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Pelican Files Amended Complaint; Darl Files Motion to Dismiss - What Does Long-Arm Mean? - Updated: Defendants File Answer, CC
Thursday, October 08 2009 @ 05:11 PM EDT

Pelican Equity has filed a First Amended Complaint [PDF], and Darl McBride has finally managed to file a motion to dismiss it with respect just to himself, based on a claim that New York State lacks jurisdiction, so it's a Motion to Dismiss for Lack of Jurisdiction [PDF]. He tried before, but they filed in paper format, and the court wouldn't accept that. Now, he's filed properly, and the motion dance begins. To understand what is happening, I need to explain jurisdiction and a bit about New York's long-arm statute.

It means pretty much what you'd think long-arm might mean in a context about jurisdiction. A court can only gain the authority to hear your claim or a claim about you if it has jurisdiction, meaning the authority to rule on it. This litigation is happening in New York; McBride is in Utah. How can he be sued in the Big Apple? Normally, if you live in Utah and I live in New York, it's mighty hard for me to sue you in New York. The only way would be via the long-arm statute, which allows a New York court to reach you with a long arm, and there are specifics about what makes that possible. It isn't always possible, and then you have to hire a Utah lawyer and sue in Utah.

You know how in EULAs they often say that you agree that any disputes will be handled in the vendor's state? They do that because they want you to suffer the annoyance and expense of going to their state instead of vice versa. But when there is no EULA, sometimes there are issues that a court has to decide, and this is one of them. The question is, can McBride be sued in New York?

Here, the plaintiff wants to sue him and some other defendants, some of them in New York, over an alleged conspiracy hatched and at least partially executed in New York, according to the complaint. McBride is claiming that Pelican can't sue him in New York State, since he says he has no connection to that state at all. Pelican claims he does, as I'll show you, but it also claims the Computer Fraud and Abuse Act provides supplemental jurisdiction.

Imagine if that's the simple version. Here we go with the details.

First, the latest filings:

09/29/2009 - 23 - ENDORSED LETTER addressed to Judge Naomi Reice Buchwald from Samuel E. Bonderoff dated 9/24/2009 re: The parties have conferred and agreed to the following briefing schedule: Motion to dismiss to be filed October 13, 2009. Plaintiff's response to the motion to dismiss to be filed November 9, 2009. Bryan Cave's reply to plaintiff 's response to be filed November 18, 2009. ENDORSEMENT: So Ordered. (Signed by Judge Naomi Reice Buchwald on 9/29/2009) (jpo) (Entered: 09/29/2009)

09/18/2009 - 24 - AMENDED COMPLAINT amending 1 Complaint against Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran, Darl McBride, Bryan Cave LLP.Document filed by Pelican Equity, LLC. Related document: 1 Complaint filed by Pelican Equity, LLC.(laq) (Entered: 10/01/2009)

10/06/2009 - 25 - ENDORSED LETTER: addressed to Judge Naomi Reice Buchwald from Paul R. Niehaus dated 10/5/09. re: Mr, McBride's attorneys and counsel for Plaintiff have agreed to the following briefing schedule with respect to Mr. McBride's motion to dismiss: Mr. McBride's motion to dismiss will be filed on or before October 8, 2009; Plaintiffs opposition papers will be filed on or before November 5, 2009; Mr, McBride's reply papers will be made on or before November 13, 2009 ENDORSEMENT: So Ordered. ( Motions due by 10/8/2009. Replies due by 11/13/2009. Responses due by 11/5/2009) (Signed by Judge Naomi Reice Buchwald on 10/6/09) (js) (Entered: 10/06/2009)

10/07/2009 - 26 - MOTION to Dismiss for Lack of Jurisdiction. Document filed by Darl McBride. Responses due by 11/5/2009(Niehaus, Paul) (Entered: 10/07/2009)

10/07/2009 - 27 - MEMORANDUM OF LAW in Support re: 26 MOTION to Dismiss for Lack of Jurisdiction.. Document filed by Darl McBride. (Niehaus, Paul) (Entered: 10/07/2009)

10/07/2009 - 28 - DECLARATION of Darl McBride in Support re: 26 MOTION to Dismiss for Lack of Jurisdiction.. Document filed by Darl McBride. (Niehaus, Paul) (Entered: 10/07/2009)

10/07/2009 - 29 - DECLARATION of Kevin McBride in Support re: 26 MOTION to Dismiss for Lack of Jurisdiction.. Document filed by Darl McBride. (Attachments: # 1 Exhibit (Ex. 1, pt. 1), # 2 Exhibit Ex. 1 (pt 2), # 3 Exhibit Ex. 2, # 4 Exhibit Ex. 3)(Niehaus, Paul) (Entered: 10/07/2009)

McBride tried to file a motion to dismiss some time back, but it was rejected because of being a paper filing. His brother Kevin McBride was listed as his lawyer:
Filed & Entered: 08/24/2009
Note Rejection of Attempted Paper Filing in ECF Case
Docket Text: ***REJECTION OF ATTEMPTED PAPER FILING IN ECF CASE. The following document(s) Darl McBride's Motion to dismiss for lack of personal jurisdiction, Memorandum in support of Darl McBride's Motion to Dismiss for lack of personal jurisdiction, Declaration of Darl McBrid in support of motion to dismiss for lack of personal jurisdiction. Filing Attorney: McBride Law, PC, was rejected by the Clerk's Office and must be FILED ELECTRONICALLY on the Court's ECF System. (eef)
Darl has since hired another attorney for his team. The big news from the filings is that Mark Robbins has denied that he owes Darl McBride money, as you can see in the transcript, Exhibit 1, attached to Kevin McBride's declaration, of the July creditors' meeting in the AIP bankruptcy, p. 23 of the PDF:
MR. MORGAN: Let me ask, Mr. Benson, do you know Mr. McBride?

MR. BENSON: I do.

MR. MORGAN: Does the debtor -- does this debtor acknowledge any debt -- portion of this debt he's identified as being debt of this debtor?

MR. BENSON: He does not. Mr. James Nesland is an attorney and has asked me to make a statement that they're pursuing three different fraud lawsuits against Mr. McBride currently. I'm supposed to make that statement.

MR. MORGAN: Who is Mr. James Nesland?

MR. BENSON: Jim Nesland is an attorney for Mark Robbins.

So someone is not being truthful in this picture, McBride or Robbins. I guess there could be other possibilities -- the lawyer maybe got it wrong, or the employee talking for Robbins did. McBride testified in the SCO bankruptcy about a "loan" to Robbins; now Robbins is claiming he owes McBride nothing. So did that money go to Robbins or not? So we'll put a paper clip there to remind us to keep watching that part of the story as it unfolds.

The other interesting tidbit is that the amended complaint alleges that McBride was working out of AIP offices in 2007. Not SCO's offices? Another paper clip.

But let me explain a bit about long-arm. In the Memorandum of Law in support of Darl's motion to dismiss, the preliminary statement reads like this:

The Court lacks personal jurisdiction over Darl McBride because Mr. McBride lacks the necessary minimum contacts with the State of New York, either generally under NY CPLR § 301, or for the specific purposes of this case under NY CPLR § 302. Mr. McBride is a resident of Utah. All of Mr. McBride's allegedly relevant conduct occurred in Utah. Mr. McBride has no business dealings in the State of New York and derives no income from the State of New York.

It is beyond reasonable dispute that Mr. McBride lacks minimum contacts for the exercise of general jurisdiction over him in the State of New York, and the First Amended Complaint does not even attempt to make this case. But the allegations in the First Amended Complaint also make clear that Mr. McBride lacks the necessary contacts with the State of New York for the exercise of specific jurisdiction in the instant case. The First Amended Complaint does not allege any acts by Mr. McBride within the State of New York. Instead, jurisdiction over Mr. McBride rests solely on allegations falling into two categories: (a) alleged internet- based defamation against Mark Robbins through the website skylinecowboy.com and Yahoo! Finance postings; and (b) alleged conspiracy with the other co-defendants. However, NY CPLR § 302 specifically excludes from the exercise of long-arm jurisdiction any claims based on alleged defamation. And NY CPLR § 302 does not extend to bare allegations of conspiracy, entirely unsupported by facts showing overt acts in furtherance of the alleged conspiracy committed by the non-resident anywhere, much less in the State of New York.

Therefore, all claims against Mr. McBride must be dismissed for lack of in personam jurisdiction.

So what is all this saying? There's more than one kind of jurisdiction, subject matter and personal. In personam means personal. Subject matter jurisdiction means the type of case, whether the court handles the type of claim; personal jurisdiction means whether or not it can touch you personally.

For example, if you want to divorce me, you can't file for divorce in bankruptcy court, because that isn't the subject matter the bankruptcy court handles, so the court would lack subject matter jurisdiction. But if we are in a divorce, and you know you have property that you think is at least partly yours, even if I've moved to another state, you can still go after me and the property.

Before the Internet, jurisdiction was a breeze. People were where they were, and they did what they did in a certain state. Now, you can affect people lots of places you've never even visited. The idea is simple enough and basically remains the same, though. States can't touch you if you don't live there, unless you at least have meaningful contacts with the state or derive income from business there or unless you did something awful in that state.

In meat space, it's simpler. But the fact is, you can do a lot of business in New York State without ever setting foot there. So now it's a lot more complex. In fact, it's so complex, I couldn't predict who will win this motion, even if I had knowledge of the facts, which I don't. We don't know who, if anyone, is telling the truth. For all we know, Robbins filed this case to do McBride a favor. Not likely, but I'm just saying we can't assume anything. Judges have a lot of leeway with this question of jurisdiction. Here's a recent article that explains all the fine points, though, The Golden Age of Personal Jurisdiction [PDF]. It specifically treats New York's long-arm statute and a couple of meaningful cases that will give you the overview. A brief excerpt, so you'll know if you want to dig deeper:

A New York State court cannot render a valid, binding judgment without jurisdiction. Jurisdiction consists of subject matter jurisdiction (competence to entertain a claim or claims), in personam jurisdiction (power over the person or property), and proper notice. All three components are necessary for a court to assert jurisdiction. Subject matter jurisdiction and proper notice will not be discussed in this article.

If the defendant is domiciled, incorporated, or licensed to do business in New York, a New York court may exercise personal jurisdiction over that defendant. Jurisdiction over the property includes both in rem and quasi in rem jurisdiction. The former occurs when the litigation involves property within the territorial boundaries of New York. The latter occurs when a non-domiciliary’s property within the State is attached to obtain a basis for jurisdiction in a cause of action not directly related to the property. These traditional grounds for jurisdiction, referred to as general jurisdiction, were developed prior to the adoption of the CPLR and were subsequently incorporated into CPLR 301.16 Specific jurisdiction pursuant to CPLR 302 permits New York courts to assert long-arm jurisdiction over non-domiciliary individuals and corporations that are not subject to general jurisdiction.

Jurisdiction under CPLR 302 is, however, restricted to the contacts listed in the statute, and the claim over which jurisdiction is asserted must arise out of those contacts. Moreover, the long-arm statute does not extend as far as is constitutionally permissible. In addition to being constrained by the Due Process Clause of the Fourteenth Amendment, long-arm jurisdiction is also restricted by article I, section six of the New York State Constitution. In personam jurisdiction must be determined separately for each cause of action asserted in the plaintiff’s complaint. Similarly, a third-party plaintiff must establish personal jurisdiction over a third-party defendant on an impleader action and over a co-defendant on a cross-claim action. Courts have considerable leeway in deciding a motion to dismiss for personal jurisdiction and, if the plaintiff makes a prima facie showing of jurisdiction, may order “jurisdictional discovery” under CPLR 3211(d).

There are multiple footnotes which you can read in the original, but we're just skimming the surface here, for the general idea of what this motion is about. Notice the part about having to establish jurisdiction over each claim? McBride is claiming that the only claim against him regarding the Skyline Cowboy website would be a defamation claim, but that server isn't in New York State, and defamation jurisdiction doesn't come under the NYS long-arm statute, or so they state. As for the conspiracy claim, the alleged conspiracy has nothing to do with McBride or, as far as he is concerned, New York:
A. The Alleged Defamatory Statements
Do Not Support Long-Arm Jurisdiction

Mr. McBride's alleged defamatory statements cannot serve as the basis for personal jurisdiction under NY CPLR §302(a) because no acts were alleged to have occurred within New York, because any actions allegedly occurring outside of New York cannot be used to tie Mr. McBride to New York, and -- most fundamentally -- the alleged acts are specifically excluded as a basis for the exercise of jurisdiction.

In Best Van Lines, Inc. v. Walker, 490 F.3d 239 (2d Cir. 2007), the Second Circuit Court of Appeals examined exhaustively the use of allegedly defamatory internet postings as the basis for long-arm jurisdiction under NY CPLR §302. In circumstances remarkably similar to the case at bar, the Second Circuit found that allegedly defamatory postings by a non-domiciliary on an out-of-state website did not provide a basis for long-arm jurisdiction. The court reviewed comprehensively a variety of theories under which the defendant could possibly have been subject to jurisdiction in New York, and rejected each in turn.

Defamation of character is specifically excluded as a basis for the exercise of jurisdiction under NY CPLR §302(a)(2) and (3). NY CPLR §302(a)(2) extends long-arm jurisdiction over non-residents for tortious acts committed within the State of New York, "except as to a cause of action for defamation of character arising from the act..." Similarly, NY CPLR §302(a)(3) extends long-arm jurisdiction for tortious acts committed outside the State of New York, "except as to a cause of action for defamation of character arising from the act," and only if a person "(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce."

Plaintiff's allegations of jurisdiction against Mr. McBride as set forth in ¶ 49 fail under NY CPLR §302(a)(2) and (3) because, inescapably, any alleged website designed to make "disparaging and misleading statements about [Mark] Robbins and his business and to discredit him" can only sound in defamation. Similarly, any alleged "negative and false statements about Mr. Robbins and his business on Twitter and Yahoo! Finance postings" can only sound in defamation, and are thus excluded as a basis for jurisdiction under NY CPLR §302(a).

In addition, allegations of defamatory statements, the allegations of ¶ 49 cannot form the basis for jurisdiction under §302(a)(2) because any such conduct did not occur within the State of New York, and is not alleged to have done so.

The allegations of ¶ 49 also independently fail under §302(a)(3) because Mr. McBride does not regularly do or solicit business in New York, derive substantial revenue from interstate commerce, and could not have expected that his alleged actions would have consequences in New York. Indeed, neither the named Plaintiff (Pelican Equity, LLC), nor the real parties in interest (Mark Robbins and AIP) are alleged to have anything whatsoever to do with the State of New York. Pelican is alleged to be a Delaware entity with its headquarters in California. Robbins did not reside or operate in New York. AIP was not domiciled in New York and did not operate in New York. Therefore, any alleged conduct by Mr. McBride could not reasonably be expected to have had foreseeable consequences in the State of New York, and in fact did not. And to reiterate, Darl McBride had never even heard of the company Pelican Equity, LLC until the filing of this litigation. It is impossible that he could have engaged in any act against Pelican Equity, LLC, and no such allegations exist in the First Amended Complaint.

Finally, there is absolutely no allegation that Mr. McBride's allegedly defamatory statements arose out of the transaction of business within New York under NY CPLR §302(a)(1). Again, the sole allegation is that Mr. McBride posted statements on the internet -- there is nothing in the FAC to suggest that such postings were in any way connected to a business transaction involving Pelican Equity or either of Robbins or AIP.

For these reasons, any internet-based activity alleged against Mr. McBride does not give rise to long-arm jurisdiction under NY CPLR ß302(a) under the facts of the instant case.

B. The Alleged "Conspiracy" Does Not Support Long-Arm Jurisdiction

Nor can Plaintiff's wholly unsupported allegations of conspiracy support personal jurisdiction under NY CPLR §302(a). Such allegations are raised at various points throughout the FAC, but most particularly in ¶ 51. Paragraph 51 alleges: "[o]n information and belief, he [McBride] shared with the others the Confidential Business Information [of AIP] in his possession and collaborated with the others in the operation of their new pirated business."

Under none of the various subsections of NY CPLR §302(a) can such vague and unsubstantiated allegations support the exercise of personal jurisdiction over Mr. McBride.

As an initial matter, bald and unsupported allegations of conspiracy cannot form the basis for the exercise of jurisdiction. Lacking any supportable facts of conspiracy, Plaintiff resorts to an "information and belief" allegation of conspiracy against Mr. McBride in ¶ 51 of the FAC. This is simply not enough to justify long-arm jurisdiction against a non-resident under any theory of law. See, Second Amendment Foundation et al. v. United States Conference of Mayors et al., 274 F.3d 521 (D.C. Cir. 2001) (bare allegations of conspiracy insufficient to support long-arm jurisdiction); First Chicago International v. United Exchange Co Ltd., 836 F.2d 1375 (D.C. Cir. 1988) (alleged participation in international check-kiting scheme insufficient to extend jurisdiction to non-resident co-conspirators).

Second Circuit case law rejects the application of long-arm jurisdiction with respect to the "conspiracy" theory allegations as alleged in the instant case. In Grove Press, Inc. v. Angleton, 649 F.2d 121 (2d Cir. 1981) the Second Circuit Court of Appeals held that "a showing must be made that the alleged agent acted in New York for the benefit of, with the knowledge and consent of, and under some control by, the nonresident principal" before long-arm jurisdiction under CPLR §302 could be lawfully extended. In the instant case, there is no allegation that Mr. McBride somehow acted as a principal to control a New York agent. To the contrary, the FAC paints Mr. McBride as an agent, not a principal. (See, e.g., FAC ¶ 49).

Even if the FAC's threadbare conspiracy allegations could pass muster as sufficiently detailed (and they cannot), the allegations would still not support the exercise of jurisdiction over Mr. McBride under any relevant section of NY CPLR §302(a).

NY CPLR §302(a)(1) cannot be the basis for jurisdiction because there are no allegations that the purported "conspiracy" was in connection with the transaction of business in the State of New York.

NY CPLR §302(a)(2) cannot be the basis for jurisdiction because there are no allegations that Mr. McBride committed any tortious act within New York State.

NY CPLR §302(a)(3)(i) cannot be the basis for jurisdiction because there is no allegation that Mr. McBride "regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state."

And NY CPLR §302(a)(3)(ii) cannot be the basis for jurisdiction because there are no allegations that Pelican Equity LLC, AIP or Mark Robbins has anything whatsoever to do with the State of New York, and it is therefore patently unreasonable to expect or foresee material consequences of any "conspiracy" in the State of New York. Finally, Mr. McBride has no financial or business connection whatsoever to Talos or the other defendants, and has no agreement or expectation of sharing of profit. Therefore, Mr. McBride has no expectation of revenue from interstate or international commerce related to any so-called "conspiracy" with Talos or the other co-defendants.

There is also a Due Process claim, but the above is in essence where McBride has planted his flag. I don't think it's accurate that the only claims regarding the website would be defamation, since Pelican is claiming a conspiracy to ruin AIP, so Talos could take the business for itself, and the website was allegedly in furtherance of that goal. But let's look at the two paragraphs referenced from the First Amended Complaint, or FAC, as they call it, 49 and 51, but I'll throw in 50 as well for continuity:
49. On or before February 11, 2009, the Individual Defendants began a smear campaign against Robbins and AIP. Brazell made disparaging statements to AIP vendors about Robbins in order to harm his reputation and drive AIP out of business. McBride, at Brazell's direction, established a website named skylinecowboy.com, the purpose of which was to make disparaging and misleading statements about Robbins and his business and to discredit him. He and another accomplice, A.J. Discala, also posted negative and false statements about Mr. Robbins and his business on twitter and Yahoo! Finance postings.

50. Among the false statements that McBride published over the internet were that Robbins had "pled No Contest to fraud," owes more than $40,000,000 to others, and had "become dubbed 'the Bernie Madoff of Utah" due to "Ponzi-type swindling." He referred to the stock loan business as the "Robbins stock loan scam." In some of his postings, McBride urged the parties not to do business with Robbins or his associates. To the extent that many of the postings contained a grain of truth, however distorted or mixed with jaundiced opinion, the defendants had learned of those matters through their association with AIP and access to its records and nonpublic information. The object of those efforts was to assist in the Individual Defendants' to destroy AIP while they started up Talos and competed against it. Yet they also had more ambitious hopes for it. Brazell and another working with him stated publicly that: "by the time we get done with Robbins he will commit suicide" and bragged about using "our little 'Bulldog Puppet' McBride to take him [Robbins] down."

51. Although McBride's internet postings were his most visible contribution to the defendants' conspiracy to destroy Robbins and AIP and steal AIP's business, his participation in that conspiracy was not limited to those postings. An experienced executive, he was not involved merely to act as a low-level hatchet man for the other conspirators. Rather, he was and is a full participant in the conspiracy and participated in and consulted regarding the planning of the overall scheme. On information and belief he shared with the others the Confidential Business Information in his possession and collaborated with the others in the operation of their new pirated business. The other conspirators, including Brazell, agreed that McBride would participate in Talos and in the profits all of them hoped their venture would reap.

There is another paragraph they don't cite, but I think might be significant, paragraph 20:
20. Beginning in 2007, McBride expressed an interest in joining AIP. In or about May 2007 he participated in several meetings in New York City with Robbins, Norris, and others in which he discussed his possible participation in AIP and conduct of business ventures with it and its affiliates, including a venture to acquire The SCO Group, Inc. and his participation in AIP's stock lending business. In or about the fall of 2007, at a time when he was president of The SCO Group, Inc., he moved into AIP's Salt Lake City offices and remained there for more than a year. McBride became a trusted confidante of Robbins. While located in those offices, he worked with and supervised AIP sales people and other employees who conducted AIP's stock loan business. He also headed AIP's efforts to resolve problems that arose with an AIP affiliate's development of a resort in Little Exuma, Bahamas. When an AIP controller departed, McBride assumed responsibility regarding AIP's finances. While working there in 2008, McBride repeatedly expressed his desire to become an AIP equity owner and its chief executive officer and in that capacity to oversee its operations. In connection with his work for, and negotiations with, AIP, McBride had access to virtually all of AIP's files and learned the details of AIP's stock lending business that constituted its Confidential Business Information, which he agreed to keep confidential.
Isn't that weird? Why wouldn't Darl be in SCO's offices? I'd like to see some proof, before I'd believe this allegation, personally. Normally, though, lawyers don't make statements that they don't think they can prove, because there can be penalties for doing that, and if they can demonstrate some evidence of these allegations, I don't think it's so hard to prove jurisdiction, since AIP folks were in New York plenty, according to the FAC, and if there is a way to link McBride to Talos, there you are. Talos is just the same people as AIP, minus Robbins, as far as at the top. Of course, McBride asserts he has no connection to Talos at all. Such a jurisdiction question is totally fact-based, and we don't have the facts, just the allegations and defenses. Perhaps the judge will order jurisdiction discovery.

A.J. Discala, eh? I wonder how Pelican knows that name? Perhaps they got Yahoo! to respond to a subpoena? Google shows more than one A. J. Discala. Presumably it's not the Hollywood guy. Maybe the investment guy with the "hands-on" approach? Probably not. There's even a female by that name, and she can't be it. Let's not guess, as it will all come out in the wash eventually, and there are always multiple people with the same name. If we were guessing about which A. J. Discala won a Nobel Prize, I'd be willing to guess and maybe risk making a mistake. But this is about wrongdoing, so let's not guess. Another paper clip.

Here's why Pelican believes it has jurisdiction:

14. This Court has jurisdiction over the claims in this action pursuant to 28 U.S.C. §1367(a).

15. This Court has personal jurisdiction over the Individual Defendants because most of them were and are employed by Talos in New York, New York and the others of them participated and are participating in a conspiracy centered here. Most of the individual Defendants performed their job responsibilities and committed many of the illicit acts hereinafter described within the State of New York with both the knowledge and intention that such acts would cause injury within the Southern District of New York. The others engaged in a conspiracy with them with the full knowledge of the acts and results that would occur in new York. This Court has personal jurisdiction over Talos and Bryan Cave because they transact business, and the wrongs they committed were performed and caused injury in New York.

16. Venue is proper in New York County pursuant to 28 U.S.C.§ 1391(b)(2) because a substantial part of the events giving rise to the claims occurred with the Southern District of New York.

As you can see, the parties are very far apart, not only in legal theories but even on the facts. So it will have to be sorted out by the judge. The only other factors I can think of to tell you about would be that it's very common to try to avoid jurisdiction if you can with a motion to dismiss, and in this case, it's possibly also strategic, I think, since McBride believes that Robbins is trying to avoid Utah, or so he expressed at the bankruptcy hearing. Perhaps the hope is that if the motion to dismiss is successful, McBride will be severed from the New York litigation, leaving Robbins with the recourse of suing in Utah, which he might not be willing to do.

But of course the law is not ever simple, so there are other possibilities as well. For example, you can't defame someone and then get away with it because you live in another state. You especially can't get away with it in the age of the Internet. It depends on the state, and its laws, of course, but Wall Street is the investment capital of the country, and it is in New York. If your reputation is ruined there, it's ruined, I'd imagine in the investment business. So where else would you want it restored but where it impacted to you the most?

Update: The rest of the defendants have now filed an Answer with Counterclaim to the First Amended Complaint:

10/09/2009 - 30 - ANSWER to Amended Complaint., COUNTERCLAIM against Pelican Equity, LLC. Document filed by Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran. Related document: 24 Amended Complaint, filed by Pelican Equity, LLC.(Blair, Jeanette) (Entered: 10/09/2009)

Interestingly, they deny the allegations in paragraphs 49, 50 and 51, and they ask for both compensatory and punitive damages, as well as attorneys' fees. Plaintiff is an alter ego for Robbins and AIP, and in paragraph 7, they state this:
7. Talos Defendants deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 7 of the Complaint, except deny that AIP ever had any proprietary intellectual property, business plans, models or confidential business information pertaining to a stock loan business or any claims of any nature against the Talos Defendants.
And you know how I keep cautioning not to necessarily believe anything about this case yet? Note paragraph 34:
34. Talos Defendants deny the allegations contained in paragraph 34 of the Complaint, and allege that the e-mail alleged to have been sent by Mr. Discala was, in fact, sent by Robbins posing as Mr. Discala.
See what I mean? This is a weird case, and it's about which of the parties is a fraudster, if anyone, and you and I can only watch, slack jawed, as it plays out.

Here's the full history of the case so far, up to today's filings:

History

Doc.
No.
Dates Description
--
Filed: 06/29/2009
Entered: 06/30/2009
Summons Issued
Docket Text: SUMMONS ISSUED as to Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran, Darl McBride, Bryan Cave LLP. (mbe)
--
Filed: 06/29/2009
Entered: 06/30/2009
Case Designation
Docket Text: Magistrate Judge Gabriel W. Gorenstein is so designated. (mbe)
--
Filed: 06/29/2009
Entered: 06/30/2009
Case Designated ECF.
Docket Text: Case Designated ECF. (mbe)
1
Filed: 06/29/2009
Entered: 06/30/2009
Complaint
Docket Text: COMPLAINT against Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran, Darl McBride, Bryan Cave LLP. (Filing Fee $ 350.00, Receipt Number 692929)Document filed by Pelican Equity, LLC.(mbe)
2
Filed: 06/29/2009
Entered: 06/30/2009
Rule 7.1 Corporate Disclosure Statement
Docket Text: RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Pelican Equity, LLC.(mbe)
3
Filed & Entered: 07/15/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by Gerard E. Harper on behalf of Bryan Cave LLP (Harper, Gerard)
4
Filed & Entered: 07/15/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by Moses Silverman on behalf of Bryan Cave LLP (Silverman, Moses)
5
Filed & Entered: 07/15/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by Samuel Ethan Bonderoff on behalf of Bryan Cave LLP (Bonderoff, Samuel)
6
Filed & Entered: 07/15/2009
Rule 7.1 Corporate Disclosure Statement
Docket Text: RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Bryan Cave LLP.(Silverman, Moses)
7
Filed & Entered: 07/17/2009
Certificate of Service Complaints
Docket Text: CERTIFICATE OF SERVICE of Summons and Complaint. Bryan Cave LLP served on 6/30/2009, answer due 7/20/2009. Service was accepted by Alan Pearce. Document filed by Pelican Equity, LLC. (Altman, Steven)
8
Filed & Entered: 07/24/2009
Stipulation and Order
Docket Text: STIPULATION AND ORDER, that Bryan Cave's time to move or answer in response to the Complaint be extended until August 19, 2009. (Signed by Judge Naomi Reice Buchwald on 7/23/09) (pl)
9
Filed & Entered: 07/29/2009
Affidavit of Service Complaints
Docket Text: AFFIDAVIT OF SERVICE. Robert V. Brazell served on 7/21/2009, answer due 8/10/2009; Stephen L. Norris served on 7/21/2009, answer due 8/10/2009; Talos Partners, LLC served on 7/21/2009, answer due 8/10/2009; Rama Ramachandran served on 7/21/2009, answer due 8/10/2009. Service was accepted by Mitchell Schuster, attorney. Document filed by Pelican Equity, LLC. (Altman, Steven)
10
Filed & Entered: 08/05/2009
Affidavit of Service Complaints
Docket Text: AFFIDAVIT OF SERVICE of Summons and Complaint. Darl McBride served on 7/27/2009, answer due 8/17/2009. Service was accepted by Darl McBride. Document filed by Pelican Equity, LLC. (Altman, Steven)
11
Filed & Entered: 08/05/2009
Certificate of Service Complaints
Docket Text: CERTIFICATE OF SERVICE of Summons and Complaint. Robert V. Brazell served on 7/14/2009, answer due 8/10/2009. Service was accepted by James Hyde, C.O.O.. Document filed by Pelican Equity, LLC. (Altman, Steven)
12
Filed & Entered: 08/07/2009
Rule 7.1 Corporate Disclosure Statement
Docket Text: RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Talos Partners, LLC.(Blair, Jeanette)
13
Filed & Entered: 08/07/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by Jeanette Renee' Blair on behalf of Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran (Blair, Jeanette)
14
Filed & Entered: 08/07/2009
Notice of Change of Address
Docket Text: NOTICE OF CHANGE OF ADDRESS by Jeanette Renee' Blair on behalf of Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran. New Address: Meister Seelig & Fein, Two Grand Central Tower, 140 East 45th Street, 19th Floor, New York, New York, USA 10017, (212) 655-3500. (Blair, Jeanette)
15
Filed & Entered: 08/07/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by James M. Ringer on behalf of Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran (Ringer, James)
16
Filed & Entered: 08/11/2009
Stipulation and Order
Docket Text: STIPULATION, the Talos Defendants' time to answer the complaint is extended to and through 8/19/09. Robert V. Brazell answer due 8/19/2009; Stephen L. Norris answer due 8/19/2009; Talos Partners, LLC answer due 8/19/2009; Rama Ramachandran answer due 8/19/2009. (Signed by Judge Naomi Reice Buchwald on 8/10/09) (cd)
17
Filed & Entered: 08/19/2009
Answer to Complaint
Docket Text: ANSWER to Complaint. Document filed by Robert V. Brazell, Stephen L. Norris, Talos Partners, LLC, Rama Ramachandran.(Ringer, James)
18
Filed & Entered: 08/21/2009
Affidavit of Service Complaints
Docket Text: AFFIDAVIT OF SERVICE. Document filed by Pelican Equity, LLC. (Altman, Steven)
--
Filed & Entered: 08/24/2009
Note Rejection of Attempted Paper Filing in ECF Case
Docket Text: ***REJECTION OF ATTEMPTED PAPER FILING IN ECF CASE. The following document(s) Darl McBride's Motion to dismiss for lack of personal jurisdiction, Memorandum in support of Darl McBride's Motion to Dismiss for lack of personal jurisdiction, Declaration of Darl McBrid in support of motion to dismiss for lack of personal jurisdiction. Filing Attorney: McBride Law, PC, was rejected by the Clerk's Office and must be FILED ELECTRONICALLY on the Court's ECF System. (eef)
19
Filed & Entered: 08/31/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by James E. Nesland on behalf of Pelican Equity, LLC (Attachments: # (1) Affidavit Declaration of Service)(Nesland, James)
20
Filed & Entered: 09/08/2009
Notice of Appearance
Docket Text: NOTICE OF APPEARANCE by Paul Robert Niehaus on behalf of Darl McBride (Niehaus, Paul)
21
Filed: 09/08/2009
Entered: 09/09/2009
Terminated: 09/23/2009
Motion to Appear Pro Hac Vice
Docket Text: MOTION for Kevin McBride to Appear Pro Hac Vice. Document filed by Darl McBride.(mro) (mro).
--
Filed: 09/10/2009
Entered: 09/14/2009
Telephone Conference
Docket Text: Minute Entry for proceedings held before Judge Naomi Reice Buchwald: Telephone Conference held on 9/10/2009. (mro)
--
Filed & Entered: 09/17/2009
Cashiers Remark
Docket Text: CASHIERS OFFICE REMARK on [21] Motion to Appear Pro Hac Vice in the amount of $25.00, paid on 09/08/2009, Receipt Number 699236. (jd)
--
Filed & Entered: 09/23/2009
Transmission to Attorney Admissions Clerk
Docket Text: Transmission to Attorney Admissions Clerk. Transmitted re: [22] Order on Motion to Appear Pro Hac Vice, to the Attorney Admissions Clerk for updating of Attorney Information. (djc)
22
Filed & Entered: 09/23/2009
Order on Motion to Appear Pro Hac Vice
Docket Text: ORDER granting [21] Motion for Kevin McBride to Appear Pro Hac Vice on behalf of Darl McBride. (Signed by Judge Naomi Reice Buchwald on 9/22/09) (djc) (djc).
23
Filed & Entered: 09/29/2009
Endorsed Letter
Docket Text: ENDORSED LETTER addressed to Judge Naomi Reice Buchwald from Samuel E. Bonderoff dated 9/24/2009 re: The parties have conferred and agreed to the following briefing schedule: Motion to dismiss to be filed October 13, 2009. Plaintiff's response to the motion to dismiss to be filed November 9, 2009. Bryan Cave's reply to plaintiff 's response to be filed November 18, 2009. ENDORSEMENT: So Ordered. (Signed by Judge Naomi Reice Buchwald on 9/29/2009) (jpo)
Update: And here's how it all ended, according to the Salt Lake City News in May of 2013.

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