Tatung Co. v. Shu Tze Hsu

217 F.Supp.3d 1138

TATUNG COMPANY, LTD., a foreign corporation, Plaintiffs,

v.SHU TZE HSU, a foreign national; et al., Defendants.

Case No.: SA CV 13–1743 (DOC) (ANx)

United States District Court, C.D. California, Southern Division.

Signed November 14, 2016

Daniel T. Pascucci, Benjamin L. Wagner, Eric Joseph Eastham, James Paul Conley, Joseph R. Dunn, Randy Kane Jones, Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., San Diego, CA, Joseph S. Wu, Usasia Law, La Jolla, CA, Peter A. Biagetti, Mintz Levin Cohn Ferris Glovsky and Popeo PC, Boston, MA, for Plaintiffs.

Gopi K. Panchapakesan, Hernan D. Vera, Paul S. Chan, John K. Rubiner, Gerard Fox Law, Gopi K. Panchapakesan, Thomas V. Reichert, Bird Marella Boxer Wolpert Nessim Drooks Lincenberg Rhow PC, Christopher Kolkey, Eric M. George, Benjamin D. Scheibe, Browne George Ross LLP, Los Angeles, CA, Lawrence C. Jones, Law Offices of Lawrence Jones, Marina Del Rey, CA, Dimitri P. Gross, Dimitri P. Gross Law Offices, Irvine, CA, Robert James Feldhake, The Feldhake Law Firm APC, Costa Mesa, CA, Yaw–Ming Chung, for Defendants.

Hung–Wen (Eric) Chen, pro se.

ORDER GRANTING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT [749, 750, 763]; DENYING MOTIONS TO JOIN IN CO–DEFENDANTS' MOTIONS [757, 764, 769]; GRANTING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [762]

DAVID O. CARTER, U.S. DISTRICT JUDGE

I. INTRO

Before the Court are the Bird Marella Defendants' Motion for Summary Judgment (Dkt. 749); the Former Employee Defendants' Motion for Summary Judgment (Dkt. 750); and Defendant David Chen's Motion for Summary Judgment (Dkt. 763). Also before the Court is Plaintiff's Motion for Partial Summary Judgment (Dkt. 762). The Court heard oral argument on these Motions on November 7, 2016.

II. FACTS¹

After years of litigation and extensive briefing by the parties, a level of familiarity with the facts of this case is assumed. Any facts that the Court finds relevant to the disposition of the instant Motions are noted in the Discussion section below.

III. PROCEDURAL HISTORY

On November 5, 2013, Plaintiff filed its initial Complaint. See generally Complaint ("Compl.") (Dkt. 1). On November 2, 2015, Plaintiff filed its Fourth Amended Complaint ("4AC") (Dkt. 489). The 4AC asserts twelve causes of action against various defendants:

1. Violation of 18 U.S.C. § 1962(c) (Count I),

2. Violation of 18 U.S.C. § 1962(d) (Count III),

3. Fraud (Count IV),

4. Civil conspiracy to commit fraud (Count V),

5. Fraudulent transfer of LED TV Assets (Count VI),

6. Conspiracy to fraudulently transfer LED TV assets (Count VII),7. Breach of fiduciary duty (Counts VIII, IX),

8. Declaratory relief—alter ego liability (Count X),

9. Declaratory relief—successor liability and alter ego liability (Count XI),

10. Fraudulent transfer of LED Lighting Assets (Count XII), and

11. Conspiracy to fraudulently transfer LED Lighting Assets (Count XIII).

See generally 4AC.

Defendants filed four Motions for Summary Judgment. The following papers have been filed with the Court:

• Defendants Pixi Lighting, Inc. and Ever Venture Solutions, Inc. (collectively, the "Pixi Defendants") filed a Motion for Summary Judgment on August 15, 2016 (Dkt. 737). Plaintiff filed its opposition on September 6, 2016 (Dkt. 794); the Pixi Defendants filed their reply on September 19, 2016 (Dkt. 827).

• Shu Tze Hsu, Shou–Por Houng, Rui–Lin Hsu, Chin–Ying Hsu, Howard Houng, Gregory Hu, Li Fu, CMT, and RD (collectively, the "Bird Marella Defendants") filed a Motion for Summary Judgment on August 15, 2016 (Dkt. 749). Plaintiff filed its opposition on September 7, 2016 (Dkt. 812); Bird Marella Defendants filed their reply on September 21, 2016 (Dkt. 842).

• John Araki, Benson Lin, Arthur Moore, Juan Salcedo, Douglas Woo, and Jennifer Huang (collectively, the "Former Employee Defendants") filed a Motion for Summary Judgment on August 15, 2016 (Dkt. 750). Plaintiff filed its opposition on September 6, 2016 (Dkt. 799); the Former Employee Defendants filed their reply on September 19, 2016 (Dkt. 834).

• Defendant David Chen filed a Motion for Summary Judgment on August 15, 2016 (Dkt. 763). Plaintiff filed its opposition on September 6, 2016 (Dkt. 804); Chen filed his reply on September 19, 2016 (Dkt. 838).

All Defendants filed Notices of Joinder concurrently with their respective Motions for Summary Judgment (Dkts. 757 (Former Employee Defendants), 764 (Bird Marella Defendants), 769 (Chen), 772 (Pixi Defendants)). Plaintiff filed an Omnibus Opposition to Defendants' Joinders on September 6, 2016 (Dkt. 803).

On November 3, 2016, Plaintiff filed a Notice of Settlement and Stipulated Withdrawal of Certain Pending Motions (Dkt. 877), in which the Pixi Defendants withdrew their Motion and later-filed Amended Motions (Dkts. 765, 766). On November 4, 2016, Plaintiff filed a Notice of Stipulation (Dkt. 878) dismissing the Pixi Defendants from this case and amending the 4AC to remove Counts XII (fraudulent transfer of the LED Lighting Assets) and XIII (conspiracy to fraudulently transfer the LED Lighting Assets).

Plaintiff filed a Motion for Partial Summary Judgment on August 15, 2016 (Dkt. 762). The Bird Marella Defendants filed their opposition on September 6, 2016 (Dkt. 793). The Former Employee Defendants and David Chen filed a joint opposition on the same day (Dkt. 795). Plaintiff filed an omnibus reply to defendants' oppositions on September 19, 2016 (Dkt. 826).

IV. LEGAL STANDARD

Summary judgment is proper if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is to be granted cautiously, with due respect for a party's right to have its factually grounded claims and defenses tried to a jury.

Celotex Corp. v. Catrett , 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A court must view the facts and draw inferences in the manner most favorable to the non-moving party. United States v. Diebold, Inc. , 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) ; Chevron Corp. v. Pennzoil Co. , 974 F.2d 1156, 1161 (9th Cir. 1992). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact for trial, but it need not disprove the other party's case. Celotex , 477 U.S. at 323, 106 S.Ct. 2548. When the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out that the non-moving party has failed to present any genuine issue of material fact as to an essential element of its case. See Musick v. Burke , 913 F.2d 1390, 1394 (9th Cir. 1990).

Once the moving party meets its burden, the burden shifts to the opposing party to set out specific material facts showing a genuine issue for trial. See Liberty Lobby , 477 U.S. at 248–49, 106 S.Ct. 2505. A "material fact" is one which "might affect the outcome of the suit under the governing law...." Id. at 248, 106 S.Ct. 2505. A party cannot create a genuine issue of material fact simply by making assertions in its legal papers. S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & Co., Inc. , 690 F.2d 1235, 1238 (9th Cir. 1982). Rather, there must be specific, admissible, evidence identifying the basis for the dispute. See id. The court need not "comb the record" looking for other evidence; it is only required to consider evidence set forth in the moving and opposing papers and the portions of the record cited therein. Fed. R. Civ. P. 56(c)(3) ; Carmen v. S.F. Unified Sch. Dist. , 237 F.3d 1026, 1029 (9th Cir. 2001). The Supreme Court has held that "[t]he mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for [the opposing party]." Liberty Lobby , 477 U.S. at 252, 106 S.Ct. 2505.

V. DISCUSSION

A. Joinders

Between August 15 and 17, 2016, each group of defendants described above filed a joinder, in which they "join in the substance of the ... Motions for Summary Judgment" filed by the other groups of defendants. See Dkts. 757, 764, 769, 772.

1. Legal Standard

When reviewing whether to allow a party to join in a motion, the court will allow the joinder when either (1) the parties are so similarly situated that filing an independent motion would be redundant, or (2) the party seeking joinder specifically points out: which parts of the motion apply to the joining party, the joining party's basis for standing, and the factual similarities between the joining party and moving party that give rise to a similar claim or defense. See United States v. Longoria , CR No. 89–225–FR, 1990 WL 11418, at *4 (D. Or. Jan. 31, 1990) (allowing co-defendants to join on motion to compel discovery of informant's identity where same informant testified against all defendants); United States v. Ledbetter , No. 2:14–CR–127, 2015 WL 5954587, at *2 (S.D. Ohio Oct. 14, 2015) (allowing parties to join in discovery motions where the exact same discovery is requested); United States v. Cerna , No. CR–08–0730 WHA, 2011 WL 500229, at *12 (N.D. Cal. Feb. 9, 2011) (holding motion to join in another's motion should not "leave the [court] guessing as to the reasons why the motions sought to be joined apply"); United States v. Svihel , No. 15–cr–190 (2)(4) (DSD/LIB), 2016 WL 1212364, at *6 (D. Minn. Feb. 25, 2016) (denying "blanket authorization to join in all motions" and requiring movant to "allege a basis for standing" and a "factual basis for joining" each motion).

This is consistent with summary judgment rules requiring moving parties to "identify[ ] each claim or defense ... on which summary judgment is sought." Fed. R. Civ. P. 56. The "notice provision is not an unimportant technicality, but a vital procedural safeguard.... [T]he notice provision ensures that litigants will have at least ten days in which to formulate and prepare their best opposition to an impending assault...