Summary
In Qudian, the Appellate Division held that there was no basis for a stay because after the federal court dismissed certain of the claims asserted in the federal action and that the only claim remaining in the federal action concerned Dabai Auto which was not at issue in the state action, there was no overlap between the federal and state actions and, as such, no risk of inconsistent rulings (id., at 449-450).
Summary of this case from Hipple v. Oatly Grp. ABOpinion
12537N Index No. 651804/18 653047/18 Case No. 2020-02421
12-03-2020
IN RE QUDIAN SECURITIES LITIGATION Panther Partners Inc. et al., Plaintiffs–Appellants, v. Qudian Inc. et al., Defendants–Respondents, Min Luo et al., Defendants.
Robbins Geller Rudman & Dowd LLP, Melville (Joseph Russello of counsel), for appellants. Simpson Thacher & Bartlett LLP, New York (Stephen P. Blake of counsel), for Qudian Inc., respondent. O'Melveny & Myers LLP, New York (Jonathan Rosenberg of counsel), for Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and UBS Securities LLC, respondents.
Robbins Geller Rudman & Dowd LLP, Melville (Joseph Russello of counsel), for appellants.
Simpson Thacher & Bartlett LLP, New York (Stephen P. Blake of counsel), for Qudian Inc., respondent.
O'Melveny & Myers LLP, New York (Jonathan Rosenberg of counsel), for Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and UBS Securities LLC, respondents.
Renwick, J.P., Manzanet–Daniels, Mazzarelli, Singh, Scarpulla, JJ.
Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered May 15, 2020, which denied plaintiffs' motion to vacate a previously imposed stay, unanimously reversed, on the law and the facts and in the exercise of discretion, without costs, and the motion granted. There is no basis for a stay of this action pursuant to CPLR 2201 since the decision in the federal action will not determine all of the questions in this action (see e.g. Otto v. Otto, 110 A.D.3d 620, 621, 974 N.Y.S.2d 54 [1st Dept. 2013] ). After the decision in In re: Qudian Inc. Sec. Litig. , 2019 WL 4735376, 2019 U.S. Dist LEXIS 167072 [S.D. N.Y., Sept. 27, 2019, No. 17–CV–9741 (JMF)] ), the only claim remaining in the federal action concerns Dabai Auto, which is not at issue in the case at bar.
The only claim in plaintiffs' proposed consolidated amended complaint (CAC) is that defendants failed to disclose that Ant Financial was entitled to direct changes to critical aspects of Qudian's business, such as requiring it to reduce its effective annualized rate to 24%. This claim differs from the dismissed interest/fee claim in the federal action, which alleged that Qudian misleadingly represented that its fees did not exceed 36%, when it actually charged penalty fees that exceeded those allowed under Chinese law (see Qudian, 2019 WL 4735376 at *7, 2019 U.S. Dist LEXIS 167072 at *21 ). Hence, the finding in the federal action would not pose a risk of inconsistent rulings (see American Intl. Group, Inc. v. Greenberg, 60 A.D.3d 483, 484, 875 N.Y.S.2d 39 [1st Dept. 2009] ; see also Lauria v. Kriss, 147 A.D.3d 575, 575, 46 N.Y.S.3d 790 [1st Dept. 2017] [federal and state actions "do not sufficiently overlap or show the likelihood of estoppel"]).
The CAC is not plaintiffs' third bite at the apple. There is no indication in the record that Bryan Foat – the federal plaintiff who was represented by Robbins Geller Rudman & Dowd LLP – is related to either Panther Partners Inc. or The Morrow Property Trust (plaintiffs in the instant action), or that any of these plaintiffs are mere tools or puppets of Robbins Geller. Therefore, Foat should not be conflated with plaintiffs in the case at bar. The fact that the proposed CAC is plaintiffs' second bite at the apple does not preclude amendment (see Plaza PH2001 LLC v. Plaza Residential Owner LP, 98 A.D.3d 89, 98, 947 N.Y.S.2d 498 [1st Dept. 2012] ).