Salba Corp., N.A. et al v. X Factor Holdings, LLC et al

Filing 166

ORDER Adopting 165 Report and Recommendations by Judge Robert E. Blackburn on 4/24/15. Default is entered against Core Naturals, LLC, Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient Naturals, LLC. The counterclaims of Core Naturals, LL C, Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient Naturals, LLC are dismissed, and, when final judgment is entered in this case, judgment shall enter in favor of the plaintiffs and against defendants on each of these counterclaims. Plaintiffs are awarded their costs concerning the counterclaims of Core Naturals, LLC, Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient Naturals, LLC.(dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 12-cv-01306-REB-KLM
SALBA CORP., N.A., a Canadian corporation,
SALBA SMART NATURALS PRODUCTS, a Colorado limited liability company,
WILLIAM A. RALSTON, and
RICHARD L. RALSON,
Plaintiffs,
v.
X FACTOR HOLDINGS, LLC, an inactive Florida limited liability company, and
ANCIENT NATURALS, LLC, a Florida limited liability company,
Defendants and Counter-Claimants, and
MITCHELL A. PROPSTER, a resident of the State of Florida,
CORE NATURALS, LLC, a Florida limited liability company, and
NATURAL GUIDANCE, LLC, a Florida limited liability company,
Defendants.

ORDER ADOPTING RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
Blackburn, J.
The matter before me is the Recommendation of United States Magistrate
Judge [#165] filed March 25, 2015. No objection having been filed to the
recommendation, I review it for plain error only. See Morales-Fernandez v.
Immigration & Naturalization Service, 418 F.3d 1116, 1122 (10th Cir. 2005). I
perceive no error, much less plain error, in the recommendation of the magistrate judge.
I approve and adopt the recommendation.
As detailed by the magistrate judge, the entity defendants, Core Naturals, LLC,
Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient Naturals, LLC, have been

warned that they may appear and act in this case only through counsel. Additionally,
they have been warned that a failure to obtain counsel may result in the entry of default
judgment on the claims of the plaintiffs against the defendants and dismissal of the
counterclaims of the entity defendants. For the reasons detailed by the magistrate
judge, the entry of default and default judgment and dismissal of the counterclaims of
the entity defendants is merited.
In addition to the authority cited by the magistrate judge, I address also the
criteria outlined in Gripe v. City of Enid, Okl., 312 F.3d 1184, 1188 (10th Cir. 2002),
citing Ehrenhaus v. Reynolds, 965 F.2d 916, 918 (10th Cir. 1992). The plaintiffs have
been prejudiced because, absent participation of the entity defendants through counsel,
the plaintiffs are not able to advance their claims to resolution on the merits. The entity
defendants have interfered with the judicial process by effectively refusing to defend
against the claims of the plaintiffs and by asserting counterclaims, but effectively failing
to prosecute their counterclaims. The entity defendants are culpable because their
failure to defend and to prosecute is caused solely by the entity defendants. The entity
defendants were warned that dismissal was a possible sanction for their failure to
defend and to prosecute and there is no indication that a sanction lesser than entry of
default judgment and dismissal without prejudice would be efficacious. I therefore find
and conclude that the recommendation of the magistrate judge should be approved and
adopted.
THEREFORE, IT IS ORDERED as follows:
1. That the Recommendation of United States Magistrate Judge [#165] filed
March 25, 2015, is approved and adopted as an order of this court;
2. That under Fed. R. Civ. P. 55(a), default shall enter against defendants, Core
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Naturals, LLC, Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient Naturals,
LLC, on each of the claims asserted against these defendants by the plaintiffs in the
Amended Complaint With Jury Demand [#62] filed January 14, 2014;
3. That if the plaintiffs seek entry of default judgment against one or more of the
defendants, Core Naturals, LLC, Natural Guidance, LLC, X Factor Holdings, LLC, and
Ancient Naturals, LLC, then by May 15, 2015, the plaintiffs shall file a motion for default
judgment which includes the documents required by Fed. R. Civ. P. 55 and
D.C.COLO.LCivR 55.1 and any other documents necessary to the entry of default
judgment providing the relief sought by the plaintiffs;
4. That under Fed. R. Civ. P. 37(b)(2)(A)(v) and 41(b), the counterclaims of
Core Naturals, LLC, Natural Guidance, LLC, X Factor Holdings, LLC, and Ancient
Naturals, LLC, as asserted in the Answer and Counterclaims in Response To
Amended Complaint [#89] and the Answer and Counterclaims in Response To
Amended Complaint [#95], are dismissed for failure to prosecute, for failure to comply
with court orders, and for lack of counsel;
5. That when final judgment is entered in this case, judgment shall enter in favor
of the plaintiffs and against defendants, Core Naturals, LLC, Natural Guidance, LLC, X
Factor Holdings, LLC, and Ancient Naturals, LLC, on each of the counterclaims
asserted by these defendants in the Answer and Counterclaims in Response To
Amended Complaint [#89] and the Answer and Counterclaims in Response To
Amended Complaint [#95]; and
6. That concerning the counterclaims of Core Naturals, LLC, Natural Guidance,
LLC, X Factor Holdings, LLC, and Ancient Naturals, LLC, the plaintiffs are AWARDED

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their costs, which shall be taxed by the clerk under Fed. R. Civ. P. 54(d)(1) and
D.C.COLO.LCivR 54.1 after entry of final judgment in this case.
Dated April 24, 2015, at Denver, Colorado.
BY THE COURT:

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