Isaly v. Boston Globe Media Partners, LLC

Background

Samuel D. Isaly brought a defamation action against Boston Globe Media Partners, LLC, based on an article published in STAT on December 5, 2017. The article reported former OrbiMed employees’ allegations that Isaly had harassed and demeaned female employees while serving as OrbiMed’s managing partner.

Boston Globe removed the action from New York state court based on diversity jurisdiction. Isaly then filed a First Amended Complaint adding Damian Garde, the article’s author, and Delilah Burke, a former assistant identified as a source. The opinion states that Garde and Burke, like Isaly, are New York citizens, so their addition would destroy complete diversity. Isaly moved to remand the case to state court, and Boston Globe moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the amended complaint for failure to state a claim.

Motion to Remand and Added Defendants

The court held that 28 U.S.C. § 1447(e) applied even though Isaly amended his complaint as a matter of course under Rule 15. That statute gives a federal court discretion to deny the addition of defendants whose joinder would destroy subject-matter jurisdiction, or to allow the joinder and remand the case.

The court found that the claims against Garde and Burke satisfied the basic requirements for joining defendants because they arose from the same article and involved common factual or legal questions. It nevertheless concluded that fundamental fairness did not support allowing the joinder. The court found that the timing of the amendment favored Isaly, but that possible prejudice to Boston Globe, the likelihood of multiple litigation, and—most importantly—Isaly’s motivation favored Boston Globe. The court inferred that Isaly was seeking to avoid litigating in the federal forum where his earlier, related defamation action had been dismissed.

The court therefore struck Garde and Burke from the First Amended Complaint and denied Isaly’s motion to remand in its entirety.

Motion to Dismiss

The court applied New York claim-preclusion law, known as res judicata, because the earlier judgment had been entered by a federal court exercising diversity jurisdiction. Claim preclusion generally bars a later lawsuit involving the same parties and the same transaction when an earlier court entered a judgment on the merits.

The court determined that the earlier dismissal was on the merits under applicable New York law. It found that the earlier court had intended to bring that action to a final conclusion, had directed the Clerk to enter judgment and close the case, and had examined the allegations and found them insufficient to plead that Boston Globe’s reporter acted with the required gross irresponsibility. The court also found that Isaly’s current complaint relied on virtually identical allegations and did not correct the defects identified earlier. Instead, it added conclusory assertions that the court was not required to accept as true.

Because the current claim was barred by res judicata, the court did not reach Boston Globe’s alternative arguments supporting dismissal. Judge Laura Taylor Swain granted Boston Globe’s motion to dismiss the First Amended Complaint with prejudice, directed entry of judgment, and closed the case.