CHURCH OF SCIENTOLOGY OF CALIFORNIA and Founding Church of Scientology of
Washington, D. C., Plaintiffs,
James SIEGELMAN, Flo Conway, J. B. Lippincott Company and Morris Deutsch,
No. 79 Civ. 1166 (GLG).
United States District Court, S. D. New York.
May 30, 1980.
After announcing its intention to dismiss the action because of plaintiff's
failure to comply with discovery orders, the District Court, Goettel, J., held
that: (1) even though counterclaims remained, there was no reason for delaying
entry of judgment dismissing the complaint, and (2) court would award costs for
failure to comply with discovery requests.
See also, D.C., 471 F.Supp. 950 and D.C., 481 F.Supp. 866.
 MALICIOUS PROSECUTION
Claim essentially arising in malicious prosecution should not be commenced
until there has been a favorable determination of the underlying litigation.
 FEDERAL CIVIL PROCEDURE
Where questions concerning discovery which led to trial court's dismissal of
the complaint for failure to comply with discovery orders would arise in
prosecution of the counterclaims and where court would have been inclined, had
the motion been made, to have entertained a stay of counterclaims, which
sounded in malicious prosecution, until the main action was determined on the
merits, court would enter order stating that there was no reason for delaying
entry of judgment dismissing the complaint for refusal to make discovery.
Fed.Rules Civ.Proc. Rule 54(b), 28 U.S.C.A.
 FEDERAL CIVIL PROCEDURE
Attorney fees can only be granted where there is clear evidence that the claims
are entirely without basis and asserted for purposes of harassment.
 FEDERAL CIVIL PROCEDURE
Where complaint was being dismissed on legal grounds and where defendants'
counterclaims which sounded in malicious prosecution would undoubtedly seek as
damages the cost of defending the original suit, it was inappropriate to assess
 FEDERAL CIVIL PROCEDURE
Where plaintiffs continually stated that, if there were a final direction to
make discovery, plaintiffs would do so, and where plaintiffs thereafter
announced that they would not make discovery under any circumstances after all
avenues had been exhausted, court would award $2,000 in costs to the defendants
because of the plaintiffs' failure to comply with discovery requests.
Fed.Rules Civ.Proc. Rule 37, 28 U.S.C.A.
*554 Cohn, Glickstein, Lurie, Lubell & Lubell, New York City, for
plaintiffs; Jonathan W. Lubell, New York City, of counsel.
Clark, Wulf, Levine & Peratis, New York City, for defendants, Siegelman and
Conway; Melvin L. Wulf, New York City, of counsel.
Lester, Schwab, Katz & Dwyer, New York City, for defendant, Lippincott;
Patrick A. Lyons, New York City, of counsel.
Rosner & Rosner, New York City, for defendant, Deutsch; Jonathan L. Rosner,
New York City, of counsel.
GOETTEL, District Judge:
At a hearing held on this matter on May 13, 1980, this Court indicated, for
reasons stated on the record, its intention to dismiss the plaintiffs'
complaint in view of their refusal to make discovery. There remained, however,
the question as to whether a Rule 54(b) certification should be issued as to
the claims dismissed, and whether attorneys' fees and additional costs should
be assessed. Before these matters could be determined, it was discovered that
the attorney who had been appearing on behalf of plaintiff was not admitted to
practice in this court. The matter could not, therefore, proceed, and attorneys
of record were given additional time in which to submit papers. The following
is the Court's decision with respect to the unresolved issues.
Rule 54(b) Certification
With the dismissal of the claims asserted against defendant Deutsch the Court
has now dismissed all of the plaintiffs' claims. (Previously, the Court had, on
the merits, dismissed as against all of the other defendants. Church of
Scientology of California v. Siegelman, 475 F.Supp. 950 (S.D.N.Y.1979)).
Additionally, most of the counterclaims asserted by the individual defendants
have also been dismissed. As to each of the individual defendants, however, a
counterclaim for prima facie tort remains. Nevertheless, this Court expressly
determines that despite these remaining counterclaims no just reason for delay
exists, and hereby directs the Clerk, pursuant to Fed.R.Civ.P. 54(b), to
enter judgment in favor of defendant Deutsch. In light of the ruling of the
Second Circuit in Cullen v. Margiotta, 618 F.2d 226 (2d Cir. 1980), the
following brief and reasoned explanation for certifying the entry of judgment
 The remaining counterclaims for prima facie tort are, at least
technically, not premature, as at least some of the acts alleged therein
purportedly occurred prior to the commencement of the instant action. These
claims, however, are, in essence, ones for malicious prosecution, with some
additions. As this Court indicated in its earlier opinion, a claim essentially
arising in malicious prosecution should not be commenced until there has been a
favorable termination of the underlying litigation. Church of Scientology of
California v. Siegelman, supra. Consequently, the Court would have been
inclined, had a motion been made, to have entertained a stay of each
counterclaim until the plaintiffs' action had been *555 determined on the
merits. That being so, there is no reason for delaying entry of judgment
disposing of plaintiffs' case. The judgment should include all discovery and
special costs assessed against plaintiff, as well as the usual costs upon entry
An additional reason for certifying judgment is that the question concerning
discovery will arise again in the prosecution of the counterclaims. Although
the considerations concerning the need for the discovery will not be identical
as to the counterclaims, the reasons for opposing the discovery by the Church
of Scientology can be expected to be the same. And, while it is relatively easy
to deal with a plaintiffs' refusal to make discovery, by giving them the
alternative of either complying with the discovery demand or having their case
dismissed, it is quite difficult to find a suitable remedy when it is a
defendant on counterclaim who is resisting discovery. The discovery involved
relates not only to liability, but also to the amount of damages. As a result,
it would be quite difficult to structure any sanction adequately disposing of
the problem. That being the case, it is highly desirable to obtain appellate
review of this Court's earlier rulings on discovery for guidance before
proceeding further. Curtiss-Wright Corporation v. General Electric
Company, --- U.S. ----, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980).
Attorneys' Fees and Costs
 A claim for attorneys' fees can only be granted when there is "clear
evidence" that the claims are entirely without basis and asserted for purposes
of harassment. While the actions of plaintiffs to date definitely suggest that
this may be the case, this Court has held no hearings on the merits of the
case, and as a result is not in a position to make a reasoned determination of
the facts. This action is being dismissed on legal grounds. Additionally, the
defendants in their counterclaims will undoubtedly seek as damages the cost of
defending the original suit. Under these circumstances, it is inappropriate at
this time to assess attorneys' fees. Nemeroff v. Abelson, 620 F.2d 339 (2d
 This Court is, however, authorized under Rule 37, Fed.R.Civ.P., to
impose costs and fees where a party fails to comply with discovery requests.
(There have been prior assessments against the plaintiffs.) During the course
of the eight motions made by plaintiffs it was stated that if there was a final
direction to make discovery the plaintiff would do so. However, when all
avenues had been exhausted (and re-exhausted), including an application for an
interim appeal, plaintiff announced that it would not make the discovery under
any circumstance. Much needless and protracted time and expense was involved in
reaching this position. Consequently, an additional $2,000 in costs is hereby
assessed against the plaintiff, to be paid by plaintiffs' counsel. 28 U.S.C.
s 1927. Finally, the defendant, in billing its costs upon entry of judgment,
may seek to recover all expenses involved in the taking of depositions (except
attorneys' fees) since such were unnecessary in light of the plaintiffs'
ultimate position as to discovery.
The action against defendant Deutsch is hereby dismissed. The Clerk is
directed to enter judgment in accordance herewith pursuant to Fed.R.Civ.P.