Synergy Global Outsourcing, LLC v. Hinduja Global Solutions Inc.

• Court: New Jersey Superior Court Appellate Division
• Decided: March 13, 2025
• Docket: A-2010-22
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2010-22

SYNERGY GLOBAL OUTSOURCING, LLC,

Plaintiff-Respondent,

v.

HINDUJA GLOBAL SOLUTIONS, INC. and HGS HEALTHCARE, LLC,

Defendants-Appellants. __________________________

Submitted April 8, 2024 – Decided March 13, 2025

Before Judges Gilson, DeAlmeida and Jacobs.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1803-22.

Fishkin Lucks LLP, Barry Barnett (Susman Godfrey LLP) of the Texas bar, admitted pro hac vice, and Tanner H. Laiche (Susman Godfrey LLP) of the California bar, admitted pro hac vice, attorneys for appellant (Erin C. O'Leary, Barry Barnett and Tanner H. Laiche, of counsel and on the briefs). Benjamin R. Joelson (Akerman LLP) and Scott M. Kessler (Akerman LLP) of the New York bar, admitted pro hac vice, attorneys for respondent (Benjamin R. Joelson and Scott M. Kessler, on the brief).

The opinion of the court was delivered by

DeALMEIDA, J.A.D.

This appeal arises from an action initiated by motion in the Law Division

to quash a subpoena ad testificandum served on non-party Wilson Mitchell in

an action pending in a Texas state court. Hinduja Global Solutions, Inc. (HGSI)

and HGS Healthcare, LLC (collectively, the HGS Parties), who served the

subpoena, appeal from the January 23, 2023 order of the Law Division: (1)

granting Mitchell's motion for reconsideration of the court's December 6, 2022

order denying his motion to quash the subpoena; and (2) quashing the subpoena

and dismissing the action without prejudice. We affirm.

I.

On December 30, 2019, Synergy Global Outsourcing, LLC (Synergy)

filed a complaint in the District Court of Dallas County against the HGS Parties,

alleging breach of a broker agreement in which the HGS Parties agreed to pay

Synergy commissions for procuring existing and new lines of business (the

Texas Matter).

A-2010-22 2 The HGS Parties asserted several counterclaims in the Texas Matter

against Synergy and Ali Ganjaei, former general counsel of Synergy and the

HGS Parties, and a former member of the Boards of Directors of the HGS

Parties. The HGS Parties allege Ganjaei, among other things, caused himself

and other fiduciaries of HGSI to acquire a controlling interest in Synergy

through ownership of HBI Group, Inc. (HBI Group), and failed to disclose that

he stood to gain personally from the broker agreement. Of the HGS Parties'

counterclaims, only a claim for knowing breach of fiduciary duty remains

pending.

On February 22, 2022, the HGS Parties served a subpoena duces tecum

and ad testificandum in the Texas Matter on HBI Group in New York. The

subpoena primarily sought to trace the flow of payments and other benefits from

the broker agreement, including through payments Synergy made to HBI Group,

to the ultimate beneficiaries, whom the HGS Parties seek to identify. HBI Group

timely served responses and objections to the subpoena on March 17, 2022.

On May 31, 2022, the HGS Parties initiated a special proceeding in New

York Supreme Court in Albany County to compel HBI Group to respond more

fully to the subpoena and produce a representative for a deposition. The matter

was transferred to New York County.

A-2010-22 3 On November 22, 2022, the New York Supreme Court granted in part and

denied in part the HGS Parties' motion to compel. The court ordered HBI Group

to respond to the subpoena, but limited the scope of the production request from

the eighteen-year period identified in the subpoena to January 1, 2009 through

December 31, 2011. The court reasoned that the HGS Parties' counterclaims

arose out of execution of the broker agreement in 2011 and HBI Group's

acquisition of a controlling interest in Synergy in 2010 and, therefore, an

eighteen-year scope of inquiry would be overbroad and onerous.

Both HBI Group and the HGS Parties appealed the decision to the

Appellate Division of New York Supreme Court. HBI Group moved for a stay

pending appeal, which the New York Appellate Division granted.

On the same day the HGS Parties subpoenaed HBI Group in New York,

they served a substantially similar subpoena on Hinduja Group International,

LLC (HGIL), HBI Group's parent corporation, in Delaware. The HGS Parties

later moved to compel HGIL's compliance with the subpoena in the Delaware

Superior Court. A Delaware judge ordered HGIL to produce all documents in

its possession, custody, or control relating to HGIL's controlling interest in HBI

Group dated between January 1, 2009 and December 31, 2011.

A-2010-22 4 On October 3, 2022, prior to the New York trial court's decision on the

motion to compel, the HGS Parties served a subpoena ad testificandum in the

Texas Matter on Mitchell, HBI Group's Chief Financial Officer (CFO), in New

Jersey.

On October 17, 2022, Mitchell moved in the Law Division pursuant to R.

4:10-2 to quash the subpoena or, alternatively, for a protective order limiting the

scope of the deposition to Mitchell's role and conduct with respect to Synergy

for the period January 1, 2009 through December 31, 2011. Mitchell argued the

court should quash the subpoena because the New York action, which was filed

before the HGS Parties served the New Jersey subpoena, concerns the

permissible scope of the HGS Parties' discovery from HBI Group in the Texas

Matter. Alternatively, Mitchell argued that if the motion to quash was denied,

the court should enter a protective order limiting the scope of his deposition to

his role and conduct with Synergy between January 1, 2009 and December 31,

2011. Mitchell relied, in part, on the Delaware court's decision limiting the

scope of the HGS Parties' inquiry.

The HGS Parties opposed the motion, arguing that Mitchell served on

HGSI's Board of Directors from at least 2015 to 2019, and on Synergy's Board

of Directors beginning in 2016. In light of those positions, the HGS Parties

A-2010-22 5 argued, Mitchell had an intimate personal knowledge of the flow of payments

from them through Synergy to HBI Group and the ultimate beneficiaries, beyond

that of the HBI Group as a corporate entity. Thus, they argued, discovery from

HBI Group, which was at issue in the New York action, was not substantially

the same issue as discovery from Mitchell.

On December 6, 2022, the trial court issued a written decision denying

Mitchell's motion. The court found that "Mitchell's first argument, that the

subpoena should be quashed because compelling Mitchell's deposition would

violate the first-filed rule, is no longer applicable, given the Supreme Court of

the County of New York's November 22, 2022 decision." The court continued,

"[a]lthough Mitchell has appealed the Supreme Court's ruling and filed an

'application for an interim stay of the [d]ecision pending appeal,' this [c]ourt

may properly deny the motion to quash, because the motion to compel itself is

no longer 'pending.'" (citation omitted).

With respect to Mitchell's request for a protective order, the court found

he did not satisfy his burden of establishing that inquiry by the HGS Parties

about events outside the January 1, 2009 to December 31, 2011 timeframe would

be unreasonable or oppressive. The court found that the HGS Parties established

Mitchell held significant leadership positions at HGSI beginning in 2015 and

A-2010-22 6 served dual leadership roles at Synergy and HBI Group during a time when

Synergy distributed at least nine million dollars to HBI Group and a related

entity between 2010 and 2020. The court found the HGS Parties showed a

logical connection between questioning Mitchell about his roles with Synergy

and HBI Group during that time and Synergy's breach of contract claim and their

counterclaim in the Texas Matter. A December 6, 2022 order memorialized the

trial court's decision.

On December 16, 2022, Mitchell moved for reconsideration of the

December 6, 2022 order. He argued the December 6, 2022 order was premised

on the incorrect assumption that the motion to compel in the New York court

had been resolved because the New York trial court had issued a decision on the

motion, even though an appeal of that decision was pending. Mitchell argued

the court overlooked two precedents holding that the fact that a matter is on

appeal does not impact its status as a first-filed action. See Kitchen's Int'l, Inc.

v. Evans Cabinet Corp., 413 N.J. Super. 107, 114-16 (App. Div. 2010) and

Exxon Research & Eng'g Co. v. Indus. Risk Insurers, 341 N.J. Super. 489, 512-

14 (App. Div. 2001).

Mitchell also noted that the New York Appellate Division had issued a

stay of the trial court's decision pending appeal. Thus, he argued, there

A-2010-22 7 continues to be no order from any New York court requiring HBI Group to

comply with the New York subpoena. The HGS Parties opposed the motion.

On January 23, 2023, the trial court issued a written decision granting the

motion for reconsideration and quashing the subpoena. The court agreed it had

overlooked the cited precedents and erred when it concluded that the first-filed

rule did not apply once the New York trial court issued its opinion where an

appeal of that decision was pending. The court, therefore, granted Mitchell's

motion for reconsideration.

Turning to the first-filed rule, the court found the New York action, which

was filed on May 31, 2022, was filed before Mitchell filed his motion to quash

on October 17, 2022.

In addition, the court found the two actions involve substantially the same

parties, claims, and legal issues. The court found that the New York subpoena

was served on HBI Group and seeks a corporate representative to testify about

the recipients of the benefits of the payments to HBI Group by Synergy and to

track the flow of those payments and benefits to the ultimate beneficiaries. The

New Jersey subpoena, the court found, sought information from Mitchell with

respect to his dual roles at Synergy and HBI Group about the same subjects. The

court was not convinced by the HGS Parties' argument the two matters

A-2010-22 8 concerned different parties, claims, and legal issues because Mitchell has

intimate and personal knowledge about the identified areas of inquiry separate

and apart from the knowledge of HBI Group as a corporate entity.

The court found the HGS Parties did not argue they would not have the

opportunity to obtain adequate relief in the New York action. Thus, the court

found, the HGS Parties did not establish special equities exist to avoid

application of the first-filed rule.

A January 23, 2023 order grants Mitchell's motion for reconsideration,

quashes the subpoena without prejudice, and dismisses the action without

prejudice.

This appeal follows. The HGS Parties argue the trial court erred because:

(1) the first-filed rule does not apply because Mitchell is not substantially the

same party as HBI Group, and the two subpoenas do not involve substantially

the same claims or legal issues; (2) the court in the Texas Matter, which was

filed before the New York matter, issued decisions requiring broad discovery,

to which the Law Division should have deferred rather than deferring to the New

York action; and (3) special equities exist that militate against abstention under

the first-filed rule, including ongoing efforts by Synergy and Ganjaei to obstruct

discovery.

A-2010-22 9 On March 9, 2023, the New York Appellate Division issued an opinion

modifying the trial court's temporal limitation of the subpoena served on HBI

Group, striking the majority of the HGS Parties' document requests and

deposition topics, and placing limits on the remaining requests and topics. In re

Hinduja Grp. Solutions, Inc. v. HBI Group, Inc., 184 N.Y.S.3d 755 (N.Y. App.

Div. 2023).

On November 26, 2024, New York Appellate Division affirmed a special

adjudicator's ruling that HBI Group produce documents in addition to those it

produced after remand following the first appeal. In re Hinduja Global

Solutions, Inc. v. HBI Group, Inc., 223 N.Y.S.3d 630 (N.Y. App. Div. 2024).

II.

Appellate courts evaluate a trial court's decisions on comity matters under

an abuse of discretion standard. See Sensient Colors, Inc. v. Allstate Ins. Co.,

193 N.J. 373, 390 (2008). "The determination of whether to grant a comity stay

or dismissal is generally within the discretion of the trial court." Ibid.

"New Jersey has long adhered to 'the general rule that the court which first

acquires jurisdiction has precedence in the absence of special equities.'" Id. at

386 (quoting Yancoskie v. Del. River Port Auth., 78 N.J. 321, 324 (1978)).

"Under the first-filed rule, a New Jersey state court ordinarily will stay or

A-2010-22 10 dismiss a civil action in deference to an already pending, substantially similar

lawsuit in another state, unless compelling reasons dictate that it retain

jurisdiction." Platkin v. Smith & Wesson Sales Co., Inc., 474 N.J. Super. 476,

487 (App. Div. 2023) (quoting Sensient Colors, Inc., 193 N.J. at 386).

When a party moves for a comity stay or dismissal, the court must

undertake a two-step analysis. First, the court decides whether the moving party

has shown "that there is a first-filed action in another jurisdiction involving

substantially the same parties, claims, and legal issues as the action in this state."

Sensient Colors, 193 N.J. at 393. Then, "[o]nce that is established, the party

opposing a stay or dismissal must demonstrate the presence of one or more

special equities that overcome the presumption favoring the first-filed action."

Ibid.

There is no dispute the New York action was filed before the New Jersey

motion to quash. The HGS Parties, however, contend the two matters do not

concern substantially the same parties, claims and legal issues. The record does

not support that contention.

"[T]he parties, claims, and issues in the two lawsuits" need not be "exactly

the same"; rather, the question is whether the issues are "substantially the same."

Id. at 391 (emphasis in original). That determination is fact-specific. For

A-2010-22 11 example, where a later-filed action significantly expands the scope of the claims

at issue by adding additional parties and claims, the earlier action may not be

considered the "first-filed" action for comity purposes as to the additional parties

and claims. See Cont'l Ins. Co. v. Honeywell Int'l, Inc., 406 N.J. Super. 156,

175-76 (App. Div. 2009).

We see no basis on which to disturb the trial court's conclusion that the

New York matter and the New Jersey matter involve substantially the same

parties, claims, and legal issues. The HGS Parties and no other parties seek

production of discovery in both matters. Additionally, HBI Group and Mitchell,

who is HBI Group's CFO, bear substantial similarity, particularly in relation to

the proceedings at issue here. The HGS Parties admit the testimony they seek

from Mitchell concerns HBI Group's business and the flow of payments to and

from HBI Group.

The legal issues and claims in both matters are also substantially similar.

The New York court has before it the question of which documents HBI Group

must produce and what topics will be addressed at the deposition of the witness

HBI Group names in response to the New York subpoena. The New Jersey

action concerns the topics Mitchell may be questioned about at a deposition in

response to the New Jersey subpoena. Both subpoenas seek discovery about the

A-2010-22 12 flow of funds from the HGS Parties through Synergy to HBI Group and,

subsequently, from HBI Group to what the HGS Parties describe as the "ultimate

beneficiaries."

While HBI Group is a separate legal entity from its officers and may not

share a common legal interest with Mitchell, those distinctions are insufficient

to establish that the two subjects of the subpoenas are not substantially similar

parties or that the proper scope of the subpoenas are not substantially similar

issues.

We also discern no abuse of discretion with the trial court's conclusion

that the HGS Parties did not establish special equities justifying a court's

decision to "disregard the traditional deference paid to the first-filed action in

another state and to exercise jurisdiction over a case filed in this state." Sensient

Colors, 193 N.J. at 387. "Special equities are reasons of a compelling nature

that favor the retention of jurisdiction by the court in the later-filed action." Ibid.

Courts have found special equities under a variety of circumstances, including

when (1) "'significant state interests . . . are implicated, and when deferring to a

proceeding in another jurisdiction "would contravene the public or judicial

policy" of the forum state'"; (2) "'it would cause "great hardship and

inconvenience" to one party by proceedings in the first-filed action and no

A-2010-22 13 unfairness to the opposing party by proceeding in the second-filed action'"; (3)

"'one party has engaged in jurisdiction shopping to deny the other party the

benefit of its natural forum'"; and (4) "'a party acting in bad faith has filed-first

"in anticipation of the opposing party's imminent suit in another, less favorable,

forum."'" Smith & Wesson Sales Co., 474 N.J. Super. at 487 (omission in

original) (quoting Sensient Colors, 193 N.J. at 387-89).

The record does not support a finding of any of those circumstances. New

Jersey has no apparent interest in the Texas Matter, our public policy is not

implicated by the subpoenas, there has been no showing of great hardship to the

HGS Parties in proceeding in the New York forum they chose, and no party has

alleged jurisdiction shopping or strategic filing to avoid a less favorable forum.

Nor do we see support in the record for the HGS Parties' claim that a

special equity exists to maintain the New Jersey action because they will not

have an opportunity to obtain complete relief in New York. Their argument is

based on the premise that the New York court may limit their ability to question

HBI Group and its representative, who may not have the same breadth of

knowledge about HBI Group's financial affairs as Mitchell. The chance that the

HGS Parties will not secure a complete victory in New York is not the equivalent

of being denied the opportunity to obtain complete relief. The HGS Parties

A-2010-22 14 elected to seek discovery from HBI Group through service of a subpoena in New

York. They then filed a motion to compel in a New York court. The record

establishes that the New York courts are actively considering the appropriate

scope of the HGS Parties' discovery requests. The HGS Parties' subsequent

attempt to obtain discovery from HBI Group's CFO in a New Jersey court should

defer to the New York action.

To the extent we have not specifically addressed the HGS Parties'

remaining claims, including that the New Jersey court should have maintained

the motion to quash in order to effectuate the Texas court's broad view of the

scope of discovery, and we conclude they lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

The HGS Parties do not argue in their brief the trial court erred when it

granted Mitchell's motion for reconsideration. We, therefore, deem any

arguments with respect to the provisions of the January 23, 2023 order granting

reconsideration waived. "[A]n issue not briefed is deemed waived." Pressler &

Verniero, Current N.J. Court Rules, cmt. 5 on R. 2:6-2 (2025); Telebright Corp.,

Inc. v. Dir., N.J. Div. of Tax'n, 424 N.J. Super. 384, 393 (App. Div. 2012)

(deeming a contention waived when the party failed to include any arguments

supporting the contention in its brief).

A-2010-22 15 Affirmed.

A-2010-22 16