United States District Court, E.D. Pennsylvania
TARGET GLOBAL LOGISTICS SERVICES, CO. Plaintiff/Counterclaim Defendant
KVG, LLC Defendant/Counterclaim Plaintiff
QAIS ANIL MEDICAL EQUIPMENT COMPANY LTD MOHAMMAD SEDIQ and ASIA PHARMA LTD Counterclaim Defendants
S. Perkin, M.J.
matter is before the Court on Defendant KVG's Motion to
Amend its Counter-Complaint Against
Plaintiff/Counter-Defendant Target Global Logistics Company
to Include Fraud (Dkt. No. 174), which motion was filed April
11, 2018. Plaintiff's Opposition to Defendant KVG
LLC's Motion to Amend its Counter-Complaint Against
Plaintiff/Counter-Defendant Target Global Logistics Company
to Include Fraud (Dkt. No. 188) was filed on April 25, 2018.
Having reviewed and considered the contentions of the
parties, the Court is prepared to rule on this matter.
KVG has filed this motion seeking security for costs it has
incurred in defending itself in this action. KVG avers that
Plaintiff Target Global is not likely to prevail on its
claims because it is unable to prove that conforming goods
were delivered per the contracts at issue. KVG further
asserts that it is highly unlikely that it will be able to
recover its costs from Target Global (assuming KVG is the
prevailing party) because it is a non-operating Afghan
company with no assets in the United States.
response, Target Global asserts that KVG's current
attempt at seeking security is untimely because the motion
was filed with less than a month prior to trial, and after
all pretrial filings have been submitted to this Court.
Target Global submits that there has been no change in
circumstances raised by KVG since this Court's August 16,
2016 Order denying security. Moreover, Target Global asserts
that there is an extreme likelihood of its success on the
merits of its contract claims.
Rule of Civil Procedure 54.1(a) provides:
In every action in which the plaintiff was not a resident of
the Eastern District of Pennsylvania at the time suit was
brought, or, having been so afterwards removed from this
District, an order for security for costs may be
entered, upon application thereof within a reasonable time
and upon notice. In default of the entry of such security at
the time fixed by the court, judgment of dismissal shall be
entered on motion. (Emphasis added)
within the sound discretion of the Court to issue an order
for security costs. See Zeth v. Pennsylvania R. Co.,
7 F.R.D. 612 (1947). “[Local Rule 54.1] does not list
specific factors a district court should consider in
requiring a plaintiff to post security. In previous cases
where defendants have sought security for costs, this Court
has evaluated the likelihood of a plaintiff's ultimate
success and a plaintiff's ability to post security or pay
costs in making its determination.” Van Bui v.
CHOP, 178 F.R.D. 54, 55 (E.D. Pa. 1998); Korat Gag
v. Franklin Mint, No. 88-577 1988 WL 22074
(E.D. Pa Mar. 9, 1988); Internet Billions Domain v.
Venetian Casino Resort, LLC, 2002 WL 1610032,
F.Supp.2d (May 31, 2002).
undersigned notes that the pleadings in this matter have been
closed for some time, discovery is complete, all dispositive
motions have been adjudicated, and the matter is now ripe for
trial. The parties have already submitted numerous pretrial
motions and pretrial documents, including a lengthy pretrial
order. At the final pretrial conference held May 3, 2018,
counsel for the parties waived their right to a jury trial
and opted to proceed before me without a jury. A non-jury
trial of this matter is scheduled to commence less than a
week away, on May 21, 2018. As such, I am the trier of fact
in this case.
matter has been fraught with discovery issues, which has
likely resulted in increased litigation costs to both
parties. In particular, this Court notes that many of the
discovery issues before the undersigned concerned the
location of the deposition of Mr. Ahmadi given his inability
to obtain a visa for travel to the United States. Throughout
the course of discovery, both parties suggested alternate
locations for his deposition, and for the most part, each
time a suggestion was made, opposing counsel disagreed. KVG
insisted on an in person deposition, despite having the
ability to depose Mr. Ahmadi through other electronic means.
I note, however, that a deposition of Mr. Ahmadi was secured
in August 2017 by electronic means. This Court continually
tried to accommodate KVG's insistence on an in person
deposition, offering suggestions as to locations several
times during the course of discovery. Ultimately, the Court
directed that India would be the location of the in-person
trial deposition, a location which KVG initially opposed, but
later acceded to, and the in person trial deposition of Mr.
Ahmad was conducted in the beginning of March 2018.
evidenced by its brief in opposition, Target Global contends
that KVG accepted goods, whether they were alleged to be
conforming or not, within the meaning of 13 Pa. C.S.A. §
2-607. In addition, Target Global contends that because KVG
accepted tender of the medical equipment and other supplies
with full knowledge of alleged nonconformities and failed to
provide timely notice of the alleged breach, KVG as a matter
of law will be legally barred from any remedy. Although this
matter is currently scheduled to be a bench trial, and the
undersigned will ultimately be making the determinations of
fact and law following receipt of all testimony and evidence,
it does appear to this Court at this moment that there is a
plausible controversy between Target Global and KVG. Target
Global asserts that it has performed under the terms of its
contracts with the KVG, and KVG in turn asserts that Target
Global breached its contractual obligations by providing,
among other assertions, nonconforming goods and materials.
What does not appear to be in dispute that Target Global
received no payments from KVG while KVG was paid in large
part by the United States Government. It may be that the
actions of KVG in not making payments are fully justified
under the facts and the law and it may be that KVG is
entitled to relief upon its counterclaims. The Court,
however, now as the trier of fact, cannot and should not
predetermine its findings before the case has been tried in
an effort to determine each party's likelihood of
in support of its motion for security, KVG questions Target
Global's ability to pay costs should it succeed at trial.
KVG submits an affidavit which indicates that its fees and
legal costs to date are in excess of $300, 000, and currently
requests $30, 000 in security for costs. Although KVG
represents that approximately $25, 000 has been incurred in
costs, it does not specifically detail its alleged costs.
This Court notes that only certain costs are recoverable
under Fed.R.Civ.P. 54. This Court cannot determine with any
degree of accuracy the costs which are in issue at this point
the foregoing reasons, this Court will not exercise its
discretion to require security under Local Rule 54.1.
KVG's motion for ...