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Hecklerco, LLC v. YuuZoo Corp.

Citation: 258 F. Supp. 3d 350Docket: 15-CV-5779 (VM)

Court: District Court, S.D. New York; June 12, 2017; Federal District Court

Narrative Opinion Summary

In this case, plaintiffs brought a lawsuit against multiple defendants, including YuuZoo Corporation Limited and Wells Fargo Advisors, LLC, alleging federal securities fraud, common law fraud, negligent misrepresentation, and breach of contract. The claims arose from the plaintiffs' purchase of YuuZoo shares and a loan secured by those shares. Previously, the court denied a motion to dismiss the case based on lack of personal jurisdiction over the YuuZoo defendants, who then sought an appeal and reconsideration, both of which were denied. The court found specific jurisdiction over the YuuZoo defendants due to their business activities in New York facilitated through the Wells Fargo defendants. The court emphasized that interlocutory appeals are not suitable for revisiting factual determinations. Despite the YuuZoo defendants presenting new evidence, it was deemed insufficient to alter the court's prior order denying their motion to dismiss. The decision underscored the importance of an agency relationship in establishing jurisdiction and addressed the procedural standards for motions for reconsideration and interlocutory appeals. Ultimately, the court maintained its stance, finding no clear error or manifest injustice in its earlier ruling.

Legal Issues Addressed

Agency Relationship in Securities Transactions

Application: The court considered the agency relationship between YuuZoo and Wells Fargo defendants crucial in establishing jurisdiction and the merits of the claims.

Reasoning: Plaintiffs allege that Creevey and the Wells Fargo defendants made material misrepresentations during these transactions and that the YuuZoo and Yuuu defendants conducted business in New York through their agents.

Federal Securities Fraud

Application: Plaintiffs allege that the defendants engaged in federal securities fraud through material misrepresentations during the sale of YuuZoo shares.

Reasoning: Plaintiffs Hecklerco LLC, Hecklerco, James Heckler, and Andrew Heckler filed a lawsuit against multiple defendants, asserting claims of federal securities fraud.

Interlocutory Appeal

Application: The court denied the YuuZoo defendants' request for interlocutory appeal, emphasizing that such appeals are not intended for early review of factual determinations.

Reasoning: The YuuZoo Defendants' request for interlocutory appeal is denied as it is not meant for early review of factual determinations.

Motion for Reconsideration

Application: The YuuZoo defendants' motion for reconsideration was denied because the court found no new evidence or clear error that would change the prior ruling.

Reasoning: Consequently, the new evidence cannot justify reconsideration of the court's prior order.

Personal Jurisdiction

Application: The court found specific personal jurisdiction over the YuuZoo defendants due to their business activities in New York through agents.

Reasoning: The Court concluded that the YuuZoo Defendants had purposefully availed themselves of doing business in New York by using the WF Defendants to sell shares.