Yesterday, IH filed an Opposition to D.E. 90, the renewed 3rd Party Motion to Dismiss, which had been filed on December 19, 2016.
Summary: Not much is likely to happen here, the arguments to dismiss are weak, unlikely to prevail in an MTD, where all plaintiff allegations that appear to have any factual basis at all will prevent dismissal and require at least discovery and perhaps trial to resolve.
The sequence here: (what became moot is indented)
09/19/2016 0050-0_second_amended_answer (Industrial Heat et al)
10/11/2016 0060-0_mtd_fabiani Fabiani’s motion to dismiss IH third party complaint
10/11/2016 0061-0_mtd_johnson Johnson’s motion to dismiss IH third-party complaint
10/13/2016 0062-0_order-to-combine_60_61 Dismissal without prejudice of motions 60 (Fabiani) and 61 (Johnson), order to combine as a joint motion, to avoid duplicated arguments.
10/20/2016 0069-0_3rd_party_motion_to_dismiss Joint MOTION TO DISMISS Answer to Complaint … by James A. Bass, Fulvio Fabiani, J.M. Products, Inc., Henry Johnson, United States Quantum Leap, LLC. Responses due by 11/7/2016
11/17/2016 0077.0_3rd_party_reply_re_MTD Third-party Defendants’ combined reply to Counter-Plaintiff’s response in opposition to third-party Defendant’s motion to dismiss Counts III, IV, and V of Counter-Plaintiff’s Second Amended Counterclaims and third-party claims.
11/23/2016 0078-0_3rd_amended_ih_answer Per Judge’s Order DE 67.
12/05/2016 0083-0_dismissal_of_3rd_party_mtd DE69 dismissed sua sponte as moot, as IH counterclaim amended.
12/19/2016 0090.0_3rd_party_MTD refiled after original MTD mooted (per order, D.E. 83)
1/3/2017 0101.0_IH_Opposition_to_3rdP_MTD Replies due by 1/10/2017
I have not reviewed changes between the two separate 3rd party MTDs and the combined one. However, what changed between the IH 2nd amended answer and the 3rd? The Judge’s Order that was the basis for filing a 3rd Amended Answer only struck certain Affirmative Defenses, which would be irrelevant to the 3rd Party Defendants’ MTD, since they are not Plaintiffs against which Defenses are needed.
The Judge’s order then created more necessary documents in the Docket, for no apparent gain. I don’t see, though, that any party would have a motivation to ask the Judge to reconsider. The 3p defendants may appreciate the extra time. (Only an impatient plaintiff would oppose that). Possibly IH would want to speed it up, but opposing the dismissal of a Motion to Dismiss their complaint would be, ah, counter-intuitive. In any case, they are not in any hurry. And maybe those defendants would have reconsidered and not filed what is very likely to fail.
So, did the 3p defendants change their filing? Yes, it has definitely been edited. I would need to reformat the files to be sure about whether or not that any changes were substantive, because they reformatted the first page, plus the history got longer, so diffpdf is a bit confused. Maybe I will convert these files to text and use another diff utility.
How about the IH Opposition? They removed Items A and C from the table of contents and apparently the corresponding arguments. They added new authorities. So both sides used the opportunity to polish their arguments and presentations.
I discussed the previous motion, opposition and reply, on lenr-forum.
Joint 3rd Party Motion to Dismiss was about the original MTD.
New document, IH Opposition to document 69, the 3rd party defendant’s MTD covered the original Opposition.
The Empire Strikes Back covered the original Reply.
I may review this point by point, and in the process of that, I would become more informed about the arguments, but I doubt, at this point, that I will see anything that would change my conclusion that the MTD will not succeed.
This activity is being discussed on lenr-forum.
… The main information we have from this filing is that IH continues to press forward with what looks like a ‘burn the whole thing down’ strategy. They explicitly re-state that they are not merely suing for the 11.5 million, but they also want their payments to Fabiani and Penon back. And they are essentially reinforcing their claims of fraud against all of them (including Bass and of course Johnson)….
And, of course, triple damages for fraud. As sigmoidal goes on to state, pressing a maximal case could provide incentive to settle. And then he wrote:
I doubt we’ll see any new evidence from IH before trial, unfortunately. The MTD by the third parties will be rejected by the court, without any additional evidence submitted by IH. I think the ‘Counter-Plaintiffs can and will provide…’ statement is just there to emphasize the point that their existing claims are adequate, while providing a back-up in the extremely remote situation that the court thinks IH has not been specific enough in their claims.
I agree with the analysis. That is a backup argument. From her history with the original IH Motion to Dismiss, she would be likely to allow facts to come out in discovery. The picture of fraud presented by IH is specific enough that she was able to tell the story in her ruling on the Rossi MTD, and the defendants would know it and not be shaking their heads wondering what they might possibly have done. That doesn’t mean that she believes the IH story, only that she understands it. And that is the requirement, that a complaint be specific enough to be understood; further details will be disclosed in discovery.
Bass, for example, either was or was not a Director of Engineering, but it is alleged that the represented himself as such. I have written a possible excuse for Bass, that would make him an innocent victim, not having any idea that what he was doing was deceptive. I have no idea of the truth of this, but when the MTD is dismissed, Bass will submit an Answer, and will then be subject to discovery, and I hope he has an independent counsel, because if he is tempted to lie, he could be tempted into the road to ruin.
I think there is a very good possibility that Bass will simply tell the truth. He has way too much to lose if he doesn’t.