United States District Court, S.D. New York
September 7, 2005.
ATSI COMMUNICATIONS, INC., Plaintiff,
THE SHAAR FUND, LTD., et al., Defendants.
The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
On February 25, 2005, the Court granted motions to dismiss the
action. ATSI Communications, Inc. v. Shaar Fund, Ltd.,
357 F.Supp.2d 712 (S.D.N.Y. 2005). Mindful of the mandate of the
Private Securities Litigation Reform Act, 15 U.S.C. § 78
u-4(c)(1), it invited the parties to submit papers on the issue
of the appropriateness of sanctions. Defendants have responded
with motions for sanctions that, after full briefing and together
with plaintiff's response, number in the hundreds of pages. It is
evident, moreover, that if the Court of Appeals were to overturn
this Court's dismissal, all of the effort that has been and
remains to be devoted to the sanctions issue will have been for
naught. Even if the Court of Appeals affirms, the sanctions may
appear in a different light. Furthermore, the ruling on the
motions to dismiss is not dependent in any way upon the Court's
view of the sanctions issue. Finally if plaintiff, contrary to
this Court's view, has filed a legally sufficient complaint,
delay of resolution of the merits of the controversy for the time
necessary to determine the sanctions would be needlessly
prejudicial to the plaintiff.
There also remains pending a counterclaim by defendant
Corporate Capital Management ("CCM"). There have been no
proceedings on the counterclaim, however, CCM has represented
that it does not presently intend to pursue the counterclaim, and
all parties other than plaintiff are prepared to stipulate to
dismissal of the counterclaim without prejudice. Under these
circumstances, the counterclaim provides no just reason for delay
in the entry of judgment dismissing plaintiff's claims.
Accordingly, the Court, pursuant to Fed.R.Civ.P. 54(b),
hereby determines that there is no just reason for delay and
directs the Clerk to enter judgment dismissing the action, thus
rendering the dismissal appealable. The motions for sanctions are
denied without prejudice to reinstatement upon the earlier of (a)
the expiration of the time within which to appeal from the
judgment, entry of which is directed hereby, with no such appeal having been taken, and (b)
the entry on the docket of the mandate of the Court of Appeals
disposing of any appeal from that judgment.
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