NEWSPRING MEZZANINE CAPITAL II, L.P. v. HAYES et al

Filing 80

ORDER THAT DEFENDANT UTILIPATH'S MOTION TO DISMISS COUNTS I, II, III, IV AND V OF BASTER McLINDON HAYES, JR'S AND UTILIPATH'S AMENDED CROSS-CLAIM IS DENIED. SIGNED BY HONORABLE GERALD A. MCHUGH ON 11/12/14. 11/12/14 ENTERED AND COPIES E-MAILED.(mbh, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA NEWSPRING MEZZANINE CAPITAL II, L.P., Plaintiff, v. HAYES, JR. et al., Defendants. This 12th : : : : : : : : CIVIL ACTION No. 14-1706 ORDER day of November, 2014, Defendant Utilipath, LLC’s Motion to Dismiss Counts I, II, III, IV, and V of Baxter McLindon Hayes, Jr.’s and Utilipath Holdings, Inc.’s Amended Cross-claim is DENIED for the reasons that follow: 1) With respect to Count I, taking the allegations of the Cross-claim Complaint collectively, Claimaints have sufficiently pleaded a Rule 10b-5 claim. Tellabs v. Makor Issues & Rights, Ltd. 551 U.S. 308, 323–24 (2007). 2) With respect to Count II, regardless of whether Pennsylvania or Delaware law applies, which I am not deciding, the allegations suffice to plead fraudulent inducement and reliance. 3) With respect to Count IV, although the adequacy of the Cross-claim is a closer issue under Ashcroft v. Iqbal, 556 U.S. 662 (2009), it is sufficient to withstand dismissal. 4) With respect to Counts III and V, the basis for denial of the Motion, without prejudice, is set forth in the accompanying Memorandum. /s/ Gerald Austin McHugh United States District Court Judge

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