Empire United Lines Co., Inc. et al v. SK Imports, Inc. et al

Filing 15

MEMORANDUM AND ORDER. For the reasons set forth herein, the Plaintiffs' claims in Global Auto are dismissed without prejudice pursuant to Fed. R. Civ. P. 41(b). The Clerk of Court is directed to enter a default upon EUL's co unterclaims in Global Auto and upon the plaintiffs' claims against defendant SK Imports, Inc., in Empire United Lines. EUL's motion for an injunction precluding the Plaintiffs in Global Auto from pursuing cross- claims in Akishev is denied. The Clerk of Court shall terminate Kapustin's letter-motion to change venue in Global Auto (docketed as Document 104 in Global Auto) since Kapustin does not, and cannot, represent the corporate plaintiffs in that case. Ordered by Judge Sandra L. Townes on 9/29/2015. (Barrett, C)

N rflK' OTFIOr

U. DISTRICT COURT E..NY.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------x
GLOBAL AUTO, INC., et al.,
Plaintiffs,
-against-

* SEP30 2015 '*
!ROOKLYN OFFICE
MEMORANDUM AND ORDER
13-CV-2479 (SLT)(RER)

MICHAEL HITRINOV, a/k/a MICHAEL
KHITRINOV, et al.,
Defendants.
------------------------------------x
EMPIRE UNITED LINES CO., INC., et al.,
Plaintiffs,
-against-

14-CV-2566 (SLT)(RER)

SK IMPORTS, INC., et al.,
Defendants.
-----------------------------------x
TOWNES, United States District Judge:
These two actions principally involve disputes between corporations engaged in selling
American automobiles to European consumers and Empire United Lines, Co., Inc., a non-vessel
operating common carrier which was involved in transporting those automobiles from New
Jersey to Finland. The consumers unsuccessfully attempted to intervene in the first abovecaptioned action—Global Auto, Inc. v. Hitrinov, No. 13-CV-2479 (SLT)(RER) ("Global
Auto")—then commenced a lawsuit against the parties in both of the above-captioned actions in
the United States District Court for the District of New Jersey: Akishev v. Kapustin, N.J. Docket
No. 13-cv-7152-NHL-AMD ("Akishev"). After filing cross-claims in Akishev against Empire
United Lines and its principal, Michael Hitrinov (collectively, "EUL"), which raised the same
claims as the First Amended Complaint in Global Auto, the attorneys representing the
corporations and their principals withdrew as counsel in all three actions. Those corporations

and their principals have been unable to find counsel to represent them in this Court, although
they have reportedly succeeded in retaining counsel in Akishev.
Citing to cases which hold that a corporation cannot proceed pro Se, EUL now moves to
dismiss the plaintiffs' claims in Global Auto pursuant to Rule 41 (b) of the Federal Rules of Civil
Procedure. EUL also moves to enjoin those same plaintiffs from proceeding with the crossclaims in Akishev and requests that the Clerk of Court enter a default on its counterclaims in
Global Auto and its claims against SK Imports, Inc., the only corporation named as a defendant
in Empire United Lines Co., Inc. v. SK Imports, Inc., No. 14-CV-2566 (SLT)(RER) ("Empire
United"). In response, Sergey Kapustin, one of the principals of the unrepresented corporations,
has filed a "letter-motion" requesting that Global Auto be transferred to the District of New
Jersey. For the reasons set forth below, the plaintiffs' claims in Global Auto are dismissed
without prejudice, the Clerk of Court is directed to enter the defaults as requested by EUL, and
EUL's motion for injunctive relief is denied. The Court declines to consider Kapustin's "lettermotion" because he, as a layperson, cannot and does not represent the plaintiffs in Global Auto.
BACKGROUND
In April 2013, plaintiffs Global Auto, Inc.; G Auto Sales, Inc.; and Effect Auto Sales,
Inc. (collectively, "Plaintiffs")—all of which are New Jersey corporations allegedly engaged in
internet sales of automobiles to Europeans—commenced this action against EUL, principally
alleging that EUL breached a maritime contract and violated the Racketeering Influenced and
Corrupt Organizations Act ("RICO") by converting cars which EUL was shipping to Europe on
Plaintiffs' behalf.' In papers originally filed on June 28, 2013, and amended on July 17, 2013,
'Plaintiffs also sued Mediterranean Shipping Company (USA), Inc., the vessel operating
common carrier used by EUL to ship the cars. The claims against this defendant were dismissed
in late January 2014.

eleven of Plaintiffs' dissatisfied customers moved to intervene in Global Auto pursuant to Rules
24(a) and 24(b) of the Federal Rules of Civil Procedure. In a memorandum and order dated
November 5, 2013, the Court denied that application noting, inter alia, that Global Auto
primarily related to a maritime dispute between Plaintiffs and EUL, while the customers' causes
of action related primarily to Plaintiffs' dealings with the customers themselves. On November
25, 2013—about two weeks after receiving the memorandum and order denying the motion to
intervene—the eleven customers, along with three others (collectively, the "NJ Plaintiffs"),
commenced an action against Plaintiffs and others in the United States District Court for the
District of New Jersey, alleging 16 counts, including violations of RICO and other federal
statutes. To the extent that it is relevant to the motions pending before the Court, the procedural
history of this New Jersey action, Akishev, is discussed below. See pp. 4-6, post.
In early February 2014, Plaintiffs filed a First Amended Complaint in Global Auto which
named Carcont Oy, Ltd. ("CarCont"), a Finnish business entity allegedly controlled by Hitrinov,
as an additional defendant. On February 28, 2014, EUL filed an answer to the First Amended
Complaint, which included counterclaims against Plaintiffs. The docket sheet in Global Auto
does not reflect that CarCont has been served or has appeared in that action.
In mid-May 2014, EUL commenced Empire United against four defendants: SK Imports,
Inc. d/b/a Global Cars, a Pennsylvania corporation, and the corporation's principals—Sergey
Kapustin; Kapustin's wife, Irma Kapustina; and Kapustina's son, Michael Goloverya—all of
whom allegedly reside in Warminster, Pennsylvania. In a letter to the Court dated May 14,
2014, counsel for EUL represented that Empire United was related to Global Auto because,
among other things, Kapustin, Kapustina and Goloverya were also principals of Plaintiffs.

3

Accordingly, Empire United was reassigned from Judge Matsumoto to the undersigned on May
15, 2014, and the two cases were consolidated for purposes of discovery.

In a letter-motion filed on June 9, 2014, in GlobalAuto, EUL moved to compel Plaintiffs
to respond to certain discovery requests. On June 29, 2014, after conferences in which the
parties narrowed their discovery disputes, Magistrate Judge Reyes entered an order which
directed Plaintiffs to respond to certain document requests and directed EUL to produce certain
other documents. Judge Reyes's order did not provide deadlines for the production of these
documents, and neither Plaintiffs nor EUL ever contacted Judge Reyes to complain about their
adversaries' failure to comply with this order.
The New Jersey Action
As originally filed, Akishev named 15 defendants (not including Does), including
Plaintiffs, Global Cars, Inc., and SK Imports, Inc. (collectively, the "Global Corporations"); EUL
and CarCont (collectively, the "EUL Defendants"); and Kapustin, Kapustina and Goloverya
(collectively, the "Global Principals"). Although the NJ Plaintiffs allege that they served the
EUL Defendants with process on May 20, 2014, see Letter to Magistrate Judge Ann Marie
Donio from Anna V. Brown, Esq., dated June 12, 2014 (N.J. Docket No. 46), p. 1, none of these
three defendants have answered or otherwise responded to the pleadings and no attorney has yet
appeared on their behalf. Nonetheless, according to a letter from counsel for the NJ Plaintiffs,
an attorney representing the EUL Defendants has recently requested judicial assistance "in the
resolution of the dispute concerning the enforcement and interpretation of the settlement
agreement" between his clients and the NJ Plaintiffs. See Letter to Hon. Noel L. Hillman from
Maria Temkin, Esq., dated July 27, 2015 (N.J. Docket No. 247), p. 1. There is nothing on the

docket sheet in Akishev to suggest that any of the EUL Defendants have been dismissed from
that action.
On October 7, 2014, the Global Corporations and the Global Principals (collectively, the
"Global Defendants"), filed an Amended Answer in Akishev which incorporated cross-claims by
Plaintiffs against the EUL Defendants. Although the allegations in the cross-claims differ
slightly from the allegations contained in the First Amended Complaint in Global Auto, the
cross-claims and the First Amended Complaint both contain essentially the same nine causes of
action .2 In addition, the cross-claims request the same remedies set forth in the First Amended
Complaint, including compensatory and punitive damages and replevin of 16 vehicles held by
the EUL Defendants in an Elizabeth, New Jersey, warehouse.
On October 27, 2014, the NJ Plaintiffs moved for sanctions against the Global
Defendants and their counsel, alleging, inter alia, that the Global Defendants were dissipating
their assets despite their assurances that they would not do so (see N.J. Docket No. 103). In
mid-February 2015, the NJ Plaintiffs filed another motion for sanctions against the Global
Defendants and their counsel, alleging "willful refusal to comply with the Court's Orders and
deliberate failure to comply with their discovery obligations[;] ... fraudulent representations to
the Court in pleadings and communications signed by counsel and a sworn declaration signed by
Kapustin; and oral misrepresentations to the Court ...." Notice of Motion for Sanctions (N.J.
Docket No. 169), p. 1. In a memorandum of law in support of that motion, the NJ Plaintiffs
requested, inter a/ia, that defaults be entered against the Global Defendants. Memorandum of
Law in Support of the Motion for Sanctions (N.J. Docket No. 169-42), p. 36. That motion

2 The causes of action differ in that some of the state-law cross-claims are brought
pursuant to New Jersey, rather than New York, law.

5

remains pending. However, Judge Hillman—the district judge presiding over Akishev—has
entered a temporary restraining order which enjoins the Global Defendants from withdrawing
money from any bank accounts and freezes the assets currently in those accounts.

See

Temporary Restraining Order dated June 18, 2015 (N.J. Docket No. 217), pp. 3-4.
The Global Defendants' Counsel's Motions to be Relieved
On October 21, 2014, James S. Dobis and Boris Parker—the attorneys representing the
Global Defendants—moved for permission to withdraw as counsel in Akishev. See Motion on
Behalf of James S. Dobis and Boris Parker to be Releived as Counsel (N.J. Docket No. 96).
Although that application was initially denied without prejudice, see Minute Entry for
Proceeding before Judge Hillman on October 22, 2014 (N.J. Docket No. 97), it was
subsequently granted in an order dated May 4, 2015 (N.J. Docket No. 196). Although Parker
also represented Plaintiffs in Global Auto, Parker did not move to withdraw as counsel in this
Court until February 2015, more than one month after EUL' s counsel wrote a letter to Judge
Hillman noting that Parker had not moved to be relieved in this action. See Letter to Hon. Noel
L. Hillman from Jon Werner dated December 29, 2014 (N.J. Docket No. 144).
In February 2015, Parker and the other attorneys who had been representing the Global
Defendants in this Court—Marcus Nussbaum, and Harlan Greenberg— requested permission to
withdraw as counsel in Global Auto and Empire United. Parker's application, which stated that
Nussbaum remained on the case, was promptly granted by Judge Reyes. See Order dated
February 13, 2015. On the same day Judge Reyes issued his order, however, Nussbaum and
Greenberg moved to withdraw as well. EUL did not oppose that motion, although EUL's
counsel wrote a lengthy letter dated March 2, 2015, which discussed developments in Akishev
and speculated that Nussbaum and Greenberg were attempting to avoid sanctions. Letter to
No

Hon. Ramon E. Reyes, Jr., from Jon Werner dated Mar. 2, 2015. In a telephone conference on
March 5, 2015, Judge Reyes granted Nussbaum and Greenberg's motion, leaving the Global
Defendants—including Plaintiffs and the other Global Corporations—unrepresented.
Judge Reyes gave the Global Defendants ample opportunity to obtain legal
representation, extending Plaintiffs' time to retain counsel on at least two occasions. First, in an
order dated April 17, 2015, Judge Reyes extended the time to obtain counsel by an additional
two weeks. Although that order stated that there would be "[n]o further extensions" of the
deadline, Kapustin requested another extension of time on April 30, 2015, representing that he
had located an attorney willing to appear on the Global Defendants' behalf. In an order dated
May 27, 2015, Judge Reyes extended the deadline to June 3, 2015. However, Judge Reyes again
stated that there would be no further extensions and warned that, if new counsel had not filed a
notice of appearance by June 3, 2015, Plaintiffs would be in default.
The Instant Motions
When no attorney appeared on Plaintiffs' behalf, EUL moved for involuntary dismissal
of Global Auto pursuant to Rule 41 (b) of the Federal Rules of Civil Procedure. In a motion filed
June 10, 2015, EUL argues that this action should be dismissed with prejudice for failure to
prosecute; for failure to comply with Judge Reyes' orders of April 17, 2015, and May 27, 2015,
which directed Plaintiffs to retain counsel; and for failure to comply with Judge Reyes' July 29,
2014, order directing Plaintiffs to provide certain discovery. Along with this motion, the EUL
Defendants filed a Request for a Certificate of Default pursuant to Rule 55(a) of the Federal
Rules of Civil Procedure, asking the Clerk of Court to enter a default against Plaintiffs in Global
Auto and against SK Imports in Empire United.

7

Because the Global Defendants continue to be unrepresented, they have not opposed the
Rule 41 (b) motion or the entry of the Certificate of Default. However, both Kapustin and the NJ
Plaintiffs have voiced their opposition. In a letter dated July 16, 2015, Kapustin states that he
has "found an attorney ... who showed interest" in representing the Global Defendants for "very
modest fees" in Akishev, claims that he has "funds to hire representation for [the] New Jersey
case only," and requests that Global Auto be transferred to the District of New Jersey. Letter to
Hon. Sandra L. Townes from Sergey Kapustin, dated July 16, 2015, p. 1. Similarly, at a July 29,
2015, conference on an unrelated motion for injunctive relief, an attorney for some of the NJ
Plaintiffs requested that the Court either transfer Global Auto to the District of New Jersey or
dismiss the Plaintiffs' claims without prejudice.
On July 31, 2015, EUL moved this Court to enjoin Plaintiffs from pursuing the crossclaims they filed against the EUL Defendants in Akishev. EUL argues that those cross-claims
and Plaintiffs' claims in Global Auto both "arise out of the same dispute concerning the
business dealings between the EUL [D]efendants and [P]laintiffs," and that Global Auto is the
first-filed case. Memorandum of Law in Support of Motion to Enjoin Plaintiffs from Proceeding
Forward with Second-Filed Claims, p. 8. EUL further argues that the "first-filed rule" dictates
that Plaintiffs' claims be litigated in this forum; that none of the exceptions to the first-filed rule
apply; and that this Court should enforce the first-filed rule by enjoining Plaintiffs from
proceeding with their cross-claims in Akishev.
DISCUSSION
The Court first turns to EUL's motion to dismiss Plaintiffs' claims in Global Auto
pursuant to Rule 41 (b) of the Federal Rules of Civil Procedure. Rule 41 (b) provides, in
pertinent part, that "[i]f the plaintiff fails to prosecute or to comply with ... a court order, a

defendant may move to dismiss the action or any claim against it." The Second Circuit has
identified "five principal factors" to consider in determining the propriety of dismissal under
Rule 41(b): "(1) the plaintiff's failure to prosecute caused a delay of significant duration; (2)
plaintiff was given notice that further delay would result in dismissal; (3) defendant was likely to
be prejudiced by further delay; (4) the need to alleviate court calendar congestion was carefully
balanced against plaintiffs right to an opportunity for a day in court; and (5) the trial court
adequately assessed the efficacy of lesser sanctions." United States ex rel. Drake v. Norden
Sys., Inc., 375 F.3d 248, 254 (2d Cir. 2004)).
EUL's Rule 41 (b) motion principally alleges that Plaintiffs failed to prosecute Global
Auto by failing to retain counsel.' Although 28 U.S.C. § 1654 provides that parties in federal
actions "may plead and conduct their own cases personally or by counsel," this statute only
"recognizes that an individual generally has the right to proceed pro se with respect to his own
claims or claims against him personally." Berrios v. N. Y. City Housing Auth., 564 F.3d 130,
132 (2d Cir. 2009). "The statute does not permit 'unlicensed laymen to represent anyone else
other than themselves." Lattanzio v. COMTA, 481 F.3d 137, 139 (2d Cir. 2007) (quoting

'The motion also appears to seek dismissal as a sanction for Plaintiffs' failure to comply
with one of Judge Reyes' discovery orders. To be sure, a district court has discretion to dismiss
an action for failure to comply with discovery orders. See, e.g., Valentine v. Museum of Modern
Art, 29 F.3d 47, 49-50 (2d Cir. 1994); Bobal v. Rensselaer Polytechnic Inst., 916 F.2d 759, 764
(2d Cir. 1990). "However, dismissal with prejudice is a harsh remedy to be used only in
extreme situations ..., and then only when a court finds willfulness, bad faith, or any fault on the
part of the prospective deponent." Bobal, 916 F.2d at 764 (internal quotations and citation
omitted). Even assuming that Plaintiffs violated Judge Reyes' discovery order and that EUL
could establish that the violation was willful or in bad faith, dismissal would be far too harsh a
sanction for this violation. EUL could have either moved to compel the production of these
document or moved for one of the lesser sanctions available under Fed. R. Civ. P. 37.

Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1308 (2d Cir. 1991)). "Accordingly, a
layperson may not represent a separate legal entity such as a corporation." Id.
District courts in this Circuit have exercised their discretion to dismiss an action for
failure to prosecute where a corporate plaintiff fails to obtain counsel after being directed to do
so and being warned of the consequences of inaction. For example, in United States ex rel.
Reliable Constr, PM, Inc. v. Land Frog, Inc., No. 13-CV-735 1 (ARR)(CLP), 2015 WL 740034
(E.D.N.Y. Feb. 20 1 2015), Judge Ross adopted a report and recommendation and dismissed a
case for failure to prosecute where the corporate plaintiff failed to obtain counsel for six months
after being directed to do so and warned that the case would be dismissed if the corporation
failed to obtain counsel. Similarly, in Ne grin v. Kalina, No. 09 Civ. 6234 (LGS), 2013 WL
5925916 (S.D.N.Y. Nov. 5, 2013), Judge Schofield adopted a report and recommendation which
recommended dismissing an action brought by a corporation and a limited liability company
after the plaintiffs failed to obtain counsel. In his report and recommendation in that case,
Magistrate Judge Fox noted that the plaintiffs had been directed to engage counsel in an order
dated May 9, 2013, which warned that failure to do so on or before May 27, 2013, could result
in dismissal of the action. Negrin v. Kalina, No. 09 Civ. 6234 LOS, 2013 WL 5630681, at *2
(S .D.N.Y. Oct. 15, 2013). Nothwithstanding this warning, the plaintiffs indicated to the Court
their intention not to engage counsel by stating that "retaining counsel ... is very expensive." Id.
In this case, Plaintiff's counsel were granted leave to withdraw on or before March 5,
2015. Judge Reyes twice extended Plaintiffs' time to obtain new counsel but warned, in an
order dated May 27, 2015, that Plaintiffs would "be in default" if new counsel for Plaintiffs had
not filed a notice of appearance by June 3, 2015. Plaintiffs have failed to obtain counsel and
their principal, Kapustin, has implied that they will be unable to do so. Specifically, in a letter
10

dated July 16, 2015, Kapustin states that he has found an attorney willing to represent the Global
Defendants, including Plaintiffs, in Akishev, but cannot afford an attorney to represent Plaintiffs
in this case as well. Since the Global Defendants' bank accounts have been frozen in Akishev,
there appears to be no prospect of Plaintiffs obtaining counsel anytime in the near future.
Although less than six months have elapsed since Plaintiffs' counsel withdrew,
Kapustin's letter makes it clear that a delay of significant duration would be inevitable if this
action were to continue. Plaintiffs were on notice that failure to obtain counsel by June 3, 2015,
could result in dismissal, and will not be significantly prejudiced by dismissal since their crossclaims against the EUL Defendants in Akishev raise similar issues. Conversely, the Court and
EUL will be needlessly burdened if this action is permitted to languish on the docket. Given
these circumstances, dismissal is the most appropriate course of action.
A question remains, however, regarding whether the dismissal should be with or without
prejudice. Rule 41 (b) states that "[u]nless the dismissal order states otherwise, a dismissal under
this subdivision (b) ... operates as an adjudication on the merits." This language implies that
dismissal under Rule 41(b) "may be without prejudice if so specified by the court imposing it."
Lyell Theatre Corp. v. Loews Corp., 682 F.2d 37, 43 (2d Cir. 1982).
Courts in this Circuit have dismissed cases without prejudice where dismissal with
prejudice "could potentially prejudice a properly represented party with standing in a subsequent
litigation." Gabayzadeh v. Taylor, No. 08-CV-3239 (JFB)(ETB), 2009 WL 2983013, at *4
(E.D.N.Y. Sept. 14, 2009). For example, the Second Circuit has repeatedly held that while
claims brought by unrepresented laypersons on behalf of incompetent persons or children must
be dismissed unless the layperson obtains counsel, the dismissal should be without prejudice.
See Berrios, 564 F.3d at 135; Cheung v. Youth Orchestra Found. of Buffalo, Inc., 906 F.2d 59,
11

62 (2d Cir. 1990). Relying on Berrios, the district court in Gabayzadeh dismissed without
prejudice a case in which an unrepresented layperson attempted to bring claims on behalf of a
trust despite her lack of standing. Gabayzadeh, 2009 WL 2983013, at *45•
To the extent that Plaintiffs claims against the EUL Defendants are meritorious,
Plaintiff's creditors may wish to pursue those claims in the event they obtain judgment against
Plaintiffs. For that reason, counsel for some of the NJ Plaintiffs have urged the Court to dismiss
Plaintiffs' claims against the EUL Defendants without prejudice. Since dismissal with prejudice
might impede the NJ Plaintiffs' ability to recover on a judgment against Plaintiffs, the Court will
dismiss Plaintiffs' claims in this action without prejudice.
EUL 's Request for Certificates of Default
In light of the Global Corporations' failure to retain counsel, EUL requests that the Clerk
of Court enter defaults pursuant to Fed. R. Civ. P. 55(a) with respect to EUL's counterclaims
against Plaintiffs in Global Auto and EUL's claims against defendant SK Imports in the Empire
United. Rule 55(a) provides that "[w]hen a party against whom a judgment for affirmative relief
is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party's default." Since a corporation's failure to retain
counsel results in a failure to "otherwise defend," it is appropriate to enter a default against a
corporation which has failed to comply with a court order to retain counsel.

See Eagle Assocs.,

926 F.2d at 1310; Dow Chem. Pac. Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 336 (2d Cir.
1986).
As discussed above, the Global Corporations—including the Plaintiffs in Global Auto
and defendant SK Imports in Empire United—have failed to retain counsel despite Judge Reyes'
repeated orders that they do so. Accordingly, the Clerk of Court shall enter a default upon
12

EUL's counterclaims against all plaintiffs in Global Auto and on EUL's claims against
defendant SK Imports, Inc., in Empire United.
EUL 's motion for Injunctive Relief
In another motion currently pending before the Court in Global Auto, EUL moves to
enjoin Plaintiffs from pursuing their cross-claims against the EUL Defendants in Akishev.
Those cross-claims contain essentially the same nine causes of action as the First Amended
Complaint in Global Auto. Since the First Amended Complaint in Global Auto was filed on
February 7, 2014—exactly eight months before Plaintiffs amended their answer to, among other
things, add the cross-claims in Akishev—EUL argues that Global Auto is the first-filed action
and that the "first-filed rule" dictates that Plaintiffs litigate the nine causes of action in this
Court.
"The first-filed rule states that, in determining the proper venue, '[w]here there are two
competing lawsuits, the first suit should have priority." NY. Marine & Gen. Ins. Co. v.
Lafarge N Am., 599 F.3d 102,112 (2d Cir. 2010) (quoting D.H. Blair & Co., Inc. v.
Gottdiener, 462 F.3d 95, 106 (2d Cir. 2006)). This rule is not "an invariable mandate," but is
only a presumption that may be rebutted by proof of the desirability of proceeding in the forum
of the second-filed action." Employers Ins, of Wausau v. Fox Entm 't Group, Inc., 522 F.3d 271,

275 (2d Cir. 2008) (internal quotations and citations omitted). "[T]ransfer to the first-filed
jurisdiction is ... inappropriate when 'the balance of convenience favors the second-filed
action." NY. Marine, 599 F.3d at 112 (quoting Employers Ins., 522 F.3d at 276).
"The factors relevant to the balance of convenience analysis are essentially the same as
those considered in connection with motions to transfer venue pursuant to 28 U.S.C. § 1404(a)."
Employers Ins., 522 F.3d at 275 (internal quotations and citation omitted). The factors include:
13

(1) the plaintiff's choice of forum, (2) the convenience of
witnesses, (3) the location of relevant documents and relative ease
of access to sources of proof, (4) the convenience of the parties,
(5) the locus of operative facts, (6) the availability of process to
compel the attendance of unwilling witnesses, [and] (7) the
relative means of the parties.
Id. (quoting Gottdiener, 462 F.3d at 106-07) (brackets in Gottdiener). While "[a] balance of
these factors will identify the more appropriate forum," id.,"[d]istrict courts have broad
discretion in making determinations of convenience under Section 1404(a) and notions of
convenience and fairness are considered on a case-by-case basis."

Gottdiener, 462 F.3d at 106

(citing In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992)).
Since the Court is dismissing Plaintiffs' claims in Global Auto, it is unclear whether
there are still "two competing lawsuits." To be sure, EUL's counterclaims in Global Auto and
claims in Empire United both relate to the agreement which was the subject of the breach of
contract claims in Plaintiffs' cross-claims in Akishev. However, in determining the EUL
Defendants' motions for default judgments in Global Auto and Empire United, the Court will
assume the factual allegations in the EUL Defendants' pleadings to be true, decide whether
those facts establish liability and, if so, determine the amount of that liability. See Bricklayers
& Allied Craf/workers Local 2, Albany, N. Y Pension Fund v. Moulton Masonry & Constr.,
LLC, 779 F.3d 182, 187 (2d Cir. 2015). Accordingly, the inquiry should focus principally on
the facts alleged in the EUL Defendants' pleadings, without regard to whether those facts are
subsequently disproven in Akishev.
Even assuming that there are still "two competing lawsuits," the EUL Defendants have
not established that the balance of convenience does not favor New Jersey. First, while
Plaintiffs chose this forum when they filed the complaint in Global Auto, they subsequently filed

14

the claims set forth in the First Amended Complaint as cross-claims in Akishev. While the
agreement between Plaintiffs and Empire United Lines may have been negotiated and signed in
New York, performance of that contract appears to have taken place largely in the Elizabeth,
New Jersey, facilities in which the cars were stored and from which the cars were shipped. The
only potential witness in New York appears to be Hitrinov. The Global Corporations are mostly
located in New Jersey and the Global Principals live in Warminster, Pennsylvania—a
Philadelphia suburb located about 30 miles from the Camden, New Jersey, courthouse where
Akishev is being litigated. Moreover, as the EUL Defendants concede, there are no unwilling
witnesses.
Furthermore, all interested parties, including European customers, are already litigating
in the New Jersey action.' Although that action was filed later than Global Auto, it appears to
have progressed faster than the cases in this Court. Finally, Plaintiffs have been unable to find
counsel they can afford in New York, but have reportedly been able to find counsel in New
Jersey. All these factors suggest that it would be more convenient, more efficient, and fairer to
Plaintiffs and the other Global Corporations if all parties were to litigate all of their claims in
New Jersey.
Kapustin 's "Letter-Motion"
In his letter dated July 16, 2015, Kapustin requests that this Court transfer Global Auto
to the District of New Jersey. The Court cannot consider that request because Kapustin, as a
'Although the EUL Defendants have not appeared in Akishev, counsel for the NJ
Plaintiffs represents that these parties have not only been served, but have reached an agreement
to settle the claims against them. According to NJ Plaintiffs' counsel, an attorney representing
the EUL Defendants has requested judicial assistance "in the resolution of the dispute
concerning the enforcement and interpretation of the settlement agreement" between his clients
and the NJ Plaintiffs. See Letter to Hon. Noel L. Hillman from Maria Temkin, Esq., dated July
27, 2015 (N.J. Docket No. 247), p. 1.
15

layperson, does not, and cannot, represent the corporate Plaintiffs. Moreover, for the reasons set
forth above, the Court currently anticipates that the EUL Defendants' motions for default
judgments will not raise issues of law or fact that will create conflicts with the New Jersey
action. However, if conflicts do arise, the Court may sua sponte revisit the issue of whether to
transfer both Global Auto and Empire United to the District of New Jersey.
CONCLUSION

For the reasons set forth above, the Plaintiffs' claims in Global Auto are dismissed
without prejudice pursuant to Fed. R. Civ. P. 41(b). The Clerk of Court is directed to enter a
default upon EUL's counterclaims in Global Auto and upon the plaintiffs' claims against
defendant SK Imports, Inc., in Empire United Lines. EUL's motion for an injunction precluding
the Plaintiffs in Global Auto from pursuing cross-claims in Akishev is denied. The Clerk of
Court shall terminate Kapustin's letter-motion to change venue in Global Auto (docketed as
Document 104 in Global Auto) since Kapustin does not, and cannot, represent the corporate
plaintiffs in that case.
II)JT1J

/s/ Sandra L. Townes

SANDRA L. TOWNES
United States District Judge
Dated: September7 2015
Brooklyn, New York

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