Court Opinion

ID: 815093
Source: CourtListenerOpinion
Date Created: 2013-01-10 15:19:10+00
Date Added: 2024-06-11T12:32:20.714167
License: Public Domain

11-4609-cv
         Tese-Milner v. The Diamond Trading Co.

                                      UNITED STATES COURT OF APPEALS
                                          FOR THE SECOND CIRCUIT

                                                  SUMMARY ORDER
     Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007,
     is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing
     a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic
     database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not
     represented by counsel.

 1               At a stated term of the United States Court of Appeals for the Second Circuit, held at the
 2       Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
 3       on the 10th day of January, two thousand and thirteen,
 4
 5       PRESENT:
 6
 7             DEBRA ANN LIVINGSTON,
 8             RAYMOND J. LOHIER, JR.,
 9                                Circuit Judges,
10             DONALD C. POGUE,
11                                Judge.*
12       ________________________________________________
13
14       W.B. DAVID & CO., INC.,
15
16                                         Plaintiff,

17       ANGELA TESE-MILNER, as Chapter 7 Trustee of the Estate
18       of W.B. David Co., Inc.,

19                                         Plaintiff-Appellant,
20
21                        -v.-                                                        No. 11-4609-cv

22       DE BEERS CENTENARY AG, DE BEERS CONSOLIDATED MINES
23       LTD., DE BEERS SOCIETE ANONYME, DE BEERS LV LTD.,
24       DIAMDEL SA, DIAMDEL NV, GARY RALFE, GARETH PENNY,
25       NICKY F. OPPENHEIMER, JONATHON OPPENHEIMER, ALAN

                 *
                 The Honorable Donald C. Pogue, Chief Judge of the United States Court of International
         Trade, sitting by designation.

                                                                1
 1   CAMPBELL, DEREK PALMER, STEPHEN LUSSIER, J. WALTER
 2   THOMPSON U.S.A., INC., J. WALTER THOMPSON COMPANY,
 3   DIANE WARGA-ARIAS, D. NAVINCHANDRA & CO., E.M.A.
 4   DIAMOND MANUFACTURING LIMITED, R.T. DIAMOND PVT.
 5   LTD., RICHOLD SA, S. VINODKUMAR & CO., SHREE
 6   RAMKRISHNA EXPORT, SUNDIAMOND BVBA, VENUS JEWEL,
 7   DALUMI DIAMONDS LTD., AMC BVBA, A. SCHWARTZ &
 8   SONS DIAMONDS LTD., ARJAV DIAMONDS NV, ASIAN STAR
 9   CO. LTD., ASTRA DIAMOND MANUFACTURERS LTD., B.
10   VIJAYKUMAR & CO., BHAVANI GEMS, BLUE STAR, C.
11   MAHENDRA EXPORTS, CLASSIC DIAMONDS (INDIA) LTD.,
12   D.D. MANUFACTURING NV, DALI DIAMONDS COMPANY NV
13   LTD., DE TOLEDO DIAMONDS LTD., DIAMANTHANDEL
14   A.SPIRA BVBA, DIAROUGH NV., DILIPKUMAR V. LAKHI,
15   DIGICO HOLDINGS LTD., DIMEXON DIAMONDS LTD.,
16   DYNAMIC DIAMOND CORP., E.F.D. LTD., EUROSTAR
17   DIAMOND TRADERS NV, FABRIKANT & SALANT GROUP LTD.,
18   FESTIDIAM CUTTING WORKS PTY LTD., FRUCHTER GAD
19   D IAMONDS LTD ., GEMBEL E UROPEAN S ALES NV,
20   HASENFELD-STEIN, INC., INTER GEMS-CLAES NV, J.B.
21   DIAMONDS, JULIUS KLEIN DIAMONDS LLC, K. GIRDHARLAL,
22   KGK ENTERPRISES, K.P. SANGHVI & SONS, KARP IMPEX
23   LTD., L.I.D. LTD., DILIP KUMAR V. LAKHI GROUP, LAXMI
24   DIAMOND, LAZARE KAPLAN INTERNATIONAL INC., LILI
25   DIAMONDS, LIVINGSTONES, LOUIS GLICK & CO., M. SURESH
26   & CO., MAHENDRA BROTHERS, MICHAEL WERDIGER, INC.,
27   MOHIT DIAMONDS IMPEX PVT. LTD., MOTI GANZ, NAVIN
28   GEMS, OVERSEAS DIAMONDS NV, KOTHARI & CO., PREMIER
29   GEM CORP., PREMIER DIAMOND CUTTING LTD., RAND
30   PRECISION CUT DIAMONDS (PTY) LTD., RATILAL BECHARLAL
31   & SONS, ROSY BLUE INC., ROSY BLUE NV (INDIA) PVT. LTD.,
32   SANGHAVI EXPORTS, SCHACHTER & NAMDAR POLISHING
33   WORKS LTD., SHEETAL MANUFACTURING CO, SHRENUJ &
34   COMPANY, LTD., SMOLENSK STATE UNITARY CO., KRISTAL
35   PRODUCTION CORP., STAR DIAMOND GROUP (SDG) BV,
36   SUASHISH DIAMONDS LTD., SUPERGEMS HOLDINGS LTD.,
37   SURESH BROTHERS, TACHE COMPANY NV, TASAKI SHINJU
38   CO. LTD., TRAU BROS. NV, PLUCZENIK DIAMOND CO. NV,
39   VIJAYDIMON BVBA, YAHALOMEI ESPEKA INTERNATIONAL
40   LTD., YERUSHALMI BROTHERS DIAMOND LTD., OTHER
41   SIGHTHOLDERS, JOHN DOES 1 84, CENTRAL SELLING
42   ORGANIZATION, CSO VALUATIONS A.G., DIAMOND
43   DEVELOPMENT COMPANY N.V., DIAMOND DEVELOPMENT
44   COMPANY S.A., DE BEERS S.A., DB INVESTMENTS, INC.,

                                                 2
 1   DIAMDEL HOLDINGS (LIMITED) HONG KONG, DE BEERS
 2   INVESTMENTS S.A.,
 3                           Defendants,

 4   DIAMOND TRADING COMPANY, LTD.

 5                           Defendant-Appellee.
 6   _______________________________________________

 7                                         John A. Wait and Yann Geron, Fox Rothschild LLP, New
 8                                         York, NY, for Plaintiff-Appellant.

 9                                         Steven C. Sunshine, John R. Seward, and Paul M. Eckles,
10                                         Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY
11                                         & Washington, D.C. for Defendant-Appellee.

12          Appeal from a judgment of the United States District Court for the Southern District of

13   New York (Wood, J.).

14          UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED

15   that the judgment entered September 30, 2011 is AFFIRMED in part and VACATED and

16   REMANDED in part.

17          Plaintiff-Appellant Angela Tese-Milner (“Trustee”), acting as Chapter 7 Trustee of the Estate

18   of Plaintiff W.B. David & Co., Inc., appeals the dismissal of her suit against various members and

19   associates of the De Beers Group (“De Beers”), including Defendant-Appellee Diamond Trading

20   Company, Ltd. The Trustee contests three orders of the District Court: (1) a March 27, 2007 order

21   vacating an entry of default against the De Beers defendants; (2) a February 24, 2010 order

22   dismissing the Trustee’s amended complaint for failure to state a claim; and (3) a September 29,

23   2011 order dismissing the Trustee’s second amended complaint for failure to state a claim. We

24   assume the parties’ familiarity with the underlying facts and procedural history of the case.

                                                      3
 1           1. March 27, 2007 Order

 2           The Trustee first contends that the District Court erred in vacating, under Federal Rule of

 3   Civil Procedure 55(c), an entry of default against the De Beers defendants. When determining

 4   whether there is “good cause” to vacate an entry of default under Rule 55(c), a district court must

 5   consider three factors: (1) the willfulness of the default; (2) the existence of a meritorious defense

 6   to the defaulted claims; and (3) the level of prejudice that the non-defaulting party might suffer

 7   should relief be granted. Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 171 (2d Cir. 2001). This

 8   determination is reviewed on appeal for abuse of discretion. Powerserve Int’l, Inc. v. Lavi, 239 F.3d

 9   508, 514 (2d Cir. 2001).

10           The Trustee argues that the District Court abused its discretion by vacating the entry of

11   default despite having found it “questionable” whether the De Beers defendants defaulted willfully.

12   A finding of willfulness is typically enough to let an entry of default stand. See, e.g., Brien v.

13   Kullman Indus., Inc., 71 F.3d 1073, 1078 (2d Cir. 1995). This does not mean, however, that once

14   a district court determines that a defaulting party acted willfully it must let the entry of default stand.

15   Here the District Court also concluded that De Beers had a meritorious defense and that W.B. David

16   would not suffer prejudice as a result of vacating the entry of default. We find no error in these

17   determinations. In light of all three factors, and also our general “preference for resolving disputes

18   on the merits,” id. at 1077, we cannot say that the District Court abused its discretion in vacating the

19   entry of default.

20           2. February 24, 2010 and September 29, 2011 Orders

21           The District Court’s February 24, 2010 and September 29, 2011 orders dismissed,

22   respectively, the Trustee's first amended complaint and second amended complaint for failure to

                                                         4
 1   state a claim. The District Court found that neither complaint related back to the Trustee’s original

 2   complaint under Federal Rule of Civil Procedure 15(c)(1)(B), thus making many of the claims

 3   untimely. The District Court also provided alternative grounds for dismissing most of the claims

 4   in the two amended complaints, which the Trustee does not challenge on appeal.

 5          Under Rule 15(c)(1)(B), an amendment to a pleading will relate back to that pleading when

 6   "the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence

 7   set out—or attempted to be set out—in the original pleading." As we have explained, the "central

 8   inquiry" under Rule 15 "is whether adequate notice of the matters raised in the amended pleading

 9   has been given to the opposing party within the statute of limitations by the general fact situation

10   alleged in the original pleading." Slayton v. Am. Express Co., 460 F.3d 215, 228 (2d Cir. 2006)

11   (internal citation and quotation marks omitted). Thus, an amended pleading that lays out the

12   allegations of a previous pleading in more definite and precise terms will relate back, but claims

13   based on an "entirely distinct set" of factual allegations will not. Id. We review a district court's

14   determination of whether an amended pleading relates back under Rule 15 de novo. Id.

15          We agree with the District Court that most of the allegations in the first and second amended

16   complaints do not relate back to the original complaint. We conclude, however, that there is one

17   claim that appears in all three complaints: that De Beers's "sight" system was, or was an attempt or

18   conspiracy to create, an unlawful restraint of trade and/or unlawful monopoly. This claim appears

19   in the second amended complaint at paragraphs 34, 48, and 63–67, in the amended complaint at

20   paragraphs 26–27, 34, and 38, and in the original complaint at paragraphs 134–37, 153–64, and 241.

21   De Beers had notice of this claim through all three pleadings, and the claim thus relates back to the

                                                      5
 1   filing of the original complaint. The District Court, which did not provide any alternative reasons

 2   for why the claim failed as a matter of law, erred in dismissing it on statute of limitations grounds.

 3           We have considered the Plaintiff-Appellant's remaining arguments and have determined that

 4   they are without merit. Accordingly, the judgment of the District Court is hereby VACATED and

 5   REMANDED in part for further proceedings as to the “sight” claims, and is AFFIRMED in part

 6   as to all other claims.

 7                                                         FOR THE COURT:
 8                                                         Catherine O’Hagan Wolfe, Clerk
 9

10

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