Cutting v. Riveles Wahab LLP

Background

Shawn C. Cutting, Crypto Traders Management, LLC, and Crypto Traders Fund, LP filed a complaint asserting one legal-malpractice claim against Riveles Wahab LLP, Simon Riveles, Kaiser Wahab, and Terrence Griffiths. The complaint alleged that the defendants were negligent because they failed to file a Form D with the Securities and Exchange Commission. The plaintiffs were proceeding without lawyers.

The defendants filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Because the two corporate plaintiffs had to be represented by counsel in federal court, the court repeatedly directed Cutting to state whether he intended to retain counsel for them. Cutting initially said he intended to retain counsel and later described his efforts to find one. After more than four months without counsel for the corporate entities, the court dismissed those entities without prejudice for failure to prosecute.

Failure to Prosecute

The court then directed Cutting to state whether he intended to respond to the pending motion to dismiss and warned that failing to do so would result in dismissal of the action for failure to prosecute. Cutting did not respond by the original deadline or by an extended deadline. The opinion states that he had not participated in the case since May 1, 2024.

Federal Rule of Civil Procedure 41(b) allows a court to dismiss an action when a plaintiff fails to prosecute or comply with court orders. The court considered the duration of Cutting’s noncompliance, the warnings he received, possible prejudice to the defendants, the court’s interest in managing its docket, Cutting’s opportunity to be heard, and whether a lesser sanction would work.

Ruling

Judge Vernon S. Broderick concluded that Cutting had willfully abandoned the case. The court found that he had received repeated warnings, had been given a fair opportunity to continue, and could not be effectively sanctioned with a lesser measure because he was not participating in the litigation. The court also found that the defendants faced prejudice from the unresolved case remaining pending, although the case was still in its early stages.

The court determined that the circumstances were not extreme enough to support dismissal with prejudice. It therefore DISMISSED the action without prejudice for failure to prosecute under Rule 41(b), directed the Clerk of Court to mail the order to Cutting at his last known address, and closed the case. The opinion does not decide the pending motion to dismiss or the underlying legal-malpractice claim.