16‐2474‐cv

StreetEasy, Inc. v. Chertok

      

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

          

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.  CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE

OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.  WHEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE

FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ).  A

PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED

BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in

the City of New York, on the 26th day of March, two thousand eighteen.

PRESENT: GUIDO CALABRESI,  

DENNY CHIN,

SUSAN L. CARNEY,

     Circuit Judges.

   

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STREETEASY, INC.,*

     Plaintiff‐Appellee,

            

     v.         16‐2474‐cv

          

DOUGLAS CHERTOK,

     Defendant‐Appellant.

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FOR PLAINTIFF‐APPELLEE: ISAAC B. ZAUR (Emily Reisbaum, on the brief),

Clarick Gueron Reisbaum LLP, New York,

New York.  

                                                 

*

   NMD Interactive, Inc. has changed its name to StreetEasy, Inc.  The Clerk of

Court is respectfully directed to amend the official caption to conform to the above.
   

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FOR DEFENDANT‐APPELLANT: PAUL F. CORCORAN (James R. Levine, Jacob

P. Freeman, on the brief), Davis & Gilbert LLP,

New York, New York.   

Appeal from the United States District Court for the Southern District of

New York (Sullivan, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the orders of the district court are AFFIRMED.  

Defendant‐appellant Douglas Chertok appeals from the district courtʹs

June 16, 2016 order denying his motion to vacate the courtʹs prior orders for fraud on

the court pursuant to Federal Rule of Civil Procedure 60(d)(3) and from the district

courtʹs March 13, 2017 opinion and order denying his motion for reconsideration of the

June 16, 2016 order.  We assume the partiesʹ familiarity with the underlying facts,

procedural history, and issues on appeal.

This appeal, the third appeal in this case, arises out of Chertokʹs repeated

refusal to honor the terms of a 2012 settlement agreement with plaintiff‐appellee

StreetEasy, Inc. (ʺStreetEasyʺ).  In the underlying dispute, StreetEasy brought suit

against Chertok, its co‐founder, alleging claims for, inter alia, breach of fiduciary duty

and for cybersquatting under 15 U.S.C. § 1125(d).   

On June 5, 2014, in the first appeal, we vacated the district courtʹs

sanctions award against Chertok and remanded for reconsideration of the appropriate

amount, upholding one of the three factual bases relied on by the district court.  
   

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StreetEasy, Inc. v. Chertok, 752 F.3d 298, 308‐09, 311 (2d Cir. 2014).  On remand, the

district court imposed a reduced sanctions award, which Chertok appealed.   

In April 2016, while Chertokʹs second appeal was pending, he filed (1) a

motion in this Court to vacate our prior June 5, 2014 order for fraud on the court

pursuant to Rule 60(d)(3), and (2) a pre‐motion letter with the district court ‐‐ in

accordance with the courtʹs Individual Rule 2A ‐‐ describing a similar contemplated

motion to vacate the district courtʹs March 18, 2013 and May 20, 2015 orders for fraud

on the court pursuant to Rule 60(d)(3).  StreetEasy opposed Chertokʹs motion in this

Court and filed a letter response in opposition to Chertokʹs letter in the district court.

On June 7, 2016, we affirmed the district courtʹs reduced sanctions award

and denied Chertokʹs motion, concluding that Chertok failed to present ʺclear and

convincing evidence to meet the high bar for finding fraud on the Court.ʺ  StreetEasy,

Inc. v. Chertok, 651 F. Appʹx 37, 40 (2d Cir. 2016).  StreetEasy and Chertok filed

supplemental letters with the district court regarding our decision.   

On June 16, 2016, the district court issued an order treating Chertokʹs pre‐

motion letter as a Rule 60(d)(3) motion and denied it, citing our June 7, 2016 decision

denying Chertokʹs ʺessentially identicalʺ motion in this Court.  Sp. App. 1.  Chertok

moved for reconsideration pursuant to Rule 60, and StreetEasy moved to enjoin

Chertok from future filings.  On March 13, 2017, the district court issued an opinion and
   

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order denying both motions.  NMD Interactive, Inc. v. Chertok, Case No. 11‐cv‐6011(RJS),

2017 WL 993069, at *1 (S.D.N.Y. Mar. 13, 2017).  Chertok appealed.   

We review for abuse of discretion a district courtʹs denial of a Rule 60

motion. See Paddington Partners v. Bouchard, 34 F.3d 1132, 1140 (2d Cir. 1994).  ʺA

court abuses its discretion when its decision rests on a legal error or a clearly erroneous

factual finding, or when its decision does not fall within the range of permissible

decisions.ʺ  RJE Corp. v. Northville Indus. Corp., 329 F.3d 310, 316 (2d Cir. 2003).   

First, Chertok contends that the district court abused its power, violated

the Federal Rules, and violated his due process rights when it treated Chertokʹs pre‐

motion letter as his Rule 60(d)(3) motion and denied it, without allowing full briefing.  

Although ʺa court has no power to prevent a party from filing pleadings, motions or

appeals,ʺ Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 652 (2d Cir. 1987), the

district court did not prevent Chertok from filing anything here; rather, it reasonably

construed Chertokʹs pre‐motion letter as the motion itself and denied it.  We have

approved this practice under appropriate circumstances.  See In re Best Payphones, Inc.,

450 F. Appʹx 8, 15 (2d Cir. 2011).  

Here, the parties offered detailed arguments in pre‐motion letters that

evidenced the clear lack of merit in Chertokʹs contemplated motion, particularly

following our June 7, 2016 decision.  The district court therefore acted within its

discretion when it ʺdeem[ed] [Chertokʹs] motion made and deni[ed] it.ʺ  Sp. App. 1.  
   

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Moreover, Chertok thereafter moved for reconsideration and submitted a full set of

motion papers.  At no point in the district court, in his papers on appeal, or, when

invited to do so, at oral argument in this Court, has Chertok identified any additional

arguments he would have pressed, or evidence he would have introduced, had he been

permitted to file full motion briefs initially.   

Second, Chertok argues that the district courtʹs denials of his Rule 60(d)(3)

motion and subsequent motion for reconsideration were an abuse of discretion.  We

discern no error, much less an abuse of discretion.  Even accepting Chertokʹs contention

that the mandate rule derived from the law‐of‐the‐case doctrine does not apply, see Brief

for Def.‐Appellant at 48‐49, we once again conclude that Chertok failed to present clear

and convincing evidence to satisfy the high bar for establishing fraud on the court, see

King v. First Am. Investigations, Inc., 287 F.3d 91, 95 (2d Cir. 2002).

Finally, while we understand StreetEasyʹs frustration, like the district

court we deny StreetEasyʹs motion to impose sanctions and a filing injunction.  We may

impose sanctions pursuant to Federal Rule of Appellate Procedure 38 for a frivolous

appeal ʺtotally lacking in merit, framed with no relevant supporting law, conclusory in

nature, and utterly unsupported by the evidence.ʺ  In re Drexel Burnham Lambert Grp.

Inc., 995 F.2d 1138, 1147 (2d Cir. 1993) (quoting United States v. Potamkin Cadillac Corp.,

689 F.2d 379, 381‐82 (2d Cir. 1982) (per curiam)).  While Chertokʹs motion in the district

court was meritless, we are not persuaded that his appeal of the procedure used by the
   

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district court was frivolous.  We decline to impose sanctions beyond the usual costs

awarded to a prevailing party on appeal.  Our denial of NMDʹs request for sanctions

should not constrain the district court in awarding the appropriate sanctions for the

filing of the Rule 60(d)(3) motion in the district court, or from sanctioning Chertok in

the future.  Moreover, Chertokʹs request that we vacate the district courtʹs comment that

he ʺhas a demonstrated history of filing vexatious, harassing, and duplicative motions

for which he appears to lack an objective good‐faith expectation of prevailing,ʺ NMD

Interactive, Inc., 2017 WL 993069, at *5, is denied.  Chertokʹs request for reassignment on

remand is denied as moot.  

We have considered Chertokʹs remaining arguments and find them to be

without merit.  Accordingly, we AFFIRM the judgment of the district court, with costs.

FOR THE COURT:

     Catherine OʹHagan Wolfe, Clerk