Directv Latin America, L.L.C. v. Park 610, L.L.C., 08 Civ. 3987 (VM).

• Decision Date: 30 April 2009
• Docket Number: No. 08 Civ. 3987 (VM).,08 Civ. 3987 (VM).
• Parties: DIRECTV LATIN AMERICA, L.L.C. et al., Plaintiffs, v. PARK 610, L.L.C. et al., Defendants.
• Court: U.S. District Court — Southern District of New York

614 F.Supp.2d 446

DIRECTV LATIN AMERICA, L.L.C. et al., Plaintiffs, v. PARK 610, L.L.C. et al., Defendants.

No. 08 Civ. 3987 (VM).

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

April 30, 2009.

Steven Glen Mintz, Terence William McCormick, Mintz & Gold LLP, New York City, NY, for Plaintiffs.

Vitaly David Rivkin, Jooyun Kim, Fox Horan & Camerini LLP, David Clifford Burger, Robinson Brog Leinwand Greene Genovese & Gluck PC, New York, NY, for Defendants.

DECISION AND ORDER

VICTOR MARRERO, District Judge.

I. BACKGROUND

Plaintiff DirecTV Latin America, LLC ("DirecTV") brought this action on its own behalf and as a derivative suit on behalf of Latin American Sports, LLC ("LAS"), alleging breach of fiduciary duty and other common law claims against defendants Park 610, LLC ("Park 610"), Carlos Vicente Avila ("Avila"), Roberto Timistit ("Timistit"), Carlos Pratola ("Pratola"), Alejandro Zunda Cornell ("Zunda"), and Diego Clemente ("Clemente") (collectively "Defendants"). The litigation arises from Defendants' alleged wrongful conduct pertaining to the formation of LAS as a joint venture of DirecTV and Park 610. Defendants filed two separate motions to dismiss the complaints, one submitted by Park 610, Avila, and Timistit (the "Park 610 Defendants") and one by Pratola, Zunda, and Clemente. DirecTV moved to file a Second Amended Complaint. Pratola, Zunda, and Clemente moved to stay further proceedings pending the Court's rulings on the various motions.

Magistrate Judge Gabriel Gorenstein, to whom this matter had been referred for supervision of pretrial proceedings, on his own motion raised a question as to whether complete diversity of citizenship, and thus subject matter jurisdiction, existed in this case in view of the shared citizenship of LAS with either Park 610 or DirecTV that would result from the realignment of LAS as either a plaintiff or a defendant for the purposes of the analysis of a party's citizenship in a derivative action.

By Order dated March 18, 2009, 2009 WL 692202, Magistrate Judge Gabriel Gorenstein issued a Report and Recommendation (the "Report"), a copy of which is attached and incorporated herein, finding that subject matter jurisdiction does not exist in this action because complete diversity was destroyed by the citizenship of LAS and Zunda. Consequently, Magistrate Judge Gorenstein recommended that the action be dismissed, but with leave to file an amended complaint removing some claims and defendants to cure the jurisdictional defects. The Report further recommended that the orders of attachment of certain assets of Avila, Pratola, and Clemente that DirecTV had obtained in connection with this litigation remain in place. The Report recommended that the attachment as to Zunda be vacated because any claims against Zunda would need to be dropped to achieve diversity and give the Court subject matter jurisdiction.

DirecTV filed timely qualified objections to the Report, challenging its recommendations only if intended to preclude DirecTV from pursuing direct claims for breach of fiduciary duty as set forth in its Fifth Cause of Action. The Park 610 Defendants and Avila separately filed objections challenging the continuation of the attachment of Avila's property, taking issue with DirecTV's objections, and seeking an order awarding fees and costs for the alleged wrongful restraint of the property at issue. Pratola, Zunda, and Clemente similarly submitted objections to the attachments issued as to their assets and demanded that the restraints be dissolved upon dismissal of the action. For the reasons stated below, the Court adopts the Report in its entirety.

II. STANDARD OF REVIEW

A district court evaluating a Magistrate Judge's report may adopt those portions of the report to which no "specific, written objection" is made, as long as the factual and legal bases supporting the findings and conclusions set forth in those sections are not clearly erroneous or contrary to law. Fed.R.Civ.P. 72(b); see also Thomas v. Arn, 474 U.S. 140, 149, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Greene v. WCI Holdings Corp., 956 F.Supp. 509, 513 (S.D.N.Y.1997). "Where a party makes a `specific written objection ... after being served with a copy of the [magistrate judge's] recommended disposition,' however, the district court is required to make a de novo determination regarding those parts of the report." Cespedes v. Coughlin, 956 F.Supp. 454, 463 (S.D.N.Y.1997) (citing United States v. Raddatz, 447 U.S. 667, 676, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980)). The Court is not required to review any portion of a Magistrate Judge's report that is not the subject of an objection. See Thomas, 474 U.S. at 149, 106 S.Ct. 466. A district judge may accept, set aside, or modify, in whole or in part, the findings and recommendations of the Magistrate Judge as to such matters. See Fed.R.Civ.P. 72(b); DeLuca v. Lord, 858 F.Supp. 1330, 1345 (S.D.N.Y.1994).

III. DISCUSSION

Having conducted a review of the full factual record in this litigation, including the pleadings, the papers submitted in connection with the parties' underlying motions and Magistrate Judge Gorenstein's sua sponte motion, the objections filed in this proceeding, as well as the Report and applicable legal authorities, the Court concludes that the findings, reasoning, and legal support for the recommendations made in Report are not clearly erroneous or contrary to law and are thus warranted.

Specifically, the Court finds that, as noted in the Report, complete diversity of citizenship, and therefore subject matter jurisdiction, does not exist by reason of the shared citizenship of LAS and the citizenship of Zunda. With regard to DirecTV's objection to the Report's recommendation concerning the Fifth Cause of Action, as the Court reads the Report there is no intent to preclude DirecTV from asserting a direct, non-derivative claim of breach of fiduciary duty. DirecTV's objections, insofar as they are grounded on a contrary interpretation, are denied. With respect to the attachments of the property of Avila, Pratola, and Clemente, the Court finds that because the order of dismissal is granted with...