Gong v. Sarnoff

1

JUNWU GONG, Plaintiff, v. STUART M. SARNOFF, O'MELVENY & MYERS LLP, CARL M. STANTON, CITY OF NEW YORK, OFFICER JOHN DOE 1, OFFICER JOHN DOE 2, OFFICER JOHN DOE 3, OFFICER LAUREN A. DUFFY, Defendants.

No. 23-cv-343 (LJL)

United States District Court, S.D. New York

August 22, 2023

OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge

Defendants Stuart M. Sarnoff (“Sarnoff”) and O'Melveny & Myers LLP (“O'Melveny” and, together with Sarnoff, the “Moving Defendants”) move pursuant to Federal Rule of Civil Procedure 11, for an order granting them sanctions against Plaintiff's counsel Yongbing Zhang and Richard Freeth, and enjoining Plaintiff Junwu Gong (“Gong” or “Plaintiff”) and his counsel and those in active concert with them from filing other similar suits without leave of court. Dkt. No 36. The motion is granted in part and denied in part.

BACKGROUND

The Court assumes familiarity with the prior proceedings in this matter. The following facts are taken from the parties' submissions in connection with the motion for sanctions and the Court resolves factual disputes as necessary for the disposition of the motion. See Chemiakin v. Yefimov 932 F.2d 124, 130 (2d Cir. 1991) (suggesting that on Rule 11 motions courts should act as fact finders and an evidentiary hearing is required when there are disputed facts).

I. The Allegations of the Complaint

Plaintiff initiated this action by complaint filed on January 18, 2023 (the “Complaint”).^[1] Dkt. No. 2. Plaintiff is a foreign-born, ethnic Chinese U.S. Permanent Resident who has, on numerous occasions, joined with other ethnic Chinese individuals to protest against the Chinese Communist Party (“CCP”). Id. ¶¶ 15, 36-37. He alleges that he has been subjected to an ongoing campaign of harassment by agents of the CCP. Id. ¶ 70. O'Melveny is a Delaware-registered limited liability partnership, which conducts business as a law firm and regularly transacts business in the State of New York. Id. ¶ 50. Defendant Sarnoff is a lawyer at O'Melveny, id. ¶ 45, and is a resident of the State of New York, id. ¶ 49.

The Complaint alleged that Moving Defendants violated the Foreign Agents Registration Act, 22 U.S.C. § 611(c)(1) (“FARA”), by acting as unregistered agents or representatives of the People's Republic of China (“PRC”). Id. ¶¶ 173-79. It also alleges that Moving Defendants violated and conspired to violate Plaintiff's constitutional rights under the First, Fourth, and Fourteenth Amendments to the United States Constitution, enforceable through 42 U.S.C. §§ 1983 and 1985(3). Id. ¶¶ 126-55.

The Complaint's allegations grow out of a series of events from November 22, 2022 to December 20, 2022. On November 22, 2022, Plaintiff participated in what he claims were peaceful protests at the offices of O'Melveny in New York, because of what he alleges to be O'Melveny's relationship with the CCP. O'Melveny is alleged to have at least three offices in the PRC and to conduct work in the PRC that is “extremely lucrative.” Id. ¶¶ 42-43. In 2013, it represented a China-based genomic research and sequencing company, BGI, in the first ever acquisition of a United States publicly traded company by a Chinese acquiror. Id. ¶¶ 25-26.^[2] Beginning on December 2, 2022, Plaintiff participated in regular protests at a location believed to be near Sarnoff's home in New York City. Id. ¶ 68. Sarnoff is an O'Melveny lawyer, who is allegedly “conspicuous[ly]” involved in the firm's China practice. Id. ¶ 45. On the morning of December 20, 2022, Plaintiff again joined protests at a location believed to be near Sarnoff's home. Id. ¶ 71.

Plaintiff alleged that he and other protesters were harassed at these protests by another Defendant, Carl M. Stanton (“Stanton”); the only identifying information provided about him in the Complaint is that he is alleged to be a resident of New York City and New York State. Id. ¶ 51. The Complaint focused on events that occurred on December 20, 2022, during which Plaintiff was hit by an automobile driven by Stanton. Id. ¶ 96. Officers of the New York Police Department (“NYPD”) (one of whom is personally named in the Complaint) failed to file a police report after Plaintiff summoned them to the scene. See id. ¶¶ 101-08. Later, after Plaintiff had begun feeling ill and “went into shock” at a nearby restaurant, the protesters called an ambulance to assist Plaintiff but NYPD officers obstructed Plaintiff's efforts to get medical attention. Id. ¶¶ 112-19.

The Complaint contained few, if any, allegations regarding the conduct of Moving Defendants and no allegations that tied Moving Defendants to any state action. It alleged that the December 20 protest occurred at a location believed to be near Sarnoff's residence. Id. ¶¶ 71-72. However, it does not allege that Sarnoff did anything during the protest or that he was even present in his residence at the time.^[3] The Complaint also alleged that, during a prior protest outside O'Melveny's offices in New York City, Stanton was observed “on several instances” taking pictures from inside the property where the protesters and members of the public were not permitted and using a swipe card to enter through the security entrance. Id. ¶¶ 76-77. Plaintiff alleged, upon information and belief, that Stanton is not an officer of the NYPD, id. ¶ 82, although the Complaint alleged that Stanton represented that he was “with” the police or had some kind of connection with the NYPD, id. ¶¶ 80-81. Further, there are no allegations that O'Melveny, much less Sarnoff, have any relationship with Stanton, and there are no allegations that O'Melveny or Sarnoff had any involvement with the conduct of Stanton, the NYPD, or any state actor on December 20. It was Plaintiff, not O'Melveny, Sarnoff, or Stanton, according to the Complaint, who called the NYPD after he was hit by Stanton's car and the protesters who called the ambulance. Id. ¶¶ 85, 88, 114.

The Complaint did allege that Moving Defendants had a connection to the CCP. Plaintiff asserted that “O'Melveny is beholden to the CCP, and as such performs whatever acts are requested by the CCP-including acts within the United States that would require registration as foreign agents with the U.S. Government,” id. ¶ 47, and that the CCP's unregistered agents in the United States “are now believed to be Defendant Sarnoff, Defendant O'Melveny and Defendant Stanton,” id. ¶ 64. The only factual allegations made to support these claims were that O'Melveny and Sarnoff performed legal work on behalf of a Chinese company, id. ¶¶ 25-26, and that O'Melveny has offices in the PRC from which it conducts “lucrative” business with a “potentially significant impact on the country,” id. ¶¶ 42-43. There are no factual allegations to support that Stanton has any connection to the PRC or CCP.

II. Procedural History Relevant to the Rule 11 Motion

On March 23, 2023, Moving Defendants filed a motion to dismiss the Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). Dkt. No. 19. In their memorandum of law in support of the motion, Moving Defendants argued that Plaintiff failed to allege any conduct by either of them directed toward Plaintiff, Dkt. No. 20 at 1-2, and that the FARA claim was “just as meritless” because “[c]ourt after court has held that there is no private right of action under FARA,” Plaintiff had not alleged any injury traceable to Moving Defendant's conduct, and Plaintiff did not allege facts that would require FARA registration, id. at 2-3.

On March 28, 2023, Moving Defendants filed their motion for sanctions, along with a supporting memorandum of law and a declaration. Dkt. Nos. 26-28. Moving Defendants, however, withdrew the motion on March 29, 2023, because they had not complied “with the requirements of Federal Rule of Civil Procedure 11(c)(2)” that the motion cannot be filed until after the party against whom the motion is made has been given an opportunity to withdraw the offending claim or papers. Dkt. No. 29.

On April 14, 2023, the Court held an initial pretrial conference. Dkt. No. 34. At the conference, the Court inquired whether Plaintiff's counsel had any additional factual “allegations against either Mr. Sarnoff or O'Melveny that would suggest that they acted in collusion with the police department.” Id. at 4. Counsel responded that his allegations were based on supposition:

“[T]he firm and the individual defendants were not pleased with being the target of these protests,” and “it would make sense that . . . the defendants in their position would send someone to . . . observe, get information.” Id. at 7. Counsel admitted that he did not know or have factual allegations regarding Stanton's “mandate.” Id.. He also admitted that he did not know whether Stanton hit Plaintiff “accidentally or on purpose.” Id. at 8. As to the police, counsel claimed that the conduct of the officers was “peculiar,” because the officers refused to file a report. Id.

Plaintiff's counsel nonetheless claimed that there was factual information that counsel had that was responsive to a number of issues raised in Moving Defendant's motion to dismiss. Id. at 1314. As a result, the Court stayed discovery pending a decision on the motion to dismiss and gave Plaintiff leave to file an amended complaint by April 21, 2023. Id. at 15-16. The Court also warned Plaintiff's counsel: “while I have not looked at the Rule 11 motion, I have looked at your complaint. And you should give it a second look because the motion does appear to be quite strong. And I will take the Rule 11 motion that is going to be filed very seriously.” Id. at 16-17.

On April 26, 2023, Plaintiff filed the first amended complaint (“Amended Complaint”).^[4]The Amended Complaint contains eleven new paragraphs quoting a report...