Thursday, April 16, 2015

In legal battle over modular factory, Skanska targets Forest City associate BerlinRosen, partner Greenland; seeks civil contempt ruling

No, the battle over the ill-fated modular partnership between Forest City Ratner and Skanska USA is not over.

They fighting in court over cost overruns and alleged flaws regarding B2, the unfinished modular tower they were once building together, and over Skanska's decision to shut down the modular factory they once ran together at the Brooklyn Navy Yard.

And now an associated dispute has gotten bitter, as Skanska seeks to hold BerlinRosen, a Forest City p.r. firm (and a major player in NYC politics), and Greenland USA, Forest City's new joint venture partner (and majority owner of Atlantic Yards/Pacific Park), in civil contempt of court based on their alleged failure to properly respond to subpoenas seeking documents.

A hearing is scheduled for May 6. Skanska requests compliance with the subpoenas, court costs and attorneys' fees, and a statutory penalty of $250 each against BerlinRosen and Greenland.

What Skanska seeks

The subpoena issued to BerlinRosen seeks discovery of facts related to a 9/5/14 press release that Skanska attorneys claim is "libelous per se" regarding Skanska's Richard Kennedy, a party to the case.

The press release stated that the complaint claimed Kennedy "knowingly, wrongfully, intentionally, maliciously, in bad faith and without reasonable justification or excuse induced Skanska Modular to breach" the agreement with FC Modular.

Skanska and Kennedy have separately filed a counterclaim charging those statements were libelous. Skanska "wants to know the identities of the persons or entities which authorized the issuance of the Press Release and the scope and extent of the Press Release’s dissemination." 

(In other words, Skanska's beef is really with Forest City.)

The Greenland subpoena relates to plans for the next two buildings on the arena block, B3 and B4, which Skanska says Forest City initially indicated would be built modular. (In dispute is how firm a promise that was, since Forest City says the pipeline would have had to work more smoothly to get the next buildings up.)

"Because Greenland has allegedly acquired the controlling interest in the Atlantic Yards Project and presumably has rights in the B3 and B4 buildings, it is apparent that Greenland possesses information concerning the decision that was made for B3 not to be built modularly and/or as to the manner in which B4 is to be built," Skanska says.

Thus Greenland possesses information as to how or why the modular factory has been "allegedly deprived of future work," according to Skanska

Timing and response

Skanska says that both Greenland and Berlin Rosen ignored the March 16 return date of the subpoenas and filed objections only after that date.

Both Greenland and BerlinRosen say they'd produce documents only if Forest City's’ motion to dismiss is denied and if no other party in the case can produce the documents.

Not only are the subpoenas premature, say BerlinRosen and Greenland, they are also overbroad, and seek documents that are privileged and confidential.

Skanska responded that the "meritless objections" impede its ability to oppose the motion to dismiss made by Forest City, adding that "it becomes apparent that the non-parties are acting in concert with Plaintiff to deny access to discovery."

The documents at issue

Here are the documents that describe the battle: 
Skanska Motion for Contempt of CourtSkanska Memorandum of Law backing motionSkanska lawyer's AffirmationSkanska Subpoena Request to Berlin Rosen
Skanska Subpoena Request to Greenland
Berlin Rosen Objections to Subpoena
Greenland Objections to Subpoena

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