SUE L. ROBINSON, District Judge.
On June 25, 2015, plaintiff Mario Alberto Lopez Garza, the Executor of the Estate of Hans Jorg Schneider Sauter ("plaintiff" or "Estate") filed this action against Citigroup, Inc. ("Citigroup" or "defendant") seeking an accounting to determine whether defendant has information with respect to funds that may belong to the Estate. (D.I. 1) Presently before the court is Citigroup's motion for costs and a stay pursuant to Federal Rule of Civil Procedure 41(d). (D.I. 7) The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332.
Plaintiff Mario Alberto Lopez Garza resides in Jalisco, Mexico, and claims to serve as the Executor for the Estate of Hans Jorg Scneider Sauter. (D.I. 1 at ¶ 2) Hans Jorg Scneider Sauter was a citizen of Mexico and died on March 4, 2008. (Id. at ¶ 3) Citigroup is a global bank incorporated in the State of Delaware, with its principle place of business in New York, New York. (Id. at ¶ 4) Grupo Financiero Banamex, S.A. de C.V. ("Banamex") is a wholly owned, indirect subsidiary of Citigroup. (D.I. 11 at ¶ 5)
Plaintiff alleges that Mr. Schneider Sauter deposited approximately $340,000,000 in two Banamex accounts between August 2002 and June 2003. (D.I. 10, ex. 1 at ¶¶ 9, 12) Plaintiff claims to possess three Banamex documents that establish Banamex is holding substantial depository funds that belong to the Estate. (D.I. 1 at ¶ 11) Plaintiff alleges that the first document purports to describe an internal banking investigation with respect to Mr. Schneider Sauter and his accounts, and suggests that any dispute will be fully resolved and any funds returned to Mr. Schneider Sauter's control once he "signs the resolution of the Cumulative Processing, which shows that the funds of the [account] are of licit origin and amount to the sum of 780,046,970 pesos."
With these documents, plaintiff initiated probate proceedings in Mexico in November 2012. (D.I. 10, ex. 1 at ¶ 25) Between March 4, 2013, and April 7, 2014, the Mexican probate judge issued thirteen orders directing Banamex to turn over the alleged funds to the Estate or "come forward with evidence sufficient to defeat the Estate's claim to the funds." (D.I. 1 at ¶ 13) In response, Banamex filed legal proceedings in Mexican civil courts asserting that the probate court lacks judicial power to order Banamex to turn over the alleged funds. (Id. at ¶ 14)
In July 2014, while the Mexican proceedings were still ongoing, plaintiff commenced an action against Banamex, Banamex USA, and Citigroup in the United States District Court for the Southern District of New York ("New York litigation"), alleging "(1) fraudulent conversion that justifies piercing the corporate veil; (2) a claim under the Alien Tort Claims Act; (3) a claim under the Expedited Funds Availability Act; and (4) a claim for enforcement of money judgments under New York law." Estate of Sauter v. Citigroup Inc., Civ. No. 14-05812 LGS, 2015 WL 3429112, at *1 (S.D.N.Y. May 27, 2015). One month later, plaintiff filed an amended complaint, which added a new defendant (Grupo Financiero Banamex, S.A. de C.V.), new factual allegations, and a new cause of action asserted under the Racketeer Influenced and Corrupt Organization Act ("RICO"). Id.
Citigroup alleges that it requested that plaintiff withdraw the amended complaint because it was deficient and did not comply with the requirements of Federal Rule of Civil Procedure 11. (D.I. 8 at 4) Plaintiff declined to do so. (Id.) On October 29, 2014, the New York defendants timely responded to the amended complaint with a motion to dismiss.
On November 10, 2014, plaintiff timely filed a motion seeking leave to file a proposed second amended complaint. Estate of Sauter, 2015 WL 3429112, at *2. The court, finding that the proposed second amended complaint was a complete rewrite
On May 27, 2015, the court ruled that the "extreme circumstances" necessary to vacate a voluntary dismissal were not present, and denied Citigroup's motion.
On June 25, 2015, plaintiff filed the instant complaint, claiming that Citigroup, Banamex's indirect corporate parent, must account for the funds Mr. Schneider Sauter allegedly deposited at its foreign subsidiary. (D.I. 1 at ¶¶ 17-19)
"If a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court: (1) may order the plaintiff to pay all or part of the costs of that previous action; and (2) may stay the proceedings until the plaintiff has complied." Fed. R. Civ. P. 41 (d).
Rule 41(d) endows federal courts with "broad discretion" to order stays and the payment of costs to deter "forum shopping and vexatious litigation." Esquivel v. Arau, 913 F.Supp. 1382, 1386 (C.D. Cal. 1996); see also Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 874 (6th Cir. 2000) (stating that 41(d) is "intended to prevent attempts to gain any tactical advantage by dismissing and re-filing the suit"). "[T]he court should simply assess whether the plaintiff's conduct satisfies the [rule's] requirements" and grant the motion if "the circumstances of the case warrant an award . . . to prevent prejudice to the defendant." See Esquivel, 913 F. Supp. at 1388. Generally, however, costs have been imposed only in those cases where the plaintiff has brought an identical, or nearly identical, claim and requested identical, or nearly identical, relief. Young v. Dole, Civ. No. 90-2667(TCP), 1991 WL 158977, at *3 (E.D.N.Y. July 11, 1991). To determine the scope of each of two successive claims and thus whether the second claim duplicates the first, the court must consider "whether the same transaction or connected series of transactions is at issue, whether the same evidence is needed to support both claims, and whether the facts essential to the second [claim] were present in the first." NLRB v. United Technologies Corp., 706 F.2d 1254 (2d Cir. 1983). In essence, it must inquire whether the present claim might have been adjudicated based upon the facts involved in the first. Id.
Plaintiff avers that Rule 41(d) does not apply because: the complaint at bar pleads a different count and seeks different relief; Citigroup has not demonstrated bad faith on plaintiff's part; costs cannot be awarded for any tasks that would be useful to Citigroup in the instant action; and costs recoverable under Rule 41(d) do not include attorney fees. (D.I. 10 at 6-12)
Plaintiff avers that the current complaint "differs substantially" from the voluntarily dismissed complaint because it "only makes sixteen factual allegations and pleads only one count seeking an accounting." (Id. at 6) Therefore, plaintiff contends Citigroup is not entitled to costs under Rule 41(d). (Id.)
In comparing the New York complaint to that filed in Delaware, the court finds: (1) although the New York complaint asserted forty-four factual allegations, the current complaint does not add any new allegations, and the factual allegations made at bar are not materially different from the New York complaint; (2) although the New York complaint asserted five counts for relief and the current complaint pleads only one count, plaintiff seeks nearly identical relief. (Id., ex. 1); (D.I. 1) In this regard, the New York complaint sought damages, but also requested that "the court order Citigroup and the other [d]efendants to turn over information pertaining to all accounts of Hans Jorg Schneider Sauter immediately." (Id., ex. 10 at 24-25) Plaintiff currently asks the court to "order an accounting capable of permitting Counsel Garza to ascertain all transfers of funds into and out of the bank accounts formerly belonging to the decedent." (D.I. 1 at ¶ 19) The court finds that, under the standard of Rule 41(d), plaintiff has "commence[d] an action based upon or including the same claim[s] as brought in a previously dismissed action against the same defendant." Fed. R. Civ. P. 41(d).
Plaintiff also avers that, by filing this second suit, he is not acting in bad faith or "trying to game the system."
Plaintiff contends that the burden is on a defendant seeking an award of costs under Rule 41 (d) to demonstrate that money spent on tasks in the first lawsuit will not be necessary to defend against the second suit.
The court concludes that Citigroup has established that it incurred "needless expenditures" and cannot rely entirely on the work performed in the New York litigation to defend against the suit at bar. The work done by Citigroup in drafting its motion papers in the voluntarily dismissed New York litigation involved researching, analyzing, and preparing to defend against plaintiff's claims under the Alien Tort Statute, fraudulent conversion, the Expedited Funds Availability Act, and RICO. Estate of Sauter, 2015 WL 3429112, at *1. These claims, as well as numerous factual allegations previously asserted by plaintiff, have all been dropped from the present suit and, therefore, such work has little value in this action.
The court must also address the question of whether attorney fees can be included in an award of costs under Rule 41(d), as Citigroup has sought attorney fees in its request. In this regard, Citigroup argues that the underlying purpose and the absence of any qualifier from the language of Rule 41(d) indicate that costs recoverable under Rule 41(d) include attorney fees.
The Supreme Court has recognized the "American Rule" that, absent express statutory authority, bad faith,
The court finds itself confronting an issue of first impression in this circuit, and the courts that have addressed this issue in different circuits and districts are split.
The plain language of Rule 41(d), which does not refer to "attorney fees," implies that "costs" do not include "attorney fees." Fed. R. Civ. P. 41(d). The Supreme Court has noted that exclusion from a statute of any mention of attorney fees bears significantly on the determination of whether the award of such fees was intended. See Marek v. Chesny, 473 U.S. 1, 8-9 (1985).
Rule 41(d) does not expressly provide for the award of attorney fees. Under the plain language of the Rule, Citigroup should receive only costs and not attorney fees.
The court has discretion to order a stay of the instant action pending plaintiff's payment of the costs imposed under Rule 41(d). Fed. R. Civ. P. 41(d). In this case, plaintiff has not persuaded the court that it would be unable to pay an award of costs, nor has plaintiff asserted that it would be harmed in any way by a stay of the proceedings. The court, therefore, finds a stay appropriate.
For the foregoing reasons, Citigroup's motion for costs and a stay pursuant to Federal Rule of Civil Procedure 41 (d) will be granted. (D. I. 7) An appropriate order shall issue.