Receiver's Response to Plaintiff's Motion for Entry of Judgment — SideSolve v. Docklight Brands (Document 22)
Summary
Receiver's Response to Plaintiff's Motion for Entry of Judgment, filed March 4, 2024 as Document 22 in United States of America ex rel. SideSolve LLC v. Docklight Brands, Inc., Case No. 22-cv-1371-JNW, in the U.S. District Court for the Western District of Washington at Seattle. Dominique Scalia, the court appointed receiver of Docklight, states that the Receiver does not intend to fight plaintiff's claim. It asks plaintiff to participate in the state court receivership and this Court to defer under principles of comity, noting that Docklight placed itself into a voluntary proceeding governed by Ch. 7.60 RCW on December 15, 2023. In the alternative it asks that any collection actions on a judgment be stayed pending the state receivership. It is signed /s/ Daniel J. Bugbee as Attorney for Defendant.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Receiver's Response to Plaintiff's Motion for Entry of Judgment — SideSolve v. Docklight Brands (Document 22).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-w-d-wash-no-2-22-cv-01371-dkt-22-w-d-wash-74118c68cf/
, SHA-256 51672fbd4c4dee7e25aae99b71d2a98293da4d5452e84ad6a562333a0570cebf.Full text
Case 2:22-cv-01371-JNW Document 22 Filed 03/04/24 Page 1 of 5
1 The Honorable Jamal N. Whitehead
2
3
4
5
6
7
UNITED STATES DISTRICT COURT
8 WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
9
UNITED STATES OF AMERICA, ex rel. Case No. 22-cv-1371-JNW
10
SIDESOLVE LLC,
11
Plaintiff, RECEIVER’S RESPONSE TO
12 PLAINTIFF’S MOTION FOR
v. ENTRY OF JUDGMENT
13
DOCKLIGHT BRANDS, INC., Noted for Consideration on:
14 March 8, 2024
Defendant.
15
16
Dominique Scalia, the court appointed receiver (“Receiver”) of Docklight Brands,
17
Inc. (“Docklight”) hereby responds to plaintiff’s motion for entry of judgment. The Receiver
18
does not intend to fight plaintiff’s claim or its right to payment, but instead requests plaintiff
19
to participate in the state court receivership and for this Court to defer under principles of
20
comity to the state court insolvency proceedings.
21
As plaintiff acknowledges, Docklight placed itself into a voluntary proceeding
22
23 governed by Ch. 7.60 RCW on December 15, 2023. Pursuant to RCW 7.60.060, the Receiver
24 has the power to generally prosecute and defend against claims brought against the debtor.
25
RESPONSE TO MOTION FOR ENTRY OF
JUDGMENT - 1
22-cv-1371-JNW
Case 2:22-cv-01371-JNW Document 22 Filed 03/04/24 Page 2 of 5
1 Further, RCW 7.60.110 operates as a stay of actions – including the continuation of existing
2 actions by third parties – against the debtor. While the “police powers” of the government are
3
exempted, this action is an attempt to obtain a monetary judgment, presumably to enforce
4
against the receivership estate of Docklight.
5
Under the general rule, “Federal courts should not assume a role in controversies in
6
which a state court has taken control of assets . . .” AMS Mktg. v. Fidelity Sec. Life Ins. Co.,
7
830 F. Supp. 1284, 1286 (D. Ariz. 1993). However, if the action is in personam, as opposed
8
to in rem, this prohibition is not jurisdictional. See Navajo Life Ins. v. Fidelity and
9
10
Deposit, 807 F. Supp. 1485, 1487 (D. Ariz. 1992). So long as a federal court's ruling will not
11 "interfere with the constructive possession" of the estate, federal court jurisdiction is not
12 barred. Id.; Grimes v. Crown Life Ins. Co., 857 F.2d 699, 701-02, n.2 (10th Cir. 1988). Even
13 where the prohibition is not jurisdictional, the United States Supreme Court has recognized
14 several situations in which exceptional circumstances warrant abstention from the exercise of
15
federal jurisdiction.
16
Under the doctrine established in Burford v. Sun Oil Co., 319 U.S. 315, 87 L. Ed.
17
1424, 63 S. Ct. 1098 (1943), federal courts should decline to exercise jurisdiction in
18
proceedings involving essentially local issues arising out of a complicated state regulatory
19
scheme. AMS Mktg., 830 F. Supp. at 1286. The handling of the affairs of insolvent companies
20
is an example of such a regulatory scheme and “federal courts have been reluctant to interfere
21
in state receivership proceedings.” State of Idaho ex rel. Soward v. U.S., 858 F.2d 445, 450
22
23
(9th Cir. 1988). Once there is a receivership filing, “the state has concentrated suits involving
24
25
RESPONSE TO MOTION FOR ENTRY OF
JUDGMENT - 2
22-cv-1371-JNW
Case 2:22-cv-01371-JNW Document 22 Filed 03/04/24 Page 3 of 5
1 the local issue, i.e., the receivership and the status of [the debtor].” AMS Mktg., 830 F. Supp.
2 at 1287. 1
3
If this Court enters judgment and allows plaintiff to execute on the judgment through
4
garnishments or otherwise, it will flip the orderly liquidation of Docklight on its head and
5
potentially abrogate the state law receivership process. The Receiver is not advocating setting
6
aside or re-litigating plaintiff’s claims in the state court, but instead is asking plaintiff to
7
submit its claim pursuant to RCW 7.60.210 (submission of claims in general receiverships)
8
and to receive treatment as provided for in RCW 7.60.230 (priorities) and as adjudicated by
9
10
the King County Superior Court. In requiring plaintiff to do so, this Court will be upholding
11 the principles of comity espoused in Burford and its progeny.
12 At the very least, should this Court proceed to enter a judgment in this matter, the
13 Receiver requests that any collection actions with respect to the judgment be stayed pending
14 the outcome of the state court receivership proceeding. See Tucker v. First Maryland Sav. &
15
Loan, Inc., 942 F.2d 1401, 1405 (9th Cir. 1991) (discussing available alternative remedies of
16
both dismissing or staying the federal action).
17
I certify that this memorandum contains 630 words in compliance with local civil rules.
18
DATED this 4th day of March, 2024.
19
DBS | LAW
20
/s/ Daniel J. Bugbee__________________
21 Daniel Bugbee, WSBA No. 42412
155 NE 100th St Ste 205
22
Seattle, WA 98125-8015
23
(206) 489-3802
24
1
While AMS Mktg involved an insurance company put into receivership by the state itself, Docklight can
only avail itself of a state-court insolvency proceeding due to its nexus to the state-regulated cannabis industry,
thus the same principles apply.
25
RESPONSE TO MOTION FOR ENTRY OF
JUDGMENT - 3
22-cv-1371-JNW
Case 2:22-cv-01371-JNW Document 22 Filed 03/04/24 Page 4 of 5
1 dbugbee@lawdbs.com
Attorney for Defendant
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
RESPONSE TO MOTION FOR ENTRY OF
JUDGMENT - 4
22-cv-1371-JNW
Case 2:22-cv-01371-JNW Document 22 Filed 03/04/24 Page 5 of 5
1 CERTIFICATE OF SERVICE
2
I certify under penalty of perjury under the laws of the State of Washington, that on the
3
date set forth below, I served the document(s) to which this is attached, in the manner noted, on
4
5
the following persons:
6
Attorneys for Plaintiff
7
MATT WALDROP, GA#349571 ( ) Via U.S. Mail
8 Assistant United States Attorney ( ) Via E-Mail
United States Attorney’s Office (X) Via E-Service
9 700 Stewart Street, Suite 5220 ( ) Via Overnight Mail
Seattle, Washington 98101-1271
10
11
12
13
DATED this 4th day of March, 2024.
14
/s/ Daniel J. Bugbee
15
Daniel J. Bugbee, WSBA No. 42412
16
17
18
19
20
21
22
23
24
25
RESPONSE TO MOTION FOR ENTRY OF
JUDGMENT - 5
22-cv-1371-JNW
File and source
- File
- 22.pdf
- Size
- 213,868 bytes
- SHA-256
- 51672fbd4c4dee7e25aae99b71d2a98293da4d5452e84ad6a562333a0570cebf
- Our copy
- 22.pdf
- Original
- No public link identified.