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Madpunter
Fri 12:10

Premium Chat Member
Defendants be awarded all their attorneys' fees and costs; and 3. For such other relief as the Court may deem just and proper in the circumstances. DATED: June 13, 2019 Respectfully submitted, By: /s/ Ross H. Parker Ross H. Parker Texas State Bar No. 24007804 Admitted Pro Hac Vice Email: rparker@munsch.com Natalie A. Sears Texas State Bar No. 24098400 Admitted Pro Hac Vice Email: nsears@munsch.com Munsch Hardt Kopf & Harr, P.C. 500 N. Akard St., Suite 3800 Dallas, Texas 75201 Telephone: (214) 225-4304 Facsimile: (214) 855-7584

 

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Madpunter
Fri 12:19

Premium Chat Member
Posted by Contra @ 08:42 :-

I may have missed something here but what about discovery?. If there has been an episode of naked shorting and/or other wrongdoing by Hope/OMF then this should be revealed in discovery. Maybe the evidence obtained from YA is the basis of what Frontera have for their case - it's just that we don't know the full story yet.

Posted by Tsbs @ 08:50 :-

True, but, surely hope would know what they had discovered and wouldn't be wanting to go to a jury trial

Posted by VivaLasVegas @ 08:59 :-

Tsbs, I agree. Ref Hopes get out statement at end of doc

PRAYER WHEREFORE, PREMISES CONSIDERED, Defendants respectfully pray for judgment as follows: 1. Plaintiffs take nothing by virtue of this action, and that judgment be rendered in favor of Defendants or, upon consent by Defendants, that this action be dismissed with prejudice to re-filing

Does Hope want full discovery? Na! He IMO is looking to exit as the golden chalice is out of his grasp.

VLV

Madpunter
Fri 12:21

Premium Chat Member
Posted by Madpunter @ 11:17 :-

VLV - The interesting wording in the statement which I've re-copied below, is the request for the 'action to be dismissed with prejudice to RE-FILING' (CAPS. inserted by myself). The Caymen's case initially went in favour of SH/O, but then appeared more in favour of FRR. In California, the case has been in favour of SH/O. Perhaps, now that SH/O is off the board and the DOS has allowed 12 months grace, the case may revert back to the Caymen's. Even if FRR with Discovery and possibly evidence from YA were to pursue in California, has Judge Seeborg been swayed by FRR wasting the courts time with the injunction and the use of two jurisdictions? Also, I seem to remember that someone posted about the breaking of FD being more subjective in the Caymen's. Furthermore, the possibility of a deal being negotiated with the super majors, might be better served with a total news blackout on production side, with the inferences that it is due to legal matters. All conjecture, but something to consider.

'PRAYER WHEREFORE, PREMISES CONSIDERED, Defendants respectfully pray for judgment as follows: 1. Plaintiffs take nothing by virtue of this action, and that judgment be rendered in favor of Defendants or, upon consent by Defendants, that this action be dismissed with prejudice to re-filing.'

Posted by Madpunter @ 11:35 :-

Also worth considering that if YA are involved and were to testify in California, then they may be prosecuted by the SEC. Whereas, if YA were to testify in the Caymen's, could they then be a witness for the prosecution if the SEC act against SH/O? One for the legal eagles on here to enlighten us with the points of law.

Madpunter
Fri 18:07

Premium Chat Member
Posted by Dave73 @ 15:51 :-

Russia/Georgia/NATO

Russia's Deputy Foreign Minister Grigory Karasin and Special Representative of the Georgian Prime Minister for Relations with Russia Zurab Abashidze met in Prague on June 13. The sides discussed various issues related mainly with trade, economy, humanitarian and cultural aspects of bilateral relations.

Grigori Karasin said before the meeting that Russia is concerned about possible accelerated membership of Georgia in NATO. According to him, it will affect the country’s relations with Russia.

“US Secretary of State Mike Pompey has openly stated that Georgia’s NATO membership should be accelerated. To our mind, this will have catastrophic effects on our relationship”, Deputy Foreign Minister of Russia stated.

Prime Minister's Special Representative for Relations with Russia Zurab Abashidze responded to the statement made by Karasin about Georgia's NATO membership.

“Russia should not talk about NATO-Georgia relations in a threatening tone”, Zurab Abashidze said.

Abashidze believes that NATO-Georgia relations are the country’s sovereign choice and no one has rights to dictate or change its diplomatic course.

“Our relations with NATO and other international organizations, this is our sovereign right, sovereign choice. This is totally unacceptable for us when Russia’s representatives make some statements in a threatening tone,” Zurab Abashidze stated.

Georgia wanting more US investment , well you have it just bloody support it , how about a tax rebate for starters

Madpunter
Sat 16:00

Premium Chat Member
The following posts were posted by Taffy52 earlier today :-

RE: Document 46 has appeared

So I’m going to copy the new document on to here. It’s 16 pages in total so bear with. I’m going to copy FRR lawyers personal statement first followed by Plaintiffs brief. They are pretty similar and a lot of information is duplicated.

Madpunter
Sat 16:00

Premium Chat Member
DECLARATION OF WILLIAM DECLERCQ 1. My name is William DeClercq. I am over the age of eighteen (18) and competent to give this Declaration. I am one of Plaintiffs’ counsel of record in this action and have personal knowledge of all matters set forth herein. This Declaration is given for use in connection with Plaintiffs’ Brief to the Court in Opposition to Issuance of Sanctions and for all other purposes permitted by law. 2. Neither I, nor Plaintiffs, nor any of my partners, ever intended to mislead the Court. My intention at all times has been to be honest and forthright with the Court, follow applicable local rules, and focus on the imminent issues that motivated us to file the lawsuit on April 14, and later amend the complaint and seek injunctive relief. We never intended or considered that the Court would rule or even consider ruling on the temporary restraining order without notice to Defendants. I understand that the Court may be distrustful of counsel’s motives, but the reason for the omission was a matter of our perspective and interpretation of the relevant local rules, and inadvertence under the press of an urgent client need and a rapidly-evolving situation. It did not occur to me that the Court would consider filings in an inconclusive prior action material to its inquiry or any ruling in this action. Having discussed the matter with the Court I now understand the Court’s point of view on the issue, and I wholeheartedly apologize for myself and my partners for any inconvenience or inadvertent misdirection caused to the Court. 3. As officers of the Court, and as a matter of common courtesy, it pains my law partners and I that this Court might believe that we attempted to deceive the Court or Defendants. That was never our intention, and on behalf of my partners and myself, apologize that our filings created any impression of sharp or deceitful practice. More importantly, we would not want our clients to be prejudiced in any way as a result of any filing, omission, or impression on the court

Madpunter
Sat 16:01

Premium Chat Member
On behalf of Plaintiffs, I caused the original Complaint (Dkt. 1) to be filed in this matter over the weekend, e-filed on the evening of April 14, 2019, with the understanding that the prior action would be voluntarily dismissed at the beginning of the business day, April 15, in the Cayman Islands. In other words, the two actions overlapped by a few hours, admittedly. To be clear, the prior action was discontinued the morning of April 15, 2019: before the summons was issued, before service was attempted, and before the case initiation papers were accepted by the Court. 5. The original Complaint sought monetary damages; it did not seek injunctive relief of any sort. (Dkt. 1.) Notice of the original complaint was to be achieved through service of process since no injunctive relieve was originally contemplated. 6. Some of the reasons for the change in venue are privileged and cannot be disclosed to the Court for that reason. Some of the business reasons and more obvious venue-selection reasons are understandable. As indicated at oral argument, the United States court system is more familiar to Plaintiffs, who are based in the United States; Plaintiffs are based in the United States, its witnesses, documents, and corporate attorneys are located in the United States, and the laws of the United States are understood by its citizens. Importantly, the key Defendant in this action, Stephen Hope, resides in the Northern District of California, and therefore is amenable to service of process, deposition, and appearances in this Court. Plaintiffs’ counsel maintains offices in Los Angeles and San Francisco and therefore the venue makes good business sense. 7. The Summonses (Dkt. 5) were issued by the Court on April 16, 2019, after the process of dismissal of the prior action was completed. For this reason, as the case was getting underway, it did not make sense in my mind or in the minds of my law partners to file a Notice of Related case in this action because: (a) the Cayman Islands action (the “Caymans Action”) was concluded; (b) the Caymans

Madpunter
Sat 16:02

Premium Chat Member
Action was not in the United States; and (c) Local Rule 3-13 seems to refer to pending actions within the federal or state courts of this country. 8. While Plaintiffs were in the process of securing a process server in the San Francisco area, Plaintiffs received a copy of the Enforcement Notice from Maples dated April 17, 2019. (See Dkt. 6-1). Receipt of this Enforcement Notice and the ensuing wave of irreparable harm it triggered forced Plaintiffs to reconsider their strategy in this matter. 9. Ultimately, Plaintiffs took action to attempt to minimize the harm was to amend the Complaint and seek interlocutory injunctive relief. Because the Enforcement Notice triggered a broad array of powers that Plaintiffs believe were being orchestrated by Mr. Hope, and which Plaintiffs believe are destructive to the going concern value of Plaintiffs, it was incumbent on me and my law partners to act quickly to amend the complaint and seek to protect our client from further irreparable harm, if possible. 10. Based on our understanding of fast-moving and quickly-changing facts, Plaintiffs revised the original complaint and filed their First Amended Verified Complaint for Injunctive Relief and Damages (the “Amended Complaint”) (Dkt. 6) at 6:35 p.m. PST on April 24, 2019. At that point in time, the Caymans Action had been dismissed for over a week. 11. At 1:59 p.m. PST on April 26, 2019, a paralegal in our offices emailed to Mr. Hope copies of: the Amended Complaint; the Motion for TRO; the Memorandum of Points and Authorities in Support of Plaintiffs’ Motion for TRO (Dkt. 10); and the Court’s Order Regarding Briefing Schedule (the “April 26th Order”) (Dkt. 15) in which the Court set May 2, 2019 as the earliest date for Defendants to have to submit documents to the Court. In addition to Mr. Hope, this email was also sent to Mr. Cornwell, a Houston-based attorney whom Plaintiffs suspected would arrange for California counsel for Defendants.

Madpunter
Sat 16:02

Premium Chat Member
12. In its Order Denying Motion for Preliminary Injunction (Dkt. 42), the Court stated that Plaintiffs “sought the issuance of temporary injunctive relief with no notice to Defendants.” (Dkt. 42, p. 5). But, as described above, Plaintiffs provided notice of the Motion for TRO to Defendants and Mr. Cornwell in the precise manner set forth in their submission to this Court. In its April 26th Order, the Court did not instruct Plaintiffs to do otherwise, and certainly did not correct Plaintiffs for this proposed manner of notice at that time. (See Dkt. 15). Plaintiffs had no intention of seeking relief without giving defendants notice and an opportunity to be heard, did not request relief be issued without notice, and would have agreed to a stipulated briefing schedule on the TRO. 13. Plaintiffs’ counsel reviewed Rule 3-13 prior to filing the pleadings in this action and did not believe that disclosure of the Caymans Action was necessary because the rule references “another action which is pending in any other federal or state court…” and the Cayman Islands action was not pending in any court in the United States at the time this case was filed; and was entirely dismissed a few hours after ti was filed. In addition to information protected by the attorney-client privilege, Plaintiffs’ counsel considered the following: (1) The Caymans Action was dismissed without prejudice on the morning Monday, April 15. The Amended Complaint in this action was not filed until after-hours on April 24, and the Motion for TRO was not filed until the following afternoon. Therefore, the Caymans Actions had not been “pending” for nearly 10 days. (The Caymans Action was technically pending for several hours after Plaintiffs filed their original Complaint, but that version only sought monetary damages, and the Caymans Actions was dismissed a full day prior to the Court even issuing the Summonses associated with the original Complaint).

Madpunter
Sat 16:03

Premium Chat Member
2) The Caymans Action was neither pending nor recently dismissed “in any other federal or state court.” It was an action in the Cayman Islands, which is not covered by Rule 3-13. (3) None of the interim rulings in the Caymans Actions have any preclusive effect. Regardless, while the Caymans Court commented in one order about the perceived merits of certain causes of action, the same judge cautioned that he believed that “Plaintiffs’ appeal against that decision had realistic prospects of success….” (See Dkt. 23-11 ¶ 54). And, (4) Mr. Hope and the other defendant in the Caymans Action were represented only by lawyers based in the Cayman Islands, with no known presence in the United States. 14. Had Plaintiffs’ counsel believed Plaintiffs were required to inform the Court of the Caymans Action, I would have ensured that the requisite notification was provided. Based on my reading and interpretation of Local Rule 3-13, and my own subjective intent along with the intent of my law partners, I do not believe that my failure to file a Notice of Related Case and/or our allegation and argument that the Cayman Islands action has no legal impact on this action, was done for any improper purpose, the omission of that information from our filing was unwarranted by existing law or the extension of the law, or lacked evidentiary support. The Court might disagree with our interpretation but I do not believe our conduct warrants sanctions. I declare under penalty of perjury of that the foregoing is true and correct. Dated: June 14, 2019. /s/ William DeClercq William DeClercq

Madpunter
Sat 16:03

Premium Chat Member
And now the main plaintiff brief

Madpunter
Sat 16:04

Premium Chat Member
At the Court’s invitation, Plaintiffs respectfully submit their response to the Court’s concerns that sanctions could be warranted for Plaintiff’s failure to inform the Court of the now-concluded prior action in the Cayman Islands (the “Caymans Action”) among some of the parties to this action.
As a preliminary matter, undersigned counsel would like to emphasize his statements at oral argument that there was no intent to mislead the Court, nor was there an intent that the Court would rule on the temporary restraining order without notice to the defendants. Viewed from the Court’s perspective, undersigned counsel understands the Court may be distrustful of counsel’s motives, but the reason for the omission was a matter of counsel’s perspective and interpretation of the relevant local rules, and inadvertence regarding the Court’s view of the materiality of an inconclusive prior action. (See Declaration of William DeClercq (“DeClercq Decl.”), ¶ 2). Counsel extends sincere apologies to the Court for any inconvenience or misdirection.
This Court has observed that “Rule 11 sanctions are appropriate if an action has been brought for an improper purpose, the claims are not warranted by existing law or the extension of the law, or the allegations lack evidentiary support. Sanctions, however, are an extraordinary remedy, one to be exercised with extreme caution. They should be reserved for rare and exceptional cases where the action is clearly frivolous, legally unreasonable or without legal foundation, or brought for an improper purpose.” Organic Consumers Ass'n v. Sanderson Farms, Inc., 2018 U.S. Dist. LEXIS 56150, *3, 2018 WL 1586142, citing and quoting Fed. R. Civ. P. 11(b) and Operating Eng'rs Pension Tr. v. A-C Co., 859 F.2d 1336, 1345 (9th Cir. 1988) [observing, “while plaintiffs' counsel ideally could have been more transparent in both the FAC and the opposition to Sanderson's motion to dismiss regarding the USDA's position on the testing data it had provided, their reliance on the USDA's data was not without a reasonable basis.”] Plaintiffs respectfully ask the Court to find their position here had a reasonable basis.
-2-
PLAINTIFFS’ BRIEF TO THE COURT IN OPPOSITION TO ISSUANCE OF SANCTIONS

Madpunter
Sat 16:05

Premium Chat Member
A. Timing of the Actions, and Notice of the TRO to Defendants It may help the Court in this sanctions inquiry to consider a clarification with respect to the timeline of events and the notice provided to Defendants. Plaintiffs filed the original Complaint (Dkt. 1) in this matter over the weekend, e-filed on the evening of April 14, 2019, with the understanding that the prior action would be voluntarily dismissed at the beginning of the business day, April 15, in the Cayman Islands. In other words, the two actions overlapped by a few hours, admittedly. To be clear, the prior action was discontinued entirely on April 15, 2019, before the commencement in earnest of this action: before the summons was issued, before service was attempted, and before the case initiation papers were accepted by the Court. (DeClercq Decl., ¶ ¶ 2-4). The Court may also wish to consider that the original Complaint filed on April 14, 2019, sought only monetary damages; it did not seek injunctive relief of any sort. (Dkt. 1; DeClercq Decl., ¶ 5) In other words, the injunction has dissolved in the Cayman Islands action when it was dismissed, on April 15, 2019, before Plaintiffs asked this court for injunctive relief. This gap in the timeline might be relevant to the Court’s analysis, because in the interim, additional, new events occurred that Plaintiffs sought to enjoin. Notice of the original complaint was to be achieved through service of process since no injunctive relieve was originally contemplated in tis action. (DeClercq Decl., ¶ 4). Some of the reasons for the change in venue are privileged and cannot be disclosed to the Court for that reason. Some of the business reasons and more obvious venue-selection reasons are understandable. (Id., ¶ 6). As indicated at oral argument, the United States court system is more familiar to Plaintiffs, who are based in the United States; Plaintiffs are based in the United States, its witnesses, documents, and corporate attorneys are located in the United States, and the laws of the United States are understood by its citizens. Importantly, the key Defendant

Madpunter
Sat 16:05

Premium Chat Member
in this action, Stephen Hope, resides in the Northern District of California, and therefore is amenable to service of process, deposition, and appearances in this Court. Plaintiffs’ counsel maintains offices in Los Angeles and San Francisco and therefore the venue makes good business sense. (Id.). The Summonses (Dkt. 5) were issued by the Court on April 16, 2019, after the process of dismissal of the Caymans Action was completed, and the injunctions dissolved as a result. For this reason, as this case was getting underway, it did not make sense to file a Notice of Related case because (a) the Caymans Action was concluded; (b) the Caymans Action was not in the United States; and (c) Local Rule 3-13 seems to refer to pending actions within the federal or state courts of this country, since it states: “Whenever a party knows or learns that an action filed or removed to this district involves all or a material part of the same subject matter and all or substantially all of the same parties as another action which is pending in any other federal or state court…” (emphasis added). Based on the language of Rule 3-13, counsel may have had a reasonable basis to concluded that, even if there were some overlapping issues and overlapping parties between the cases, an action in the Cayman Islands (i.e., not in the United States) was not within the ambit of the rule, particularly since the rule contemplates coordination of actions, etc., which would have been impracticable if not impossible here. The Court’s point, at oral argument, is well-taken, to the extent that this action involves a material part of the prior action and at least some of the same parties. When viewed from the Court’s perspective, rather than the practitioner’s, the Court’s concerns are of course understandable. This action seeks relief based upon Steven Hope’s inherently conflicted loyalties, as a Board member of the Plaintiffs, acting on behalf of and in favor of the interests of a senior secured creditor. Plaintiffs have alleged breaches of fiduciary duty because Mr. Hope disapproved of a variety of funding transactions, rather than abstaining from matters that impacted his position as a creditor,

Madpunter
Sat 16:06

Premium Chat Member
concerning additional lending activity. This action has alleged that Mr. Hope failed to act in the best interest of the Plaintiffs and failed to take action to protect Plaintiff’s value as a going concern, as Plaintiffs allege he was duty-bound to do. Plaintiffs allege in this action Mr. Hope acted to protect his security interest, to the detriment of Plaintiffs, and opposed decisions, using his effective veto power, to block actions that could have assisted Plaintiffs. In addition, the Outrider defendants are parties as they are alleged to have aided and abetted Mr. Hope in favoring his own financial interests. (See Dkt. 1.) Some of these issues were, admittedly, raised in the prior action based on the facts as they were known to Plaintiffs at that time, and some facts and allegations are not yet able to be proven, since discovery has not commenced. After the Cayman Islands action had been dismissed, and while Plaintiffs were still in the process of hiring a process server in the San Francisco area, Plaintiffs received a copy of the Enforcement Notice from Maples dated April 17, 2019. (See Dkt. 6-1; DeClercq Decl. ¶ 8). Receipt of this Enforcement Notice and the ensuing wave of irreparable harm it triggered forced Plaintiffs to reconsider their strategy in this matter. (Id.) Mr. Hope’s (alleged) actions, in April 2019, directing MaplesFS to commence enforcement and (allegedly) directing FTI, in April/ May 2019, to commence “voluntary” liquidation at the same time Mr. Hope still held a seat on the Board of Directors and still had access to all of Plaintiffs’ most important information, was a paramount concern. (Dkt. 6-1) These new (alleged) breaches of fiduciary duty, starting April 17, 2019, when Mr. Hope still was a Board member, offered after the prior lawsuit was dismissed, formed new allegations in a new complaint and a new request for relief that was never at issue in the Cayman Islands action, as it had been dismissed before MaplesFS was appointed by Mr. Hope or his agents. (Id.) Ultimately, Plaintiffs realized that their best option to attempt to minimize the harm was to amend the Complaint and seek interlocutory injunctive relief

Madpunter
Sat 16:07

Premium Chat Member
based on the new breaches of duty that Plaintiffs believe were caused by Mr. Hope, while he was still a director. (DeClercq Decl., ¶ 9). Because the Enforcement Notice triggered a broad array of powers that Plaintiffs believe were (and possibly still are) being directed and orchestrated by Mr. Hope, and which Plaintiffs believe are destructive to the going concern value of Plaintiffs, it was incumbent on undersigned counsel to act quickly to amend the complaint and seek to protect the client from further irreparable harm, if possible. (Id.). Under the press of a client emergency, counsel must select the most salient facts and the ones that counsel believes are legally relevant and persuasive. Because the Cayman Islands action was inconclusive and involved an older set of facts, with different parties, there was no issue- or claim-preclusive effect and from counsel’s perspective, little if any reason to revisit that action. (See Id. at ¶¶ 9 & 13(3)). The omission therefore was not unwarranted. (Id. at ¶ 9.) Based on counsel’s understanding of fast-moving facts, which at that time were changing daily, Plaintiffs revised the original complaint and filed their First Amended Verified Complaint for Injunctive Relief and Damages (the “Amended Complaint”) (Dkt. 6) at 6:35 p.m. PST on April 24, 2019. (Id., ¶ 10). At that point in time, the Caymans Action had been dismissed for nine days, and was entirely concluded new facts were evolving and there was a new basis for relief. Plaintiffs’ Notice of Motion and Motion for Temporary Restraining Order (the “Motion for TRO”) (Dkt. 9) at 2:45 p.m. PST on April 25, 2019. On the first page of text of the Motion for TRO, Plaintiffs stated the following to this Court: Counsel for Plaintiffs intend to provide Defendants with notice of the instant Motion via personal service on Defendant Hope (who is also the registered agent for the corporate Defendants) and via email pursuant to Local Rule 65-1(b). Plaintiffs intend to personally serve Mr. Hope and/or email to him this Notice of Motion and Motion for Temporary Restraining Order and the corresponding documents by the close of business on Friday, April 26, 2019.

Madpunter
Sat 16:07

Premium Chat Member
Dkt. 9, p. 2 (emphasis added)). The original moving papers sought emergency relief but did not request ex parte relief without notice. At 1:59 p.m. PST on April 26, 2019, a paralegal at the offices of Plaintiffs’ counsel emailed to Mr. Hope copies of: the Amended Complaint; the Motion for TRO; the Memorandum of Points and Authorities in Support of Plaintiffs’ Motion for TRO (Dkt. 10); and the Court’s Order Regarding Briefing Schedule (the “April 26th Order”) (Dkt. 15) in which the Court set May 2, 2019 as the earliest date for Defendants to have to submit documents to the Court. (DeClercq Decl., ¶ 11). In addition to Mr. Hope, this email was also sent to Mr. Cornwell, a Houston-based attorney whom Plaintiffs suspected would arrange for California counsel for Defendants. (Id.). In its Order Denying Motion for Preliminary Injunction (Dkt. 42), the Court stated that Plaintiffs “sought the issuance of temporary injunctive relief with no notice to Defendants.” (Dkt. 42, p. 5). But, as described above, Plaintiffs provided notice of the Motion for TRO to Defendants and Mr. Cornwell in the precise manner set forth in their submission to this Court. (DeClercq Decl., ¶ 12). In its April 26th Order, the Court did not instruct Plaintiffs to do otherwise, and the Court did not correct Plaintiffs for this proposed manner of notice at that time. (See Dkt. 15). Plaintiffs had no intention of seeking relief without giving defendants notice and an opportunity to be heard, did not request relief be issued without notice, and would have agreed to a stipulated briefing schedule. (DeClercq Decl., ¶ 12). B. Compliance with Local Rule 3-13 Local Rule 3-13(a) states: Notice. Whenever a party knows or learns that an action filed or removed to this district involves all or a material part of the same subject matter and all or substantially all of the same parties as another action which is pending in any other federal or state court, the party must promptly file with the Court in the action pending before this Court and serve all opposing parties in the action pending

Madpunter
Sat 16:08

Premium Chat Member
before this Court with a Notice of Pendency of Other Action or Proceeding. (L.R. 3-13(a) (emphasis added)). Here, the Cayman Islands action was in a different country and has not been pending since April 15, 2019. During the June 6 hearing before this Court, and in its Order Denying Motion for Preliminary Injunction, this Court was very concerned that Plaintiffs failed to comply with Rule 3-13(a) by not notifying the Court of the Caymans Action in the Amended Complaint or the Motion for TRO. (See Dkt. 42, p. 5). As officers of the Court, and as a matter of common courtesy, it pains Plaintiffs’ counsel that this Court believes that they attempted to deceive the Court or Defendants. (DeClercq Decl., ¶ 2). By no means was that the intention of Plaintiffs’ counsel, and they apologize sincerely that this is the impression their filings provided. (Id., ¶ 2). Plaintiffs’ counsel reviewed Rule 3-13 prior to filing the pleadings in this action and did not believe that disclosure of the Caymans Action was necessary. (Id., ¶ 13). In addition to information protected by the attorney-client privilege, Plaintiffs’ counsel considered the following: (1) The Caymans Action was dismissed without prejudice on the morning Monday, April 15. The Amended Complaint in this action was not filed until after-hours on April 24, and the Motion for TRO was not filed until the following afternoon. Therefore, the Caymans Actions had not been “pending” for nearly 10 days. (The Caymans Action was technically pending for several hours after Plaintiffs filed their original Complaint, but that version only sought monetary damages, and the Caymans Actions was dismissed a full day prior to the Court even issuing the Summonses associated with the original Complaint). (2) The Caymans Action was neither pending nor recently dismissed “in any other federal or state court.” It was an action in the Cayman Islands, which is not covered by Rule 3-13.

Madpunter
Sat 16:08

Premium Chat Member
3) None of the interim rulings in the Caymans Actions have any preclusive effect. Regardless, while the Caymans Court commented in one order about the perceived merits of certain causes of action, the same judge cautioned that he believed that “Plaintiffs’ appeal against that decision had realistic prospects of success….” (See Dkt. 23-11 ¶ 54). And, (4) Mr. Hope and the other defendant in the Caymans Action were represented only by lawyers based in the Cayman Islands, with no known presence in the United States. (Id.) Had Plaintiffs’ counsel believed Plaintiffs were required to inform the Court of the Caymans Action, they would have ensured that the requisite notification was provided. (Id., ¶ 14). Plaintiffs’ counsel believes that plaintiff complied with Rule 3-13, based on counsel’s interpretation of the Rule’s language and purpose, and did not intentionally withhold information from the Court that counsel believes could have or should have impacted the Court’s rulings. The Court may very well disagree, even strongly, with counsel’s interpretation of the rule and the obligation to disclose even information not covered by the rule, but the omission was not for any improper purpose, was not unwarranted by existing law, or extension of the law, and/or without evidentiary support. (Id., ¶ 14). Reasonable minds can differ, and Plaintiff’s counsel is of a different view than the Court, in good faith. Respectfully, neither Plaintiffs nor their counsel should be sanctioned for interpreting a Local Rule differently from the Court because there is no basis to conclude that Plaintiff’s position and conduct “are legally or factually baseless or that this is one of the rare circumstances where the extraordinary remedy of sanctions is appropriate.” See Organic Consumers Ass'n, supra, at *6.

Madpunter
Sat 16:09

Premium Chat Member
CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that the Court not impose sanctions on Plaintiffs or their counsel. DATED: June 14, 2019 Respectfully submitted, TAYLOR ENGLISH DUMA LLP /s/ William DeClercq William DeClercq SBN 240538



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