nations, 796 F. Supp. 761, 763 (S.D.N.Y. 1992) (holding that where attachment of defendant embassy's account would "force it to cease operations," then attachment would be contrary to the Vienna Convention). 3. FSIA-Related Discovery Although it is clear that the FSIA presumptively immunizes the property of a sovereign nation from attachment and discovery, it is less clear what the scope of discovery should be when determining whether an exception to FSIA immunity applies. As the Seventh Circuit recently explained: [a] potential difficulty arises . . . when an asserted exception to immunity turns on disputed facts. The FSIA does not directly address the extent to which a judgment creditor may pursue discovery to establish that the property he is seeking to attach fits within one of the statutory exceptions to the attachment immunity conferred by section 1609. Rubin, 637 F.3d at 795. There is no bright line rule for when discovery is appropriate to verify whether particular [*12] property is, in fact, immune from discovery under the FSIA. Rather, the circuit courts have urged that district courts proceed with caution, taking into account the "comity concerns" implicated in the "delicate balancing 'between permitting discovery to substantiate exceptions to statutory foreign sovereign immunity and protecting a sovereign's or sovereign agency's legitimate claim to immunity from discovery.'" First City, Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d 172, 176 (2d Cir. 1998) (quoting Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 534 (5th Cir. 1992)). The Second Circuit has emphasized that "[d]iscovery should be ordered circumspectly and only to verify allegations of specific facts crucial to an immunity determination." EM Ltd., 473 F.3d at 486. See also Rubin, 637 F.3d at 796-97 ("Discovery orders that are broad in scope and thin in foundation unjustifiably subject foreign states to unwarranted litigation costs and intrusive inquiries about their American-based assets. One of the purposes of the immunity codified in § 1609 is to shield foreign states from these burdens."). 2011 U.S. Dist. LEXIS 103378, *9 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 23 of 30 Page 5 of 11 C. Application of Law to Fact2 Respondent argues that Judge Freeman's discovery order must be reversed because the "undisputed record makes clear that the Accounts are not an attachable asset of the Respondent." (Mem. of Law in Support of Resp. Obj. to the April 4, 2011 Order of Magistrate Judge Debra Freeman, April 28, 2011 (hereinafter "Resp. Mem.") at 6.) Respondent bases this contention on the fact that it submitted an affidavit from its counsel that states that David J. Branson, Respondent's counsel, traveled to Laos in April 2011, where he "met with senior legal counsel, Mr. Sisoulath, and a representative responsible for North American diplomatic affairs at the Ministry of Foreign Affairs." (Declaration of David J. Branson, (hereinafter "Branson Decl.") ¶ 4.) He states: 6. Based upon this meeting, and a prior meeting with a representative of the Ministry [*14] of Finance, Mr. Rithikone, on January 4, 2011, there are only two bank accounts maintained by the Government of the Lao People's Democratic Republic in the United States: one account in Washington, DC used to maintain the Respondent's Embassy in its diplomatic duties, and one account in New York City used to maintain the Respondent's Diplomatic Mission to the United Nations. 7. In addition, based upon the enquiries described above, the Government of the Lao People's Democratic Republic does not maintain any bank accounts in the United States used for 'commercial activity' as that term is used in the U.S. Foreign Sovereign Immunities Act. (Branson Decl. ¶¶ 6 - 7 . ) This testimony does not create an "undisputed record" because it is of extremely limited evidentiary value. The declaration states expressly that it is based not upon personal knowledge, but rather, upon meetings with people who presumably have personal knowledge of these matters. Statements in an attorney's affidavit not based on personal knowledge are not entitled to evidentiary weight. See United States v. Maldonado-Rivera, 922 F.2d 934, 972 (2d Cir. 1990) (holding that the "court properly declined to credit [an] attorney's [*15] affidavit because it was not based on the attorney's personal knowledge"); cf. Fed. R. Evid. 602 ("A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter."); Fed. R. Civ. P. 56(e) ("A n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated."). In addition, Mr. Branson's statement that Respondent does not maintain any accounts used for "'commercial activity' as that term is used in the [FSIA]," (Branson Decl. ¶ 7), is a "conclusory statement[] of law" that is of no value. Omnipoint Commc'ns v. Common Council of Peekskill, 202 F. Supp. 2d 210, 213 (S.D.N.Y. 2002). Respondent cites Sales v. Republic of Uganda, No. 90 Civ. 3972, 1993 WL 437762 (S.D.N.Y. Oct. 23, 1993) as an example of a case where "[r]eliance upon an uncontroverted affidavit was . . . determinative." (Resp. Reply in Support of Its Rule 72(a) Obj. to Magistrate Judge Freeman's Order Relating to Diplomatic Bank Records and in Opp. to Cross-Motion for [*16] Sanctions, May 18, 2011 (hereinafter "Resp. Reply Mem.") at 3.) However, in that case, the affidavit stating that the accounts at issue were used only for diplomatic purposes was from the "Ambassador and Deputy Permanent Representative of Uganda." Sales, 1993 WL 437762, at *2. That is not the case here. Mr. Branson, an attorney uninvolved in Laos' diplomatic affairs, has submitted an affidavit that explicitly states that it is not based on his personal knowledge. The Court is thus left with little evidence to determine whether the "commercial activity" exception to FSIA immunity applies. 3 Respondent argues that Judge Freeman applied the wrong standard when she said, according to Respondent's counsel, that the proper test for discovery was "whether the information will lead to assets that could be attached." (Second Branson Decl. ¶ 11.) Without a written record of the conference, it is impossible to know precisely how Judge Freeman formulated the test that she was applying. However, the test, as quoted by [*17] Respondent, is not clearly erroneous. On the contrary, the decisions that Respondent cites acknowledge that, in certain circumstances, limited discovery will be necessary to ascertain whether an 2 As an initial matter, Petitioners argue that Respondent is [*13] estopped from objecting to the April 4 Order, since Judge Freeman entered the version of the order submitted by Respondent. However, it is clear that Respondent objected to the Order before it was issued, and its submission of language memorializing that Order, at Judge Freeman's request, did not waive Respondent's right to object to the substance of the Order. 3 There is no dispute that Respondent has waived sovereign immunity, and thus the exception under section 1610(a)(1) applies, as long as the assets are used for "commercial activity." 2011 U.S. Dist. LEXIS 103378, *12 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 24 of 30 Page 6 of 11 exception to FSIA immunity applies. See, e.g., Rafidain Bank, 150 F.3d at 176 (noting that "a plaintiff may be allowed limited discovery with respect to [a] jurisdictional issue") ; EM Ltd., 473 F.3d at 486 (acknowledging that discovery may be appropriate to "verify allegations of specific facts crucial to an immunity determination"). For example, in Rubin v. Islamic Republic of Iran, the Seventh Circuit acknowledged that a plaintiff may be entitled to discovery regarding the assets of the defendant, provided such discovery is not overly broad. 637 F.3d at 796-98. Specifically, the court held that "a plaintiff seeking to attach the property of a foreign state in the United States must identify the specific property that is subject to attachment and plausibly allege that an exception to § 1609 attachment immunity applies." Id. It was not clearly erroneous to find that Petitioners have met this burden with respect to bank accounts held by Respondent. Respondent cites Sales v. Republic of Uganda, [*18] which held that mere speculation about possible commercial activity does not suffice to allow large scale, intrusive discovery of a foreign sovereign: Plaintiffs suggest the possibility that some of the rent moneys might be used for non-diplomatic purposes. That subject could be explored only by painstaking examination of the Mission's budget and books of account. Such an exercise cannot be reconciled with the principle of sovereign immunity. 1993 WL 437762, at *4. But here, the discovery that Judge Freeman ordered does not involve a "painstaking examination of the [Embassy's and Consulate's] budget and books of account." Id. In fact, Judge Freeman substantially narrowed Petitioners' discovery requests, ordering discovery of only documents related to Respondent's U.S. bank accounts. The Court finds that this strikes a reasonable balance "between permitting discovery to substantiate exceptions to statutory foreign sovereign immunity and protecting a sovereign's or sovereign agency's legitimate claim to immunity from discovery." Rafidain Bank, 150 F.3d at 176. Should the evidence show that Respondent's accounts do not reflect any commercial activity, the discovery burden on Respondent will [*19] have been minimal. Indeed, Respondent's counsel appears to have agreed, both at the conference and in subsequent correspondence to Petitioners and to the Court, that he would provide that discovery, albeit over objection. 4 (See Fourth Declaration of Charlene C. Sun (hereinafter "Fourth Sun Decl."), Ex. B-E.) Respondent does not offer any authority for the proposition that the Vienna Convention immunizes property from discovery or attachment. The decisions cited by Respondent consider whether the Vienna Convention protects particular property from attachment. See, e.g., Liberian E. Timber Corp., 659 F.Supp. at 608. These decisions do not stand for the proposition that a plaintiff cannot seek discovery about particular assets to [*21] determine if that property is, in fact, immune under the Vienna Convention. For the foregoing reasons, Respondent's objection to the April 4 Order is overruled. 5 4 Respondent's counsel disputes that he agreed to produce this discovery, but the correspondence between the parties after the conference supports Petitioners' contentions. See Fourth Sun Decl. Ex. B, E-mail from David Branson to James E. Berger, Mar. 22, 2011, 1:58 PM (regarding the conference, stating "I . . . recall that the Embassy issue resulted from your statement that 'there must be Embassy bank accounts' - I agreed to see and produce documents from those accounts."); Ex. C, E-mail from David Branson to James E. Berger, Mar. 23, 2011, 11:25 AM ("I have no objection to making inquiries and producing documents relating to Bank accounts in the United States"); Ex. D, E-mail from David Branson to James E. Berger, Mar. 25, 2011, 5:05 PM ("The bank accounts of the Sovereign maintained for embassy use are not for 'commercial activities', but at Judge Freeman's suggestion I agreed [*20] to provide bank account records by April 8."); Ex. E, E- mail from David Branson to James E. Berger, Mar. 28, 2011, 6:18 PM ("I have agreed to produce bank documents by April 8."). In a letter to Judge Freeman on April 4, 2011, Respondent's counsel preserved his objection to producing the bank account information but stated that he would nevertheless produce the information. See Second Branson Decl., Ex. 8 ("At the court's instruction, Laos will be producing bank account information for embassy and diplomatic accounts. Laos does so with objection, since these accounts are immune from attachment. . . . (Laos also requests the bank information must be maintained under a confidentiality order that limits disclosure to counsel of record-we will ask counsel to concur."). 5 Respondent's Notice of Motion contains two additional arguments that are not addressed in its Memorandum of Law. First, Respondent argues that despite the applicability of Frontera Res. Azerbaijan Corp. v. State Oil Co. of the Azerbaijan Republic, 582 F.3d 393, 399-400 (2d Cir. 2009), which held that foreign states are not entitled to the personal jurisdictional protections of the due process clause, minimum 2011 U.S. Dist. LEXIS 103378, *13 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 25 of 30 Page 7 of 11 III. Petitioners' Cross-Motion for Sanctions Petitioners move for sanctions pursuant to Rule 37, the Court's inherent authority to [*23] award sanctions, and 28 U.S.C. § 1927. 6 Petitioners contend that Respondent should be sanctioned for: (1) failing to comply with Petitioners' discovery demands for, and with Judge Freeman's order to produce, the U.S. bank account information at issue, and (2) filing frivolous objections to the April 4 Order. Petitioners seek reimbursement from Respondent for expenses and attorneys' fees incurred in connection with litigating (1) Petitioners' motion to compel discovery and (2) Respondent's instant objections. For the reasons that follow, the Court grants Petitioners' motion pursuant to Rule 37, but the specific relief sought by Petitioners is denied. Petitioners' motion for sanctions pursuant to the Court's inherent authority and 28 U.S.C. § 1927 is hereby denied. A. Applicable [*24] Law Under Rule 37, if a motion to compel production of discovery is granted, "the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees." Fed. R. Civ. P. 37(a)(5)(A). The court "must not order this payment if . . . the opposing party's nondisclosure, response, or objection was substantially justified; or . . . other circumstances make an award of expenses unjust." Id. Rule 37 also provides that a court must order the payment of "reasonable expenses, including attorney's fees" by an opposing party who "fails to obey an order to provide or permit discovery." Fed. R. Civ. P. 37(b)(2). Similar to sub-section (5)(A), payment of expenses is inappropriate where the "failure was substantially justified or other circumstances make an award of expenses unjust." Id. Where "the nature of the alleged breach of a discovery obligation is the non-production of evidence, a district court has broad discretion in fashioning an appropriate sanction." Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 106-07 (2d Cir. 2002). [*25] Although severe sanctions under either provision, such as dismissal of the action, can generally be imposed only upon a showing of willfulness or bad faith on the part of the party refusing discovery, monetary damages may be awarded for discovery abuses or failures, even absent bad faith. See Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1066 & n.8 (2d Cir. 1979). A court may also impose sanctions on a party, its counsel, or both, for other misconduct in discovery under its inherent power to manage its own affairs. DLC Mgmt Corp. v. Hyde Park, 163 F.3d 124, 135-36 (2d Cir. 1998). Inherent power sanctions are appropriate only in "narrowly defined circumstances" and "must be exercised with restraint and discretion." Chambers v. NASCO, Inc., 501 U.S. 32, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991); see also DLC Mgmt Corp., 163 F.3d at 136 ("Because of the potency of the court's inherent power, courts must take pains to exercise restraint and discretion when wielding it."). In recognition of the need for restraint, the Second Circuit requires a particularized showing of bad faith to justify the use of the court's inherent power. United States v. Int'l Bhd. of Teamsters, 948 F.2d 1338, 1345 (2d Cir. 1991). [*26] A finding of bad contacts analysis is appropriate to the enforcement of discovery orders. Second, Respondent argues that production of Respondent's bank records must be kept confidential. The Court has already addressed the first argument, Respondent's jurisdictional argument, in its Order denying Respondent's motion to dismiss. (See Dkt. Entry No. 50.) Respondent has conceded that the argument has little merit, and that it included the argument to preserve it for appeal. (See Resp. Reply Mem. at 8.) In any event, the Second Circuit has made clear that "[t]he waiver by a foreign state [under the FSIA], rendering it party to an action, is [*22] broad enough to sustain the court's jurisdiction through proceedings to aid collection of a money judgment rendered in the case, including discovery pertaining to the judgment debtor's assets." Rafidain Bank, 281 F.3d at 53. This includes the ability to impose discovery-related sanctions. See, e.g., Ex.-Im. Bank of Republic of China v. Grenada, No. 06 Civ. 2469, 2010 U.S. Dist. LEXIS 137310, 2010 WL 5463876 (S.D.N.Y. Dec. 29, 2010) (imposing sanctions against foreign state that expressly waived immunity for failing to comply with plaintiff's discovery request). Respondent does not cite any authority for the proposition that a court's jurisdiction over a confirmation proceeding generally would not confer jurisdiction to order discovery or impose sanctions as necessary. As for the need to keep any production of documents confidential, Respondent is, of course, free to move for an appropriate protective order under Rule 26 of the Federal Rules of Civil Procedure, but this issue does not affect the question of whether Respondent is obligated to produce the documents in the first instance. 6 The parties also make several passing references to Rule 11 in their briefs on this issue. However, Rule 11 is not applicable to discovery- related motions. See Fed. R. Civ. P 11(d) ("This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37."). The Court will therefore not consider the Rule's application to Petitioner's cross-motion for sanctions. 2011 U.S. Dist. LEXIS 103378, *20 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 26 of 30 Page 8 of 11 faith requires "clear evidence that the challenged actions are entirely without color and are taken for reasons of harassment or delay or for other improper purposes and a high degree of specificity in the factual findings of the lower courts." Id. (internal quotations and citation omitted). Finally, a court may impose additional sanctions pursuant to 28 U.S.C. § 1927 on a party's counsel, as opposed to the party itself, for "multipl[ying] the proceedings in any case unreasonably and vexatiously." 28 U.S.C. § 1927. Like an award made pursuant to the court's inherent power, an award under § 1927 is punitive in nature. Therefore, sanctions under this statute also require a showing of bad faith. See Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986) (holding that an award made under § 1927 must be supported by a finding of bad faith similar to that necessary to invoke the court's inherent power). Sanctions under § 1927 are appropriate only "when the attorney's actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay." State St. Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 180 (2d Cir. 2004) [*27] (citation omitted). B. Application of Law to Fact 1. Rule 37 Sanctions a. Fed. R. Civ. P. 37(a)(5)(A) Petitioners claim that they moved to compel discovery on February 8, 2011, that Respondent thereafter produced the requested materials, and that Respondent is therefore required under Rule 37(a)(5)(A) to pay the costs of Petitioners' motion. Respondent argues that there can be no sanctions under Rule 37(a)(5)(A) because Petitioners never filed a motion to compel discovery. Petitioners claim that Judge Freeman stated during the March 18 teleconference that Petitioners' February 8, 2011 letter (the "February 8 letter"), seeking leave to move to compel compliance with its discovery request, would suffice as a motion to compel "and that no further submissions from Petitioners would be required to perfect that motion." (Fourth Sun Decl. ¶ 4.) As previously noted, the March 18 conference was not transcribed or recorded, and it is impossible to know with certainty what Judge Freeman said. However, the record and the absence of any subsequent written motion to compel, support Petitioners' contention that Judge Freeman deemed the February 8 letter a motion to compel. See Fourth Sun Decl. ¶ 4, Ex. [*28] A. Although Petitioners' February 8 letter constituted a motion to compel, Respondent's objection to discovery was "substantially justified" within the meaning of Rule 37(a)(5)(A). When deciding whether a failure to make discovery is "substantially justified," courts are aided by Pierce v. Underwood, 487 U.S. 552, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988), in which the Court effectively defined the phrase: "To our knowledge, that has never been described as meaning 'justified to a high degree,' but rather has been said to be satisfied if there is a 'genuine dispute . . . or 'if reasonable people could differ as to [the appropriateness of the contested action].'" Id. at 565 (brackets in original) (citations omitted). The law governing FSIA-related discovery is not clearly defined and is susceptible to genuine dispute. Respondent reasonably argued that the FSIA's immunity provisions shielded the production of its U.S. bank account records. Although its argument was ultimately denied by Judge Freeman and now by this Court, Respondent's objection to disclosure was "substantially justified" such that sanctions should not issue under Rule 37(a)(5)(A). c. Fed. R. Civ. P. 37(b)(2) Petitioners argue that Respondent is subject to [*29] sanctions under Rule 37(b)(2) because it violated Judge Freeman's April 4 Order when it failed to identify and produce the bank account records by the April 8 deadline set forth in that Order. Respondent claims that its timely objection to the April 4 Order precludes the imposition of sanctions. According to Respondent, "in light of the Government's timely filing of its Objection . . . it is a given that non-compliance with the Discovery Order in the meantime was 'substantially justified' within the meaning of Federal Rule 37(b)(2)(C)." (Resp. Reply Mem. at 11.) Respondent incorrectly states the law. Absent a stay of a magistrate judge's order, merely filing an objection to that order does not excuse a party from complying with it. See Lytton Indus., Inc. v. Lehman Bros. Kuhn Loeb, Inc., 124 F.R.D. 75, 78-79 (S.D.N.Y. 1989) (filing objections to an order by a magistrate judge does not operate to automatically stay the order). Where a party fails to obey a discovery order, this Court "must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially 2011 U.S. Dist. LEXIS 103378, *22 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 27 of 30 Page 9 of 11 justified [*30] or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(b)(2) (emphasis added). Respondent has not met its burden of proving that there was substantial justification for its failure to produce the relevant information or that there are any circumstances that make such an award unjust. 7 See, e.g., Worldcom Network Servs. v. Metro Access, Inc., 205 F.R.D. 136, 143 (S.D.N.Y. 2002) (noting that the burden is on the disobedient party to show its noncompliance is excusable under Rule 37(b)(2)). Respondent relies only on the argument that its timely filing of the instant objection relieves it from complying with the April 4 Order, which, as noted above, is insufficient justification for noncompliance. This Court therefore orders Respondent to pay to Petitioners the reasonable expenses and attorneys' fees Petitioners incurred as a result of Respondent's failure to comply with the April 4 Order. 8 Respondent shall pay those fees and costs reasonably incurred in connection with (1) Petitioners' efforts to obtain a response to the discovery request at issue after Respondent failed to produce the relevant information on April 8, as required by the April 4 Order; and (2) the sanctions motion itself. Petitioners are directed to submit a fee application detailing these fees and costs to Magistrate Judge Freeman by September 27, 2011. 2. Sanctions Pursuant to this Court's Inherent Authority and 28 U.S.C. § 1927 Petitioners argue that, pursuant to its inherent authority and 28 U.S.C. § 1927, the Court should sanction Respondent and its counsel for filing objections to the April 4 Order. 9 Petitioners seek reimbursement for their expenses and costs incurred in connection with litigating the objections. Petitioners point to two distinct categories of misconduct to support such an award. First, Petitioners contend that Respondent agreed to provide the U.S. bank account information at issue, only to "expressly repudiate[]" that arrangement and file the instant objections, thereby reneging on "an agreement that could have significantly expedited these proceedings" and "requir[ing] Petitioners to engage in, and the Court to entertain, over three months of unnecessary motion practice." (Pets. Reply Mem. in Support of Cross-Motion for Sanctions (hereinafter "Pets. Reply Mem.") at 7-8.). Second, Petitioners argue that Respondent's objections rely on frivolous legal arguments, fail to disclose binding authority, and contain a series of false factual statements and material omissions. (Pets. [*33] Reply Mem. At 8.). Sanctions pursuant to either the Court's inherent authority or 28 U.S.C. § 1927 may be imposed only upon a showing that Respondent's actions were undertaken in bad faith. See Oliveri, 803 F.2d at 1273. As articulated by the Second Circuit, bad faith requires "clear evidence that the challenged actions are entirely without color and are taken for reasons of harassment or delay or for other improper purposes." Int'l Bhd. of Teamsters, 948 F.2d at 1345 (internal quotations and citation omitted). Upon the record before it and the totality of the circumstances, the Court cannot conclude that either Respondent's behavior or that of its counsel evinces the bad faith required to satisfy this standard. 7 The record is unclear as to why Respondent ultimately failed to comply with the April 4 Order after representing that it would do so. Thus, there is not sufficient evidence to conclude that its noncompliance was in bad faith. However, a showing of bad faith is not required in order to impose the minimum sanction provided for by Rule 37(b)(2). See Cine Forty-Second Street Theatre Corp., 602 F.2d at 1066 & n.8 (upholding severe Rule 37 sanctions upon a showing of gross negligence [*31] only). 8 The Court notes that this mandatory relief is the minimum, mandatory sanction contemplated by Rule 37(b)(2). Petitioners have not requested more under Rule 37(b)(2) than the minimum, mandatory sanction, so the Court will not consider whether to award harsher sanctions. The Court notes, however, that the minimum sanction is particularly appropriate in light of Judge Freeman's decision on July 5, 2011 to sua sponte stay the April 4 Order she issued. Although Petitioners were certainly prejudiced by Respondent's failure to comply, that prejudice was tempered [*32] by Judge Freeman's stay of the Order. 9 28 U.S.C. § 1927 and a court's inherent authority provide distinct bases upon for a court's award of sanctions. Pursuant to its inherent power, a court may impose a wide range of sanctions against a party or its counsel for any abusive litigation practice undertaken in bad faith. See, e.g., Penthouse Int'l Ltd. v. Playboy Enters., 663 F.2d 371, 386 (2d Cir. 1981). In contrast, 28 U.S.C. § 1927 authorizes the imposition of sanctions against any lawyer who "unreasonably and vexatiously" proliferates litigation proceedings. Such sanctions are limited to the "excess costs, expenses and attorneys' fees reasonably incurred because of [the lawyer's] misconduct." 28 U.S.C. § 1927. Despite the narrower range of conduct to which 28 U.S.C. § 1927 applies and the more limited sanctions permitted under that statute, the Second Circuit has noted that "the only meaningful difference between an award made under § 1927 and one made pursuant to the court's inherent power is . . . that awards under § 1927 are made only against attorneys or other persons authorized to practice before the courts while an award made under the court's inherent power may be made against an attorney, a party, [*34] or both." Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986). Therefore, this Court will group the authorities together for purposes of analyzing Petitioners' arguments. 2011 U.S. Dist. LEXIS 103378, *29 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 28 of 30 Page 10 of 11 Petitioners argue that Respondent improperly delayed litigation by "reneg[ing]" on its agreement to produce the discovery and filing the instant objections. (Pets. Opp. to Resp. Rule 72(a) Objs. and Cross-Motion for Sanctions (hereinafter "Pets. Mem") at 22.) Although Respondent's counsel agreed to produce the U.S. bank account [*35] information, he did so only upon being ordered to do so over objection by Judge Freeman on March 18. His submission of a draft order memorializing Judge Freeman's ruling at her request does not preclude Respondent from objecting to the substance of that order. The record also shows that Respondent's counsel preserved Respondent's objection to production. See Second Branson Decl., Ex. 8 ("At the court's instruction, Laos will be producing bank account information for embassy and diplomatic accounts. Laos does so with objection, since these accounts are immune from attachment . . . ."); Second Branson Decl. Ex. 10 ("I also note that in my letter to this Court of April 4, 2011, the Government noted its objection to producing Embassy bank records 'since these accounts are immune from attachment . . . .'" ). 10 The Court acknowledges that Respondent caused undue delay by failing to produce the required information by the April 8 deadline set in Judge Freeman's order; however, delay alone, without "clear evidence" of bad faith, does not rise to the level of sanctionable conduct contemplated by the case law. As noted above, the record is insufficient to show that Respondent's noncompliance was in bad faith. Petitioners have not offered "clear evidence" that Respondent's failure to produce (and subsequent filing of the objections) was motivated by harassment, delay, or other improper purpose. See Int'l Bhd. of Teamsters, 948 F.2d at 1345. Petitioners also argue that Respondent should be sanctioned for its reliance [*37] on frivolous legal arguments, false factual statements and material omissions, and for its failure to disclose binding authority. Again, to succeed, Petitioners must show that Respondent's submission was "entirely without color and . . . taken for reasons of harassment or delay or other improper purpose." Id. A claim is colorable "when it has some legal and factual support, considered in light of the reasonable beliefs of the individual making the claim." Nemeroff v. Abelson, 620 F.2d 339, 348 (2d Cir. 1980). Although the Court has found Respondent's instant arguments to be without merit, the Court does not find Respondent's appeal to be sufficiently egregious to be sanctionable. The Court recognizes that there are some indicia of possible bad faith by Respondent in terms of the presentation of weak arguments. However, the Court does not believe that Respondent's filing evinces the bad faith or "serious and studied disregard for the orderly process of justice" that courts have required in order to impose inherent authority or § 1927 sanctions. Overnite Transp. Co. v. Chicago Indus. Tire Co., 697 F.2d 789, 795 (7th Cir. 1983); see also Grant v. Grenadier Realty Corp., 1986 WL 8223, at *1 (S.D.N.Y. Mar. 17, 1986) [*38] (quoting Overnite with approval). Accordingly, Petitioners' motion for expenses and costs associated with litigating the instant objections is denied. IV. Conclusion For the foregoing reasons, the Court AFFIRMS Magistrate Judge Freeman's April 4 Order. The Court also GRANTS IN PART and DENIES IN PART Petitioners' Cross-Motion for Sanctions. Pursuant to Rule 37(b)(2) of the Federal Rules of Civil Procedure, Respondent shall pay to Petitioners the costs Petitioners incurred as a result of Respondent's failure to comply with the April 4 Order. Particularly, Respondent shall pay those fees and costs reasonably incurred in connection with (1) Petitioners' efforts to obtain a response to the discovery request at issue after Respondent failed to produce the relevant information on April 8, 2011, as required by the April 4 Order; and (2) the sanctions motion itself. Petitioners are directed to submit a fee application detailing these fees and costs to Magistrate Judge Freeman by September 27, 2011. SO ORDERED. Dated: New York, New York September 12, 2011 10 The Court notes that Petitioners, while accusing Respondent of making false factual statements, have themselves failed to represent the facts with complete accuracy. As evidence of Respondent's agreement to produce the information at issue, Petitioners cite an April 4, 2011 letter submitted to Judge Freeman by Respondent's counsel. See Third Declaration of Charlene Sun (hereinafter [*36] "Third Sun Decl."), Ex. I. Petitioners misleadingly cite counsel's statement that "At the court's instruction, Laos will be producing bank account information for embassy and diplomatic accounts" without including the very next sentence: "Laos does so with objection, since these accounts are immune from attachment . . . ." Just as this Court is hesitant to impose sanctions without clearer evidence of Respondent's bad faith, so too is it wary of allowing the pot to call the kettle black. 2011 U.S. Dist. LEXIS 103378, *34 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 29 of 30 Page 11 of 11 /s/ Kimba M. Wood Kimba M. Wood United States District Judge End of Document 2011 U.S. Dist. LEXIS 103378, *36 Case 1:16-cv-09768-JFK Document 4-4 Filed 01/17/17 Page 30 of 30 B4638903.2 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK EDWARD NEWMAN, Plaintiff, v. THE REPUBLIC OF BULGARIA, Defendant. : : : : : : : : : : : : CIVIL ACTION NO. 16-CV-9768 [PROPOSED] ORDER Upon consideration of Defendant the Republic of Bulgaria’s Motion to Dismiss the Complaint of Plaintiff Edward Newman, it is hereby ORDERED that the Motion is GRANTED Dated this ___ day of __________, 2017. BY THE COURT: ___________________________________ THE HONORABLE JOHN F. KEENAN UNITED STATES DISTRICT JUDGE Case 1:16-cv-09768-JFK Document 4-5 Filed 01/17/17 Page 1 of 2 B4638903.2 CERTIFICATE OF SERVICE I, Christina Hioureas, certify that on this 17th day of January 2017, I electronically filed the foregoing document with the United States District Court for the Southern District of New York using the CM/ECF system, and, I will serve a copy of this document by U.S. mail to Plaintiff’s counsel: Thomas Joseph Foley Foley Griffin, LLP 666 Old Country Rd., Suite 305 Garden City, NY 11530 Phone: 516-741-1110 Email: tom@foleygriffin.com Dated: January 17, 2017 /s / Christina Hioureas Christina Hioureas Case 1:16-cv-09768-JFK Document 4-5 Filed 01/17/17 Page 2 of 2