LeDuc Gifts & Specialty Products, LLC v. Sachs et al

Filing 377

MEMORANDUM OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATIONS re (371 in 0:15-cv-02743-JRT-DTS) Report and Recommendations and (399 in 0:15-cv-02744-JRT-DTS) Report and Recommendations, OVERRULING objections (402 in 0:15-cv-02744-JRT-DTS ) Sealed Document filed by Skolnick & Joyce, P.A. and (375 in 0:15-cv-02743-JRT-DTS) Sealed Document filed by Skolnick & Joyce, P.A., and DENYING Counsel's Request to Stay the Proceedings Pending Appeal (363 in 0:15-cv-02743-JRT-DTS) Lett er to Magistrate Judge filed by Skolnick & Joyce, P.A. and (392 in 0:15-cv-02744-JRT-DTS) Letter to Magistrate Judge filed by Skolnick & Joyce, P.A.(Written Opinion). Signed by Chief Judge John R. Tunheim on 5/17/2018. Associated Cases: 0:15-cv-02744-JRT-DTS, 0:15-cv-02743-JRT-DTS(HAZ)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 15-2744 (JRT/DTS)
4BRAVA, LLC,
Plaintiff,
v.
DANIEL SACHS, DSC PRODUCTS, INC., and
DSC PRODUCTS HOLDING, LLC,
Defendants.
****************************************
Civil No. 15-2743 (JRT/DTS)
LEDUC GIFTS & SPECIALTY PRODUCTS,
LLC, d/b/a Signature USA,
Plaintiff,
v.
DANIEL SACHS, DSC PRODUCTS, INC., DSC
PRODUCTS HOLDING, LLC,
Defendants.
DSC PRODUCTS, INC.,
Counter Claimant,
v.
LEDUC GIFTS & SPECIALTY PRODUCTS,
LLC, d/b/a Signature USA,
Counter Defendant.
DSC PRODUCTS, INC.,
Cross Claimant/Third Party Plaintiff,
v.
BRUCE LEDUC, JENNEA LEDUC, MARCI
LEDUC, and 4BRAVA, LLC,
Cross Defendants/Third Party Defendants.

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MEMORANDUM OPINION
AND ORDER ADOPTING
REPORT AND
RECOMMENDATION

Adrianna Shannon and Bonnie M. Smith, SHANNON LAW, LLC, 333
South Seventh Street, Suite 2830, Minneapolis, MN 55402, for 4Brava,
LLC, and LeDuc Gifts & Specialty Products, LLC.
William R. Skolnick, Andrew H. Bardwell, and Samuel M. Johnson,
SKOLNICK & JOYCE, P.A., 527 Marquette Avenue South, 2100 Rand
Tower, Minneapolis, MN 55402, for Daniel Sachs, DSC Products, Inc.,
and DSC Products Holding, LLC.

BACKGROUND
These two related cases involve an abandoned business venture that sought to sell
plastic tumblers to large retailers. Daniel Sachs and his companies DSC Products, Inc.
(“DSC Products”), and DSC Products Holding, LLC (collectively, “Defendants”), were
on one side of the deal; the LeDuc family and its companies, LeDuc Gifts & Speciality
Products, LLC and 4Brava, LLC, were on the other side (collectively, “Plaintiffs”).
These cases are set for trial later this year.
The law firm of Skolnick & Joyce, P.A., and attorneys William R. Skolnick,
Andrew H. Bardwell, and Samuel M. Johnson (collectively, “Counsel”) are Defendants’
current counsel of record. In both cases, Counsel filed a Motion to Withdraw as Counsel
of Record Without Substitution. (Case No. 15-2743, Mot. to Withdraw, Nov. 17, 2017,
Docket No. 303; Case No. 15-2744, Mot. to Withdraw, Nov. 17, 2017, Docket No. 331.)
United States Magistrate Judge David T. Schultz denied Counsel’s motion. (Case No.
15-2743, Order, Dec. 27, 2017, Docket No. 314; Case No. 15-2744, Order, Dec. 27,
2017, Docket No. 343.) The Court overruled Counsel’s Objections to the Magistrate
Judge’s Order. (Case No. 15-2743, Order, Jan. 17, 2018, Docket No. 359; Case No. 15-

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2744, Order, Jan. 17, 2018, Docket No. 386.) Counsel’s interlocutory appeal to the
Eighth Circuit is pending.
The parties submitted to the Magistrate Judge their positions on whether the Court
should stay these matters pending Counsel’s appeal. Counsel asks that the Court issue a
stay, and 4Brava opposes a stay. (Case No. 15-2743, Counsel’s Letter, Feb. 1, 2018,
Docket No. 363; Case No. 15-2743, Pls.’ Letter, Feb. 2, 2018, Docket No. 364; Case No.
15-2744, Counsel’s Letter, Feb. 1, 2018, Docket No. 392; Case No. 15-2744, Pls.’ Letter,
Feb. 2, 2018, Docket No. 393.)

The Magistrate Judge issued a Report and

Recommendation (“R&R”), recommending the Court deny Counsel’s request. (Case No.
15-2743, R&R, Feb. 14, 2018, Docket No. 371; Case No. 15-2744, R&R, Feb. 14, 2018,
Docket No. 399.)

Because the Magistrate Judge’s recommendation is not clearly

erroneous or contrary to law, the Court will overrule Counsel’s objections and deny
Counsel’s request.

DISCUSSION
A district court’s review of a magistrate judge’s decision on nondispositive
matters is “extremely deferential.” See Roble v. Celestica Corp., 627 F. Supp. 2d 1008,
1014 (D. Minn. 2007). 1 The Court will reverse such a decision only if it is clearly

1

Counsel did not formally file a motion to stay the proceedings, and the Magistrate Judge
did not issue an order on such a motion. Rather, Counsel requested a stay via a letter submitted
at the Magistrate Judge’s request. Nevertheless, the Court will treat the R&R on Counsel’s
request for a stay pending appeal as an order denying a nondispositive motion to stay
proceedings, and the Court will review the R&R according to the deferential standards of review
for orders on nondispositive motions. See, e.g., Scheffler v. Equifax Info. Servs., LLC, No. 15(footnote continued on next page)

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erroneous or contrary to law. See 28 U.S.C. § 636(b)(1)(A); D. Minn. LR 72.2(a). For a
decision to be clearly erroneous, the Court must have a “definite and firm conviction that
a mistake has been committed.” Lisdahl v. Mayo Found., 633 F.3d 712, 717 (8th Cir.
2011) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985)).
The Court has the inherent power to stay proceedings of an action to control its
docket, to conserve judicial resources, and to ensure that each matter is handled “with
economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am.
Co., 299 U.S. 248, 254 (1936); Lunde v. Helms, 898 F.2d 1343, 1345 (8th Cir. 1990)
(noting that power to stay proceedings is incidental to court’s power to manage its
docket); Kemp v. Tyson Seafood Grp., Inc., 19 F. Supp. 2d 961, 964 (D. Minn. 1998).
The party requesting “a stay has the burden of showing specific hardship or inequity if he
or she is required to go forward.” Jones v. Clinton, 72 F.3d 1354, 1364 (8th Cir. 1996)
(citing Landis, 299 U.S. at 254-56), aff’d, 520 U.S. 681 (1997). The Court will also
“weigh the competing interests of the parties, and the hardship or inequity a party may
suffer if a stay is granted.” In re Hanson, No. 13-2991, 2013 WL 6571594, at *1 (D.
Minn. Dec. 13, 2013) (quoting Robinson v. Bank of Am., N.A., No. 11-2284, 2012 WL
2885587, at *1 (D. Minn. July 13, 2012)).
Counsel requests a stay of the proceedings pending their appeal of the Court’s
denial of their motion to withdraw as counsel. The Magistrate Judge – after determining
____________________________________

3340, 2016 WL 424969, at *2 (D. Minn. Feb. 3, 2016) (reviewing motion to stay proceedings
with deferential standard of review).

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that “whether a stay must or should issue when the denial of a motion to withdraw is
appealed under the collateral order doctrine is one of first impression in this district” –
concluded that, here, a stay was neither mandatory nor recommended. (R&R at 6, 12.)
That conclusion is neither clearly erroneous nor contrary to law. Whether a stay is
mandatory here is unclear given the case law on interlocutory appeals in analogous areas
of law, such as sovereign immunity and compelling arbitration; and the Magistrate Judge
did not clearly err in concluding that a stay here is discretionary.

(R&R at 6-8.)

Moreover, the Magistrate Judge did not clearly err in concluding that the Court should
not stay the proceedings under the four-factor analysis from Hilton v. Braunskill, 481
U.S. 770, 776 (1987). In particular, granting a stay here would further delay this case,
thereby causing 4Brava additional concrete harm. (R&R at 11.)

ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Counsel’s Objections [Case No. 15-2743, Docket No. 375;
Case No. 15-2744, Docket No. 402] are OVERRULED, the Report & Recommendation
of the Magistrate Judge [Case No. 15-2743, Docket No. 371; Case No. 15-2744, Docket
No. 399] is ADOPTED, and Counsel’s Request to Stay the Proceedings Pending Appeal
[Case No. 15-2743, Docket No. 363; Case No. 15-2744, Docket No. 392] is DENIED.
DATED: May 17, 2018
at Minneapolis, Minnesota.

____

____
JOHN R. TUNHEIM
Chief Judge
United States District Court

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