PAMELA K. CHEN, District Judge.
Plaintiffs presently move for reconsideration of the Court's dismissal, with prejudice, of Plaintiffs' complaint on the basis that they were denied the opportunity to amend the complaint to allege additional facts that would have adequately stated a claim of defamation per se. Because Plaintiffs were given ample opportunity to allege any additional facts necessary to defeat the dismissal motion, and because the requested amendment would have been futile, Plaintiffs' request for reconsideration is denied.
Plaintiffs' complaint ("Complaint"), filed on April 27, 2013, asserted four causes of action: (1) a derivative claim on behalf of Sons of Norway against the individual defendants for breach of fiduciary duty; and (2) three claims against Sons of Norway alleging (a) defamation per se, (b) defamation, and (c) intentional infliction of emotional distress. (Dkt. 1 at 38-45.) On July 8, 2013, the Court set a briefing schedule in connection with Defendants' proposed motion to dismiss the Complaint pursuant to Federal Rules of Civil Procedure ("FRCP") 12(b)(1) and 12(b)(6). On August 26, 2013, Plaintiffs sought leave to file an amended complaint, arguing, in substance, that the amended complaint would defeat some of Defendants' dismissal arguments. (Dkt. 28 at 3.) That same day, the Court denied Plaintiffs' request to file an amended complaint, but allowed them to "include in [their] dismissal opposition all of the factual allegations [they] would assert in an amended complaint to establish personal jurisdiction." (August 26, 2013 Order.)
On September 12, 2013, the parties submitted the fully briefed motion. Plaintiffs' opposition to the motion included a section titled "Allegations of the Proposed Amended Complaint" ("Additional Allegations"). (Dkt. 48 at 4-7.) The Additional Allegations included several paragraphs regarding the basis for the Court's personal jurisdiction over the individual defendants. Additionally, and in disregard of the Court's order, Plaintiffs also included numerous newly asserted facts regarding the substance of their claims. Most pertinently, Plaintiffs alleged a new statement that they claimed was defamatory, viz., that non-defendant Paul Kornbrekke stated that "David Thorsen stole money from Nansen Lodge." (Dkt. 48 at 6.)
Two months later, on November 12, 2013, Plaintiffs submitted a request for leave to submit a sur-reply in further opposition to the motion or for oral argument. (Dkt. 49.) The Court granted Plaintiffs' request to submit a sur-reply (November 13, 2013 Order), which Plaintiffs submitted on November 28. (Dkt. 51.)
The Court granted Defendants' motion to dismiss the Complaint on February 6, 2013. (Dkt. 53.) First, the Court found that it had personal jurisdiction over the Defendants. Second, the Court addressed each of Plaintiffs' substantive claims, finding that each failed to state a claim upon which relief could be granted. (Dkt. 53.) On February 20, 2013, Plaintiffs timely moved for reconsideration of the grant of dismissal. (Dkts. 55-56.) Plaintiffs seek reconsideration of the Court's "dismissal of the Complaint with prejudice and dismissal of Count Two [defamation per se]." (Dkt. 56 at 5.) Plaintiffs also move the Court to "alter or amend the Judgment so that Plaintiffs may file an amended complaint." (Dkt. 56 at 5.)
A motion for reconsideration is the proper vehicle for bringing to the Court's attention matters it may have overlooked in its initial ruling or order. See Local Civil Rule 6.3. The grounds for reconsideration are an "intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992). "The standard for granting [a reconsideration motion] is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (citations omitted). "It is well-settled that [a motion for reconsideration] is not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple." Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.), as amended (July 13, 2012) (quotations omitted). Furthermore, arguments raised for the first time on reconsideration are not proper grounds for reconsideration. See Image Processing Techs., LLC v. Canon Inc., 10-CV-3867, 2012 WL 253097, at *1 (E.D.N.Y. Jan. 26, 2012) ("[A] party is not permitted to `advance new facts, issues or arguments not previously presented to the Court' on a motion for reconsideration.") (citing Caribbean Trading & Fid. Corp. v. Nigerian Nat'l Petroleum Corp., 948 F.2d 111, 115 (2d Cir. 1991)). "[A] party requesting [reconsideration] is not supposed to treat the court's initial decision as the opening of a dialogue in which that party may then use Rule [6.3] to advance new facts and theories in response to the court's rulings." Church of Scientology Int'l v. Time Warner, Inc., 92-CV-3024, 1997 WL 538912 (S.D.N.Y. Aug. 27, 1997). "`The purpose of the rule is to ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters.'" Woodard v. Hardenfelder, 845 F.Supp. 960, 966 (E.D.N.Y. 1994) (quoting McMahan & Co. v. Donaldson, Lufkin & Jenrette, 727 F.Supp. 833, 833 (S.D.N.Y. 1989)).
Here, Plaintiffs point to no intervening change of controlling law or extant controlling law that the Court overlooked. Plaintiffs likewise do not contend that the Court overlooked any facts or that new evidence is available. Rather, in essence, Plaintiffs contend that they would be able to assert new facts to save their defamation claims had they been given the opportunity to amend their complaint, and that the Court unfairly denied them the opportunity to plead additional facts by denying their motion to amend and then dismissing this action with prejudice. (Dkt. 56 at 7-8.) As discussed below, this argument is factually and legally incorrect.
Plaintiffs argue that reconsideration is warranted because they were denied the opportunity to allege additional, new facts that would have been sufficient to state a claim for defamation per se. (Dkt. 56 at 2.) However, as Plaintiffs acknowledge, although granted the limited opportunity to allege new facts about personal jurisdiction, Plaintiffs used that opportunity to also allege new facts "addressing Defendants' concerns as to the specificity with which Plaintiffs pleaded defamation and defamation per se." (Dkt. 56 at 2.) Based on a declaration submitted by their counsel, Plaintiffs additionally alleged, inter alia, that (1) at a Nansen Lodge meeting, Sons of Norway member "Paul Kornbrekke published the defamatory statement that David Thorsen stole money from Nansen Lodge", and (2) the "Committee [on which Defendants sat] was informed about the meeting, and the risk that defamatory statement would be published during the meeting [] before the meeting occurred." (Dkt. 48 at 17 (emphasis added).) Using these newly alleged facts, Plaintiffs argued in its dismissal opposition that they had stated a "legally cognizable claim for defamation" and that Defendants were vicariously liable for this purportedly defamatory act. (Dkt. 48 at 17-18.)
In deciding the motion to dismiss, the Court considered the additional facts asserted by Plaintiffs in support of their defamation claims. However, as the Court explained in its decision, those additional facts were insufficient to state a claim of defamation or defamation per se. (Dkt. 43 at 27-30.) With respect to the defamation claim, neither the Complaint nor the Additional Allegations alleged any "special damages" that flowed from the defamatory statement.
Plaintiffs' defamation per se claim did not fail because Plaintiffs were denied the opportunity to amend the complaint; it failed because Plaintiffs did not realize what was needed to sufficiently plead that claim. This lapse does not provide a basis for reconsideration. Naiman v. New York Univ. Hosps. Ctr., 95-CV-6469(RPP), 2005 WL 926904, at *1 (S.D.N.Y. Apr. 21, 2005) (purpose of Local Civil Rule 6.3 "is to `ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters.'") (quoting Carolco Pictures Inc. v. Sirota, 700 F.Supp. 169, 170 (S.D.N.Y. 1988)).
Having seized the opportunity to assert new factual allegations, which they presumably deemed necessary to defeat the dismissal motion, Plaintiffs cannot now, having lost the motion, claim that they intended to "reserve their right" to add even more facts, which would have saved their complaint. (Dkt. 37 at 4; Dkt. 48 at 4 n.3.) Plaintiffs are not allowed to selectively "reserve their right[s]" in this manner. The interests of justice do not justify allowing Plaintiffs to replead additional new facts, such as the enhanced defamatory statement, which Plaintiffs plainly could have alleged as part of its opposition had they understood and made the relevant arguments regarding the sufficiency of their defamation per se claim. The time to have added those facts and made those arguments has passed. See Lightfoot v. Union Carbide Corp., 110 F.3d 898, 909 (2d Cir. 1997) ("The district court properly declined to consider [the newly asserted evidence], as it had been in [plaintiff's] possession for two years before the court's order and therefore was not `newly discovered evidence' that might have justified reconsideration of the court's decision."); cf. Housing Works, Inc. v. Turner, 362 F.Supp.2d 434, 438 (S.D.N.Y. 2005) ("[L]itigants cannot be permitted to use litigation before a magistrate judge as something akin to [a] spring training exhibition game, holding back evidence for use once the regular season begins with the district judge.").
Plaintiffs failed to discuss anywhere in their dismissal opposition or sur-reply the elements of either their defamation or defamation per se claims, and failed to explain how the facts alleged in the Complaint or Additional Allegations satisfied these elements. (Dkt. 53 at 17-18). Indeed, Plaintiffs entirely failed to articulate their theory of why their claims supported a defamation claim—they did not allege or describe special damages nor explain the legal basis of the defamation per se claim. (Dkt. 48 at 16.) Accordingly, they have waived the arguments they now make on reconsideration. See, e.g., Nat'l Union Fire Ins. Co. of Pittsburgh v. Stroh Cos., Inc. 265 F.3d 97, 115 (2d Cir. 2001) (affirming district court's rejection of argument raised for the first time on a motion for reconsideration); Newbro v. Freed, 06-1722-CV, 2007 WL 642941 (2d Cir. Feb. 27, 2007) (summary order) ("[W]e conclude that the district court did not abuse its discretion in denying the [] motion for reconsideration. Because they raised it for the first time on reconsideration, the court properly refused to consider the [] argument[.]"); Goldberg v. UBS AG, 690 F.Supp.2d 92, 98 (E.D.N.Y. 2010) ("[B]y failing to timely raise such an argument during the briefing of its motion to dismiss, defendant waived its right to seek reconsideration of this point."); Nobel Ins. Co. v. City of New York, 00-CV-1328, 2006 WL 2848121, at *16 (S.D.N.Y. Sept. 29, 2006) ("Normally, [the Court] will not consider arguments raised for the first time in a reply brief, let alone [at or] after oral argument."); Halpert Enters., Inc. v. Harrison, 07-1144-CV, 2008 WL 4585466, at *3 (2d Cir. Oct. 15, 2008) (summary order) ("given [plaintiff's] failure to mention this argument in either its complaint or memorandum, raising any such claim even explicitly at oral argument would have been to no avail"). Accordingly, the Court denies reconsideration of Plaintiffs' waived arguments regarding defamation per se.
Plaintiffs argue, for the first time on reconsideration,
In any event, even if Plaintiffs were permitted to amend their complaint to include the alleged $5,000 theft statement by Kornbrekke (Dkt. 56 at 9), reconsideration still must be denied because further leave to amend Plaintiffs' defamation per se claim would be futile, due to a qualified privilege that applies to the alleged defamatory statement.
Leave to amend should not be granted where such amendment would be futile. "Where it appears that granting leave to amend is unlikely to be productive, [] it is not an abuse of discretion to deny leave to amend." Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993) (citing Foman v. Davis, 371 U.S. 178, 183 (1962)); Lucente v. Int'l Business Machines Corp., 310 F.3d 243, 258 (2d Cir. 2002) ("One appropriate basis for denying leave to amend is that the proposed amendment is futile."). "An amendment to a pleading is futile if the proposed claim could not withstand a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)." Lucente, 310 F.3d at 258 (citing Dougherty v. N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002)).
The elements of a defamation claim are that the defendant made: "(1) a false statement about the plaintiff, (2) published to a third party without authorization or privilege; (3) through fault amounting to at least negligence on [the] part of the publisher, (4) that either constitutes defamation per se or caused `special damages.'" Thai v. Cayre Grp., Ltd., 726 F.Supp.2d 323, 329 (S.D.N.Y. 2010) (citing Garguiulo v. Forster & Garbus, Esqs., 651 F.Supp.2d 188, 192 (S.D.N.Y. 2009) (itself citing Dillon v. City of New York, 261 A.D.2d 34 (1st Dep't 1999)).
In connection with the second element of a defamation and defamation per se claim, "New York recognizes a qualified common interest privilege when the allegedly defamatory statement is made between persons who share a common interest in the subject matter." Thai, 726 F. Supp. 2d at 330 (citing El-Hennawy v. Davita, Inc., 50 A.D.3d 625, 626 (2d Dep't 2008)). "The privilege creates a rebuttable presumption of good faith that constitutes a complete defense to defamation." Hussey v. N.Y. State Dep't of Law/Office of Atty. Gen., 933 F.Supp.2d 399, 414 (E.D.N.Y. 2013). "At the pleadings stage, a plaintiff can overcome the common interest privilege by alleging that the defamatory statement was motivated solely by [common law or constitutional]
New York courts apply the common interest privilege in a variety of situations, including "`where members of an organization discuss among themselves matters of concern to the organization.'" Kalika v. Stern, 911 F.Supp. 594, 604 (E.D.N.Y. 1995) (quoting Brockman v. Frank, 149 Misc.2d 399, 401 (N.Y. Sup. Ct. 1991)). Such common interest privilege regularly is found where "the speaker and the listeners were generally members of a group or organization-which undoubtedly suggested a robust common interest existed." Walther v. Maricopa Int'l Inv., Corp., 97-CV-4816, 1998 WL 689943, at *2 (S.D.N.Y. Sept. 30, 1998) (collecting cases).
Here, Plaintiffs argue that "Paul Kornbrekke stated to the assembled Nansen Lodge members that David Thorsen stole $5,000 from Nansen Lodge" and that "[t]his is a false statement that Mr. Kornbrekke published to the assembled members of Nansen Lodge." (Dkt. 56 at 9) (emphases added). Kornbrekke and the members of the Nansen Lodge all share a common interest in the subject matter asserted in Kornbrekke's purportedly defamatory statement. Members of a fraternal organization certainly share a common interest in the operations of the organization and how the organization's funds are being used.
Because a common interest privilege applies to the newly alleged statement by Kornbrekke, permitting Plaintiffs to amend the complaint to add this allegation would be futile. Accordingly, the Court denies reconsideration on that additional basis.
Lastly, Plaintiffs seek clarification that "Sons of Norway is vicariously liable for the tortious acts of officers of Nansen Lodge . . . when the officers are acting in their official capacities as officers of Sons of Norway, and within the scope of their authority of Sons of Norway." (Dkt. 56 at 13.) Because the Court's decision, which is not being reconsidered, was based on findings that Plaintiffs failed to state any of the claims set forth in their Complaint and Additional Allegations, there is no reason for the Court to reach the issue about Defendants' vicarious liability. The Court, therefore, declines to do so.
For the reasons stated herein, Plaintiffs' motions for reconsideration and for alteration of the judgment are denied in their entirety.
SO ORDERED: