NEAL v. ASTA FUNDING, INC. et al

Filing 48

AMENDED OPINION re 44 Opinion. Signed by Judge Kevin McNulty on 1/6/2014. (nic, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

DAVID SHAUN NEAL,

Civ. No. 13-3438 (KM) (MAR)

Plaintiff,
AMENDED OPINION
(Relates to Document No. 44)

v.
ASTA FUNDING, INC., GARY STERN,
MARY CURTIN, SETH BERMAN, CYNTHIA
SCHATZMANN (HORVAT), LOUIS
PICCOLO, DAVID CAVILL, and JOHN
DOES 1-10,
Defendants.

KEVIN MCNULTY, U.S.D.J.:
This matter comes before the Court on the Defendants’ motion (Docket
No. 25) to dismiss the Complaint (Docket No. 1 (“Compi.”)) in its entirety
pursuant to Rules 12(b)(6) and 12(b)(1), Fed. R. Civ. P. In addition, the pro se
plaintiff, David Shaun Neal, has filed a motion to stay a pending arbitration
and to impose sanctions pursuant to 28 U.S.C. § 1927 (Docket No. 28). In
response to that motion, the Defendants have cross-moved for sanctions and
for injunctive relief (Docket No. 34). Defendants’ motion to dismiss includes the
contention that Neal is bound by an arbitration agreement and should
in the
therefore “be compelled to pursue any Counts that survive
Arbitration and this action [should be] stayed” pursuant to 9 U.S.C. § 3 and 4
(Docket No. 25-1 at 28).
.

.

.

The essence of Defendants’ position is that these claims should be
pursued, not here, but in an arbitration that is already pending (Docket No.
25-1 at 28). The essence of Neal’s position is that the arbitration should be
stayed and his claims should proceed in this action (and others).’ Whether or
1

In addition to the present action, the Court is aware of the following actions

not Neal’s claims are arbitrable, however, I will stay this action pending the
resolution of the pending arbitration. Consequently, I will administratively
terminate Defendants’ motion to dismiss the Complaint, without prejudice.
I. BACKGROUND
The Complaint alleges that Neal was an employee of Defendant ASTA.
Essentially, the Complaint alleges that ASTA wrongfully terminated Neal’s
employment because he blew the whistle on unlawful or unethical conduct of
ASTA and its employees. See Compl. at ¶[ 99—100, 338. More specifically, the
Complaint asserts the following claims: (1) Violation of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, 12 U.S.C. § 5567 (“Dodd-Frank”);
(2) Violation of the Sarbanes Oxley Act, 18 U.S.C. § 1514A (“SOX”); (3) Violation
of New Jersey’s Conscientious Employee Protection Act, N.J. Stat. § 34:19-1
(“CEPA”); and (4) Violation of public policy under Pierce v. Ortho
Pharmaceuticals, 84 N.J. 58 (N.J. 1980) (holding that an “employee at will has a
cause of action for wrongful discharge when the discharge is contrary to a clear
mandate of public policy”). The fifth and final count is a general request for
punitive damages.
The corporate Defendant, ASTA, is a debt acquisition and collection
company. Individual Defendants Gary Stern, Mary Curtin, Seth Berman, and
David Cavill are employed by ASTA. Compi. at 1-2; see Docket No. 25-1 at 3.
Defendant Cynthia Schatzmann “is a former employee of ASTA and is believed
to be a current employee of ASTA.” Defendant Louis Piccolo (“Piccolo”) is “a
current independent director of ASTA.” Id.

that Neal has personally filed which arise from his dispute with ASTA: (1): A
whistleblower action in the District of New Jersey that was voluntarily dismissed (New
World Solutions, et al. v. ASTA Funding, Inc. et al, No. 2: 12-cv-5307); (2): a
whistleblower complaint with the Department of Labor (No. 2-1750-13-002); (3): a Fair
Debt Collection Practices Action in the Southern District of New York that was
recently dismissed (Vivaudou et al v. ASTA Funding, Inc., 12-cv-9089); (4): a
defamation action in the Southern District of New York (Neal v. ASTA Funding Inc., et
al., No. 7: 13-cv-2 176); (5): a defamation, malpractice, and intentional infliction of
emotional distress action before this Court (Neal v. ASTA Funding, Inc. et a!, No. 2:13cv-48 14); (6) a fraud and criminal coercion action before the Supreme Court of New
Jersey, Orange County (Neal v. American Arbitration Association et al., No. 20 13-cv7991); and (6): a recently-filed complaint in this Court seeking a declaratory judgment
(Neal v. ASTA Funding, Inc., No. 2: 13-cv-6981). Additionally, NWS, with Neal as its
representative, filed a counterclaim in the original arbitration initiated by ASTA.
2

The Complaint alleges that Neal began his employment with ASTA in
2004 and that his company, New World Solutions (“NWS”), was retained to do
certain Information Technology work for ASTA in 2009. Neal alleges that he
was “a vocal critic of the lackadaisical attitude of senior management regarding
legal compliance,” and that he “repeatedly complained to ASTA that it lacked a
compliance office.” He further alleges that he “informed senior management at
ASTA, including Defendant Stern, of the wrongful, illegal, and/or unethical
activity” committed by ASTA. Compi. at ¶f 99—101. Neal alleges that
Defendants retaliated against him for reporting these activities. Specifically, he
alleges that Stern reduced his salary, set impossible budget goals, terminated
his employment, and commenced a frivolous arbitration action against him. He
also alleges that Curtin, Berman, Schatzmann, Cavill, and Piccolo retaliated
against him by “transmitting false and disparaging statements to various
employees of ASTA,” and that Curtin, Schatzmann, and Cavill also “suggest[ed]
that Neal’s employment be terminated.” Compl. at 321—334.
Defendants deny that ASTA employed Neal. On the contrary, according to
ASTA, it retained NWS, a company co-owned by Neal, as an independent
contractor to perform Information Technology-support (“IT”) services. That
relationship was embodied in a written Information Technology Services
Agreement, dated July 1, 2009. See Docket No. 25-3 (Exhibit A) (“Consulting
Agreement”). That Consulting Agreement had a term of three years. Id. ASTA
states that, on June 27, 2012, it terminated the Consulting Agreement because
NWS had allegedly failed to perform as warranted and inflated its billing.
(Arbitration Case No: 18 117 Y 00925 12; Docket No. 25-1 at 6—7; Compi. ¶J
324, 373).
The Consulting Agreement contains a broad clause providing for
arbitration of disputes under the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”) 2 After terminating the Agreement, on July 26,
2

The arbitration clause of the Consulting Agreement reads as follows:
All matters regarding the performance of IT Services under this
Agreement shall be brought to the attention of the IT Services Managers
assigned to ASTA and NWS. IT will be the responsibility of the IT Services
Managers to communicate and develop a resolution for such matters. In
the even that a dispute, controversy, or claim between the Parties arises
directly or indirectly out of or in connection with this Agreement cannot
be resolved by the IT Services Managers, either Party may elect to have
such dispute, controversy, or claim resolved by arbitration in accordance
3

2012, ASTA filed a claim in arbitration with AAA alleging that NWS breached
the Consulting Agreement by failing to perform as required under the
Robert E. Bartkus, Esq., was duly
agreement and by inflating its billing.
appointed as arbitrator by the AAA. According to ASTA’s filings, Neal has
moved twice to remove Mr. Bartkus as arbitrator, but the AAA Administrative
Review Counsel has denied those motions. (Docket No. 34-1 at 8). In the
arbitration, NWS filed a counterclaim alleging that ASTA had itself breached
the Consulting Agreement. (Docket 43-1, Exhibit 3 (“Counterclaim”)).
After filing the arbitration case, ASTA learned that Neal had allegedly
accessed confidential information, gained personal access to ASTA employees’
email accounts, and copied certain confidential information. According to
Defendants, Neal thereby violated confidentiality covenants that are contained
in the Consulting Agreement, as well as a confidentiality order issued by the
Arbitrator. Indeed, the Defendants say, the allegations in Neal’s Complaint in
this action are based on those confidential materials.
In the arbitration, the Arbitrator has entered a Thrnover Order that, inter
alia, restrained NWS and “its principal Shaun Neal” from disclosing any
confidential information; ordered NWS to return all copies of documents that
related to ASTA other than discovery materials produced during the
arbitration; and restrained NWS and Neal from using any of these materials for
any purpose other than for the arbitration proceedings. See Docket No. 43
(Exhibit 5); Docket No. 34-1 at 10—11. Neal then moved in this Court to vacate
the Arbitrator’s Turnover Order. Magistrate Judge Hammer denied that motion
(Docket No. 35), and Neal recently moved for reconsideration of Judge
Hammer’s order (Docket No. 39).
On August 1, 2013, ASTA moved in the arbitration to supplement its
statement of claim and assert new claims against NWS and Neal for alleged
misappropriation of confidential information. Docket No. 34-1 at 14. At first,
the Arbitrator allowed supplementation of the claims against NWS, but did not
with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”). Any arbitration shall be conducted by arbitrators
approved by the AAA and mutually acceptable to the Parties. If the
Parties are unable to agree on the arbitrator(s), then the AAA shall select
the arbitrator(s).
Consulting Agreement at § 6.2. The Agreement also provides that it is to be
construed in accordance with New Jersey state law.
4

allow the addition of Neal as a party, because the request came too close to the
scheduled hearing date. Id. Therefore, on September 3, 2013, ASTA initiated a
second arbitration against Neal and the former co-owner of NWS, Robert F.
Coyne. In that second arbitration, ASTA alleged claims of consumer fraud,
violations of the Consumer Fraud and Prevention Act, and other New Jersey
computer-related offenses. The original and second arbitration were recently
consolidated. In connection with that consolidation, the Arbitrator, Mr.
Bartkus, examined his own jurisdiction and held that Neal was individually
subject to the arbitration agreement. (Docket No. 42-1 (Exhibit 6)
(“Consolidation Order”)). The arbitration hearing, originally scheduled for
September 18, 2013, has been adjourned, and the arbitration is proceeding on
a consolidated basis.

II. DISCUSSION
A.

Arbitrability Under the Federal Arbitration Act and the Court’s
Power to Stay Litigation Pending Arbitration

The Federal Arbitration Act (“FAA”) reflects a longstanding “liberal federal
policy favoring arbitration agreements . . . .“ Moses H. Cone Memorial Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24 (1983). The FAA is designed to “ensure
judicial enforcement of privately made agreements to arbitrate.” Dean Witter
Reynolds, Inc. V. Byrd, 470 U.S. 213, 219 (1985). Congress’ “clear intent” in
passing the FAA was “to move the parties to an arbitrable dispute out of court
and into arbitration as quickly and easily as possible.” Moses H. Cone Memorial
Hosp., 460 U.S. at 22. To fulfill that goal, courts must “rigorously enforce
agreements to arbitrate . . . .“ Dean Witter Reynolds, Inc., 470 U.S. at 221. The
FAA established that, “as a matter of federal law, any doubts concerning the
scope of arbitrable issues should be resolved in favor of arbitration, whether
the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone
Memorial Hosp., 460 U.S. at 24-25; see also Barrowclough v. Kidder, Peabody &
Co., 752 F.2d 923, 938 (3d Cir. 1985) (ambiguous or unclear cases should be
resolved in favor of arbitration).
To implement that federal policy in favor of arbitration, Section 3 of the
FAA provides that issues within the scope of an arbitration agreement shall be
referred to arbitration, and that court proceedings shall be stayed:

5

If any suit or proceeding be brought in any of the courts of the
the court
United States upon any issue referable to arbitration.
in which such suit is pending, upon being satisfied that the issue
involved in such suit or proceedings is referable to arbitration
under such agreement, shall on application of one of the parties
stay the trial of the action until such arbitration has been had in
accordance with the terms of the agreement, providing the
application for the stay is not in default in proceeding with such
arbitration.
.

.,

FAA, 9 U.S.C. § 33 When the parties and issues significantly overlap between a
court proceeding and an arbitration, a court may stay the entire court action.
That is true even where the overlap is not complete, for example, even if some
of the parties or issues are not subject to arbitration. Crawford v. W. Jersey
Health Sys. (Voorhees Div.), 847 F. Supp. 1232, 1240 (D.N.J. 1994) (citing
Tenneco Resins, Inc. v. Davy Intern., 770 F.2d 416 (5th Cir. 1985); American
Home Assur. Co. v. Vecco Concrete Constr. Co., 629 F.2d 961 (4th Cir. 1980);
Lawson Fabrics, Inc. v. Akzona, Inc., 355 F. Supp. 1146 (S.D.N.Y.), affd, 486
F.2d 1394 (2d Cir. 1973); Harman Elec. Const. Co. v. Consolidated Eng. Co., 347
F. Supp. 392, 397 (D. Del. 1972)).
Setting aside the mandate of the FAA, a district court also possesses the
inherent discretion to control its docket. As a component of that discretion, the
court has the inherent power to stay its own proceedings. See Moses H. Cone
Mem’l Hosp., 460 U.S. at 21 (citing Landis v. North American Co., 299 U.S. 248,
254—255 (1936)). In Landis, for example, the Court stated:
[TJhe power to stay proceedings is incidental to the power inherent
in every court to control the disposition of the causes 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
True, the suppliant for
judgment, which must an even balance..
a stay must make out a clear case of hardship or inequity in being
required to go forward, if there is even a fair possibility that the
stay for which he prays will work damage to someone else. Only in
rare circumstances will a litigant in one cause be compelled to
.

.

The contract containing the arbitration clause must “evidence a transaction
involving commerce.” Crawford v. W. Jersey Health Sys., 847 F. Supp. 1232, 1240
(D.N.J. 1994) (quoting 9 U.S.C. § 2). That requirement is met when the contractual
activity affects or facilitates commerce, even tangentially. Id. (citing Prima Paint Corp.
v. Flood & Conklin Mfg. Co., 388 U.S. 395, 40 1—02 n. 7 (1967)). Neither party suggests
that the commerce connection is an issue here.
6

stand aside while a litigant in another settles the rule of law that
will define the rights of both.
299 U.S. at 254—55 (citations omitted). In Merritt-Chapman & Scott Corp. v.
Pennsylvania Turnpike Commission, the Third Circuit, citing Landis, reasoned
that a stay of court proceedings pending arbitration is a remedy that is “within
the inherent power of the court and does not require statutory authority.” 387
F.2d 768, 773 (3d Cir. 1967); see also Mason-Dixon Lines, Inc. v. Local Union
No. 560, Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am.,
443 F.2d 807, 809 (3d Cir. 1971) (citing Yale & Towne Mfg. Co. v. Local Lodge
1717, Machinists, 299 F.2d 882 (3d Cir. 1962) (“Certainly, the normal power of
a court to do equity enables it to postpone action on a complaint pending the
outcome of a procedure for resolving such a dispute upon which the parties
have agreed.”); Vespe Contracting Co. v. Anvan Corp., 399 F. Supp. 516, 519
(E.D. Pa. 1975) (holding that the court “need rely neither on the United States
in order to support a
Arbitration Act nor the Pennsylvania Arbitration Act
decision to grant a stay of proceedings pending arbitration”).
.

B.

.

.

A Referral of Claims to Arbitration and a Stay of These
Proceedings Pending Arbitration is Appropriate
1. [Purposely omitted]
2. Stay of this case pending arbitration

The substantive issues that either are being decided or are subject to
being decided in arbitration are intertwined with the claims asserted in the
Complaint, and may affect their resolution. Even if some or all of the claims in
the Complaint were found non-arbitrable, a stay of this action would be
appropriate. A stay serves the interests of judicial efficiency and the broad
federal policy in favor of free arbitration of the disputes that are currently
before the Arbitrator. Under Section 3 of the FAA and this Court’s broader
discretionary powers, this action will be stayed pending the outcome of
arbitration.
First, a stay is appropriate under Section 3 of the FAA. At least one issue
(and possibly all) “involved in [this] suit or proceedings is referable to
arbitration” under the Consulting Agreement’s arbitration clause. 9 U.S.C. § 3.
As discussed above, the claims asserted in the Complaint appear to be
arbitrable, and the Arbitrator may well so find. Under such circumstances, a
stay is warranted. See id.; authorities cited at pp. 5-6, supra. Any doubts as to
7

whether a particular party or sub-issue is subject to arbitration need not
preclude a stay. At the very least, “significant overlap exists between parties
and issues. . . .“ Crawford 847 F. Supp. at 1240. Under such circumstances, a
Section 3 stay of court proceedings is appropriate.
Second, this Court has the inherent power to stay proceedings pending
arbitration. I find that a stay is appropriate, taking into account all competing
interests. See generally Landis v. N. Am. Co., 299 U.S. at 254—55; authorities
cited at pp. 6-7, supra. In particular, a court may stay proceedings in the
interest of efficiency where the issues in arbitration are related to (if not strictly
dispositive of) the issues before the court. Thus, in Leyva v. Certified Grocers of
California, Ltd., the Ninth Circuit held that that, even where Section 3 of the
FAA does not apply, a trial court may properly stay a proceeding pending
arbitration where “it is efficient for its own docket and the fairest course for the
parties to enter a stay of an action before it, pending resolution of independent
proceedings which bear upon the case.” 593 F.2d 857, 863—64 (9th Cir. 1979).
The court reasoned that “[t]his rule applies whether the separate proceedings
are judicial, administrative, or arbitral in character, and does not require that
the issues in such proceedings are necessarily controlling of the action before
the court.” Id; see also Nederlandse Erts-Tankersmaatschappij, N. V. v.
Isbrandtsen Co., 339 F.2d 440, 44 1—42 (2d Cir. 1964) (reasoning that the
district court had the inherent power to stay proceedings pending an
arbitration where defendants were not party to the arbitration agreement, but
the issues involved in the case may be determined in arbitration).
The resolution of the arbitration will involve issues overlapping and
bearing upon disputes raised in this action. The retaliation-based claims that
Neal brings before this Court involve factual and legal issues closely related to
those in the arbitration. Neal of course is identified with NWS. All of the
opposing parties are either ASTA employees or are otherwise implicated as a
result of their association with ASTA. In the arbitration, ASTA has argued that
it terminated the Consulting Agreement for a legitimate reason: because NWS
inflated billing and did not perform as required under the Agreement. A
determination that ASTA had a legitimate reason for terminating the
relationship with NWS would be highly relevant to Neal’s claim, for example,
that he was fired on a retaliatory basis, even assuming that he could establish
that his relationship with ASTA was that of employee and employer. I agree
with the Defendants that the claims in this action “are inextricably intertwined
with the services provided by NWS pursuant to the Consulting Agreement.”
Docket No. 25-1 at 27. And it would be inadvisable to have these intertwined
8

claims proceed simultaneously in court and in arbitration; such a procedure
would be rife with opportunities for mutual interference, inconsistent rulings,
and general procedural confusion.
ASTA initiated arbitration on July 26, 2012, well over a year ago. (Docket
No. 25-1 at 26). NWS and ASTA remain embroiled in the ongoing arbitration.
The Arbitrator has now determined that Neal is individually subject to the
arbitration agreement, and has consolidated ASTA’s claims against Neal with
the other claims. Consolidation Order. Neal acknowledges that, as of July 26,
2013, “tens of thousands of pages of discovery ha[d] been exchanged by the
parties as well as several hundred thousand emails and four depositions have
occurred.” Docket No. 11-1 at 4. Neal has fully participated in the arbitrations
as NWS’s representative. See, e.g., Docket No 42-1 (Exhibit 8) (“Respondent’s
4
Motion for Omnibus Relief’). That process should be permitted to proceed to
an orderly conclusion without the interference of this Court.
In balancing the interests of the parties, I do not find that Neal will be
unduly harmed by a stay of this proceeding pending the arbitration. In the
event that any of Neal’s claims are not arbitrable and are not addressed in the
arbitration, he may be able to pursue them in court. It is likely that the
Arbitrator’s resolution of the arbitrable claims would narrow and focus the
nonarbitrable claims, if any, that might remain.
For all of the foregoing reasons, I will stay this action pending the
resolution of the arbitration.
C. The Remaining Motions
i. Plaintiff’s Motion for Sanctions
Neal has moved for sanctions pursuant to 28 U.S.C. 1927 and the
Court’s inherent powers, arguing that Defendants and their counsel have
engaged in “numerous instances of frivolous conduct. . . .“ Docket No. 28-1 at
5. Neal argues, inter alia, that he is not party to an arbitration agreement and
On August 8, 2013, before the Consolidation Order was issued, Neal signed a
Motion for Omnibus Relief, filed as part of the arbitration between ASTA and NWS:
David Shaun Neal, Managing Partner, New World Solutions, for the Respondent
Counterclaimant, New World Solutions, Inc. Respondent’s Motion for Omnibus Relief.

9

that Defendants and their counsel have engaged in frivolous conduct, such as
evasion of service, unauthorized practice of law, making knowingly false
statements to the Court, and filing an “utterly meritless arbitration demand”
against Neal. Id. at 2—6.
Section 1927 provides:
Any attorney or other person admitted to conduct cases in any
court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally the
excess costs, expenses, and attorneys fees reasonably incurred
because of such conduct.
28 U.S.C. § 1927. “Although a trial court has broad discretion in managing
litigation before it, the principal purpose of imposing sanctions under 28 U.S.C.
§ 1927 is the ‘deterrence of intentional and unnecessary delay in the
proceedings.’” Zuk v. Eastern Pennsylvania Psychiatric Institute, 103 F.3d 294,
297 (3d Cir. 1996) (quoting Beatrice Foods v. New England Printing, 899 F.2d
1171, 1177 (Fed. Cir. 1990)). Section 1927 “requires a court to find an attorney
has (1) multiplied proceedings; (2) in an unreasonable and vexatious manner;
(3) thereby increasing the cost of the proceedings; and (4) doing so in bad faith
or by intentional misconduct.” In re Prudential Ins. Co. Am. Sales Practice Litig.
Agent Actions, 278 F.3d 175, 188 (3d Cir. 2002) (citing Williams v. Giant Eagle
Markets, Inc., 883 F.2d 1184, 1191(3rd Cir. 1989)). Additionally, a court has
the inherent power to issue sanctions. Such circumstances that may justify
sanctions pursuant to this power include “cases where a party has acted in
bad faith, vexatiously, wantonly, or for oppressive reasons . . . .“ Id. at 189
(quoting Chambers v. NASCO, Inc., 501 U.S. 32, 4 5—46 (199 1)).
The claimed abuses consist substantially of ASTA’s taking positions
contrary to Neal in arbitration or litigation, positions that in some cases have
been held to be substantially justified. Nor can I find that Defendants have
vexatiously multiplied proceedings. In light of the case record, I do not find that
sanctions pursuant to Section 1927 or the inherent power of the Court are
appropriate here. I exercise my discretion to deny Neal’s motion for sanctions.
ii. Defendants’ Cross Motion for Sanctions and for Injunctive Relief

10

Defendants have filed a cross motion for sanctions and for injunctive
relief. Defendants argue that Neal has filed a multitude of frivolous actions to
harass and burden ASTA and its representatives, draining judicial resources
and abusing the judicial process in an attempt to further his campaign to
harass and abuse ASTA. Docket No. 34-3 at 19-20. They also maintain that
5
Neal failed to disclose certain information and failed to effect service on
Defendants as to various motions. Id.
The motion for sanctions is denied. Neal’s litigation conduct, while
perhaps vexatious in the ordinary sense, does not, or at least does not yet, rise
to the level of requiring sanctions pursuant to 28 U.S.C. § 1927, the All Writs
Act, 8 U.S.C. § 1651(a), or the Court’s inherent power. Influenced by my
consideration that sanctions are a last resort, and that Neal appears pro Se, I
will exercise my discretion to deny sanctions at the present time. All parties,
however, whether pro se or represented, are cautioned that the rules of Court
must be complied with, and that related claims should not be asserted
piecemeal in multiple actions.
The motion for an injunction is likewise denied. Defendants request that
the Court restrain Neal from filing any further complaints or motions with
respect to ASTA and any of its representatives or agents without leave of court,
pursuant to the All Writs Act. (Docket No. 34-1 at 2). The Third Circuit has
held that, “while the All Writs Act, 28 U.S.C. § 1651, gives the district court the
power to issue an injunction to restrict the filing of meritless pleadings, it is an
extreme remedy which must ‘be narrowly tailored and sparingly used.’” Abdul
Akbar v. Watson, 901 F.2d 329, 332 (3d Cir. 1990) (quoting Matter of Packer
Ave. Associates, 884 F.2d 745, 747 (3d Cir. 1989)). There is a strong preference
for dealing with actions on the merits, rather than precluding their filing
altogether. I do not find that the extreme remedy of an injunction is necessary
here, particularly in light of the fact that this case, at least, will now be stayed
pending the outcome of arbitration.
iii. Other pending matters
Neal has moved for this Court to stay the arbitration pending the
resolution of his claims in this Court. As explained above, I have stayed this
action in order to permit arbitration to proceed. In light of my resolution of
those issues, Neal’s application is denied.
See list of other actions and proceedings filed by Neal at n. 1, supra.
11

As noted above, Magistrate Judge Hammer denied Neal’s motion to
vacate the Arbitrator’s Turnover Order (Docket No. 35). Neal recently moved for
reconsideration of Judge Hammer’s order (Docket No. 39). That reconsideration
motion will be denied in light of my stay of this action. The Court does not find
it appropriate to interfere with such interlocutory rulings in the arbitration.

CONCLUSION

Defendants’ motion to dismiss Neal’s claims for failure to state a claim is
DENIED as presented and administratively terminated without prejudice.
Meanwhile, this entire action is STAYED pending the outcome of the ongoing
arbitration. Plaintiffs motion for sanctions is DENIED. Defendants’ cross
motion for sanctions and injunctive relief is DENIED. Plaintiffs motion to stay
the arbitration is DENIED. Plaintiffs motion for reconsideration of Magistrate
Judge Hammer’s order declining to vacate the Arbitrator’s Turnover Order is
DENIED.
An appropriate order follows.
Amended opinion filed January 6, 2014

MCNULJ
United States District Judge

12