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Pelican Opposes McBride's Motion to Dismiss
Friday, November 06 2009 @ 12:25 AM EST

Pelican has filed its Memorandum in Opposition to Darl McBride's Motion to Dismiss its complaint against him. It's a scorcher. First, it says it was McBride who personally led and oversaw the smear campaign against Mark Robbins on the website However, we have yet to hear from McBride on that point, as this filing points out. He hasn't denied it, but then he hasn't spoken about it substantively yet, relying instead on jurisdictional arguments. Most of the filing is in response to McBride's assertion that the court lacks jurisdiction over him.

Here is the filing:
11/05/2009 - 33 - MEMORANDUM OF LAW in Opposition re: 26 MOTION to Dismiss for Lack of Jurisdiction.. Document filed by Pelican Equity, LLC. (Altman, Steven) (Entered: 11/05/2009)
Pelican asserts, with cases in support, that it doesn't need to show that McBride committed any acts personally in New York to obtain jurisdiction. It accuses him of being part of a conspiracy in which some of the other conspirators committed tortious acts in the state. The conspirator is "deemed to ratify the known prior actions of all his confederates in furtherance of the conspiracy." So the New York actions of all of them are attributed to a new conspiracy "even if no conspirator engages in action in New York during the time when the new conspirator is participating in the scheme." In addition, Pelican alleges he did go to New York several times in furtherance of the conspiracy.

Pelican isn't asserting a defamation claim against McBride, but rather it is alleging that McBride and his fellow defendants "engaged in an unlawful conspiracy to destroy AIP and steal its business":

Mr. McBride fails to address Pelican's relevant allegations and focuses instead on jurisdictional issues pertinent to defamation suits, irrelevant and misleading assertions regarding his purported lack of personal contact with New York, and Mark Robbins' unrelated alleged legal problems. His contention that his defamatory statements do not support long-arm jurisdiction is pointless because the Court's jurisdiction over him is not premised on any defamation claim against him. Pelican has asserted no such claim.... In sum, Mr. McBride has effectively left the field to Pelican and the Court, as nothing he has stated in his papers provides a legitimate reason to dismiss him from this action.
In addition, the allegation is that he "was aware of the New York impact of the conspiracy" and that it was he who "personally conducted the conspirators' internet smear campaign." Pelican notes that McBride "carefully avoids squarely contradicting the relevant allegations."
His denial that he ever "created an Internet web site that was either located or hosted in the State of New York" can only be seen as a red herring in light of Pelican's claims, which do not and need not include any such allegation. Mr. McBride does not even deny that he conducted the smear campaign as part of the defendants' scheme to destroy AIP and steal its business.
I think that's probably because he doesn't want to be deemed to have accepted jurisdiction over him by the New York court, actually. If he loses his motion to dismiss, then he will have to answer all the allegations at that time.

McBride, Pelican says, "purposefully availed himself of the privilege of conducting activities within New York State and could reasonably expect that his involvement in a conspiracy with acts and effects in New York might cause him to be sued here." Pelican in effect says McBride was in the conspiracy up to his eyeballs:

Pelican alleges that Darl McBride participated fully with the other conspirators in the planning of their scheme to destroy AIP and steal its business.... He consulted with them regarding the execution of that scheme and shared with them the confidential information to which he had access at AIP. It also alleges that Mr. McBride engaged in a campaign to disparage Mark Robbins and AIP, largely through internet postings and through a website,, that Mr. McBride established for exactly that purpose... Beginning on or before February 11, 2009, shortly after the conspirators' mutiny came into the open, Mr. McBride, in consultation with Robert Brazell, relentlessly disparaged Mr. Robbins, and his (AIP's) stock loan business in the hope of eliminating any chance that AIP might survive the conspirators' plot and keep any of the business that Talos was stealing....Mr. McBride of course did not perform those tasks solely for his own entertainment. He was motivated to assist in the conspiracy because he hoped to share in the tremendous profits that it would generate and apparently has generated.
As for McBride's involvement, Pelican says this:
According to Pelican, beginning in 2007 Darl McBride expressed an interest in joining AIP and becoming a "partner" in it.... He moved into AIP's offices and worked with and supervised AIP salespeople and other employees who conducted AIP's stock loan business. When an AIP controller departed, Mr. McBride assumed responsibilities for the company's finances.
Eek. But wasn't he supposedly working as the CEO of SCO Group simultaneously? How can this be so and be OK with the SCO board of directors? No doubt we'll hear more about this as time goes on.

As for the unrelated allegations against Robbins, Pelican points out that Robbins is not a party to the action, and so the only reason for including the accusations was this:


Mr. McBride begins his declaration and the fact section of his brief with totally irrelevant and misleading allegations regarding an arrest warrant for Mark Robbins and Mr. McBride's alleged attendance at a meeting relating to the settlement of an unrelated case. Those assertions are of course irrelevant to his motion because they have nothing to do with the contacts between Mr. McBride and his conspiracy and the state of New York or any other facts pertinent to this Court's jurisdiction over him. They are at least two steps removed from relevance because Mr. Robbins is not a party to this action. Mr. McBride does not explain how he expects the Court to consider the warrant - a bench warrant issued because Mr. Robbins apparently did not appear for a deposition in a collection matter after entry of a default judgment - in deciding the motion. if he means to imply that that is the only reason Pelican brought the action in New York it makes no sense, not only because Mr. Robbins is not the plaintiff, because that warrant is a relatively minor matter that Mr. Robbins can easily dispose of, and because Mr. McBride has not moved to dismiss this action on the basis of the forum non convenience doctrine, but also because the location of the defendants' competing business in this District provides ample explanation for that choice of forum. Indeed, the most obvious cause of the prominent inclusion of those allegations in Mr. McBride's papers is Mr. McBride's apparently irresistable inclination to take the low road. It should be no surprise that the same person who waged a despicable internet campaign against a person who suffers from manic depression would litigate this action in that manner.

And in a footnote, Pelicans says that the defendants "are well aware of Mr. Robbins' medical history, which is why Mr. Brazell could, as he stated, hope that the internet campaign would cause Mr. Robbins to kill himself." Pelican asks the court to disregard the extraneous and irrelevant allegations. A court can do that, but let's realistically acknowledge that the medical information reverberates. The judge will inevitably at least wonder if the allegations are based in reality. That's where evidence will matter, of course, and so far we're still in the motion to dismiss phase.

As for McBride's argument that the only cause of action must be defamation, on the contrary, Pelican says. It is alleging ten claims for relief:

In consequence of the defendants' misconduct, Pelican alleges ten claims for relief, including violation of the Computer Fraud and Abuse Act, misappropriation of trade secrets, breach of fiduciary duties and duty of loyalty, tortious interference with fiduciary duties, duty of loyalty, and business relations, unfair competition, and fraud.... It also alleges conspiracy to compete unfairly, tortiously interfere with AIP's business relations, and to commit breaches of fiduciary duties and the duty of loyalty.
If the conspiracy arguments persuade the judge, that they all are responsible for all the actions of every other conspirator in furtherance of the conspiracy, then McBride will have to appear in the New York action. And it makes the big picture for him a lot worse. No wonder he would like to avoid it. It's a scary thing for a Utah person to end up on the fast track of New York. That's the big time, and every scam there is in the world has appeared there, I'd wager, at one time or another. You have to be a Bernie Madoff to surprise anybody there. New York has seen it all. Many scams have come to their bitter end there, including Madoff's.

There is, of course, another motion to dismiss, that of the law firm, Bryan Cave. Its argument was simpler, that it didn't know there was a conspiracy and so it wasn't any part of it in any case. You can't aid and abet if you don't even know what is going on. However, I note that Pelican is now alleging, on page 7, that the conspirators were at one point working out of "space at Bryan Cave's New York offices". Pelican hasn't yet filed its opposition memo against Bryan Cave's motion, but we can expect it shortly.

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