Nicholas Malfitano Mar. 16, 2016, 8:43am


PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit has affirmed a ruling from a lower federal court that both prevented a recusal motion from proceeding and dismissed a judicial fraud complaint in its entirety.

Edward Bukstel filed an appeal asking the Third Circuit to summarily vacate the U.S. District Court for the Eastern District of Pennsylvania’s orders, but the appeals court denied Bukstel’s motion and granted the appellees’ motion to dismiss.

Bukstel is the founder of a company called VitaminSpice, Inc. In 2011, company investors brought a federal lawsuit where they alleged Bukstel and VitaminSpice committed conversion and securities fraud, and unlawfully prevented the investors from selling their VitaminSpice stock, in violation of the Uniform Commercial Code. The investors were represented by attorneys from Hangley Aronchick Segal & Pudlin. Bukstel answered the suit and filed counterclaims.

In 2013, the parties settled the case and it was dismissed from the District Court.

The following year, Bukstel filed a motion arguing the plaintiff/counterclaim defendants engaged in various forms of impropriety, including one of the parties (Advanced Multilevel Concepts) being a fictitious entity and their counsel covering up this misconduct. It was a motion denied by the District Court.

Rather than appeal that decision, Bukstel filed a brand-new complaint last year, naming both the plaintiffs/counterclaim defendants from the original suit, in addition to Hangley and its lawyers. Bukstel alleged fraud on the District Court through Hangley’s alleged representation of a fictitious entity, and that the District Court judge hearing the case (Judge Michael M. Baylson) should have recused himself from the matter due to a supposed close friendship with Mark Aronchick, a named shareholder of the Hangley law firm.

The District Court dismissed the complaint and Bukstel appealed to the Third Circuit, claiming abuse of discretion on the part of the District Court. But in a per curiam ruling, Judges Joseph A. Greenaway Jr., Patty Shwartz and Morton I. Greenberg affirmed the judgment of the District Court.

“We will summarily affirm the District Court’s judgment. First, the District Court did not err in dismissing Bukstel’s complaint. As the Court observed, Rule 60(b) does not provide a civil cause of action,” the Third Circuit said.

The appeals court added Bukstel’s claims were barred by the District Court’s denial of the claims when he raised them in his first Rule 60(b) motion, and that in dismissing his federal claims, the District Court was within its right to not exercise supplemental jurisdiction over his state law claims.

Further, the Third Circuit ruled the District Court did not abuse its discretion in denying his recusal motion pointed towards Baylson and his alleged friendship with Aronchick.

“Typically, a judge need not recuse merely because he or she is friends with an attorney in the case. Any potential bias here was mitigated by the fact that Mark Aronchick was not involved in any way in this case,” the Third Circuit said.

The appeals court termed Bukstel’s additional allegations that Baylson and Aronchick conspired to have Bukstel evicted from his home and “unsubstantiated” and “irresponsible”, and that they provide no support for his motion.

“Moreover, even if the District Judge should have recused, given our conclusion that the District Court was correct to dismiss Bukstel’s complaint, any recusal error would be harmless,” the Third Circuit said.

“Accordingly, we deny Bukstel’s motion for summary action, grant the defendants’ cross-motion, and will summarily affirm the District Court’s judgment. Bukstel’s numerous pending motions, to the extent that they request additional relief, are denied,” the Third Circuit concluded.

The appellees are represented by Matthew Hamermesh and John S. Summers of Hangley Aronchick Segal & Pudlin, in Philadelphia.

U.S. Court of Appeals for the Third Circuit case 15-3301

U.S. District Court for the Eastern District of Pennsylvania case 2:15-cv-03951

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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