Just when you think you’re out, the Second Circuit pulls you back in.
That’s what DLA Piper must be thinking after a Second Circuit decision vacated a lower court’s dismissal of Chinese software company Link Motion’s $180 million malpractice lawsuit. The federal complaint was dismissed by Judge Victor Marrero as being time barred, but the Second Circuit found — without commenting on the timing — that the case should be litigated in New York state court.
The case arises from a shareholder derivative action, as reported by Reuters:
The 2018 lawsuit claimed Link Motion and three of its executives were stripping the company of valuable assets that were transferred to unknown third parties. Link Motion never responded to that lawsuit and consented to being placed into receivership.
Link Motion alleged in its legal malpractice case that DLA Piper could have raised defenses against the shareholder’s claims, arguing the firm’s malpractice cost it $180 million in damages.
DLA Piper asked and received permission from a Manhattan judge to withdraw as Link Motion’s counsel in the shareholder case four months after it was filed. The firm said Link Motion was unable to pay its legal fees and was unresponsive.
Attorney for Link Motion, Michael Maloney, said of the Second Circuit’s decision, “We look forward to litigating this case in state court.” While DLA’s lawyer, Kevin Rosen of Gibson, Dunn, is looking on the bright side, noting in a statement the appellate decision is “fully consistent with the fact that the substantive allegations are frivolous and sanctionable.”
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
