Defendants try to block lawyer from out of state
Attorneys for the buyers of Grove Farm Co. dispute language and the length of the complaint
Defendants in a lawsuit over the sale of Grove Farm Co. Inc. to media mogul Steve Case are trying to block an out-of-state lawyer from representing former shareholders who have sued in Hawaii state court.
The motion seeks to bar Matthew Simmons, a Maryland lawyer experienced in business litigation, from representing former shareholders who have sued Case, former Grove Farm executives and board members.
The suit, filed in state Circuit Court on Kauai, alleges the defendants breached their fiduciary duties and defrauded shareholders by withholding pertinent information when the company was entertaining offers from potential buyers in late 2000.
As a result, the suit alleges, the company fetched far less than it was worth when Case paid $26 million for it in December 2000.
The complaint also names as a defendant the law firm of Case Bigelow & Lombardi; at the time of the sale, Grove Farm was represented by the firm, while Steve Case was represented by his father, Dan, a partner in the firm.
Dan Case is also a minority shareholder and director of Oahu Publications Inc., which publishes the Honolulu Star-Bulletin.
The suit asks for $750 million in compensatory damages and punitive damages of approximately three times that amount, or $2 billion, from each of three defendant groups: Steve Case, the board members and Case Bigelow & Lombardi.
The complaint was filed by John McDermott, a Honolulu lawyer who is serving as local plaintiffs' counsel.
However, the complaint also bears Simmons' name, indicating that he has asked for the court's permission to work with McDermott.
A sole practitioner in Bethesda, Md., Simmons has worked as an associate for the Delaware office of the 1,750-lawyer corporate firm Skadden, Arps, Slate, Meagher & Flom and for Schnader, Harrison, Segal & Lewis, LLP in Philadelphia.
He graduated in 1996 from Georgetown University Law Center, where he was selected for the Order of the Coif, a legal honor society.
Out-of-state lawyers not licensed to practice law in Hawaii are allowed to advise local counsel on specific cases with permission of a judge.
But in their motion, the board-of-director defendants argue that Simmons should be barred because his complaint is too long and "is filled with improper argument, innuendo, and caustic comments which find no proper place in a complaint."
Circuit Court Judge Kathleen Watanabe is to hear arguments this afternoon.
Simmons' 188-page complaint provides a detailed narrative of alleged events surrounding the sale of Grove Farm to Case. Although many of the allegations appear to be based on documents and testimony gathered by plaintiffs' lawyers in similar lawsuits that are pending or on appeal in state courts, defense lawyers have argued that Simmons should be disqualified in part because of his word choice in his complaint.
For example, the defense motion takes issue with the complaint's reference to Steve Case as a "'shark' buyer" who "according to the Forbes 400 list, ... is one of the wealthiest men in the United States."
Case co-founded AOL, engineered its merger with Time Warner to create the world's largest media conglomerate, and ultimately became chairman of AOL Time Warner.
The defense also takes issue with the complaint's sheer length, saying it violates Hawaii civil procedure rules, which require a suit to be a "short and plain statement of the claim showing that the pleader is entitled to relief."
Simmons declined to comment. Corey Park, who filed the motion to block Simmons, didn't return calls.
Gary Grimmer, an attorney for Dan Case, could not be reached.
Paul Alston, an attorney for Steve Case, said the state court suit and a similar one filed in federal court simply "recycle old and unfounded allegations."
"The merger between Grove Farm and Steve Case's company was approved by almost 99 percent of the company's shareholders -- including the plaintiffs in these lawsuits -- in a process that was thorough and appropriate," Alston said. "This new challenge, brought by a few disgruntled investors who apparently have a bad case of sellers' remorse, has no merit.
"Mr. Case looks forward to being fully vindicated by the courts in both cases," Alston said.