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Katz v. Feldman

United States District Court, D. Delaware

January 18, 2019

BERNARD KATZ, Plaintiff,
v.
WILLIE FELDMAN, Defendant.

          MEMORANDUM

          Honorable Maryellen Noreika, United States District Judge.

         1. INTRODUCTION

         Plaintiff, Bernard Katz, (“Katz”), who appears pro se, commenced this action on February 6, 2018, against Defendants Willie Feldman (“Feldman”), individually, and Salem Botanicals, Inc. (“Salem Botanicals”) alleging fraud during an arbitration proceeding and asking the Court to set aside an arbitration award. (D.I. 1). The matter proceeds on the Third Amended Complaint. (D.I. 9). Katz also filed an Amended Motion to Vacate an American Arbitration Association Award Order. (D.I. 5). The proper vehicle for a party seeking vacatur of an arbitral award is by motion, not by filing a complaint. See 9 U.S.C. § 1, et seq.; Pfeffer v. Wells Fargo Advisors, LLC, 2017 WL 2269541, at 2 (S.D.N.Y. May 23, 2017). Feldman has filed an Amended Counterclaim for judgment and lien against Katz and Telesonic Corp. (D.I. 7).

         II. BACKGROUND

         Katz asks the Court to set aside the arbitration award In the Matter of the Arbitration between Salem Botanicals Inc. v. Telesonic Packaging Corp., Case Number: 01-17-0002-9404, heard before the American Arbitration Association Commercial Arbitration Tribunal on January 2, 2018. (See D.I. 1; D.I. 5 at 15). The arbitrator awarded Salem Botanicals, the Claimant, $40, 380.75 and denied Telesonic Packaging Corp.'s counterclaim. (D.I. 5 at 15). Katz filed a Complaint, Amended Complaint, and Third Amended Complaint in this Court appealing the award. (D.I. 1, 4, 9). On October 29, 2018, Salem Botanicals and Angela Giampolo, both of whom were named as defendants in the Third Amended Complaint, were dismissed for failure to serve process pursuant to Fed.R.Civ.P. 4(m). (See D.I. 12). Feldman is the only defendant in this action.[1]

         Katz is not a named party in the arbitration matter. In the original Complaint and the Amended Complaints Katz appeals the arbitration award as “owner of Telesonic, a sole proprietorship.” (D.I. 1; D.I. 4; D.I. 9 at 2). Courts have allowed sole proprietors to appear pro se on behalf of their business entity. See Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. 2007). “Telesonic” is not a party to the underlying arbitration matter.

         The Motion and Amended Motion to Vacate the Arbitration Award were filed by Katz as “owner of Telesonic Packaging Corporation, ” and seek to vacate the arbitration award. (D.I. 3, 5 at 2). Telesonic Packaging Corp. is the Respondent in the arbitration matter. The word “Corporation” or the abbreviation “Corp.” connotes a corporation, not a sole proprietorship. See e.g., Winkler v. Andrus, 594 F.2d 775, 777 (10th Cir. 1979). A corporation may appear in the federal courts only through licensed counsel. See Rowland v. California Men's Colony, 506 U.S. 194, 201-02 (1993). Katz, a non-attorney, may not represent the interests of a corporation in this Court.[2]

         Feldman, who also appears pro se, filed a counterclaim against Katz (D.I. 6) which he later amended (D.I. 7). Feldman is a managing member of Salem Botanicals. (Id. at 10). Like Katz, he was not a party to the arbitration. The Amended Counterclaim asks the Court to confirm the arbitration award in favor of Salem Botanicals, and enter judgment against Katz and Telesonic Corp. in the amount of the arbitration award. Like Katz, Feldman is not an attorney, and he may not represent the interests of a corporation in federal court.

         III. DISCUSSION

         A. Legal Standards

         Every Court has the inherent authority to manage the cases on its docket “with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936). In addition, “district courts have the inherent authority to manage their dockets and courtrooms with a view toward the efficient and expedient resolution of cases.” Dietz v. Bouldin, 136 S.Ct. 1885, 1892 (2016). Finally, the Court has broad discretion in deciding whether to dismiss an action with prejudice pursuant to its inherent authority to manage its docket. See Lee v. Krieg, 227 F. App=x 146, 148 (3d Cir. 2007) (“We reiterate that the court has broad discretion in deciding whether to dismiss an action with prejudice under Rule 41(b) or pursuant to its inherent authority to manage its docket.”).

         B. Proper Parties and Jurisdiction

          Typically, the proper parties to a suit challenging an arbitration award are the same as those in the underlying arbitration proceeding. See e.g., Pham v. Financial Industry Regulatory Auth., Inc., 2013 WL 633398, at *3 (N.D. Cal. Feb. 20, 2013) (proper challenge to an award is an action to vacate it brought against the other party, the real adversary). The arbitration award was issued in favor of Claimant Salem Botanicals, named as a defendant in this action, but who was not served, and has been dismissed. Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co. Ltd., 484 U.S. 97, 104 (1987). Because Salem Botanicals was never served, the Court does not have jurisdiction over it.

         Feldman, who was not a party to the underlying arbitration proceeding, is the sole defendant. Plaintiff alleges that he is the “owner” of Salem Botanicals, while Feldman indicates that he is its managing member. To the extent Katz seeks to recover from Feldman personally, in essence, he asks the Court to pierce Salem Botanicals' corporate veil. The pleadings do not indicate this issue was presented at arbitration and, ...


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