Judge Arthur Spatt
Lorber sought damages under RICO and state law charges including fraud, fraudulent inducement, conversion and contract breach. The court dismissed the RICO claim, with prejudice, as time barred, and declined supplemental jurisdiction over Lorber’s state law claims. Defendant Winston (joined by the Ganz defendants) sought Rule 11 sanctions against Lorber and her attorney Sorkin, who had been disqualified based on prior representation of Winston. They argued Rule 11 sanctions appropriate because the allegations in Lorber’s amended complaint were false, and that Lorber and Sorkin knew or should have known of such falsity. The court deemed Rule 11 sanctions inappropriate. Noting Lorber’s filing of state court action based on the same facts as those asserted in her federal action, the court concluded that to decide the Rule 11 motion, it would need to resolve whether the alleged fraud that Lorber accused the movants of participating in actually occurred. The court declined to engage in such a “heavily factual” inquiry. Further, despite Lorber’s being unsuccessful on statute of limitations and Federal Rule of Civil Procedure 9(b) grounds, it could not be said that her and Sorkin’s decision to bring suit was wholly unreasonable.
