Film Co. Jumped Summary Judgment Gun In $45M EB-5 Suit
A Georgia federal judge denied Open Rivers Media Group Inc. summary judgment in its $45 million suit against various entertainment-related companies and former National Basketball Association player Theo Ratliff over an unsuccessful EB-5 funding deal, ruling Friday the bid was made too soon.
U.S. District Judge Steve C. Jones said that the case — which accuses Ratliff, his company, Ratliff Entertainment LLC, the Southern Film Regional Center LLC and others of pushing Open Rivers out of a lucrative funding opportunity with the EB-5 immigrant investor program — was only slightly more than a month old and that Open Rivers’ partial summary judgment bid was premature. The judge noted that the defendants have a motion to dismiss pending and a reply brief due May 4.
“In previous rulings, this court has questioned the wisdom of ruling on summary judgment without allowing a full opportunity for fact and expert discovery, and the same holds true for plaintiffs' present motion which has been filed before discovery has even begun,” the order stated.
The judge also denied the defendants' emergency motion for status conference and ordered that all activity be stayed until the court has ruled on the defendants’ pending motion to dismiss.
He gave Open Rivers leave to refile its summary judgment motion within 30 days of the end of discovery.
Last week, the defendants, which had earlier called on Open Rivers to amend its suit to more clearly articulate the allegations in its “shotgun pleading,” argued that the studio filed for summary judgment too soon and created even more confusion than already existed by not adhering to the court's rules for such filings.
Open Rivers' attorney Christopher Brown of Brown & Rosen LLC told Law360 that he was pleased with the ruling.
“Judge Jones denied the defendants’ motion for a conference and indicated that my clients’ motion for summary judgment can be refiled 30 days after the close of discovery,” Brown said. “He ruled that granting summary judgment before completing discovery is not something he was inclined to do.”
The defendants' attorney, Thomas Grant of Lewis Brisbois Bisgaard & Smith LLP, told Law360 that they were glad to see that the court agreed with their arguments that the summary judgment motion was premature and improper, and that Judge Jones therefore dismissed it as soon as they filed an emergency motion bringing it to his attention.
"We are also glad that the court has stayed the case so that we can get a ruling on our motion to dismiss, before plaintiffs try to proceed with discovery or take any other action," Grant added.
Also, on Monday, the defendants filed a reply brief supporting their motion to dismiss, saying that the plaintiffs did not comply with numerous court rules or address or justify any of the problems behind their "shotgun" complaint. They also asked the judge to grant a "forthcoming motion for attorneys' fees."
The EB-5 program offers foreign nationals and their families green cards in exchange for investment in American projects, as long as the investment creates at least 10 jobs. Generally, the minimum investment is $1 million, but $500,000 may qualify if it's invested in a rural or high-unemployment area.
Open Rivers claims in its suit that it signed a contract with SFRC in January 2014 for help preparing an EB-5 application and paid the company $100,000. The same month, the studio signed an investment agreement with Ratliff Entertainment to share profits from the EB-5 application, the suit says.
Ratliff and Open Rivers sought to produce content targeted at African-Americans, according to a news release that the complaint linked to.
But Open Rivers claims that the business relationship went south between February and June 2014 with SFRC, Ratliff Entertainment and other defendants seeking to exclude the studio from the EB-5 application process. Open Rivers claims that SFRC decided to abandon Open Rivers’ application in favor of creating its own EB-5 venture with Ratliff, his company and other NBA players.
Open Rivers contends that the EB-5 funding has now been derailed. The company makes a breach of contract claim against SFRC, fraud, misrepresentation and racketeering claims against all defendants, and various other claims such as defamation against certain defendants.
Open Rivers is represented by Christopher L. Brown of Brown & Rosen LLC and Daniel Kane of Daniel Kane PC & Associates.
The defendants are represented by Thomas C. Grant of Lewis Brisbois Bisgaard & Smith LLP.
The case is Open Rivers Media Group Inc. et al. v. Southern Film Regional Center LLC et al., case number 1:15-cv-00724, in the U.S. District Court for the Northern District of Georgia.
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