Sydow v. Acheson & Co.

81 F. Supp. 2d 758, 2000 U.S. Dist. LEXIS 673, 2000 WL 94944
CourtDistrict Court, S.D. Texas
DecidedJanuary 26, 2000
DocketCIV. A. G-99-360
StatusPublished
Cited by8 cases

This text of 81 F. Supp. 2d 758 (Sydow v. Acheson & Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sydow v. Acheson & Co., 81 F. Supp. 2d 758, 2000 U.S. Dist. LEXIS 673, 2000 WL 94944 (S.D. Tex. 2000).

Opinion

ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS’ MOTIONS TO DISMISS AND DENYING DEFENDANTS’ MOTIONS FOR MORE DEFINITE STATEMENT

KENT, District Judge.

Plaintiffs bring this claim against Defendants alleging a variety of claims arising from a contract allegedly reached by the parties in July 1995. Now before the Court are Motions to Dismiss for Lack of Subject Matter Jurisdiction, for Lack of Personal Jurisdiction, and for Forum non Conveniens, which were filed by Defendants Acheson & Company, Deborah A. Acheson, Kevin W. Whitley, Mark Steven, and Robert W. Cameron on August 4, 1999. Alternatively, Defendants move for More Definite Statement. Defendants Connell Lightbody and Heather Donison filed separate but identical Motions to Dismiss and Motions for More Definite Statement with the Court on November 15, 1999 and December 27, 1999, respectively. For the reasons stated below, the Motions to Dismiss and Motions for More Definite Statement submitted by Defendants Acheson & Co., Deborah A. Acheson, Kevin W. Whitley, Cornell Lightbody, Mark Steven, and Heather Donison are all DENIED, but Defendant Robert W. Cameron’s Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED.

I. FACTUAL SUMMARY

This suit stems from Defendants’ alleged repudiation of a legally binding contract. In January 1994, Defendant Whitley, acting on behalf of all Defendants, entered into an agreement with Plaintiffs to jointly pursue the claims of eighty-four Canadian breast implant litigants in Texas state court. 1 Eventually, those suits were dismissed based on forum non conveniens.

Defendants, however, allegedly reached a second agreement with Plaintiffs in July 1995. That “contract” provided that Plaintiffs assist Defendants in representing one hundred nine of Defendants’ Canadian breast implant claimants in a bankruptcy proceeding that had been filed in Michigan by the Dow-Corning Corp. Specifically, the “contract” called for Plaintiffs to aid Defendants in liquidating Defendants’ clients’ breast implant claims, regardless of whether such liquidation occurred in the United States or in a class action filed in Canada. Moreover, Plaintiffs agreed to assist Defendants in enforcing all judg- *762 merits in United States bankruptcy court. In return, Plaintiffs were to receive a 50% share of the contingency fees obtained by Defendants.

In support of their obligations under the alleged contract, Plaintiffs claim to have allocated enormous time and resources conducting discovery and gathering evidence. Much correspondence between Plaintiffs and Defendants ensued, and on more than one occasion Defendants sent attorneys to Houston to access the voluminous materials Plaintiffs had accumulated in its Texas offices. Ultimately, the Canadian breast implant claims were liquidated through a class action filed in British Columbia, Canada. On February 16, 1999, the Supreme Court of British Columbia approved a $25 million settlement reached by the Canadian breast implant claimants and Dow-Corning, with payments beginning in late 2000. That court also approved a contingency fee agreement for class counsel, subject to the actions of an independent administrator. This settlement, however, now awaits confirmation by a United States Bankruptcy Court in Michigan. With a settlement for the Canadian breast implant litigants reached, Plaintiffs allege that Defendants have terminated the July 1995 agreement and therefore will refuse to compensate Plaintiffs as originally promised once the contingency fees become available. Consequently, Plaintiffs have filed suit against Defendants alleging breach of contract, breach of fiduciary duty, fraud, conversion, and promissory estoppel.

II. MOTION TO DISMISS

A. Standard of Review

The Federal Rules of Civil Procedure authorize a court, upon suitable showing, to dismiss any action or any claim within an action for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). When considering a motion to dismiss, the Court accepts as true all well-pleaded allegations in the complaint, and views them in a light most favorable to the plaintiff. See Malina v. Gonzales, 994 F.2d 1121, 1125 (5th Cir. 1993). Unlike a motion for summary judgment, a motion to dismiss should be granted only when it appears without a doubt that the plaintiff can prove no set of facts in support of her claims that would entitle her to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).

B. Subject Matter Jurisdiction

Defendants first argue that Plaintiffs’ claims are not ripe for adjudication, because Defendants have not collected any fees in connection with the breast implant settlement. The Court, however, finds the issue raised by Defendants moot, as Plaintiffs filed an Amended Complaint on December 2, 1999 seeking, pursuant to 28 U.S.C. § 2201 (1994), declaratory relief over the disputed fees once they are awarded and distributed to Defendants. Recognizing that a suit brought under the declaratory Judgment Act does not, by itself, confer jurisdiction upon federal courts, the Court must determine whether an independent basis for jurisdiction exists. See Shelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72, 70 S.Ct. 876, 878-79, 94 L.Ed. 1194 (1950). In this case, the Court holds that Plaintiffs’ claims are valid under 28 U.S.C. § 1333.

While the Texas Plaintiffs cannot receive immediate enforcement of their declaratory claims, the fact remains that the $6 million contingency fee likely to be awarded to the Canadian Defendants as a result of the breast implant settlement exceeds the $75,000 threshold necessary to invoke diversity jurisdiction. See 28 U.S.C. § 1333. More importantly, because Defendants continue to vehemently deny a contractual obligation to split any portion of the fees with Plaintiffs, the Court finds that an actual, justiciable controversy exists concerning the parties’ rights to the *763 contingency fee award so as to confer subject matter jurisdiction upon the Court. See Maryland Cas. Co. v. Pacific Coal & Oil Co.,

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Bluebook (online)
81 F. Supp. 2d 758, 2000 U.S. Dist. LEXIS 673, 2000 WL 94944, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sydow-v-acheson-co-txsd-2000.