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LMS Commodities DMCC v. Libyan Foreign Bank

United States District Court, W.D. Texas, Austin Division

April 30, 2019




         Before the Court is Defendant Libyan Foreign Bank's (the “Bank”) motion to dismiss. (Dkt. 10). Also before the Court are several related motions and filings: Plaintiff LMS Commodities DMCC's (“LMS”) first amended complaint, (Dkt. 11), its motion for leave to file a second amended complaint, (Dkt. 17), its motion to strike portions of the Bank's motion to dismiss, (Dkt. 14), and the Bank's motion to strike portions of LMS's reply brief in support of its motion for leave to amend, (Dkt. 22). Having considered the parties' motions and responsive briefing, the record, and the relevant law, the Court finds that: (1) the Bank's motion to dismiss should be granted, (2) LMS's first amended complaint should be struck, (3) LMS's motions should both be denied, and (4) the Bank's motion to strike is moot.

         I. BACKGROUND

         LMS alleges that it secured a $108 million judgment against the Banks from the Court of Appeals in the Republic of Tunisia and seeks to have that judgment recognized and enforced by this Court. (Compl., Dkt. 1, at 1-2). The Bank responds that LMS's “judgment” is not in fact a judgment at all; it is an order affirming a lower court's entry of a prejudgment, temporary asset-freeze order. (Mot. Dismiss, Dkt. 10, at 1). According to the Bank, LMS fails to state a claim for relief because the Texas Uniform Foreign Country Money-Judgment Recognition Act (“UFCMJRA”), under which LMS seeks relief, does not permit recognition and enforcement of prejudgment orders. (Id. at 7). The Bank also objects that the Court lacks jurisdiction to enforce a prejudgment freeze order in the absence of a final judgment in LMS's favor. (Id. at 13).

         Instead of timely responding to the Bank's motion, see W.D. Tex. Loc. R. CV-7(e)(2), LMS filed a document purporting to be an amended complaint 21 days later. (1st “Am. Compl., ” Dkt. 11). Concerned that LMS had attempted to smuggle an untimely response under the guise of an amended complaint, the Court ordered the parties to participate in a telephone conference at which it directed LMS to seek leave to file a second amended complaint that did not contain responsive arguments. (Order, Dkt. 12; Minute Entry, Dkt. 15). LMS nominally did so, filing a three-sentence motion for leave in which it offers no justification for receiving leave to amend. (Mot. Leave, Dkt. 17). The parties have since filed several advisories about the state of the Tunisian litigation that is the subject of this case. (Dkts. 21, 23, 24).


         Because an amended pleading supersedes the original, King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994), the Bank's motion to dismiss would be moot if LMS has in fact amended its complaint. For the reasons discussed below, the Court finds that it has not: LMS's first “amended complaint” is not in fact a pleading under the Federal Rules of Civil Procedure, and the Court will deny LMS leave to file its second “amended complaint.”

         A. First “Amended Complaint”

         In its reply brief, the Bank argues that LMS's “first amended complaint” is simply an untimely opposition brief titled as an amended pleading. (Reply Mot. Dismiss, Dkt. 13, at 3). According to the Bank, this so-called pleading contains none of the features required by the Federal Rules of Civil Procedure. (Id. at 3-5). It does not “state its claims . . . in numbered paragraphs, ” Fed.R.Civ.P. 10(b); it has no statement of jurisdiction, Fed.R.Civ.P. 8(a)(1); and it has no demand for relief, Fed.R.Civ.P. 8(a)(3). (Id.). To conclude that some of these deficiencies are fortuitously rescued by LMS's incorporation of its original complaint[1] would be to overlook the fundamental fact that almost none of the “amended complaint” contains factual allegations. Rather, LMS spends much of its “amended complaint” responding directly to the Bank's motion to dismiss. (See 1st “Am. Compl., ” Dkt. 11, at 8 (arguing that the Bank's declaration in support of its motion should be struck); id. at 8-9 (arguing against one of the Bank's defensive arguments in its motion); id. at 9-11 (arguing against another of the Bank's arguments in its motion)). In the document's “conclusion and prayer, ” LMS asks that the arguments in the Bank's motion to dismiss “not be given consideration” because they are “irrelevant.” (Id. at 12). Because LMS's “amended complaint” largely offers responsive arguments to the Bank's motion to dismiss rather than state factual allegations in support of its own claims for relief, the Court agrees with the Bank that LMS's “amended complaint” is an untimely response masquerading as a deficient pleading. The Court will therefore disregard it. See Simmons v. Outreach Health Cmty. Care Services LP, EP-15-CV-286-KC, 2016 WL 3162147, at *3 (W.D. Tex. June 3, 2016) (citing Frick v. Quinlin, 631 F.2d 37, 40 (5th Cir. 1980) (stating that the “district court was free to either consider or disregard” an untimely response); J & J Sports Productions, Inc. v. Tawil, SA-09-CV-327-XR, 2009 WL 4639670, at *2 (W.D. Tex. Nov. 30, 2009) (same).[2]

         B. LMS's Motion for Leave to Amend

         The Federal Rules of Civil Procedure permit amendment as a matter of course if the amended pleading is filed within 21 days after service of a motion under Rule 12(b). Fed.R.Civ.P. 15(a)(1)(B). Otherwise, a party may amend only with the opposing party's consent or the court's leave. Fed.R.Civ.P. 15(a)(2). Rule 15(a) requires a trial court “to grant leave to amend ‘freely,' and the language of this rule ‘evinces a bias in favor of granting leave to amend.'” Lyn-Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir. 2002) (citation omitted). Accordingly, a district court must possess a “substantial reason” to deny a request for leave to amend. Id. Nonetheless, “leave to amend is by no means automatic.” Jones v. Robinson Prop. Group, L.P., 427 F.3d 987, 994 (5th Cir. 2005) (quoting Halbert v. City of Sherman, 33 F.3d 526, 529 (5th Cir. 1994)). In deciding whether to grant leave to amend, the district court may consider a variety of factors in exercising its discretion, including undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, and futility of the amendment. Id. (quoting Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir. 1981)).

         LMS makes no effort to justify receiving leave to amend. In its bare-bones motion, LMS says only that it would be “[i]n the interest of justice” to grant it leave. (Mot. Leave, Dkt. 17). Attached to that motion is another purported pleading plagued by the same deficiencies as the first. (2nd “Am. Compl., ” Dkt. 17-1). Like the first, LMS spends much of the document responding to the Bank's motion to dismiss. (Id. at 5 (arguing that the law and facts in the Bank's motion are “inadmissible”); id. at 6-7 (arguing that the Bank makes incorrect statements in its motion that should be “ignored as inadmissible”); id. at 12-15 (asking the Court to reject a series of defenses raised by the Bank in its motion); id. at 16 (arguing that the Court should reject the assertions made by the Bank in its motion)). This second “amended complaint” therefore represents a repeated failure to cure the deficiencies in LMS's first “amended complaint”: once again, it contains responsive arguments to a defensive motion instead of simply stating factual allegations in the manner required by the Federal Rules of Civil Procedure. LMS's repeated failure to file a valid pleading is a substantial reason for denying leave to amend. Because the Court denies LMS's motion for leave, LMS's live pleading is its original complaint, to which the Bank's motion pertains.

         C. The Bank's Motion to Dismiss

         Although the Bank is not explicit about the rule under which it seeks dismissal, the substance of its motion implies that it seeks to dismiss LMS's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (See Mot. Dismiss, Dkt. 10, at 18 (arguing that the Tunisian court order is not enforceable by this Court “under any conceivable theory”)). Given LMS's failure to timely respond, the Court may consider the Bank's motion to be unopposed. See Loc. R. W. D. Tex. CV-7(e)(2) (requiring an opposing party to respond to a dispositive motion within 14 days and allowing the district court to grant a motion as unopposed if no timely response is filed). However, the Court acknowledges the Fifth Circuit's reluctance to dispose of a cause of action simply for failure to comply with a response deadline imposed by the local rules. See Johnson v. Pettiford, 442 ...

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