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JACOBS v. CITIBANK

United States District Court, S.D. New York


May 24, 2004.

HARRY JACOBS, on behalf of himself and all all others similarly situated, Plaintiff, -against- CITIBANK, N.A., CITICORP., ET AL., Defendants

The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge

REPORT AND RECOMMENDATION

FACTUAL BACKGROUND

By Order dated March 31, 2003, your Honor barred plaintiff Harry Jacobs ("Jacobs") from serving in the dual role of class representative and class counsel in this action brought pursuant to the Truth In Lending Act, 15 U.S.C. § 1601, et seq., and the regulations promulgated thereunder. Jacobs appealed from that order to the Second Circuit Court of Appeals. That court determined that entertaining Jacobs' appeal would be inappropriate because the March 31, 2003 Order issued by your Honor was not a "final judgment," within the meaning of 28 U.S.C. § 1291, from which an appeal might be mounted but, rather, was an interlocutory order from which no immediate appeal lies. See Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, 903 F.2d 176, 178 (2d Cir. 1990).

  In late December 2003, the plaintiff advised the Court of the action taken by the Second Circuit Court of Appeals on his appeal. On December 23, 2003, Jacobs was directed to have his new counsel file a notice of appearance with the Clerk of Court on or before January 22, 2004, and to submit a copy of that document to the undersigned magistrate judge and to counsel to the defendants. On January 5, 2004, the Court received a writing from Jacobs through which he sought to obtain information concerning the status of the action and advice from the Court concerning the effect on the status of the action if Jacobs: (a) obtained new counsel; or (b) refrained from doing so by January 22, 2004, the date on which the Court had previously directed that new counsel for Jacobs file a notice of appearance with the Clerk of Court. No advisory opinion was issued to Jacobs in response to his inquiries. However, on January 5, 2004, Jacobs was directed to comply with the Court's December 23, 2003 Order.

  On January 25, 2004, the Court received a writing from Jacobs in which he stated that he was unable to comply with the Court's December 23, 2003 Order, within the time fixed by the Court for him to comply. On January 26, 2004, the Court directed Jacobs to advise it of the amount of time he estimated would be needed for him to obtain new counsel. On January 30, 2004, Jacobs wrote to the Court and advised that Damon J. Carter, Esq. had "agreed to be retained as plaintiff's personal counsel in this matter and to participate with [Jacobs] in the prosecution of the instant class [] action against Citibank N.A. and Citicorp."

  The text of Jacobs' January 30, 2004 letter was curious since it indicated, in contravention of your Honor's March 31, 2003 Order, that he was continuing to serve as class counsel and to serve as the putative class representative. In order to clarify the situation, the Court had a telephonic conference with the parties on February 19, 2004. During the conference, Jacobs stated that he was "not withdrawing, either as class representative [or] as the class counsel." Rather, he was "bringing in associate counsel [Mr. Carter] who would work together [with Jacobs]." Jacobs also stated that he was unable to comply with the Court's directive that new counsel be obtained to represent the purported class that Jacobs seeks to represent. When asked to explain his inability to comply with the Court's order, Jacobs made reference to various writings he had sent to the Court previously. However, none of the writings sent to the Court by Jacobs, after the Second Circuit Court of Appeals declined to entertain his appeal, described either the efforts, if any, Jacobs was making or had made to comply with the December 23, 2003 Order, or any particular difficulty he had encountered in complying with that order. In addition, the notice of appearance filed by Mr. Carter indicates that he is appearing in the action "on behalf of the individual plaintiff, Harry Jacobs, and as associate counsel with Mr. Jacobs in the instant class action."

  As a result of the events chronicled above, on February 18, 2004, the defendants made an application, pursuant to Fed.R.Civ.P. 41(b), that the instant action be dismissed, due to Jacobs' failure to comply with your Honor's March 31, 2003 Order by ceding the role of class counsel to another attorney. Jacobs was given an opportunity to be heard in opposition to the defendants' application during the telephonic conference held on February 19, 2004. At that time, Jacobs explained to the Court that he viewed the defendants' application as one among many "spurious allegations that have been pointed at me." Jacobs advised the Court that he "[objected] completely to the demand [by the defendants that the action be dismissed]." Jacobs then indicated that he had nothing further to state in opposition to the defendants' application.

  DISCUSSION

  Based upon statements made by Jacobs during the telephonic conference referenced above, and the text of the notice of appearance filed by Mr. Carter, it is clear that Jacobs intends to continue to serve in the dual role of class representative and class counsel in this action, notwithstanding your Honor's clear and unambiguous March 31, 2003 Order barring him from doing just that.

  Fed.R.Civ.P. 41, in pertinent part, states the following:

For failure of the plaintiff . . . to comply with . . . any order of court, a defendant may move for dismissal of an action or of any claim against the defendant.
Fed.R.Civ.P. 41(b).

  The determination to grant a motion to dismiss a complaint, pursuant to Fed.R.Civ.P. 41(b), for failure to obey a court order is a matter committed to the court's discretion. See Harding v. Federal Reserve Bank of New York, 707 F.2d 46, 50 (2d Cir. 1983); Jackson v. City of New York, 22 F.3d 71, 74-75 (2d Cir. 1994). However, dismissal is a severe remedy which should be reserved for use only in extreme situations. See Harding, supra, at 50. Before imposing such a sanction upon a plaintiff who has failed to comply with a court order, the court, after assessing the record as a whole, should weigh the following factors: (1) the duration of the plaintiff's failure to comply with the order; (2) whether the plaintiff had been placed on notice that further delays might result in a dismissal of the action; (3) whether the defendant will likely be prejudiced by continued delay; (4) whether a balance may be struck between the court's desire to alleviate calendar congestion and a party's right to due process and a fair chance to be heard; and (5) the efficacy of a lesser sanction. See Jackson, supra, at 74.

  In the case at bar, the plaintiff has failed to comply with the court's order since December 2003, when the Second Circuit Court of Appeals rejected, as premature, Jacobs' appeal from your Honor's March 31, 2003 order. Thus, plaintiff has been out of compliance with the order for a relatively short time. While no specific notice was given to Jacobs, that his failure to comply with the court's order might result in dismissal of the complaint, he is presumed to be aware of the provisions of the Federal Rules of Civil Procedure since that is a prerequisite for admission to practice before this court. Furthermore, as an attorney, Jacobs would have to realize that failing to abide by an order of the court could result in the imposition of a sanction, including the harsh sanction of dismissal.

  This action was commenced in 2001. The plaintiff's failure to comply with your Honor's order has hampered and will continue to hamper the defendants' ability to obtain a final resolution to this action. Furthermore, given the age of the case, continued delay occasioned by Jacobs' failure to comply with the court's order will prejudice the defendants since the delay will affect adversely the ability of witnesses, upon whom the defendants may rely, to recall pertinent facts completely and accurately.

  In considering whether the court's interest in managing its own docket should weigh more heavily than the plaintiff's interest in receiving a fair opportunity to be heard, it must be remembered that the instant application has been made simply because the plaintiff has elected not to comply with an order of the court. Through that action, the plaintiff has demonstrated that his desire is not to advance the litigation toward resolution and have it removed from the court's docket. If the plaintiff's aim was to move forward with the prosecution of the action, he would have complied with the court's order or would have explained, what, if anything, has prevented him from ceding the role of class counsel to another attorney. Therefore, under the circumstances, when management of the court's docket is weighed against the plaintiff's interest in having a fair opportunity to have his claim heard, the scale tips in favor of the court's interest in managing its own docket. Having reviewed the factors that must be considered before a court acts on a request that an action be dismissed, pursuant to Fed.R.Civ.P. 41(b), the Court finds that the short time that has elapsed since December 2003, when the Second Circuit Court of Appeals rejected Jacobs' appeal, and the date of the defendants' application, as well as the lack of any specific notice to the plaintiff that his action might be dismissed if he failed to obey the court's order, militate against imposing the harsh remedy of dismissal at this juncture in the litigation. However, although dismissal, pursuant to Fed.R.Civ.P. 41(b), might not be warranted, the plaintiff's failure to comply with your Honor's March 31, 2003 Order, Jacobs' declaration to the Court, during the February 19, 2004 telephonic conference, that "I am not withdrawing, either as the class representative [or] as the class counsel" and his failure to show that he is unable to comply with the order might reasonably be viewed as contumacious behavior. See Huber v. Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995). Consequently, in accordance with 28 U.S.C. § 636(e)(6)(B)(iii), the facts recited in this document are certified to your Honor so that a determination may be made whether to find Jacobs in contempt of court.

  RECOMMENDATION

  It is recommended that your Honor: (a) deny the defendants' request that the action be dismissed; and (b) issue an order requiring Jacobs to appear before the court on a date certain to show cause why he should not be adjudged in contempt and be penalized appropriately.

 

FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
  Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Jed. S. Rakoff, 500 Pearl Street, Room 1340, New York, New York, 10007, and to the chambers of the undersigned, 40 Foley Square, Room 540, New York, New York, 10007. Any requests for an extension of time for filing objections must be directed to Judge Rakoff. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140 (1985); IUE AFL-CIO Pension Fund v. Hermann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Reynoso, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).

20040524

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