United States District Court, Eastern District of Pennsylvania
IT’S ALL WIRELESS, INC. t/a PRO MOBILE GEAR, Plaintiff,
WOOT, INC. et al., Defendants.
MEMORANDUM OPINION AND ORDER
CYNTHIA M. RUFE, J.
Plaintiff has moved to compel discovery and for leave to file an amended complaint. In response, Defendant Woot, Inc., has moved to dismiss this case for the third time, based upon a history of “extreme dereliction” in the prosecution of this case, coupled with “a campaign of deceit and omission” by Plaintiff and its counsel. For the reasons explained below, the Court will deny the motion to compel discovery and the motion to amend the complaint and grant the motion to dismiss Plaintiff’s affirmative claims.
A. The Factual Allegations
Plaintiff It’s All Wireless, trading as Pro Mobile Gear (“Pro Mobile”), filed suit in state court against Defendants Woot and S&D Cellular. Woot removed the case to this Court pursuant to 28 U.S.C. § 1441(a), invoking this Court’s diversity jurisdiction, and asserted counterclaims against Pro Mobile. Pro Mobile then filed the First Amended Complaint, asserting claims against the original Defendants, Woot and S&D, as well a number of other Defendants who are not relevant to the current motions.
The First Amended Complaint alleges that for several years before the events that gave rise to the litigation, Pro Mobile had purchased items for resale from S&D. Pro Mobile also alleges that it had in the past purchased merchandise as a buyer’s agent or broker for Woot, an online retailer and subsidiary of Amazon.com. In the autumn of 2010, S&D offered to sell to Pro Mobile Kindle devices manufactured by Amazon.com. Pro Mobile accepted the offer and contracted to purchase the Kindles from S&D on Woot’s behalf, as a buyer’s agent. Pro Mobile then arranged for shipment directly from S&D to Woot. Pro Mobile wired funds to S&D to pay for the Kindles, but although Woot received at least one shipment of Kindles, Woot failed to remit payment to Pro Mobile, citing allegations that the Kindles had been stolen from Amazon.com. Woot, for its part, has asserted counterclaims against Pro Mobile seeking compensatory damages of $125, 000, the amount Woot says it paid to Pro Mobile for some of the Kindles.
B. The Conduct of the Litigation
There is no dispute that there have been significant delays in the litigation of this case, and that many of those delays are attributable to Pro Mobile or to its former counsel. Because Pro Mobile failed to prosecute the case, Woot filed its first motion seeking dismissal of Pro Mobile’s claims on June 10, 2011. After a hearing and by order dated July 19, 2011, the Court denied the motion without prejudice and ordered Plaintiff’s counsel, Michael S. Gressen, to pay fees and expenses associated with the motion and hearing, which, pursuant to an order of August 2, 2011, amounted to $9, 525.42. Because it is important to have the full context of the proceedings, the Court reproduces the findings of the order of July 19, 2011:
In mid-January 2011, the Court held a scheduling conference with Woot and Pro Mobile. Pro Mobile did not timely submit its scheduling information report, as required by this Court’s Scheduling Order. On February 28, following yet another teleconference, this Court issued an order setting the discovery deadlines in this case: initial disclosures were due by March 28; amended pleadings were due by April 14; fact discovery was to close on May 27; and summary judgment motions were to be filed by June 27.
Pro Mobile missed each of these deadlines. It failed to submit its initial disclosures by March 28, and, in fact, did not submit them until just prior to this Court’s June 24 hearing on Woot’s pending combined motion-three days before the dispositive motions deadline. And though Woot served its interrogatories and production requests on Pro Mobile on March 16, Pro Mobile failed to respond to those requests until ordered by this Court, on June 24, to do so by June 27. And Pro Mobile had not, even by the June 24 hearing, served any discovery requests on Woot. Woot did not file a motion to compel Pro Mobile to respond to its discovery requests.
On May 3, Woot wrote Pro Mobile’s attorney, Michael S. Gressen, noting Woot had not heard from either Pro Mobile or Mr. Gressen since the February 24 teleconference or received Pro Mobile’s disclosures or discovery responses and therefore intended to move for dismissal. Mr. Gressen did not respond to Woot’s letter, nor seek any discovery extensions.
Having received no response to its May 3 letter, Woot informed this Court, via letter fax dated May 18, of Mr. Gressen’s failure to engage in discovery, and sought a teleconference with the Court and Pro Mobile. Woot made clear that it would seek dismissal if the discovery inertia was not resolved. Woot copied Mr. Gressen on that letter. The Court declined to schedule a teleconference, preferring instead to address discovery disputes through proper motions and record hearings where appropriate. Woot then filed the pending motion.
On June 24, 2011, the Court held a hearing on Woot’s combined motion. During that hearing, Mr. Gressen did not contest that he missed the discovery deadlines set by the February 28 Order, but averred that he had been unable to engage in discovery because he was out of the area working on other matters for all but six days since the February 24 teleconference, and had been busy investigating Pro Mobile’s claims against S&D and other responsible parties beyond Woot. At the close of the hearing, and by Order issued that same day, the Court directed Pro Mobile to respond to Woot’s discovery requests by June 27, 2011, and directed Woot to submit a declaration regarding its fees and costs in this matter.
The Court unambiguously notified Pro Mobile that it “is on notice . . . that it must proceed apace with discovery and prosecution of this action. Any further unexcused non-compliance or unwarranted delay in prosecuting this action may result in both dismissal of Pro Mobile’s Complaint and entry of default judgment against it on the counterclaims.”
The case then proceeded, and the Court notes that some delays resulted from a stay of proceedings while motions to dismiss certain defendants were pending. After those motions were decided, however, the case failed to move forward. By order dated November 30, 2012, the Court set a discovery deadline of February 1, 2013. Pro Mobile’s continued lack of attention to the case resulted in a failure to complete discovery by that deadline, however, and Woot filed its second motion to dismiss Pro Mobile’s claims and for default judgment on the counterclaims, arguing that Pro Mobile violated the Court’s November 29, 2012 scheduling order, by not confirming whether Pro Mobile wanted a settlement conference; failing to appear for a deposition on January 23, 2013; failing to make formal additional discovery requests before February 1, 2013; failing to conduct jurisdictional discovery from Shalina Daswani; and in essence giving “hardly any attention to this case since the discovery stay was lifted.” All of this, Woot noted, occurred after Pro Mobile had been sanctioned close to $10, 000 for inaction and dilatoriness in 2011.
In response, Pro Mobile hired new counsel, who essentially laid the blame for Pro Mobile’s failings at the feet of Michael Gressen, Pro Mobile’s former counsel, and argued that there was no personal responsibility of Pro Mobile’s president, Stuart Lacheen. Mr. Gressen submitted an affidavit explaining that in November of 2012 his father passed away unexpectedly, and Mr. Gressen had numerous related estate issues in Florida that took his attention, as did the health and legal problems of his aunt. Mr. Gressen averred that he had made efforts to move the case forward.
The Court held a hearing on April 26, 2013. At that hearing, Pro Mobile asserted that Mr. Gressen had been overwhelmed and he “fell down on the job.” Pro Mobile’s new counsel, George Bochetto, stressed that Woot would “get every bit of evidence and testimony and discovery literally within the next seven days.” Mr. Lacheen also spoke at the hearing:
Mr. Lacheen: I immediately told Mr. Gressen on January 31st that I could no longer use him on this case because he failed to do his job.
The Court: But, are you still using him on other cases, sir?
Mr. Lacheen: I have brought other attorneys in to advise and to help me with the one other case that ...