Republic of Turk. v. Christie's, Inc.
316 F. Supp. 3d 675
| S.D. Ill. | 2018Background
- Turkey filed suit to recover an Anatolian Kiliya-type Idol that it alleges was illicitly removed; the Idol is in Christie's possession and was slated for auction.
- Plaintiff's operative pleading seeks declaration of ownership and asserts replevin and conversion claims.
- Defendants (Christie's and Steinhardt) filed amended counterclaims seeking (1) a declaration that Steinhardt owns the Idol and (2) tortious interference with contract and, alternatively, with prospective economic advantage, based on allegations that Turkey's public actions caused the winning bidder to withdraw.
- Turkey moved to stay discovery on the tortious-interference counterclaims pending resolution of its motion to dismiss those counterclaims, arguing the allegations are "spurious and scandalous" and likely to be dismissed.
- The Scheduling Order set a close of written discovery on the counterclaims shortly after the stay request; defendants opposed the stay as unsupported and minimally burdensome.
- The magistrate judge denied the stay, finding Turkey failed to show good cause and that the counterclaims were not plainly meritless on their face.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discovery on the tortious-interference counterclaims should be stayed pending resolution of Turkey's motion to dismiss | Discovery should be stayed because the counterclaims are scandalous/spurious and likely to be dismissed | No good cause for stay; discovery burden is limited and counterclaims may have merit | Denied — Turkey failed to show good cause for a protective order; counterclaims are not facially devoid of merit |
| Whether the tortious-interference claims facially state a claim (relevant to the strength of the stay request) | The counterclaims should be dismissed as legally insufficient | The counterclaims allege contract/relationship, knowledge, intentional interference by Turkey, use of intimidation/public statements, and damages | Magistrate found the counterclaims plausibly allege required elements and thus are not frivolous, so their merits do not justify a stay |
Key Cases Cited
- Ace Arts, LLC v. Sony/ATV Music Publishing, LLC, 56 F. Supp. 3d 436 (S.D.N.Y. 2014) (sets forth New York-law elements for tortious interference with contract and with prospective economic relations, and when litigation activity can constitute "wrongful means")
- Hong Leong Fin. Ltd. (Singapore) v. Pinnacle Performance Ltd., 297 F.R.D. 69 (S.D.N.Y. 2013) (district court has broad discretion to stay discovery for good cause; stay not routine simply because motion to dismiss is filed)
- Brown v. Astoria Fed. Sav. & Loan Ass'n, [citation="444 F. App'x 504"] (2d Cir. 2011) (burden of showing good cause for protective order rests with the movant)
- Jerolimo v. Physicians for Women, P.C., 238 F.R.D. 354 (D. Conn. 2006) (to show good cause under Rule 26(c) party must make particularized factual showing, not conclusory assertions)