Ventoso v. Shihara

Background

Pro se plaintiff Laura Ventoso brought claims for common-law fraud, violations of New York’s Deceptive and Unfair Trade Practices Act, and violations of New York’s Civil Theft Statute against Bill Shihara, individually, Bittrex, LLC, and Bittrex, Inc. On June 26, 2019, the court referred the claims to arbitration based on a mandatory arbitration clause in the then-applicable terms of service and an applicable arbitration agreement. The court stayed the case while arbitration was pending and required the parties to submit joint status updates every 90 days.

Ventoso submitted some status letters through June 22, 2020, and indicated in December 2019 and June 2020 that she was prepared to begin arbitration. She did not, however, initiate arbitration. The opinion states that she also stopped submitting the required status updates and stopped communicating with defense counsel. The defendants continued submitting status letters reporting that arbitration had not begun.

Motion and Legal Standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 41(b) for failure to prosecute, meaning failure to move the case forward. They served the motion on Ventoso by email and FedEx, and she did not oppose it.

The court explained that dismissal for failure to prosecute is a severe remedy. It considered five factors: the length of the delay, whether the plaintiff received notice that continued delay could lead to dismissal, likely prejudice to the defendants, the balance between court efficiency and the plaintiff’s opportunity to have the case heard, and whether a lesser sanction would work.

Court’s Analysis

The court found that all five factors supported dismissal. First, it found that Ventoso’s failure to begin arbitration had delayed the case for more than two and a half years. Second, it found that she had repeatedly been told—in the arbitration referral order and later court orders—that she needed to pursue arbitration. The defendants’ motion also notified her that the case could be dismissed.

Third, the court presumed prejudice to the defendants because of the unreasonable delay, Ventoso’s failure to prosecute the case, and her extended lack of communication. Fourth, the court stated that it could not bypass the required arbitration to decide Ventoso’s claims. Fifth, it found that no lesser remedy could cure the prejudice caused by her refusal to begin arbitration.

Disposition

The court dismissed the action with prejudice for failure to prosecute under Rule 41(b). It directed the clerk to terminate the pending motion and close the case. The opinion did not decide whether Ventoso’s fraud or New York statutory claims had merit.