United States District Court, D. New Jersey
JEFFREY A. WINTERS, COLLECTION SOLUTIONS, INC., Plaintiffs,
ELECTRONIC MERCHANT SYSTEMS, et al., Defendants.
Falk, United States Magistrate Judge.
MATTER is before the Court following a hearing on
May 28, 2019, to address the status of the case (ECF No. 70),
precipitated by correspondence stating, inter alia,
that Plaintiffs had discharged former counsel, David Hoffman,
Esq., and proceeded to settle the case with substitute
counsel, which Mr. Hoffman objects to;
upon review of the docket and the proceedings in this case,
the Court concludes as follows:
AND PROCEDURAL HISTORY
case has a convoluted procedural history, which is discussed
as necessary below. In its current form, it is a fraud and
breach of contract putative class action, in which Plaintiffs
allege that Defendants have breached various contractual
principles by enforcing supposedly “illegible”
provisions in contracts and failing to properly account for
funds collected on their behalf.
case was originally filed in New Jersey Superior Court on May
18, 2016. (Notice of Removal, ¶ 6.) Following the filing
of two amended complaints, the second of which added class
action allegations to the case, the matter was removed from
New Jersey Superior Court on November 22, 2017, pursuant to
the Class Action Fairness Act of 2005, 28 U.S.C. §§
1332(d), 1453. (ECF No. 1.) At the time of removal, there
were two named Plaintiffs: Collection Solutions, Inc. and its
principal, Jeffrey Winters.
December 5, 2017, Plaintiffs' then-counsel, David M.
Hoffman, Esq., filed a letter with the Court requesting a
status conference and a “reference to mediation.”
(ECF No. 9.)
December 8, 2017, and January 17 and February 15, 2018, the
Undersigned held status conferences with counsel regarding
Plaintiffs' request to proceed to mediation, as well as
addressing a series of issues and questions about the state
of the pleadings and the federal court docket. For example,
due to the timing of removal, the parties were unsure as to
which was the operative complaint and whether motions that
were filed in state court were pending in federal court. In
addition, Plaintiffs' counsel indicated that plaintiffs
wished to file a third amended complaint.
February 22, 2018, Plaintiffs filed a motion for leave to
file a third amended complaint. The motion was opposed. On
September 14, 2018, the Undersigned held an in-person
conference that included oral argument on the motion seeking
permission to file the third amended complaint.
Plaintiffs' motion was granted, and the third amended
complaint was filed on September 17, 2018. (ECF Nos. 32-33.)
September 28, 2018 (later modified by Order dated October 19,
2018), at the request of the parties, the Undersigned
referred this case to mediation before the Hon. Dennis M.
Cavanaugh (ret.) (ECF Nos. 38, 44.) This referral was to
private mediation on the consent of both parties.
(Id.) However, as a condition of Defendants
consenting to the mediation, the Undersigned permitted
Defendants to file their pre-answer motion to dismiss the
third amended complaint and have that motion briefed.
(Id.) The concept was that the motion to dismiss
would be on file and also provide the parties with
substantive assistance to prepare for mediation by reflecting
their respective views on the merits of the case.
Order finalizing the referral to mediation made clear that,
other than the filing and briefing of Defendants' motion
to dismiss the third amended complaint, the case was stayed
for 150 days from the date of the Order:
With the exception of the briefing schedule outlined
above, this action is hereby stayed for 150 days from the
date of this Order. If the mediation is not
successful, there shall be a telephone conference before the
Undersigned on March 6, 2019, at 3:00 p.m .....
(Order dated October 9, 2018, at ¶ 7) (emphasis added).
February 24, 2019, within the 150 day stay of the case
imposed by the October 9 Order, Mr. Hoffman, Plaintiffs'
then-counsel, filed on the docket a two page document titled
“Notice of Supplement to First Federal Class Action
Complaint Naming Four Additional Class Action Representative
Plaintiffs.” (ECF No. 54.) This filing, although
referencing four additional representatives, purported to add