Liberty Synergistics Inc v. Microflo LTD et al

Filing 166

ORDER ADOPTING REPORT AND RECOMMENDATIONS. For the reasons discussed in the attached Memorandum and Order, the Court adopts Judge Locke's report and recommendations in their entirety pursuant to 28 U.S.C. § 636(b)(1). Plaintiff's cla ims are dismissed with prejudice for failure to prosecute pursuant to Rule 41(b) of the Federal Rules of Civil Procedure. The Court further orders a default judgment against Plaintiff as to Defendants' counterclaims, and respectfully refers the matter to Judge Locke for a determination of damages as to Defendants' counterclaims. Ordered by Judge Margo K. Brodie on 9/18/2017. (McKenzie, Lindsay)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------LIBERTY SYNERGISTICS, INC.,
Plaintiff,

MEMORANDUM & ORDER
11-CV-523 (MKB) (SIL)

v.
MICROFLO, LTD., EDWARD MALKIN,
ECOTECH LIMITED, and DOES 1–20,
Defendants.
--------------------------------------------------------------MARGO K. BRODIE, United States District Judge:
Plaintiff Liberty Synergistics, Inc. commenced this action on September 17, 2010, against
Defendants Microflo, Ltd., Edward Malkin, Ecotech Limited, and Does 1 through 20, alleging
that Defendants maliciously prosecuted an action against Plaintiff in Microflo, Ltd. v. Liberty
Bearing Corp., No. 08-CV-3907 (E.D.N.Y. filed Sept 24, 2008). 1 (Compl., annexed to Notice of
Removal as Ex. A., Docket Entry No. 1.) After years of extensive litigation, Plaintiff has failed
to prosecute this action over approximately the last six months. By report and recommendation
dated May 11, 2017 (the “R&R”), Magistrate Judge Steven Locke recommended that the Court
dismiss Plaintiff’s claims with prejudice for failure to prosecute pursuant to Rule 41 of the
Federal Rules of Civil Procedure. (R&R 1, Docket Entry No. 164.) Judge Locke also
recommended that the Court find Plaintiff in default on Defendants’ counterclaims and
determine damages owed to Defendants at an inquest. As discussed below, the Court adopts the

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After Liberty commenced this action on September 17, 2010 in California state court,
Defendants removed the action to the Central District of California. (See Compl., annexed to
Notice of Removal as Ex. A.) The parties then requested that the action be transferred to the
Eastern District of New York pursuant to 28 U.S.C. § 1404(a). (Order on stipulation to transfer
to Eastern District of New York, Docket Entry No. 15.)

R&R in its entirety.
I.

Background
The Court assumes familiarity with the facts and procedural history of the case as

detailed in the Court’s Memorandum and Order dated September 25, 2014. Liberty Synergistics,
Inc. v. Microflo Ltd., 50 F. Supp. 3d 267, 274–76 (E.D.N.Y. 2014). The Court provides only a
summary of the relevant procedural history.
In August of 2011, Defendants moved to strike the Complaint and for sanctions, which
request then Magistrate Judge Thomas Boyle denied and Judge Sandra Feuerstein subsequently
affirmed in substantial part. (See Docket Entry Nos. 45, 60.) Defendants appealed the denial of
their motion to the Second Circuit. (See Notice of Appeal, Docket Entry No. 63.)
While the case was pending before the Second Circuit, Plaintiff filed an Amended
Complaint on July 23, 2012, in response to which Defendants asserted various counterclaims
against Plaintiff. (Am. Compl., Docket Entry No. 80; Answer & Counterclaims, Docket Entry
No. 82.) On September 26, 2012, Defendants moved to stay the matter pending the outcome of
their appeal, which stay the Court denied. 2 (Defs. Mot. to Stay Pending Appeal, Docket Entry
No. 96; Mem. & Order, Docket Entry No. 99.)
On May 31, 2013, the Second Circuit reversed and remanded Judge Feuerstein’s decision
denying Defendants’ motion to strike the Complaint and for sanctions. Liberty Synergistics Inc.
Microflo Ltd., 718 F.3d 138, 156–57 (2d Cir. 2013). On June 18, 2013, Judge Boyle ordered
supplemental briefing in light of the Second Circuit’s decision. 3 (Min. Entry dated June 18,

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The case was reassigned to the undersigned on March 23, 2012.

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The case was subsequently reassigned from Judge Boyle to Magistrate Judge William
D. Wall on July 15, 2013.

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2013, Docket Entry No. 121.) On December 11, 2013, Defendants filed a supplemental motion
to strike. (Defs. Suppl. Mot. to Strike, Docket Entry No. 130.) On December 17, 2013, then
Magistrate Judge William Wall recommended that the Court grant the motion, dismiss the
Complaint and allow the parties to brief the issue of sanctions. 4 (Report & Recommendations
dated Dec. 17, 2013, Docket Entry No. 134.)
On September 25, 2014, the Court adopted in part and denied in part Judge Wall’s report
and recommendations, denying the motion to strike as to the named Defendants, granting the
motion to strike as to Does 1 through 20 and denying Defendants’ motion for sanctions. (Mem.
& Order dated Sept. 25, 2014, Docket Entry No. 140.) Defendants subsequently appealed the
Court’s September 25, 2014 decision, which appeal was dismissed by the Second Circuit on
April 21, 2016 for lack of appellate jurisdiction. (Mandate of USCA, Docket Entry No. 149.)
While the matter was on appeal, on November 6, 2015, Plaintiff requested permission to
move for a prejudgment order of attachment. (Pl. Letter dated Nov. 6, 2015, Docket Entry No.
146.) Although Plaintiff proposed a briefing schedule which was approved by Judge Locke,
Plaintiff never moved for the order of attachment. (Order dated May 19, 2016.)
On October 13, 2016, Lewis Brisbois Bisgaard & Smith LLP (“Lewis Brisbois”) filed a
motion to be relieved as Plaintiff’s counsel, citing both Plaintiff’s failure to pay its legal fees
since August of 2015 and a communication breakdown between Plaintiff and Lewis Brisbois.
(Mot. to Withdraw, Docket Entry No. 154.) On November 22, 2016, Judge Locke granted Lewis
Brisbois’ motion, stayed the action for ninety days and directed Plaintiff to retain new counsel or
risk entry of a default judgment. (Order dated Nov. 22, 2016, Docket Entry No. 160.) Judge

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2014.

The case was subsequently reassigned from Judge Wall to Judge Locke on July 31,

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Locke also scheduled a status conference for February 24, 2017, which conference was later
adjourned to March 2, 2017. (Order dated Jan. 30, 2017.)
Plaintiff failed to appear at the March 2, 2017 conference. (Min. Entry dated Mar. 2,
2017, Docket Entry No. 161.) Judge Locke rescheduled the conference for April 7, 2017 and
warned Plaintiff that “failure to appear will result in recommendation of dismissal of Plaintiff’s
claims and default on Defendants’ counterclaims.” (Id.) Plaintiff failed to appear at the April 7,
2017 status conference, and Judge Locke rescheduled the conference for May 9, 2017, again
warning Plaintiff that “failure to appear will result in recommendation of dismissal of Plaintiff’s
claims and default on Defendants’ counterclaims.” (Min. Order dated Apr. 7, 2017, Docket
Entry No. 162.) Plaintiff again failed to appear at the May 9, 2017 conference. (Min. Order
dated May 9, 2017, Docket Entry No. 163.)
On May 11, 2017, Judge Locke issued the R&R, recommending that Plaintiff’s claims be
dismissed for failure to prosecute and that the Court enter a default judgment against Plaintiff on
Defendants’ counterclaims. (R&R 1, 7.) Plaintiff did not file any objections to the R&R.
II.

Discussion
A district court reviewing a magistrate judge’s recommended ruling “may accept, reject,

or modify, in whole or in part, the findings or recommendations made by the magistrate judge.”
28 U.S.C. § 636(b)(1)(C). “Failure to object to a magistrate judge’s report and recommendation
within the prescribed time limit ‘may operate as a waiver of any further judicial review of the
decision, as long as the parties receive clear notice of the consequences of their failure to
object.’” Sepe v. N.Y. State Ins. Fund, 466 F. App’x 49, 50 (2d Cir. 2012) (quoting United States
v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997)); see also Almonte v. Suffolk Cty., 531 F. App’x
107, 109 (2d Cir. 2013) (“As a rule, a party’s failure to object to any purported error or omission

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in a magistrate judge’s report waives further judicial review of the point.” (quoting Cephas v.
Nash, 328 F.3d 98, 107 (2d Cir. 2003))); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis,
Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010) (“[A] party waives
appellate review of a decision in a magistrate judge’s report and recommendation if the party
fails to file timely objections designating the particular issue.” (citations omitted)).
III.

Conclusion
The Court has reviewed the unopposed R&R and, finding no clear error, the Court adopts

Judge Locke’s R&R in its entirety pursuant to 28 U.S.C. § 636(b)(1). Plaintiff’s claims are
dismissed with prejudice for failure to prosecute pursuant to Rule 41(b) of the Federal Rules of
Civil Procedure. The Court further orders a default judgment against Plaintiff as to Defendants’
counterclaims, and respectfully refers the matter to Judge Locke for a determination of damages
as to Defendants’ counterclaims.

SO ORDERED:
s/ MKB
MARGO K. BRODIE
United States District Judge
Dated: September 18, 2017
Brooklyn, New York

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