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Star Pacific Corp. v. Star Atlantic Corp.

October 6, 2009

STAR PACIFIC CORPORATION, PLAINTIFF(S),
v.
STAR ATLANTIC CORP., ET AL., DEFENDANT(S),



The opinion of the court was delivered by: Madeline Cox Arleo United States Magistrate Judge

REPORT AND RECOMMENDATION

BACKGROUND

On October 8, 2008, plaintiff, Star Pacific Corporation ("plaintiff"), filed the complaint. On October 17, 2008, defendants Star Atlantic Corporation, a New Jersey Corporation ("SAC/NJ"); Qi Lu; Star Atlantic Corporation, a Florida Corporation ("SAC/FL"); Yafei (Alfred) Zhao ("Alfred Zhao"); and Zheng Li filed an answer to the complaint and asserted counterclaims. On October 30, 2008, plaintiff filed an amended complaint to add Ocean Textile Corporation, Anna Karina, Inc., and fictitious individuals and entities as party defendants. On November 21, 2008, SAC/NJ, SAC/FL, Qi Lu, Alfred Zhao, and Zheng Li filed an answer to the amended complaint and asserted counterclaims. On December 1, 2008, Ocean Textile and Anna Karina filed an answer to the amended complaint. On December 5, 2008, plaintiff filed an answer to defendants' counterclaims.

On November 12, 2008, this Court entered a Letter Order, stating that a Scheduling Conference would be held on December 8, 2008. In advance of the conference, the parties were directed to exchange Fed. R. Civ. P. 26 disclosures.

Following the December 8, 2008 conference, the Court issued a Pretrial Scheduling Order on December 8, 2008, with a discovery end date of May 15, 2009. The Scheduling Order directed the parties to, among other things, raise any discovery disputes with the Court after the parties' good faith attempt to resolve the dispute had failed. Written discovery was to be served by December 22, 2008, and responses were due within thirty days of receipt. The Scheduling Order admonished that failure to follow the discovery schedule would result in sanctions pursuant to FED. R. CIV. P. 16(f) and 37. A telephone status conference was scheduled for February 26, 2009.

According to plaintiff's counsel, he served written discovery demands on Alfred Zhao's attorney James Flynn ("Flynn") of the law firm of Epstein, Becker & Green, P.C., on December 22, 2008. (See Bing Li's 9/24/09 Letter at Exhs. B & C). Accordingly, Mr. Zhao's answers to plaintiff's written discovery demands were due on or before January 23, 2009. (See id.) On January 20, 2009, this Court issued a Letter Order, converting the February 26, 2009 telephone status conference to an in person conference on the same date.

On January 23, 2009, attorney Flynn filed a motion to be relieved as counsel for SAC/NJ, Qi Lu, SAC/FL, and Alfred Zhao. On January 23, 2009, Flynn and defendant Zheng Li filed a Stipulation of Attorney, wherein Flynn withdrew from representing Zheng Li who was substituted to represent himself pro se. On January 27, 2009, this Court granted Flynn's motion to withdraw ("January 27, 2009 Order"). According to plaintiff's counsel, Alfred Zhao had not responded to plaintiff's written discovery demands by January 23, 2009. (See Bing Li 9/24/09 Ltr).

On February 3, 2009, this Court issued a Letter Order, supplementing the January 27, 2009 Order, and directing, among other things, that Flynn provide a copy of the February 3, Order to his clients. This Court further directed SAC/NJ and SAC/FL, which are corporate entities, to have new counsel enter an appearance on their behalf no later than February 15, 2009, as corporate entities cannot represent themselves under applicable law. The Court also advised that, if counsel failed to enter an appearance on behalf of SAC/NJ and SAC/FL by February 15, 2009, this Court would ask the District Court to strike the answer and counterclaims of SAC/NJ and SAC/FL and enter default against them.

As to defendants Qi Lu, Alfred Zhao, and Zheng Li, if new counsel was not secured by February 15, 2009, the Court would then deem them to be proceeding on a pro se basis. The attorneys and pro se parties were directed to appear for status conference on February 26, 2009 at 12:00 p.m.. The February 3, 2009 Letter Order admonished that failure to appear would result in sanctions, up to and including entry of default. On February 13, 2009, attorney Kevin Tung, Esq. filed a Notice of Appearance on behalf of SAC/NJ, SAC/FL, Qi Lu, and Alfred Zhao.

On February 26, 2009, the Court held an in person conference. Thereafter, on March 2, 2009, the Court issued an Order, directing the parties, including Alfred Zhao, to, among other things, respond to any and all outstanding discovery notices served by the parties on or before March 21, 2009. According to plaintiff's counsel, Alfred Zhao did not provide discovery responses by the March 21, 2009 deadline. (See Bing Li, 9/24/09 Ltr.).

After a failed attempt to resolve this discovery dispute, on March 26, 2009, plaintiff's counsel sought the Court's intervention. (See id.; Dkt. Entry No. 66). Alfred Zhao's counsel, Kun Zhao, submitted opposition, explaining that he advised Alfred Zhao about his discovery obligations, but lost contact with his client on March 3, 2009. (See Kun Zhao 3/30/09 Ltr at Dkt. Entry No. 68). Attorney Zhao ultimately regained contact with Alfred Zhao, and received Alfred Zhao's answers only to plaintiff's document requests. (Id.) However, when attorney Zhao attempted to contact Alfred Zhao to finalize his document request responses, attorney Zhao was again unable to contact his client. As of the date of his March 30, 2009 letter to the Court, attorney Zhao had received no response from defendant Zhao. (Id.)

On April 9, 2009, attorney Tung filed a motion to be relieved as counsel for SAC/NJ, SAC/FL, and Yafei (Alfred) Zhao. On May 13, 2009, the Court issued an Order, scheduling an in person conference for May 19, 2009 to address attorney Tung's motion to withdraw and all outstanding discovery issues.

Following the May 19, conference, on May 22, 2009, this Court issued a Letter Order, granting attorney Tung's motion to withdraw based on good cause shown. However, the Court again directed SAC/NJ and SAC/FL, as corporate entities, to have new counsel enter an appearance on their behalf no later than June 15, 2009. The Court further advised that, if counsel had not entered an appearance on their behalf by June 15, this Court would ask the District Court to strike their answer and counterclaims and enter default against them. As to Alfred Zhao, if new counsel was not secured by June 15, the Court would then deem him to be proceeding on a pro se basis. The attorneys and pro se parties were directed to appear for a status conference on June 16, 2009. Failure to appear would result in sanctions, up to and including entry of default.

On June 16, 2009, no party or counsel appeared on behalf of SAC/NJ, SAC/FL, or Alfred Zhao. Zheng Li appeared pro se at the conference and attorney Kun Zhao appeared on behalf of Qi Lu. On June 17, 2009, the Court issued an Order to Show Cause why monetary/reprimand sanctions should not be imposed pursuant to Fed. R. Civ. P. 16(f), arising out of the failure of SAC/FL, SAC/NJ, and Alfred Zhao to attend the Court ordered June 16, 2009, Conference.*fn1 The Order to Show Cause was ...


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