PSD wins summary judgment for client on trade secret and related claims

In a 21-page opinion, the Superior Court of Connecticut in New London granted summary judgment on the claims against a defendant in LBI, Inc. v. Sparks, et al.  PSD argued that the claims were barred by res judicata, agreement of the parties, and by accord and satisfaction.  The plaintiff argued that the parties had agreed only on a scope of injunctive relief in a Consent Order to which the parties agreed on the eve of a preliminary injunction hearing.  The court ruled that the terms of the Consent Order favored treating it as a final judgment barring monetary claims as well.  In part, the court explained that the action involved sophisticated parties represented by counsel who could have used more explicit language if trying to preserve monetary claims.  PSD had removed the case to federal court, where the Consent Order had been entered.  Plaintiff later attempted but failed to vacate the Consent Order in federal court, which rejected the plaintiff’s efforts as untimely.  During an appeal, the Second Circuit remanded the case to state court over plaintiff’s objection.

In a letter dated June 15, 2015 to Senator Chuck Grassley, Chairman of the Senate Judiciary Committee, PSD has proposed legislation concerning appellate waiver clauses that federal prosecutors impose in plea agreements.

The legislation responds in part to a memorandum by Attorney General Eric Holder to all federal prosecutors validating the imposition of these waivers so long as an exception is carved out for ineffective assistance of counsel claims.

PSD Partner Barry Pollack explained that prosecutors are increasingly imposing appellate waivers in plea agreements, in white collar and other types of criminal cases. The letter added: “The typical appellate waiver language used in plea agreements has a tendency to mislead defendants into believing that they have given broader waivers than what the law recognizes.”

The letter explained it is also “common practice for federal prosecutors to include language that the U.S. Attorney has the power or discretion to determine whether a defendant has breached any provision of the plea agreement.”   As a result of this language, the letter explains that “defendants face the threat of various remedies that federal prosecutors reserve for their office,” which can intimidate defendants into refraining from taking permissible appeals.  The letter highlights the “uneven bargaining leverage” as the government generally retains its right to appeal.

The proposed legislation would require federal courts to inform the defendant that, despite the appellate waiver, the defendant can still bring an appeal based on a breach by the government of the plea agreement, a flaw in the entry of the plea that could deem it involuntary, or based on a claim of ineffective assistance of counsel.  The court would also have to ask counsel whether they have identified any constitutional grounds for an appeal and confirm that the defendant understands those grounds are being waived.  The legislation would also nullify language that purports to reserve for prosecutors the right to determine whether the defendant breaches the plea agreement, leaving such determinations to courts.

On April 1, 2015, the First Circuit ruled in favor of PSD’s client on a sentencing appeal concerning whether the client was entitled to a third acceptance-of-responsibility point for purposes of his Sentencing Guidelines calculation. Represented by other counsel at the trial level, the defendant had pleaded guilty before the United States District Court for the District of Puerto Rico without any written plea agreement with the government. The trial court found that the defendant was entitled to a two-point reduction in his Sentencing Guidelines calculation for his acceptance of responsibility. The government refused, however, to file a motion for a third acceptance-of-responsibility point because the defendant had not entered into a written plea agreement, despite the fact that he pled guilty to the crime as charged. The prosecutor explained that because of the lack of a written agreement that resolved factual issues relevant to sentencing, the government did not save expenses related to “trial” preparations, and thus would not move for the third point.  The trial court judge held that pursuant to Sentencing Guidelines § 3E1.1(b), he had no discretion to consider granting a third point for acceptance of responsibility in the absence of a government motion.

On appeal, PSD argued for the defendant that the trial judge erred as a matter of law, as the trial court was required to assess whether the government’s refusal to file a motion was based on improper grounds. As PSD pointed out, not only did the government improperly condition the motion for a third point on the defendant’s willingness to enter into a written plea agreement, but the prosecutor also refused to discuss potential stipulations with defense counsel to resolve any open factual issues for sentencing.

The First Circuit agreed with PSD that it was error for the trial court to refuse to consider whether the prosecution’s withholding of a motion was proper. Accepting PSD’s argument, the First Circuit held that “once the appellant raised a claim that the government withheld its section 3E1.1(b) motion for an improper reason, he was entitled to have the district court resolve this point.” As a result, the First Circuit remanded the case to the trial court with instructions that the trial court vacate the sentence and conduct a new sentencing hearing.

The case is United States v. Melendez-Rivera, First Circuit Case No. 13-2136. The defendant-appellant was represented on appeal by PSD’s Joshua Solomon and Matthew Arnould.

Earlier today, a federal judge in the Southern District of Florida issued a 44-page opinion in favor of PSD’s clients, finding that a plaintiff’s law firm that sued them acted in bad faith from the outset of the litigation.

The court granted PSD’s clients’ motion for sanctions and ordered that the plaintiff’s firm pay the legal fees and costs incurred by PSD’s clients defending the two related cases, one a discrimination case and the other a FLSA case.  After an evidentiary hearing, the court accepted testimony that the fees at issue exceeded $500,000 and has allowed PSD up to 30 days to submit documentation supporting the request for reasonable attorneys fees in such an amount.

In its findings, the court explained that the plaintiff had violated the company’s confidentiality policies by retaining a large volume of corporate records including the entire “my documents” folder from the CEO’s laptop.  Further, the court found that the plaintiff’s firm accepted and kept all of the company’s documents that the former employee provided and then knowingly and recklessly held back and did not produce the bulk of these documents in the face of demands for the return of company property and discovery requests until compelled to do so by court orders.  The court found that both cases filed by the plaintiff’s firm were frivolous ab initio.  The court further found that only after discussions with the plaintiff’s law firm did plaintiff’s focus, and later, her testimony, become more skewed toward describing her duties in a way to try to create claims.  The court explained that the lead counsel at plaintiff’s firm needlessly obstructed the litigation.  Despite statements by plaintiff’s counsel to the contrary, within a month of filing the case, the plaintiff’s lead lawyer knew full well that her client had retained and provided to her firm company property in the form of, at least, a box of documents, a thumb drive, and a CD containing the CEO’s “my documents” folder from his laptop.  The court found that the plaintiff’s lawyer engaged in “sheer and unadulterated obfuscation.”  By use of this subterfuge, the plaintiff’s firm kept the company and its counsel in the dark about the fact that it had possession of voluminous documents, which were critical to the litigation.  The court also stated that the plaintiff’s lawyers “were less than candid in their testimony at the evidentiary hearing and [the lead plaintiff’s counsel] required admonishment due to her evasiveness and non-responsiveness.”

In conclusion, the court held that plaintiff’s counsel “engaged in knowing and reckless conduct throughout the FLSA case and the Discrimination case, which infected the entire … litigation.  To make matters worse, rather than acknowledge the impropriety of such conduct and rectify it, they used smoke and mirrors each time they were called to account, even to the point of failing to render credible testimony at the final evidentiary hearing to which they were entitled.”

Defendants were represented in the matter by Barry Pollack and Joshua Solomon of PSD.

In a major $250 million international investment fraud receivership, PSD convinced a federal judge that the SEC needs to reassess its receivership processes. PSD represents a Swiss entity that is the largest victim of the Ponzi scheme. After uncovering the fraud, PSD investment fraud attorneys brought a fraud case against the perpetrators, followed by the fraudsters going to jail and their businesses placed into a receivership established by the SEC. PSD led objections against excessive professional services fees in the receivership, resulting in a savings of more than $6 million that benefits investor victims.
The NY Law Journal reported:
“Throughout the receivership action, the SEC took positions that favored professional service providers over victims,” said investor’s counsel Barry Pollack, a partner with Pollack Solomon Duffy in Boston. “We insist that the SEC improve its process for commencing receiverships, for identifying appropriate professionals, and for establishing reasonable and fair rates of compensation.”
The federal judge agreed, explaining that the “situation cries out for a discussion with the SEC in advance about a budget.”
The SEC issued a statement claiming that it generally takes “great care to monitor all receiverships and carefully scrutinize fees and expenses to ensure that they are reasonable to the work performed, and to provide our recommendation to the court based on that thorough review.”
In the Wextrust matter, however, the SEC supported the initial bills that the judge found unreasonable. The receiver did not return calls from the NY Law Journal for comment.
PSD blasted the SEC in a letter to SEC chair Mary Jo White, criticizing the agency’s receivership processes.

Read more: http://www.newyorklawjournal.com/id=1202714456679/Dewey-Left-Out-of-Latest-Fees-in-SixYearOld-Case#ixzz3OIHlr0jps

A Professor of Law at the University of North Carolina and Mitoaction joined in an amicus brief filed today against DCF, arising from its arbitrary reliance on allegations of “medical child abuse” without meaningful standards that safeguard fundamental parental rights. Professor Maxine Eichner is Reef C. Ivey, II Professor of Law at UNC and an expert in the field of family law, as well as in the relationship between families and the state. The brief argues that the state may not intervene in parents’ healthcare decisions for a child absent compelling circumstances in which non-controversial medical treatment is being disregarded that has a high chance of success with limited countervailing risks. In other words, when medical professionals disagree or otherwise leave unclear the likely course of treatment for a cure, parents retain the fundamental right to control the care of their children. The amicus brief criticizes the recent growth of “medical child abuse” accusations that lack reasonable standards by which to impose such a classification, let alone to support the state’s interference with parental rights. In the pending case, the parents allege in their Complaint how DCF teamed up with psychiatrists at Children’s Hospital Boston to threaten parents with the loss of custody if they sought other medical opinions rather than allow their child to be admitted for inpatient treatment at the particular hospital. The treatment imposed upon the parents and their young daughter failed. As a result, the Complaint and amicus brief support a finding that DCF violated the constitutional rights of parents when interfering with their right to determine the best care for their young daughter.

PSD client EDCare Management, Inc. won the dismissal of an employment discrimination claim pending against it in the Southern District of Florida. The Court adopted PSD’s arguments and explained:

“A federal complaint is not the place for insinuation. If Eldredge is alleging that EDCare was not really engaged in a reduction-in-force plan than she must clearly set that out in her pleading. Subtle hints will not do. The plaintiff is the master of the complaint. Neither EDCare nor the Court can adequately evaluate this case without knowing how Eldredge is framing her claims. Is it a reduction-in-force case or isn’t it? In addition to the confusion over Eldredge’s theory of her own case, her allegations do not meet the plausibility standard….”

At 8:00 a.m. today, a JetBlue flight departed Logan International Airport for Houston Hobby Airport carrying a 17-month old baby who had been taken into DCF custody three months earlier based on a mother’s disagreement with recommendations by Children’s Hospital about the use of breast milk. During the three-month legal skirmish, DCF repeatedly changed its positions and took inconsistent positions, as it struggled to justify depriving the mother and child of their natural bond. DCF also sought to preclude the father from exercising his custodial rights even though he had remained in Texas while the mother sought assessment of their daughter at Children’s Hospital Boston. It is too early to tell the full extent of harm that DCF has caused the child and the family. During the child’s time in DCF custody, caretakers lacked medical knowledge that led to further complications. This case is the latest in a series in which DCF lacked sufficient and independent medical resources to test recommendations by Children’s Hospital. Fortunately, through arduous efforts of Attorney Duffy, this situation did not turn into a year-long ordeal like another DCF debacle resulting from healthcare providers calling it medical child abuse when a parent disagreed with one of multiple medical views. Attorney Duffy obtained an Order dated October 7, 2014, from Boston Juvenile Court requiring the return of the daughter to her parents in Texas.

PSD client Oceanus Insurance Company won a summary judgment motion today in Federal court in West Virginia, in Soyoola v. Oceanus Insurance Company. The plaintiff brought claims for breach of contract and unfair and deceptive acts claiming that Oceanus should have provided higher limits of liability. In a lengthy decision, the court ruled that plaintiff was not even entitled to take depositions because the undisputed evidence reflected an insufficient communication from a patient to a doctor to constitute a “claim” within the meaning of the claims-made-and-reported policy. Previously Oceanus successfully defeated a motion to remand the matter to state court and obtained an important ruling that several claims were preempted by the Federal Liability Risk Retention Act.