Rissman Hendricks & Oliverio, LLP v. MIV Therapeutics Inc et al
Filing
49
Ch. Magistrate Judge Judith G. Dein: ORDER entered. MEMORANDUM OF DECISION AND ORDER allowing in part and denying in part 34 Plaintiff's Emergency Motion for Protective Order Restraining Threatening Of Fact Witnesses. (Dambrosio, Jolyne)
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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
RISSMAN, HENDRICKS & OLIVERIO, LLP,
)
)
Plaintiff,
)
v.
)
)
MIV THERAPEUTICS, INC., MIV SCIENTIFIC )
HOLDINGS LTD, BIOSYNC SCIENTIFIC
)
PVT (a/k/a MIV INDIA), ALAN P. LINDSAY,
)
CHRIS XUNAN CHEN and PATRICK McGOWN, )
)
Defendants.
)
CIVIL ACTION
NO. 11-10791-MLW
MEMORANDUM OF DECISION AND ORDER ON
PLAINTIFF’S MOTION FOR A PROTECTIVE ORDER
October 20, 2011
DEIN, U.S.M.J.
I. INTRODUCTION
This litigation involves a claim by the plaintiff law firm for payment for legal
services rendered and expenses paid on the defendants’ behalf in connection with, inter
alia, patent prosecutions, as well as claims that the defendants have engaged in fraudulent
conduct to hide assets which should have been available to pay these fees and expenses,
which total in excess of $400,000.00. This matter is before the court on the plaintiff’s
“Emergency Motion for Protective Order Restraining Defendant Alan Lindsay From
Threatening Fact Witnesses Expected to Testify in This Case” (Docket No. 34). By this
motion, the plaintiff law firm is seeking “a protective order restraining and enjoining the
defendant Alan Lindsay from threatening any person who is or may be a potential witness
in this case including specifically the former officers and employees of the corporate
defendants, Dr. Mark Landy and Anthony Huston, both of whom have personal knowledge of facts pertinent to proof of one or more counts of this case.” Mot. at 1. As
detailed herein, the motion is ALLOWED IN PART AND DENIED IN PART, and a
protective order shall be issued in the form detailed below.
II. STATEMENT OF FACTS
Members of the plaintiff law firm, John A. Rissman, M. Lawrence Oliverio, and
Jay A. Stelacone, have submitted detailed affidavits reciting conversations they had with
Anthony Huston and Dr. Mark Landy, in which these witnesses stated that they had been
threatened with financial ruin by the defendant Alan Lindsay or his representative if they
participated in this litigation. It is undisputed that Mr. Huston and Dr. Landy are likely to
be critical witnesses in this litigation.
Specifically, but without limitation, Attorney Oliverio has submitted an affidavit
dated September 26, 2011 in which he states, in relevant part:
Several weeks ago, I received a telephone call from Dr. Mark Landy
who was at certain times relevant to the counts in this suit, an officer
of at least one of the named defendants, MIV Therapeutics, Inc. In
my conversation with Dr. Landy he advised me that Mr. Lindsay had
demanded that he cease any further discussions with the Rissman
Firm, that he refuse to provide any further assistance or information
to the Rissman Firm about Mr. Lindsay, or that Mr. Lindsay would
use every dollar of his bottomless deep pocket of monetary resources
to bankrupt Mr. Landy including instigating litigation against Dr.
Landy....
Oliverio Decl. (Docket No. 34) at ¶ 2.
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Attorney Rissman has submitted an affidavit dated September 19, 2011, and a
supplemental affidavit dated October 7, 2011, in which he states, in relevant part:
Over the past several months I have had multiple telephone
conversations with Dr. Mark Landy (formerly President & CEO of
MIVT), as well as Mr. Anthony Huston (formerly Vice President of
Business Development & Investor Relations for MIVT), regarding
MIVT. On the majority of such occasions, these contacts were
initiated by either Dr. Landy or Mr. Huston. On limited occasions, I
received e-mails from them regarding MIVT. During these
conversations, the most recent of which took place on or about
September 7, 2011, Dr. Landy and Mr. Huston each made the
following comments to me, namely:
... Indicating that each of them had been threatened by Mr. Lindsay
to cease any further discussions with the Rissman Firm, and to
refuse to provide further assistance to the Rissman Firm, or they
would each face considerable difficulties in the future. Dr. Landy
told me that Mr. Lindsay threatened him more than once that he
would sue him and exert every possible effort against Dr. Landy,
using his considerable wealth, until Dr. Landy was effectively
bankrupted, if Dr. Landy cooperated in any way with the Plaintiff in
this suit against the Defendants, especially Mr. Lindsay. Mr. Huston
told me that he had been told that Mr. Lindsay had instructed his
nephew, Denis Corin, to relate the same threat to Mr. Huston, and
that the threat of litigation into submission was made against Mr.
Huston on earlier occasions [by Mr. Lindsay and Mr. Corin].
Rissman Aff. (Docket No. 34-1) at ¶ 4; Rissman 2d Aff. (Docket No. 40-3) at ¶ 38.
Attorney Stelacone has submitted an affidavit dated October 7, 2011 in which he
details a conversation between Messrs. Rissman and Huston on September 7, 2011,
which Attorney Stelacone listened in on. Stelacone Aff. (Docket No. 40) at ¶ 2. In this
conversation Mr. Huston informed them that Dr. Landy had told him that he had been
“threatened by Alan Lindsay to not assist the Rissman Firm with regard to this litigation
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at the risk of Mr. Lindsay causing financial ruin” for Dr. Landy. Id. at ¶ 3. In addition,
Mr. Huston had been contacted by Denis Corin (Mr. Lindsay’s nephew), who told Mr.
Huston, “I hope you haven’t said anything to John Rissman about the lawsuit or company
affairs.” Id. Attorney Stelacone also sat in on a telephone conversation between
Attorney Rissman and Dr. Landy on September 7, 2011. Id. at ¶ 4. During that call “Dr.
Landy confirmed that Mr. Lindsay had threatened him . . . with a lawsuit that would ruin
him . . . financially if he cooperated in any way with the Rissman Firm regarding this
litigation.” Id.
Mr. Lindsay denies making any of the statements attributed to him by the
plaintiffs. He has submitted an affidavit dated October 6, 2011. Lindsay Aff. (Docket
No. 37-1). Therein, he contends that he resigned as the president and CEO of MIV
Therapeutics on December 31, 2007, and that while he remained on the Board of
Directors as a non-Executive Chairman until February 2010, in that role he did not have
any authority to bind MIV to any contracts and was not involved with the day-to-day
management of MIV. Id. at ¶¶ 2-3. He also categorically denies making the statements at
issue. Thus, as Mr. Lindsay attests:
While I have spoken with Dr. Landy since the initiation of this
litigation, I never threatened Dr. Landy. Likewise, I never instructed
Denis Corin to relate threats to Mr. Huston. These allegations are
pure fabrication.
Mr. Huston has denied making such allegations against me. See
attached ex. 1. And Dr. Landy sent me an email he sent to Mr.
Oliverio stating that the allegations made in a previous pleading were
not factually accurate. See ex. 2.
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Id. at ¶¶ 16-17. The referenced exhibit 1 is a copy of some messages, though its
provenance is unclear. It is labeled “Copy of text messages from A. Huston” dated
September 25, 2011. It states:
As I said to you yesterday alan I never said those things and really it
doesn’t matter because I never signed anything stating I said
anything ... it’s just hearsay - forget about it! If I had agreed to back
up his claims that would be a different story - alan my family and I
have lost millions because of how poorly this company was run - I
am working my ass off to get back financially what we lost so I don’t
have time for this and I trust you understand as you still have
millions and I lost mine ... the least of my worries is what Jr is
saying to be honest because if I get called into court I would deny it simple! What I need is for miv to get back trading again so we get
hope back in our lives ....
(Internal punctuation omitted). The attached exhibit 2 consists of a series of emails
which show Attorney Oliverio sending Dr. Landy a draft pleading relating to the
plaintiff’s motion to remand the instant action to state court on July 12, 2011 (although
the pleading is not attached to exhibit 2), and asking Dr. Landy “if the facts as stated are
accurate?” Dr. Landy replies on the same day that to the best of his knowledge, “the
allegations highlighted in yellow against Lindsay and McGowan during my tenure at
MIV (April 2006 to December 2009) are not factual.” On September 20, 2011, Dr.
Landy sends Mr. Lindsay an email stating, “This was my reply to the email below and I
have included the referenced document. Lawrence Oliverio I believe is a partner at
John’s Firm.” There is no indication as to what motivated Dr. Landy to communicate
with Mr. Lindsay or to send this email chain to Mr. Lindsay.
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In response to Mr. Lindsay’s affidavit, Attorney Rissman filed his second affidavit
dated October 7, 2011. (Docket No. 40-3). Therein, Attorney Rissman challenges
Mr. Lindsay’s statements concerning his lack of involvement with MIV. Thus, Attorney
Rissman details what he understands to be Mr. Lindsay’s continued involvement in
efforts to obtain financing for MIV after December 31, 2007, his continued involvement
in reviewing invoices for legal services rendered by the plaintiff law firm, and his
continued assurances to the plaintiff law firm that it would be compensated for the work
it had done. See, e.g., ¶ 10 & Ex. C (listing 54 strategy meetings requested and/or
attended by Lindsay); ¶ 18 (legal fee budgets sent to Lindsay); ¶ 23 (Lindsay’s involvement in hiring potential consultant in 2009); ¶ 24(l) (instructions to plaintiff in 2010 to
send all invoices to Lindsay); ¶ 26 (3/15/10 email from Mr. Huston to Attorney Rissman
stating that “Alan” (Lindsay) had requested that Mr. Huston set up a conference call
between Attorney Rissman and Chris Chen, and acknowledging that outstanding amounts
were due to the firm).
During oral argument on the motion for a protective order, which was held on
October 11, 2011, the plaintiff submitted emails dated October 6, 2011 from Mr. Huston
to Attorney Rissman, which indicated that Mr. Lindsay was in communication with Mr.
Huston. Thus, Mr. Huston sent an email to Attorney Rissman at 10:35 a.m., in which he
stated:
Alan [Lindsay] called me very upset saying that I told you a bunch
of lies and that you gave a sworn affidavit to him. Is this true? I told
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him that you would never do that. Please let me know if this is true
and if it is you need to know that I will NOT stand behind it.
A few hours later Mr. Huston emailed Attorney Rissman again, stating:
Any allegations that you have stated in your affidavit regarding
myself are untrue and I will NOT stand behind them! Please remove
me from your lawsuit.
At the conclusion of oral argument, Mr. Lindsay was asked to propose a stipulation he would be willing to abide by, without the need for a court order. He did propose
a stipulation on October 12, 2011. Consistent with this court’s order, he did not seek
prior approval of the plaintiffs, before filing his proposed stipulation, and he did not
admit any liability in his proposal. The plaintiffs objected to his proposal. Since there
was no agreement, this court has decided the pending motion.
Additional facts will be provided below.
III. ANALYSIS
A.
Personal Jurisdiction
As an initial matter, Mr. Lindsay contends that this court lacks personal jurisdiction over him and that, consequently, it cannot enter a protective order. He has filed a
motion to dismiss for lack of personal jurisdiction, which is presently pending before the
District Judge. Briefing on that motion is extensive and ongoing.
It would not be appropriate for this court to pre-judge the merits of the motion to
dismiss. For present purposes, however, the plaintiff has put forth sufficient facts to
establish a prima facie case of specific jurisdiction over Mr. Lindsay. “[D]ue process
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requires only that in order to subject a defendant to a judgment in personam, if he be not
present within the territory of the forum, he have certain minimum contacts with it such
that maintenance of the suit does not offend ‘traditional notions of fair play and
substantial justice.’ . . . In a contract case, we evaluate the parties’ ‘prior negotiations and
contemplated future consequences, along with the terms of the contract and the parties’
actual course of dealing’ to determine whether the defendants purposefully established
minimum contacts.” Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290
F.3d 42, 52 (1st Cir. 2002) (quoting Int’l Shoe v. Washington, 326 U.S. 310, 316, 66 S.
Ct. 154, 158, 90 L. Ed. 95 (1945), and Burger King Corp. v. Rudzewicz, 471 U.S. 462,
479, 105 S. Ct. 2174, 2185, 85 L. Ed. 2d 528 (1985)) (additional citations omitted). “The
Supreme Court, speaking on the subject of specific personal jurisdiction in contract cases,
has ‘emphasized that parties who ‘reach out beyond one state and create continuing
relationships and obligations with citizens of another state’ are subject to regulation and
sanctions in the other State for the consequences of their activities.” Id. at 61 (quoting
Burger King, 471 U.S. at 473, 105 S. Ct. 2182) (additional citations omitted). If, as the
plaintiff alleges, Mr. Lindsay participated in the hiring of the plaintiff law firm,
frequently communicated with the attorneys in Massachusetts, hired them to do work in
Massachusetts, and is liable personally for the bills incurred, there is a basis for this
court’s assertion of personal jurisdiction. See Daynard, 290 F.3d at 60-62.
Moreover, the plaintiff has alleged that Mr. Lindsay engaged in an extensive
course of conduct of sending false and misleading representations to the attorneys in
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Massachusetts regarding the status of the over-due account, along with promises to pay.
The attorneys allege that they relied on these misrepresentations in continuing to perform
legal work and in advancing additional funds. “Massachusetts courts have found that an
intentional misrepresentation made in or sent into Massachusetts, for the purpose of
inducing the plaintiff’s reliance, constitutes an act within the Commonwealth.” Cherin v.
Cherin, 72 Mass. App. Ct. 288, 294 n.9, 891 N.E.2d 684, 688 n.9 (2008), and cases cited.
Under such an analysis, the plaintiff has established a prima facie case of personal
jurisdiction sufficient for this court to address the merits of the claim for a protective
order.
B.
Standard of Review
The parties are not in agreement as to the appropriate standard to be applied to the
emergency motion for a protective order. While the defendant contends that the plaintiff
must meet the standard for a protective order under Fed. R. Civ. P. 65, the plaintiff argues
that it is seeking “a protective order, issued pursuant to the inherent equitable powers of
the court to prevent abuses, oppression, and injustices.” See Disability Rights N.J., Inc.
v. Velez, No. 10-0950 (DRD), 2011 WL 2937355, at *3 (D.N.J. July 19, 2011) (unpub.
op). “When deciding a motion for a preliminary injunction, a district court weighs
several factors: ‘(1) the plaintiff’s likelihood of success on the merits; (2) the potential for
irreparable harm in the absence of an injunction; (3) whether issuing an injunction will
burden the defendants less than denying an injunction would burden the plaintiffs; and
(4) the effect, if any, on the public interest.’” Boston Duck Tours, LP v. Super Duck
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Tours, LLC, 531 F.3d 1, 11 (1st Cir. 2008) (quoting United States v. Weikert, 504 F.3d 1,
5 (1st Cir. 2007)). In contrast, the plaintiff contends that the appropriate standard is that
provided in Fed. R. Civ. P. 26(c) relating to protective orders in the context of discovery,
pursuant to which the court “may, for good cause, issue an order to protect a party or
person from annoyance, embarrassment, oppression, or undue burden or expense[.]”
This court agrees that “[w]hile some forms of witness intimidation or document
destruction doubtlessly necessitate injunctive relief under Rule 65, protective orders are
also an appropriate vehicle to prevent interference with potential witnesses.” Velez, 2011
WL 2937355, at *4 (discussing Ben David v. Travisono, 495 F.2d 562, 564 (1st Cir.
1974) (protective order prohibiting witness intimidation appropriate upon a finding “that
the plaintiffs reasonably fear retaliation and that the court’s fact-finding may be
materially impaired unless there is provided the tangible protection of a suitable court
order.”)). In the instant case, given the allegations of interference with witnesses, it
would be appropriate for this court to exercise its inherent equitable powers to ensure full
and fair proceedings. Nevertheless, in light of the defendant’s insistence that the
preliminary injunction standard applies, this court has considered the Rule 65 factors in
ruling on the plaintiff’s motion. This court concludes that, regardless whether the
standard is one of good cause or that needed for a preliminary injunction, a protective
order is appropriate.
As an initial matter, the defendant contends that the plaintiff has not put forth any
“reliable evidence supporting its need for an injunction against Mr. Lindsay.” Defs. Opp.
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(Docket No. 37) at 3. This court disagrees. The attorneys have submitted detailed
affidavits concerning direct conversations they contend they had with Dr. Landy and Mr.
Huston, in which these individuals stated that Mr. Lindsay had threatened to drag them
through litigation and cause them serious financial harm if they cooperated with the law
firm. While the plaintiff has not submitted supporting affidavits from these witnesses,
that would not be surprising if, in fact, they were being threatened. The attorneys’
affidavits, while certainly not conclusive, constitute reliable evidence to support the
plaintiff’s contention that it is likely to prevail on its claim that the witnesses were
threatened.
The emails submitted by both parties establish that Mr. Lindsay had a number of
conversations with Dr. Landy and Mr. Huston concerning whether or not they were
cooperating with the plaintiff, which supports the plaintiff’s contention that these
conversations were taking place. The emails also indicate that, as a result of those
conversations, the potential witnesses felt it important to disavow any involvement with
the plaintiff’s pleadings. This is consistent with the plaintiff’s description of events.
Further, at least Mr. Huston acknowledged to Mr. Lindsay that he had nowhere near the
financial resources that Mr. Lindsay had, and that he was concerned about the financial
impact litigation might have on him. This also is consistent with the plaintiff’s representations concerning Mr. Huston’s fears of being financially ruined if he cooperated. In
short, the emails are not inconsistent with the attorneys’ affidavits. While further
discovery may establish that the plaintiff’s fear that the witnesses are being threatened is
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unfounded, the plaintiff has put forth sufficient reliable evidence to establish at this point
that it is likely to succeed on its claim.
As to the other factors considered in connection with a motion for a preliminary
injunction, they all weigh in favor of granting a protective order. If, in fact, witnesses are
being threatened and are prepared to change their testimony accordingly, there is no
question that the harm would be irreparable. Since there is no reason why Dr. Lindsay
needs to communicate with these potential witnesses, other than through his counsel,
issuing an injunction will be less of a burden on the defendant than denying the injunction would burden the plaintiff. Finally, the issuance of an injunction would not have
significant impact on the public interest other than to remove doubt about the voluntariness of the testimony that these witnesses eventually give. Therefore, whether this court
applies a “good cause” standard or a Rule 65 standard, a protective order is warranted.
C.
Scope of the Protective Order
Plaintiffs have proposed that the court enter an order that:
Alan Lindsay shall have no contact with Mark Landy, Anthony
Huston or any other person who he has reason to believe is providing
information to plaintiff regarding this case other than through his
counsel of record in this action.
This court finds that the proposed order is too broad in that there is no evidence that Mr.
Lindsay has attempted to communicate with any other witnesses in this case. On the
other hand, this court finds that the proposed order does not address the situation where a
third person, such as Denis Corin, may become involved in communications with the
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potential witnesses. Therefore, after consideration of the record and the parties’
proposals,1 it is hereby ORDERED as follows:
Alan Lindsay shall not communicate personally with, or cause a
third party (other than counsel) to communicate on his behalf with,
Mark Landy or Anthony Huston while this matter is pending.
Nothing herein shall limit or restrict the right of Alan Lindsay’s
counsel to communicate with Anthony Huston or Mark Landy. In
addition, nothing herein shall prohibit Alan Lindsay from attending
the depositions of Anthony Huston or Mark Landy, provided,
however, that nothing herein shall preclude the plaintiff from filing
another motion seeking to restrict Mr. Lindsay’s attendance at the
depositions if it deems it appropriate.
This order is sufficiently narrow so that it addresses the plaintiff’s concerns without
unduly burdening the defendant. Moreover, it is sufficiently clear so that everyone can
understand what behavior is being prohibited.
IT IS SO ORDERED.
/ s / Judith Gail Dein
Judith Gail Dein
U.S. Magistrate Judge
1
As noted above, Mr. Lindsay has submitted a proposed stipulation in accordance with
this court’s order. However, as made clear during argument, this court will not seek to hold Mr.
Lindsay to the terms of the proposed stipulation since there was no agreement between the
parties. The court, however, has considered what Mr. Lindsay was willing to agree to in
fashioning the protective order.
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