Utah filing from Light Pursuant to Federal Rule o
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Posted On: 10/17/2019 11:15:33 PM
Utah filing from Light
Pursuant to Federal Rule of Civil Procedure 12(c) and the Court’s inherent powers,
Defendant Ucore Rare Metals Inc. respectfully submits this Motion to Dismiss, or in the
Alternative, to Stay and Memorandum in Support.
RELIEF REQUESTED AND GROUNDS
Defendant Ucore Rare Metals, Inc. asks the Court to dismiss this lawsuit, or in the
alternative, to stay this lawsuit pending resolution of the first-filed lawsuit currently pending in
Canada. The lawsuit should be dismissed under fundamental principles of international comity
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and abstention because it is duplicative of claims already pending in Canada between the same
parties and because it would be a waste of resources and needlessly cumulative to proceed with
this litigation of duplicative claims.
SUMMARY
Plaintiffs’ forum shopping must come to an end. This is the third lawsuit involving the
same parties. The defendant in this action - Ucore Rare Metals Inc. (“Ucore”) filed the first
lawsuit in December in Nova Scotia, Canada (the “Canadian Lawsuit”). The plaintiffs in this
action, IBC Advanced Technologies, Inc. (“IBC”) and Steven R. Izatt both appeared as
defendants in the Canadian Lawsuit. They have stipulated to the equivalent of a temporary
restraining order in the Canadian Lawsuit and they have affirmatively asked the Canadian court
for relief. The Canadian Lawsuit involves claims of defamation and breach of a contract that is
central to this case.
Rather than litigate its claims in the first-to-file court, IBC and Mr. Izatt are out shopping
for the court that they would rather have. First, they filed a lawsuit against Ucore and three of its
officers in Utah State Court, Case No. 190900129 (the “First Utah Lawsuit”). Then, they filed
this lawsuit against Ucore and two of its officers in Utah State Court (the “Second Utah
Lawsuit”). This brings the number of lawsuits between Ucore, IBC, and Mr. Izatt to three.
Shopping forums by pursuing multiple lawsuits in various courts is a waste of the parties’ and
the courts’ resources. Rather than continue down this wasteful litigation road, the Court should
dismiss or stay this case and let the parties fight it out in Canada. The Canada Lawsuit was not
only first, it involves the same facts and the key contract between the parties, it has already been
actively litigated, and all the parties are or could easily be in that lawsuit.
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.STATEMENT OF FACTS
Ucore, IBC, and Mr. Izatt Have Been Actively Litigating in Canada For Five Months.
1. On December 11, 2018, Ucore filed a lawsuit in the Supreme Court of Nova
Scotia against Mr. Izatt and IBC (the “Canadian Lawsuit”). See Nova Scotia Notice of
Application, attached as Exhibit A.
2. Mr. Izatt and IBC accepted service of the Canadian pleading and have confirmed
to the Court in Nova Scotia that they are not opposing the Court’s jurisdiction over them in
regards to the defamation claims asserted by Ucore in the Canadian Lawsuit.
3. On January 15, 2019, counsel for Mr. Izatt and IBC appeared in the Canadian
Lawsuit at a Motion for Directions, which is essentially a scheduling conference, and agreed to
certain dates for that litigation.
4. While Mr. Izatt and IBC have sought to delay the Canadian Lawsuit by agreeing
to and then failing to comply with a number of dates scheduled by the court, IBC and Mr. Izatt
have taken a significant number of steps already in the Canadian Lawsuit.
5. For example, Ucore filed a motion for an interlocutory injunction (the Canadian
equivalent of a preliminary injunction). This motion asked the court to enjoin IBC and Mr. Izatt
from transferring assets or taking other actions that would deprive Ucore of its rights under an
Option Agreement that the parties entered into. This Option Agreement is the principal contract
that forms the basis of the claims in this Second Utah Lawsuit before this Court. See Complaint
at ¶¶ 71-134.
6. IBC and Mr. Izatt stipulated to entry of an interim injunction (the Canadian
equivalent of a temporary restraining order). A copy of the Canadian Court’s Order is attached
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hereto as Exhibit B. This Order contains recitals about the very contract at issue here in this
case. Compare Exhibit B at Recitals and Complaint at ¶¶ 71-134. This Order grants relief
concerning the Option Agreement that is directly at issue in this Utah case. See Complaint at ¶¶
71-134.
7. The Canadian Court has scheduled a hearing on April 30 to determine whether to
convert the temporary restraining order into an interlocutory injunction (i.e. a preliminary
injunction).
8. In the meantime, Ucore was granted leave to amend its pleadings in Canada to
assert various claims for breach of a contract at issue in this Utah lawsuit. Ucore’s amended
Canadian pleading is attached hereto as Exhibit C.
9. The similarity of issues in the Canadian Lawsuit and this, the Second Utah
Lawsuit, are clear. In the Canadian Lawsuit, Ucore alleges multiple breaches of an Option
Agreement the parties entered into. See Ucore Amended Notice of Action at page 2, ¶ 4, and
pages 5-6. In this Second Utah Lawsuit, IBC alleges multiple breaches of that exact same
Option Agreement. See Complaint at ¶¶ 111-134.
10. In the Canadian Lawsuit, Ucore asserts that the Option Agreement is valid and
binding and it asserts its rights to enforce that agreement. See Ucore Amended Notice of Action
at page 1. In this Second Utah Lawsuit, IBC alleges that Ucore can no longer enforce its rights
under the Option Agreement. See Complaint at ¶ 126.
11. The Canadian Lawsuit does not include a claim for breach of the Research
Agreement while this, the Second Utah Lawsuit does. This is immaterial, however, because IBC
has yet to file its counterclaims in the Canadian Lawsuit and there is no impediment to it
asserting every claim asserted in this the Second Utah Lawsuit in the Canadian Lawsuit.
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12. Finally, it is IBC’s position that it was defrauded into entering the Option
Agreement and it has asserted numerous claims based on this core allegation. Complaint at ¶¶
141-166, and 174-184. This position will be fully litigated in the Canadian proceeding as either
a defense or counterclaim to Ucore’s claim that the Option Agreement is valid and enforceable.
13. Importantly, IBC has not been afraid to ask the Canadian Court for relief. In
addition to the temporary restraining order and preliminary injunction that IBC and Mr. Izatt
have been actively litigating, Mr. Izatt and IBC moved the Canadian Court to rule that certain
information relevant to the parties’ dispute should be confidential and sealed. See Plaintiffs’
March 14, 2019 Brief, at page 5, attached hereto as Exhibit D.
14. This motion filed by IBC in Canada illustrates perfectly the way that a forum
shopping litigant will play courts off of each other in an attempt to gain a strategic advantage.
In the First Utah Lawsuit and in this, the Second Utah Lawsuit, IBC and Mr. Izatt moved the
state court ex parte to seal portions of their complaint. Ucore has not yet challenged IBC and
Mr. Izatt’s ex parte motions to seal and there has been no hearing or a written decision
explaining why those complaints should be sealed.1
Both Utah Courts granted the ex parte
motions to seal, but if those ex parte motions are challenged, it is difficult to see how the state
court’s orders will stand. This is because IBC redacted innocuous phrases and basic details
about the parties’ relationships that have been in the public domain for years. In Canada, IBC
and Mr. Izatt pointed to the Utah state court’s ex parte Orders as proof that the Canadian court
must seal certain documents in the Canadian proceedings and argued that public disclosure in
Canada of “information that is now protected in the United States would effectively undermine
1 Ucore chose not to oppose IBC and Mr. Izatt’s motions to seal at this point, choosing instead to stand in
the First Utah Lawsuit by its jurisdiction defenses and in this, the Second Utah Lawsuit on the arguments
set forth in this motion.
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the Utah court’s decision on that issue.” See Exhibit D at p. 9. Thus, IBC and Mr. Izatt argued
that the Canadian courts should avoid a “conflicting decision” because that would be “at odds
with the principle of comity.” Id. Agreed. The parties should litigate their dispute in Canada
and avoid altogether the risk of conflicting decisions that IBC warns the Canadian court about.2
Ucore and Mr. Izatt’s Claims Do Not Stem From Utah Conduct or Evidence Located in Utah.
15. In this, the Second Utah Lawsuit, IBC and Mr. Izatt assert 7 causes of action. The
first and second causes of action are for breach of contract and breach of the covenant of good
faith and fair dealing. IBC and Mr. Izatt’s complaint goes on for pages, but the actual conduct
that allegedly amounts to the various alleged breaches of contract and breaches of the covenant
of good faith and fair dealing all occurred outside of Utah, mostly in Canada. Specifically, IBC
and Mr. Izatt allege that Ucore breached the contracts by:
a.
. These announcements were made by a Canadian company
(Ucore) in Canada.
b.
.
c.
.
2
Although IBC and Mr. Izatt have appeared before the Canadian Court, stipulated to a temporary
restraining order, and sought other relief, they have belatedly challenged the Canadian Court’s
jurisdiction. A hearing is scheduled in Nova Scotia for April 23 –before this Motion will even be fully
briefed.
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d.
.
e.
.
f.
.
g.
. Ucore is a Canadian company and at the time these disputed agreements
were developed, its officers resided in Canada, so it would presumably have
drafted the agreements from its office in Canada. Id. at ¶¶ 19-21.
h. .
Suncor is a Canadian company just like Ucore. See Suncor Articles of
Amalgamation attached hereto as Exhibit F.
i.
. Ucore is a
Canadian company, so the laws, rules, and regulations it is subject to are
Canadian. Id. at ¶ 66, 69, and 70. Indeed, IBC and Mr. Izatt cite to the
Canadian regulations that Ucore has allegedly violated. Id. at ¶ 70.
j. . Ucore would have
necessarily made these payments from Canada, where it resides.
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k.
.
16. The third, fourth, fifth, and seventh causes of action are various fraud and tort
claims. They all stem from the same breaches outlined above and/or Ucore’s alleged fraudulent
statements, fraudulent intent, and/or alleged failure to provide to information. Id. at ¶¶ 141-166,
and 174-184. IBC conclusorily alleges that these representations allegedly occurred both in Utah
and Canada (see id. generally). IBC, of course, disputes that it made any misrepresentations and
that any representations made about the contracts at issue were made in Canada.
17. More fundamentally, IBC contends that these mispresentations induced it into
entering into an “Option Extension Agreement.” Complaint at ¶¶ 179-183. A copy of the
Option Extension Agreement is attached hereto as Exhibit G. The Option Extension Agreement
is an amendment to the Option Agreement that the parties previously entered into. See Exhibit
G, at p. 1, ¶ a. A copy of the Option Agreement is attached hereto as Exhibit H.
18.
Exhibit H at ¶ 6.3.
19.
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20. There is no allegation in the Complaint that IBC was induced to enter into the
Option Extension Agreement on the basis of a misrepresentation as to the terms that the Option
Extension Agreement contains. See Complaint generally.
21. But even if the alleged misrepresentations of which Ucore complains would
survive the integration clause, proving that those representations were false will require
examination of (1) what a Canadian company and its employees knew or did not know; (2)
whether that Canadian company had the requisite fraudulent intent; and (3) whether the
Canadian company had facts or information in its possession that should have alerted it to the
alleged falsity of its disclosures and non-disclosures. All of this evidence comes predominantly
from Canadian witnesses and evidence.
22. The sixth cause of action is for unjust enrichment. IBC asks the Court to order
Ucore to disgorge the value of the benefit it allegedly received. Id. at ¶ 167-173. Any benefit
that Ucore has improperly retained, would necessarily be retained by it in Canada, since that is
where Ucore is located.
ARGUMENT
A. THIS LAWSUIT SHOULD BE DISMISSED AND THE PARTIES SHOULD
RESOLVE THEIR CLAIMS IN THE FIRST-FILED LAWSUIT IN CANADA.
"International comity is a doctrine of prudential abstention, one that 'counsels voluntary
forbearance when a sovereign which has a legitimate claim to jurisdiction concludes that a
second sovereign also has a legitimate claim to jurisdiction under principles of international
law.'" Mujica v. AirScan Inc., 771 F.3d 580, 598 (9th Cir. 2014) (quoting United States v. Nippon
Paper Indus. Co., 109 F.3d 1, 8 (1st Cir.1997)). When a case is already pending in a foreign
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court, "'deference to the foreign court is appropriate so long as the foreign proceedings are
procedurally fair and [ ] do not contravene the laws or public policy of the United States.'" Id.
(quoting JP Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 424 (2d
Cir. 2005)).
To determine whether a U.S. District Court should abstain from asserting jurisdiction in
the face of a concurrent international lawsuit, the Court must balance “(1) a proper level of
respect for the acts of our fellow sovereign nations . . .; (2) fairness to litigants; and (3) efficient
use of scarce judicial resources.” Turner Entm’t Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518
(11th Cir. 1994). In Nat’l Union Fire Ins. Co. v. Kozeny, the Court considered “overarching
concerns” for comity as well as the following factors in staying the action to allow a British suit
to proceed: “1) similarity of parties and issues involved in the foreign litigation; 2) the
promotion of judicial efficiency; 3) adequacy of relief available in the alternative forum; 4)
issues of fairness to and convenience of the parties, counsel, and witnesses; 5) the possibility of
prejudice to any of the parties; and 6) the temporal sequence of the filing of the actions.” 115 F.
Supp. 2d 1243, 1247 (D. Colo. 2000).
Applying these factors, courts have found Canadian courts to provide adequate relief and
have stayed or dismissed the action before them. For example, in Multi Holsters, LLC v. Tac
Pro Inc., the court granted a motion to stay the U.S. action pending resolution of the Canadian
litigation. Case No. 17-10438, 2017 U.S. Dist. LEXIS 149844 at *1 (E.D. Mich. 2017). The
Plaintiff had sued Defendant in Michigan claiming “various fraud and trade secret violations
under Michigan statutory and common law, as well as federal law.” Id. Plaintiffs were
Pennsylvania citizens while Defendants were Canadian citizens. In staying the Michigan case,
the Michigan court considered that the underlying factual allegations were “essentially identical .
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. . although the theories of recovery differ[ed] slightly.” Id. at *6. The Court observed that the
differences in parties in the two actions were minimal. Id. at *10. Although the actions were
filed two years apart, the Ontario action was still in discovery and no dispositive motions had
been filed nor had trial been set. Id. at *19. Nevertheless the court concluded that this factor
strongly favored abstention. Id. Accordingly, the court stayed the Michigan case. Id. at *21.
In Detroit Int’l Bridge Co. v. Gov’t of Can., the suit arose out of a Canadian company’s
efforts to build a bridge connecting Canada to Detroit, Michigan. 78 F. Supp. 3d 117 (D. D.C.
2015). While Detroit International Bridge Company (DIBC) was engaged in negotiating and
working to get the various permits required, the Canadian government began working with the
United States and Michigan on a separate bridge project that would eliminate the need for the
project DIBC was supposed to be constructing. Id. at 118–19. DIBC then sued the Canadian
government in the District of D.C. Id. at 119. Meanwhile, a third party, who owned an already
existing bridge sued the Canadian government in Ontario for substantially the same claims as
DIBC alleged in the D.C. case. Id. Canada moved in the D.C. case to stay on grounds that the
rights of DIBC’s parent company would be adjudicated fully by the Canadian courts. Id.
Because one of the claims at issue in D.C. was whether DIBC had an exclusive right to build and
operate a bridge and because the Ontario case would decide whether the parent company had a
right, the Canadian action was broader than the D.C. case but would answer the question at issue
in the D.C. case. Id. Although not all of the parties were the same in both actions, the claims
against Canada were the same in both and the issues in the two cases were substantially similar.
Id. at 121. The court observed that “if this Court cannot extend comity to Canada, the comity
principle has little vitality in our jurisprudence.” Id. at 122 (quoting Brinco Mining LTD. V. Fed.
Ins. Co., 552 F. Supp. 1233, 1240 (D. D.C. 1982)). The court concluded that the risk of
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inconsistent judgment along with the similarity between the cases justified a stay of the action.
Id.; see also Exxon Research & Eng’g v. Indus. Risk Insurers, 775 A.2d 601 (N.J. Super. Ct.
App. Div. 2001) (dismissing U.S. litigation because “the Venezuela suit was filed first; both
cases involved substantially the same parties, claims, and legal issues; the Venezuela courts
provided an opportunity for adequate relief for plaintiffs; and plaintiffs had not established any
special equities justifying retaining the action in New Jersey”); Advantage Int’l Mgmt. v.
Martinez, Case No. 93 Civ. 6227, 1994 U.S. Dist. LEXIS 12535 (S.D. N.Y. Sept. 7, 1994)
(dismissing case in favor of foreign proceeding even when claims were not identical because
those claims could be brought as counterclaims in the Spanish proceeding).
Applying the comity analysis here, the Court should dismiss or stay this case pending
resolution of the Canadian Lawsuit. First, the same parties are in both cases. The Canadian
Lawsuit was brought by Ucore against IBC and Mr. Izatt. This case is brought by IBC and Mr.
Izatt against Ucore. In addition, IBC and Mr. Izatt have named Peter Manuel and Jim McKenzie
in this case, even though those individuals are not subject to personal jurisdiction in Utah. These
individuals will file a motion to dismiss for lack of personal jurisdiction at the appropriate time.
But the reality is that these individuals live in Nova Scotia. Accordingly, IBC and Mr. Izatt can
easily pursue their claims against Mr. McKenzie and Mr. Manuel without prejudice in the
Canadian Lawsuit and with no personal jurisdiction concerns.
Second, litigating the Canadian Lawsuit promotes judicial efficiency. IBC and Mr. Izatt
have made this dispute as onerous and expensive as possible by filing two separate lawsuits
against Ucore and its officers after Ucore filed the Canadian Lawsuit. If left to IBC and Mr.
Izatt’s devices, the parties would fight three parallel lawsuits. This is wasteful and needless.
The parties should litigate their concerns in one proceeding and the proceeding where all parties
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would be subject to jurisdiction is Canada. Mr. Izatt and IBC have already submitted to the
jurisdiction of the Canadian court. And Ucore and the named officers of Ucore are subject to
jurisdiction there. The case should proceed there rather than have multiple lawsuits deciding the
same issues in potentially inconsistent ways.
Third, IBC can obtain full relief in Canada. As explained above, U.S. Courts have stayed
U.S. actions in favor of Canadian actions, finding that the Canadian courts deserve comity and
can provide adequate relief. Detroit Int’l Bridge Co. v. Gov’t of Can., 78 F. Supp. 3d 117, 122
(D. D.C. 2015) (“if this Court cannot extend comity to Canada, the comity principle has little
vitality in our jurisprudence”). Canada is a “nation with courts rooted, as are ours, in the
common law.” Feltham v. Bell Helicopter Textron, Inc., 41 S.W.3d 384, 388 (Tex. App. 2001).
Courts consistently agree that Canada provides an adequate alternate forum. Deston Songs LLC
v. Wingspan Records, 00 Civ. 8854, 2001 U.S. Dist. LEXIS 9763, at *11 (S.D.N.Y. July 12,
2001) (noting little dispute about whether “Canada would be an adequate alternate forum”);
Howe v. Goldcorp Invs., Ltd., No. 89-1248-N, 1990 U.S. Dist. LEXIS 21007, at *6 (D. Mass.
Aug. 20, 1990) (concluding that Canada provides an adequate forum). And importantly, as
evidenced by Ucore’s claims in Canada, Canada can adjudicate and enforce the parties’
contractual rights. While there may be some ways in which litigating in Canadian courts will
differ from litigating in Utah courts, those differences do not make the Canadian courts “so
clearly inadequate or unsatisfactory that there is no remedy at all.” Piper Aircraft, 454 U.S. at
254.
Issues of fairness to and convenience of the parties and witnesses weigh in favor of
Canada. All but one of Ucore’s employees live in Canada, none of which need voluntarily
appear for any deposition or discovery in Utah. Ucore keeps its documents in Canada. Since
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nearly all of the alleged breaches of contract occurred in Canada, any relevant third-party
witnesses will be in Canada (or Alaska). These Canadian third-party witnesses, such as Ucore’s
employees, cannot be compelled to provide any testimony or documents in Utah by the issuance
of Utah subpoenas. The cumbersome process of the Hague Convention will be necessary. And
while there are potentially witnesses in Alaska, Iowa, and Kentucky, there are no witnesses in
Utah other than the Plaintiffs. No international treaties are required to obtain information from
Mr. Izatt and IBC, because if they intend to prevail in Canada, they will need to provide their
testimony there. Further, as outlined above, nearly every alleged breach of contract occurred
somewhere other than Utah. For example Ucore’s alleged insolvency, Ucore’s alleged
announcements in Canada, and Ucore’s alleged non-compliance with Canadian law stem from
action that occurred in Canada and/or evidence that exists only in Canada.
Additionally, the fraud allegations that form the basis of IBC and Mr. Izatt’s various torts
are not actionable as a matter of law, and thus, should not weigh in favor of this Court retaining
jurisdiction of this case. IBC and Mr. Izatt claim that IBC was induced into entering into an
Option Extension Agreement through various fraudulent statements concerning other agreements
that Ucore also purportedly agreed to enter into. However, as explained above, the Option
Extension Agreement is an integrated contract. Under Alaskan law, this renders those alleged
fraudulent statements legally irrelevant.3
Alaska Diversified Contractors v. Lower Kuskokwim
Sch. Dist., 778 P.2d 581, 583 n.2 (Alaska 1989) (an integrated contract supersedes inconsistent
terms of other alleged agreements). In Johnson v. Curran, the party alleged in the face of an
integrated contract that it was fraudulently induced into entering the contract. 633 P.2d 994
(Alaska 1981). The Alaska Supreme Court affirmed summary judgment against the party and
3 Alaska law applies to the interpretation of the Option Extension Agreement and the Option Agreement.
See Option Agreement at ¶ 6.9.
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explained that when there is an integrated contract “absent any evidence that [a party] was
induced to enter into the contract on the basis of a misrepresentation as to the terms it contained”
the claim fails. Id. at 998. Similarly here, IBC and Mr. Izatt do not allege anywhere in the
complaint that there is a misrepresentation as to the terms actually contained within the
integrated agreement. Instead, they complain that there were promises to enter other contracts,
or in other words, promises of other terms that are not part of the integrated contract. IBC and
Mr. Izatt’s legally irrelevant allegations should not influence this Court to retain jurisdiction
But even if the Court were to consider that some of the alleged conduct allegedly
occurred in Utah, the discovery into that conduct will require discovery of evidence that is not in
Utah, but in Canada. Evidence concerning the falsity of any alleged statements and/or Ucore’s
intent or knowledge in allegedly making those statements all exists in Canada. Canada is where
the witnesses are and where any documentary evidence demonstrating knowledge or intent is
located. Obtaining evidence from Canada is more convenient and efficient when the lawsuit is in
Canada – not Utah. Moreover, the fundamental role of fairness should not be forgotten. Ucore
is being asked to come to Utah to defend itself. It is fundamentally unfair to hold Canadian
citizens liable under a legal system that they have not availed themselves of.
There is no possibility of prejudice to any of the parties. As explained above, all of the
parties’ claims and disputes can be litigated in Canada. Moreover, if IBC and Mr. Izatt were to
prevail in Canada, there would be no difficulty in collecting any judgment against Ucore and the
individual defendants where they reside. Further, the Canadian Court can exercise jurisdiction
over all the parties, something that cannot be said about the Utah Courts. See Motion to Dismiss
First Utah Action, attached hereto as Exhibit E. And IBC and Mr. Izatt have retained
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accomplished and capable lawyers in Canada to litigate this dispute for them. Put simply, no
parties lose any rights or claims by having the Canadian court resolve this dispute.
Conversely, the parties are prejudiced by the case proceeding here and in Canada. This is
due to the inevitable duplication of expense and effort. Moreover, parallel proceedings risk
inconsistent decisions and confusion about the parties’ rights. The Canadian Court will soon rule
on Ucore’s preliminary injunction motion. If granted, there is nothing that stops IBC from
seeking relief contrary to the Canadian court’s order here in Utah. Moreover, if this motion to
dismiss or stay is not granted, Ucore will likely assert counterclaims here in Utah and seek
injunctive relief, making it inevitable that there will be different courts ruling on the same issues.
And if this Court were to find jurisdiction over some but not all of the defendants, then Plaintiffs
would be forced to Canada to pursue their claims against the dismissed defendants, resulting in
multiple claims across multiple jurisdictions stemming from the same alleged conduct. This
duplication of effort and risk of inconsistent outcomes is prejudicial and further reason for
dismissal. The Second Circuit, for example, dismissed an action brought against Hungarian
entities for their role in the Holocaust because a Hungarian court was the only venue where all of
the litigation could be brought without duplicative litigation. Fischer v. Magyar Allamvasutak
Zrt, 777 F.3d 847, 869 (2d Cir. 2015). The court was further persuaded to dismiss because an
action pertaining to the same subject matter and parties was already pending in the foreign
jurisdiction. Id.
Finally, the temporal sequence of the actions weighs in favor of Canada. The Canadian
Lawsuit was first. That case has been actively litigated now for five months. The parties have
stipulated to a temporary restraining order concerning the key contract at issue in this case. A
preliminary injunction motion will be heard before briefing on this motion is complete. IBC and
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Mr. Izatt have conceded to the Canadian court’s jurisdiction over them in regards to the
defamation claims brought by Ucore. In fact, Mr. Izatt has personally written the Canadian
Court ex parte asking the Court to rearrange its schedule for him. IBC and Mr. Izatt have further
moved the Canadian Court for affirmative relief and obtained an order from the Canadian Court.
In short, the Canadian Lawsuit was not only first, it is moving along and will soon determine in
the context of Ucore’s motion for a preliminary injunction whether Ucore’s claims concerning
the Option Agreement present a “serious issue to be tried.”4
All this before the briefing on this
motion or any motions the individual defendants in this case may file is even complete.
There is no justification for proceeding with multiple lawsuits in multiple jurisdictions.
This case should be stayed or dismissed in favor of the Canadian Lawsuit, which was filed first
and which is a more efficient forum for this dispute.
CONCLUSION
For the foregoing reasons, Ucore respectfully moves the Court to dismiss this action
without prejudice, or in the alternative, to stay this action pending resolution of the Canadian
Lawsuit.
Dated this 10th day of April, 2019.
DORSEY & WHITNEY LLP
Pursuant to Federal Rule of Civil Procedure 12(c) and the Court’s inherent powers,
Defendant Ucore Rare Metals Inc. respectfully submits this Motion to Dismiss, or in the
Alternative, to Stay and Memorandum in Support.
RELIEF REQUESTED AND GROUNDS
Defendant Ucore Rare Metals, Inc. asks the Court to dismiss this lawsuit, or in the
alternative, to stay this lawsuit pending resolution of the first-filed lawsuit currently pending in
Canada. The lawsuit should be dismissed under fundamental principles of international comity
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and abstention because it is duplicative of claims already pending in Canada between the same
parties and because it would be a waste of resources and needlessly cumulative to proceed with
this litigation of duplicative claims.
SUMMARY
Plaintiffs’ forum shopping must come to an end. This is the third lawsuit involving the
same parties. The defendant in this action - Ucore Rare Metals Inc. (“Ucore”) filed the first
lawsuit in December in Nova Scotia, Canada (the “Canadian Lawsuit”). The plaintiffs in this
action, IBC Advanced Technologies, Inc. (“IBC”) and Steven R. Izatt both appeared as
defendants in the Canadian Lawsuit. They have stipulated to the equivalent of a temporary
restraining order in the Canadian Lawsuit and they have affirmatively asked the Canadian court
for relief. The Canadian Lawsuit involves claims of defamation and breach of a contract that is
central to this case.
Rather than litigate its claims in the first-to-file court, IBC and Mr. Izatt are out shopping
for the court that they would rather have. First, they filed a lawsuit against Ucore and three of its
officers in Utah State Court, Case No. 190900129 (the “First Utah Lawsuit”). Then, they filed
this lawsuit against Ucore and two of its officers in Utah State Court (the “Second Utah
Lawsuit”). This brings the number of lawsuits between Ucore, IBC, and Mr. Izatt to three.
Shopping forums by pursuing multiple lawsuits in various courts is a waste of the parties’ and
the courts’ resources. Rather than continue down this wasteful litigation road, the Court should
dismiss or stay this case and let the parties fight it out in Canada. The Canada Lawsuit was not
only first, it involves the same facts and the key contract between the parties, it has already been
actively litigated, and all the parties are or could easily be in that lawsuit.
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.STATEMENT OF FACTS
Ucore, IBC, and Mr. Izatt Have Been Actively Litigating in Canada For Five Months.
1. On December 11, 2018, Ucore filed a lawsuit in the Supreme Court of Nova
Scotia against Mr. Izatt and IBC (the “Canadian Lawsuit”). See Nova Scotia Notice of
Application, attached as Exhibit A.
2. Mr. Izatt and IBC accepted service of the Canadian pleading and have confirmed
to the Court in Nova Scotia that they are not opposing the Court’s jurisdiction over them in
regards to the defamation claims asserted by Ucore in the Canadian Lawsuit.
3. On January 15, 2019, counsel for Mr. Izatt and IBC appeared in the Canadian
Lawsuit at a Motion for Directions, which is essentially a scheduling conference, and agreed to
certain dates for that litigation.
4. While Mr. Izatt and IBC have sought to delay the Canadian Lawsuit by agreeing
to and then failing to comply with a number of dates scheduled by the court, IBC and Mr. Izatt
have taken a significant number of steps already in the Canadian Lawsuit.
5. For example, Ucore filed a motion for an interlocutory injunction (the Canadian
equivalent of a preliminary injunction). This motion asked the court to enjoin IBC and Mr. Izatt
from transferring assets or taking other actions that would deprive Ucore of its rights under an
Option Agreement that the parties entered into. This Option Agreement is the principal contract
that forms the basis of the claims in this Second Utah Lawsuit before this Court. See Complaint
at ¶¶ 71-134.
6. IBC and Mr. Izatt stipulated to entry of an interim injunction (the Canadian
equivalent of a temporary restraining order). A copy of the Canadian Court’s Order is attached
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hereto as Exhibit B. This Order contains recitals about the very contract at issue here in this
case. Compare Exhibit B at Recitals and Complaint at ¶¶ 71-134. This Order grants relief
concerning the Option Agreement that is directly at issue in this Utah case. See Complaint at ¶¶
71-134.
7. The Canadian Court has scheduled a hearing on April 30 to determine whether to
convert the temporary restraining order into an interlocutory injunction (i.e. a preliminary
injunction).
8. In the meantime, Ucore was granted leave to amend its pleadings in Canada to
assert various claims for breach of a contract at issue in this Utah lawsuit. Ucore’s amended
Canadian pleading is attached hereto as Exhibit C.
9. The similarity of issues in the Canadian Lawsuit and this, the Second Utah
Lawsuit, are clear. In the Canadian Lawsuit, Ucore alleges multiple breaches of an Option
Agreement the parties entered into. See Ucore Amended Notice of Action at page 2, ¶ 4, and
pages 5-6. In this Second Utah Lawsuit, IBC alleges multiple breaches of that exact same
Option Agreement. See Complaint at ¶¶ 111-134.
10. In the Canadian Lawsuit, Ucore asserts that the Option Agreement is valid and
binding and it asserts its rights to enforce that agreement. See Ucore Amended Notice of Action
at page 1. In this Second Utah Lawsuit, IBC alleges that Ucore can no longer enforce its rights
under the Option Agreement. See Complaint at ¶ 126.
11. The Canadian Lawsuit does not include a claim for breach of the Research
Agreement while this, the Second Utah Lawsuit does. This is immaterial, however, because IBC
has yet to file its counterclaims in the Canadian Lawsuit and there is no impediment to it
asserting every claim asserted in this the Second Utah Lawsuit in the Canadian Lawsuit.
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12. Finally, it is IBC’s position that it was defrauded into entering the Option
Agreement and it has asserted numerous claims based on this core allegation. Complaint at ¶¶
141-166, and 174-184. This position will be fully litigated in the Canadian proceeding as either
a defense or counterclaim to Ucore’s claim that the Option Agreement is valid and enforceable.
13. Importantly, IBC has not been afraid to ask the Canadian Court for relief. In
addition to the temporary restraining order and preliminary injunction that IBC and Mr. Izatt
have been actively litigating, Mr. Izatt and IBC moved the Canadian Court to rule that certain
information relevant to the parties’ dispute should be confidential and sealed. See Plaintiffs’
March 14, 2019 Brief, at page 5, attached hereto as Exhibit D.
14. This motion filed by IBC in Canada illustrates perfectly the way that a forum
shopping litigant will play courts off of each other in an attempt to gain a strategic advantage.
In the First Utah Lawsuit and in this, the Second Utah Lawsuit, IBC and Mr. Izatt moved the
state court ex parte to seal portions of their complaint. Ucore has not yet challenged IBC and
Mr. Izatt’s ex parte motions to seal and there has been no hearing or a written decision
explaining why those complaints should be sealed.1
Both Utah Courts granted the ex parte
motions to seal, but if those ex parte motions are challenged, it is difficult to see how the state
court’s orders will stand. This is because IBC redacted innocuous phrases and basic details
about the parties’ relationships that have been in the public domain for years. In Canada, IBC
and Mr. Izatt pointed to the Utah state court’s ex parte Orders as proof that the Canadian court
must seal certain documents in the Canadian proceedings and argued that public disclosure in
Canada of “information that is now protected in the United States would effectively undermine
1 Ucore chose not to oppose IBC and Mr. Izatt’s motions to seal at this point, choosing instead to stand in
the First Utah Lawsuit by its jurisdiction defenses and in this, the Second Utah Lawsuit on the arguments
set forth in this motion.
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the Utah court’s decision on that issue.” See Exhibit D at p. 9. Thus, IBC and Mr. Izatt argued
that the Canadian courts should avoid a “conflicting decision” because that would be “at odds
with the principle of comity.” Id. Agreed. The parties should litigate their dispute in Canada
and avoid altogether the risk of conflicting decisions that IBC warns the Canadian court about.2
Ucore and Mr. Izatt’s Claims Do Not Stem From Utah Conduct or Evidence Located in Utah.
15. In this, the Second Utah Lawsuit, IBC and Mr. Izatt assert 7 causes of action. The
first and second causes of action are for breach of contract and breach of the covenant of good
faith and fair dealing. IBC and Mr. Izatt’s complaint goes on for pages, but the actual conduct
that allegedly amounts to the various alleged breaches of contract and breaches of the covenant
of good faith and fair dealing all occurred outside of Utah, mostly in Canada. Specifically, IBC
and Mr. Izatt allege that Ucore breached the contracts by:
a.
. These announcements were made by a Canadian company
(Ucore) in Canada.
b.
.
c.
.
2
Although IBC and Mr. Izatt have appeared before the Canadian Court, stipulated to a temporary
restraining order, and sought other relief, they have belatedly challenged the Canadian Court’s
jurisdiction. A hearing is scheduled in Nova Scotia for April 23 –before this Motion will even be fully
briefed.
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d.
.
e.
.
f.
.
g.
. Ucore is a Canadian company and at the time these disputed agreements
were developed, its officers resided in Canada, so it would presumably have
drafted the agreements from its office in Canada. Id. at ¶¶ 19-21.
h. .
Suncor is a Canadian company just like Ucore. See Suncor Articles of
Amalgamation attached hereto as Exhibit F.
i.
. Ucore is a
Canadian company, so the laws, rules, and regulations it is subject to are
Canadian. Id. at ¶ 66, 69, and 70. Indeed, IBC and Mr. Izatt cite to the
Canadian regulations that Ucore has allegedly violated. Id. at ¶ 70.
j. . Ucore would have
necessarily made these payments from Canada, where it resides.
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k.
.
16. The third, fourth, fifth, and seventh causes of action are various fraud and tort
claims. They all stem from the same breaches outlined above and/or Ucore’s alleged fraudulent
statements, fraudulent intent, and/or alleged failure to provide to information. Id. at ¶¶ 141-166,
and 174-184. IBC conclusorily alleges that these representations allegedly occurred both in Utah
and Canada (see id. generally). IBC, of course, disputes that it made any misrepresentations and
that any representations made about the contracts at issue were made in Canada.
17. More fundamentally, IBC contends that these mispresentations induced it into
entering into an “Option Extension Agreement.” Complaint at ¶¶ 179-183. A copy of the
Option Extension Agreement is attached hereto as Exhibit G. The Option Extension Agreement
is an amendment to the Option Agreement that the parties previously entered into. See Exhibit
G, at p. 1, ¶ a. A copy of the Option Agreement is attached hereto as Exhibit H.
18.
Exhibit H at ¶ 6.3.
19.
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20. There is no allegation in the Complaint that IBC was induced to enter into the
Option Extension Agreement on the basis of a misrepresentation as to the terms that the Option
Extension Agreement contains. See Complaint generally.
21. But even if the alleged misrepresentations of which Ucore complains would
survive the integration clause, proving that those representations were false will require
examination of (1) what a Canadian company and its employees knew or did not know; (2)
whether that Canadian company had the requisite fraudulent intent; and (3) whether the
Canadian company had facts or information in its possession that should have alerted it to the
alleged falsity of its disclosures and non-disclosures. All of this evidence comes predominantly
from Canadian witnesses and evidence.
22. The sixth cause of action is for unjust enrichment. IBC asks the Court to order
Ucore to disgorge the value of the benefit it allegedly received. Id. at ¶ 167-173. Any benefit
that Ucore has improperly retained, would necessarily be retained by it in Canada, since that is
where Ucore is located.
ARGUMENT
A. THIS LAWSUIT SHOULD BE DISMISSED AND THE PARTIES SHOULD
RESOLVE THEIR CLAIMS IN THE FIRST-FILED LAWSUIT IN CANADA.
"International comity is a doctrine of prudential abstention, one that 'counsels voluntary
forbearance when a sovereign which has a legitimate claim to jurisdiction concludes that a
second sovereign also has a legitimate claim to jurisdiction under principles of international
law.'" Mujica v. AirScan Inc., 771 F.3d 580, 598 (9th Cir. 2014) (quoting United States v. Nippon
Paper Indus. Co., 109 F.3d 1, 8 (1st Cir.1997)). When a case is already pending in a foreign
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court, "'deference to the foreign court is appropriate so long as the foreign proceedings are
procedurally fair and [ ] do not contravene the laws or public policy of the United States.'" Id.
(quoting JP Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 424 (2d
Cir. 2005)).
To determine whether a U.S. District Court should abstain from asserting jurisdiction in
the face of a concurrent international lawsuit, the Court must balance “(1) a proper level of
respect for the acts of our fellow sovereign nations . . .; (2) fairness to litigants; and (3) efficient
use of scarce judicial resources.” Turner Entm’t Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518
(11th Cir. 1994). In Nat’l Union Fire Ins. Co. v. Kozeny, the Court considered “overarching
concerns” for comity as well as the following factors in staying the action to allow a British suit
to proceed: “1) similarity of parties and issues involved in the foreign litigation; 2) the
promotion of judicial efficiency; 3) adequacy of relief available in the alternative forum; 4)
issues of fairness to and convenience of the parties, counsel, and witnesses; 5) the possibility of
prejudice to any of the parties; and 6) the temporal sequence of the filing of the actions.” 115 F.
Supp. 2d 1243, 1247 (D. Colo. 2000).
Applying these factors, courts have found Canadian courts to provide adequate relief and
have stayed or dismissed the action before them. For example, in Multi Holsters, LLC v. Tac
Pro Inc., the court granted a motion to stay the U.S. action pending resolution of the Canadian
litigation. Case No. 17-10438, 2017 U.S. Dist. LEXIS 149844 at *1 (E.D. Mich. 2017). The
Plaintiff had sued Defendant in Michigan claiming “various fraud and trade secret violations
under Michigan statutory and common law, as well as federal law.” Id. Plaintiffs were
Pennsylvania citizens while Defendants were Canadian citizens. In staying the Michigan case,
the Michigan court considered that the underlying factual allegations were “essentially identical .
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. . although the theories of recovery differ[ed] slightly.” Id. at *6. The Court observed that the
differences in parties in the two actions were minimal. Id. at *10. Although the actions were
filed two years apart, the Ontario action was still in discovery and no dispositive motions had
been filed nor had trial been set. Id. at *19. Nevertheless the court concluded that this factor
strongly favored abstention. Id. Accordingly, the court stayed the Michigan case. Id. at *21.
In Detroit Int’l Bridge Co. v. Gov’t of Can., the suit arose out of a Canadian company’s
efforts to build a bridge connecting Canada to Detroit, Michigan. 78 F. Supp. 3d 117 (D. D.C.
2015). While Detroit International Bridge Company (DIBC) was engaged in negotiating and
working to get the various permits required, the Canadian government began working with the
United States and Michigan on a separate bridge project that would eliminate the need for the
project DIBC was supposed to be constructing. Id. at 118–19. DIBC then sued the Canadian
government in the District of D.C. Id. at 119. Meanwhile, a third party, who owned an already
existing bridge sued the Canadian government in Ontario for substantially the same claims as
DIBC alleged in the D.C. case. Id. Canada moved in the D.C. case to stay on grounds that the
rights of DIBC’s parent company would be adjudicated fully by the Canadian courts. Id.
Because one of the claims at issue in D.C. was whether DIBC had an exclusive right to build and
operate a bridge and because the Ontario case would decide whether the parent company had a
right, the Canadian action was broader than the D.C. case but would answer the question at issue
in the D.C. case. Id. Although not all of the parties were the same in both actions, the claims
against Canada were the same in both and the issues in the two cases were substantially similar.
Id. at 121. The court observed that “if this Court cannot extend comity to Canada, the comity
principle has little vitality in our jurisprudence.” Id. at 122 (quoting Brinco Mining LTD. V. Fed.
Ins. Co., 552 F. Supp. 1233, 1240 (D. D.C. 1982)). The court concluded that the risk of
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inconsistent judgment along with the similarity between the cases justified a stay of the action.
Id.; see also Exxon Research & Eng’g v. Indus. Risk Insurers, 775 A.2d 601 (N.J. Super. Ct.
App. Div. 2001) (dismissing U.S. litigation because “the Venezuela suit was filed first; both
cases involved substantially the same parties, claims, and legal issues; the Venezuela courts
provided an opportunity for adequate relief for plaintiffs; and plaintiffs had not established any
special equities justifying retaining the action in New Jersey”); Advantage Int’l Mgmt. v.
Martinez, Case No. 93 Civ. 6227, 1994 U.S. Dist. LEXIS 12535 (S.D. N.Y. Sept. 7, 1994)
(dismissing case in favor of foreign proceeding even when claims were not identical because
those claims could be brought as counterclaims in the Spanish proceeding).
Applying the comity analysis here, the Court should dismiss or stay this case pending
resolution of the Canadian Lawsuit. First, the same parties are in both cases. The Canadian
Lawsuit was brought by Ucore against IBC and Mr. Izatt. This case is brought by IBC and Mr.
Izatt against Ucore. In addition, IBC and Mr. Izatt have named Peter Manuel and Jim McKenzie
in this case, even though those individuals are not subject to personal jurisdiction in Utah. These
individuals will file a motion to dismiss for lack of personal jurisdiction at the appropriate time.
But the reality is that these individuals live in Nova Scotia. Accordingly, IBC and Mr. Izatt can
easily pursue their claims against Mr. McKenzie and Mr. Manuel without prejudice in the
Canadian Lawsuit and with no personal jurisdiction concerns.
Second, litigating the Canadian Lawsuit promotes judicial efficiency. IBC and Mr. Izatt
have made this dispute as onerous and expensive as possible by filing two separate lawsuits
against Ucore and its officers after Ucore filed the Canadian Lawsuit. If left to IBC and Mr.
Izatt’s devices, the parties would fight three parallel lawsuits. This is wasteful and needless.
The parties should litigate their concerns in one proceeding and the proceeding where all parties
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would be subject to jurisdiction is Canada. Mr. Izatt and IBC have already submitted to the
jurisdiction of the Canadian court. And Ucore and the named officers of Ucore are subject to
jurisdiction there. The case should proceed there rather than have multiple lawsuits deciding the
same issues in potentially inconsistent ways.
Third, IBC can obtain full relief in Canada. As explained above, U.S. Courts have stayed
U.S. actions in favor of Canadian actions, finding that the Canadian courts deserve comity and
can provide adequate relief. Detroit Int’l Bridge Co. v. Gov’t of Can., 78 F. Supp. 3d 117, 122
(D. D.C. 2015) (“if this Court cannot extend comity to Canada, the comity principle has little
vitality in our jurisprudence”). Canada is a “nation with courts rooted, as are ours, in the
common law.” Feltham v. Bell Helicopter Textron, Inc., 41 S.W.3d 384, 388 (Tex. App. 2001).
Courts consistently agree that Canada provides an adequate alternate forum. Deston Songs LLC
v. Wingspan Records, 00 Civ. 8854, 2001 U.S. Dist. LEXIS 9763, at *11 (S.D.N.Y. July 12,
2001) (noting little dispute about whether “Canada would be an adequate alternate forum”);
Howe v. Goldcorp Invs., Ltd., No. 89-1248-N, 1990 U.S. Dist. LEXIS 21007, at *6 (D. Mass.
Aug. 20, 1990) (concluding that Canada provides an adequate forum). And importantly, as
evidenced by Ucore’s claims in Canada, Canada can adjudicate and enforce the parties’
contractual rights. While there may be some ways in which litigating in Canadian courts will
differ from litigating in Utah courts, those differences do not make the Canadian courts “so
clearly inadequate or unsatisfactory that there is no remedy at all.” Piper Aircraft, 454 U.S. at
254.
Issues of fairness to and convenience of the parties and witnesses weigh in favor of
Canada. All but one of Ucore’s employees live in Canada, none of which need voluntarily
appear for any deposition or discovery in Utah. Ucore keeps its documents in Canada. Since
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nearly all of the alleged breaches of contract occurred in Canada, any relevant third-party
witnesses will be in Canada (or Alaska). These Canadian third-party witnesses, such as Ucore’s
employees, cannot be compelled to provide any testimony or documents in Utah by the issuance
of Utah subpoenas. The cumbersome process of the Hague Convention will be necessary. And
while there are potentially witnesses in Alaska, Iowa, and Kentucky, there are no witnesses in
Utah other than the Plaintiffs. No international treaties are required to obtain information from
Mr. Izatt and IBC, because if they intend to prevail in Canada, they will need to provide their
testimony there. Further, as outlined above, nearly every alleged breach of contract occurred
somewhere other than Utah. For example Ucore’s alleged insolvency, Ucore’s alleged
announcements in Canada, and Ucore’s alleged non-compliance with Canadian law stem from
action that occurred in Canada and/or evidence that exists only in Canada.
Additionally, the fraud allegations that form the basis of IBC and Mr. Izatt’s various torts
are not actionable as a matter of law, and thus, should not weigh in favor of this Court retaining
jurisdiction of this case. IBC and Mr. Izatt claim that IBC was induced into entering into an
Option Extension Agreement through various fraudulent statements concerning other agreements
that Ucore also purportedly agreed to enter into. However, as explained above, the Option
Extension Agreement is an integrated contract. Under Alaskan law, this renders those alleged
fraudulent statements legally irrelevant.3
Alaska Diversified Contractors v. Lower Kuskokwim
Sch. Dist., 778 P.2d 581, 583 n.2 (Alaska 1989) (an integrated contract supersedes inconsistent
terms of other alleged agreements). In Johnson v. Curran, the party alleged in the face of an
integrated contract that it was fraudulently induced into entering the contract. 633 P.2d 994
(Alaska 1981). The Alaska Supreme Court affirmed summary judgment against the party and
3 Alaska law applies to the interpretation of the Option Extension Agreement and the Option Agreement.
See Option Agreement at ¶ 6.9.
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explained that when there is an integrated contract “absent any evidence that [a party] was
induced to enter into the contract on the basis of a misrepresentation as to the terms it contained”
the claim fails. Id. at 998. Similarly here, IBC and Mr. Izatt do not allege anywhere in the
complaint that there is a misrepresentation as to the terms actually contained within the
integrated agreement. Instead, they complain that there were promises to enter other contracts,
or in other words, promises of other terms that are not part of the integrated contract. IBC and
Mr. Izatt’s legally irrelevant allegations should not influence this Court to retain jurisdiction
But even if the Court were to consider that some of the alleged conduct allegedly
occurred in Utah, the discovery into that conduct will require discovery of evidence that is not in
Utah, but in Canada. Evidence concerning the falsity of any alleged statements and/or Ucore’s
intent or knowledge in allegedly making those statements all exists in Canada. Canada is where
the witnesses are and where any documentary evidence demonstrating knowledge or intent is
located. Obtaining evidence from Canada is more convenient and efficient when the lawsuit is in
Canada – not Utah. Moreover, the fundamental role of fairness should not be forgotten. Ucore
is being asked to come to Utah to defend itself. It is fundamentally unfair to hold Canadian
citizens liable under a legal system that they have not availed themselves of.
There is no possibility of prejudice to any of the parties. As explained above, all of the
parties’ claims and disputes can be litigated in Canada. Moreover, if IBC and Mr. Izatt were to
prevail in Canada, there would be no difficulty in collecting any judgment against Ucore and the
individual defendants where they reside. Further, the Canadian Court can exercise jurisdiction
over all the parties, something that cannot be said about the Utah Courts. See Motion to Dismiss
First Utah Action, attached hereto as Exhibit E. And IBC and Mr. Izatt have retained
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accomplished and capable lawyers in Canada to litigate this dispute for them. Put simply, no
parties lose any rights or claims by having the Canadian court resolve this dispute.
Conversely, the parties are prejudiced by the case proceeding here and in Canada. This is
due to the inevitable duplication of expense and effort. Moreover, parallel proceedings risk
inconsistent decisions and confusion about the parties’ rights. The Canadian Court will soon rule
on Ucore’s preliminary injunction motion. If granted, there is nothing that stops IBC from
seeking relief contrary to the Canadian court’s order here in Utah. Moreover, if this motion to
dismiss or stay is not granted, Ucore will likely assert counterclaims here in Utah and seek
injunctive relief, making it inevitable that there will be different courts ruling on the same issues.
And if this Court were to find jurisdiction over some but not all of the defendants, then Plaintiffs
would be forced to Canada to pursue their claims against the dismissed defendants, resulting in
multiple claims across multiple jurisdictions stemming from the same alleged conduct. This
duplication of effort and risk of inconsistent outcomes is prejudicial and further reason for
dismissal. The Second Circuit, for example, dismissed an action brought against Hungarian
entities for their role in the Holocaust because a Hungarian court was the only venue where all of
the litigation could be brought without duplicative litigation. Fischer v. Magyar Allamvasutak
Zrt, 777 F.3d 847, 869 (2d Cir. 2015). The court was further persuaded to dismiss because an
action pertaining to the same subject matter and parties was already pending in the foreign
jurisdiction. Id.
Finally, the temporal sequence of the actions weighs in favor of Canada. The Canadian
Lawsuit was first. That case has been actively litigated now for five months. The parties have
stipulated to a temporary restraining order concerning the key contract at issue in this case. A
preliminary injunction motion will be heard before briefing on this motion is complete. IBC and
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Mr. Izatt have conceded to the Canadian court’s jurisdiction over them in regards to the
defamation claims brought by Ucore. In fact, Mr. Izatt has personally written the Canadian
Court ex parte asking the Court to rearrange its schedule for him. IBC and Mr. Izatt have further
moved the Canadian Court for affirmative relief and obtained an order from the Canadian Court.
In short, the Canadian Lawsuit was not only first, it is moving along and will soon determine in
the context of Ucore’s motion for a preliminary injunction whether Ucore’s claims concerning
the Option Agreement present a “serious issue to be tried.”4
All this before the briefing on this
motion or any motions the individual defendants in this case may file is even complete.
There is no justification for proceeding with multiple lawsuits in multiple jurisdictions.
This case should be stayed or dismissed in favor of the Canadian Lawsuit, which was filed first
and which is a more efficient forum for this dispute.
CONCLUSION
For the foregoing reasons, Ucore respectfully moves the Court to dismiss this action
without prejudice, or in the alternative, to stay this action pending resolution of the Canadian
Lawsuit.
Dated this 10th day of April, 2019.
DORSEY & WHITNEY LLP
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