United States District Court, D. Colorado
ORDER ADOPTING FEBRUARY 26, 2019 RECOMMENDATION OF
UNITED STATES MAGISTRATE JUDGE
CHRISTINE M. ARGUELLO, JUDGE
matter is before the Court upon the February 26, 2019 Order
Discharging Order to Show Cause, Order Imposing Sanctions on
Plaintiff, and Recommendation by United States Magistrate
Judge N. Reid Neureiter that this Court deny Defendant's
Motion to Dismiss Pursuant to Fed.R.Civ.P. 41(b). (Doc. #
44.) Defendant Thomas Richard Young filed an Objection (Doc.
# 52) to the magistrate judge's Orders and Recommendation
on March 12, 2019, and Plaintiff Swan Global Investments, LLC
filed a Response (Doc. # 60) on March 26, 2019. For the
reasons that follow, the Court overrules Defendant's
Objection, affirms and adopts the Recommendation, and denies
Defendant's Motion to Dismiss Pursuant to Fed.R.Civ.P.
41(b) (Doc. # 25).
Judge Neureiter's Recommendation details the factual and
procedural background of this case. (Doc. # 44 at 1-11.) The
Recommendation is incorporated herein by reference.
See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P.
72(b). Accordingly, the factual background of this dispute
will be reiterated only to the extent necessary to address
initiated the instant action in Colorado state court on
November 16, 2018, and filed its first Amended Complaint on
November 26, 2018. (Doc. ## 1-1, 1-2.) On December 4, 2018,
Defendant removed the case to federal court. (Doc. # 1.) On
December 14, 2018, Leslie E. Fourton filed a Notice of Entry
Appearance (Doc. # 14) as Plaintiff's General Counsel. On
December 30, 2019, Mr. Fourton filed two documents (Doc. ##
19, 20), which formed the basis of Defendant's Motion to
Dismiss Pursuant to Fed.R.Civ.P. 41(b) (Doc. # 25) and,
ultimately, Defendant's Objection to Magistrate Judge
Neureiter's Orders and Recommendation (Doc. # 52).
the December 30 filings was an amended complaint. (Doc. #
20.) The parties had previously conferred regarding
Plaintiff's intention to file an amended complaint, and
defense counsel “consented to the additional amendment
. . . with the understanding and belief from
[Plaintiff's] counsel that the forthcoming amendments
would narrow the complaint and address the numerous
deficiencies identified during the conferral between
counsel.” (Doc. # 25 at 2.) However, the amended
complaint was twice as long as its predecessor and included
the same causes of action. (Id.)
other December 30 filing was a Motion to Withdraw as Counsel,
which indicated that Plaintiff was “eliminating the
General Counsel position in its entirety as of December 31,
2018.” (Id. at 1.) Mr. Fourton reiterated that
statement at a hearing before Magistrate Judge Wang on January 9,
2019, and a representative from Plaintiff's organization
who was in attendance did not state anything to the contrary.
(Doc. # 36 at 2-3.) However, in an unrelated matter,
Defendant learned that James Candelaria had become
Plaintiff's General Counsel effective January 1, 2019.
(Doc. # 25 at 3.) By email dated January 11, 2019, Mr.
I am not representing [Plaintiff] in the [instant case] nor
can I because I am a U.S. District Court Magistrate in the
District of Colorado. The Federal Court knows that I work for
[Plaintiff]. It is true that I am in-house counsel for
[Plaintiff] (part-time) and will represent [Plaintiff] on
matters. However, since I have a conflict [Plaintiff] is
having to search for and hire outside counsel.
25-1 at 1.) Mr. Candelaria's signature block in the email
indicates that he is “General Counsel” for
Mr. Candelaria's role in Plaintiff's organization
became apparent, Magistrate Judge Wang recused herself from
this case due to her professional relationship with Mr.
Candelaria. (Doc. # 26 at 1.) The case was reassigned to this
Court, and this Court designated Magistrate Judge Neureiter
to conduct non-dispositive proceedings. (Doc. ## 28, 29.)
Accordingly, this Court referred the following matters to
Magistrate Judge Neureiter on January 16, 2019:
• Mr. Fourton's first and second Motion to Withdraw
as Counsel (Doc. ## 19, 28);
• Defendant's Unopposed Motion for an Extension of
Time to Respond to Plaintiff's Third Amended Complaint
(Doc. # 24); and
• Defendant's Motion to Dismiss Pursuant to
Fed.R.Civ.P. 41(b) (Doc. # 25).
(Doc. # 30.)
Magistrate Judge Neureiter held a motions hearing on February
6, 2019, at which Plaintiff failed to appear. The Courtroom
Minutes reflect that the magistrate judge “will issue a
recommendation regarding granting [Defendant's] Motion to
Dismiss Pursuant to Fed.R.Civ.P. 41(b) . . . . The Court
tentatively decides to recommend that this case be
dismissed.” (Doc. # 37 at 2.) On February 12, 2019, the
magistrate judge issued an Order to Plaintiff Swan Global to
Show Cause Why This Case Should Not Be Dismissed with
Prejudice Pursuant to Fed.R.Civ.P. 41(b). (Doc. # 38.)
Specifically, the Order directed Plaintiff to show cause:
why this matter should not be dismissed with prejudice as a
sanction for (1) making misrepresentations or material
omissions to opposing counsel and the Court; (2) failing to
file a “short and plain” statement of the case,
and failing to make it either shorter or plainer in multiple
amendments; (3) failing to respond in a timely manner to
Defendant's Motion to Dismiss; (4) failing to have
replacement counsel timely enter an appearance to replace
counsel who has twice sought to withdraw from the case, even
after being ordered to do so by the Court; and (5) failing to
appear at the February 6, 2019 motions hearing.
(Id. at 1.)
February 20, 2019, Thomas F. Quinn filed an Entry of
Appearance as counsel for Plaintiff (Doc. # 39) and a
Response to Order to Show Cause (Doc. # 41). On February 22,
2019, Defendant filed a Reply to Plaintiff's Response to
Order to Show Cause. (Doc. # 42.) On February 25, 2019,
Magistrate Judge Neureiter held a hearing on the ...