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NMD Interactive, Inc. v. Chertok

United States District Court, S.D. New York

March 13, 2017


          OPINION & ORDER


         Now before the Court are (1) Defendant’s motion, pursuant to Local Rule 6.3 and Federal Rule of Civil Procedure 60, for reconsideration of the Court’s June 16, 2016 Order (Doc. No. 108), and (2) Plaintiff’s motion to enjoin future filings by Defendant (Doc. No. 113). For the reasons set forth below, both motions are denied.

         I. Background

         The Court assumes the parties’ familiarity with the facts and procedural history of this case and therefore limits its discussion as necessary for the disposition of these motions. Plaintiff NMD Interactive, Inc., which does business under the name of “,” initiated this action in August 2011, alleging various claims against Defendant, Douglas M. Chertok, one of its founders, including breach of fiduciary duty and cybersquatting under 15 U.S.C. § 1125(d). (See Doc. Nos. 1, 23.) In 2012, the parties entered into a settlement agreement on the record before the Honorable Andrew J. Peck, United States Magistrate Judge, and stipulated to dismissal of this action with prejudice. (See Doc. No. 27 (“Settlement”).) Thereafter, Defendant moved, pursuant to Federal Rule of Civil Procedure 60(b), to vacate the Settlement on the ground that it was obtained as a result of fraud by Plaintiff. (See Doc. Nos. 42, 43.) In response, Plaintiff moved to compel compliance with the Settlement and for sanctions against Defendant pursuant to Rule 11 of the Federal Rules of Civil Procedure based on misrepresentations he had made concerning the Settlement. (See Doc. Nos. 46, 47, 50, 51.)

         In a Memorandum and Order dated March 18, 2013, the Court denied Defendant’s Rule 60(b) motion and granted Plaintiff’s motion to enforce the settlement. (Doc. No. 68 (“March 2013 Opinion”).) The Court also granted Plaintiff’s motion for sanctions based on Defendant’s objectively unreasonable conduct in “propound[ing] factual contentions [concerning the Settlement] lacking any evidentiary support whatsoever.” (Id. at 13.) Although Defendant appealed the imposition of sanctions and order to compel compliance with the Settlement, he did not appeal the Court’s denial of his Rule 60(b) motion. StreetEasy, Inc. v. Chertok, 752 F.3d 298, 304 n.6 (2d Cir. 2014).

         In an opinion dated June 5, 2014, the Second Circuit affirmed in part and reversed in part the Court’s sanctions order and remanded “for reconsideration of the appropriate amount of monetary sanctions.” Id. at 307–11.[1] On remand, in an order dated May 19, 2015, the Court imposed a reduced sanctions award of $19,192.33 against Defendant. (Doc. No. 98 (“the $19,192.33 Sanction”).) On June 19, 2015, Defendant appealed the $19,192.33 Sanction. (See Doc. No. 99).

         On April 27, 2016, while his appeal from the $19,192.33 Sanction was pending, Defendant asked the Second Circuit to vacate its prior judgment partially affirming the Court’s sanctions order pursuant to Federal Rule of Civil Procedure 60(d)(3) on the ground that it was obtained as a result of fraud committed by Plaintiff’s counsel on both this Court and the Second Circuit. (NMD Interactive, Inc. v. Chertok, No. 15-cv-2003 (“Circuit Doc.”), Doc. No. 66-1 (2d Cir. Apr. 27, 2016) (“Circuit Motion”) at 1.) Two days later, on April 29, 2016, Defendant filed a pre-motion letter with this Court regarding a contemplated motion to vacate the $19,192.33 Sanction and the March 2013 Opinion’s denial of his Rule 60(b) motion, also on the grounds that Plaintiff’s counsel had defrauded the Court in prior submissions. (Doc. No. 101 (“SDNY Motion”).) On May 4, 2016, Plaintiff filed a response. (Doc. No. 102.)

         In an Order dated June 7, 2016, the Second Circuit affirmed the $19,192.33 Sanction and denied Defendant’s Circuit Motion. StreetEasy, Inc. v. Chertok, 651 F. App’x 37, 39–40 (2d Cir. 2016) (“June 2016 Summary Order”). With respect to the Circuit Motion, the Second Circuit concluded that Defendant “ha[d] not presented clear and convincing evidence to meet the high bar for finding fraud on the [c]ourt.” Id. at 40. Plaintiff then filed a letter, dated June 8, 2016, apprising this Court of the June 2016 Summary Order and arguing that, in light of the Circuit’s ruling, Defendant’s contemplated SDNY Motion should also be denied, since it was “essentially identical” to his failed Circuit Motion. (Doc. No. 103.) After receiving a response from Defendant on June 9, 2016 (Doc. No. 104), the Court issued an order on June 16, 2016 deeming Defendant’s contemplated SDNY Motion made and denying the motion “for the same reasons” set forth in the Second Circuit’s June 2016 Summary Order (Doc. No. 105 (“June 16 Order”) at 2).

         On July 1, 2016, Defendant filed the instant motion for reconsideration of the June 16 Order, to which Plaintiff responded on July 18, 2016. (Doc. Nos. 108, 111, 112.) Plaintiff also moved to enjoin Defendant from making any new filings in connection with this litigation, whether “in this [Court] or [in] any [other] federal court in the United States.” (Doc. No. 113.) On July 28, 2016, Defendant filed a reply in further support of his motion for reconsideration, and on August 4, 2016, Defendant filed a supplemental submission in opposition to Plaintiff’s motion for a filing injunction, to which Plaintiff replied on August 15, 2016. (Doc. Nos. 116, 117.)[2]

         II. Discussion

         A. Defendant’s Motion for Reconsideration

         A motion for reconsideration pursuant to Local Civil Rule 6.3 “will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked – matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 256–57 (2d Cir. 1995). A motion for reconsideration “may not be used to advance new facts, issues[,] or arguments not previously presented to the Court, nor may it be used as a vehicle for re-litigating issues already decided by the Court.” Am. ORT, Inc. v. ORT Israel, No. 07-cv-2332 (RJS), 2009 WL 233950, at *3 (S.D.N.Y. Jan. 22, 2009) (internal quotation marks omitted); accord Kahala Corp. v. Holtzman, No. 10-cv-4259 (DLC), 2011 WL 1118679, at *1 (S.D.N.Y. Mar. 24, 2011) (citing Nat’l Union Fire Ins. Co. of Pittsburgh v. Stroh Cos., 265 F.3d 97, 115 (2d Cir. 2001)).

         Here, Defendant first argues that it was improper to deny the SDNY Motion without scheduling a pre-motion conference and granting him leave to file and fully brief the motion. It is true, as Defendant asserts, that a district court may not “prevent a party from filing pleadings, motions or appeals authorized by the Federal Rules of Civil Procedure.” Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 652 (2d Cir. 1987); (see also Doc. No. 109 (“Mem.”) at 16; Doc. No. 115 (“Reply”) at 9–10.) And it is also true that district courts must “allow filing of even those motions that, on their face, may appear to lack merit,” since it “is necessary to enable appellate review.” (Mem. 20 (quoting Curto v. Roth, 296 F. App’x 129, 130 (2d Cir. 2008)).) Even so, the Second Circuit has recognized that courts have the discretion to “construe[] pre-motion letters as the motions themselves and den[y] the motions” where the parties’ letters have sufficient “length and detail,” the moving party has had sufficient “opportunity to make the arguments necessary to preserve [his] motion for appellate review,” and there is a “clear lack of merit” to the moving party’s arguments. See In re Best Payphones, Inc., 450 F. App’x 8, 15 (2d Cir. 2011) (collecting cases); see also Highland CDO Opportunity Master Fund, L.P. v. Citibank, N.A., No. 12-cv-2827 (NRB), 2014 WL 6686600, at *3 (S.D.N.Y. Nov. 21, 2014) (“[W]hen pre-motion letters adequately present the parties’ views of a straightforward request, it is equally appropriate for a district judge to treat the letters themselves as motion papers and to rule on the merits without holding an unnecessary pre-motion conference.”) (collecting cases); cf. City of New York v. Fedex Ground Package Sys., Inc., No. 13-cv-9173 (ER), 2016 WL 1718261, at *4 (S.D.N.Y. Apr. 27, 2016) (finding that magistrate judge erred in granting motion based on moving party’s pre-motion letter without having received a response from the non-moving party, thus depriving the non-moving party of the “opportunity to be heard on the substantive issues”).

         Here, the Court did not “prevent” Defendant from making his SDNY Motion. Rather, the Court exercised its discretion to construe Defendant’s pre-motion letters as a motion and deny it. As the length and detail of the parties’ letters make clear, Defendant had the opportunity to make any “arguments necessary to preserve [his] motion for appellate review,” and Plaintiff had an adequate opportunity to respond. See In re Best Payphones, Inc., 450 F. App’x at 15. Specifically, Defendant filed a three-page, single-spaced letter setting forth the alleged frauds that he identified as the “predicates” for his contemplated Rule 60(d)(3) motion (Doc. No. 101), followed by a one-and-a-half page single-spaced reply letter on June 9, 2016 that further elaborated on the merits of Defendant’s contemplated motion and responded to Plaintiff’s arguments in favor of dismissal (Doc. No. 104). The Court also reviewed Defendant’s related Circuit Motion and supporting ...

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