Preview
FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------------------------- X
CRESCO LABS NEW YORK, LLC, a New :
York limited liability company, and CRESCO :
LABS, LLC, an Illinois limited liability : Index No. 652343/2018
company, :
: Hon. Andrew Borrok
:
Plaintiffs/Counterclaim Defendants, : Mot. Seq. No. __
:
v. :
:
:
FIORELLO PHARMACEUTICALS, INC., a :
New York corporation, :
:
Defendant/Counterclaimant.
----------------------------------------------------------- X
PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF THEIR
MOTION FOR LEAVE TO FILE SUR-REPLY IN OPPOSITION TO
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Pursuant to Commercial Division Rule 18, Plaintiffs respectfully request leave to file the
short attached sur-reply to respond to Defendant’s arguments about a purportedly “controlling”
legal authority that Defendant discussed for the first time in its reply brief. In Fiorello’s opening
brief in support of its motion for summary judgment, NYSCEF No. __,1 it asked the Court to
limit Cresco’s damages for Fiorello’s breach of a binding no-shop provision, relying primarily on
the Court of Appeals’ decision in Goodstein Const. Corp. v. City of New York, 80 N.Y.2d 366,
373 (1992). After Cresco distinguished Goodstein in its opposition brief, NYSCEF No. __,
1
Consistent with the prior stipulation of the parties “so ordered” by the court on May 22, 2020,
NYSCEF No. 182, Fiorello’s moving papers in support of its motion for summary judgment
have been served but not yet filed. Fiorello’s papers will be filed on January 6, 2022 (one day
before the return date on Fiorello’s motion). NYSCEF No. 226.
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Fiorello discussed on four separate pages of its reply brief a First Department authority that it
now characterizes as “controlling” to Fiorello’s affirmative argument, even though this authority
was available at the time of Fiorello’s opening brief but not cited therein. See Fiorello Reply
Brief, NYSCEF No. __, at 2, 9, 14, and 15 (discussing Garda USA, Inc. v. Sun Capital Partners,
194 A.D.3d 545 (1st Dep’t 2021)) (“Garda”).2 Fiorello has not explained its decision to discuss
legal authority it now characterizes as “controlling” for the first time in a reply brief.
The Court has “the discretion to determine whether to accept . . . surreply papers for
‘good cause.’” U.S. Bank Tr., N.A. v. Rudick, 156 A.D.3d 841, 842 (2d Dep’t 2017) (affirming
trial court’s decision to consider surreply papers). A motion to file a sur-reply may be
appropriate if the reply brief “raise[s] new issues of law or fact which require a response.” Diane
Serra Inc. v. Charmer Indus., Inc., 190 Misc. 2d 386, 391, 737 N.Y.S.2d 529, 532 (N.Y. Cnty.
2002).
Because Fiorello delayed citation to Garda until its reply papers, there is good cause to
allow Plaintiffs to file a sur-reply limited to responding to Fiorello’s new legal authority. Beazer
v. New York City Health & Hosps. Corp., 76 Ad.3d 405, 407 (1st Dep’t 2010) (“The court
properly permitted plaintiff to submit a surreply in response to [defendant’s] reply papers, which
advanced a certain argument for the first time ….”), aff’d, 18 NY.3d 833 (2011). Plaintiffs
should be given a chance to distinguish Garda, which rejected an award of lost profits based on
an “unsigned letter of intent” where the parties had never agreed on acquisition terms—in
marked contrast to the situation here, where the no-shop provision was included in a signed and
2
The First Department decided Garda on May 18, 2021, well before Fiorello served its opening
brief in support of its summary judgment motion on July 2, 2021.
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binding letter of intent that included a detailed agreement as to the economic terms of the
transaction.3
In the alternative to granting the instant motion for leave, the Court should disregard
Fiorello’s discussion of Garda. See Moorman v. Meadow Park Rehab. & Health Care Ctr.,
LLC, 57 A.D.3d 788, 789 (2d Dep’t 2008) (affirming decision not to consider “new arguments or
new grounds, asserted for the first time in the petitioner’s reply papers, in support of the relief
sought”); Gleasion v. Chase, No. 27394/08, 2009 WL 6849874 at n.2 (N.Y. Cnty. Sep. 15, 2009)
(“a reply may not be used to present affirmative contentions that should have been addressed in
the moving papers”).
CONCLUSION
For the foregoing reasons, Plaintiffs should be given permission to file a sur-reply, which
is attached as Exhibit 1 to this motion. If permission is granted, Plaintiffs will file the sur-reply
within one business day of entry of the order granting permission.
3
The proposed sur-reply also discusses in one paragraph a new trial court decision cited by
Fiorello for the first time in its reply brief, but decided after Fiorello served its opening brief.
See Fiorello Reply Br. at 9 (citing Logic LP Acquisition Co., LLC v. Prestige Employees Adm’rs,
Inc., No. 653504/2020, 2021 WL 3284683 (N.Y. Sup. Ct. July 28, 2021)).
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Dated: January 5, 2022
New York, New York
Respectfully submitted,
JENNER & BLOCK LLP
By: /s/ Stephen L. Ascher _
Stephen L. Ascher
Jason P. Hipp
Melissa T. Fedornak
1155 Avenue of the Americas
New York, NY 10036
212-891-1670
sascher@jenner.com
Counsel for Plaintiffs Cresco Labs New York,
LLC and Cresco Labs, LLC
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Certification of Compliance with Word Count Limit
I hereby certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division
that the total number of words in this brief, exclusive of the caption, table of contents, table of
authorities, and signature block, is 702.
Dated: January 5, 2022 /s/ Stephen L. Ascher _
New York, New York Stephen L. Ascher
JENNER & BLOCK LLP
1155 Avenue of the Americas
New York, NY 10036
212-891-1670
sascher@jenner.com
Counsel for Plaintiffs Cresco Labs New York,
LLC and Cresco Labs, LLC
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Preview
FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------- X CRESCO LABS NEW YORK, LLC, a New : York limited liability company, and CRESCO : LABS, LLC, an Illinois limited liability : Index No. 652343/2018 company, : : Hon. Andrew Borrok : Plaintiffs/Counterclaim Defendants, : Mot. Seq. No. __ : v. : : : FIORELLO PHARMACEUTICALS, INC., a : New York corporation, : : Defendant/Counterclaimant. ----------------------------------------------------------- X PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION FOR LEAVE TO FILE SUR-REPLY IN OPPOSITION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT Pursuant to Commercial Division Rule 18, Plaintiffs respectfully request leave to file the short attached sur-reply to respond to Defendant’s arguments about a purportedly “controlling” legal authority that Defendant discussed for the first time in its reply brief. In Fiorello’s opening brief in support of its motion for summary judgment, NYSCEF No. __,1 it asked the Court to limit Cresco’s damages for Fiorello’s breach of a binding no-shop provision, relying primarily on the Court of Appeals’ decision in Goodstein Const. Corp. v. City of New York, 80 N.Y.2d 366, 373 (1992). After Cresco distinguished Goodstein in its opposition brief, NYSCEF No. __, 1 Consistent with the prior stipulation of the parties “so ordered” by the court on May 22, 2020, NYSCEF No. 182, Fiorello’s moving papers in support of its motion for summary judgment have been served but not yet filed. Fiorello’s papers will be filed on January 6, 2022 (one day before the return date on Fiorello’s motion). NYSCEF No. 226. 1 1 of 5 FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022 Fiorello discussed on four separate pages of its reply brief a First Department authority that it now characterizes as “controlling” to Fiorello’s affirmative argument, even though this authority was available at the time of Fiorello’s opening brief but not cited therein. See Fiorello Reply Brief, NYSCEF No. __, at 2, 9, 14, and 15 (discussing Garda USA, Inc. v. Sun Capital Partners, 194 A.D.3d 545 (1st Dep’t 2021)) (“Garda”).2 Fiorello has not explained its decision to discuss legal authority it now characterizes as “controlling” for the first time in a reply brief. The Court has “the discretion to determine whether to accept . . . surreply papers for ‘good cause.’” U.S. Bank Tr., N.A. v. Rudick, 156 A.D.3d 841, 842 (2d Dep’t 2017) (affirming trial court’s decision to consider surreply papers). A motion to file a sur-reply may be appropriate if the reply brief “raise[s] new issues of law or fact which require a response.” Diane Serra Inc. v. Charmer Indus., Inc., 190 Misc. 2d 386, 391, 737 N.Y.S.2d 529, 532 (N.Y. Cnty. 2002). Because Fiorello delayed citation to Garda until its reply papers, there is good cause to allow Plaintiffs to file a sur-reply limited to responding to Fiorello’s new legal authority. Beazer v. New York City Health & Hosps. Corp., 76 Ad.3d 405, 407 (1st Dep’t 2010) (“The court properly permitted plaintiff to submit a surreply in response to [defendant’s] reply papers, which advanced a certain argument for the first time ….”), aff’d, 18 NY.3d 833 (2011). Plaintiffs should be given a chance to distinguish Garda, which rejected an award of lost profits based on an “unsigned letter of intent” where the parties had never agreed on acquisition terms—in marked contrast to the situation here, where the no-shop provision was included in a signed and 2 The First Department decided Garda on May 18, 2021, well before Fiorello served its opening brief in support of its summary judgment motion on July 2, 2021. 2 2 of 5 FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022 binding letter of intent that included a detailed agreement as to the economic terms of the transaction.3 In the alternative to granting the instant motion for leave, the Court should disregard Fiorello’s discussion of Garda. See Moorman v. Meadow Park Rehab. & Health Care Ctr., LLC, 57 A.D.3d 788, 789 (2d Dep’t 2008) (affirming decision not to consider “new arguments or new grounds, asserted for the first time in the petitioner’s reply papers, in support of the relief sought”); Gleasion v. Chase, No. 27394/08, 2009 WL 6849874 at n.2 (N.Y. Cnty. Sep. 15, 2009) (“a reply may not be used to present affirmative contentions that should have been addressed in the moving papers”). CONCLUSION For the foregoing reasons, Plaintiffs should be given permission to file a sur-reply, which is attached as Exhibit 1 to this motion. If permission is granted, Plaintiffs will file the sur-reply within one business day of entry of the order granting permission. 3 The proposed sur-reply also discusses in one paragraph a new trial court decision cited by Fiorello for the first time in its reply brief, but decided after Fiorello served its opening brief. See Fiorello Reply Br. at 9 (citing Logic LP Acquisition Co., LLC v. Prestige Employees Adm’rs, Inc., No. 653504/2020, 2021 WL 3284683 (N.Y. Sup. Ct. July 28, 2021)). 3 3 of 5 FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022 Dated: January 5, 2022 New York, New York Respectfully submitted, JENNER & BLOCK LLP By: /s/ Stephen L. Ascher _ Stephen L. Ascher Jason P. Hipp Melissa T. Fedornak 1155 Avenue of the Americas New York, NY 10036 212-891-1670 sascher@jenner.com Counsel for Plaintiffs Cresco Labs New York, LLC and Cresco Labs, LLC 4 4 of 5 FILED: NEW YORK COUNTY CLERK 01/05/2022 10:47 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 01/05/2022 Certification of Compliance with Word Count Limit I hereby certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division that the total number of words in this brief, exclusive of the caption, table of contents, table of authorities, and signature block, is 702. Dated: January 5, 2022 /s/ Stephen L. Ascher _ New York, New York Stephen L. Ascher JENNER & BLOCK LLP 1155 Avenue of the Americas New York, NY 10036 212-891-1670 sascher@jenner.com Counsel for Plaintiffs Cresco Labs New York, LLC and Cresco Labs, LLC 5 5 of 5