Novack and Macey attorneys Eric Macey, Richard Douglass and Joseph Nacca successfully defended a complaint filed by their client, Mirant Americas Energy Marketing LP, in the United States District Court for the Southern District of New York against a motion to dismiss filed by Defendant MediaNews Group, Inc.

Federal court judge Kimba Wood, in a written opinion, denied Defendant MediaNews Group’s motion to dismiss based on res judicata. Mirant sued MediaNews Group for breach of its post-termination obligations under an ISDA Swap Agreement. MediaNews Group filed a motion to dismiss the complaint, relying heavily on the fact that Mirant’s claim “could have been brought” procedurally in an earlier bankruptcy proceeding that challenged the termination itself. But after carefully reviewing Second Circuit precedent, the Court agreed with Novack and Macey that the proper test for res judicata is not whether a claim “could have been brought,” but rather whether the claim “should have been brought” in an earlier action. The Court held that under the “more focused view of what constitutes a claim that should have been brought and is thus barred by res judicata, [Mirant’s] claim here is meaningfully different from the ones litigated in the Bankruptcy Court.” Therefore, the Court denied MediaNews Group’s motion to dismiss. This allows Mirant’s multi-million dollar claim to go forward.