Pearson Education, Inc. et al v. Does 1-100

Filing 211

ORDER, THE COURT HEREBY ORDERS Plaintiffs to submit a letter to the Court by March 17, 2022 stating whether they (a) wish the Court to consider its motion as written, notwithstanding the foregoing discussion, or (b) withdraw their motion, with th e intent to file an updated motion to amend accompanied by a revised proposed complaint. Plaintiffs' letter must clarify the status and amounts of any funds they have received from the remaining Defendants that were subject to the inquest con ducted by Magistrate Judge Fox and for whom the Court adopted damages determinations. (ECF Nos. 184, 190.) In the event that Plaintiffs choose to amend the Proposed Complaint, they may file a renewed motion and revised proposed complaint with the Co urt no later than April 18, 2022. If the revised proposed complaint consists of allegations and parties found in the current Proposed Complaint and the First Amended Complaint, the time between the filing of the instant motion on June 11, 2021 an d the submission of a new motion will not be held against Plaintiffs as evidence of undue delay or a lack of diligence. IT IS FURTHER ORDERED that, to reflect Judge Batts's severance of the Divine action, the Clerk of Court is respectfully di rected to: Designate a new docket number for the Divine action (in which plaintiffs Pearson Education, Inc.; Cengage Learning, Inc.; and McGraw-Hill Global Education Holdings, LLC, sue Dann Divine; Daphnee Divine; Rejoice Senaye; Mawuli Krah; Ros chelle Salmon; Joshua Khalifa; Bridgeports Intl Inc.; and Happy Families Intl Inc.), waiving the filing fee for that new case; Designate this newly opened case as related to the litigation at docket number 17-CV-203 and therefore assign the new ca se to this Court; File in the newly opened case copies of the documents found under docket number 17-CV-203 at ECF Nos. 137 through 150, 152 through 155, 162 through 172, 175 through 183, and 185 through 189; Terminate the newly opened case, beca use final judgments have been entered with respect to all eight defendants in that case; and Change the caption of the case at docket number 17-CV-203 to match the caption of this Order. IT IS FURTHER ORDERED that the Clerk of Court is respectfull y directed to enter final judgment against Blue Rocket Books, Ltd. in the case with docket number 17-CV-203.2 Because of the substantial amount of time that has passed since entry of the purportedly final judgment against Blue Rocket Books, Ltd. a nd the company's possible reliance on the stipulated terms of that judgment (ECF No. 101), the Court holds that there is no just reason for delay and certifies the judgment as final and appealable pursuant to Rule 54(b). This final judgment shall be identical in terms to the stipulated Order at ECF No. 101. SO ORDERED. ( Motions due by 4/18/2022.) (Signed by Judge Kimba M. Wood on 3/4/22) (yv) Transmission to Civil Case Openings Clerk for processing. Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------X
PEARSON EDUCATION, INC.; CENGAGE
LEARNING, INC.; and MCGRAW-HILL
GLOBAL EDUCATION HOLDINGS, LLC,

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: __________________
DATE FILED:
3/4/2022

Plaintiffs,
-againstHELIOSBOOKS, INC.; RAMAN
KANDOLA; HAMID KHAN; SHARMA
RAJESH; YK SHARMA; BHAGWAT
PRAKASH; OLIVER W. CHEN; SIOW
HONG CHANG; BLUE ROCKET
BOOKS, LTD.; MENG ZHANG; MANUJ
OBEROI; DERICK RADFORD;
DILSHAD SAIFI; and DOES 1–10,

17-CV-203 (KMW)
ORDER

Defendants.
-------------------------------------------------------X
KIMBA M. WOOD, United States District Judge:
Plaintiffs have moved to amend the operative complaint in this action and to name new
parties. (ECF No. 197.) Attached to this motion is a new complaint (the “Proposed Complaint,”
ECF No. 197-1) that would add two new plaintiffs, seventy-six new defendants, and various new
factual allegations. As the Court has considered this motion under the “good cause” standard of
Rule 16 of the Federal Rules of Civil Procedure and the liberal standard of Rules 15 and 21, it
has become clear that the procedural complexity of the docket creates a need for clarification as
to Plaintiffs’ intent. 1

One source of confusion stems from Judge Batts’s grant in 2019 of Plaintiffs’ motion to sever Dann Divine and
seven other Defendants into a new action (see Tr. at 10, ECF No. 205), which severance was not reflected by the
designation of a new docket number. Filings in both actions, the “Divine action” and the original, “Heliosbooks
action,” were entered as if they were in the same case (docket number 17-CV-203).

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Plaintiffs’ recent briefing asserts that no scheduling order governs the Heliosbooks action, which would preclude the
need to satisfy the “good cause” standard of Rule 16. As recognized in actions taken by Plaintiffs (ECF No. 191)
and by the Court (e.g., ECF No. 192), however, the deadlines established in the Scheduling Order and Discovery

Amending the complaint as Plaintiffs propose would have the confusing effects of
reopening orders that had been styled as “final” judgments and of dismissing nearly all current
Defendants from the case. While it is conceivable that these outcomes match Plaintiffs’ intent,
the Court’s responsibility to manage its docket “with a view toward the efficient and expedient
resolution of cases,” Dietz v. Bouldin, 579 U.S. 40, 47 (2016), urges caution against the
possibility of creating procedural complications that must then be unwound. Plaintiffs are
ordered to submit a letter to the Court in accordance with the directions at the conclusion of this
Order.
Two dynamics produce the need for clarification. First, there is a lack of finality in the
prior orders entered in the Heliosbooks action. Heliosbooks, Inc. (“Heliosbooks”) has not
received a final judgment because Plaintiffs successfully requested that Heliosbooks be removed
from the inquest to determine damages. (See ECF No. 153.) An order that determines liability
but leaves the amount of damages undecided is not “one that ‘ends the litigation on the merits
and leaves nothing for the court to do but execute the judgment.’” Nelson v. Unum Life Ins. Co.
of Am., 468 F.3d 117, 119 (2d Cir. 2006) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463,
467 (1978)). With no final judgment against Heliosbooks, the Court has “adjudicate[d] fewer
than all the claims or the rights and liabilities of fewer than all the parties.” Fed. R. Civ. P.
54(b). The Court has not directed entry of final judgment, nor “expressly determine[d] that
there is no just reason for delay” as to any of the other Defendants that remain in the Heliosbooks
action. Id. For this reason, none has a final disposition.

Plan issued at ECF No. 155, as amended in ECF Nos. 168, 169, 177, 178, 183, and 192, apply to the Heliosbooks
action as well as the Divine action.

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Second, amending the complaint would significantly unsettle aspects of this case that had
long seemed settled. The complex procedural history of the case may have obscured this fact.
Ten Defendants who defaulted as to the First Amended Complaint would be added back into this
litigation. (See ECF No. 151.) The Proposed Complaint would reopen the question of liability
as to these ten Defendants—notwithstanding that the Court entered a purportedly “final”
judgment against them in March 2020, and notwithstanding that the Court adopted damages
determinations with respect to nine of them in March 2021. (ECF Nos. 151, 190.)
Furthermore, superseding the operative complaint would require dismissal of twelve
Defendants that were named in the First Amended Complaint, but are not named in the Proposed
Complaint—the nine defaulted Defendants with damages determinations who have not been
voluntarily dismissed after settlement; Blue Rocket Books, Ltd., which had a stipulated judgment
entered in December 2017 that was not certified as a partial final judgment pursuant to Rule
54(b) (ECF No. 101); and two named Defendants who appear not to have been addressed in this
litigation since becoming subject to a preliminary injunction in February 2017, Raman Kandola
and Derick Radford. Heliosbooks is the only Defendant named in both the First Amended
Complaint and the Proposed Complaint. “It is . . . generally the case that ‘[a]ll causes of action
alleged in an original complaint which are not alleged in an amended complaint are waived.’”
Elliott v. City of Hartford, 649 F. App’x 31, 32 (2d Cir. 2016) (quoting Austin v. Ford Models,
Inc., 149 F.3d 148, 155 (2d Cir. 1998)). The Proposed Complaint would therefore be equivalent
to Plaintiffs waiving their claims against the twelve Defendants cited in the first sentence of this
paragraph.
In light of the foregoing discussion, THE COURT HEREBY ORDERS Plaintiffs to
submit a letter to the Court by March 17, 2022 stating whether they (a) wish the Court to

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consider its motion as written, notwithstanding the foregoing discussion, or (b) withdraw their
motion, with the intent to file an updated motion to amend accompanied by a revised proposed
complaint.
Plaintiffs’ letter must clarify the status and amounts of any funds they have received
from the remaining Defendants that were subject to the inquest conducted by Magistrate Judge
Fox and for whom the Court adopted damages determinations. (ECF Nos. 184, 190.)
In the event that Plaintiffs choose to amend the Proposed Complaint, they may file a
renewed motion and revised proposed complaint with the Court no later than April 18, 2022. If
the revised proposed complaint consists of allegations and parties found in the current Proposed
Complaint and the First Amended Complaint, the time between the filing of the instant motion
on June 11, 2021 and the submission of a new motion will not be held against Plaintiffs as
evidence of undue delay or a lack of diligence.
IT IS FURTHER ORDERED that, to reflect Judge Batts’s severance of the Divine
action, the Clerk of Court is respectfully directed to:
•

Designate a new docket number for the Divine action (in which plaintiffs Pearson
Education, Inc.; Cengage Learning, Inc.; and McGraw-Hill Global Education
Holdings, LLC, sue Dann Divine; Daphnee Divine; Rejoice Senaye; Mawuli Krah;
Roschelle Salmon; Joshua Khalifa; Bridgeports Int’l Inc.; and Happy Families Int’l
Inc.), waiving the filing fee for that new case;

•

Designate this newly opened case as related to the litigation at docket number 17CV-203 and therefore assign the new case to this Court;

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•

File in the newly opened case copies of the documents found under docket number
17-CV-203 at ECF Nos. 137 through 150, 152 through 155, 162 through 172, 175
through 183, and 185 through 189;

•

Terminate the newly opened case, because final judgments have been entered with
respect to all eight defendants in that case; and

•

Change the caption of the case at docket number 17-CV-203 to match the caption of
this Order.

IT IS FURTHER ORDERED that the Clerk of Court is respectfully directed to enter
final judgment against Blue Rocket Books, Ltd. in the case with docket number 17-CV-203. 2
Because of the substantial amount of time that has passed since entry of the purportedly final
judgment against Blue Rocket Books, Ltd. and the company’s possible reliance on the stipulated
terms of that judgment (ECF No. 101), the Court holds that there is no just reason for delay and
certifies the judgment as final and appealable pursuant to Rule 54(b). This final judgment shall
be identical in terms to the stipulated Order at ECF No. 101.
SO ORDERED.
Dated: New York, New York
March 4, 2022

/s/ Kimba M. Wood
KIMBA M. WOOD
United States District Judge

In the “appropriate case,” a court may consider sua sponte whether to direct partial final judgment pursuant to Rule
54(b) of the Federal Rules of Civil Procedure. Lankler, Siffert & Wohl, LLP v. Rossi, No. 02 Civ. 10055 (RWS),
2004 WL 541842, at *3 (S.D.N.Y. Mar. 19, 2004) (Sweet, J.), aff’d, 125 F. App’x 371 (2005).

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