`Clerk’s Office
`Filed Date: 12/23/2020
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`----------------------------------------------------------x
`ABBOTT LABORATORIES, ABBOTT
`DIABETES CARE INC., and ABBOTT
`DIABETES CARE SALES CORPORATION,
`Plaintiffs,
`
`-against-
`
`ADELPHIA SUPPLY USA, et al.,
`Defendants.
`----------------------------------------------------------x
`
`12:36 PM
`
`U.S. DISTRICT COURT
`EASTERN DISTRICT OF
`NEW YORK
`BROOKLYN OFFICE
`
`NOT FOR PUBLICATION
`MEMORANDUM & ORDER
`15-CV-5826 (CBA) (LB)
`
`AMON, United States District Judge:
`Abbott1 initiated this action in October 2015, asserting claims against multiple defendants,
`
`including the H&H Defendants2, in connection with the unlawful sale of Abbott’s international
`
`FreeStyle test strips in the United States. (ECF Docket Entry (“D.E.”) # 1.) Following extensive
`
`discovery, Abbott moved for summary judgment against the defendants, seeking, inter alia,
`
`summary judgment on its claims against H&H under the Lanham Act for trademark infringement
`
`and willfulness. (D.E. # 1414.) The Court granted Abbott’s motion for summary judgment as to
`
`liability, finding H&H liable for willful infringement as a matter of law. (D.E. # 1563.) The Court
`
`also found all defendants (save for a few individual defendants) liable at summary judgment for
`
`Lanham Act trademark infringement, although it determined that damages could not be resolved
`
`on summary judgment.
`
`During the same time in which Abbott was preparing its motion for summary judgment,
`
`Abbott commenced a related action, Abbott Laboratories et al. v. H&H Wholesale Services Inc. et
`
`al., No. 17-cv-3095 (E.D.N.Y.), against the H&H Defendants for their sale of international
`
`1 Plaintiffs Abbott Laboratories, Abbott Diabetes Care Inc., and Abbott Diabetes Care Sales Corp. (collectively,
`“Abbott”).
`
`2 H&H Wholesale Services, Inc. (“H&H”), Howard Goldman, and Lori Goldman (collectively, the “H&H
`Defendants”).
`
`1
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 2 of 13 PageID #: 35182
`
`
`
`FreeStyle strips repacked in counterfeit U.S. packaging. In that action, Abbott conducted a Court-
`
`authorized search of H&H’s premises, which resulted in the seizure of their email server. Review
`
`of the contents of that server revealed that the H&H Defendants had engaged in a calculated pattern
`
`of discovery misconduct in this action that amounted to a fraud on the Court. (D.E. # 1613 at 4–
`
`6.)
`
`Abbott moved for case-ending sanctions against the H&H Defendants in the instant action,
`
`and the motion was referred to Magistrate Judge Bloom for report and recommendation (“R&R”).
`
`See Jan. 14, 2019 Order Referring Mot. On May 2, 2019, Judge Bloom issued an R&R
`
`recommending that the Court grant Abbott’s motion and enter a default judgment against the H&H
`
`Defendants. (D.E. # 1545.) After receiving objections to the R&R and Abbott’s reply to those
`
`objections, the Court adopted Judge Bloom’s R&R in its entirety and entered a default judgment
`
`against the H&H Defendants. (D.E. # 1613.) Among the Court’s findings were that “the H&H
`
`Defendants—including the Goldmans—had a duty to comply with the Court’s orders, and each
`
`willfully and grossly failed to do so.” Id. at 15; see also id. at 16, 19 (finding the Goldmans
`
`“individually liable for the willful discovery fraud and cover-up they undertook personally or that
`
`was undertaken by their agents in their name”); id. at 25 (finding that “the H&H Defendants’
`
`withholding of … documents constituted willful discovery misconduct” regardless of the reason
`
`they were withheld).
`
`Given the entry of default, on March 24, 2020, the Court ordered briefing on the issue of
`
`when the damages inquest under Federal Rule of Civil Procedure 55(b)(2) against the H&H
`
`Defendants should occur in relation to trial against the remaining non-defaulting defendants.
`
`
`
`2
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 3 of 13 PageID #: 35183
`
`
`
`Abbott, the H&H Defendants, the G&S Defendants3 and the S&S4 Defendants have all submitted
`
`briefing on the issue. The H&H Defendants argue that the damages inquest should either (a) come
`
`after the non-defaulting defendants’ trial; or (b) be consolidated with the non-defaulting
`
`defendants’ trial. (D.E. # 1614.) Abbott and the S&S Defendants argue that the damages inquest
`
`as to the H&H Defendants should be held prior to the trial for the non-defaulting defendants. (D.E.
`
`## 1619, 1622.) The G&S Defendants express no view on the sequencing, arguing only argue that
`
`the inquest and trial should not be consolidated. (D.E. # 1618.)
`
`A more developed statement of the facts, issues, and procedural history of this complex
`
`action is provided in the Court’s September 30, 2019 Memorandum and Order. Familiarity with
`
`the matter is here presumed, and the Court recounts only those facts necessary to adjudicate the
`
`present issue. For the reasons provided below, the damages inquest shall be held prior to the trial
`
`for the non-defaulting defendants.
`
`DISCUSSION
`
`The decision of whether to enter a final judgment against some but fewer than all of the
`
`parties in an action is left to the sound discretion of the district court. Bleecker v. Zetian Sys., Inc.,
`
`No. 12 CIV. 2151 DLC, 2013 WL 5951162, at *6 (S.D.N.Y. Nov. 1, 2013). The standard is
`
`governed by Rule 54(b), which provides in relevant part:
`
`[W]hen multiple parties are involved, the court may direct the entry of a final
`judgment as to one or more, but fewer than all, claims or parties only if the court
`expressly determines that there is no just reason for delay.
`
`
`
`
`3 Defendants Able Wholesalers of Tennessee LLC, Kevin Singer, Paul Leight, Massalah Trading U.S.A., Ltd. Saad
`(Sam) Haddad, Matrix Distributors, Inc. Christopher Benevent, Seth Grumet, Drugplace, Inc., Neil Feig, Save Rite
`Medical.com LLC, Mark Kaplan, Shie Greenfeld, Dream Cereal, Inc. and Douglas Hauck are represented by Goodman
`& Saperstein LLC, the (“G&S Defendants”).
`
` Value Wholesaler, Inc., Adelphia Supply USA, and Primed Pharmaceuticals LLC are represented by Stern & Schurin
`LLP (the S&S Defendants”).
`
` 4
`
`
`
`3
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 4 of 13 PageID #: 35184
`
`
`
`Fed. R. Civ. P. 54(b).
`
`In making such a determination, “there are no fixed criteria.” Bleecker, 2013 WL 5951162,
`
`at *6 (S.D.N.Y. Nov. 1, 2013) (internal quotation marks omitted). However, courts have
`
`interpreted the Supreme Court’s nineteenth-century decision in Frow v. De La Vega, 82 U.S. (15
`
`Wall.) 552, 21 L.Ed. 60 (1872) as informing the propriety—at least in certain circumstances—of
`
`a court’s entering final judgment against a defaulting defendant while answering defendants
`
`remain in the action. See id. Accordingly, the Court must determine whether holding a damages
`
`inquest and entering final judgment against the H&H Defendants prior to the trial of the non-
`
`defaulting defendants is consistent with both Rule 54 and Frow.
`
`
`
`A. Frow and Joint Liability
`
`The H&H Defendants primarily argue that a damages inquest conducted prior to the trial
`
`of the answering defendants is premature and impermissible in light of Frow. Abbott contends
`
`that Frow’s holding is not controlling here, and that the rationale underlying Frow is not implicated
`
`by the facts of the present case. The Court concludes that Frow is not controlling here and does
`
`not necessarily prohibit the damages inquest and entry of a final judgment under Rule 54.
`
`In Frow, the plaintiff filed a bill in equity to determine title to a parcel of real property.
`
`The pleading alleged that fourteen defendants engaged in a joint conspiracy to defraud plaintiff of
`
`the property. When one of these defendants failed to plead, a default judgment was entered against
`
`him. The answering defendants proceeded to trial and prevailed on the merits. The Supreme Court
`
`vacated the default judgment, observing that it would be “absurd[]” to have “one decree of the
`
`court sustaining the charge of joint fraud committed by the defendants; and another decree
`
`disaffirming the said charge. . . .” Id. at 554.
`
`
`
`4
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 5 of 13 PageID #: 35185
`
`
`
`Accordingly, courts have determined that where Frow applies, notice of defendant’s default
`
`may be docketed, “but entry of final judgment should be deferred pending disposition as to the
`
`non-defaulting defendants, so that the case can be resolved by one final, consistent judgment.”
`
`Mitchell v. Lyons Prof'l Servs., Inc., 727 F. Supp. 2d 116, 119 (E.D.N.Y. 2010). Exactly when
`
`Frow applies and what it stands for, however, is not entirely clear from the opinion itself. See
`
`Farzetta v. Turner & Newall, Ltd., 797 F.2d 151, 154 n.2 (3d Cir. 1986) (noting Frow’s
`
`“ambiguity”). Courts interpreting Frow “have treated this holding narrowly,” Rivera v. Mattingly,
`
`No. 06-CIV-7077(LAP)(HBP), 2017 WL 7050323, at *6 (S.D.N.Y. June 23, 2017), finding the
`
`holding applies to defendants who are jointly liable. See Lemache v. Tunnel Taxi Mgmt., LLC,
`
`354 F. Supp. 3d 149, 152 (E.D.N.Y. 2019) (“[Frow] explained that in a multi-defendant case where
`
`defendants are alleged to be jointly liable, entering a default judgment runs the risk of inconsistent
`
`judgments.”) (emphasis original); Mitchell, 727 F. Supp. 2d at 119 (noting Frow’s “holding has
`
`been narrowed to cases involving true joint liability”) (internal quotation marks omitted); see also
`
`10A Charles Alan Wright, et al., Federal Practice and Procedure: Civil 3D § 2690 (2001) (Frow
`
`stands for the proposition that “when one of several defendants who is alleged to be jointly liable
`
`defaults, judgment should not be entered against that defendant until the matter has been
`
`adjudicated with regard to all defendants, or all defendants have defaulted.”).
`
` Similarly, the Second Circuit “has cast doubt on the vitality of Frow in light of the
`
`subsequent enactment of Federal Rule of Civil Procedure 54(b), which authorizes entry of default
`
`judgment against fewer than all parties as long as there is no just reason for delay.” Consumer
`
`Fin. Prot. Bureau v. NDG Fin. Corp., No. 15-CIV-5211(CMR)(WL), 2018 WL 1605067, at *6
`
`(S.D.N.Y. Mar. 12, 2018) (citing Int’l Controls Corp. v. Vesco, 535 F.2d 742, 746 n.4 (2d Cir.
`
`1976)). The Second Circuit observed that “it is most unlikely that Frow retains any force
`
`
`
`5
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 6 of 13 PageID #: 35186
`
`
`
`subsequent to the adoption of Rule 54(b). In any event, at most, Frow controls in situations where
`
`the liability of one defendant necessarily depends upon the liability of the others.” Int’l Controls
`
`Corp, 535 F.2d at 746 n.4. “In contrast, if the liability sought to be imposed is joint and several
`
`rather than joint, most courts have held that the rationale of Frow does not directly apply, since it
`
`would not be inconsistent to hold some but not all defendants liable.” Rivera, 2017 WL 7050323,
`
`at *7. See also Lemache, 354 F. Supp. 3d at 153 (explaining that, unlike a theory of joint and
`
`several liability, it is “impossible” under a theory of joint liability “for one defendant to be liable
`
`unless all other defendants are also liable”); In re Uranium Antitrust Litig., 617 F.2d 1248, 1257–
`
`58 (7th Cir. 1980) (same).
`
`
`
`Frow is not directly controlling in this action. As an initial matter, Frow concerned jointly
`
`liable defendants, some of which were exonerated on the merits. Here, both the defaulting and
`
`non-defaulting defendants have already (with minimal exception) been found liable for trademark
`
`infringement at summary judgment; the non-defaulting defendants are proceeding to trial on the
`
`question of damages. Moreover, the H&H Defendants were placed in default in light of their
`
`unique actions. Accordingly, there is no risk of inconsistent judgments as to liability on these
`
`claims. Moreover, with regard to the Lanham Act claims for trademark infringement against both
`
`the defaulting and the non-defaulting defendants, Abbott has alleged a theory of joint and several
`
`liability. See In re Uranium Antitrust Litig., 617 F.2d 1248, 1257–58 (7th Cir. 1980) (“The result
`
`in Frow was clearly mandated by the Court’s desire to avoid logically inconsistent adjudications
`
`as to liability. However, when different results as to different parties are not logically inconsistent
`
`or contradictory, the rationale for the Frow rule is lacking. Such is this case involving joint and
`
`several liability.”). Abbott does not argue that any one defendant is automatically liable for the
`
`entirety of the damages sought by Abbott regardless of which boxes the defendant actually
`
`
`
`6
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 7 of 13 PageID #: 35187
`
`
`
`trafficked. Rather, each defendant is liable for the unlawfully diverted boxes that it trafficked, and
`
`Abbott is seeking varying damages amounts against different defendants based on that varying
`
`number of boxes. Cf. Frow, 82 U.S. (15 Wall.) 552 (regarding a single res in controversy).
`
`B. Frow and Joint and Several Liability
`
`Abbott has also, however, maintained that defendants are jointly and severally liable for
`
`trademark infringement damages attributable to those boxes for which multiple defendants were
`
`in the same distribution chain. H&H Defendants agree. (See D.E. # 1614 at 23 (“[W]e do accept
`
`that H&H, like any other individual defendant in this case, is jointly and severally liable for the
`
`damages specifically allocated to its particular distribution chain.”).) H&H Defendants point to
`
`this doctrine as raising the specter of inconsistent damages awards as between such defendants
`
`and, under the principles guiding Frow and its progeny, precluding entry of a final judgment prior
`
`to the damage determination at trial for the non-defaulting defendants.
`
` Although “[t]he Frow holding has been narrowed to cases involving true joint liability,”
`
`courts have, in the absence of countervailing justifications, nonetheless “also consistently delayed
`
`damages inquests even where a plaintiff seeks joint and several liability in order to avoid the
`
`problems of dealing with inconsistent damage determinations.” Harvey v. Home Savers
`
`Consulting Corp., No. 07-CV-2645 (JG), 2008 WL 724152, at *1 (E.D.N.Y. Mar. 17, 2008)
`
`(internal citations and quotation marks omitted) (collecting cases); Gesualdi v. MMK Trucking,
`
`Inc., No. CV 09-1484 SLT AKT, 2010 WL 3619569, at *5 (E.D.N.Y. Aug. 24, 2010), report and
`
`recommendation adopted, No. 09 CV 1484 SLT AKT, 2010 WL 3619719 (E.D.N.Y. Sept. 9, 2010)
`
`(“Even though[] the defaulting and non-defaulting Defendants may be held jointly and severally
`
`liable for the same damages, deferring consideration of damages with respect to the defendants in
`
`
`
`7
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 8 of 13 PageID #: 35188
`
`
`
`default until after Plaintiffs’ contested claims are litigated will minimize the risk of inconsistent
`
`awards.”) (internal brackets and quotation marks omitted).
`
`These cases are, however, distinguishable in that the risk of an inconsistent damages award
`
`arose there because the plaintiff was seeking a single, unitary damages amount against multiple
`
`defendants. Where a unitary damages figure is sought against defaulting and non-defaulting
`
`defendants alike, there is a risk that logically inconsistent awards be entered. As stated above,
`
`Abbott is here seeking different and unique damages amounts against different defendants based
`
`on the boxes that particular defendant sold.
`
`On the other hand, the H&H Defendants rightly observe that the defendants in this action
`
`did not operate in neat silos, and that the distribution chains involving multiple defendants that
`
`trafficked the same infringing box(es) are interweaving. Moreover, at summary judgment, several
`
`defendants argued that Abbott could not prove that the defendants’ infringement displaced sales
`
`of non-infringing boxes and caused actual damages. The Court declined to grant summary
`
`judgment as to damages, determining that the jury must decide the extent to which Abbott suffered
`
`any actual damages. The H&H Defendants now argue that Abbott’s theory of the case places them
`
`at the center of a complicated distribution-chain web, leaving H&H jointly and severally liable
`
`with multiple non-defaulting defendants for an outsize portion of the total number of infringing
`
`boxes that Abbott alleges the H&H Defendants trafficked in. They argue that it would be at the
`
`heart of Frow’s concern were the Court to impose damages on the H&H Defendants at an inquest
`
`for trafficking in infringing boxes where the jury determined, vis-à-vis a non-defaulting defendant
`
`in the same distribution chain as H&H, that those same boxes did not cause actual damages at the
`
`point of sale. They argue that the presence of this common issue between the defendants as to
`
`
`
`8
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 9 of 13 PageID #: 35189
`
`
`
`whether an infringing box caused actual damages renders them and non-defaulting defendants in
`
`the same distribution chain “similarly situated.”
`
`Courts have observed that “decisions in this Circuit subsequent to Vesco support extension
`
`of Frow to cases in which defendants are merely ‘similarly situated.’” Diarama Trading Co. Inc.
`
`v. J. Walter Thompson U.S.A., Inc., No. 01-cv-2950 (DAB), 2002 WL 31545845, at *4 (S.D.N.Y.
`
`Nov. 13, 2002) (quoting Farberware v. Groben, 1991 WL 123964, at *3 n. 4 (S.D.N.Y.1991)).
`
`The “similarly situated” principle has been applied in cases where liability of the answering
`
`defendants was yet undetermined, and the defendants’ liability was inextricably connected.
`
`Diarama Trading Co. Inc, 2002 WL 31545845, at *4 (declining to enter default judgment for fear
`
`of prejudicing appearing defendants, who all claimed that their rights in the contested trademark
`
`derive from the defaulting defendant). Here, all of the defaulting and non-defaulting defendants
`
`(with minimal exception) have all already been found liable for trademark infringement.
`
`Moreover, it is not clear to the Court at this time which defendants may be jointly and severally
`
`liable with which other defendants, and for what boxes. Finally, the non-defaulting defendants
`
`may present different defenses and theories to the jury that are accepted by the jury but are
`
`inapplicable to the H&H Defendants.
`
`The H&H Defendants have failed to show that “liability of one defendant necessarily
`
`depends upon the liability of others”, Int’l Controls Corp, 535 F.2d at 746 n.4. And, even assuming
`
`arguendo that there is a common issue between the defendants within the purview of the “similarly
`
`situated” doctrine which presents a possible risk of inconsistent awards, the Court weighs this
`
`against the countervailing factors and determines there is no just reason for delay in entering final
`
`judgment against the H&H Defendants. See Shanghai Automation Instrument Co. v. Kuei, 194 F.
`
`Supp. 2d 995, 1009 (N.D. Cal. 2001) (“To hold that the mere possibility of inconsistent judgment
`
`
`
`9
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 10 of 13 PageID #: 35190
`
`
`
`divests the Court of its discretion under Rule 54(b) would imply that whenever there are multiple
`
`defendants who raise similar defenses, the court could never enter a default judgment until
`
`conclusion of the entire case regardless of the substantial prejudice likely to be suffered by the
`
`plaintiff as a result of the delay. Such a rule would contravene the purpose of the 1961 amendment
`
`to Rule 54(b).”).
`
`C. Balancing the Equities
`
`In Int’l Gemmological Inst., Inc. v. Rafaeil, the court observed that while some decisions
`
`delayed a damages inquest over concerns of inconsistent awards, that interest in “judicial
`
`economy” must yield to the “interests of the parties in proceeding with the inquest.” No. 05-cv-
`
`2395 JGK JCF, 2005 WL 3880222, at *2 (S.D.N.Y. Aug. 17, 2005), report and recommendation
`
`adopted, 2006 WL 739822 (S.D.N.Y. Mar. 21, 2006). Specifically, the parties there would have
`
`been prejudiced by delay because plaintiff could not begin to collect until final judgment was
`
`entered, and the “defaulting defendants would have ample opportunity to spend, secrete, or
`
`otherwise protect their ill-gotten gains . . . [which would] permanently prevent the plaintiff from
`
`being made whole.” Id. at *3. Additionally, the court determined that this would also prejudice
`
`the non-defaulting defendants, since if “defaulting parties are able to insulate themselves from
`
`judgment during the continuing litigation, the non-defaulting parties could be forced to satisfy the
`
`entire damage award without the possibility of contribution from the defaulting defendants.” Id.;
`
`see also Bleecker v. Zetian Sys., Inc., No. 12-cv-2151 DLC, 2013 WL 5951162, at *7 (S.D.N.Y.
`
`Nov. 1, 2013) (declining to delay entry of final judgment against defaulting defendant because,
`
`inter alia, plaintiff plead that defaulting defendant against whom final judgment was sought was
`
`“seeking to avoid liability” by transferring out its assets); Lemache, 354 F. Supp. 3d at 154
`
`
`
`10
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 11 of 13 PageID #: 35191
`
`
`
`(“Courts in this Circuit have routinely declined to apply Frow in cases asserting joint and several
`
`liability, and proceeded to decide the default judgment motion while other parties are litigating.”).
`
`Abbott asserts that they will be prejudiced by a delay of final judgment against the H&H
`
`Defendants because there is a serious risk that those defendants will dissipate their assets prior to
`
`final judgment and collection. Citing to declarations filed under seal, Abbott avers that the H&H
`
`Defendants’ former counsel stated early in this litigation that his firm had taken steps to render the
`
`H&H Defendants judgment proof. (See D.E. # 1619 at 26.) Abbott further avers that during this
`
`litigation, the H&H Defendants “took additional steps to move to protect their assets from
`
`collection.” (Id.) The non-defaulting defendants argue that they would be similarly prejudiced by
`
`granting the H&H Defendants more time to insulate themselves from collection. The H&H
`
`Defendants have not responded to this allegation in their briefing on this damages-sequencing
`
`issue. The Court finds this risk is credible and substantial. Additionally, the Court takes notice of
`
`the ongoing global pandemic and the substantial delay in jury trials that it has caused. See e.g.,
`
`E.D.N.Y. Administrative Order 2020-26 (postponing all jury selection and trials until further
`
`notice). Considering that criminal matters will likely be prioritized over civil matters when jury
`
`trials resume, the Court expects a substantial delay before a jury trial may be conducted for the
`
`non-defaulting defendants.
`
`The H&H Defendants do, however, argue that a separate damages inquest prior to trial
`
`would be inefficient. As an initial matter, the Court determines that any risk of judicial inefficiency
`
`is here outweighed by the risk of prejudice to the other parties. Int’l Gemmological Inst., 2005
`
`WL 3880222, at *2. Moreover, the H&H Defendants overstate the risk of inefficiency. Their
`
`assertion that the proceedings at an inquest and trial would be entirely duplicative is unfounded.
`
`Although there may be some overlap in the evidence presented during the different stages, the
`
`
`
`11
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 12 of 13 PageID #: 35192
`
`
`
`facts and findings relevant to Abbott’s damages claim against the H&H Defendants are unique to
`
`them. And for those defendants that go to trial, the jury will be making findings unique to the
`
`damages liability of those defendants appearing before it, based on their conduct and arguments
`
`relating to defenses applicable to their circumstances but not others. In contrast, delaying the
`
`inquest until after a jury trial would not reduce the scope of the inquest, because the H&H
`
`Defendants’ liability for Lanham Act damages, aiding-and-abetting-fraud damages, reputational
`
`harm, and attorneys’ fees are all specific to them. Finally, the decision to hold the inquest first
`
`may well prove to be a more efficient use of judicial resources if it helps to facilitate a settlement
`
`that obviates trial: if Abbott is successful at inquest against the H&H Defendants in establishing
`
`damages, the non-defaulting defendants may use that figure as a guide in evaluating their own
`
`exposure; if Abbott is not successful in proving a significant quantum of damages, that will inform
`
`Abbott that it may fare better if it tempers its demands in its future negotiations with the non-
`
`defaulting defendants.5
`
`The H&H Defendants were placed in default as a result of their serious fraud upon the
`
`Court. Delaying the inquest and entry of final judgment could frustrate the Court’s interest in
`
`vindicating its sanctions and prejudice the other parties to this litigation. Weighing these
`
`prejudices against the countervailing factors, the Court determines that there is no just reason for
`
`delay, and that the damages inquest and entry of final judgment should precede the trial of the non-
`
`defaulting defendants. Cf. Diarama Trading Co. Inc., 2002 WL 31545845, at *4 (holding that
`
`“Plaintiff fail[ed] to convince the Court that good cause exists for the Court to exercise its authority
`
`under Rule 54(b) to enter final judgment against [defaulting defendant]” because, inter alia,
`
`
`5 Finally, the Court declines the H&H Defendants’ invitation to consolidate the inquest with the jury trial. In addition
`to the reasons provided in text, the Court concludes that consolidation would introduce undue prejudice to the parties
`and tax the jury’s focus in what is already a complex case.
`12
`
`
`
`
`
`Case 1:15-cv-05826-CBA-LB Document 1633 Filed 12/23/20 Page 13 of 13 PageID #: 35193
`
`
`
`“Plaintiff has made no showing of prejudice flowing from” a decision holding the motion for final
`
`judgment in abeyance pending resolution of the merits against answering defendants); United
`
`States v. First Funds LLC, No. 10 Civ. 6540(JGK)(MHD), 2012 WL 1415327, at *3 (S.D.N.Y.
`
`Apr. 20, 2012) (citing Int’l Gemmological for the proposition that “one argument for separate
`
`damage assessments … is that a plaintiff should be able to pursue prompt enforcement of judgment
`
`against a defaulted defendant,” although finding that inapplicable to the case before it “because
`
`there is no prospect of such an asset pursuit”).
`
`CONCLUSION
`
`
`
`For these reasons, the Court concludes that the damages inquest against the H&H
`
`Defendants shall be held before the trial of the non-defaulting defendants.
`
`The parties are directed to file briefing and relevant documentary evidence regarding the
`
`proper calculation and amount of damages to be entered against the H&H Defendants, in
`
`accordance with the following schedule: Abbott shall file its papers by January 29, 2021; the H&H
`
`Defendants shall file any opposition by March 1, 2021; Abbot’s reply, if any, shall be filed by
`
`March 15, 2020. If, after reviewing the papers, the Court determines that argument or an
`
`evidentiary hearing is warranted, one may be scheduled at a later date.
`
`SO ORDERED.
`
`
`
`
`Dated: December 23, 2020
`
`Brooklyn, New York
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Carol Bagley Amon
`Carol Bagley Amon
`United States District Judge
`
`
`
`13
`
`