AES-Apex Employer Servs. v. Dino Rotondo , 924 F.3d 857 ( 2019 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0094p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
AES-APEX EMPLOYER SERVICES, INC.; AES-APEX ┐
EMPLOYER SOLUTIONS, INC., │
Plaintiffs-Appellees (17-2068), │
Plaintiffs-Appellants (17-2211), │
│
> Nos. 17-2068/2211
v. │
│
│
DINO ROTONDO; RICHARD MARK; UNITED STATES │
DEPARTMENT OF THE TREASURY, INTERNAL REVENUE │
SERVICE, │
Defendants-Appellees (17-2068 & 17-2211), │
│
│
AKOURI INVESTMENTS, LLC,
│
Intervenor-Appellant (17-2068), │
Intervenor-Appellee (17-2211). │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:13-cv-14519—Robert H. Cleland, District Judge.
Argued: May 8, 2019
Decided and Filed: May 17, 2019
Before: SUHRHEINRICH, THAPAR, and LARSEN, Circuit Judges.
_________________
COUNSEL
ARGUED: H. Nathan Resnick, RESNICK LAW, P.C., Bloomfield Hills, Michigan, for Akouri
Investments. Geoffrey J. Klimas, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for United States Department of the Treasury and Internal Revenue Service.
Scott D. MacDonald, DIXON & MACDONALD, Southfield, Michigan, for AES-Apex. ON
BRIEF: H. Nathan Resnick, RESNICK LAW, P.C., Bloomfield Hills, Michigan, for Akouri
Investments. Geoffrey J. Klimas, Teresa E. McLaughlin, UNITED STATES DEPARTMENT
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OF JUSTICE, Washington, D.C., for United States Department of the Treasury and Internal
Revenue Service. Scott D. MacDonald, DIXON & MACDONALD, Southfield, Michigan, for
AES-Apex.
_________________
OPINION
_________________
THAPAR, Circuit Judge. Dino Rotondo serves as a consultant for AES-Apex. This case
is a dispute about who gets the money that he makes consulting. The IRS says that it should get
the money because Rotondo is behind on his taxes. Akouri Investments says it should get the
money instead because Akouri loaned Rotondo money that he has not paid back yet. And
finally, AES-Apex says that it should get to keep some of the money pursuant to its contract with
Rotondo. The district court granted summary judgment in favor of the IRS, and we affirm.
I.
As relevant here, Dino Rotondo was the sole owner of Apex Administrative Services
(“Apex”). Apex, in turn, wholly owned four limited liability companies: Apex HR Services,
LLC, Pinnacle HR Services, LLC, AS Holdings Group, LLC, and AS South, LLC (collectively,
the “Directional Entities”). Together with these Directional Entities, Apex provided a variety of
services, such as human resources, to different clients.
Eventually Rotondo opted to sell the Directional Entities’ key asset—their customer lists,
essentially lists of who their clients were. He sold the customer lists in a deal with two firms,
AES-Apex Solutions, Inc. and AES-Apex Employer Services, Inc. (collectively, “AES”). As
part of that deal, AES agreed to pay Rotondo a share of its gross profits in the form of
“Consulting Fees.”
Yet the bad news for Rotondo is that he will not keep the Consulting Fees because he
owes a lot of money and is behind on his payments. Two entities have claims to collect
Rotondo’s Consulting Fees. First, a firm named Akouri Investments, LLC (“Akouri”) loaned
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money to one of Rotondo’s other companies.1 In return for that loan, Akouri gained a security
interest in Apex’s assets. When Rotondo failed to pay back his loan, Akouri obtained a
judgment against Rotondo and Apex for $1.4 million.
Second, Rotondo owes the IRS. Over the years, Rotondo failed to pay his taxes, so the
IRS has assessed various tax penalties against him. As of 2015, Rotondo owed the IRS
$3.4 million. To try and get that money, the IRS filed several notices of tax liens against
Rotondo, Apex, and the Directional Entities.
Once Rotondo started earning his Consulting Fees, both the IRS and Akouri saw an
opportunity to get what they were owed. The IRS contacted AES directly, claiming it was
entitled to the Consulting Fees because of its tax liens. Then, several months later, Akouri
claimed that it was entitled to the Consulting Fees. Facing conflicting claims to the Consulting
Fees—and the possibility of having to pay twice—AES filed this interpleader action in state
court. Interpleader permits a party facing claims “that may expose [it] to double or multiple
liability” to join all claimants as defendants in a single action. Fed. R. Civ. P. 22(a)(1). The IRS
removed the case to federal district court, and the district court granted summary judgment in its
favor. The parties now appeal several of the district court’s decisions. We review each in turn.
II.
Before determining whether the IRS or Akouri gets the Consulting Fees, we must first
figure out the size of the pot—i.e., how much money does AES owe Rotondo? That turns on
two sets of agreements between AES and Rotondo: the Consulting Agreement and the Asset
Purchase Agreement.2 AES claims that both of those agreements allow it to deduct the costs and
attorneys’ fees that it incurs in this case from what it owes Rotondo in Consulting Fees. The
district court disagreed and found instead that AES must pay the “full value” of those Consulting
1Another individual, Richard Mark, also loaned money to Rotondo’s companies, but Mark’s interest is not
a subject of this appeal.
2AES and Rotondo signed two Consulting Agreements and two Asset Purchase Agreements that the parties
treat as having substantially identical terms except for the AES signatory (either AES-Apex Solutions, Inc. or AES-
Apex Employer Services, Inc.). We refer to these agreements in the singular.
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Fees. This is a matter of contract interpretation that we review de novo. Royal Ins. Co. of Am. v.
Orient Overseas Container Line Ltd., 525 F.3d 409, 421 (6th Cir. 2008).
A.
AES first claims that the Consulting Agreement allows it to deduct litigation expenses.
In AES’s Consulting Agreement with Rotondo, AES agreed to pay Rotondo a percentage of
gross profits as Consulting Fees. But the agreement permits it to deduct two types of costs from
those gross profits: the taxes that AES owes on its own profits and “direct expenses attributable
to the employees leased under [a client’s] account.” R. 1, Pg. ID 52. AES claims that the costs
of this litigation (including related state court actions) are such “direct expenses.” In interpreting
the Consulting Agreement, we apply the “plain and ordinary meaning” of these terms. Rory v.
Cont’l Ins. Co., 703 N.W.2d 23, 28 (Mich. 2005); see also Stryker Corp. v. Nat’l Union Fire Ins.
Co. of Pittsburgh, 842 F.3d 422, 426 (6th Cir. 2016) (applying Michigan law).
This “direct expenses” argument does not go very far. Even assuming the meaning of the
phrase “direct expenses” could include the costs of this litigation, we do not interpret contract
language in isolation. We must read “direct expenses” in context. See Mich. Twp. Participating
Plan v. Pavolich, 591 N.W.2d 325, 328 (Mich. Ct. App. 1998). The full clause in the contract
says that AES is only entitled to deduct “direct expenses attributable to the employees leased
under [a client’s] account.” R. 1, Pg. ID 52 (emphasis added). “Attributable” essentially means
“produced by.” Oxford English Dictionary (2012). And the “employees leased” are AES’s
clients’ employees. Thus, the “direct expenses” clause covers expenses “produced by” the
employees of one of AES’s clients. But neither AES’s clients nor its clients’ employees did
anything to produce these litigation expenses. None of AES’s clients are parties to this litigation,
and there is no suggestion that any of the clients’ employees are bringing claims for Rotondo’s
Consulting Fees—only the IRS and Akouri are. Indeed, AES’s briefing does not even mention
its clients’ employees or point to any evidence that the costs of this litigation could be attributed
to its clients’ employees. The litigation expenses from this case are not “attributable” to any of
AES’s employees at all—they are “attributable” to AES’s lawyers, the IRS, and Akouri. So,
under the plain meaning of the Consulting Agreement, AES cannot deduct its litigation expenses
from Rotondo’s Consulting Fees.
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AES counters by saying that the purpose of this provision was to enhance its profitability.
Thus, anything that lowers its profitability should be deducted from the Consulting Fees. But
such an expansive definition does not fit the language to which the parties agreed. Again, that
language expressly limits AES’s deductions to only two categories—not anything that could
“significantly diminish[]” profit. 17-2068 Appellant Br. 20. We “honor the intent of the parties”
by enforcing their agreement “as written”—not based on whatever vague purposes can be
supplied after the fact. Superior Commc’ns v. City of Riverview, 881 F.3d 432, 438 (6th Cir.
2018) (quoting Rasheed v. Chrysler Corp., 517 N.W.2d 19, 29 n.28 (Mich. 1998)). Accordingly,
AES may not deduct costs or attorneys’ fees on account of this provision.
B.
Next, AES contends that the Asset Purchase Agreement allows it to deduct litigation
expenses. AES relies on two interwoven provisions in this Agreement: the Indemnification
Provision and the Offset Provision. Our analysis again rests on the plain and ordinary meaning
of these provisions. Rory, 703 N.W.2d at 28.
Indemnification Provision. This provision states that Rotondo and the Directional
Entities must “indemnify” AES from the costs of litigation in a variety of circumstances,
including “any claim, litigation or other action of any nature arising out of any act . . . prior to the
date” the deal closed. R. 1, Pg. ID 19. The provision further requires Rotondo to indemnify
AES for litigation expenses incurred in “enforc[ing] the indemnification obligations.” Id. The
Indemnification Provision may indeed encompass expenses incurred in this litigation since
Rotondo owed taxes and did not pay his loan before the deal closed.
While Rotondo may owe AES money, it does not follow that AES can automatically
deduct what it thinks Rotondo owes from the Consulting Fees. The Indemnification Provision
does not create an automatic right for AES to be paid. Instead, this provision qualifies Rotondo’s
indemnification obligation by stating that Rotondo must pay after AES has made a “demand.”
Id. Without a demand, there is no right to payment under the contract. But there is no evidence
that AES made such a demand—and thus no evidence that the Indemnification Provision has
even been triggered.
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Offset Provision. AES alternatively suggests that the last line of the Indemnification
Provision, called the Offset Provision, proves that it has an automatic right to deduct costs and
attorneys’ fees. The Offset Provision states that AES “shall have a right to offset such losses,
damages, liabilities, deficiencies, costs, expenses and attorneys’ fees against any sums owed by
[AES] to [Rotondo].” Id. AES thus argues that deducting costs and attorneys’ fees from the
Consulting Fees is merely executing this “right to offset.”
AES’s argument once again falls short because it failed to consider the full context of the
Offset Provision. The Offset Provision only provides that an “offset” can occur for “such losses,
damages, liabilities, deficiencies, costs, expenses and attorneys’ fees.” Id. (emphasis added).
But does this mean that AES can offset automatically—and whenever it pleases—any losses
caused by Rotondo against the fees owed him? What are “such . . . costs”? We can figure that
out with the help of a canon of textual interpretation: a “demonstrative adjective generally refers
to the nearest reasonable antecedent,” i.e., when a word like “such” is used, it is normally
referring to something mentioned previously. Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts § 18 (2012); Barnhart v. Thomas, 540 U.S. 20, 27–28 (2003);
see also Sims’s Lessee v. Irvine, 3 U.S. (Dall.) 425, 444 n.* (1799) (“The rule is, that ‘such’
applies to the last antecedent, unless the sense of the passage requires a different construction.”).
Applying this canon, we look to what came before the Offset Provision in the Asset
Purchase Agreement. Immediately preceding the Offset Provision is a reference to costs
incurred when “enforc[ing] the indemnification obligations.” R. 1, Pg. ID 19. Perhaps “such”
refers only to these enforcement costs. If that is the case, then AES is out of luck; no
enforcement costs currently exist because AES has not sought to enforce Rotondo’s
indemnification obligations. But the text of the Offset Provision cuts against interpreting “such”
as referring exclusively to costs incurred in enforcing the Indemnification Provision. The Offset
Provision refers not merely to “such . . . costs, expenses and attorneys’ fees”—losses that could
be incurred trying to enforce the Indemnification Provision—but also “such . . . damages,
liabilities, [and] deficiencies.” It is hard to imagine how AES could incur the latter sort of
losses—e.g., “damages”—by trying to enforce the Indemnification Provision. And the mention
of “damages, liabilities, [and] deficiencies” in the Offset Provision likely refers back to
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“damage[s], liabilit[ies] or deficienc[ies]” mentioned in the opening sentence of the
Indemnification Provision. In other words, the Offset Provision is best read as referring to both
the costs of enforcing the Indemnification Provision and the total costs that could be
indemnified.3
But the broad coverage of the Offset Provision does not help AES here. Although the
Offset Provision allows AES to offset any sums Rotondo is obligated to pay under the
Indemnification Provision, Rotondo is not obligated to pay anything under that provision until
AES has made a demand. Because there is no evidence in the record that AES has made such a
demand, Rotondo is not currently obligated to pay under the Indemnification Provision. And
there is thus no outstanding payment obligation to trigger the Offset Provision.
As there is no basis in either the Consulting Agreement or the provisions of the Asset
Purchase Agreement for AES to deduct its costs and attorneys’ fees from this litigation, we
affirm the district court’s contract interpretation. AES owes Rotondo the full amount of the
Consulting Fees, without deductions.
III.
Although AES owes the full value of the Consulting Fees, Rotondo will not get to keep
that money. Instead, the Consulting Fees will go to one of the two entities to whom he owes
money: either Akouri or the IRS. Both have a claim to Rotondo’s money. We must decide
which one has seniority, i.e., who gets paid. The district court granted summary judgment in
favor of the IRS. Akouri challenges this conclusion, and we review de novo. 1st Source Bank v.
Wilson Bank & Tr., 735 F.3d 500, 502 (6th Cir. 2013).
Federal law controls the priority of a federal tax lien vis-à-vis other property interests.
United States v. Dishman Indep. Oil, Inc., 46 F.3d 523, 526 (6th Cir. 1995). And “priority for
purposes of federal law is governed by the common-law principle that ‘first in time is the first in
right.’” United States v. McDermott, 507 U.S. 447, 449 (1993) (quoting United States v. New
Britain, 347 U.S. 81, 85 (1954)). So it all comes down to timing: did the IRS’s interest come
3It would also be strange if AES could offset losses from trying to enforce the indemnification provision
but could not offset the losses Rotondo had to indemnify in the first place.
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first, or did Akouri’s? We measure the timing of a federal tax lien by when the IRS gave notice
of its lien. 26 U.S.C. § 6323(a), (f). And we measure the timing of state security interests, like
Akouri’s, by when they become “choate”—i.e., complete or perfected. See United States v.
Equitable Life Assurance Soc’y of the U.S., 384 U.S. 323, 328 (1966); see also Black’s Law
Dictionary (10th ed. 2014) (defining choate). In general, these interests become “choate” as a
result of a state judgment or state attachment filing (“when there is nothing more to be done”).
Blachy v. Butcher, 221 F.3d 896, 905–06 (6th Cir. 2000).
The IRS was first. The United States filed its notices of tax liens against Rotondo’s
assets between October 2007 and September 2013. Akouri, in contrast, did not receive a state
judgment against Rotondo until December 2013. Thus, the IRS’s liens have priority.
Akouri does not dispute this analysis. Instead, Akouri tries to get around the IRS’s clear
priority in two ways. Both are an attempt to recategorize the customer list assets as originally
belonging to Apex rather than the Directional Entities. If Apex really sold those customer lists to
AES, then Akouri says it can take priority over the IRS because of its purportedly senior security
interest in Apex.
First, Akouri claims Apex actually owned the customer lists that Rotondo sold to AES.
In order to survive summary judgment on this theory, Akouri needed to first raise a genuine
dispute of material fact as to the ownership of the customer lists. See Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). But Akouri has pointed to nothing in the record that disputes the
pieces of evidence that tend to prove that the Directional Entities, not Apex, owned and then sold
the customer lists to AES. First, the Asset Purchase Agreement contains schedules detailing
which customers’ information was being sold. These schedules list the owner of each
customer’s information, and only the Directional Entities are listed as owners. Second, there are
two examples of contracts that the Directional Entities proposed to a client to offer services.
These “exemplar contracts” offer some proof that the Directional Entities were the companies
working with the customers. Third, Rotondo submitted an affidavit stating that the “customer
assets . . . were owned by entities which were at no time subject to a lien . . . of Akouri.” R. 53-
6, Pg. ID 1529. Since Akouri did not have a lien on the Directional Entities, this too implies it
was the Directional Entities that sold the customer lists.
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While this may not be the strongest conceivable evidence, summary judgment is first and
foremost about dispute resolution; facts must be disputed by the party, like Akouri, that opposes
summary judgment. See Williamson v. Aetna Life Ins. Co., 481 F.3d 369, 378–79 (6th Cir. 2007)
(holding that the party opposing summary judgment is required to point to evidence in the record
that creates an issue of fact). Rather than dispute any of the IRS’s evidence, Akouri has merely
said that there is not enough evidence to conclusively say the Directional Entities owned the
customer lists. We agree with the district court, however, that casting only “metaphysical doubt”
is insufficient to survive summary judgment. Matushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986).4
Akouri did, however, offer evidence that went to its second and altogether different
theory of why Apex should be considered the owner of the customer lists. Even if the
Directional Entities technically owned the customer lists, Akouri argues that they did not observe
various corporate formalities separating them from Apex. Thus, according to Akouri, the
Directional Entities are just sham companies—“alter egos” of Apex. As “alter egos,” the
Directional Entities would collapse back into one corporate form with Apex. And Akouri says it
has a senior security interest in Apex.
But this theory fails as well. As mentioned, a security interest can only defeat an IRS tax
lien if it is “choate.” Blachy, 221 F.3d at 905–06. An interest is only “choate” if it does not
require an additional judicial determination. Cf. United States v. Vermont, 377 U.S. 351, 355
(1964). It is one thing to casually describe the Directional Entities as “alter egos” of Apex, but it
is another to consider them “alter egos” as a matter of law. For the Directional Entities to be
legally considered “alter egos,” a court would need to first make a judicial determination. See,
e.g., In re Two Springs Membership Club, 408 B.R. 453, 468–69 (Bankr. N.D. Ohio 2009),
reversed on other grounds by United States v. Camp Coast to Coast, Inc., 424 B.R. 251 (N.D.
Ohio 2010). Thus, Akouri’s interest under this theory remains inchoate because of the need for
4We also follow the district court in declining to decide if a Michigan state court decision has res judicata
effect on this question. It is unclear whether the state court decided the ownership question. New Hampshire v.
Maine, 532 U.S. 742, 748–49 (2001) (requiring “an issue of fact or law actually [be] litigated and resolved in a valid
court determination”).
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an additional judicial determination. And an “inchoate” interest cannot take priority over the
IRS’s tax lien. Cf. McDermott, 507 U.S. at 449.
Moreover, even if a court were to now decide that the Directional Entities are sham
companies, that determination would be too late. An interest becomes “choate” at a specific
point in time—the federal law of priority does not allow for interests to “relat[e] back” to an
earlier time. Blachy, 221 F.3d at 905. Akouri’s interest would be choate as of 2019, not some
earlier date. But the IRS’s tax liens indisputably date to well before 2019, so Akouri’s interest
would still not be “first in time.” Id.Accordingly, we affirm summary judgment in favor of the IRS.
IV.
Akouri appeals two additional decisions by the district court. First, the district court
denied Akouri’s motion for supplemental briefing, which included a request that the court
consider new evidence on the ownership of the customer lists. Second, the district court declined
to exercise supplemental jurisdiction over Akouri’s additional state law fraudulent transfer claim.
Akouri concedes that we can only reverse these decisions if they were an abuse of discretion.
Jones v. Northcoast Behavioral Healthcare Sys., 84 F. App’x 597, 599 (6th Cir. 2003) (citing In
re Air Crash Disaster, 86 F.3d 498, 516 (6th Cir. 1996)) (supplemental briefing); Harper v.
AutoAlliance Int’l, Inc., 392 F.3d 195, 200 (6th Cir. 2004) (supplemental jurisdiction).
Supplemental Briefing. After the magistrate judge finished his report and
recommendation—and nearly three months after briefing concerning that report and
recommendation had been completed—Akouri sought permission to file a supplemental brief
with new evidence attached. This evidence came from new depositions that Akouri took in a
state court action involving Rotondo and AES. Akouri says that the district court should have
considered this evidence. Docket control, however, is something that rests in the “sound
discretion of the district court.” In re Air Crash Disaster, 86 F.3d at 516 (alteration omitted).
And the district court pointed out that Akouri had the opportunity to request these depositions
during federal discovery but did not. Had it sought these depositions, it then could have used
them to develop additional arguments and included them in the various summary judgment
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motions. Further, to the extent that this evidence would lead to new legal arguments, the district
court explained Akouri had forfeited those arguments. See Murr v. United States, 200 F.3d 895,
902 n.1 (6th Cir. 2000). Such reasoning was not an abuse of discretion.
Akouri argues otherwise. Akouri says the district court would have denied an earlier
request for discovery as duplicative of its state court discovery. Therefore, it would have been
fruitless to ask. But we cannot know what the district court would have done if given the
opportunity to review Akouri’s request for evidence earlier. All we know is there was nothing
barring Akouri from making a good faith request for discovery during the time allotted by the
parties, the magistrate judge, and the district court. Akouri made a strategic decision not to make
that request. And when it finally got the depositions and sought to introduce them, the district
court reasonably explained why it was too late. Cf. Landis v. N. Am. Co., 299 U.S. 248, 254
(1936) (stating that a court has inherent power “to control the disposition of the causes on its
docket with economy of time and effort for itself, for counsel, and for litigants”).
In one last argument, Akouri points to an unpublished decision, Muhammad v. Close.
No. 08–1944, 2009 WL 8755520, at *2 (6th Cir. Apr. 20, 2009) (order). But Muhammad did
nothing more than recognize the age-old truth that district courts must actually use the discretion
that they have. Id. (remanding because district court did not appear to use its discretion in
deciding whether to accept late evidence); cf. Foman v. Davis, 371 U.S. 178, 182 (1962). Here,
the district court did so in its reasoned discussion of Akouri’s request. It simply exercised that
discretion in a way contrary to what Akouri wanted. Indeed, a district court never abuses its
discretion when it holds that an issue not actually presented to a magistrate judge is forfeited.
See United States v. Waters, 158 F.3d 933, 936 (6th Cir. 1998) (citing Marshall v. Chater, 75
F.3d 1421, 1426–27 (10th Cir. 1996) (collecting cases holding that issues raised for the first time
in objections to a magistrate judge’s report are deemed forfeited)). And Muhammad did not
create a different rule (nor could it). Accordingly, Muhammad neither calls into question the
discretion that the district court used here nor alters the district court’s forfeiture analysis.
Supplemental Jurisdiction. As part of its cross-complaint below, Akouri alleged that the
sale of the customer lists from the Directional Entities to AES was a fraudulent conveyance
under Michigan law. The district court dismissed this claim after it granted summary judgment
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in favor of the IRS. Akouri’s dispute with the IRS was the basis of the court’s jurisdiction;
Akouri’s Michigan-law claim merely tagged along based on supplemental jurisdiction. This
dismissal was not an abuse of discretion. “[I]n the usual case in which all federal-law claims are
eliminated before trial,” district courts should decline to “exercise jurisdiction over the remaining
state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 & n.7 (1988).
Akouri claims this is not a usual case. It points out that three years had passed since it
filed its state law claim. Therefore, Akouri argues, it was imprudent for the district court to
dismiss the state law claim since the litigation was no longer in its “early stages.” Id. at 350.
But the progression of litigation is not measured so much in years as in the various and familiar
stages laid out in the Federal Rules of Civil Procedure—there is the filing of the complaint,
notice, answers to the complaint or motions to dismiss, discovery, motions for summary
judgment, trial, and final judgment. See, e.g., Fed. R. Civ. P. 3, 4, 12, 26, 40, 54, 56. So the
proper metric is how far Akouri’s state law claim was along these stages. The answer? Not far.
Akouri points to no discovery undertaken for this claim, and the docket discloses no motions for
summary judgment on this claim either. Indeed, Akouri concedes that it instead sought most of
its discovery on these issues in the parallel state case. Thus, in terms of the stages of litigation
and the resources to be expended on it, Akouri’s state law claim was in its very early stages
indeed. See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559–60 & n.6 (2007) (discussing the
burdens and resource intensive nature of the discovery stage of litigation). The district court did
not abuse its discretion by declining to exercise supplemental jurisdiction over Akouri’s state law
claim.
* * *
The district court properly interpreted the agreements between AES and Rotondo,
properly granted summary judgment in favor of the IRS’s claim for the Consulting Fees, and did
not abuse its discretion in denying Akouri’s requests for supplemental briefing and supplemental
jurisdiction.
We affirm.