Production Co. Fights Sanctions Bid Over EB-5 Suit

Production Co. Fights Sanctions Bid Over EB-5 Suit

EB-5 Visa, EB5 Visa, EB-5 Investment

A film and TV production company urged a Georgia federal judge on Tuesday not to impose sanctions in a now-dismissed $45 million lawsuit alleging former NBA player Theo Ratliff and others conspired to shut it out of a prospective deal involving the EB-5 program, saying its attorneys did not act in bad faith. 

Open Rivers Media Group Inc. argued that even though an Eleventh Circuit panel found its original and amended complaints to be “shotgun pleadings,” the actions of its attorneys were not improper or vexatious and did not extend the proceedings unnecessarily. Ratliff and a number of entertainment-related companies are seeking nearly $70,000 in fees and costs allegedly expended to fend off what they believed to be “baseless” claims by Open Rivers.

But in its brief to U.S. District Judge Steve C. Jones, Open Rivers argued that it would be unfair to impose sanctions for bad faith litigation simply based on a finding of meritless claims at the pleading stage and a premature summary judgment motion filed by the production company. Open Rivers also argued that the entertainment companies’ fee request is too high, as it includes certain self-inflicted costs.

“Multiple fee entries are associated with defendants’ choice to pursue counterclaims in the matter, to seek to disqualify plaintiffs’ counsel and to obtain press coverage for the case,” Open Rivers said. “Defendants did not incur these ‘excess costs’ due to any conduct of plaintiffs’ attorney and these costs bear no financial connection to any alleged sanctionable conduct.”

Additionally, Open Rivers said the companies improperly seek reimbursement for attorneys’ fees associated with the proceedings at the Eleventh Circuit, which they should have sought at the time of the appeal instead of waiting. The company said the sanctions motion as a whole is untimely as well, as it comes eight months after the court’s final judgment.

Counsel for the defendants, Thomas C. Grant of Lewis Brisbois Bisgaard & Smith LLP, disagreed with this contention, telling Law360 on Wednesday that they could not file a motion for sanctions immediately due to a stay imposed on the case to address the “reckless nature” of Open Rivers’ filings, which proved to be fruitless.

“The plaintiff’s motion assumes that they had ‘ordinary’ filings, which is not the case,” Grant said.

The sanctions fight stems from Open Rivers' March 2015 lawsuit, which accused Ratliff and the other entertainment company defendants of conspiring to exclude the studio from a production deal that could have netted Open Rivers $45 million. The company said it hired Southern Film Regional Center LLC, which connects immigrant investors with producers, to help the studio prepare an application under the EB-5 visa program. The EB-5 program provides green cards to foreign nationals who invest at least $500,000 in an American project that creates at least 10 U.S. jobs.

Judge Jones rejected Open Rivers’ complaint in November 2015, calling it “confusing” even after the addition of factual material and explanations.

He allowed an amended complaint, however, and in December 2015, the company added close to 20 pages of facts and allegations accusing Ratliff and the other defendants of perpetrating a scheme to steal the business for themselves, including blocking Open Rivers from meetings with TV network BET and Hollywood film producer Reuben Cannon, known for his Tyler Perry Studios.

Judge Jones dismissed the amended complaint in May, saying it was not particularly “coherent” and failed to present a chronological recounting of perceived wrongdoings. It also failed to connect any of the factual allegations to specific causes of action, leaving it unclear who is being accused of what by the studio, the judge said.

Open Rivers proposed another amended complaint, but the request was rejected in late June. The production company appealed, but in December the Eleventh Circuit panel sided with Ratliff and the other entertainment company defendants.

Counsel for the parties did not immediately respond Wednesday to requests for comment.

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.

--Additional reporting by Fola Akinnibi and Rick Archer. Editing by Kelly Duncan.


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