SPRINT SOLUTIONS, INC. et al v. J&S INVESTMENTS OF DELAWARE, INC. et al

Filing 121

OPINION. Signed by Judge Noel L. Hillman on 2/1/2018. (rtm, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SPRINT SOLUTIONS, INC. and
SPRINT COMMUNICATIONS COMPANY
L.P.,
Plaintiffs,

1:16-cv-01420-NLH-AMD
OPINION

v.
J&S INVESTMENTS OF DELAWARE,
INC. doing business as
CELLUSALES, SARABJIT SINGH
also known as SAM SINGH,
FRANK J. ALTAMURA, KARAMJEET
SINGH also known as
RICKY SINGH,
Defendants.

APPEARANCES:
JARRETT KIRK VINE
POLSINELLI PC
222 DELAWARE AVENUE
SUITE 1101
WILMINGTON, DE 19801
JASON A. NAGI
POLSINELLI PC
600 THIRD AVENUE, 42ND FLOOR
NEW YORK, NY 10016
On behalf of Plaintiffs
CRAIG S. HILLIARD
GENE MARKIN
STARK & STARK, PC
PRINCETON PIKE CORPORATE CENTER
993 LENOX DRIVE - BUILDING TWO
PO BOX 5315
PRINCETON, NJ 08543-5315
On behalf of Defendants J&S Investments of Delaware, Inc.,
doing business as CELLUSALES, Frank J. Altamura, and

Sarabjit Singh, also known as Sam Singh, and Karamjeet
Singh, also known as Ricky Singh
SABINA DHILLON
LAW FIRM OF SABINA DHILLON, LLC
103 CARNEGIE CENTER, SUITE 300
PRINCETON, NJ 08540
On behalf of Defendant Karamjeet Singh, also known as Ricky
Singh
HILLMAN, District Judge
Plaintiffs, Sprint Solutions, Inc. and Sprint
Communications Company L.P. (hereinafter “Sprint”) have moved to
voluntarily dismiss their complaint without prejudice against
Defendants J&S Investments of Delaware, Inc. d/b/a Cellusales,
Sarabjit Singh, also known as Sam Singh, Karamjeet Singh, also
known as Ricky Singh, and Frank J. Altamura.

Sprint’s complaint

alleges that Defendants are perpetrators of an unlawful scheme to
profit from the illegal acquisition and resale of new Sprint
wireless handsets.

Sprint states that it has chosen to dismiss

its claims against Defendants due to developments in other cell
phone trafficking cases, and its view that the amount of phones
at issue in this case does not warrant further expenditure of the
parties’ resources.

Sprint relates that it seeks to dismiss its

claims without prejudice, rather than with prejudice, in the
event Defendants assert claims against it in the future.
Defendants have opposed Sprint’s motion.
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They argue that

Sprint recklessly filed its complaint against them, and even when
it became clear that Defendants were reputable business people
who were not engaged in illegal trafficking of cell phones more
than a year before it filed its instant motion to dismiss its
claims, Sprint persisted with the action, resulting in
significant financial, emotional, and reputational harm.
Defendants ask that if the Court were to grant Sprint’s motion,
the Courts should order two curative conditions: (1) that Sprint
must pay for Defendants’ attorney’s fees and costs to defend the
action, and (2) that Sprint must issue a public statement
acknowledging that it has not uncovered any conclusive evidence
that implicates Defendants in the wrongful conduct they have been
accused of.

Defendants have also cross-moved to file an amended

answer and assert counterclaims and a third-party complaint to
pursue fraud, malicious prosecution, and other similar type
claims against Sprint and the investigator it used to manufacture
this case against them.
Federal Civil Procedure Rule 41(a) governs Plaintiff’s
motion, and it provides that a plaintiff may dismiss an action
without a court order by filing a notice of dismissal before the
opposing party serves either an answer or a motion for summary
judgment, or a stipulation of dismissal signed by all parties who
have appeared.

Fed. R. Civ. P. 41(a)(1)(A).
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If a plaintiff is

unable to avail itself of Rule 41(a)(1)(A), the plaintiff must
obtain a court’s order to voluntarily dismiss its claims.
R. Civ. P. 41(a)(2).

Fed.

The determination of whether to grant a

plaintiff’s request to dismiss its claims is at a court’s
discretion.

See id. (“[A]n action may be dismissed at the

plaintiff's request only by court order, on terms that the court
considers proper.”).

“Rule 41 motions ‘should be allowed unless

defendant will suffer some prejudice other than the mere prospect
of a second lawsuit.’”

In re Paoli R.R. Yard PCB Litigation, 916

F.2d 829, 863 (3d Cir. 1990) (quoting 5 J. Moore, Moore's Federal
Practice ¶ 41.05[1], at 41–62 (1988)).
That same discretionary and liberal standard applies to
motions for leave to amend an answer, add counterclaims, and file
a third-party complaint.

See id. (“[It is] the well-established

rule that amendments should be granted liberally.”); Travelers
Casualty and Surety Company v. Becton Dickinson and Company, 2017
WL 349376, at *1 (D.N.J. 2017) (citing Charpentier v. Godsil, 937
F.2d 859, 863–64 (3d Cir. 1991)) (providing that Rule 15(a)
encompasses amending an answer to include an affirmative
defense); id. (citing Fed. R. Civ. P. 13(f)); Fingermates, Inc.
v. Nailtiques Cosmetic Corp., 1996 WL 901967, at *3 (D.N.J. 1996)
(citing Fidelity Federal Savings & Loan Ass'n v. Felicetti, 149
F.R.D. 83, 85 (E.D. Pa. 1993)) (“The standard to be applied to
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motions to add counterclaims pursuant to Rule 13(f) is the same
as the one applicable to motions to amend under Rule 15(a).”);
Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F. 2d 435,
439 (3d Cir. 1971), cert. denied, 405 U.S. 1017 (1972)) (“The
decision to grant leave to file a third-party complaint is left
with the sound discretion of the court.”).

For all amendments,

they must be permitted in the absence of undue delay, bad faith,
dilatory motive, unfair prejudice, or futility of amendment.
Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)
(citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
Overall, when considering a plaintiff’s motion for voluntary
dismissal of its claims or a defendant’s motion to amend its
answer, add counterclaims, and advance a third-party complaint,
some courts grant the relief each party seeks.

However, the

Court must also be mindful of the relevant equities and seek to
do justice.

See Smith v. City of Plainfield, 2016 WL 4402812, at

*2 (D.N.J. 2016) (citing United States ex rel. Haskins v. Omega
Inst., 11 F. Supp. 2d 555, 570 (D.N.J. 1998)) (in the Rule
41(a)(2) context); Grayson, 293 F.3d at 108 (in the Rule 15
context).
The Court has considered the parties’ positions and will
exercise its discretionary authority to grant Sprint’s motion to
dismiss all of its claims against Defendants without prejudice
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and deny Defendants’ motion for leave to file an amended answer,
add counterclaims, and file a third-party complaint.

There are

several reasons for this result.
First, even though the parties provide lengthy arguments
regarding the legitimacy and viability of Sprint’s claims and
Defendants’ defenses and counterclaims, the Court is not in a
position at this juncture to determine the relative merits of the
competing claims.

Plaintiffs’ claims and Defendants’ proposed

counterclaims are just that – unproven allegations couched in
sharply contrasting positions.

To the extent the Court has had

occasion to rule on the merits it has determined that Sprint has
pled viable claims and nothing to date has changed that as the
law of the case.
Second, this case is not so far along procedurally or
chronologically that dismissal of the case as a whole would work
an injustice on Defendants.

To the extent that parties have

engaged in some discovery, which has not been extensive, that
exchange of information is readily available to aid the parties
and the subsequent tribunal in advancing the litigation.
Moreover, the alleged facts in Defendants’ proposed counterclaims
suggest those claims are still well within applicable state law
statutes of limitations.
Third, although it is clear this Court could, even if it
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dismissed Plaintiffs’ claims, exercise supplemental jurisdiction
over Defendants’ proposed counterclaims, it is equally clear
that there is no separate subject matter jurisdiction for those
claims.

The Court’s original basis for subject matter

jurisdiction was Sprint’s claims for violation of federal
statutes, more specifically the United States Trademark Act,
Title 15 of the United States Code and the Computer Fraud and
Abuse Act, 18 U.S.C. § 1030, et seq.

That foundation for the

Court’s jurisdiction falls away upon dismissal of Plaintiffs’
claims.
Defendants’ counterclaims and third-party complaint, in
contrast, all arise under state law and the parties have made no
attempt to establish diversity jurisdiction.

In such

circumstances, where the counterclaims become the core of the
case, it is within the Court’s discretion to defer the
resolution of state claims to state court.

See, e.g., Growth

Horizons, Inc. v. Delaware Cnty., Pa., 983 F.2d 1277, 1284 (3d
Cir. 1993) (citing 28 U.S.C. § 1367(c)(2)(3)) (explaining that a
district court may, in its discretion, decline to exercise
jurisdiction when the claim or counterclaim substantially
predominates over the claims over which the district court had
original jurisdiction, or where district court has dismissed all
claims over which it has original jurisdiction).
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Fourth, and perhaps more importantly in terms of equity, is
the timing of the Defendants’ cross-motion.

Defendants filed

their respective answers in May 2016 and only Defendant
Karamjeet Singh lodged a counterclaim.

It is simply unclear, if

Plaintiffs’ claims are as baseless as Defendants now claim, why
counterclaims could not have been asserted in the original
answer of the other Defendants and came about only when
Plaintiffs sought to end the litigation.

As Plaintiffs point

out, courts should encourage those asserting claims to dismiss
them if continued litigation would be unjustified and they
should be free to do so without the fear that the cost of such a
decision would be merely switching sides in the caption.

This

is not to say, of course, that Defendants should suffer any
prejudice, only that under these circumstances the proper course
for Defendants is to institute their own action against Sprint
if they wish to pursue their claims against it.
Thus, the Court will dismiss Sprint’s complaint against
Defendants without prejudice, deny Defendants’ cross-motion, and
direct the Clerk to close the case.
An appropriate Order will be entered.

Date: February 1, 2018
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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