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Crocs, Inc. v. Effervescent, Inc.
United States District Court, D. Colorado
March 19, 2018
CROCS, INC., Plaintiff,
EFFERVESCENT, INC., HOLEY SOLES HOLDINGS, LTD., DOUBLE DIAMOND DISTRIBUTION, LTD., and U.S.A. DAWGS, INC., Defendants. U.S.A. DAWGS, INC. and DOUBLE DIAMOND DISTRIBUTION, LTD., Plaintiffs,
RONALD SNYDER, DANIEL HART, THOMAS J. SMACH, ANDREW REES, GREGG RIBATT, ANDREW REDDYHOFF, GEORGE B. BOEDECKER, JR., LYNDON HANSON, DONALD LOCOCO, RAYMOND CROGHAN, RONALD FRASCH, MICHAEL MARGOLIS, JEFFREY LASHER, MICHAEL E. MARKS, PRAKASH MELWANI, JOHN P. MCCARVEL, ERIK REBICH, SARA HOVERSTOCK, and JOHN AND JANE DOE DEFENDANTS 1-30, Defendants.
A. BRIMMER United States District Judge
matter is before the Court on U.S.A. Dawgs Inc.'s Notice
of Pending Bankruptcy and of Automatic Stay [Docket No. 807]
and the parties' responses [Docket Nos. 815, 817] to the
Court's February 14, 2018 minute order [Docket No. 813],
which directed the parties to discuss whether this matter
should be administratively closed until the automatic stay is
Crocs and the individual defendants in the Snyder
action, Civil Action No. 16-cv-02004, request that the Court
not administratively close this matter pursuant to the
automatic stay. They assert that Crocs's claims against
U.S.A. Dawgs must be resolved in order for the bankruptcy
proceeding to reach a conclusion. Docket No. 815 at 3-4.
Additionally, Crocs and the individual defendants argue that
the following matters are not subject to the automatic stay:
(1) Crocs's claims against Double Diamond Distribution,
Ltd.; (2) the Lanham Act counterclaim against Crocs by Double
Diamond and U.S.A. Dawgs; (3) the Lanham Act claim against
the individual defendants in Civil Action No. 16-cv-02004;
and (4) “issues of compliance with Court Orders and
discovery misconduct.” Id. at 2-3.
Dawgs and Double Diamond acknowledge that certain matters may
not be subject to the automatic stay, but they request that
the entire matter be stayed for a limited period of time in
order to allow this case to proceed in a more efficient
manner once the bankruptcy proceeding has been resolved.
Docket No. 817 at 2.
consideration of the parties' responses, the Court finds
that administrative closure of the entire matter is
appropriate. The parties agree that Crocs's claims
against U.S.A. Dawgs are subject to the automatic stay under
11 U.S.C. § 362(a). See Docket No. 815 at 2;
Docket No. 817 at 2; see also TW Telecom Holdings Inc. v.
Carolina Internet Ltd., 661 F.3d 495, 496 (10th Cir.
2011) (noting that “§ 362 of the Bankruptcy Code
automatically stays the commencement or continuation of a
judicial proceeding against the debtor that was or could have
been initiated before the filing of a bankruptcy
petition”). Additionally, claims against nonbankrupt
codefendants may be stayed in “unusual situations,
” such as when “there is such identity between
the debtor and the third-party defendant that the debtor may
be said to be the real party defendant and that a judgment
against the third-party defendant will in effect be a
judgment or finding against the debtor.” Okla.
Federated Gold & Numismatics, Inc. v. Blodgett, 24
F.3d 136, 141-42 (10th Cir. 1994). The Court finds that this
is likely the situation here. The same claims are asserted
against both U.S.A. Dawgs and Double Diamond, see
generally Docket No. 473, and defendants have been
operating largely as a single entity in their defense of the
lawsuit. See, e.g., Docket No. 817 (joint response
to minute order).
Crocs's claims against Double Diamond and U.S.A.
Dawgs's Lanham Act claims against Crocs and the
individual defendants are not subject to § 362(a)'s
automatic stay, the interests of judicial economy weigh in
favor of administrative closure. See Hawg Tools, LLC v.
Newsco Int'l Energy Servs., Inc., No.
14-cv-03011-REB-MJW, 2015 WL 1087051, at *2 (D. Colo. Mar. 9,
2015) (finding that administrative closure pending resolution
of state court appeal would serve the interests of judicial
economy and avoid unnecessary expenditures on litigation);
see also Quinn v. CGR, 828 F.2d 1463, 1465 n.2 (10th
Cir. 1987) (noting that administrative closure is the
practical equivalent of a stay). There is significant
entwinement among the parties and the claims asserted in this
case. Accordingly, to allow this matter to proceed in a
piecemeal fashion pending resolution of the bankruptcy
proceeding or an order lifting the automatic stay would
impose unnecessary burdens on both the parties and the Court.
pursuant to the Court's authority under D.C.COLO.LCivR
41.2, it is
that Civil Action Nos. 06-cv-00605 and 16-cv-02004 shall be
administratively closed, subject to being reopened upon a
showing of good cause by any party. It is further
that the parties shall file a status report within 30 days of
any action that serves to lift the automatic stay in force as
a result of the bankruptcy proceeding in the District of
Nevada [Case No. 18-10453]. The status report shall indicate
what the action was, the purported impact, and how the party
or parties intend to proceed in this case. It is further
that all pending motions in this case are DENIED without
prejudice. If and when the case is reopened, the parties may
request leave to re-file their motions. It is further
that all settings and deadlines in ...