'Wolf of Wall Street' Producers Want Libel Suit Rejected Based on Martin Scorsese's New York Roots

Federal jurisdiction of a complaint brought by a former Stratton Oakmont exec is being challenged.
Daniel Zuchnik/WireImage

Nobody would ever doubt that Martin Scorsese is a true-blue New Yorker. But just in case, the film legend on Tuesday submitted a declaration in court that testifies to the fact he's been a resident of New York City his entire life and that his company, Sikelia Productions, does its business there too.

Scorsese's input comes in a defamation lawsuit over Wolf of Wall Street brought by former Stratton Oakmont executive Andrew Greene, allegedly the basis for the toupee-wearing character of Nicky "Rugrat" Koskoff. More than two years after Greene sued the production companies behind the film for portraying this character as "a criminal, drug user, degenerate, depraved, and/or devoid of any morality or ethics," the defendants have moved for dismissal on jurisdictional grounds.

The complaint is filed in federal district court based on the diversity of citizenship of the parties involved. Greene is a New Yorker too, but as a dismissal motion explains, "In a case with multiple defendants, if a single defendant is from the same state as the plaintiff, the district court loses diversity jurisdiction over the entire action."

Thus, the sudden attempt to tout Scorsese's connections to New York.

Sikelia is a defendant in the case, and the wrinkle here is that Scorsese's company is incorporated in Delaware. Apparently, Scorsese had to learn about this fact.

"My present knowledge of the legal aspects of Sikelia comes from conversations that I've had with my accountant, Arnold Herrmann," he states in the declaration. "He tells me that Sikelia was incorporated under the laws of the state of Delaware, that I own 100 percent of the shares of Sikelia, and that I am the President, Secretary and Treasurer of Sikelia, and have held those offices for more than a decade."

Scorsese, though, adds that the corporate executive offices are in New York City and that the preponderance of his time is spent within the state. "That was the case throughout my involvement with the motion picture 'The Wolf of Wall Street,' as well as on February 18, 2014, the date this lawsuit was filed."

The defendants say that means the company is domiciled in New York and that the Supreme Court's 2010 decision in Hertz Corporation v. Friend resolved a circuit split by concluding that the "principal place of business is best read as referring to the place where a corporation's officers direct, control and coordinate the corporation's activities."

And so, the defendants say the lawsuit has no business being in federal court.

Now, what tactical edge that producers hope to get by having the case brought in state rather than federal court is another discussion. Maybe there will be jurisdictional challenges by some of the defendants there as well and perhaps the plaintiff will have to endure more headaches at the procedural stage. What's a bit odd is the fact that defendants — especially in cases involving First Amendment principles — most often seek to stick such disputes in federal court. (See Sean Penn v. Lee Daniels for example.) And one could hardly attribute the move to change venue to what the judge has been deciding. The first motion to dismiss resulted in a decision that didn't quite end the litigation, but was largely in defendants' favor. And while the judge may have disappointed defendants by recently authorizing discovery such as a Leonardo DiCaprio deposition, it's said in the memorandum supporting dismissal that attorneys for the defendant brought up the jurisdictional issue in private correspondence back in March.

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