Opinion ID: 2320756
Heading Depth: 1
Heading Rank: 5

Heading: Adventure Outdoors' Default

Text: Unlike Mickalis Pawn, Adventure Outdoors continued to participate in the lawsuit through the close of discovery. On April 29, 2008, all other defendants having either settled or defaulted, Adventure Outdoors moved for summary judgment seeking dismissal based on, inter alia, lack of personal jurisdiction and preemption by the Protection of Lawful Commerce in Arms Act, 15 U.S.C. §§ 7901-7903. While Adventure Outdoors' summary-judgment motion was pending, the district court issued an order sua sponte directing the parties to make submissions as to whether they were entitled to a trial by jury. Following oral argument held on May 21, the district court decided that neither party was so entitled. The court announced that it would sit as the finder of fact with the assistance of an advisory jury, as provided by Federal Rule of Civil Procedure 39(c). The following day, the district court denied Adventure Outdoors' motion for summary judgment. See City of New York v. A-1 Jewelry & Pawn, Inc. ( A-1 Jewelry III ), 252 F.R.D. 130, 131 (E.D.N.Y.2008). The court directed that the trial begin on May 27, 2008, with the selection of the advisory jury. On June 2, in the midst of jury selection, counsel for Adventure Outdoors moved to withdraw from the case. In a written submission, counsel reported that Adventure Outdoors had chosen not to engage in the futile exercise of defending itself at a bench trial. Motion of Renzulli Law Firm to Withdraw as Counsel (Renzulli Withdrawal Motion) at 1 (June 2, 2008). Counsel asserted that if the district court sat as factfinder, the ultimate outcome of the trial would be a foregone conclusion and Adventure Outdoors would not receive a fair trial. Id. Counsel also adverted to their client's limited financial resources. Counsel advised the court that Adventure Outdoors nonetheless intended to appeal from any default judgment that may be entered against it. Id. Attached to the motion was a declaration by Jay Wallace, the president of Adventure Outdoors, attesting that he had been informed . . . of the consequences of not participating in the bench trial and affirming that Adventure Outdoors consented to counsel's withdrawal. Aff. of Jay Wallace ¶ 3, Ex. 1 to Renzulli Withdrawal Motion. The district court, upon hearing argument from the parties, denied Adventure Outdoors' motion to withdraw its counsel in light of the fact that trial was already underway. The court warned that if Adventure Outdoors refuse[d] to go forward with the case, that course of conduct would constitute a default under Federal Rule of Civil Procedure 55. Transcript of Proceedings at 7 (June 2, 2008). When the district court asked whether the defendant refuse[d] to go forward with [jury] selection and further proceedings in the matter, counsel responded that Adventure Outdoors indeed so refused. Id. at 10-12. Counsel declined, however, to consent expressly to entry of default or default judgment. In light of Adventure Outdoors' refusal to proceed, the City consented to dismissal of the advisory jury. The district court then noted Adventure Outdoors' default on the record, conditionally granted the City's motion for default judgment, and directed that all further proceedings in the case be held before the magistrate judge. [9] Thereafter, the City and Adventure Outdoors each made submissions to the magistrate judge regarding the City's motion for default judgment. On January 27, 2009, the magistrate judge issued her report and recommendation to the effect that a default judgment be granted and that the City's proposed findings of fact and conclusions of law be adopted. See City of New York v. Adventure Outdoors, Inc . ( A-1 Jewelry IV ), 644 F.Supp.2d 201, 203-18 (E.D.N.Y.2009) (reproducing text of magistrate judge's January 27, 2009 report and recommendation). Adventure Outdoors submitted detailed objections to the magistrate judge's report and recommendation. On March 24, 2009, the district court adopted the magistrate judge's report and recommendation in its entirety and entered a default judgment against Adventure Outdoors, simultaneously with the entry of default judgment against Mickalis Pawn. Id. at 203. The district court also issued a permanent injunction against Adventure Outdoors with terms substantially identical to those of the injunction entered against Mickalis Pawn. See City of New York v. Adventure Outdoors, Inc . ( Adventure Outdoors Inj. ), No. 06-CV-2233, 2009 WL 792023 (E.D.N.Y. Mar. 23, 2009). [10] The defendants appeal.