CHURCH OF SCIENTOLOGY INTERNATIONAL, Plaintiff, - against - TIME
  WARNER, INC., TIME INC. MAGAZINE COMPANY, and RICHARD BEHAR,
  Defendants.

                   92 Civ. 3024 (PKL)

   UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

                26 Media L. Rep. 1052

                August 27, 1997, Decided August 27, 1997, Filed

COUNSEL: For Plaintiff: BURT NEUBORNE, ESQ., New York, New York.

Eric M. Lieberman, Esq., RABINOWITZ, BOUDIN, STANDARD, KRINSKY & LIEBERMAN, P.C., New York, New York, of counsel, for Plaintiff.

Floyd Abrams, Esq., of counsel, Dean Ringel, Esq., of counsel, David G. Januszewski, Esq., of counsel, Janet A. Beer, Esq., of counsel, CAHILL GORDON & REINDEL, New York, New York, for Defendants.

JUDGES: Peter K. Leisure, U.S.D.J.

OPINIONBY: Peter K. Leisure

OPINION: OPINION AND ORDER

LEISURE, District Judge:

Before the Court is plaintiff Church of Scientology International's motion for an order, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure and the Court's inherent authority, modifying and revising the Court's July 17, 1996 Opinion and Order. n1 For the reasons stated below, the motion is denied.

(footnote)

n1 The Opinion and Order was dated July 16, 1996, but it was not docketed until July 17, 1996. The Court will refer to this opinion as the July 17, 1996 Opinion and Order.

(footnote) [*2]

BACKGROUND

Because the Court has issued three prior opinions in this action, familiarity with which is presumed, the Court will briefly summarize the relevant history. In its May 6, 1991 issue, Time magazine ran as its cover story an article entitled "Scientology: The Cult of Greed," which was highly critical of the Church of Scientology. Thereafter, plaintiff filed this diversity action for libel against defendants Time Warner, Inc., Time Inc. Magazine Company, and Richard Behar, the author of the article, alleging that certain statements in the article were false and defamatory. Plaintiff has admitted that it is a public figure for the purposes of this action. Under New York Times Co. v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964) and its progeny, a public figure bringing a libel action must prove, as one of the essential elements of its claim, that the defendant published the challenged material with actual malice -- that is, with actual knowledge of its falsity or with serious doubts as to its truth. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 244, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (citing Curtis Publ'g Co. v. Butts, 388 [*3] U.S. 130, 18 L. Ed. 2d 1094, 87 S. Ct. 1975 (1967); New York Times Co., 376 U.S. at 279-280); Contemporary Mission, Inc. v. New York Times Co., 842 F.2d 612, 621 (2d Cir.) (limited purpose public figure case), cert. denied, 488 U.S. 856 (1988); Mr. Chow v. Ste. Jour Azur S.A., 759 F.2d 219, 230 (2d Cir. 1985) (citing Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 511 n.30, 80 L. Ed. 2d 502, 104 S. Ct. 1949 (1984)).

By Opinion and Order dated November 23, 1992, the Court granted defendants' motion to dismiss plaintiff's claims regarding several statements in the complaint, on the grounds that those statements could not be read as referring to plaintiff. See Church of Scientology Int'l v. Time Warner, Inc., 806 F. Supp. 1157 (S.D.N.Y. 1992). In a second Opinion and Order, dated November 15, 1995, the Court granted summary judgment to defendants with respect to all but one of the remaining statements on the grounds that no reasonable jury could find, by clear and convincing evidence, that defendants published those statements with actual malice. See Church of Scientology Int'l v. Time Warner, Inc., 903 F. Supp. 637 (S.D.N.Y. 1995). In [*4] the July 17, 1996 Opinion and Order, the Court, upon reconsideration, granted defendant's motion for summary judgment in its entirety because the remaining statement was subsidiary in meaning to the nonactionable views expressed in the article. See Church of Scientology v. Time Warner, Inc., 932 F. Supp. 589 (S.D.N.Y. 1996). n2

(footnote)

n2 The Court based this decision on the subsidiary meaning doctrine, which provides that:

Where a maliciously false statement implies the same ultimate conclusion as that of the remainder of the publication, which has been published without actual malice, a plaintiff cannot base his defamation action solely on inaccuracies contained within statements subsidiary to these larger views. Thus, having determined one or more of the ultimate conclusions of the publication, and determined that those conclusions were not published with actual malice, a court must grant summary judgment for the defendant where the minor inaccuracies sued upon are subsidiary to one of the larger views which is nonactionable.

(footnote) [*5]

On November 26, 1996, plaintiff filed the instant motion asking the Court to modify and revise its July 17, 1996 Opinion and Order. Plaintiff argues, for the first time, that although a public figure must demonstrate actual malice in order to recover substantial damages, it need not demonstrate actual malice in order to recover nominal damages. n3 In essence, plaintiff asks the Court to carve out an exception to the rule announced in New York Times Co. v. Sullivan by holding that a public figure plaintiff in a libel action may recover nominal damages upon a showing of falsity, despite its inability to demonstrate actual malice. This rule would allow a public figure to obtain "a declaration of falsity expressed through an award of nominal damages as an independent means of vindicating its reputation." Pl.'s Mem. Law Supp. at 3.

(footnote)

n3 As a preliminary matter, the Court notes that plaintiff is asking the Court to reconsider the merits of its November 14, 1995 Opinion and Order rather than its July 17, 1996 Opinion and Order. As stated above, the November 14, 1995 Opinion and Order granted partial summary judgment to defendants because plaintiff presented insufficient evidence of actual malice. Plaintiff now argues that a public figure need not demonstrate actual malice in order to avoid summary judgment.

(footnote) [*6]

DISCUSSION

The Court cannot address the merits of this novel argument raised in plaintiff's motion because the motion, although labelled a "Motion to Modify" pursuant to Rule 54(b) and the Court's inherent authority, is, in substance, a procedurally defective motion for reargument. Local Civil Rule 3(j), governing motions for reargument, provides that:

A notice of motion for reargument shall be served within ten (10) days after the docketing of the court's determination of the original motion.... There shall be served with the notice of motion a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked.

(footnote)

n4 The Local Rules were amended, effective April 15, 1997, and Local Rule 3(j) was redesignated as Local Rule 6.3. Local Rule 6.3 is identical, in all material respects, to former Local Rule 3(j). Moreover, the legal standards governing Local Rule 6.3 are the same as those governing former Local Rule 3(j). See United States v. $ 490,920 in U.S. Currency, 1997 U.S. Dist. LEXIS 11603, No. 95 Civ. 8743, 1997 WL 452360, at *1 (S.D.N.Y. Aug. 7, 1997) (citing Jones v. Trump, 919 F. Supp. 583, 1997 WL 394950, at *1 (S.D.N.Y. 1997)). Because this motion was filed before the Local Rules were amended, the Court will refer to the Local Rule by its former designation.

(footnote) [*7]

To prevail on a motion for reargument, the movant "must demonstrate that the Court overlooked controlling decisions or factual matters that were put before it on the underlying motion." Gill v. Gilder, No. 95 Civ. 7933, 1997 WL 419983, at *2 (S.D.N.Y. July 28, 1997) (citing cases); accord In re Asbestos Litig., 173 F.R.D. 87, 89 (S.D.N.Y. 1997); Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 171 F.R.D. 79, 81-82 (S.D.N.Y. 1997); Tenenbaum v. Williams, 907 F. Supp. 606, 610 (E.D.N.Y. 1995). Thus, "the only proper ground on which a party may move to reargue an unambiguous order is that the court overlooked 'matters or controlling decisions' which, had they been considered, might reasonably have altered the result reached by the court." Litton Indus. v. Lehman Bros. Kuhn Loeb Inc., 1989 U.S. Dist. LEXIS 9145, No. 86 Civ. 6447, 1989 WL 162315, at *4 (S.D.N.Y. Aug. 4, 1989) (quoting Adams v. United States, 686 F. Supp. 417, 418 (S.D.N.Y. 1988)) (internal quotation marks omitted), rev'd on other grounds, 967 F.2d 742 (2d Cir. 1992). A party may not, on a motion for reargument, raise an argument for the first time. See Randell v. United States, 64 F.3d 101, 109 (2d Cir. 1995) (citing [*8] Morse/Diesel, Inc. v. Fidelity & Deposit Co., 768 F. Supp. 115, 116 (S.D.N.Y. 1991)), cert. denied, 117 S. Ct. 65 (1996); United States v. Certain Funds on Deposit in Scudder Tax Free Inv. Account # 2505103, 998 F.2d 129, 132 (2d Cir. 1993) ("The principle underlying Rule 3(j) is that a party, on a motion for reargument, should not be permitted 'to advance new facts, issues, or arguments.'" (quoting Weissman v. Fruchtman, 124 F.R.D. 559, 560 (S.D.N.Y. 1989))); Caribbean Trading & Fidelity Corp. v. Nigerian Nat'l Petroleum Corp., 948 F.2d 111, 115 (2d Cir. 1991) (citing Schonberger v. Serchuk, 742 F. Supp. 108, 119 (S.D.N.Y. 1990) ("[A] party making a motion for reargument may not, under Civil Rule 3(j), advance new facts, issues or arguments not previously presented to the Court."); Ashley Meadows Farm, Inc. v. American Horse Shows Ass'n, Inc., 624 F. Supp. 856, 857 (S.D.N.Y. 1985)), cert. denied, 504 U.S. 910 (1992); Gill, 1997 WL 419983, at *3; In re Asbestos Litig., 173 F.R.D. at 89; Bonnie & Co. Fashions, Inc., 171 F.R.D. at 82; Tennenbaum, 907 F. Supp. at 612; Litton Indus., 1989 WL 162315, at *4. Indeed, a party requesting [*9]

reargument "is not supposed to treat the court's initial decision as the opening of a dialogue in which that party may then use Rule 3(j) to advance new facts and theories in response to the court's rulings." Woodard v. Hardenfelder, 845 F. Supp. 960, 966 (E.D.N.Y. 1994) (quoting McMahan & Co. v. Donaldson, Lufkin & Jenrette Sec. Corp., 727 F. Supp. 833, 833 (S.D.N.Y. 1989)).

Furthermore, a party's failure to comply with Local Rule 3(j)'s ten-day "time limit may be adequate grounds to deny a motion to reargue." Bensen v. American Ultramar Ltd., 1996 U.S. Dist. LEXIS 12472, No. 92 Civ. 4420, 1996 WL 490702, at *3 n.3 (S.D.N.Y. Aug. 28, 1996) (citing Virgin Atl. Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.), cert. denied, 506 U.S. 820, 121 L. Ed. 2d 34, 113 S. Ct. 67 (1992)). Courts will enforce the time limit "absent adequate justification for ignoring it." Algie v. RCA Global Communication, Inc., 891 F. Supp. 875, 882 (S.D.N.Y. 1994), aff'd, 60 F.3d 956 (2d Cir. 1995).

These requirements are fatal to plaintiff's motion. Plaintiff's motion, by advancing an argument that was not previously presented to the Court, does not raise a proper ground for reargument. [*10] In addition, plaintiff's motion -- served on November 26, 1996, over four months after the Court's July 17, 1996 Opinion and Order was docketed -- is untimely. n5 Plaintiff does not even attempt to offer an excuse for its failure to comply with Local Rule 3(j)'s ten-day time limit. Instead, plaintiff contends that the requirements of Local Rule 3(j) do not apply to its motion because its motion is a "Motion to Modify" pursuant to Rule 54(b) and the Court's inherent power rather than a motion for reargument pursuant to Local Rule 3(j). Alternatively, plaintiff argues that Local Rule 3(j)'s restrictions impermissibly limit the Court's authority, under Rule 54(b) and its inherent powers, to reconsider or modify a prior decision at any time before the entry of final judgment. These two arguments are unpersuasive.

(footnote)

n5 Moreover, as stated above, the instant motion addresses the merits of the November 15, 1995 Opinion and Order rather than the July 17, 1996 Opinion and Order. Measured from the date of that opinion, the motion is untimely by over one year.

(footnote) [*11]

First, a movant may not avoid the strictures of Local Rule 3(j) by styling its motion as something other than a motion for reargument because a court may properly treat an artfully drafted motion as a motion for reargument. See Olin Corp. v. Insurance Co. of N. Am., 966 F.2d 718, 722 (2d Cir. 1992) (holding that the district court properly treated plaintiff's motion for "modification" as an untimely motion for reargument); Virgin Atl. Airways, Ltd., 956 F.2d at 1254-55 (holding that the district court acted within its discretion in treating defendant's "Resubmitted Motion to Dismiss" under Rule 54(b) as an untimely motion for reargument); Fonar Corp. v. Magnetic Resonance Plus, Inc., 935 F. Supp. 443, 447 (S.D.N.Y. 1996) (treating plaintiff's request for reconsideration as an untimely motion for reargument and awarding defendants attorney's fees for opposing the motion); n6 Litton Indus., 1989 WL 162315, at *4 (treating plaintiff's motion under Rule 54(b) as a motion for reargument and holding that, by raising arguments which the court had previously considered, the motion failed to present a proper ground for reargument); see also Algie, 891 F. Supp. at 881-82 [*12] (treating defendants' motion for judgment as a matter of law under Rule 50(a) as a motion for reargument and noting that the motion was untimely and that, by raising an argument based on newly submitted evidence, the motion failed to present a proper ground for reargument). Although denominated a "Motion to Modify" pursuant to Rule 54(b) and the Court's inherent authority, plaintiff's motion is, in substance, a motion for reargument. The Court has already granted summary judgment to defendants on the grounds that plaintiff failed to present sufficient evidence of actual malice. Plaintiff now argues that it is not required to demonstrate actual malice in order to avoid summary judgment. No amount of creative lawyering can convince the Court that the motion is anything other than a motion for reargument.

(footnote)

n6 In a prior decision, which was the subject of the plaintiff's request for reargument, the court granted summary judgment to defendants. See Fonar v. Magnetic Resonance Plus, Inc., 920 F. Supp. 508 (S.D.N.Y. 1996). That decision was vacated on appeal. See Fonar Corp. v. Domenick, 105 F.3d 99 (2d Cir. 1997).

(footnote) [*13]

Second, Local Rule 3(j) does not impermissibly conflict with Rule 54(b). The Court has the authority under Rule 54(b), as well as under its inherent powers, to reconsider or modify a prior decision at any time before the entry of final judgment. See Fed. R. Civ. P. 54(b); n7 Bensen, 1996 WL 490702, at *3 (citing Dictograph Prods. Co. v. Sonotone Corp., 230 F.2d 131, 134-36 (2d Cir.) (Hand, J.), cert. dismissed, 352 U.S. 883 (1956)); Demarco v. Sadiker, 952 F. Supp. 134, 141 (E.D.N.Y. 1996) ("It is well established that the interlocutory orders and rulings made pre-trial by a district judge are subject to modification by the district judge at any time prior to final judgment." (quoting Conrad v. Beck-Turek, Ltd., 891 F. Supp. 962, 967 (S.D.N.Y. 1995) (quoting In re United States, 733 F.2d 10, 13 (2d Cir. 1984))) (internal quotation marks omitted)). However, in this District, a motion to reargue or modify a prior decision must comply with the requirements of Local Rule 3(j) absent a compelling reason to waive its requirements. See Bensen, 1996 WL 490702, at *3. Accordingly, the Court retains the discretion to consider a motion for reargument notwithstanding [*14] the movant's failure to comply with Local Rule 3(j)'s requirements, but it will only exercise this discretion when justice so requires. See Algie, 891 F. Supp. at 882 (stating that the ten-day time limit under Local Rule 3(j) is enforced "absent adequate justification for ignoring it"); Litton Indus., 1989 WL 162315, at *5 ("The Court's inherent power to reconsider its decisions should be exercised only when 'justice so demands.'" (quoting DC Comics, Inc. v. Powers, 482 F. Supp. 494, 496 (S.D.N.Y. 1979))); Donahue v. Pendleton Woolen Mills, Inc., 719 F. Supp. 149, 151 (S.D.N.Y. 1988) (stating that "because further examination of the law shows that Thornton is entitled to proceed on his ADEA claim, it would not be in the interest of justice" to apply Local Rule 3(j)'s time limit). n8 Because the Court retains the power to entertain a motion for reargument, despite the movant's failure to comply with Local Rule 3(j), plaintiff's argument that Local Rule 3(j) impermissibly conflicts with Rule 54(b) is unavailing. See Litton Indus., 1989 WL 162315, at *4 (finding "nothing inconsistent with Rule 54(b) and Local Rule 3(j)").

(footnote)

n7 Rule 54(b) provides, in relevant part, that:

Any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment ....

n8 Plaintiff, drawing an analogy to the liberal standard governing the amendment of pleadings, contends that the Court should exercise its discretion to reconsider a prior decision unless the moving party is guilty of bad faith or undue delay. See Pl.'s Mem. Law Supp. at 22-23 (citing Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962) (holding that leave to amend pleadings should be freely given)). However, the Court is not aware of, and plaintiff does not cite, any authority in support of this contention. To the extent that plaintiff may attempt to amend its complaint in the future, the Court expresses no opinion on the merits of such a motion.

(footnote)

Moreover, plaintiff has not argued, and the Court does not find, that justice requires the Court to ignore the requirements of Local Rule 3(j) in this case. Plaintiff has not demonstrated, for example, that there was an intervening change in the controlling law, that there is some new evidence available that was not available at the time of the original decision, or that there is a need to correct clear error.

CONCLUSION [*16]

For the reasons stated above, plaintiff's motion is HEREBY DENIED.

SO ORDERED.

New York, New York
August 27, 1997

Peter K. Leisure

U.S.D.J.

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