Katz v. Feldman

Filing 17

MEMORANDUM. Signed by Judge Maryellen Noreika on 1/18/2019. **Copies mailed to pro se plaintiff and pro se defendant 1/18/2019** (dlw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
BERNARD KATZ,
Plaintiff,
v.
WILLIE FELDMAN,
Defendant.

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C.A. No. 18-213 (MN)

MEMORANDUM
I.

INTRODUCTION
Plaintiff, Bernard Katz, (“Katz”), who appears pro se, commenced this action on

February 6, 2018, against Defendants Willie Feldman (“Feldman”), individually, and Salem
Botanicals, Inc. (“Salem Botanicals”) alleging fraud during an arbitration proceeding and asking
the Court to set aside an arbitration award. (D.I. 1). The matter proceeds on the Third Amended
Complaint. (D.I. 9). Katz also filed an Amended Motion to Vacate an American Arbitration
Association Award Order. (D.I. 5). The proper vehicle for a party seeking vacatur of an arbitral
award is by motion, not by filing a complaint. See 9 U.S.C. § 1, et seq.; Pfeffer v. Wells Fargo
Advisors, LLC, 2017 WL 2269541, at 2 (S.D.N.Y. May 23, 2017). Feldman has filed an Amended
Counterclaim for judgment and lien against Katz and Telesonic Corp. (D.I. 7).
II.

BACKGROUND
Katz asks the Court to set aside the arbitration award In the Matter of the Arbitration

between Salem Botanicals Inc. v. Telesonic Packaging Corp., Case Number: 01-17-0002-9404,
heard before the American Arbitration Association Commercial Arbitration Tribunal on January
2, 2018. (See D.I. 1; D.I. 5 at 15). The arbitrator awarded Salem Botanicals, the Claimant,
$40,380.75 and denied Telesonic Packaging Corp.’s counterclaim. (D.I. 5 at 15). Katz filed a

Complaint, Amended Complaint, and Third Amended Complaint in this Court appealing the
award. (D.I. 1, 4, 9). On October 29, 2018, Salem Botanicals and Angela Giampolo, both of
whom were named as defendants in the Third Amended Complaint, were dismissed for failure to
serve process pursuant to Fed. R. Civ. P. 4(m). (See D.I. 12). Feldman is the only defendant in
this action. 1
Katz is not a named party in the arbitration matter. In the original Complaint and the
Amended Complaints Katz appeals the arbitration award as “owner of Telesonic, a sole
proprietorship.” (D.I. 1; D.I. 4; D.I. 9 at 2). Courts have allowed sole proprietors to appear pro se
on behalf of their business entity. See Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. 2007).
“Telesonic” is not a party to the underlying arbitration matter.
The Motion and Amended Motion to Vacate the Arbitration Award were filed by Katz as
“owner of Telesonic Packaging Corporation,” and seek to vacate the arbitration award. (D.I. 3,
5 at 2). Telesonic Packaging Corp. is the Respondent in the arbitration matter. The word
“Corporation” or the abbreviation “Corp.” connotes a corporation, not a sole proprietorship.
See e.g., Winkler v. Andrus, 594 F.2d 775, 777 (10th Cir. 1979). A corporation may appear in the
federal courts only through licensed counsel.

See Rowland v. California Men’s Colony,

506 U.S. 194, 201-02 (1993). Katz, a non-attorney, may not represent the interests of a corporation
in this Court. 2

1

Feldman did not file an answer to the Third Amended Complaint.

2

Katz may not have it both ways; identifying “Telesonic” in the complaint as a sole
proprietorship, and then identifying it in the motion to vacate the arbitration award as
“Telesonic Packaging Corporation.” As noted, the Respondent in the arbitration
proceeding was Telesonic Packaging Corp.
2

Feldman, who also appears pro se, filed a counterclaim against Katz (D.I. 6) which he later
amended (D.I. 7). Feldman is a managing member of Salem Botanicals. (Id. at 10). Like Katz,
he was not a party to the arbitration. The Amended Counterclaim asks the Court to confirm the
arbitration award in favor of Salem Botanicals, and enter judgment against Katz and Telesonic
Corp. in the amount of the arbitration award. Like Katz, Feldman is not an attorney, and he may
not represent the interests of a corporation in federal court.
III.

DISCUSSION
A.

Legal Standards

Every Court has the inherent authority to manage the cases on its docket “with economy
of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the
exercise of judgment, which must weigh competing interests and maintain an even balance.”
Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936). In addition, “district courts have the
inherent authority to manage their dockets and courtrooms with a view toward the efficient and
expedient resolution of cases.” Dietz v. Bouldin, 136 S.Ct. 1885, 1892 (2016). Finally, the Court
has broad discretion in deciding whether to dismiss an action with prejudice pursuant to its inherent
authority to manage its docket. See Lee v. Krieg, 227 F. App=x 146, 148 (3d Cir. 2007) (“We
reiterate that the court has broad discretion in deciding whether to dismiss an action with prejudice
under Rule 41(b) or pursuant to its inherent authority to manage its docket.”).
B.

Proper Parties and Jurisdiction

Typically, the proper parties to a suit challenging an arbitration award are the same as those
in the underlying arbitration proceeding. See e.g., Pham v. Financial Industry Regulatory Auth.,
Inc., 2013 WL 633398, at *3 (N.D. Cal. Feb. 20, 2013) (proper challenge to an award is an action
to vacate it brought against the other party, the real adversary). The arbitration award was issued

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in favor of Claimant Salem Botanicals, named as a defendant in this action, but who was not
served, and has been dismissed. Before a federal court may exercise personal jurisdiction over a
defendant, the procedural requirement of service of summons must be satisfied. Omni Capital
Int’l, Ltd. v. Rudolf Wolff & Co. Ltd., 484 U.S. 97, 104 (1987). Because Salem Botanicals was
never served, the Court does not have jurisdiction over it.
Feldman, who was not a party to the underlying arbitration proceeding, is the sole
defendant. Plaintiff alleges that he is the “owner” of Salem Botanicals, while Feldman indicates
that he is its managing member. To the extent Katz seeks to recover from Feldman personally, in
essence, he asks the Court to pierce Salem Botanicals’ corporate veil. The pleadings do not
indicate this issue was presented at arbitration and, therefore, it is not considered by the Court.
The Court lacks the authority to determine any alleged personal liability of Feldman.
In his Amended Counterclaim, Feldman seeks recovery on behalf of Salem Botanicals
against Telesonic Corp., which he refers to as a corporation. Telesonic Packaging Corp. was the
Respondent in the underlying arbitration matter. Neither Telesonic Corp nor Telesonic Packing
Corp. were named as Plaintiffs in the original Complaint or any of the Amended Complaints. Nor
does the Court docket reflect it was served with process or that it answered the Amended
Counterclaim. As a result, the Court lacks personal jurisdiction over it. See Omni, 484 U.S. at
104.
The Court does not have personal jurisdiction over either party to the underlying arbitration
matter and lacks authority to resolve issues not raised in the arbitration proceeding. Therefore, the

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motion to vacate the arbitration award will be denied without prejudice, and the Third Amended
Complaint and the Amended Counterclaim will be dismissed without prejudice. 3
C.

Standing

In the alternative, the matter is dismissed for lack of standing. The Court is obligated to
address the issue of standing sua sponte. See FOCUS v. Allegheny Cty. Court of Common Pleas,
75 F.3d 834, 838 (3d Cir. 1996); see also Frempong v. National City Bank of Indiana,
452 F. App’x 167, 170 (3d Cir. 2011) (“Courts are obligated to raise the issue of standing sua
sponte.”).
Generally, the validity of an arbitration agreement is governed by the Federal Arbitration
Act, 9 U.S.C. § 1 et seq. Katz moves to set aside the award pursuant to 9 U.S.C. § 10. Section 10
provides that the “court in and for the district wherein the award was made may make an order
vacating the award upon the application of any party to the arbitration.” 9 U.S.C. § 10(a). “[B]y
the express terms of the statute, a nonparty to the arbitration generally has no standing to challenge
the award.” Marshall v. Wells Fargo Advisors, LLC, 668 F. App’x 874, 875 (11th Cir. 2016)
(citation omitted) (collecting cases). As discussed above, Katz was not a party to the arbitration
proceeding and, therefore, does not have standing to move to vacate the award.
D.

Corporations and Attorneys

Finally, it is clear that both Katz and Feldman raise their claims, defenses, and
counterclaims on behalf of corporate entities. They are not attorneys and may not do so in federal
court. See Rowland v. California Men's Colony, 506 U.S. at 201-02.

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Given Katz’s and Feldman’s pro se status, all matters will be dismissed without prejudice,
even though the Court has the discretion to dismiss them with prejudice.
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E.

Counterclaim

The Court will also dismiss Feldman’s Amended Counterclaim raised against Katz and
Telesonic Corp. for two reasons. First, the Court does not have personal jurisdiction over
Telesonic Corp. as it has never been served.

Second, the Amended Counterclaim speaks

specifically to the arbitration award and Katz was not a party to that action. Therefore, the
Counterclaim will be dismissed.
IV.

CONCLUSION
For the above reasons, the Court will: (1) deny without prejudice Plaintiff’s Amended

Motion to Vacate Arbitration Award (D.I. 5); (2) dismiss without prejudice the Third Amended
Complaint (D.I. 9); and (3) dismiss without prejudice Feldman’s Amended Counterclaim (D.I. 7).
An appropriate order will be entered.

_________________________________
The Honorable Maryellen Noreika
United States District Judge
January 18, 2019
Wilmington, Delaware

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