Wai Feng Trading Co. LTD et al v. Quick Fitting, Inc.
Filing
110
ORDER denying without prejudice 82 Motion to Dismiss Count IV of Quick Fitting's Counterclaim; terminating 88 Report and Recommendations; adopting 94 Amended Report and Recommendations; and, reconsolidating this matter with CA13-56-S-PAS. So Ordered by Chief Judge William E. Smith on 9/30/2015. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
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)
)
)
Plaintiffs,
)
)
v.
)
)
QUICK FITTING, INC.,
)
)
Defendant.
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___________________________________)
WAI FENG TRADING CO., LTD.; AND
EFF MANUFACTORY CO., LTD.,
C.A. No. 13-033 S
ORDER
WILLIAM E. SMITH, Chief Judge.
This case is one of two between the parties; Defendant in
the
above-captioned
matter
(“13-33”),
Quick
Fitting,
Inc.
(“Quick Fitting”), is the plaintiff in the other, C.A. No. 13056 S (“13-56”), and Plaintiffs in this case, Wai Feng Trading
Co., Ltd., and EFF Manufactory Co., Ltd. (“Wai Feng”) are two of
the defendants in 13-56.
Before the Court is Magistrate Judge
Patricia A. Sullivan’s Amended Report and Recommendation (ECF
Nos. 94 (13-33), 120 (13-56)) (the “Amended R&R”) recommending
that the cases be reconsolidated, that Quick Fitting’s Motion
for Leave to Amend Complaint (ECF No. 100 (13-56)) be granted,
and
that
Wai
Feng’s
Motion
to
Dismiss
Count
IV
of
the
Counterclaim (ECF No. 82 (13-33)) be denied without prejudice. 1
Wai Feng filed objections (ECF Nos. 97 (13-33), 123 (13-56));
Quick Fitting filed responses (ECF Nos. 100 (13-33), 126 (1356)); and Wai Feng filed replies (ECF Nos. 102 (13-33), 127 (1356)).
Because this Court agrees with Magistrate Judge Sullivan’s
analysis, it hereby accepts, pursuant to 28 U.S.C. § 636(b)(1),
the Amended R&R.
The relevant facts, procedural background, and
analysis are fully set forth in the Amended R&R.
The Court
limits its discussion to and presents only those facts pertinent
to Wai Feng’s objections.
This order is substantially identical
to a companion order issued today in 13-56.
1
On August 22, 2014, this Court adopted Magistrate Judge
Sullivan’s Report and Recommendation (“R&R”) deconsolidating
these two cases for more efficient management.
(ECF Nos. 67
(13-33), 79 (13-56).)
On March 12, 2015, Magistrate Judge
Sullivan issued R&Rs on two motions, with the goal of
maintaining the separation of the cases. The R&R in 13-56 (ECF
No. 107) (“13-56 R&R”) recommended granting in part and denying
in part Quick Fitting’s Motion for Leave to Amend Complaint (ECF
No. 100 (13-56).) This recommendation sought to prohibit Quick
Fitting from including certain claims in 13-56, the equivalent
of which were already included in 13-33.
The R&R in this case
(ECF No. 88) (“13-33 R&R”) recommended that Wai Feng’s Motion to
Dismiss Count IV of the Counterclaim (ECF No. 82 (13-33)) be
denied on the condition that this Court stay litigation of Count
IV in 13-33 until resolution of those issues in 13-56.
Quick
Fitting filed Motions for Reconsideration or to Clarify the
R&Rs.
(ECF Nos. 91 (13-33), 115 (13-56).)
Magistrate Judge
Sullivan granted Quick Fitting’s Motions to Clarify and issued
the Amended R&R.
2
The
gravamen
of
Wai
Feng’s
objection
is
that
reconsolidating the cases will prejudice Wai Feng because their
“simple collection action” – 13-33 – will get bogged down by the
more complicated and time-consuming issues in 13-56.
this
Court
is
not
persuaded
that
keeping
However,
the
deconsolidated will actually prevent delays in 13-33.
cases
While 13-
33 may have started as a “simple collection action,” that ship
has sailed.
case
in
It has become apparent that in order to defend its
13-33,
Quick
Fitting
seeks
to
make
arguments
that
overlap with the claims in 13-56, namely that Wai Feng breached
certain agreements.
As Magistrate Judge Sullivan notes, “Quick
Fitting should not be prevented from litigating its claims and
defenses under the guise of case management.”
ECF Nos. 94 (13-44), 120 (13-56).)
(Amended R&R 5,
Once the 13-56 claims are
let into 13-33, which they must be for Quick Fitting to be able
to assert all of its defenses, “it quickly bec[omes] clear that
deconsolidation [i]s no longer workable.”
(Id. at 4.)
Indeed,
even in Magistrate Judge Sullivan’s initial R&R in 13-33, where
she attempted to keep the cases separate, her recommendation was
to “stay litigation of Count IV in 13-33 regarding (1) whether
EFF has breached the non-competition section of the 2011 License
Agreement; and (2) whether either the non-competition section or
the liquidated damages clause is unenforceable or void.”
3
(R&R
2, ECF No. 88 (13-33).)
That stay would arguably delay 13-33
even more than consolidation: rather than trying both cases at
the same time, 13-33 would have to wait until after those issues
in 13-56 were resolved.
Wai Feng also protests that the Amended R&R incorrectly
represented that Wai Feng had agreed to consolidation, when in
fact
their
agreement
conditions.
was
contingent
on
certain
discovery
During a conference with Magistrate Judge Sullivan
on May 22, 2015, Wai Feng claims they “made clear . . . that
their
willingness
to
proceed
with
the
cases
consolidated
depended on an expeditious conclusion to discovery so that 13056 would not delay 13-033.”
97 (13-33), 123 (13-56).)
(Wai Feng’s Objection 14, ECF Nos.
Wai Feng is concerned that “[t]he
Amended R&R, as written, prejudices Plaintiffs because it would
be
a
basis
for
the
Court
to
hold
they
have
waived
their
objection to an unconditional consolidation when they did not.”
(Id.
at
15.)
Wai
Feng’s
objection
is
noted;
however,
as
explained above, it does not appear that keeping the two cases
separate will actually accomplish the goal of a quick resolution
to 13-33.
In any event, the close of fact discovery in 13-56 is
currently set for October 1, 2015, and although Magistrate Judge
Sullivan declined to rule that the granted extension was final,
she
noted
that
“[t]he
Wai
Feng
4
parties
have
laid
a
strong
foundation for resisting another extension.”
(Order on Mots.
for Extension of the Scheduling Order 3, ECF No. 129 (13-56).)
Thus, the Court sees no prejudice to Wai Feng at this time in
consolidating the cases. 2
Wai
Feng’s
Reconsideration
argument
or
that
Clarification
similarly unavailing.
Quick
were
Fitting’s
without
Motions
legal
basis
for
is
As Wai Feng recognizes, the court has the
“inherent power to . . . re-examine its interlocutory orders”
where “the court has misapprehended some material fact or point
of law.”
(Wai Feng’s Objection 16, ECF Nos. 97 (13-33), 123
(13-56) (quoting Luckerman v. Narragansett Indian Tribe, 965 F.
Supp. 2d 224, 232 (D.R.I. 2013) (Smith, J.)).)
Here, “Quick
Fitting’s clarifications are significant, not only because they
reveal
that
the
March
12
R+Rs
have
unintended
substantive
consequences, but also that the overlap that has grown between
13-33
and
13-56
anachronistic.”
56).)
now
makes
continued
deconsolidation
(Amended R&R 3-4, ECF Nos. 94 (13-44), 120 (13-
Where the Court has acknowledged that it misapprehended
the “substantive consequences” and the extent of the overlap
2
Regarding Wai Feng’s concern that consolidating the cases
“could easily lead to confusion at trial” (Wai Feng’s Objection
24, ECF Nos. 97 (13-33), 123 (13-56)), the Court notes that this
Order is “without prejudice to the right of either party to seek
deconsolidation in the future or to ask the Court to bifurcate
issues for trial.”
(Amended Report and Recommendation 2, ECF
Nos. 94 (13-44), 120 (13-56).)
5
between the cases, Quick Fitting’s Motions for Reconsideration
or Clarification were appropriate.
Finally, Wai Feng argues that “the Amended R&R fails to
consider
whether
Quick
Fitting’s
amended
pleadings
should
be
rejected as futile.”
(Wai Feng’s Objection 21, ECF Nos. 97 (13-
33), 123 (13-56).)
Magistrate Judge Sullivan considered this
issue in her initial R&R in 13-56 and found that:
Defendants’
futility
arguments
are
insufficiently
developed and are more properly raised as a Fed. R.
Civ. P. 12(b)(6) motion to dismiss. . . . More
importantly, as Quick Fitting points out, the gravamen
of Defendants’ attack on the new pleading is focused
on its inconsistency with the evidence in the record,
suggesting that the appropriate challenge is by a Fed.
R. Civ. P. 56 motion for summary judgment, which may
take facts outside the pleading into consideration.
(13-56 R&R 6, ECF No. 107 (citations omitted).)
agrees.
This Court
Wai Feng may well have legitimate challenges to the new
claims in Quick Fitting’s Second Amended Complaint, but those
arguments are fact-intensive, and thus are more appropriately
raised in either a motion to dismiss or a motion for summary
judgment.
For these reasons, the Amended R&R is ADOPTED; 13-33 and
13-56
are
hereby
RECONSOLIDATED;
Quick
Fitting’s
Motion
for
Leave to File a Second Amended Verified Complaint (ECF No. 100
(13-56)) is GRANTED; and Wai Feng’s Motion to Dismiss Count IV
6
of Quick Fitting’s Counterclaim (ECF No. 82 (13-33)) is DENIED
WITHOUT PREJUDICE.
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: September 30, 2015
7
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