United States District Court, S.D. New York
ABRAMS, United States District Judge:
the Court is the September 8, 2017 Report and Recommendation
("Report") of United States Magistrate Judge
Pitman, Dkt. 58, recommending that the Asset Restraining
Order ("Order") currently in place be dissolved
without prejudice to a renewed application by Plaintiff. On
September 12, 2017, Plaintiff BMaddox Enterprises, LLC filed
a Memorandum of Law in Opposition to the Motion to Vacate,
which this Court construes as its objections to the Report.
See Dkt. 59. Defendants submitted a letter in
response to Plaintiffs submission on September 13, 2017. Dkt.
62. On September 22, 2017, Plaintiff filed additional
objections to the Report, Dkt. 65, to which Defendants
responded, Dkt. 69. The Court adopts the Report and dissolves
the Order without prejudice to a renewed application by
district court "may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the
magistrate judge." 28 U.S.C. § 636(b)(1). Under
Federal Rule of Civil Procedure 72(b)(2), a party may make
"specific written objections to the proposed findings
and recommendations" within fourteen days of being
served with a copy of a magistrate judge's recommended
disposition. A district court must review de novo "those
portions of the report or specified proposed findings or
recommendations to which objection is made." 28 U.S.C.
§ 636(b)(1). "When a party makes only conclusory or
general objections, or simply reiterates the original
arguments, the Court will review the Report strictly for
clear error." George v. Prof'l Disposables
Int'l, Inc., 221 F.Supp.3d 428, 433 (S.D.N.Y. 2016)
(quotation omitted); see also Vega v. Artuz, No.
97-CV-3775, 2002 WL 31174466, at *1 (S.D.N.Y. Sept. 30, 2002)
("[O]bjections that are merely perfunctory responses
argued in an attempt to engage the district court in a
rehashing of the same arguments set forth in the original
[papers] will not suffice to invoke de novo review.").
Court need not decide whether to review the Report de novo or
for clear error, as it finds no error, clear or otherwise, in
Judge Pitman's conclusion that Plaintiff has not met its
burden of demonstrating that it will likely suffer
irreparable harm if Defendants' assets are not
argues that the Report did not consider, or give adequate
weight, to the fact that Defendants' conduct was likely
willful, or "the scope of the infringing activity
alleged, the nature of the business engaged in by the
infringing activity, and whether the business has a fixed
location or is a fly-by-night operation." Dkt. 59 at 6
(internal quotations omitted). The case Plaintiff relies on,
Moose Toys Pty Ltd. v. Thriftway Hylan Blvd. Drug
Corp., No. 15-CV-4483 (DLI) (MDG), 2015 WL 4772173
(E.D.N.Y. Aug. 6, 2016), discusses these considerations in
deciding to grant a seizure order. Notably, however,
Moose Toys held that there was an insufficient basis
to issue an asset restraining order, even though it found
that a seizure order was appropriate. Id. at *5.
Moreover, although Plaintiffs statement that "federal
courts have found preliminary injunctions appropriate where
it has been shown that the defendant intended to frustrate
any judgment on the merits by transfer[ring assets] out of
the jurisdiction, " Dkt. 59 at 8 (alteration in
original) (quoting In re Feit & Drexler, Inc.,
760 F.2d 406, 416 (2d Cir. 1985)), is an accurate recitation
of the law, the Report rightly concluded that Plaintiff
simply has not met its burden of demonstrating that
Defendants intend to frustrate a judgment.
also argues that Defendants' alleged misrepresentations
before the Court justify continuing the Order. Plaintiff
points to In re Feit, where the court found that
freezing the assets of a defendant was appropriate after,
among other actions, the defendant had demonstrated
"blatant disregard for court orders and the obligation
to testify truthfully under oath." 760 F.2d at 411
(internal quotation marks omitted). But the comparison is
inapt. First, Defendants' behavior in this case does not
rise to the level of the defendant in Drexler.
Second, Drexler rested more squarely on the
defendant's documented and repeated efforts to hide her
assets, of which her false representations were a part.
Id. at 416. Here, as the Report rightly noted,
evidence of similar asset-hiding in order to frustrate a
judgment is absent, and Plaintiff cannot currently meet its
burden to maintain the Order.
next takes issue with the Report's conclusion that
Plaintiff "has offered no evidence in support of its
claim of irreparable injury." Dkt. 58 at 13. The Report
noted that Plaintiff has offered only counsel's unsworn
statements to show irreparable injury-statements which do not
constitute evidence. Id. Plaintiff does not dispute
that it has offered only unsworn statements, but nonetheless
argues that the Report's finding of "no evidence,
" id., is "clearly erroneous, " Dkt.
65 at 3, in light of the information contained in Defendant
Oskouie's declarations. Those declarations, Plaintiff
argues, paint a conflicting picture: continuing revenue from
e-commerce websites, and yet negligible finances in the
various accounts of Defendant Oskouie. Id. at 4.
From this, Plaintiff urges the Court to conclude that
Defendant Oskouie must be insolvent or imminently insolvent.
Id. at 5.
Plaintiff is correct that a showing that Defendant is or
imminently will be insolvent could establish irreparable
harm, see, e.g., Shaoxing Bon Textiles, Co., Ltd. v. 4-U
Performance Grp. LLC, No. 16-CV-6805 (JSR), 2017 WL
737315, at *3 (S.D.N.Y. Feb. 6, 2017), its one-page
recitation of the balances of the accounts that Defendant
Oskouie has submitted is insufficient evidence of insolvency.
As Plaintiff itself acknowledges, "only Defendants know
whether they are solvent." Dkt. 65 at 7. And if
Defendant Oskouie is not insolvent, Plaintiff concludes, then
he must be hiding money. Id. at 5. These arguments
rest on the assumption that Defendants must demonstrate why
the Order should be dissolved. But the burden is on
Plaintiff, and the Court cannot speculate about solvency and
asset-hiding at this early stage absent more evidence. The
Report's conclusions about Plaintiffs lack of
irreparable-injury evidence are not erroneous.
other objections amount to disagreements with how the Report
viewed and characterized the record. The Court see no error
with the Report's characterizations of various pieces of
evidence as insufficient to meet Plaintiffs burden.
foregoing reasons, the Court adopts Judge Pitman's
thorough and well-reasoned Report in its entirety. The Order
currently in place, Dkt. 15, is dissolved ...