Appeal from an order of the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, dismissing sua sponte a complaint for failure to prosecute. Reversed.
Before Moore, Van Graafeiland and Meskill, Circuit Judges.
This is an appeal from an order of the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, dismissing, Sua sponte, a complaint alleging securities laws violations, for failure to prosecute. This cause came on to be heard on the transcript of the record from the district court. The appeal was not argued orally by counsel and was taken on submission.
The complaint, dated October 1, 1976, was filed in the district court on December 3, 1976. Ten days later plaintiff served a request for the production of documents. Plaintiff consented to the requests of defendants Merkin & Co., Inc. (hereinafter "Merkin") and Bear, Stearns & Co., Inc. (hereinafter "Bear") for extensions of time to answer the complaint and respond to the request for documents. On February 2, 1977, the action was placed on the Suspense Docket.*fn1 The GAC defendants did not appear. As of February 15, 1977, Merkin and Bear had answered the complaint and responded to the requests for the production of documents. Bear counterclaimed for $7,400.*fn2 Plaintiff took no further steps to prosecute the action.
Merkin and Bear entered into three stipulations extending their respective times within which to file crossclaims against each other. The third such stipulation was presented to the district judge in late December, 1977, and signed by her on January 10, 1978. It extended the time for filing crossclaims until June 30, 1978. This third filing prompted the district judge to call a status conference which was held on January 13, 1978. According to the docket sheet, the purpose of the conference was to review the proposed third stipulation and the status of the case. Counsel for Merkin and Bear attended. Plaintiff's attorney of record, Ernest H. Hammer, was absent, but plaintiff was represented by Hammer's new law partner, James Spector. Spector stated that he was not fully familiar with the case,*fn3 because he had just received the file, and it was difficult to communicate with the plaintiff, who lived in Paris, France. It is undisputed that Spector indicated that he was ready to go forward with a review of the materials tendered in response to the request for documents. No stenographic minutes were taken at the conference.
Defendants' counsel made no request for a dismissal. There had been no other pretrial or scheduling conference, nor was there any judicial participation indicating that a dismissal might be in the offing.*fn4 Compare Ali v. A & G Co., Inc., 542 F.2d 595 (2d Cir. 1976).
The district judge then endorsed the following orders on the back of the complaint:
A pretrial conference was held in this case on 1/13/78.
The within action is dismissed for failure to prosecute, no action having been taken since the filing of the complaint on 12/3/76, as to defendants Bear Stearns and Merkin.*fn5 It is undisputed that plaintiff filed a similar action against these two defendants in the state court on 2/4/76, in Supreme Court N.Y., and no action was taken other than filing of a summons. No complaint ever filed (Index No. 11822).
/s/ Constance Baker Motley