Court Opinion

ID: 9371995
Source: CourtListenerOpinion
Date Created: 2023-02-17 16:00:24.076815+00
Date Added: 2024-06-11T17:16:31.669337
License: Public Domain

21-2525-cv
     Li v. Alibaba Group Holding, Ltd.

                                      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 COURT’S 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 “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER
     MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1          At a stated term of the United States Court of Appeals for the Second Circuit, held
 2   at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
 3   York, on the 17th day of February, two thousand twenty-three.
 4
 5   PRESENT:
 6
 7                                DENNIS JACOBS,
 8                                EUNICE C. LEE,
 9                                MYRNA PÉREZ,
10
11                                    Circuit Judges.
12   ------------------------------------------------------------------
13   HAI DONG LI,
14
15                                Plaintiff-Appellant,
16
17                         v.                                                No. 21-2525-cv
18
19   ALIBABA GROUP HOLDING, LTD.,
20
21                                Defendant-Appellee. *
22
23   ------------------------------------------------------------------
24
25

     *
         The clerk’s office is respectfully directed to amend the caption.
 1   For Plaintiff-Appellant:                                     NING YE
 2                                                                Law Office of Ning Ye, Esq.
 3                                                                Flushing, NY.
 4
 5   For Defendant-Appellee:                                      JONATHAN S. KAPLAN (Stephen P.
 6                                                                Blake, on the brief),
 7                                                                Simpson, Thacher & Bartlett, LLP
 8                                                                New York, NY.
 9
10
11          Appeal from an order of the United States District Court for the Southern District of New

12   York (Broderick, J.).

13          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

14   DECREED that the order of the district court is AFFIRMED.

15          Plaintiff-Appellant Hai Dong Li appeals from a district court order granting the request of

16   Defendant-Appellee, Alibaba Group Holding, Ltd. (“Alibaba”), for sanctions in the form of a pre-

17   litigation injunction against Li. The underlying suit is one in a series of actions brought by Li

18   against Alibaba in New York state, federal, and Chinese courts. Li’s claims stem from his knowing

19   purchase of apparently counterfeit goods with the intention of recouping refunds in excess of the

20   purchase price from Alibaba. By the time this suit commenced in the Southern District of New

21   York on December 19, 2019, Li’s suits in China had been dismissed and had resulted in what Li

22   himself termed “hefty sanctions” against Li. Li v. Ali Baba Grp. Holding, Ltd., 2021 WL 4084574,

23   at *2 (S.D.N.Y. Sept. 7, 2021). Meanwhile, Li’s counsel in the state litigation had withdrawn

24   after Alibaba warned him of the frivolous nature of the suits. On February 18, 2020, Alibaba

25   moved to dismiss and for Rule 11 sanctions in the form of a pre-litigation injunction and monetary

26   sanctions. Li was given an opportunity to file an amended complaint, which he did. On March

27   24, 2020, Alibaba moved to dismiss the amended complaint for lack of subject matter jurisdiction,

28   personal jurisdiction, venue, and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(1)–

                                                      2
 1   (3) and (b)(6). On September 7, 2021, the district court granted the motion to dismiss and issued

 2   a pre-litigation injunction. That injunction bars Li “from filing future actions related to or arising

 3   from his purchase of allegedly counterfeit goods from Alibaba or any entity affiliated with it—

 4   against any party or in any court—without first obtaining leave to file from [the district court].”

 5   Li, 2021 WL 4084574, at *6.

 6          On October 6, 2021, Li moved in the district court for leave to file a complaint in state

 7   court against Alibaba. The district court denied leave to file because Li failed to attach a copy of

 8   the proposed complaint, as required by the pre-litigation injunction. Rather than re-file the motion

 9   with the proposed complaint, Li filed notice to appeal to this Court on October 7, 2021. On

10   October 29, 2021, Alibaba moved in this Court for summary affirmance of (1) the district court’s

11   dismissal of the operative complaint, (2) the pre-litigation injunction, and (3) denial of the October

12   6, 2021 motion for leave to file a new complaint against Alibaba. On January 26, 2022, a panel of

13   this Court granted the motion for summary affirmance as to the dismissal of the operative

14   complaint and denial of leave to file a new complaint. The panel denied the motion to summarily

15   affirm the pre-litigation injunction and ordered that portion of the appeal to proceed. Thus, the

16   only question properly before this Court now is whether the district court abused its discretion in

17   issuing a pre-litigation injunction against Li. We conclude it did not.

18          We assume the parties’ familiarity with the underlying facts, procedural history, and issues

19   on appeal, to which we refer only as necessary to explain our decision to affirm.

20          I.      Discussion

21                  A. Standard of Review

22          We review a district court’s decision to impose sanctions for abuse of discretion. Eliahu

23   v. Jewish Agency for Isr., 919 F.3d 709, 713 (2d Cir. 2019) (reviewing a pre-suit injunction for

                                                       2
 1   abuse of discretion). Under an abuse of discretion standard, we reverse only if the district court

 2   “(1) bases its decision on an error of law or uses the wrong legal standard; (2) bases its decision

 3   on a clearly erroneous factual finding; or (3) reaches a conclusion that, though not necessarily the

 4   product of a legal error or a clearly erroneous factual finding, cannot be located within the range

 5   of permissible decisions.” Villiers v. Decker, 31 F.4th 825, 831 (2d Cir. 2022).

 6                   B. District Court’s Reasoning

 7           A district court assesses whether to issue a pre-litigation injunction under the five Safir

 8   factors. Iwachiw v. N.Y. State Dept. of Motor Vehicles, 396 F.3d 525, 528 (2d Cir. 2005). Those

 9   factors are:

10           (1) the litigant’s history of litigation and in particular whether it entailed vexatious,
11           harassing or duplicative lawsuits; (2) the litigant’s motive in pursuing the litigation,
12           e.g., does the litigant have an objective good faith expectation of prevailing?; (3)
13           whether the litigant is represented by counsel; (4) whether the litigant has caused
14           needless expense to other parties or has posed an unnecessary burden on the courts
15           and their personnel; and (5) whether other sanctions would be adequate to protect
16           the courts and other parties.

17   Id. (quoting Safir v. United States Lines, Inc., 792 F.2d 19, 24 (2d Cir. 1986)). The district court

18   concluded that the factors counseled in favor of issuing a pre-litigation injunction. The district

19   court determined that “Li has shown a history of filing duplicative, vexatious, and unreasonable

20   lawsuits against Alibaba” because in addition to the “frivolous complaint filed in this action . . .

21   he has brought actions asserting many of the same allegations against Alibaba twice before in New

22   York—one in federal court and one in state court” as well as several actions in China, “which he

23   himself pleads led to his being ordered to pay hefty sanctions.” Li, 2021 WL 4084574, at *5

24   (internal quotation marks omitted). The “legally spurious” suits, concluded the district court,

25   showed that Li “cannot have an objective good faith expectation of prevailing.” Id. (internal

26   quotation marks omitted). In addition to the expense caused by the torrent of meritless litigation,

27   the court noted that Li “continued in this action even after Alibaba warned his prior counsel as to
                                                        3
 1   the frivolous nature of Li’s state court action, which was enough to cause his prior counsel to

 2   withdraw.” Id. Finally, “because Li concedes that he has already faced monetary sanctions for

 3   bringing related suits against Alibaba, Li has demonstrated that monetary sanctions alone are

 4   unlikely to stop him from filing more baseless lawsuits.” Id. Given the above, and the lack of

 5   “any meaningful argument” by Li in response to the sanctions motion, the district court issued the

 6   pre-litigation injunction. Id. at *6.

 7            Li’s opening brief, which fails to reference the Safir factors, makes no argument on appeal

 8   as to how or why the district court abused its discretion in issuing the pre-litigation injunction.

 9   Instead, Li challenges precisely the aspect of the district court order that is not on appeal: the

10   dismissal. Absent any argument from Li, we find nothing in the district court’s order or application

11   of the Safir factors indicating that the court abused its discretion in issuing the pre-litigation

12   injunction.1

13            As a final note, we observe that though federal courts have “both the inherent power and

14   the constitutional obligation to protect their jurisdiction from conduct which impairs their ability

15   to carry out Article III functions” by, as here, enjoining state court litigation, the authority to enjoin

16   suits in state court is not limitless. In re Martin-Trigona, 737 F.2d 1254, 1261 (2d Cir.1984); see

17   also id. at 1263 (“blanket extension of [an] injunction in state court” is error). Specifically, we

18   have approved injunctions against state-court litigation that “prohibit[] [the litigant] from bringing

19   new actions . . . against persons who have encountered him in any capacity in [federal] litigation.”

20   Id.; e.g., Vassel v. Firststorm Properties 2 LLC, 750 F. App’x 50, 53 (2d Cir. 2018). Here,

21   however, we do not find that the district court exceeded its authority in extending the injunction to

     1
       Insofar as Li challenges the pre-litigation injunction in his reply brief, such argument is waived. See Cantor
     Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 711 n.3 (2d Cir. 2002) (“Because th[e] claim was first raised in plaintiffs’
     reply brief we need not consider it.”). Furthermore, even were we to consider it, we find the argument unpersuasive.

                                                               4
1   cover state court suits because we understand the pre-litigation injunction to apply to state court

2   suits only when such suits are brought against parties whom Li has previously “encountered” in

3   litigation on this subject-matter in federal court. 2

4                                         *                            *                            *

5            For the above reasons, we AFFIRM the order of the district court.

6                                                             FOR THE COURT:
7                                                             Catherine O’Hagan Wolfe, Clerk of Court
8

    2
      We leave for the district court to determine, if necessary, whether an Alibaba affiliate fits within the definition of a
    party who “ha[s] encountered him in any capacity in [federal] litigation,” In re Martin-Trigona, 737 F.2d at 1263,
    mindful of the fact that “the district court’s responsibility to protect federal jurisdiction and those individuals or entities
    who seek access to federal courts may entail periodic revision of the injunction to keep pace” with any future vexatious
    litigation, id.

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