11-4609-cv
Tese-Milner v. The Diamond Trading Co.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007,
is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing
a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic
database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not
represented by counsel.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the
2 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
3 on the 10th day of January, two thousand and thirteen,
4
5 PRESENT:
6
7 DEBRA ANN LIVINGSTON,
8 RAYMOND J. LOHIER, JR.,
9 Circuit Judges,
10 DONALD C. POGUE,
11 Judge.*
12 ________________________________________________
13
14 W.B. DAVID & CO., INC.,
15
16 Plaintiff,
17 ANGELA TESE-MILNER, as Chapter 7 Trustee of the Estate
18 of W.B. David Co., Inc.,
19 Plaintiff-Appellant,
20
21 -v.- No. 11-4609-cv
22 DE BEERS CENTENARY AG, DE BEERS CONSOLIDATED MINES
23 LTD., DE BEERS SOCIETE ANONYME, DE BEERS LV LTD.,
24 DIAMDEL SA, DIAMDEL NV, GARY RALFE, GARETH PENNY,
25 NICKY F. OPPENHEIMER, JONATHON OPPENHEIMER, ALAN
*
The Honorable Donald C. Pogue, Chief Judge of the United States Court of International
Trade, sitting by designation.
1
1 CAMPBELL, DEREK PALMER, STEPHEN LUSSIER, J. WALTER
2 THOMPSON U.S.A., INC., J. WALTER THOMPSON COMPANY,
3 DIANE WARGA-ARIAS, D. NAVINCHANDRA & CO., E.M.A.
4 DIAMOND MANUFACTURING LIMITED, R.T. DIAMOND PVT.
5 LTD., RICHOLD SA, S. VINODKUMAR & CO., SHREE
6 RAMKRISHNA EXPORT, SUNDIAMOND BVBA, VENUS JEWEL,
7 DALUMI DIAMONDS LTD., AMC BVBA, A. SCHWARTZ &
8 SONS DIAMONDS LTD., ARJAV DIAMONDS NV, ASIAN STAR
9 CO. LTD., ASTRA DIAMOND MANUFACTURERS LTD., B.
10 VIJAYKUMAR & CO., BHAVANI GEMS, BLUE STAR, C.
11 MAHENDRA EXPORTS, CLASSIC DIAMONDS (INDIA) LTD.,
12 D.D. MANUFACTURING NV, DALI DIAMONDS COMPANY NV
13 LTD., DE TOLEDO DIAMONDS LTD., DIAMANTHANDEL
14 A.SPIRA BVBA, DIAROUGH NV., DILIPKUMAR V. LAKHI,
15 DIGICO HOLDINGS LTD., DIMEXON DIAMONDS LTD.,
16 DYNAMIC DIAMOND CORP., E.F.D. LTD., EUROSTAR
17 DIAMOND TRADERS NV, FABRIKANT & SALANT GROUP LTD.,
18 FESTIDIAM CUTTING WORKS PTY LTD., FRUCHTER GAD
19 D IAMONDS LTD ., GEMBEL E UROPEAN S ALES NV,
20 HASENFELD-STEIN, INC., INTER GEMS-CLAES NV, J.B.
21 DIAMONDS, JULIUS KLEIN DIAMONDS LLC, K. GIRDHARLAL,
22 KGK ENTERPRISES, K.P. SANGHVI & SONS, KARP IMPEX
23 LTD., L.I.D. LTD., DILIP KUMAR V. LAKHI GROUP, LAXMI
24 DIAMOND, LAZARE KAPLAN INTERNATIONAL INC., LILI
25 DIAMONDS, LIVINGSTONES, LOUIS GLICK & CO., M. SURESH
26 & CO., MAHENDRA BROTHERS, MICHAEL WERDIGER, INC.,
27 MOHIT DIAMONDS IMPEX PVT. LTD., MOTI GANZ, NAVIN
28 GEMS, OVERSEAS DIAMONDS NV, KOTHARI & CO., PREMIER
29 GEM CORP., PREMIER DIAMOND CUTTING LTD., RAND
30 PRECISION CUT DIAMONDS (PTY) LTD., RATILAL BECHARLAL
31 & SONS, ROSY BLUE INC., ROSY BLUE NV (INDIA) PVT. LTD.,
32 SANGHAVI EXPORTS, SCHACHTER & NAMDAR POLISHING
33 WORKS LTD., SHEETAL MANUFACTURING CO, SHRENUJ &
34 COMPANY, LTD., SMOLENSK STATE UNITARY CO., KRISTAL
35 PRODUCTION CORP., STAR DIAMOND GROUP (SDG) BV,
36 SUASHISH DIAMONDS LTD., SUPERGEMS HOLDINGS LTD.,
37 SURESH BROTHERS, TACHE COMPANY NV, TASAKI SHINJU
38 CO. LTD., TRAU BROS. NV, PLUCZENIK DIAMOND CO. NV,
39 VIJAYDIMON BVBA, YAHALOMEI ESPEKA INTERNATIONAL
40 LTD., YERUSHALMI BROTHERS DIAMOND LTD., OTHER
41 SIGHTHOLDERS, JOHN DOES 1 84, CENTRAL SELLING
42 ORGANIZATION, CSO VALUATIONS A.G., DIAMOND
43 DEVELOPMENT COMPANY N.V., DIAMOND DEVELOPMENT
44 COMPANY S.A., DE BEERS S.A., DB INVESTMENTS, INC.,
2
1 DIAMDEL HOLDINGS (LIMITED) HONG KONG, DE BEERS
2 INVESTMENTS S.A.,
3 Defendants,
4 DIAMOND TRADING COMPANY, LTD.
5 Defendant-Appellee.
6 _______________________________________________
7 John A. Wait and Yann Geron, Fox Rothschild LLP, New
8 York, NY, for Plaintiff-Appellant.
9 Steven C. Sunshine, John R. Seward, and Paul M. Eckles,
10 Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY
11 & Washington, D.C. for Defendant-Appellee.
12 Appeal from a judgment of the United States District Court for the Southern District of
13 New York (Wood, J.).
14 UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED
15 that the judgment entered September 30, 2011 is AFFIRMED in part and VACATED and
16 REMANDED in part.
17 Plaintiff-Appellant Angela Tese-Milner (“Trustee”), acting as Chapter 7 Trustee of the Estate
18 of Plaintiff W.B. David & Co., Inc., appeals the dismissal of her suit against various members and
19 associates of the De Beers Group (“De Beers”), including Defendant-Appellee Diamond Trading
20 Company, Ltd. The Trustee contests three orders of the District Court: (1) a March 27, 2007 order
21 vacating an entry of default against the De Beers defendants; (2) a February 24, 2010 order
22 dismissing the Trustee’s amended complaint for failure to state a claim; and (3) a September 29,
23 2011 order dismissing the Trustee’s second amended complaint for failure to state a claim. We
24 assume the parties’ familiarity with the underlying facts and procedural history of the case.
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1 1. March 27, 2007 Order
2 The Trustee first contends that the District Court erred in vacating, under Federal Rule of
3 Civil Procedure 55(c), an entry of default against the De Beers defendants. When determining
4 whether there is “good cause” to vacate an entry of default under Rule 55(c), a district court must
5 consider three factors: (1) the willfulness of the default; (2) the existence of a meritorious defense
6 to the defaulted claims; and (3) the level of prejudice that the non-defaulting party might suffer
7 should relief be granted. Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 171 (2d Cir. 2001). This
8 determination is reviewed on appeal for abuse of discretion. Powerserve Int’l, Inc. v. Lavi, 239 F.3d
9 508, 514 (2d Cir. 2001).
10 The Trustee argues that the District Court abused its discretion by vacating the entry of
11 default despite having found it “questionable” whether the De Beers defendants defaulted willfully.
12 A finding of willfulness is typically enough to let an entry of default stand. See, e.g., Brien v.
13 Kullman Indus., Inc., 71 F.3d 1073, 1078 (2d Cir. 1995). This does not mean, however, that once
14 a district court determines that a defaulting party acted willfully it must let the entry of default stand.
15 Here the District Court also concluded that De Beers had a meritorious defense and that W.B. David
16 would not suffer prejudice as a result of vacating the entry of default. We find no error in these
17 determinations. In light of all three factors, and also our general “preference for resolving disputes
18 on the merits,” id. at 1077, we cannot say that the District Court abused its discretion in vacating the
19 entry of default.
20 2. February 24, 2010 and September 29, 2011 Orders
21 The District Court’s February 24, 2010 and September 29, 2011 orders dismissed,
22 respectively, the Trustee's first amended complaint and second amended complaint for failure to
4
1 state a claim. The District Court found that neither complaint related back to the Trustee’s original
2 complaint under Federal Rule of Civil Procedure 15(c)(1)(B), thus making many of the claims
3 untimely. The District Court also provided alternative grounds for dismissing most of the claims
4 in the two amended complaints, which the Trustee does not challenge on appeal.
5 Under Rule 15(c)(1)(B), an amendment to a pleading will relate back to that pleading when
6 "the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence
7 set out—or attempted to be set out—in the original pleading." As we have explained, the "central
8 inquiry" under Rule 15 "is whether adequate notice of the matters raised in the amended pleading
9 has been given to the opposing party within the statute of limitations by the general fact situation
10 alleged in the original pleading." Slayton v. Am. Express Co., 460 F.3d 215, 228 (2d Cir. 2006)
11 (internal citation and quotation marks omitted). Thus, an amended pleading that lays out the
12 allegations of a previous pleading in more definite and precise terms will relate back, but claims
13 based on an "entirely distinct set" of factual allegations will not. Id. We review a district court's
14 determination of whether an amended pleading relates back under Rule 15 de novo. Id.
15 We agree with the District Court that most of the allegations in the first and second amended
16 complaints do not relate back to the original complaint. We conclude, however, that there is one
17 claim that appears in all three complaints: that De Beers's "sight" system was, or was an attempt or
18 conspiracy to create, an unlawful restraint of trade and/or unlawful monopoly. This claim appears
19 in the second amended complaint at paragraphs 34, 48, and 63–67, in the amended complaint at
20 paragraphs 26–27, 34, and 38, and in the original complaint at paragraphs 134–37, 153–64, and 241.
21 De Beers had notice of this claim through all three pleadings, and the claim thus relates back to the
5
1 filing of the original complaint. The District Court, which did not provide any alternative reasons
2 for why the claim failed as a matter of law, erred in dismissing it on statute of limitations grounds.
3 We have considered the Plaintiff-Appellant's remaining arguments and have determined that
4 they are without merit. Accordingly, the judgment of the District Court is hereby VACATED and
5 REMANDED in part for further proceedings as to the “sight” claims, and is AFFIRMED in part
6 as to all other claims.
7 FOR THE COURT:
8 Catherine O’Hagan Wolfe, Clerk
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