Catskill Development v. Park Place Entertainment

• Decision Date: 07 October 2003
• Docket Number: No. 00 CIV. 8660 CMGAY.,00 CIV. 8660 CMGAY.
• Citation: 286 F.Supp.2d 309
• Court: U.S. District Court — Southern District of New York
• Parties: CATSKILL DEVELOPMENT, L.L.C., Mohawk Management, L.L.C., and Monticello Raceway Development Company, L.L.C., Plaintiffs, v. PARK PLACE ENTERTAINMENT CORP., Defendant.

286 F.Supp.2d 309

CATSKILL DEVELOPMENT, L.L.C., Mohawk Management, L.L.C., and Monticello Raceway Development Company, L.L.C., Plaintiffs, v. PARK PLACE ENTERTAINMENT CORP., Defendant.

No. 00 CIV. 8660 CMGAY.

United States District Court, S.D. New York.

October 7, 2003.

Thomas P. Puccio, Thomas P. Puccio, Esq., New York City, John P. Gallagher, Stites & Harbison PLLC, Atlanta, GA, Bethany A. Breetz, Stites & Harbison, Louisville, KY, Herbert F. Kozlov, Reed Smith, LLP, Andrew L. Frey, Mayer, Brown, Rowe & Maw, Herbert F. Kozlov, Reed Smith, LLP, New York City, William WHopson, J.D. Humphries, III, Stites & Harbison, PLLC, Atlanta, GA, for Catskill Development, L.L.C., Mohawk Management, L.L.C., Monticello Raceway Development Company, L.L.C., plaintiffs.

David Boies, Boies, Schiller & Flexner, L.L.P., Armonk, NY, for Park Place Entertainment Corporation, defendant.

MEMORANDUM DECISION AND ORDER

MCMAHON, District Judge.

Plaintiffs Catskill Development, L.L.C. ("Catskill"), Mohawk Management, L.L.C. ("Mohawk") and Monticello Raceway Development Co., L.L.C. ("Monticello") (collectively, "Plaintiffs" or the "Catskill Group") move pursuant to Federal Rule of Civil Procedure 60(b)(3) to vacate this Court's decision granting defendant Park Place Entertainment Corp. ("Park Place") summary judgment on plaintiffs' claim for tortious interference with prospective business relations.

For the following reasons plaintiffs' motion is granted, subject to the strict conditions set forth at the end of this opinion.

BACKGROUND

This case involves the parties' competing efforts to open casinos in upstate New York. Because gambling is illegal in New York State unless on Native American lands and under certain legal conditions, both parties sought to partner with the St. Regis Mohawk Tribe (hereinafter the "Tribe" or "Mohawks").¹

The Catskill Group's predecessors in interest (a group of businessmen and developers) opened discussions with the Mohawks in 1995 about building and operating a casino at the site adjacent to the Monticello Raceway in Monticello, New York. On June 3, 1996, Catskill (one of the plaintiffs) purchased land in Monticello. And on July 31, 1996 plaintiffs entered into five separate agreements with the Tribe: (1) a "Land Purchase Agreement," whereby the Catskill Group would transfer its land in Monticello to the United States government to be held in trust for the Mohawks; (2) a "Mortgage Agreement"; (3) a "Gaming Facility Management Agreement"; (4) a "Shared Facilities Agreement"; and (5) a "Development and Construction Agreement." The casino project these agreements contemplated was subject to regulatory approval by both the federal government and New York State. By April of 2000, plaintiffs had still not received all the necessary approvals despite having spent millions of dollars toward that goal.

Sometime after mid-1999, individuals from President Resorts Casino, Inc. ("President RC"), the company that managed a small casino the Tribe owned on its Akwesasne Reservation near the Canadian border, introduced Park Place principals to members of the Tribe. On April 14, 2000, the Tribe entered into a written agreement with Park Place that gave Park Place exclusive rights to develop and manage any Mohawk casinos in New York State.

On November 13, 2000, plaintiffs filed this lawsuit. Count I of plaintiffs' complaint alleged that Park Place had tortiously interfered with the Catskill Group's contractual relations with the Mohawks (the five agreements). Count II alleged that Park Place had tortiously interfered with plaintiffs' prospective business relations. In a series of decisions that culminated in Catskill III, I dismissed Count I on the grounds that no enforceable contract existed between plaintiffs and the Mohawks, an essential element of a tortious interference with contract claim. I granted summary judgment on Count II because plaintiffs could not prove two essential elements of their tortious interference with prospective business relations claim. I first held that plaintiffs had failed to proffer any evidence that Park Place used "wrongful" means to advance its interest in doing business with the Mohawks. I also concluded that plaintiffs could not show that any statement or action by Park Place was the "but for" cause of plaintiffs' failure to consummate their proposed deal and open the Monticello casino.² Plaintiffs have appealed my decision to the United States Court of Appeals for the Second Circuit.

On March 14, 2003 plaintiffs moved in this Court, pursuant to Federal Rule of Civil Procedure 60(b)(3), to vacate the judgment I entered in Catskill III. Plaintiffs argue that I should grant them relief because Park Place failed to provide them with six audio tapes during discovery. The tapes contain discussions between either Ivan Kaufman (CEO of President RC) or Walter Horn (President RC's inhouse counsel) and (1) Clive Cummis (a principal of Park Place), or (2) various representatives of the Tribe, including Paul Thompson (one of the Tribe's three Chiefs) and Gus McDonald (the Mohawk's Tribal Administrator). [Puccio Decl., Ex. M].

DISCUSSION

As a general matter, Rule 60(b) allows a court to "relieve a party ... from a final judgment, order, or proceeding." Fed. R.Civ.P. 60(b). The rule provides an extraordinary remedy that is granted only when the movant can demonstrate that "exceptional circumstances" justify the relief requested. See, e.g., Paddington Partners v. Bouchard, 34 F.3d 1132, 1142 (2d Cir.1994) ("[S]ince 60(b) allows extraordinary judicial relief, it is invoked only if the moving party meets its burden of demonstrating `exceptional circumstances.'"). In considering relief under Rule 60(b), the Court must weigh plaintiffs' need for substantial justice against the value of preserving the finality of judgments. See Nemaizer v. Baker, 793 F.2d 58, 63 (2d Cir. 1986) ("Properly applied, Rule 60(b) strikes a balance between serving the ends of justice and preserving the finality of judgments.").

Rule 60(b)(3) provides that a court may grant relief in the case of "fraud ..., misrepresentation, or other misconduct of an adverse party." Fed.R.Civ.P. 60(b)(3). The moving party must demonstrate by clear and convincing evidence that the adverse party engaged in fraud, misrepresentation, or other misconduct. See Fleming v. New York Univ., 865 F.2d 478, 484 (2d Cir.1989), Buxbaum v. Deutsche Bank AG, 216 F.R.D. 72, 81 (S.D.N.Y.2003). In addition, the moving party must show that "this conduct prevented [the movant] from fully and fairly presenting his case." Walther v. Maricopa Intern. Inv. Corp., 2002 WL 31521078, at *3 (S.D.N.Y. Nov. 12, 2002) (quoting Chnapkova v. Koh, 1992 WL 203906, at *2 (S.D.N.Y. Aug.7, 1992)) (internal quotations omitted). A Rule 60(b)(3) motion cannot serve as an attempt to relitigate the merits. Fleming, 865 F.2d at 484.

Park Place argues that, in addition to these requirements, a party seeking post-judgment discovery must also show both a prima facie case establishing fraud and a likelihood of success in the action if the discovery were granted. The cases it cites, however, do not involve motions brought pursuant to Rule 60(b)(3). Rather, they address claims of "fraud upon the court" that were called to the courts' attention pursuant to the saving clause of Rule 60(b), which provides: "This rule does not limit the power of a court to entertain an independent action to ... set aside a judgment for fraud upon the court." Fed.R.Civ.P. 60(b). See, e.g., H.K. Porter Co., Inc. v. Goodyear Tire and Rubber Co., 536 F.2d 1115, 1118-19 (6th Cir.1976); Signtech USA, Ltd. v. Vutek, Inc., 1999 WL 33290625, at *3 (W.D.Tex. Aug. 9, 1999); Valerio v. Boise Cascade Corp., 80 F.R.D. 626, 646-47 (N.D.Cal. 1978).

Rule 60(b)(3) and Rule 60(b)'s saving clause provide two separate avenues of relief. See King v. First American Investigations, Inc., 287 F.3d 91, 95 (2d Cir. 2002). Parties seeking relief under Rule 60(b)(3), for example, must do so within a year after judgment, while the saving clause contains no such time restrictions. See Walther, 2002 WL 31521078, at *3-4. In addition, "fraud upon the court" and the type of fraud that might warrant relief pursuant to Rule 60(b)(3) are not identical. See Gleason v. Jandrucko, 860 F.2d 556, 558-59 (2d Cir.1988) ("Indeed, `fraud upon the court' as distinguished from fraud on an adverse party is limited to fraud which seriously affects the integrity of the normal process of adjudication."); see also Rozier v. Ford Motor Co., 573 F.2d 1332, 1337-38 (5th Cir.1978) (distinguishing between "fraud upon the court" and relief under Rule 60(b)(3)).³

Here, plaintiffs have filed a timely motion pursuant to Rule 60(b)(3). I therefore find that the cases defendant cites are inapposite, and I turn to an application of the relevant standard under Rule 60(b)(3).

I. Fraud, Misrepresentation, or Other Misconduct

Plaintiffs served Park Place with their first request for production of documents on November 29, 2000. [Puccio Decl., Ex. D]. Among the documents that plaintiffs requested from Park Place were (1) any documents concerning the Catskill Group and their Monticello Raceway casino project; and (2) any documents concerning communications with the Mohawks (including any member of the Mohawk government), Gus McDonald, and Ivan Kaufman. Id. at 8-9. The discovery request defined "document" to include "all electronic media or other tangible form in which information is stored" and "tapes for visual or audio reproduction." Id. at 6.

Park Place concedes that the tapes literally fall within the parameters of plaintiffs' discovery request. And Park Place had obtained copies of the tapes as early as May 30, 2001, because they were produced by President RC in a pending state court action brought by President RC against Park Place (the "President Action").

Park Place did not provide the tapes to plaintiffs when it first responded to plaintiffs' request on ...