JNS Holding Corp (JNSH)

[roytoy6969]

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CAR CHARGING GROUP, INC. a Nevada )
Corporation and 350 HOLDINGS, LLC, )
a Florida limited liability company, and )
350 GREEN, LLC, a Virginia limited liability )
Company, )
)
Plaintiffs/Counter-Defendants, ) Case No. 13 CV 03124
)
v. ) Judge Elaine E. Bucklo
)
JNS HOLDING CORPORATION, a Delaware )
Corporation, and JNS POWER & CONTROL )
SYSTEMS, INC., an Illinois Corporation, )
)
Defendants/Counter-Plaintiffs. )
)
)
JNS POWER & CONTROL SYSTEMS, INC., )
an Illinois Corporation, ) Case No. 13 CV 04020
)
Plaintiff, ) Reassigned for relatedness to
)
v. ) Judge Elaine E. Bucklo
)
350 GREEN, LLC, a Virginia limited )
liability company, )
)
Defendant. )
JNS POWER & CONTROL SYSTEMS, INC.’S REPLY IN SUPPORT OF ITS MOTION
FOR PARTIAL SUMMARY JUDGMENT
JNS Power & Control Systems, Inc. (“JNS”), by and through its attorneys, and pursuant
to Rule 56 of the Federal Rules of Civil Procedure, respectfully submits this Reply in support of
its Motion for Partial Summary Judgment against 350 Green, LLC (“350 Green”) on Count I of
JNS’s Complaint in Case. No. 13 CV 4020 for specific performance of the April 17, 2013 Asset
Purchase Agreement entered into between JNS and 350 Green (the “APA”) for the transfer of
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2
certain assets, including 168 completed and installed electric car chargers (the “Completed
Chargers”) and 51 Coulumb or equivalent chargers (the “Coulumb Chargers”) to be used for
service at electric vehicle (“EV”) charging stations in the Chicago area (collectively referred to
as the “Chargers” or “Chicago Assets”). In its response, 350 Green raises four arguments –
none of which are supported by the law or undisputed facts in this case. As set forth below, 350
Green fails to raise any questions of material fact or law that prevent entry of partial summary
judgment in favor of JNS and against 350 Green for specific performance of the APA.
ARGUMENT
I. 350 Green’s Standing Argument Is Without Merit.
350 Green’s first argument – that JNS lacks the standing necessary to challenge the
enforceability and effect of the Equity Exchange Agreement (“Exchange Agreement”) – is
categorically wrong. 350 Green alleges that a non-party to a contract does not have standing to
bring a claim based on the contract. (Resp., pp. 7-9). However, in the instant case, JNS is not
seeking any relief under the Exchange Agreement. Rather, JNS’s arguments regarding the
Exchange Agreement are in response to claims raised by 350 Green in its affirmative defenses
and summary judgment pleadings that the Exchange Agreement purportedly voids the APA.1 It
would be illogical and fundamentally unfair for JNS not to be able to respond to 350 Green’s
affirmative defenses and summary judgment arguments regarding the Exchange Agreement
when 350 Green is at the same time arguing in the consolidated case that the Exchange
Agreement voids the APA. 350 Green’s reliance on inapplicable law governing a party’s
standing to bring a claim under a contract does not alter the fact that it has placed the
interpretation and effect of the Exchange Agreement in the center of both of these cases.
1 JNS has made these same arguments relating to the Exchange Agreement in opposition to CCGI’s motion for
partial summary judgment on CCGI’s claim for declaratory relief seeking to have the APA declared void based on
the terms of the Exchange Agreement. See 13cv3124, Dkt. 41
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Not surprisingly, none of the four cases cited by 350 Green support its bizarre notion that
a party is barred from responding to an argument based on interpretation of a contract because
that party was not a party to that contract. For instance, JNS is not a third-party seeking to
enforce a contract, i.e. the Exchange Agreement, for JNS’s benefit, as is the situation in Btesh v.
City of Maitland, Fla., 6:10-CV-71-ORL-19DAB, 2011 WL 3269647 (M.D. Fla. July 29, 2011)
(third-party shooting victim seeking to recover against municipality by enforcing an agreement
among cooperating municipalities). Similarly inapposite is Morgan Stanley v. Halliday, 873 So.
2d 400 (Fla. Dist. Ct. App. 2004), in which an arbitration clause in a customer account
agreement between a brokerage firm and the trustee was found unenforceable against the trust
beneficiary who was claiming mismanagement of the trust against the trustee. Unlike the
plaintiff in Morgan Stanley, JNS is not claiming to be an intended beneficiary of the Exchange
Agreement. The factual scenario presented in another one of 350 Green’s cases, Sun
Commodities, Inc. v. C.H. Robinson Worldwide, Inc., 11-62738-CIV, 2012 WL 602616 (S.D.
Fla. Feb. 23, 2012), is also distinguishable from and inapplicable to the instant situation between
JNS and 350 Green. In Sun Commodities, the plaintiff sought a declaratory judgment that a noncompete
contract between the defendant and defendant’s former employee was unenforceable.
Id. at * 1. In the instant case, JNS is not seeking any declaratory relief related to the Exchange
Agreement. Finally, 350 Green’s fourth case, Lujan v. Defenders of Wildlife, 504 U.S. 555
(1992), does not even involve claims requiring contract interpretation or enforcement.
By raising affirmative defenses based on the Exchange Agreement, 350 Green placed the
Exchange Agreement at issue in this case and invited arguments by JNS that 350 Green’s
affirmative defenses relying on the Exchange Agreement are meritless and do not prevent entry
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4
of summary judgment in favor of JNS. For these reasons, 350 Green’s standing argument should
be rejected out of hand.
II. The Exchange Agreement Did Not Bar 350 Green And JNS From Entering Into The
APA.
For the reasons stated in JNS’s Motion for Partial Summary Judgment (Case no.
13cv4020, Dkt. 33) and JNS’s Response to the CCGI Parties’ motion for partial summary
judgment (Case no. 13cv3124, Dkt.41), which are both adopted and incorporated as if fully set
forth herein, whether the Exchange Agreement was in effect at the time the APA was executed is
immaterial. 350 Green has not raised any new issues in response to the JNS motion for partial
summary judgment. (Resp., pp. 9-11). As should be clear from the JNS pleadings already filed,
the Exchange Agreement did not, and cannot, operate to prohibit or limit 350 Green’s ability or
capacity to enter into or perform under the APA. For this reason, there are no questions of
material fact or law that the APA is a valid and enforceable contract.
III. Knowledge Of The New York Litigation Does Not Bar JNS From Relying Upon 350
Green’s Representation And Warranties.
350 Green mistakenly argues that JNS’s knowledge of the lawsuit filed by CCGI against
350 Green and JNS Holdings Corporation (S.D.N.Y. case no. 13cv2389, “NY Lawsuit”)
somehow prevented JNS from relying on the representations and warranties of 350 Green stated
in the APA. (Resp., pp. 11-13). 350 Green’s failure to cite even one case in support of this
novel proposition serves to demonstrate the fallacy of the argument, since not surprisingly, in
Illinois, precisely the opposite is true. “A warranty is an assurance of one party to a contract of
the existence of a fact upon which the other party may rely. It is intended precisely to relieve the
promise of any duty to ascertain the fact for himself.” Vasco Trucking, Inc. v. Parkhill Truck
Co., 286 N.E.2d 383, 386 (Ill. App. Ct. 1972). Just because CCGI had sued 350 Green and JNS
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does not provide notice that any of the assets which are the subject of the APA were somehow
encumbered and could not be sold.
Indeed, in making this “notice and knowledge” argument, 350 Green ignores a key ruling
by the Judge in the NY Lawsuit. On April 15, 2013, the judge affirmatively advised all parties
that he was not enjoining JNS and 350 Green from negotiating any purchase of assets of 350
Green. Transcript of April 15, 2013 hearing in the NY Lawsuit, p. 34, a copy of which is
attached hereto as Exhibit A. Therefore, and in reliance on the judge’s ruling, JNS and 350
Green negotiated and entered into the APA on April 17, 2013. (SMF, ¶5).
In its motion for partial summary judgment in the 13cv3124 case, 350 Green makes the
same “notice and knowledge” argument, attempting to find support by analogy to purchases
made under the Uniform Commercial Code. As discussed, in detail in JNS’s response to CCGI’s
motion for partial summary judgment in the 13cv3124 case, this argument is also wholly without
legal precedent and, in fact, contradicted by the laws governing contractual representations and
warranties. See 13cv3124, Dkt. 47, pp. 12-14. Furthermore, in the NY Lawsuit case, 350 Green
took the position that after March 22, 2013, and at the time the APA was executed, 350 Green
had an unfettered right to sell its assets. (S.D.N.Y. Case no. 13cv2389, Dkt. 21, p. 11). This
position has never been held to be invalid or found improper by a court. 350 Green did not
concede that it could not sell these assets at the time it executed the April 22, 2013 Addendum,
which settled the NY Lawsuit, and did not expressly take any position regarding the APA.
(SMF, ¶39, Ex. 14 (Addendum pp. 1,3)). Obviously, 350 Green’s position in the NY Lawsuit
formed the basis for the representations and warranties made in the April 17, 2013 APA upon
which JNS reasonably relied. The argument that knowledge of the NY Lawsuit operates to
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6
invalidate the enforceability of the APA is meritless, and therefore, does not operate to prevent
entry of partial summary judgment against 350 Green.
IV. Ordering Specific Performance Of The APA, Against 350 Green, Is The
Appropriate Remedy.
350 Green’s additional arguments regarding the specific performance remedy are equally
unavailing. As demonstrated below, the Court should reject these arguments outright and find
that specific performance is the appropriate remedy for 350 Green’s breach of the APA.
A. The APA Closed And Is Enforceable.
350 Green argues that JNS has not produced any evidence that the parties executed
documents to extend the closing beyond April 11, 2013. In so arguing, 350 Green blithely
ignores the uncontested fact that both parties executed the APA on April 17, 2013. (SMF, ¶5). In
light of the date the agreement was actually signed, the date listed for closing in the APA, April
11, 2013, obviously was a scrivener’s error, uncorrected from what is clearly the April 4, 2013
draft of the APA. (Complaint, Ex. B). The underlying terms of the APA had not been agreed
upon until April 17, 2013, after the District Court in the NY Lawsuit advised all the parties that it
was not enjoining JNS or 350 Green from negotiating the purchase of 350 Green’s assets.
(Exhibit A, p. 34). Therefore, it would have been an impossibility for the APA to close on a date
prior to the parties’ execution of the contract.2
2 The contract law doctrine of “scrivener's error,” or mutual mistake, allows a court of equity to
reform a contract where a written agreement does not reflect the clear intent of the parties due to
a drafting error. Young v. Verizon's Bell Atl. Cash Balance Plan, 667 F. Supp. 2d 850, 894 (N.D.
Ill. 2009) aff'd, 615 F.3d 808 (7th Cir. 2010) (citing, 27 Richard A. Lord, Williston on Contracts
§ 70:93); “To reform a writing based on mutual mistake, the Court must find that some provision
agreed upon was omitted and reforming the agreement by inserting the provisions would change
the instrument to the contract agreed upon.” Pneumatic Trucking, Inc. v. Local 164 Int'l Bhd. of
Teamsters, 05-74875, 2007 WL 2178394 (E.D. Mich. July 27, 2007).
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Moreover, the APA called for the closing to occur “on or about April 11, 2013.”
(Complaint, Ex. B). According to Black’s Law Dictionary, the phrase “on or about” is defined
as: “Approximately; at or around the time specified.” Black's Law Dictionary, (9th ed. 2009).
Therefore, it is clear that the parties did not intend the APA to close by a specific date certain.
Accordingly, there was no need under the APA for the parties to execute documents to extend
the closing date. On April 30, 2013, JNS obtained the letter from the City approving the terms of
the APA (SMF, ¶20, Ex. 4), and clearly fulfilled its obligations and was ready willing and able to
close on the transaction “on or about April 11, 2013.” Nothing further was required.
B. JNS Fully Performed Its Obligations Under The APA.
350 Green suggests, without presenting any facts or argument in support, that a question
of fact exists, which would prevent entry of summary judgment in favor of JNS, regarding the
assignment of licenses referenced in §2.7 of the APA. 350 Green argues that JNS is not entitled
to specific performance because the consents for the assignments of licenses were not secured or
provided by the licensors. (Resp., p. 13). In arguing this point, however, 350 Green ignores that
350 Green was the party obligated to assign the licenses and secure any consents for those
assignments under the APA. (Complaint, Ex. B, ¶2.7). There is no question of material fact that
the obligation to secure and deliver consents from certain licensors was 350 Green’s alone.
Section 2.7 of the APA required 350 Green to perform as follows:
[350 Green] shall assign and [JNS] shall accept and acknowledge the assignment
of all Licenses for locations of the assets set forth in Exhibit 2.1. [350 Green]
shall provide any and all Licensor consents required pursuant to such Licenses. If
needed [350 Green] will assist in transfer of unsigned license agreements, provide
contact information and make email introductions to potential and existing hosts.
(Complaint, Ex. B, ¶2.7).
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Notably, 350 Green does not dispute that it failed to assign the Licenses to JNS, even after JNS
demanded that the transaction close on May 6, 2013. (SMF, ¶49; SAUF, ¶23).
In its response, 350 Green relies upon the affidavit of Mariana Gerzanych, the President
and member of 350 Green at the time the APA was executed (SAUF, Ex. M) wherein she
admits: “None of the hosts that needed to provide their consents for license agreements pursuant
to part (b) of the APA ever provided such consents.” (Response., p. 13; SAUF, Ex. M, ¶60). By
Gerzanych’s own statement, 350 Green admits that it did not perform its obligations under the
APA.3 That 350 Green did not perform as required does not create a question of fact that
precludes summary judgment on JNS’s specific performance claim.
“A party seeking specific performance of a contract must show he has himself always
been ready, willing and able to perform the contract on his part, and he is not entitled to a decree
for specific performance if the circumstances or a course of conduct clearly show an
abandonment of the contract by him.” Wolford v. James E. Kolls Inv. Co., Inc., 377 N.E.2d
1314, 1317 (Ill. App. Ct. 1978). The undisputed material facts before the Court demonstrate that
JNS performed its obligations as fully as possible under the APA, and stands ready willing and
able to complete this transaction upon 350 Green’s performance of its obligations. Obviously,
JNS could not accept the assignment of the licenses and licensor consents, as required by §2.7 of
the APA, until such time as 350 Green assigned the licenses and provided any licensor consents
required. JNS cannot accept that which 350 Green refused to provide.
350 Green’s argument regarding the grant is also misleading. The only condition that
JNS was required to fulfill under the APA was the agreement by the City to allow 350 Green to
3 In fact, in its response, 350 Green does not refute that it failed to transfer the Chicago Assets after the APA closed
April 30, 2013. Failing to transfer these assets was a breach of the APA that 350 Green has now conceded.
Marcavage v. City of Chicago, 659 F.3d 626, 638 (7th Cir. 2011) (holding, “Plaintiffs waived their challenge to the
permit policy by failing to respond on that point when the city defendants moved for summary judgment”).
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assign to JNS the remaining benefits and obligations associated with the grant – not the
assignment itself. This condition was achieved as evidenced by the April 30, 2013 letter from
the City to JNS accepting the terms of the APA and approving the assignment of the grant to
JNS. (SMF, ¶20).
Finally, 350 Green’s argument regarding the purported discrepancy in the amount of the
liabilities that 350 Green owed to its creditors listed in the APA and the subsequent affidavit of
Amber Achilles Ritter (“Ritter “) does not preclude entry of summary judgment. The amount of
liabilities owed by 350 Green and to be satisfied by JNS pursuant to the APA is not material to
whether specific performance is an appropriate remedy. How much JNS may have to pay to
creditors under the Chicago Grant does not affect whether 350 Green should be ordered to
transfer all of the assets described in the APA. Moreover, even if a question of fact exists
regarding the actual amount to be paid as part of JNS’s performance, 350 Green has failed to
provide any basis upon which the Court could find that discrepancy material. Specific
performance by 350 Green under the APA – which does not in any way involve payments to
these creditors by 350 Green – is the appropriate remedy.
C. The Assets To Be Transferred Are Unique In Nature Such That Monetary
Damages Are An Inadequate Remedy At Law.
350 Green’s conclusory statements that the Chicago Assets are not unique and JNS has
an adequate remedy at law (Resp., p. 14) should be rejected outright by the Court as these bare
boned conclusions are devoid of any legal or factual support. The undisputed facts and
applicable law clearly demonstrate the fallacy of these arguments.
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1. It is Uncontradicted that the Chicago Assets are Unique and Therefore,
Specific Performance is Appropriate.
“A court may decree specific performance where the goods are unique… whether goods
are replaceable as a practical matter—for example, whether it would be difficult to obtain similar
goods on the open market.” Magellan Int'l Corp. v. Salzgitter Handel GmbH, 76 F. Supp. 2d
919, 926 (N.D. Ill. 1999) (denying motion to dismiss specific performance claims). “The test of
uniqueness under this section must be made in terms of the total situation which characterized
the contract.” In re Bullet Jet Charter, Inc., 177 B.R. 593, 599 (Bankr. N.D. Ill. 1995) (citing
Uniform Commercial Code Comment, 810 ILCS 5/2–716). In Bullet Jet, the court found that,
under the totality of the circumstances, the property at issue, an aircraft, was unique based on the
nature of the aircraft and the work done to the aircraft in connection with the contract for
purchase. In re Bullet Jet Charter, Inc., 177 B.R. 593, 599.
JNS has argued that the undisputed facts demonstrate that the Chicago assets were unique
and integral to the transaction. (JNS Memorandum, p. 14). In response, 350 Green merely
makes the conclusory statement that “[t]he Chicago Assets are not unique, nor were they created
specifically for the Chicago Project.” (Resp. p. 14). Neither in its Response or it Statement of
Additional Facts, however, does 350 Green offer any factual basis for this claim.
What is clear from the undisputed facts in this case is that the Chargers, which are among
the assets 350 Green agreed to sell, are unique. As noted in the APA, all 219 chargers sold under
the APA are necessary to and inextricably integrated with the work performed and remaining to
be performed under Grant. (Complaint, Ex. B). As contemplated in the APA, JNS was to
perform the remaining tasks required under the Grant and accept those additional obligations in
exchange for those monetary benefits 350 Green already had received under the Grant. This
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included ownership of all 219 chargers already purchased by 350 Green. The Chargers, thus, are
inextricably tied to the Grant and JNS’s completion of the Chicago Project.
In addition, 168 of the chargers already have been installed at various locations
throughout the Chicago area. (SMF, ¶5). As in Bullet Jet, the work done by 350 Green to the
installed chargers, prior to executing the APA, renders those charges particularly important to the
transaction. The 168 chargers that have been installed at specific locations simply cannot be
removed and replaced by other chargers, as evidenced by the requirement that 350 Green assign
the licenses for those locations to JNS. (Complaint, Ex. B, ¶2.7). Thus, contrary to 350 Green’s
claim, these chargers were “created specifically for the Chicago Project.” To not require the
assignment of these installed chargers would defeat one of the purposes of the transaction – to
obtain these chargers and the corresponding leases in exchange for JNS’s payment to the 350
Green creditors from the Chicago Project.
Here, the Court is being asked to order 350 Green to transfer the Chargers that were
obtained and installed pursuant to the Grant, which is also being assigned, to JNS. The Chargers
are the type and model specifically described in the Grant and are either already installed or are
ready-on-hand in Chicago and available for immediate installation, so that JNS can timely
complete the remaining installations before the Grant expires on December 31, 2013. Under
these circumstances, these Chargers are not fungible or replaceable; they are unique and warrant
specific performance as a remedy for 350 Green’s breach of the APA.
Since 350 Green has provided no facts to refute the uniqueness of the Chargers which
form a significant portion of the Chicago Assets to be transferred under the APA, this argument
that the chargers are not unique should be rejected. “Generalized allegations, without more, are
insufficient to defeat a motion for summary judgment.” Villafuerte v. Camberley Associates,
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Inc., 98 C 473, 1999 WL 66575, at *3 (N.D. Ill. Feb. 8, 1999). “Bare assertions in the pleadings
and arguments are not sufficient to raise a question of material fact.” Nat'l Sur. Co. v. Preferred
Piping, Inc., 88 C 8490, 1990 WL 16213, at *3 (N.D. Ill. Feb. 1, 1990).
2. Monetary Damages are Inadequate.
350 Green also contends that monetary damages are adequate since JNS’s losses arising
from 350 Green’s breach of the APA are somehow limited to the satisfaction of 350 Green’s
previous debt to JNS. (Resp., p. 15). JNS’s losses resulting from 350 Green’s breach of the
APA, however, include the irreplaceable Chargers, the assignments, and the leases 350 Green
agreed to assign and transfer to JNS. No adequate remedy at law exists for 350 Green’s failure
to transfer the assets described in the APA since they are so unique in nature that damages for
350 Green’s breach will be impossible to calculate. In such cases, specific performance is
proper, “where the measure of damages resulting from non-performance of the agreement is
uncertain or difficult to ascertain.” Greyhound Fin. Corp., 1993 WL 294023, at *3.
Accordingly, there are no questions of material fact or law that 350 Green breached the APA and
that specific performance is the just and equitable remedy.
V. Conclusion
“In contract law once a contract is established as valid, the rights of the parties become
absolute and in absence of a breach going to the essence of it, the contract will be enforced.”
Friedman v. 5424 Cornell Corp., 382 N.E.2d 296, 298 (Ill. App. Ct. 1978). As discussed in
Sections II, A and B, infra, there are no questions of material fact that the APA is a valid and
enforceable contract. There is also no question of material fact that JNS is not in breach of any
material terms of the APA or otherwise failed to satisfy any conditions precedent to be
performed by JNS. Infra, Section 10.B. Moreover, it is undisputed that the Chicago Assets are
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unique and appropriate for specific performance. Infra, Section IV.C. Accordingly, there is no
question of fact or law that would prohibit the Court from enforcing the APA and ordering 350
Green to specifically perform pursuant to the terms of the APA.
WHEREFORE, JNS Power & Control Systems, Inc., respectfully request that this Court
find there are no questions of fact or law regarding JNS’s Motion for Partial Summary Judgment
and enter an order: (1) Granting summary judgment on Count I of JNS’s Complaint; (2) Order
350 Green to immediately transfer the Chargers to JNS, deliver the assignments of 350 Green’s
rights in the grants, licenses, rental agreements or leases identified in the APA, and provide full
releases and indemnification as identified in the APA; and (3) grant such other relief as the court
deems just and appropriate.
Respectfully submitted,
JNS Power & Control Systems, Inc.,
By: s/ Evan J. Haim
One of Their Attorneys
KELLY MCCLOSKEY CHERF
PATRICK E. DEADY
EVAN J. HAIM
HOGAN MARREN, LTD.
321 N. Clark Street, Suite 1301
Chicago, Illinois 60654
[phone]
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EXHIBIT A
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d4f0cara
1
1 D4F0CARA Motion
2 UNITED STATES DISTRICT COURT
2 SOUTHERN DISTRICT OF NEW YORK
3 ------------------------------x
3
4 CAR CHARGING GROUP, INC 350
4 HOLDINGS, LLC,
5
5 Plaintiff,
6
6 v. 13 CV 2389
7
7 350 GREEN, LLC
8 MARIANA GERZANYCH
8 TIMOTHY MASON
9 JNS HOLDING CORPORATION,
9
10 Defendant.
10
11 ------------------------------x
11 New York, N.Y.
12 April 15, 2013
12 4:08 P.M.
13
13 Before:
14
14 HON. JESSE M. FURMAN,
15
15 District Judge
16
16 APPEARANCES
17
17 MICHAEL IRA BERNSTEIN
18 Attorney for Plaintiff
18
19 CARY BRIAN SAMOWITZ
19 FARAH LISA WHITLEY-SEBTI
20 Attorney for Defendant 350 Green,LLC
20 Marian Gerzanych, Timothy Mason
21
21 RANDALL SCOTT NEWMAN
22 Attorney for Defendant JNS Holding Corporation
22
23
24
25
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
2
1 (In open court)
2 THE COURT: You may be seated.
3 In the matter of Car Charging Group, 13 CV 2389.
4 Counsel, state your names for the record.
5 MR. BERNSTEIN: Michael Bernstein, on behalf of
6 plaintiffs.
7 MR. SAMOWITZ: Carry Samowitz, for all defendants
8 other than JNS Holding Corporation. And I'm here with Farah
9 Lisa Whitley-Sebti.
10 MR. NEWMAN: Randall Newman, for defendant, JNS
11 Holdings Corporation.
12 THE COURT: All right. Good afternoon, all.
13 So, I called this conference to discuss the -- I
Page 1
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d4f0cara
14 received an application, new complaint and application for
15 preliminary injunction from plaintiff last week. And I wanted
16 to discuss how we were going to proceed, and what the status of
17 things is beyond what I know from reading the papers.
18 So to begin, with Mr. Bernstein, why don't you fill me
19 in, if there is anything beyond what I have read that I should
20 know about.
21 MR. BERNSTEIN: Thank you.
22 From the plaintiff's position, we are not aware, as of
23 right now, of any anything that's been going on in the pending
24 discussions that we understand have been ongoing between JNS
25 and 350 Green and its principle.
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
3
1 The last we heard was what was put in our papers. And
2 the reason why we had asked for injunctive relief --
3 THE COURT: Explain to me, just flush out for me why,
4 what exactly the risk of irreparable harm is here, which is to
5 say, what the harm is to your reputation if the merger doesn't
6 go through, or doesn't go through in precisely the fashion that
7 you originally contemplated.
8 I understand that it may be a bummer from your
9 client's standpoint, but why would damages not be adequate to
10 remedy whatever harm occurred as a result?
11 MR. BERNSTEIN: Your Honor, the reason for that is
12 because this industry, the electric car industry, is a new
13 industry. My clients, Car Charging, and its affiliated entity
14 that we are entering into this contract, had done so, had
15 issued press releases precisely because this acquisition was
16 going to enable them to raise considerable capital, as well as
17 enable them to complete their application for being listed on
18 the, I believe it is in our papers, they were looking to go on
19 two stock exchanges, either Nasdaq or, I believe it was the New
20 York Stock Exchange. And precisely because of -- if this deal
21 does not go through, as it's been contemplated, and the fact
22 that investors have put in moneys precisely based on this, the
23 releases, that this transaction was going to occur, you have
24 the lawsuits from public investors that bought stock and trades
25 on the over-the-counter bulletin board. So people bought stock
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
4
1 in anticipation of this transaction. The investors made
2 private investments into their company, based on the fact that
3 this deal was going to go through.
4 THE COURT: All of that goes to whether those parties
5 have been harmed by any actions of the defendants, to the
6 extent that's a question of your reputation. I mean, if this
7 deal falls through, through the acts or conduct of the
8 defendants, and perhaps even acts or conduct in violation of
9 whatever contract they had, how does it harm your reputation?
10 Certainly harms their reputation. But, you don't get the
11 benefit of the anticipated merger, but presumably you can
12 figure out, in some fashion, what -- how much that deprived you
13 in the form of, you know, anticipated earnings, or you know
14 economy scale, what have you. I'm trying to understand
15 precisely how it harms your reputation if, through misconduct
16 of theirs, the merger falls through.
17 MR. BERNSTEIN: Because if the investors invested,
18 based on this transaction, lose their confidence and pull out,
19 and/or we don't get listed because this transaction doesn't go
20 through, then the chances of us getting listed as anticipated
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21 will not happen. The company will, most likely, according to
22 the declaration of CEO Michael Farkas, will not survive the
23 whole debacle, and there will be no company.
24 So the fact that 350 Green, which says in our papers
25 has been under federal investigation, has no money, it's -- the
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
5
1 City of Chicago has cancelled the contract. And this was an
2 asset purchase that was obtained for a certain price, based on
3 all of those criminal charges of other ongoings that were going
4 on, there wouldn't be any monetary equivalent. These people
5 have no money. So in the end, Car Charging will be potentially
6 out of business. That company will be out of business, or it
7 may or may not complete its merger with JNS. It may go to
8 someone else, or nothing may happen. We don't know exactly
9 where that stands.
10 But all we know is that if Car Charging goes out of
11 business, and 350 has no assets, then there is no adequate
12 remedy at law, because getting a judgment against a defunct
13 company that has basically lost its contracts due to its, you
14 know, alleged criminal behavior, is not going to put my client
15 in a position that an adequate remedy at law would by making it
16 whole on collecting on some potential judgment that would be
17 recovered after trial.
18 THE COURT: Okay. I'm not sure you made that argument
19 in your memorandum. You didn't --
20 MR. BERNSTEIN: I believe we did, your Honor. We said
21 the exact same thing. That if this goes out of business,
22 precisely because of the investor confidence, we won't get
23 listed and the transaction won't be able to proceed.
24 THE COURT: Well, if that was on service of the
25 argument that the irreparable harm was to your reputation, not
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
6
1 the irreparable harm that would flow from the risk that the
2 they would be insolvent or not in existence, at the end of the
3 day and, therefore, couldn't pay whatever damages you sought.
4 MR. BERNSTEIN: Well, the harm to our reputation is
5 that no one is going to invest in the company. People are not
6 buying stock, if people are not investing, we're out of
7 business.
8 I can't sit here on the record and say the very fact
9 of this transaction not happening will put Car Charging out of
10 business, as your Honor brought out. But what will put it out
11 of business is if all of the investors sell out their stock
12 because of the loss of investor confidence, the private
13 investors pull out their money and, coupled with that, is the
14 inability to collect on a judgment. Because collecting on a
15 judgement after the fact may enable us, as your Honor pointed
16 out astutely, that if we get shareholder lawsuits, or
17 derivative lawsuits, that we have to pay out a recovery, if it
18 even existed, would be used to pay that. But for all practical
19 purposes, if the company goes out of business, that's not
20 really an adequate remedy of law. It's just being able to pay
21 off third party lawsuits against the company as a result of the
22 inability of this transaction to close in accordance with its
23 terms, based on the intentional breach of 350 Green.
24 THE COURT: Okay. And are you aware of any cases -- I
25 think in your memorandum, you, to the extent that you have any
SOUTHERN DISTRICT REPORTERS, P.C.
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7
1 support, legal support for the argument of irreparable harm, it
2 is for the proposition, the incontestable proposition, that the
3 loss of bid in a contract case is a form of irreparable harm.
4 Can you cite any cases, circumstances similar to this,
5 where investors have made investments based on some anticipated
6 merger, and/or, you know, there is some other collateral
7 benefit, like listing on an exchange, would flow from that and
8 that that constitutes irreparable harm?
9 MR. BERNSTEIN: Sitting here today, your Honor, I
10 don't have a case to that effect.
11 I cite it because this conduct is governed by Florida
12 law, even though the jurisdiction is here in New York.
13 We cited -- the cases we cited was the Florida standard for
14 irreparable harm. And it's our interpretation that that is
15 what, again, we are saying that that is a substantially
16 likelihood of events that will occur. As I said, I don't have
17 a case that says investors pulling out automatically makes it
18 irreparable harm. But irreparable harm is harm that a money
19 judgment at law won't provide us with sufficient benefit at the
20 end of the day. And in this case, we feel that based on these
21 circumstances that we cited, based on the Florida case law, as
22 it relates to the contract showing that there was no default
23 provision, there was no time of the essence clause. And the
24 cases that we cited were clearly on point, showing that there
25 was an intentional breach by the defendant, 350 Green, and its
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
8
1 principles. The fact that, again, your Honor, some of it is
2 based on the declaration of the CEO. From a business
3 standpoint, they were in the process of being, completing their
4 application to be listed. This will affect their ability to
5 raise money. This will affect the stock price. But, again,
6 we're doing this preemptively because it has not happened yet.
7 And so the AK that will be issued, based on this lawsuit, may
8 or may not determine how the investors would ultimately react
9 as a result of this, the publishing of what's going on now with
10 the breach of contract.
11 THE COURT: Okay. And do you have any authority for,
12 in your memorandum, you also argue that the parties
13 contemplated the need for injunctive relief and essentially
14 agreed by contract, that any party would be entitled to
15 injunctive relief to prevent the breaching of the agreement.
16 But there is no case law to support the proposition that
17 parties can agree prior to contract, the injunctive relief of
18 the sort that you are seeking. Are you aware of any such
19 authority under --
20 MR. BERNSTEIN: Standing here, today, your Honor, I do
21 not. I'm happy to try to supplement it if your Honor would
22 request. I could take a look to see if such cases exist.
23 THE COURT: All right. Well, for now, let's leave it
24 there. But we'll proceed.
25 Anything else you want to add before I ask defense
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
9
1 counsel?
2 MR. BERNSTEIN: Well, one of the things that I think
3 would be beneficial, I want to bring up, your Honor, from a
4 housekeeping standpoint, subsequent to the filing of our
5 papers, we had filed a motion to file sealed records.
6 Specifically because I think it would benefit your Honor to see
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7 the provisions of the July term sheet, the August term sheet,
8 and the exchange agreement that are the underlying documents in
9 this case which, generally, in the ordinary course are
10 requested. Surprisingly from Mr. Samowitz on behalf of the
11 defendants, objected to it being filed under seal. And as
12 such, to the extent that on the record Mr. Samowitz, since he
13 has objected on our filing it under seal, we have no objection
14 to uploading them as exhibits, that they are public records
15 that your Honor can see immediately. And it obviates the need
16 for the motion to file under seal. We just didn't want to open
17 up to a claim for breach of the terms of the agreements in the
18 confidentiality provisions.
19 And, as such, even though I picked up the sealed
20 envelope from Room 270 at 500 Pearl Street, I think from a
21 housekeeping standpoint, on that motion, I would be happy to
22 just upload those documents if Mr. Samowitz has no objection.
23 THE COURT: Well if they are going to be filed under
24 seal, you don't upload them anyway, because that would make
25 them readily available to the world. But, you know, I'll hear
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
10
1 from Mr. Samowitz on that issue, as well.
2 So, Mr. Samowitz, number one, let's stick to the
3 substance and merits for the moment. And then this is largely
4 to figure out sort of the process that we are going to follow
5 to resolve the applications on the table. But why don't you
6 start with the housekeeping matter. The motion to seal, I
7 would have thought that that was something that both sides
8 would probably want to maintain under seal.
9 MR. SAMOWITZ: Your Honor, if I understood Mr.
10 Bernstein correctly, are you saying if I don't have an
11 objection, you wouldn't bring a claim for benefits, you
12 wouldn't file the public record. So maybe it would obviate --
13 THE COURT: There is a court reporter here, but I have
14 no idea what you just said.
15 MR. SAMOWITZ: Did I hear Mr. Bernstein correctly that
16 if I'm not objecting, and your Honor's not objecting, either,
17 that you can file them in public record?
18 MR. BERNSTEIN: Correct.
19 We were filing them under seal, as I said to the
20 judge, because of the fact that there are confidentiality
21 provisions in those documents. And, as such, it is our
22 understanding that the parties wanted them confidential and not
23 published to the world.
24 Since we asked you to file it under seal, and you
25 objected, we interpreted that as you had no objection to them
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
11
1 being filed as public documents. As such, we'll just file
2 them, presuming on the record you say you have no objection.
3 MR. SAMOWITZ: We have no objection. Just to clarify,
4 the main document does not have a confidentiality provision.
5 That is one of the problems. If you'd show me the
6 confidentiality provision. But, otherwise, I don't see why.
7 These are just three contracts, your Honor. There is no reason
8 to burden the Court and the parties with the sealing of those
9 three contracts.
10 THE COURT: I am going to leave you guys to confer
11 about what can and can't be filed in public record with the
12 following guidance and caveat.
13 My view, I take the public right of access to judicial
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14 documents pretty seriously, which is to say, number 1, you
15 don't have authority to file anything under seal. You can only
16 ask me to file something under seal. And I, and I alone,
17 could, can, authorize things to be filed under seal.
18 Number 2, to the extent that documents, particularly,
19 well, judicial documents, that is documents relevant to the
20 judicial function, can be filed publically, even in redacted
21 form, I will mandate that that be that that happens. Now,
22 which is to say you should keep your redactions to a minimum.
23 An agreement between the parties that something be should
24 remain confidential, by itself, does not justify something
25 remaining under seal, if it would otherwise be subject to
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
12
1 common law right of access or the First Amendment right of
2 access.
3 So with that guidance in mind, you can look at look
4 Lugosch. I can't remember the name of the defendant. But it's
5 a leading Second Circuit case on common law right of access and
6 First Amendment right of access. If you look at that case it
7 will give you some guidance on what can and can't remain under
8 seal. And if after looking at it and conferring, either side
9 has an application, or even better there is a joint
10 application, I will consider it. But, you know, it sounds like
11 you guys can do a little bit of the leg work in the first
12 instance.
13 Okay?
14 MR. BERNSTEIN: Thank you, your Honor.
15 MR. SAMOWITZ: Very well, your Honor.
16 THE COURT: So with that, for now, I'll leave the
17 motion to seal on the record -- on the docket. And depending
18 on what comes of your discussions, that may be mooted or it may
19 not be. Maybe narrowed, I don't know. But I'll leave it to
20 you to discuss first.
21 So, with that, Mr. Samowitz, talk to me about the
22 substance and merits. And I ask counsel only about the
23 irreparable harm component of this, but you should obviously
24 address the likelihood of success component as well.
25 MR. SAMOWITZ: Sure. If I may, just to start, just as
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
13
1 a caveat for my point of view, I only found out about this case
2 maybe last Wednesday night, so please don't take whatever I'm
3 going to say as our final say on these issues, because we are
4 still coming up to speed on the facts.
5 On the merits, your Honor, just to back up for a
6 second, our client services these, manufacturing services these
7 electric vehicle charging stations.
8 And Mr. Bernstein's client is in the same business.
9 There is nothing unique about electric vehicle charging
10 stations. It's a very fungible product. There are many
11 players in the field. There is no reason why plaintiff can't
12 find another company that sells the same product, and services
13 the same product and, in fact, there was an SEC filing last
14 month that indicated that this plaintiff had done just that.
15 They bought a company called Beam, which I believe is in the
16 same field. That was disclosed in an 8K filing.
17 On the merits, your Honor, first of all, it's kind of
18 odd to hear all of this stuff about criminal activity,
19 investigations, and times that we went back on our deal.
20 Because all of that happened allegedly before the parties
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21 entered into the equity exchange agreement.
22 The two term sheets, your Honor, were not binding.
23 The parties had the right to back out of those term sheets if
24 they didn't reach a mutually agreeable deal. After everything
25 had happened that Mr. Bernstein talked about and set forth in
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
14
1 the complaint for several pages after that happened, then the
2 parties entered into this final agreement. So, you know,
3 clearly, plaintiff's waived any issue about that.
4 THE COURT: I sort of -- I mean I don't disagree with
5 that. I sort of took all of that as kind of background for
6 explaining the revised or amended term sheet or agreement,
7 which is to say that I have discounted those allegations. But
8 that being said, it strikes me as reading, obviously, their
9 papers, that you know there was a fairly definitive agreement
10 here, after all that. And it would seem that if there were
11 negotiations with JNS, let alone an agreement, that that would
12 seem to be some tension with the terms of that agreement, no?
13 MR. SAMOWITZ: The negotiations and press release that
14 plaintiff cited was before the new agreement, before the
15 exchange agreement that is at the heart of the case.
16 And I should say, your Honor, just for the record, the
17 first two term sheets have arbitration provisions. I need to
18 sit down with my client. There is one cause of action that is
19 based only on the term sheet. I don't know if they're gonna
20 seek to use arbitration provision, we may not, just in the
21 interest of simplifying the case. But I just wanted to state
22 that on the record so there is no accusation of waiver from the
23 plaintiffs later on.
24 THE COURT: Okay.
25 MR. SAMOWITZ: Now, again, briefly on the merits, your
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
15
1 Honor, the parties entered into this equity exchange agreement.
2 Both sides represented by counsel. The equity exchange
3 agreement has a very clear date for closing. It says there is
4 an effective date which is March 8. And then in clause 1.2 of
5 the agreement, the parties agreed, quote: Closing shall take
6 place no later than 10 business days after the effective date.
7 Shall take place no later than. So that's pretty
8 clear that that is the definitive closing date.
9 So what happens, is that the 23rd would be the closing
10 date under that language. On the 21st, everything that my
11 client has had to do, we had done. We sent over our signature
12 pages and said you send over your signature pages, plaintiffs,
13 and we are done.
14 On the 22nd, the in-house counsel for the plaintiffs
15 said that we acknowledge that -- I'm sorry, the 21st. In-house
16 counsel says we acknowledge that you sent over these signature
17 pages, but I'm not yet authorized to send over my signature
18 pages.
19 And we say, why, what's happening.
20 There is back and forth between counsel.
21 On the 22nd, in-house counsel for the other side sent
22 over a noncompete agreement, which was never part of the final
23 deal, totally knew element, onerous and burdensome for my
24 client. They are not allowed to compete anywhere in the United
25 States or Europe in any area of business that is subject to
SOUTHERN DISTRICT REPORTERS, P.C.
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16
1 agreement. And it was always our client's intention to do just
2 that. They were not getting out of this business. They have
3 other interests. They are very involved in the business. They
4 have other assets that are subject to the deal, it is my
5 understanding. So they did not want to do a noncompete
6 agreement.
7 And, get this. On the day before the closing, it was
8 quite upsetting to my client, but, you know, plaintiffs say it
9 was just a request in their declaration or complaint. That is
10 not what their e-mail says. E-mail says we are in-house
11 counsel, we need both documents signed in the term before I
12 will circulate the signature pages. The other document being
13 extension of the closing date.
14 So the plaintiffs recognized on the 22nd that the
15 closing date is coming the next day, and that it is not closing
16 time because of their insistence on this new deal, so they want
17 us to extend the closing date. And on the 23rd, our counsel
18 talked to their counsel and said, no, we're not going to agree
19 on an entirely new element of this deal, it is onerous and
20 burdensome, that we are not getting anything for. This is the
21 last day of the period. You sign by the end of this period or
22 no deal.
23 Just like they said to us, you sign the noncompete or
24 no deal, we said, okay, no deal. And I think we had that right
25 to do that, after what they did, which was really acting in bad
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
17
1 faith to bring in, at the 11th hour, an entirely new term.
2 So we told them no deal. There was some discussions
3 over the weekend. My clients were out of pocket for some
4 point. But eventually we said, look, we are just not doing
5 this with you guys anymore. You blew the closing date, acting
6 in bad faith introducing this new element, and we're not going
7 through with this. And that's really all there is.
8 That's the main point of the merits, your Honor.
9 THE COURT: Okay, two questions for you.
10 One, you made a representation that the press release
11 predated the revised or amended term sheet? Maybe this is
12 wrong, but looking at the plaintiff's memorandum, I felt that
13 the relevant term sheet was August 29th, 2012. And they
14 reference the press release issued by JNS Holdings Corporation,
15 as of February 11, 2013, which is to say after the relevant
16 term sheet. Am I missing something?
17 MR. SAMOWITZ: No, your Honor. I was talking about
18 another press release. The press release I believe was talking
19 about the press release issued by plaintiffs announcing one of
20 the term sheets.
21 THE COURT: I see. But my point was, if the August 29
22 term sheet, you know, basically gives plaintiff, you know, sole
23 exclusive, if you will, on the purchasing of the defendant and
24 the like, and while that agreement is still in effect the
25 defendant is negotiating with a third party, is that not a
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
18
1 breach of the August 29 agreement?
2 MR. SAMOWITZ: Well, again, your Honor, I think -- I
3 don't really know, but I think that goes back to what we talked
4 about a few minutes ago, that the equity exchange agreement
5 that, obviously, that integration clause says it supercedes
6 every previous agreement that's entered into as of March 8, so
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7 that comes after the present release about the JNS dealings.
8 So clearly, by that point, the plaintiffs have waived anything
9 that came before then. They knew about that press release. If
10 they knew they had a claim there for breach, why didn't they
11 enter into the deal with us.
12 But in any event, I think, clearly, because the final
13 agreement subsumes all other agreements, they don't have a
14 claim there anymore.
15 THE COURT: Okay. And my second question is the
16 absence -- is counsel wrong that under Florida law, which I
17 take it governs here, in the absence of the time is of the
18 essence clause, then even an agreement to close on the
19 specified date is not failure to close on that date, does not
20 constitute a breach of the agreement?
21 MR. SAMOWITZ: Again, your Honor, we have not
22 completed our research, but our understanding is that principle
23 is most often applied to real estate cases.
24 Also, that there has to be good faith on the part of
25 the other side, which we contend was not here, that it was not
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
19
D4fzcarm2 Motion
1 that the parties were just working out some kinks and needed a
2 little more time. That they came in the next to last day
3 before the closing and asked for an entire new element. Plus,
4 we said we are sticking to our right and insisting on closing
5 timely. All of that, the plaintiffs had to do. And they have
6 conceded in subsequent e-mails from in-house counsel that
7 in-house counsel had the signature pages in their possession on
8 the 21st, on the 22nd. All she had to do was press send on an
9 e-mail, and the deal is closed. So it's not like some cases
10 where the parties are still trying to work out the value of
11 property, and having some disputes about what goes with the
12 sale and what doesn't. This was a bad faith failure to close.
13 And given that bad faith failure to close, we had the right to
14 not close ourselves.
15 (Continued on next page)
16 MR. SAMOWITZ: Talking 50 seconds, your Honor, about
17 irreparable harm.
18 First of all, I believe -- and again we still only
19 believe that the plaintiffs indirectly assumed that Florida
20 injunctive relief standard is going to apply. I'm fairly sure
21 that in a federal court in New York your Honor would apply the
22 standard for injunctive relief by federal cases Second Circuit,
23 not Florida. So that issue aside, I think the standards are
24 not too dissimilar.
25 THE COURT: I certainly think federal standard
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
20
D4fzcarm2 Motion
1 applies, not a Florida state standard. I don't -- I confess I
2 don't know offhand if the Eleventh circuit case law governs or
3 Second Circuit. But looking at what counsel represented to be
4 Eleventh Circuit standard, it wasn't immediately obvious to me
5 that it should matter, but --
6 MR. SAMOWITZ: You're probably right, your Honor. I
7 just wanted to put that out there.
8 THE COURT: Okay.
9 MR. SAMOWITZ: But the cases that he cited, and that's
10 all I got to go by so far, did talk about loss of good will
11 could cause irreparable harm. But that's not the loss of
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12 goodwill he's talking about here. The loss of goodwill, a
13 party who has customers that they're trying to service and
14 someone's trying to take those customers away, that's loss of
15 good will. This is just, well, we might be a little
16 embarrassed in the market. That's just not the same thing.
17 You know, plus when they issued the press release about this
18 deal they said, look, this is subject to further negotiations,
19 regulatory approval. They say this is just going forward, you
20 can't necessarily rely on this. And for them to come back
21 later and say well we have egg on our face I don't think is
22 proper. But in any event, they haven't cited any case that
23 shows that this kind of harm, alleged harm is irreparable. And
24 in fact it sounds to me like pure money damages. If they get
25 lawsuits by shareholders and they can come after us for that, I
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
21
D4fzcarm2 Motion
1 don't think they can, but that's money. If they think that the
2 purchase price of our assets was a good deal and they can't get
3 that deal again, well, that's money. You know, the thought
4 that -- the fact that someone, some investors might not be
5 happy -- and plus I got to -- because this is an injunction,
6 that assertion, you know, is wholly unsupported by the record.
7 They have incredibly conclusory allegations from Mr. Farkas I
8 think is the CEO of the company, and all he says is some
9 unspecified investors purchased their interests in the lion of
10 this deal. And he doesn't say who the investors or they know
11 any of those investors. He hasn't submitted anything from
12 anybody saying, hey, we're pulling out of this deal because
13 we're going to sue you because this deal is gone now, or you
14 know explain to us why this deal's gone. It's just totally
15 conclusory, your Honor, which is not enough for an injunction.
16 THE COURT: And what about the question I asked about
17 the language in the contract that seems to suggest the parties
18 would agree injunctive relief was appropriate?
19 MR. SAMOWITZ: Your Honor, we're researching that as
20 well. I mean, I know that he hasn't cited any cases. I think
21 logically that language would not be sufficient to make every
22 part of the contract subject to injunction, regardless of
23 whether there is irreparable harm. I think that can't --
24 parties can't contract away the law on irreparable harm, but we
25 do need to research that further, your Honor.
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
22
D4fzcarm2 Motion
1 THE COURT: Okay.
2 MR. SAMOWITZ: I want to be candid about that. I
3 think just logically it doesn't make any sense, I have to say,
4 that would be the law. I'd also like to talk a minute about
5 the balance of harm who would be harmed by an injunction. They
6 really haven't identified much harm. You know, this vague
7 accusation that shareholders might be unhappy. For the first
8 time Mr. Bernstein today says he his company might go out of
9 business. That's nowhere in these papers, that I recall. You
10 know, that's got to be supported and it's not. You know, if
11 anything, they get to keep a lot of their shares, they would
12 have given to us as part of the deal. So they haven't
13 established any significant harm to them, as opposed to us,
14 what they're requesting is that our company basically be
15 frozen, that until this case is over we can't sell if we think
16 it's in your best interest to sell, we can't sell part of our
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17 company or all of our company, or merge. We're just stuck
18 frozen in time until this case is over, and that could destroy
19 our company, which is, you know, much more tangible harm than
20 anything they've alleged.
21 Your Honor, that's the over view. Obviously, if we
22 get to the point, we want a bond. But I guess I'd rather, if
23 it's appropriate, you know, we'd of course want discovery. We
24 think there's some dispute and factual issues here presented on
25 their papers, going to the merits and to the irreparable harm
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
23
D4fzcarm2 Motion
1 and other elements. So we would request discovery on those
2 elements. And, you know, if your Honor agrees we can discuss a
3 schedule with the three of us -- four of us, sorry -- but we'd
4 like a chance to have discovery and then brief the issues.
5 THE COURT: Okay, well, I'm certainly prepared to do
6 that, but let me hear first from Mr. Newman before we get down
7 to discussing schedules.
8 MR. NEWMAN: Well, as far as my client's concerned, I
9 don't think an injunction even is against us. It's only
10 against 350 Green. So it's our understanding -- I just got
11 involved Friday afternoon, so I'm new as to the lawyers in this
12 case -- but it's my understanding that their agreement, which
13 we haven't seen, is for the sale of the membership interest,
14 and we were negotiation -- JNS was negotiating for just one
15 asset, which is the Chicago contract. So for them to get
16 injunction preventing them from selling the -- we really don't
17 care who owns the company, because we're just buying assets.
18 So injunction preventing them from selling any assets doesn't
19 really make much sense when they're selling the shares, the
20 agreements for the shares, it's not for the assets.
21 Secondly, there is no allegations in the complaint
22 that support first of all jurisdiction against JNS. We don't
23 do business in New York. There is no allegation that any of
24 this conduct took place in New York, no allegations whatsoever
25 that the Court has personal jurisdiction over JNS.
SOUTHERN DISTRICT REPORTERS, P.C.
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D4fzcarm2 Motion
1 Also, with the tortious interference, there is no
2 allegations that we had knowledge of this contract. Obviously,
3 if 350 Green is saying there is no contract, it's hard to have
4 tortious interference with a contract that they say doesn't
5 exist. How could we have knowledge of a contract if they're
6 saying that there is no contract? And there is conclusory
7 allegations about tortious interference. Florida law doesn't
8 apply to us. It would be New York law, not Florida law. So as
9 far as we're concerned, we are going to make a motion to
10 dismiss for personal jurisdiction and 12(b)(6) failure to
11 plead.
12 THE COURT: Okay, am I correct in hearing you,
13 basically, you're saying you don't have a dog in the fight with
14 respect to the injunctive relief?
15 MR. NEWMAN: We would like to purchase the Chicago
16 asset from them, my clients. So as far as that goes, yes, we
17 don't think injunction -- there is no contract right now
18 between 350 and JNS.
19 THE COURT: Okay. And what is the current status of
20 any negotiations, if any, with respect to those parties?
21 MR. NEWMAN: I think they're circulated a draft
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22 agreement, but nobody's signed.
23 THE COURT: Okay, so I guess one question I have is,
24 you know, I'm happy to try to schedule that resolves the
25 preliminary injunction question swiftly. But if we're talking
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
25
D4fzcarm2 Motion
1 about allowing for time for discovery, which I'm prepared to do
2 followed by the preliminary injunction hearing, you know, and
3 my hope is I would be able to render a decision pretty quickly,
4 if not at the end of the hearing, but no guarantees there. You
5 know, in the meantime I would be concerned that the issue
6 wouldn't be mooted by virtue of any agreement. I didn't see
7 anything in the papers that plaintiff was asking for a TRO
8 pending the preliminary injunction, but maybe I am wrong or
9 missed that.
10 MR. NEWMAN: In the Order to Show Cause, page 5, first
11 paragraph says that ordered that until hearing on the
12 plaintiff's motion for -- it's confusing because there is no
13 such thing as a temporary -- there is either temporary
14 restraining order.
15 THE COURT: That's precisely what was causing me
16 confusion.
17 MR. NEWMAN: Right.
18 THE COURT: In some papers it was called temporary
19 injunction, which sounds like a TRO, but then in some of the
20 papers temporary injunction was described as what preliminary
21 injunction is called under Florida law. So I took that to mean
22 there was an application for preliminary injunction, rather
23 than TRO pending the preliminary injunction.
24 MR. NEWMAN: It seems that the language of paragraph
25 five, first paragraph is a TRO language.
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 THE COURT: Okay. Well, Mr. Bernstein can perhaps
2 clarify that.
3 Anything further from your end?
4 MR. NEWMAN: No, your Honor.
5 THE COURT: Sorry?
6 MR. NEWMAN: No.
7 THE COURT: And I guess my one question for you, to
8 the extent you think there is no personal jurisdiction, I
9 confess I haven't encountered this situation before, I'm not
10 quite sure -- I presume there must be a way for you to litigate
11 the preliminary injunction issue without necessarily waiving
12 the argument that there is no personal jurisdiction, is that,
13 do you know what the --
14 MR. NEWMAN: Well --
15 THE COURT: -- story, which is that?
16 MR. NEWMAN: -- technically, the preliminary -- TRO is
17 not really against us. It says, prohibits 350 Green from
18 selling any portion of 350 Green to defendant JNS. But it's
19 really against 350 Green.
20 THE COURT: Agreed.
21 MR. NEWMAN: I know that putting an appearance I don't
22 think waives personal jurisdiction, but I don't know at what
23 point it's waived. I have to do some research.
24 THE COURT: Okay, all right.
25 Mr. Bernstein, you want to clarify the temporary
SOUTHERN DISTRICT REPORTERS, P.C.
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D4fzcarm2 Motion
1 versus permanent preliminary question?
2 MR. BERNSTEIN: Your Honor, I apologize if it wasn't
3 articulated well, but it's -- essentially, we are seeking to
4 have 350 Green estopped from selling any portion of the
5 company, until your Honor decides the issue of the injunction.
6 And I think that by -- contrary to what counsel is saying, we
7 think we cited the cases from the Eleventh Circuit which would
8 be applicable here as part of federal law that says irreparable
9 harm is any harm that would not be satisfied by monetary
10 remedies. Failing to list on an exchange if he has personal
11 knowledge of going through the application, that's not monetary
12 damages that we could even -- if we get a lawsuit, that's not
13 going to help us get listed on another public exchange. I
14 would agree that having a restraint against 350 Green, pending
15 this hearing, regardless of jurisdictional issue of JNS, the
16 difficulty would apply, would be subject to jurisdiction
17 here --
18 THE COURT: You're trailing off, I didn't hear.
19 MR. BERNSTEIN: I'm sorry. I would agree that pending
20 the decision of this Court on the injunction, stopping 350
21 Green from selling its assets, to keep the status quo would, in
22 that short duration, allow the Court to decide how to proceed
23 forward on that without necessarily having a restraint against
24 JNS. And I strongly disagree that -- we knew there were talks
25 of the Chicago contract and that's how the equity exchange
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 agreement got negotiated based on the prior breach. I know Mr.
2 Samowitz says it wasn't binding. It wasn't entirely binding.
3 But when we upload these documents, you'll see there are
4 several provisions that are binding. One of those was the no
5 shop agreement. And we're not just buying membership interest
6 in a dead company. The point of being a company is you get the
7 assets along with the company, so that it's little disingenuous
8 to say they're only buying membership interest, but it doesn't
9 include any assets of the company. Those are separate, but
10 buying worthless membership interests, it's specifically for
11 the assets in the charging stations and the contracts that they
12 have, which is why we're purchasing this company for the
13 valuation that it brings. And we believe that, again, I know
14 Mr. Samowitz said a lot about the e-mails back and forth. That
15 will ultimately go to the merits because we -- and the facts
16 which will show that contrary to Mr. Samowitz's claims, his
17 client did not emphatically say X, Y and Z. As a matter of
18 fact, they claimed they are in China, they didn't respond. And
19 if you read the e-mails, your Honor will read them, you'll see
20 that it wasn't said, hey, sign this non-compete or we're not
21 doing the deal. It was requested. They said no. We said fine
22 and sent them the signature pages. So I think he's misstating
23 the facts.
24 But, again, as he said, he just got into this so he's
25 climbing out of a prism. But at the end of the day what he did
SOUTHERN DISTRICT REPORTERS, P.C.
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D4fzcarm2 Motion
1 not do is come here with any cases that said Florida law,
2 without a time of the essence clause, and contrary to his
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3 statements again, you'll read the contract, it doesn't say that
4 the closing will be on March 22nd at 10:00 a.m. in the offices
5 of DLAPiper. It says on or before ten days from the signing of
6 this agreement, which is exactly what Florida law says. There
7 is no specific date. They can close the second day from
8 signing or the 10th day from signing, which is precisely why a
9 time of the essence letter must be sent to the breaching party
10 saying closing is whatever reasonable time would be
11 interpreted; 24 hours, 48 hours, 52 hours and saying if you
12 don't show up then, we're deeming the contract breached and
13 terminated. That never happens. As far as we're concerned, we
14 have a valid binding contract to buy the membership and assets
15 of 350 Green that they're refusing to comply with and we want
16 to close this transaction, which is part of the specific
17 performance relief which won't be available to us if they start
18 selling off their assets to JNS and other people.
19 THE COURT: Okay. Let me talk to you about how I
20 envision this going, and then we can talk about the schedule
21 and the question of temporary relief.
22 Basically, it does sound like there is some fact
23 issues to explore here, so some limited discovery would be
24 appropriate.
25 My inclination is to let you talk in the first
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 instance about what the scope and timing of that discovery is,
2 but here is how I intend to proceed on the preliminary
3 injunction front. You can use that as a basis to figure out --
4 well, you can discuss the timing. So, number one, there should
5 be some discovery. Number two, obviously defendants need an
6 opportunity to file their opposition to the motion for
7 preliminary injunction, and the plaintiff obviously will be
8 given an opportunity to reply.
9 The way I proceed with a preliminary injunction
10 hearing is I take the any witnesses' direct testimony by
11 affidavit, and basically we'll give you a date by which to file
12 a joint prehearing order that is akin to a joint pretrial order
13 and sort of modeled on what I look for in a joint pretrial
14 order. On the same date, direct testimony of any witness
15 witnesses should be submitted but not filed, along with
16 proposed findings of fact and conclusion of law. Three days
17 after that, the other side can indicate which, if any of the
18 witnesses for whom direct has been filed they intend to
19 cross-examine at the hearing, and only those witnesses need to
20 appear at the hearing.
21 I should back up and say, this is assuming that we
22 have time to do this. If the nature of the circumstances
23 doesn't give us the time, then we're going to proceed in a more
24 expedited fashion than I'm now outlining. But this is
25 certainly my preferred method. Then we would basically conduct
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 a hearing a couple weeks after that, and with -- and hear from
2 the witnesses that, again, the other side has designated that
3 they intend to cross, at the end of which I might render an
4 opinion at the end of the hearing itself, but certainly will
5 endeavor to do so as quickly thereafter as possible. And given
6 the possibility that I would rule immediately, you should not
7 necessarily assume that you'll be given an opportunity to
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8 submit anything, any post hearing briefing. So any legal
9 authority you want me to consider, you need to submit to me in
10 connection with the prehearing filings that I described before,
11 and not assume that you'll have an opportunity to add anything
12 after the hearing. So that's my preferred method. But some of
13 the -- as I've just indicated, whether we can proceed in that
14 fashion, turns a little bit on the question of whether the
15 whole thing might be mooted in the interim.
16 So turning to that question, I guess, Mr. Samowitz,
17 you know, one option is I have a temporary restraining order,
18 and in which case, among other things, you're entitled to have
19 a hearing within I think 14 days. The other is, you know, you
20 represent that the issue won't be mooted while this issue runs
21 its course.
22 I guess the third is that we do this more quickly in
23 the absence of temporary relief of one sort or another.
24 MR. SAMOWITZ: Thank you, your Honor. I cannot
25 represent that my clients won't try to sell, which we believe
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 they have a right to do some or all their business. That's one
2 reason why we're so vociferously fighting a TRO, because that
3 could kill our company.
4 As you indicated, the factual disputes, I can only go
5 by the case already cited. He cited a case that says time is
6 not of the essence in contracts for the sale and purchase of
7 real estate, unless the contract so provides. That's the Henry
8 case. The Henry case also says that the Court was assuming
9 that both parties were trying to close in good faith, which we
10 think we can establish the plaintiffs weren't.
11 And as I said before, your Honor, they've not
12 established factually that there is any irreparable harm.
13 Mostly irreparable harm they discussed today is not even
14 mentioned in their brief.
15 So, you know, we certainly think there is no record
16 here sufficient to show the requirements for a temporary
17 restraining order.
18 If your Honor is concerned about the issue being
19 mooted, I think that's why -- that's the, you know, maybe it is
20 mooted, but it's not mooted all the way because they still have
21 their request for money damages. Maybe they could try to
22 unwind the transaction. But in any event until they show that
23 they can establish the standards for getting a TRO, I don't
24 think it matters to get mooted. But if your Honor's correct
25 the standard would be, we have to do this very quickly then we
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 have to do this quickly.
2 THE COURT: And what discovery would you propose to
3 take before a preliminary injunction hearing?
4 MR. SAMOWITZ: Well, again I'd like to sit and think
5 about it a little more. But we would want to depose the CEO
6 Mr. Farkas, there is an in-house counsel named Kiley Wagonett.
7 There might be another in-house counsel. There is an
8 investment banker named I believe Ian Gardener that we want to
9 talk to. Those are the depositions, and there may be a couple
10 of others. I believe the issue would be relatively narrow
11 because I think the injunction's going to go to, you know, what
12 happened in that week before the closing date, the week after,
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13 and then the irreparable harm. So I don't think we're talking
14 about extensive depositions. We'd obviously also want document
15 discovery.
16 THE COURT: Okay. But you just described four or five
17 depositions if I got you correctly. So they may not be
18 extensive, but we're not talking about discovery that could be
19 taken this week.
20 MR. SAMOWITZ: No, no, your Honor. I appreciate that.
21 It may be more a 30 day period might make sense.
22 THE COURT: Okay. Mr. Bernstein.
23 MR. BERNSTEIN: Yes, your Honor. I mean, I think that
24 if counsel for 350 wants to conduct discovery over a 30 day
25 period, certainly we would want similar type discovery on the
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
34
D4fzcarm2 Motion
1 principals of 350 Green and anyone they cited in their papers
2 as having knowledge as to the occurrences that week on their
3 side of the transaction, including JNS.
4 THE COURT: All right, let me bring a little order to
5 this by saying that based on your submission and the discussion
6 we've had today, I don't think you have met the standard for
7 temporary restraining order. I'm, you know, I'm not sure that
8 there is a -- well, putting aside the likelihood of success on
9 the merits, I'm skeptical for the reasons that I've started
10 this proceeding with, that you've demonstrated risk of
11 irreparable harm. I think most of the harms that you've
12 articulated could be remedied in the form of money damages.
13 And if there is authority for the proposition that types of
14 harms here; namely, you know, investors losing confidence and
15 not getting listed on an exchange constitute irreparable harm
16 in the form of reputational damages or damage, or parties can
17 agree by contract that, you know, essentially bargained for
18 injunctive relief, you haven't brought it to my attention. So
19 it may be that you're entitled to it and that you would be able
20 between now and preliminary injunction hearing to support the
21 request for injunctive relief.
22 But if the, to the extent that the question on the
23 table right now is whether to temporarily restrain the
24 defendants or defendant 350 Green from doing anything, I'm not
25 prepared to do that at the time, at the moment. So given that,
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 how would you like to proceed? I'm prepared to give you a
2 hearing next week and have limited discovery this week, but
3 it's not going to be of the scope that either of you is looking
4 for. We're talking about a preliminary proceeding here, and I
5 think you are entitled to try and get whatever preliminary
6 relief you want, especially in light of the fact that I'm not
7 granting you a TRO in a relatively quick fashion.
8 MR. BERNSTEIN: In light of that, your Honor, I would
9 want to have a hearing as quickly as possible. I would not
10 want it to be a 30 day period and -- I mean, if Mr. Samowitz
11 wants to conduct some discovery next week and have a hearing
12 immediately thereafter, I think it should be in the shortest
13 time the Court will allow.
14 THE COURT: Okay. Today is Monday, the 15th. I'm
15 prepared to have a hearing in this case next week, unless
16 there's some agreement in the absence of a TRO to keep things,
17 maintain the status quo for some short period between now and
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18 when the hearing is, and to give you guys limited discovery in
19 the form of maybe one or two depositions aside between now and
20 the hearing. But otherwise I think Mr. Bernstein is entitled
21 to, you know, relatively quick process in the absence of some
22 assurance or guarantee that this entire issue won't be mooted.
23 Mr. Samowitz.
24 MR. SAMOWITZ: Your Honor, if it could be another two
25 weeks instead of next week. I'm just concerned about even if
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 it's just limited to two depositions, you know, scheduling it
2 and getting documents and that in that time, I don't know what
3 the state is of plaintiff's document collection. The company
4 hearing like this, I would really ask that we have, you know, a
5 two or three week period. I understand 30 days is too much,
6 but two or three week period rather than next week.
7 THE COURT: Do you understand my concern and what I
8 think is a veiled concern of Mr. Bernstein's, which is I'm fine
9 giving more time, but I think it's unfair to grant you more
10 time if there is no assurance given to Mr. Bernstein and the
11 plaintiff that this entire issue won't be mooted and that, you
12 know, a week and a half you're not going to turn around and
13 execute the sale to JNS.
14 MR. SAMOWITZ: Very well, your Honor. May I just make
15 one other request then. I think a lot of this is going to rise
16 and fall on whether Mr. Bernstein can find those cases that are
17 not in his main brief. Could Mr. Bernstein, plaintiffs be
18 directed to let the parties and your Honor know by, you know,
19 midweek whether he's found those cases or not? Because if he
20 hasn't found those cases, I think it's really unfair to my
21 client to go through all this for something where he can't show
22 irreparable harm. I know it's a little unorthodox, but I think
23 right now we have a brief that I think we all agree just
24 doesn't cite cases he needs to cite, and it's not fair to my
25 client to have to do the hunting for him.
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 THE COURT: Mr. Bernstein.
2 MR. BERNSTEIN: I mean, if your Honor wants to give us
3 a few days to do an amended brief, which to the extent we find
4 cases that support this position for the Court's consideration.
5 The only question I have is to what Mr. Samowitz didn't say is
6 assuming for a moment that those cases are found and submitted
7 along with an extra affidavit or whatever case would go along
8 with those cases that were cited, does that mean that Mr.
9 Samowitz would then agree for status quo pending the hearing
10 with that additional time to conduct this discovery? I'm not
11 sure I'm hearing from him, if I do find those cases and submit
12 amended documents, how that ultimately affects his position on
13 this issue and the extent of time that this Court will grant
14 for discovery.
15 MR. SAMOWITZ: Obviously, I'd like to read the cases
16 first and, you know, we think we solve the argument by the
17 merits on irreparable harm. My point is that if he hasn't
18 supported his harm with case law, then he should be required to
19 do that before we're put through this whole process, either he
20 finds a case or doesn't.
21 THE COURT: He's entitled to make his case at a
22 preliminary injunction hearing.
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23 MR. SAMOWITZ: But I respect that. I think if he
24 comes back to you and says I haven't found those cases, then I
25 think I'd be entitled to say well, you know, he hasn't --
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 almost all but admitted he can't show irreparable harm so at
2 the very least you shouldn't put my client through, you know,
3 the expense of a hurry up preliminary injunction hearing.
4 MR. BERNSTEIN: Your Honor, may I respond?
5 THE COURT: Yeah.
6 MR. BERNSTEIN: I don't think it is fair for Mr.
7 Samowitz saying that in case, unless I find a case that's
8 exactly on point with this factual scenario, I haven't proven
9 irreparable harm. I don't think that that's standard in any
10 case in any federal court in this country. I don't think --
11 it's very rare that you find an exact factual scenario that
12 fits the factual pattern that's before the Court. I have no
13 problem if the Court wants some amended documents submitted for
14 the purpose of the hearing, but I would object to finding a
15 case Mr. Samowitz wants exactly on point on the exact same fact
16 pattern to be dispositive as to whether or not my client would
17 be entitled to injunctive relief.
18 MR. SAMOWITZ: I guess my point, your Honor, would
19 just be if he, you know, makes whatever submission he can make
20 by Wednesday, say, we can come back before your Honor on
21 Thursday, then talk about, you know, where we go next.
22 THE COURT: I'm not inclined to drag it out. So I
23 think what I'm going to do is -- how long do you anticipate a
24 hearing would take, Mr. Bernstein?
25 MR. BERNSTEIN: I would probably have at least two
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 witnesses, your Honor. Using your Honor's standard, is that --
2 would be the same standard as we would submit these affidavits,
3 and depending if Mr. Samowitz wants to cross them, they would
4 need to be here in person or not? That's what I'm trying to
5 establish.
6 THE COURT: I'm not sure we have time to do that,
7 given that I think we need to proceed more quickly than that
8 way would normally allow. So, no I think we're going to have a
9 full blown hearing with direct and cross, you know, in one shot
10 so.
11 MR. BERNSTEIN: For my purposes, your Honor, I would
12 probable say at least two to three hours, depending on the
13 testimony of the two or three witnesses, depending on who comes
14 to the hearing.
15 THE COURT: Mr. Samowitz.
16 MR. SAMOWITZ: I'm sorry, I didn't hear the end.
17 MR. BERNSTEIN: I said it would be two to three hours
18 depending on if I brought two or three witnesses, Mr. Farkas
19 the attorney, and obviously depending if I was calling any of
20 your witnesses that you were bringing in for cross.
21 MR. SAMOWITZ: I would say, your Honor, probably a day
22 would do it. If he's two or three hours, and that usually
23 means it's four or five hours and we'll try to do the same. So
24 I think a day.
25 THE COURT: Okay. So I'm going to schedule a hearing
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 for Monday, April 29th. And if we need to continue into the
2 30th, then so be it. We'll start at 9:00 a.m., or as close to
3 that as we can, and continue until shortly before three, each
4 of those days. In the meantime, I'm going to direct that the
5 defendants file any opposition to the motion for preliminary
6 injunction by next Monday, the 22nd, and that any reply is
7 filed by Thursday, the 25th at noon. And I would certainly
8 encourage you to include any authority that would, you know,
9 bolster your case on irreparable harm in that filing, although
10 you've made your arguments in your opening brief.
11 In the meantime, I'm prepared to allow for limited
12 discovery. If you want up to two depositions a side, and I'm
13 inclined to leave you to negotiate the timing and circumstances
14 of that to make sure that it gets done in time for you to do
15 this hearing on the 29th. So why don't you guys confer about
16 that.
17 You also have to confer about the sealing issue and
18 why don't you submit a letter to me by the close of business
19 tomorrow, indicating whether you have agreed on those issues or
20 if there is any disagreement that you need me to resolve.
21 Yes.
22 MR. SAMOWITZ: Thank you, your Honor. Document
23 requests, limited number?
24 THE COURT: Same thing. I'm prepared to do limited
25 document requests, but you guys try and resolve and reach
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 agreement on them, and the timing and scope of them. If you
2 can't, again submit a letter to me indicating what your
3 disagreement is and I will decide right away which way we're
4 going to go.
5 Is there anything else we need to do?
6 MR. BERNSTEIN: No, your Honor.
7 MR. SAMOWITZ: No. Thank you, your Honor.
8 THE COURT: Anything from you?
9 MR. NEWMAN: In the opposition to the preliminary
10 injunction, can we also do a motion to dismiss the same time?
11 Because we have to really talk about the same issues anyhow.
12 THE COURT: I mean to the extent that -- it's not
13 clear to me that if a motion were to -- sorry -- a motion to
14 dismiss were granted as to you, that that would resolve the
15 injunction issue. Because to the extent that the injunction is
16 being sought against 350 Green, I don't know what -- in other
17 words, you could have been excluded from this case altogether,
18 and may well be excluded from this case altogether if your
19 motion is granted. But how does that go to whether the
20 injunction should be entered? That was I guess my question
21 before about whether you have a dog in the fight. I understand
22 that it has implications for you.
23 MR. NEWMAN: Right. So either we shouldn't have to
24 respond at all as opposition to the preliminary injunction
25 because it doesn't affect us or if we have to respond, then
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
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D4fzcarm2 Motion
1 respond with motion to dismiss?
2 THE COURT: I'm not inclined to bring up the motion to
3 dismiss now. So if that means that you don't want to be heard
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4 on the question of the preliminary injunction, I'm fine. If
5 you please just leave it to be litigated by 350 Green and go
6 from that, I understand. Again, it has implications for you,
7 but to the extent that the injunctive relief isn't sought
8 against you, I don't know if you need to be heard on it.
9 MR. NEWMAN: Okay.
10 THE COURT: Or I guess is there a reason that the
11 defendants can't submit a single brief in connection with this
12 issue rather than having to file two?
13 MR. SAMOWITZ: In connection with the jurisdictional
14 issue?
15 THE COURT: No, in connection with the preliminary
16 injunction issue.
17 MR. SAMOWITZ: Certainly they can join whatever we
18 file. I don't want to submit a joint brief, but if they want
19 to join us, they certainly can.
20 MR. NEWMAN: Okay, we'll discuss and --
21 THE COURT: I would say if you can, I mean either of
22 you or both of you is entitled to file a brief on the schedule
23 that I set before. If you can see your way toward filing a
24 single brief on behalf of all defendants, that would certainly
25 be welcome from my perspective and I think probably makes sense
SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
43
D4fzcarm2 Motion
1 given the circumstances.
2 Anything else?
3 MR. BERNSTEIN: No, your Honor.
4 MR. SAMOWITZ: No. Thank you, your Honor.
5 THE COURT: All right, then the matter is adjourned.
6 Thank you very much.
7 MR. SAMOWITZ: Thank you.
8 (Adjourned to April 29, 2013 at 9:00 a.m.)
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SOUTHERN DISTRICT REPORTERS, P.C.
[phone]
Page 20
Case: 1:13-cv-04020 Document #: 42 Filed: 09/06/13 Page 34 of 35 PageID #:590
CERTIFICATE OF SERVICE
I, Evan J. Haim, hereby certify that on this 6th day of September, 2013, and in
accordance with the General Order on Electronic Case Filing (ECF), I served the foregoing JNS
Power & Control Systems, Inc.’s Reply in support of its Motion for Partial Summary
Judgment against 350 Green, LLC, upon the below-named individuals by electronic transmittal
through the CM-ECF electronic filing system.
Steven L. Baron Michael I. Bernstein
Natalie A. Harris The Bernstein Law Firm
Mandell Menkes LLC 1688 Meridian Avenue, Suite 418
One North Franklin Street, Suite #3600 Miami Beach, Florida 33139
Chicago, Illinois 60606 Telephone: [phone]
Telephone: [phone] Facsimile: [phone]
Facsimile: [phone] e-mail: [e-mail]
e-mail: [e-mail]
e-mail: [e-mail]
/s/ Evan J. Haim
Case: 1:13-cv-04020 Document #: 42 Filed: 09/06/13 Page 35 of 35 PageID #:591