Match.Com Wins Dismissal of Fraud Claims in Purported Class Action

On September 30, 2010, Magistrate Judge Kaplan of the Northern District of Texas dismissed certain fraud-based claims in a purported class action brought against Match.com (pdf copy of the decision here).  Match.com, an operator of an online dating service, was sued for allegedly committing RICO violations and fraudulent acts under Texas law.  The plaintiffs’ “core allegation” is that Match.com misrepresents or conceals information with respect to “the number and identity of users who can be reached through [its] websites.”  In essence, plaintiffs claim that Match.com advertises that it has 15 million “members” but does not disclose that such members “have limited access to online dating services unless they pay a fee to become ‘subscribers.’”  Plaintiffs allege that Match.com has fewer than 1.4 million subscribers.

Judge Kaplan granted Match.com’s motion to dismiss plaintiffs’ fraud-based claims because plaintiffs failed to properly plead the element of reliance (i.e., an essential element of plaintiffs’ fraud, fraudulent inducement, negligent misrepresentation, and DTPA claims).  Judge Kaplan rejected plaintiffs’ argument that there is a “presumption of reliance” in fraud cases involving both affirmative misrepresentations and a failure to disclose, and held that “[o]ther than their conclusory allegations of reliance, plaintiffs allege nothing to suggest that they actually relied on any false representation in deciding to become fee-paying subscribers of [Match.com’s] online dating services.”  Because the failure to plead facts that establish reliance was fatal to plaintiffs’ fraud-based allegations, Judge Kaplan dismissed such claims with prejudice.  (Judge Kaplan dismissed the claims with prejudice given that plaintiffs had already amended their complaint three times.)

Judge Kaplan refused to dismiss plaintiffs’ RICO and breach of contract claims, although Judge Kaplan noted that Match.com could argue for the dismissal of such claims in a motion for summary judgment.

Miriam Zakarin and Norah Hart, of Treuhaft & Zakarin LLP, represent the plaintiffs.

John Cuti and Elisa Miller, of Davis Wright Tremaine LLP, and Scott Barnard and Patrick O’Brien, of Akin Gump Strauss Hauer & Feld, represent Match.com.

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Judge McBryde Highlights Rule 11’s 21 Day Safe Harbor Provision

On October 5, 2010, Judge McBryde of the Northern District of Texas issued an Order in Val-Com Acquisitions Trust v. Wells Fargo (pdf copy of Order here).  Two interesting points to note.

First, Judge McBryde noted that one of the plaintiffs had been dismissed from the case as a sanction for her failure to appear at a court-ordered settlement conference.

Second, after granting defendant’s motion for summary judgment, Judge McBryde took up defendant’s motion for Rule 11 sanctions, which requested sanctions against plaintiff and her counsel.  Judge McBryde denied the motion, because defendant had not complied with Rule 11(c)(2)’s twenty-one day safe harbor period, which requires the party requesting sanctions to serve a copy of the sanction motion on the opposing party at least twenty-one days prior to filing the motion with the court.  The twenty-one day safe harbor provision allows the opposing party the opportunity to correct or withdraw the challenged paper, claim, defense, etc.

Stephen Tiemann represents the plaintiff.

Wells Fargo is represented by Richard Illmer and Kevin Koronka, both of Brown McCarroll LLP.

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Stanford Receiver Files Disgorgement Case in Northern District of Texas

Receiver Ralph Janvey’s complaint (pdf copy here) arose out of the massive fraud perpetuated by Allen Stanford.  The Receiver’s complaint indicates that revenue from the sale of fraudulent certificates of deposit (“CDs”) generated substantially all of the income for Stanford.  The complaint states that the Receiver identified $3.1 million in payments (including bonuses, commissions, and referral fees) that Stanford made from the CDs to the defendant, Oreste Tonarelli–a former managing director of Stanford Group Company’s Private Clients Group in Miami.  According to the Receiver, “Tonarelli played a vital role in expanding and perpetuating the Stanford Ponzi scheme by both pushing sales of [] CDs and by training others to sell [] CDs to investors in existing and untapped markets, including Latin America.”  The lawsuit seeks a return of these funds in order to make an equitable distribution to those defrauded by Stanford. 

The case is pending before Judge Boyle. 

Kevin Sadler, Robert Howell, David Arlington, and Timothy Durst, all of Baker Botts LLP, represent the Receiver.

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Marroquin Custom Upholstery Removes Copyright Infringement Case to Northern District of Texas

On October 4, 2010, Marroquin Custom Upholstery removed a lawsuit (pdf copy of the lawsuit here) filed in Dallas County state court by Cameron Collection, Inc.  Cameron Collection’s lawsuit claims that, after Cameron Collection placed several orders with Marroquin to upholster and manufacture goods based on Cameron Collection’s designs, Marroquin used photographs of Cameron Collection’s designs on Marroquin’s website without permission.  Cameron Collection also accuses Marroquin of using Cameron Collection’s mailing list without its permission. 

Cameron Collection asserts causes of action for conversion, theft, copyright infringement, and fraud.  It seeks several hundred thousand dollars worth of damages, plus its attorney’s fees. 

We note that the case, given that it contains allegations of copyright infringement, should have filed in federal court to begin with.  28 U.S.C. § 1338(a) confers exclusive jurisdiction over copyright (and patent) cases.

Marroquin Custom Upholstery is represented by Thomas Whelan and Ashley Marino, of McGuire Craddock & Strother, P.C.

Cameron Collection, Inc. is represented by David Bell, of the Law Offices of David Bell, P.C.

Judge Kinkeade is presiding over the case.

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B-50.com, LLC Hits InfoSync Services, LLC With Patent Infringement Lawsuit in the Northern District of Texas

On October 4, 2010, B-50.com, LLC filed a patent infringement lawsuit (pdf copy of the complaint here) against InfoSync Services, LLC in the Northern District of Texas.  B-50.com accuses InfoSync Services’ “RightViewWeb” reporting application of infringing United States Patent No. 6,633,851, which claims a method for generating custom reports based on restaurant point of sale data transferred between multiple remote computing devices and a central computing device.

B-50.com is represented by Richard Urquhart and James Holbrook, III, both of Zelle Hofmann Voelbel & Mason LLP, and Jonathan Jay, Daniel Polglaze and Terrance Newby, all of Leffert Jay & Polglaze, P.A.

The case is before Chief Judge Fitzwater.

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Magistrate Judge Ramirez

Magistrate Judge Ramirez became a Northern District of Texas Magistrate Judge in 2002.  She was born in Brownfield, Texas, received her B.A. from West Texas State University in 1986, and her J.D. from Southern Methodist University School of Law in 1991 where she was a Sarah T. Hughes Fellow.  From 1991-1995, she practiced law at Locke Purnell Rain Harrell, LLP, and, from 1995 until her appointment, she was an Assistant United States Attorney for the Northern District of Texas.  Judge Ramirez has taught trial advocacy at Southern Methodist University School of Law.   

Judge Ramirez’s chambers are in Dallas, Texas.

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Judge Means Orders Alleged Insider Traders to Disgorge Over $500,000

On September 27, 2010, Judge Means of the Northern District of Texas entered an agreed final judgments relating to the SEC’s complaint in SEC v. Jobe (pdf copy of the complaint here).  The SEC’s complaint accused defendants (who are friends) of violating federal securities laws by insider trading.  Defendants, according to the SEC, obtained insider information from an XTO Energy employee that Exxon Mobil would be acquiring XTO Energy, purchased  XTO Energy securities, and, combined, earned over $500,000 in illicit gains.     

Judge Means required the defendants, pursuant to their agreeement to settle the case, to disgorge, collectively, over $500,000 gained as a result of the conduct alleged in the SEC’s complaint.

Defendants were represented by Dan C. Guthrie, Jr., of the Law Office of Dan C Guthrie Jr., and Wayne M Secore, of Secore & Waller.

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Fuel Tech Sues Panasia for Patent Infringement

On September 29, 2010, Fuel Tech, Inc. filed suit (pdf copy of the complaint here) against Panasia Co., accusing Panasia of committing patent infringement.  The patent-in-suit is United States Patent No. 7,090,810, which relates to a process for reducing the NOx content in combustion gases expelled from a large-scale stationary combustor.  Fuel Tech accuses Panasia of committing willful infringement, and seeks monetary damages (including enhanced damages and attorney’s fees) and an injunction.

The case is before Judge Solis.

Fuel Tech is represented by Kelly Kubasta, Darin Klemchuk, and Kirby Drake, all of Dallas’ Klemchuk Kubasta LLP; and Thomas Ross, Michael Weiner, Sandip Patel, Jonathan Goodman, all of Marshall, Gerstein & Borun LLP.

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Lawsuit Against Bryan Cave LLP Survives Motion to Dismiss

On September 27, 2010, Judge Boyle of the Northern District of Texas allowed two counts in plaintiffs’ amended complaint to go forward against Bryan Cave LLP and American Express Tax and Business Services (pdf copy of the decision here).  The plaintiffs have sued Bryan Cave and American Express Tax and Business Services for “alleged negligent misrepresentations and omissions in various opinion letters concerning the risks associated with using specially designed insurance policies to fund pension plans.”  Judge Boyle dismissed plaintiffs’ civil conspiracy and aiding/abetting common-law fraud claim, but determined that plaintiffs’ sufficiently alleged their negligent misrepresentation and exemplary damages claims. 

The plaintiff is represented by Eric Madden and Brandon Lewis, of Diamond McCarthy LLP.  

Defendant Bryan Cave LLP is represented by Kelly Vickers, of Locke Lord Bissell & Liddell LLP; and Douglas Whitney and John Litwinski, of McDermott Will & Emery LLP

Defendant American Express Tax & Business Services Inc. is represented by Darla Stockton Roden of Andrews Kurth LLP.

Indianapolis Life Insurance Company is represented by, among others, Jeffrey Tillotson and Edward Jason Dennis, of Lynn Tillotson Pinker & Cox LLP

Hartford Life and Annuity Insurance Company is represented by David Jones, Ashley Street, Barry Chasnoff, Michelle Reed, and Jessica Taylor, of Akin Gump Strauss Hauer & Feld; and Dan Marmalefsky, David McDowell, and Rebekah Kaufman, of Morrison & Foerster LLP.

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EEOC Sues Monarch Dental for Sex Discrimination

On September 22, 2010, the EEOC sued Monarch Dental in the Northern District of Texas “to correct unlawful employment practices on the basis of sex and to provide relief” to two female Monarch Dental employees (pdf copy of complaint here).  The EEOC’s complaint asserts that the “Lead Dentist” of Monarch Dental’s Burleson location subjected his female dental assistants to unwanted sexual conduct by, among other things, touching them in a sexual manner and making sexual comments about female patients.  The EEOC seeks, among other things, an injunction prohibiting Monarch Dental from engaging in further acts of sex discrimination. 

The case is before Judge Kinkeade.

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