Nastasi & Associates, Inc. v. Bloomberg, L.P.

Background

Nastasi & Associates, Inc. moved for reconsideration of the Court’s March 11, 2020 ruling that Nastasi lacked Article III standing to bring claims that it had assigned to the Franklin D. Nastasi Trust before filing this lawsuit. Article III standing is the requirement that a plaintiff have the legal basis to bring a claim in federal court.

Defendants had raised standing in their motion to dismiss. They relied on Nastasi’s allegations in a related state-court case stating that, effective January 1, 2017, the Trust became the owner of all of Nastasi’s assets, including the rights to its accounts receivable. In opposing the motion to dismiss, Nastasi did not dispute the accuracy of those allegations or submit evidence challenging the Trust’s ownership. Instead, it argued that Nastasi remained the proper party because it had participated in the conduct described in the complaint.

Reasons for Denying Reconsideration

The court held that reconsideration is not a chance to relitigate issues, present new theories, or take a second opportunity to submit evidence that could reasonably have been submitted earlier. Nastasi’s new documents were, with one exception, either in its possession when it opposed the motion to dismiss or readily obtainable. The remaining email exchange occurred before the court issued its March 11 ruling. The court therefore found that the evidence was not a proper basis for reconsideration under Rules 59(e) and 60(b)(2) of the Federal Rules of Civil Procedure.

Nastasi also argued that its failure to submit the evidence earlier was excusable neglect under Rule 60(b)(1). Applying the factors governing excusable neglect, the court emphasized that Defendants had raised the standing issue well before Nastasi filed its opposition and that Nastasi had never sought to submit evidence disputing the Trust’s ownership. The court found no legitimate reason for the delay and concluded that allowing Nastasi to change its position after the delay would prejudice Defendants.

The court also rejected relief under Rule 60(b)(6), which permits relief for other reasons only in extraordinary circumstances not covered by the rule’s other provisions. The court found that Nastasi’s grounds were covered by other parts of Rule 60(b) and that Nastasi had not shown extraordinary circumstances or good cause for waiting.

Effect of the New Evidence

The court stated that even if it considered Nastasi’s late-submitted evidence, the evidence would not establish standing. The Security Agreement supported the conclusion that the transfer of “all of [Nastasi’s] assets” included claims and other rights. The evidence concerning a 2013 assignment did not explain what happened on January 1, 2017, when Nastasi’s own allegations said the Trust became the owner of all its assets. The court also noted that an email referred to other documents concerning the transfer, but Nastasi did not submit those documents or explain their significance.

Other Requests

The court rejected Nastasi’s argument that it had not been given an opportunity to challenge the accuracy of its state-court allegations. The court found that Defendants had expressly raised the issue and that Nastasi had been able to submit evidence but had chosen not to dispute the Trust’s ownership.

The court also rejected Nastasi’s request to have the Trust join the case or ratify Nastasi’s authority under Rule 17(a). It held that the lack of standing was a subject-matter jurisdiction problem, not merely a problem concerning the proper party, and that adding or substituting the Trust could not cure Nastasi’s lack of standing when the case began. The court further stated that, even under Rule 17(a), Nastasi had had a reasonable time to seek joinder or ratification before the March 11 ruling.

Finally, the court denied leave to amend. Nastasi had not requested permission to amend in its opposition, and the court found amendment futile because Nastasi had twice failed to establish standing. The court also noted that Nastasi had previously been allowed to amend to address issues raised in Defendants’ earlier motion to dismiss, including standing, and had been warned that it would not receive another opportunity.

Disposition

The court denied Nastasi’s motion for reconsideration and denied leave to amend. The Clerk of Court was directed to terminate ECF Nos. 174, 176, and 181.