USA v. Anthony and Gordon Construction Co Inc et al

Filing 82

MEMORANDUM ORDER DENYING 68 Motion to Strike; DENYING 68 Motion to Dismiss; DENYING 74 Appeal of Magistrate Judge Decision; GRANTING 77 Motion to Enroll as Counsel. Added as counsel Allison Anne Jones, Pamela R Jones for Anthony and Gordon Construction Co Inc; GRANTING 78 Motion to Continue Scheduling Order. The instant action is hereby REFERRED to Magistrate Judge Hayes for a scheduling conference. Signed by Judge S Maurice Hicks on 8/29/2017. (crt,Crick, S)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
UNITED STATES OF AMERICA
FOR THE USE AND BENEFIT OF
RVP CONSTRUCTION, INC.

CIVIL ACTION NO.16-1060

VERSUS

JUDGE S. MAURICE HICKS, JR.

ANTHONY GORDON CONSTRUCTION,
INC.

MAGISTRATE JUDGE HORNSBY

MEMORANDUM ORDER
Before the Court are: (1) a combined Motion to Strike Defendant Anthony Gordon
Construction, Inc.’s (“AG”) Answer and a Motion to Dismiss AG’s Counterclaim by Plaintiff
RVP Construction, Inc., (“RVP”) (Record Document 68); (2) an appeal from Magistrate
Judge Hayes’ Order granting a Motion for Extension of Time for AG to obtain new counsel
by RVP (Record Document 74); (3) a Motion to Enroll as Counsel for AG by several
attorneys (Record Document 77); and (4) a Motion to Continue the Scheduling Order in
the instant action by AG (Record Document 78).
I.

RVP’s Combined Motion to Strike and Motion to Dismiss
In RVP’s Motion to Strike and Motion to Dismiss, RVP makes the following

argument: AG failed to obtain new counsel by the original court-imposed deadline for
doing so, prejudicing RVP, and AG’s failure to timely obtain counsel should result in
issuance of a default judgment against AG and dismissal of its counterclaim against RVP.
See Record Documents 68 and 68-2. RVP states that it has suffered prejudice in the
discovery process because AG’s former counsel withdrew just before the scheduled date
for expert depositions. See Record Document 71 at 3-5. RVP also states that as a result

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of the “meritless counterclaim” filed by AG, “RVP’s surety has reduced RVP’s bonding
capacity as a result of the claim by $2.2 million.” Id. at 3.
II.

RVP’s Appeal of Magistrate Judge Hayes’ Order Extending the Time for
AG to Obtain New Counsel
In RVP’s Response to the Motion for Extension of Time to Retain New Counsel

and appeal from Magistrate Judge Hayes’ Order granting AG an extension of time to
obtain new counsel, RVP makes the following arguments: (1) because AG’s insurance
company filed the Motion on AG’s behalf, the insurance company did not have standing
to pursue such relief on behalf of AG; (2) the insurance company, Great American
Insurance Company (“Great American”), failed to comply with local rules in seeking an
extension of the deadline for obtaining new counsel; (3) Great American failed to show
good cause for the extension of time for AG to obtain new counsel; and (4) the Motion for
Extension of Time to Retain New Counsel should have been referred to the undersigned
rather than to Magistrate Judge Hayes. See Record Documents 71 and 74.
III.

The Motion to Enroll as Counsel and Motion to Continue the Scheduling
Order
On August 25, 2017, the deadline for obtaining new counsel under Magistrate

Judge Hayes’ extension of the original deadline for AG to obtain counsel, attorneys Philip
Downer, Allison Jones, and Pamela Jones filed a Motion to Enroll as Counsel on behalf
of AG. See Record Document 77. They also filed a Motion to Continue the Scheduling
Order in the instant Action, seeking the continuance on the ground that it is needed to
familiarize themselves with the case and the “voluminous” materials they are receiving
related to the case. Record Document 78. The proposed new counsel for AG also seek
a scheduling conference in this Motion. See id. RVP filed a Response to AG’s Motion to

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Continue the Scheduling Order, arguing that the Motion is procedurally improper because
the Motion to Enroll as Counsel has not yet been granted and restating several of the
arguments made in its other filings. See Record Document 80.
IV.

Analysis of Pending Motions
RVP’s filings raise valid issues. AG did miss the original deadline that Magistrate

Judge Hayes imposed for AG to obtain new counsel. See Record Document 65.
Assuming that RVP’s assertions regarding the prejudice it has suffered are true, RVP has
suffered some prejudice from AG’s failure to timely obtain new counsel. Finally, it is
generally true that a party cannot seek relief on behalf of another, unrepresented party.
However, even considering such prejudice, RVP seeks a very drastic remedy–
striking AG’s answer (permitting a default judgment to be taken against AG) and
dismissing AG’s counterclaim against RVP–in response to AG’s failure to timely obtain
counsel. See Record Documents 68, 68-2, 71, 74, and 80. Striking a party’s pleadings is
“a drastic remedy to be resorted to only when required for the purposes of justice.”
Spurgeon v. Leleux, 2017 U.S. Dist. LEXIS 3602 at *3 (W.D. La. 2017), quoting Augustus
v. Bd. of Pub. Instruction of Escambia County, Fla., 306 F.2d 862, 868 (5th Cir. 1962).
Courts are necessarily vested with inherent control “to manage their own affairs so as to
achieve the orderly and expeditious disposition of cases.” Renobato v. Compass Bank
Corp., 480 Fed. Appx. 764, 767 n.2 (5th Cir. 2012). “Dismissal with prejudice is an
extreme sanction that deprives a litigant of the opportunity to pursue his claim.” Memon
v. Allied Domecq QSR, 385 F.3d 871, 873 (5th Cir. 2004). “The appropriate measure for
a judge to take when confronted with an unrepresented corporation is inherently
discretionary.” Id. at 874. Appeals from a Magistrate Judge’s decisions on non-dispositive

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matters are reviewed under a very deferential standard of review, in which the
magistrate’s decision will not be overturned unless it was “clearly erroneous or contrary
to law.” Fed. R. Civ. P. 72(a); see Local Rule 74.1.
In the exercise of the Court’s control over its docket and its discretion in
determining how to deal with unrepresented corporations, the Court finds that imposing
the drastic sanction of striking AG’s answer and dismissing its counterclaim is
unwarranted under these facts. Though AG did fail to obtain counsel by the original
deadline, it did obtain counsel by the second deadline set by Magistrate Judge Hayes,
which was about one month after the original deadline. The Court finds that though RVP
may have suffered some prejudice from AG’s procedural failure, this prejudice and the
magnitude of AG’s failure does equal the prejudice to AG that would result from the harsh
sanction of striking AG’s answer and dismissing its counterclaim, depriving AG of the
opportunity to present the merits of its claims and defenses.
The Court also finds that Magistrate Judge Hayes’ decision to grant an extension
of time for AG to obtain new counsel was neither clearly erroneous nor contrary to law.
See Fed. R. Civ. P. 72(a). Even if the Magistrate Judge’s decision to grant the extension
was clearly erroneous or contrary to law because AG’s insurance company sought the
extension on AG’s behalf, the Court independently finds that, in the exercise of its inherent
control over the Court’s own affairs, the extension served the interests of justice in this
case.
Finally, the Court finds that, in the exercise of its inherent control over the Court’s
own affairs, permitting the proposed new counsel to enroll on behalf of AG also serves
the interests of justice. Continuing the scheduling order and referring the matter to

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Magistrate Judge Hayes for a scheduling conference will help to move the case along
and afford AG’s attorneys enough time to familiarize themselves with the case.
Accordingly,
IT IS ORDERED that:
1) RVP’s combined Motion to Strike AG’s Answer and Motion to Dismiss AG’s
Counterclaim (Record Document 68) be and is hereby DENIED;
2) RVP’s appeal from Magistrate Judge Hayes’ Order granting a Motion for
Extension of Time for AG to obtain new counsel by RVP (Record Document
74) be and is hereby DENIED;
3) the Motion to Enroll as Counsel for AG (Record Document 77) is GRANTED;
and
4) the Motion to Continue the Scheduling Order in the instant action by AG
(Record Document 78) be and is hereby GRANTED.
The instant action is hereby REFERRED to Magistrate Judge Hayes for a
scheduling conference.
IT IS SO ORDERED.
THUS DONE AND SIGNED, in Shreveport, Louisiana, this the 29th day of August,
2016.

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