Marathon CRE 2018-FL1 Issuer, Ltd. v. 257-263 W 34th Street LLC
- Katherine Failla
- 1:22-cv-01991
- U.S. District Court · Southern District of New York
- 4
In Marathon CRE v. 257-263 W 34th Street, Judge Failla denied jurisdictional discovery and a briefing stay, ordering supplemental briefs on remand issues.
The defendants were denied additional jurisdictional discovery and a stay of the briefing schedule. The plaintiff was required to file a supplemental brief, and the parties remained subject to the briefing deadlines set by the court. The court’s ruling did not decide the pending motion to amend, substitute parties, or remand.
What happened
Marathon CRE 2018-FL1 Issuer, Ltd. v. 257-263 W 34th Street LLC involved the defendants’ request for additional fact-finding about federal jurisdiction while the plaintiff sought to amend the complaint, substitute parties, and return the case to state court.
The defendants argued that discovery was needed to address the proposed new plaintiff’s citizenship and whether the assignment of the loans was intended to defeat diversity jurisdiction. The court noted that some limited jurisdictional discovery had already occurred and that the defendants had not described the additional discovery in enough detail.
Judge Katherine Polk Failla denied the request for additional jurisdictional discovery and denied the defendants’ request to pause the briefing schedule. She ordered the plaintiff to file a supplemental brief addressing the identified jurisdictional issues, followed by the defendants’ opposition and the plaintiff’s reply.
The detailed version
- Marathon CRE 2018-FL1 Issuer, Ltd. v. 257-263 W 34th Street LLC · No. 1:22-cv-01991
- Katherine Failla
- May 23, 2022
Background
The plaintiff had filed a motion to amend the complaint to substitute parties and to remand, meaning return, the case to state court. The defendants requested additional jurisdictional discovery and a continuance of the briefing schedule so they could respond to the plaintiff’s arguments.
The defendants said the discovery should address the proposed new plaintiff and its claimed New York resident limited partners. They also sought facts about the assignment of interests in the loans, including whether the assignment was intended to defeat diversity jurisdiction. Diversity jurisdiction is the federal court’s authority to hear certain disputes between citizens of different states or countries.
Court’s Analysis
The court explained that it has substantial flexibility in deciding how to investigate facts relevant to jurisdiction. It noted, however, that it had already authorized limited discovery concerning issues raised by the defendants and that the defendants had not identified the additional discovery they wanted in sufficient detail.
The court also observed that the defendants represented that the proposed discovery would focus on their secondary argument opposing remand. After reviewing the cited authorities, particularly the Supreme Court’s decision in Freeport-McMoRan, the court stated that the motivations behind the assignment were unlikely to decide the case. The court said the likely central issue was whether the plaintiff’s assignee was an indispensable party when the case was removed to federal court. An indispensable party is a party whose required involvement may affect whether the case can proceed without that party.
The court did not decide the plaintiff’s motion to amend, substitute parties, or remand in this order. It addressed only the requests for additional jurisdictional discovery and a stay of the briefing schedule.
Disposition
Judge Katherine Polk Failla denied the defendants’ request for jurisdictional discovery. The court also denied the defendants’ motion to stay the briefing schedule while additional discovery was conducted.
The court ordered the plaintiff to file a supplemental brief of no more than five pages by June 6, 2022, addressing the identified issues. The defendants’ opposition, if any, was due June 21, 2022, and the plaintiff’s reply, if any, was due July 5, 2022. The Clerk of Court was directed to terminate the motion at docket entry 41.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.