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Jha v. XCube Research and Development, Inc.

United States District Court, D. Maryland

September 20, 2018




         On February 6, 2018, Plaintiff filed this civil action against Defendant XCube Research and Development, Inc. (“XCube”) and other individual Defendants. ECF No. 1. Plaintiff amended the Complaint on February 20, 2018, and then “supplemented” the Amended Complaint on March 5, 2018. ECF Nos. 3, 6. After voluntarily dismissing the cases against the individual Defendants, Plaintiff successfully moved to amend the complaint again. ECF No.15. Plaintiff now proposes a third Amended Complaint to add Mikael Taveniku, XCube's “principal agent, ” as a defendant. ECF No. 28.

         Also pending before the Court is Plaintiff's third motion for a temporary restraining order and preliminary injunction. ECF No. 25. Plaintiff's first motion for a temporary restraining order (“TRO”) was denied for failure to provide notice or explain why notice should not be required. ECF No. 7 at 3. Plaintiff's second motion for injunctive relief was denied because Plaintiff failed to sustain his burden of demonstrating that the equities justified wholesale restraint of XCube's assets or that such requested relief was in the public interest. ECF No. 14 at 3. As to Plaintiff's requested injunction to prevent XCube from “destroying evidence, ” the Court denied the motion for failure to demonstrate that such harm was actual or imminent. Id. at 3-4.

         Plaintiff has also moved for default judgment against XCube (ECF No. 20), summary judgment against XCube on one count (ECF No. 23), and exclusion of evidence at trial. ECF No. 27. The Court now addresses each of these motions.

         I. Motion for Default Judgment

         Plaintiff's Motion for Default Judgment (ECF No. 20) is procedurally premature.[1] Rule 55 of the Federal Rules of Civil Procedure establishes a two-step process to obtain a default judgment. The first step is that the party must seek clerk's entry of default pursuant to Rule 55(a). After the Clerk has entered default, the party may then seek entry of default judgment pursuant to Rule 55(b). Wilson v. Turner, No. ELH-13-3497, 2014 WL 4426126, at *1 (D. Md. Sept. 2, 2014). Because the clerk's entry of default in this case has not been entered, default judgment under Rule 55(b) must be denied.

         Clerk's entry of default under Rule 55(a), however, is appropriate. XCube has failed to answer the complaint pending against it. Instead, Taveniku, pro se, sought additional time to retain counsel on behalf of XCube, which the Court granted. The Court warned XCube, however, that XCube, as a corporation, must be represented by counsel and only filings submitted through counsel will be considered. ECF No. 18 at 1 n.1. Although XCube was granted until June 8, 2018 to retain counsel, no counsel has entered an appearance on behalf of the corporation. Accordingly, XCube has failed to plead or otherwise defend this action, and so clerk's entry of default under Rule 55(a) is appropriate. See Allied Colloids, Inc. v. Jadair, Inc., No. 96-2078, 139 F.3d 887 (Table), 1998 WL 112719, at *1 (4th Cir. Mar. 16, 1998). The Court directs the clerk to enter default under Rule 55(a).[2] The Court also strikes Taveniku's pro se pleadings filed on behalf of XCube (ECF Nos. 19, 21).

         II. Third Motion for TRO and Preliminary Injunction

         Mindful that Plaintiff's third motion for a TRO and preliminary injunction (ECF No. 25) is governed by the factors set forth in Winter v. Natural Resources Defense. Council, Inc., 555 U.S. 7, 20 (2008), and “may only be awarded upon a clear showing that the plaintiff is entitled to such relief, ” id. at 22, the motion once again must be denied. Plaintiff's recent motion is almost identical to his previous requests for injunctive relief. In fact, the most recent motion differs in only two minor respects: Plaintiff currently asks the Court to enjoin XCube from “destroying, disposing of, maliciously altering, or transacting to remove from its possession any of XCube's remaining assets and property, including any intellectual property or trade secrets” instead of simply “destroying, disposing of, or operating its assets.” ECF No. 25 at 1; ECF No. 13 at 1. Plaintiff also adds the conclusory allegation that “if Defendant sells its primary remaining assets, Plaintiff will have no adequate remedy at law.” ECF No. 25 ¶16.

         However, the fundamental deficiencies in Plaintiff's requested relief have remained unchanged. Once again, Plaintiff seeks wholesale restraint of all XCube's assets without regard for how such relief would effectively cripple the corporation. See Asset, Black's Law Dictionary (10th ed. 2014) (defining asset as “[t]he entries on a balance sheet showing the items of property owned, including cash, inventory, equipment, real estate, accounts receivable, and goodwill”). Accordingly, as to the third Winter factor-balance of equities-Plaintiff cannot demonstrate that the it is equitable to restrain ex parte all corporate assets. Nor do the equities tilt in Plaintiff's favor based on the mere assertion that if Plaintiff were to prevail at trial, XCube will have no assets to satisfy a money judgment. In this respect, Plaintiff has not convinced this Court that he is likely to succeed on the merits of his claims and that, if successful, monetary relief does not afford Plaintiff an adequate remedy. In short, Plaintiff has failed to sustain his burden to justify the extraordinary pretrial restraint he seeks.

         Likewise, Plaintiff's request to enjoin XCube from “destroying evidence” is once again denied. Plaintiff still fails to specify any other evidence in Defendant's possession that may be destroyed if the Court denies injunctive relief. ECF No. 7 at 4. Rather, Plaintiff baldly asserts such a remedy is needed without even attempting to address any of the Winter factors. Plaintiff has not sustained his burden, and thus the Court denies the motion.

         III. Motion In Limine to Exclude Evidence at Trial

         Plaintiff's motion in limine to exclude evidence at trial (ECF No. 27) is premature. The parties have not yet begun discovery, which commences only after this Court issues a scheduling order. See Local Rule 104.4 (D. Md. 2016), A motion in limine to exclude evidence at trial is timely filed only after discovery is closed, dispositive motions on the merits have been decided, and surviving claims are set for trial. If that day ever comes, the Court will set a briefing deadline for in limine motions. Until such deadline is set by the Court, no motion in limine will be accepted. Plaintiff is forewarned that any future similar motions will be summarily dismissed without further notice. Accordingly, Plaintiff's motion at ECF No. 27 is denied without prejudice to refile at the appropriate time.

         IV. Motion to Join Defendant and ...

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