Commercial Division Blog

Posted: July 19, 2018 / Categories Commercial, Sanctions

Plaintiff Sanctioned For Attempting to Relitigate Previously Decided Claims in New York Against Defendants Over Which Court Had No Jurisdiction

On July 5, 2018, Justice Scarpulla of the New York County Commercial Division issued a decision in Kyowa Seni, Co., Ltd. v. ANA Aircraft Technics, Co., Ltd., 2018 NY Slip Op. 28211, sanctioning a plaintiff for relitigating an already-decided claim in New York against defendants not subject to jurisdiction here, explaining:

Pursuant to 22 NYCCR § 130-1.1,

(a) The court, in its discretion, may award to any party or attorney in any civil action or proceeding . . . costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct.

For the purposes of the statute, conduct is deemed frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false. The court has discretion as to both the imposition and amount of sanctions.

This action is meritless and without a good faith basis. There is simply no basis for a New York court to assert jurisdiction over a dispute between Japanese entities, a dispute which has no specific connection to New York or its citizens. Moreover, Kyowa commenced this second litigation in New York even though the dispute was already fully litigated in Japan. The allegations in this action are identical to the allegations in the Japanese Action, except that Kyowa states that it "discovered" the FAA letter after the Japanese Action. In fact, Kyowa's fraud claims were rejected, on the merits, by the Japanese courts. And, the Tokyo High Court rejected Kyowa's motion for retrial based on the FAA letter one year prior to Kyowa's commencement of this New York action.

Because the claims asserted by Kyowa against the ANA Companies have been fully litigated in Japan, and because Kyowa's arguments in support of personal jurisdiction in this action lack of merit, sanctions are warranted against Kyowa. Accordingly, I grant the ANA Companies' sanctions motion to the extent that I award them attorney's fees and costs reasonably incurred by them in litigating the action before me.

(Internal quotations and citations omitted).

Part of being a good litigator is thinking of winning arguments other lawyers miss. However, as this decision shows, courts have little patience for lawyers who cross the line from creative to making frivolous arguments. It is unusual for a party to be sanctioned like this, and we can only imagine that here the line was crossed by a significant margin. Contact Schlam Stone & Dolan partner John Lundin at if you or a client has a question regarding whether an argument has crossed the line from creative to sanctionable.