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Ukrainian Future Credit Union v. Seikaly

United States District Court, E.D. Michigan, Southern Division

December 15, 2017

UKRAINIAN FUTURE CREDIT UNION, Plaintiff,
v.
WILLIAM R. SEIKALY, et al., Defendants.

          ORDER DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION OF THE COURT'S ORDER AND JUDGMENT OF NOVEMBER 27, 2017 (ECF #42)

          MATTHEW F. LEITMAN UNITED STATES DISTRICT JUDGE

         By order dated November 27, 2017, this Court, among other things, (1) dismissed with prejudice the sole federal claim in Plaintiff Ukrainian Future Credit Union's First Amended Complaint (for violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”)), (2) dismissed without prejudice the state-law claims in the First Amended Complaint, and (3) denied Plaintiff's motion for leave to file a proposed Second Amended Complaint containing a second federal claim (for violation of the Defend Trade Secrets Act, 18 U.S.C. §§ 1832-1839 (“DTSA”)). (See ECF #40, the “Dismissal and Denial Order”.) The Court entered a judgment against Plaintiff that same day. (See ECF #41.) Plaintiff has now filed a motion for reconsideration of the Dismissal and Denial Order and amendment of the Court's judgment. (See ECF #42.) Plaintiff has failed to demonstrate that the Court erred. Accordingly, the motion for reconsideration is DENIED.

         I

         Plaintiff seeks reconsideration of the Dismissal and Denial Order and the judgment under both Rule 59(e) of the Federal Rules of Civil Procedure and Local Rule 7.1. “A court may grant a Rule 59(e) motion to alter or amend if there is: (1) a clear error of law; (2) newly discovered evidence; (3) an intervening change in controlling law; or (4) a need to prevent manifest injustice.” Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir. 2005). Under Local Rule 7.1, “[t]he court will not grant [a] motion[ ] … that merely present[s] the same issues ruled upon by the court, either expressly or by reasonable implication. The movant must not only demonstrate a palpable defect ... but also show that correcting the defect will result in a different disposition of the case.” E.D. Mich. L.R. 7.1(h)(3).

         II

         A

         Plaintiff contends that the Court erred by “consider[ing] matters outside the pleadings for the purpose of ruling on Defendant's Motion to Dismiss….” (Mot. for Reconsideration, ECF #42 at Pg. Id. 1311.) Specifically, Plaintiff faults the Court for “consider[ing]” certain state court transcripts as part of its analysis under Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Id. at Pg. ID 1311, 1318-19.) But that did not happen.

         The Court made crystal clear in the Dismissal and Denial Motion that it was not considering the state court transcripts as part of its analysis under Rule 12(b)(6). The Court referenced the transcripts in Section I(C) of the Dismissal and Denial Order. In footnote one of the Dismissal and Denial Order, the Court said that “the procedural history recited in [Section I(C)] is offered for background purposes only and is not the basis for the Court's decision to dismiss this action.” (Dismissal and Denial Order, ECF #40 at Pg. ID 1282, n.1; emphasis added.) And the section of the Dismissal and Denial Order analyzing the viability of the lone federal claim in the First Amended Complaint does not contain a single reference to the state court transcripts. (See Id. at Pg. Id. 1290-95.) On the contrary, that section focuses exclusively on Plaintiff's allegations (and the lack thereof). Simply put, the Court is hard pressed to discern any good faith basis for Plaintiff's argument that the Court erroneously considered matters outside the pleadings in the context of its analysis under Rule 12(b)(6).

         B

         Plaintiff next attempts to refute the “contention that Plaintiff's claims regarding Plaintiff's misappropriated documents were actually fully and fairly litigated in state court.” (Mot. for Reconsideration, ECF #42 at Pg. ID 1319-21.) Plaintiff insists that the state courts violated its due process rights and did not permit a fair and full adjudication of its claim that Defendants misappropriated its documents. This argument is puzzling because the Court did not rest any portion of its ruling on the result of any state court litigation. Defendant Lidia Shibanov sought dismissal of this action on the basis of res judicata, and in the context of that argument, she asserted that Plaintiff had a full and fair opportunity in state court to litigate its claims concerning its documents and confidential information. (See Shibanov Mot. to Dismiss, ECF #32 at Pg. ID 1009-15.) But the Court never reached that argument nor ruled on Shibanov's res judicata defense. Thus, Plaintiff's arguments concerning alleged deficiencies in the state court proceedings do not undermine the Court's ruling in any way.

         C

         Plaintiff next argues that the Court erred when it denied Plaintiff leave to file its proposed Second Amended Complaint without allowing Plaintiff the opportunity to cure defects in that pleading. This argument lacks merit.

         Plaintiff never asked for an opportunity to amend its proposed Second Amended Complaint, nor did Plaintiff ever suggest that, if given the chance to do so, it could amend that pleading to address the defects that led the Court to reject that pleading. Indeed, as the Court explained in the Dismissal and Denial Order, Plaintiff “never responded” to the argument by Defendant Shibanov that, in large part, persuaded the Court to deny Plaintiff leave to file its proposed Second Amended Complaint. (Dismissal and Denial Order, ECF #40 at Pg. ID 1300.) “[A] district court does not abuse its discretion in failing to grant leave to amend where such leave is not sought.” Islamic Center of Nashville v. Tennessee, 872 F.3d 377, 387 (6th Cir. 2017) (quoting Sinay v. Lamson & Sessions Co., 948 F.2d 1037, 1041-42 (6th Cir. 1991)).

         Plaintiff's request for leave to amend in its motion for reconsideration has come far too late. “When a party seeks to amend a complaint after an adverse judgment, it [] must shoulder a heavier burden.” Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612, 616 (6th Cir. 2010). When faced with a post-judgment request for leave to amend, a court must consider the “competing interest of protecting the finality of judgments and expeditious termination of litigation.” Id. at 615-16 (citations and quotations omitted). “Instead of meeting only the modest requirements of Rule 15, the claimant must meet the requirements for reopening a case established by Rules 59 or 60.” Id. at 616. “A court acts within its discretion in denying a Rule 15 and a Rule 59 motion on account of undue delay-including delay resulting from a failure to incorporate previously available evidence []-and ought to pay particular attention to the movant's explanation for failing to seek leave to amend prior to the entry of judgment.” Id. ...


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