Sang Lan v. Time Warner, Inc., 11 Civ. 2870 (LBS) (JCF)

• Decision Date: 19 April 2013
• Docket Number: 11 Civ. 2870 (LBS) (JCF)
• Parties: SANG LAN, Plaintiff, v. TIME WARNER, INC.,KAO-SUNG LIU A/K/A K.S. LIU, GINA HIU-HUNG LIU A/K/A HUI-HUNG SIE A/K/A GINA LIU, Individually and as Trustees or Managers of Goodwill for Sang Lan Fund, HUGH HU MO, DOES 1-30, Unknown Defendants, Jointly and Severally, Defendants.
• Court: U.S. District Court — Southern District of New York

SANG LAN, Plaintiff,

v. TIME WARNER, INC.,KAO-SUNG LIU A/K/A K.S. LIU, GINA HIU-HUNG LIUA/K/A HUI-HUNG SIE A/K/A GINA LIU, Individually and as Trustees or Managers of Goodwill for Sang Lan Fund,HUGH HU MO, DOES 1-30, Unknown Defendants, Jointly and Severally, Defendants.

11 Civ. 2870 (LBS) (JCF)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Dated: April 19, 2013

(ECF)

REPORT AND

RECOMMENDATION

TO THE HONORABLE LEONARD B. SAND, U.S.D.J.:

Plaintiff Sang Lan filed this action on April 28, 2011. Defendant Time Warner, Inc. ("Time Warner") and defendants Kao-Sung Liu, Gina Hiu-Hung Liu, and Hugh Hu Mo (collectively, the "Individual Defendants") separately move to dismiss the plaintiff's Fourth Amended Complaint ("4th Am. Compl.") under Rule 12(b)(6) of the Federal Rules of Civil Procedure. I recommend that Time Warner's motion to dismiss be granted and that the Individual Defendants' motion be granted in part and denied in part.

Background

The following facts from the Fourth Amended Complaint are taken as true for the purposes of these motions to dismiss. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (per curiam).

Ms. Sang¹ is a former world-class gymnast from China. (4th Am. Compl., ¶¶ 11-19). She was slated to compete in the 1998 Goodwill Games (the "Games"), a quadrennial competition conceived by Ted Turner and later sold to Time Warner as a consequence of Mr. Turner's company merging with AOL.² (4th Am. Compl., ¶¶ 20, 22, 28). While warming-up for the vault event, Ms. Sang was seriously injured, allegedly through the negligence of Time Warner and other organizers of the competition. (4th Am. Compl., ¶¶ 29-34, 55-56). Her injuries are extensive: the fall fractured two vertebrae and injured her spinal cord, rendering her permanently paralyzed from the mid-chest down; she suffers from additional complications related to the paralysis. (4th Am. Compl., ¶¶ 38-52).

In the aftermath of the accident, various people associated with the Games made public statements regarding Ms. Sang. Michael Plant, President of the Games, stated that Ms. Sang's "immediate medical needs" would be taken care of by insurance. (1998 Goodwill Games Press Conference Quotes dated July 22, 1998 ("July 22 Press Conference"), attached as Exh. F to 4th Am. Compl., at 2).³ Hecontinued, "I can't speak to the long-term, but it is our commitment to do what we can. As I said, Ted Turner and [then-Chief Executive Officer of Time Warner] Gerald Levin are both concerned. We had a lot of insurance that will provide adequate care for Sang Lan." (July 22 Press Conference at 2). According to a newspaper article, Mr. Plant solicited contributions for Ms. Sang from corporate sponsors of the Games and also stated that Ms. Sang's family "won't have to worry about digging into their pockets to help their daughter in any way." (Bill Egbert, Injured Gymnast, Turner Reneged, NY Daily News, June 3, 1999 ("NY Daily News Article"), attached as Exh. J to 4th Am. Compl.). In response to a question as to whether the corporations involved had "discussed how far Goodwill and Turner and Time Warner's responsibility extends . . . not necessarily financially, but emotionally and morally," Dr. Harvey Schiller, then President of Turner Sports, stated that executives throughout the company had

offered to assist in any way possible. What we don't want to do is take away the focus away [sic] from the care that she is getting right now and you can be assured that this corporation and hand-in-hand with US Gymnastics, as well as the International Federation, will do everything within our power to assure that her future is secure.⁴

(1998 Goodwill Games Press Conference Quotes dated July 24, 1998 ("July 24 Press Conference"), attached as Exh. G to 4th Am. Compl., at 2). In an article dated July 24, 1998 on the CNN/SportsIllustrated website, Dr. Schiller is reported to have said, "In terms of our organization, we will do all we can to make sure that Sang Lan and her family are accommodated in the best possible way . . . . We are not out to exploit this. Our focus is on today. We want her to get the best possible care." (Paralyzed gymnast's parents begin sad journey to her bedside, CNN Sports Illustrated, July 24, 2008 ("CNN Article"), attached as Exh. H to 4th Am. Compl., at 2-3). And Dr. Brock Schnebel, Chief Medical Officer of the Games, stated:

Now[] that her surgery has been performed, she has a long way to go to recover from this. There will be a long period of rehabilitation so all these different issues have to be considered. The surgery isn't the biggest part of this, there is a lot more to come. Mike Plant of the Goodwill Games, Turner Broadcasting, and Time Warner . . . ha[ve] reassured me . . . that they will do everything in their collective power to provide the necessary resources to continue her care. So we can feel comfortable that we've done everything we can for her.

(1998 Goodwill Games Press Conference Transcript dated July 26, 1998 ("July 26 Press Conference"), attached as Exh. I to 4th Am. Compl., at 3).

The leaders of the Chinese gymnastics team selected Mr. Liu and Ms. Liu, his wife, to be Ms. Sang's "'guardians' to handle all matters related to [her]," including dealing with Time Warner. (4th Am. Compl., ¶¶ 99, 101). The Lius, along with their attorney Mr. Mo, informed Ms. Sang that, if Time Warner were challenged, such as in a negligence action concerning the accident, "any hope of getting assistance from Time Warner would be extinguished." (4th Am. Compl., ¶¶ 84, 87). A fund, called the Goodwill for Sang Lan Fund (the "Fund"), which Time Warner asserted that itcontributed to and solicited donations for, was set up for Ms. Sang's benefit. (4th Am. Compl., ¶¶ 3, 90-92, 124). Shortly after it was established in 1998, the Lius began serving as the Fund's trustees or managers, exercising exclusive control over the money, as well as over Ms. Sang's medicine and medical supplies. (4th Am. Compl., ¶¶ 3, 102, 120-121, 152, 154, 156, 160). Mr. Mo and his law firm provided legal and professional assistance to the Fund, Ms. Sang, and the Lius.⁵ (4th Am. Compl., ¶¶ 103-106, 109-111, 122-123).

According to Ms. Sang, the Lius and Mr. Mo failed in their duty to "work out the specifics of the oral contract or agreement with Time Warner to secure [Ms. Sang's] future," and, in 1999, Ms. Sang accused Turner of reneging on a promise to help her financially. (4th Am. Compl., ¶ 168; NY Daily News Article). In addition, the Lius purportedly made false claims about the management, legal compliance, and expenditure of the Fund. (4th Am. Compl., ¶¶ 126-128, 133, 135). When the Lius turned over the "alleged remaining balance of the Fund" in July 2008, they failed to provide accounting records or reports, making it impossible to determine the amount of money donated to the Fund. (4th Am. Compl., ¶¶ 136, 141, 143-144, 169-172). Ms. Sang requested access to the records, but was told by the Lius to seek them from Abacus Bank, a financial institution that held part of the corpus of the Fund. (4th Am. Compl., ¶¶ 125, 139-140). Abacus Bank, in turn, directed her to contact Mr. Mo, as the Fund's attorney, to receiveauthorization for the release of the information. (4th Am. Compl., ¶ 140). In addition, Ms. Sang asserts that the Lius failed to return to her gifts and other items donated by various well-wishers during her sojourn in the United States. (4th Am. Compl., ¶ 76).

Ms. Sang further alleges that, from 1998 to the present, the Lius have used her likeness or other identifiable characteristics without her consent for the purpose of promoting their business. (4th Am. Compl., ¶¶ 179-180). In January 2011, the Lius purportedly made statements to the public that Ms. Sang was lazy, could not urinate or have bowel movements on her own, and planned to seek asylum in the United States. (4th Am. Compl., ¶ 185). These statements were broadcast via a website maintained and managed by Sinovision. (4th Am. Compl., ¶ 186). Ms. Sang also accuses the Lius of using the Sinovision site to "spew[] vulgur, obscene, and derogatory remarks . . . designed to cast [Ms. Sang] in a false light." (4th Am. Compl., ¶¶ 194, 199).

As noted above, Ms. Sang filed this action on April 28, 2011.

Discussion

A. Legal Standard

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, "a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While a complaint need not make "'detailed factual allegations,'" it must contain more than mere "'labels andconclusions' or '[f]ormulaic recitation[s] of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). A complaint with "'naked assertions' devoid of 'further factual enhancement'" is insufficient. Id. (quoting Twombly, 550 U.S. at 557). Further, where the complaint's factual allegations permit the court to infer only a possible, but not a plausible, claim for relief, it fails to meet the minimum standard. Id. at 679. In ruling on a motion to dismiss, the court's task "'is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" GVA Market Neutral Master Ltd. v. Veras Capital Partners Offshore Fund, Ltd., 580 F. Supp. 2d 321, 327 (S.D.N.Y. 2008) (quoting Eternity Global Master Fund Ltd. v. Morgan Guaranty Trust Co. of New York, 375 F.3d 168, 176 (2d Cir. 2004)).

In assessing a motion to dismiss, a court must take as true the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Erickson, 551 U.S. at 93-94; DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 110-11 (2d Cir. 2010). However, a court is "'not bound to accept as true a legal conclusion couched as a factual allegation.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S....