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Posted On: 08/17/2021 2:07:01 AM
Post# of 148870
RTB and CTMedic: 13D's motion to dismiss under Rule 12(b)6 asserts a failure to state a claim upon which relief can be granted. I have not read the motion or supporting memorandum of law,. But from what I gather through a quick perusal of related posts on this subject, the thrust of defendants' argument is that 13D has cured all misleading statements and/or omissions in its nominating notice by filing several supplements thereto, thus rendering CYDY's claims of deficiencies moot (no longer in controversy). Defendants' argument is apparently buttressed by repeated appeals to uphold the sanctity of shareholder rights.
As you may recall from my Saturday post, I suggested that 13D's position would likely come down to: we have cured all prior deficiencies and let the shareholders decide by their vote. But I was talking about 13D's likely position on the merits relative to responding to CYDY's motion for a prelim injunction to disqualify the 13D BOD slate, not a procedural motion to dismiss the complaint under Rule 12(b)6. Motions to dismiss under this rule are rarely granted because 1, lawyers seldom file a complaint that does not allege all the legal elements of a viable claim (a claim upon which relief can be granted), and 2, for purposed of a motion to dismiss, all allegations in the complaint are deemed to be true.
The Sidley Austin complaint certainly alleges misleading statements and omissions that appear to be material relative to CYDY's corporate bylaws and SEC proxy rules. But rather than wait to dispute SA's claims in the context of CYDY's motion for a preliminary injunction, Baker Botts is attempting to shortcut that process by leveraging 13Ds attempts to cure in its supplements as a means of erasing all of the relief based allegations from the complaint. In my opinion, which I'm afraid is just off the top of my head since I'm not in a position to undertake hours of legal research, the motion to dismiss will be granted only if there is a direct precedent in line with Baker Botts' argument from either the Delaware Supreme Court or the 3rd Circuit Court of Appeals (which covers Delaware). Absent that, it's also possible that Judge Noreika would follow a precedent from her own District Court or from another jurisdiction in accord with BB's position, but in that situation she would be free to ignore such a precedent and make her own. In any event, under Rule 12(b)6, her ruling will be strictly on the law. She will not be resolving any factual disputes.
Factual disputes, however, could definitely come into play in resolving the the dueling pi motions down the road, and that is where I was saying on Saturday that her prior life and professional experiences, as well as her value system, could play a role, however unconsciously, in which arguments she decides to favor. However, even there, as I should have added on Saturday, it's possible that she will be judicially bound to follow a clear and on point precedent from the Delaware Supreme Court or 3rd Circuit, should there be one.
So I give Baker Botts high marks for ingenuity here, but I would expect its 12(b)6 motion, like most others, to be denied (barring a direct, controlling precedent, that ties Judge Noreika's hands.
As you may recall from my Saturday post, I suggested that 13D's position would likely come down to: we have cured all prior deficiencies and let the shareholders decide by their vote. But I was talking about 13D's likely position on the merits relative to responding to CYDY's motion for a prelim injunction to disqualify the 13D BOD slate, not a procedural motion to dismiss the complaint under Rule 12(b)6. Motions to dismiss under this rule are rarely granted because 1, lawyers seldom file a complaint that does not allege all the legal elements of a viable claim (a claim upon which relief can be granted), and 2, for purposed of a motion to dismiss, all allegations in the complaint are deemed to be true.
The Sidley Austin complaint certainly alleges misleading statements and omissions that appear to be material relative to CYDY's corporate bylaws and SEC proxy rules. But rather than wait to dispute SA's claims in the context of CYDY's motion for a preliminary injunction, Baker Botts is attempting to shortcut that process by leveraging 13Ds attempts to cure in its supplements as a means of erasing all of the relief based allegations from the complaint. In my opinion, which I'm afraid is just off the top of my head since I'm not in a position to undertake hours of legal research, the motion to dismiss will be granted only if there is a direct precedent in line with Baker Botts' argument from either the Delaware Supreme Court or the 3rd Circuit Court of Appeals (which covers Delaware). Absent that, it's also possible that Judge Noreika would follow a precedent from her own District Court or from another jurisdiction in accord with BB's position, but in that situation she would be free to ignore such a precedent and make her own. In any event, under Rule 12(b)6, her ruling will be strictly on the law. She will not be resolving any factual disputes.
Factual disputes, however, could definitely come into play in resolving the the dueling pi motions down the road, and that is where I was saying on Saturday that her prior life and professional experiences, as well as her value system, could play a role, however unconsciously, in which arguments she decides to favor. However, even there, as I should have added on Saturday, it's possible that she will be judicially bound to follow a clear and on point precedent from the Delaware Supreme Court or 3rd Circuit, should there be one.
So I give Baker Botts high marks for ingenuity here, but I would expect its 12(b)6 motion, like most others, to be denied (barring a direct, controlling precedent, that ties Judge Noreika's hands.
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