Schafler v. Merrill Lynch, Pierce, Fenner & Smith, Inc.
707 F. App'x 751
2d Cir.2018Background
- Plaintiff Pepi Schafler (pro se) sued Merrill Lynch asserting negligence, fraud, conversion, breach of fiduciary duty, and conspiracy arising from a 2001 bankruptcy-related sale of her stock certificates.
- The Southern District of New York dismissed Schafler’s complaint as barred by res judicata, collateral estoppel, and applicable statutes of limitations; judgment entered December 1, 2016.
- The district court also entered a limited filing injunction requiring Schafler to include the dismissal order with any new action she files in the SDNY.
- Schafler moved to join additional parties; the district court denied that motion, finding the same preclusion/time-bar defects would apply.
- Schafler alleged judicial bias by Judge Román; the district court rejected the claim and treated the proceedings as impartial.
- Schafler appealed; the Second Circuit affirmed, applying de novo review to preclusion and statute-of-limitations issues and abuse-of-discretion review to the injunction and joinder denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether claims are barred by preclusion or statute of limitations | Schafler contends her claims challenging the sale and related conduct remain viable | Merrill Lynch argues prior orders, sanctions, and elapsed limitations periods bar relitigation | Affirmed: claims dismissed as barred by res judicata, collateral estoppel, and statutes of limitations (de novo review) |
| Whether a filing injunction was proper | Schafler opposed an injunction and did not meaningfully contest the request in briefing | Merrill Lynch sought injunction given Schafler’s history of repetitive litigation | Affirmed: limited injunction appropriate given vexatious litigation history and notice; not an abuse of discretion |
| Whether joinder of additional parties should be allowed | Schafler argued additional parties participated in the alleged conspiracy and must be joined | Merrill Lynch argued joinder would be futile because the same preclusion/time-bar defects apply | Affirmed: district court did not abuse discretion in denying joinder as futile |
| Whether Judge Román was biased requiring vacatur | Schafler asserted judicial bias warranting vacatur | Merrill Lynch argued record shows impartial adjudication | Affirmed: bias claim rejected; record shows proper, impartial resolution |
Key Cases Cited
- Fuchsberg & Fuchsberg v. Galizia, 300 F.3d 105 (2d Cir. 2002) (collateral estoppel standard)
- Computer Assocs. Int’l, Inc. v. Altai, Inc., 126 F.3d 365 (2d Cir. 1997) (res judicata principles)
- Ormiston v. Nelson, 117 F.3d 69 (2d Cir. 1997) (statute-of-limitations review)
- Milltex Indus. v. Jacquard Lace Co., 55 F.3d 34 (2d Cir. 1995) (standards for filing injunctions)
- Safir v. U.S. Lines, Inc., 792 F.2d 19 (2d Cir. 1986) (factors for imposing filing restrictions)
- Liteky v. United States, 510 U.S. 540 (1994) (standards for judicial bias/recusal)