United States District Court, E.D. Louisiana
ORDER AND REASONS
the Court is Plaintiffs RedHawk Holdings Corp. and Beechwood
Properties, LLC's (“Plaintiffs”) Motion for
New Trial (Rec. Doc. 129) and Defendants Daniel Schreiber,
individually, and as Trustee of the Schreiber Living Trust -
DTD 2/08/95's (“Defendants”) Opposition to
Motion for New Trial (Rec. Doc. 134). There is no reply. For
the reasons discussed below, IT IS ORDERED
that the motion for new trial is DENIED.
AND PROCEDURAL HISTORY
case is about an unsuccessful business venture between two
experienced businessmen. Plaintiff RedHawk Holdings
Corporation (“RedHawk”) is a Nevada corporation
with its principal place of business in Lafayette Parish,
Louisiana. See Rec. Doc. 1 at 1. Plaintiff Beechwood
Properties, LLC (“Beechwood”) is a Louisiana
limited liability company with its principal place of
business in Lafayette Parish, Louisiana. See id. G.
Darcy Klug is the CFO and majority shareholder of both
Plaintiffs. See Rec. Doc. 74-1 at 9. Defendant
Daniel J. Schreiber (“Defendant Schreiber”) is
the former CEO and a former Director of RedHawk. See
id. Defendant Schreiber is also the trustee and
beneficial owner of at least some of the
securities held by Defendant Schreiber Living Trust -
DTD 2/08/95. See Rec. Doc. 76-1 at 1-2.
March 2014, American Medical Distributors, Inc.
(“AMD”) entered into an Asset Purchase Agreement
(“APA”) with RedHawk. See Rec. Doc. 1 at
2. RedHawk agreed to issue AMD or its designees approximately
half of RedHawk's shares. See id. at 2-3. In
exchange, AMD agreed to pay RedHawk $60, 000 and to assign
RedHawk all of AMD's assets and property. See
id. at 3. The principal asset was exclusive distribution
rights of non-contact thermometers in North, Central, and
South America. See Rec. Doc. 74-1 at 12.
transaction, known as the AMD-RedHawk Transaction, was
executed as provided in the APA. See Rec. Doc. 1 at
4. Plaintiff Beechwood and Defendants provided AMD $60, 000;
thereafter, AMD paid $60, 000 to RedHawk and assigned RedHawk
all of its assets including the distribution rights of the
non-contact thermometers. See id. In exchange,
RedHawk assigned the agreed-upon shares to four designees of
AMD. See id. The four designees were Beechwood,
Schreiber Trust, Howard Taylor, and Paul Rachmuth. See
stemming from the executed transaction, Plaintiffs allege
numerous fraudulent misrepresentations and omissions and
contract breaches by Defendant Schreiber. See Rec.
Doc. 74-1 at 9. There are three main allegations that give
rise to their cause of action. First, Plaintiffs allege that
Defendant, along with Paul Rachmuth who served as a counsel
for AMD and Beechwood in the transaction, failed to disclose
possible patent infringement litigation that significantly
impaired the value of the distribution rights assigned to
RedHawk. See Rec. Doc. 1 at 4. Second, Defendant
Schreiber failed to uphold his agreement with Beechwood to
split RedHawk's expenses on a 50/50 basis and contribute
to other assets. See id. at 11-14. Third, Defendant
Schreiber failed to disclose his past SEC issues to RedHawk
and its investors. See Rec. Doc. 76 at
January 31, 2017, Plaintiffs filed a six-claim Complaint.
See Rec. Doc. 1. Specifically, Plaintiffs allege (1)
Securities Fraud under Sections 10B and 20 of the Exchange
Act and SEC Rule 10b-5; (2) Securities Fraud under Sections
18 and 20 of the Exchange Act; (3) Fraud under State Law; (4)
By Beechwood for Breach of Contract; (5) By Beechwood for
Unjust Enrichment; and (6) By RedHawk for Defendant
Schreiber's Breach of Fiduciary Duties. See id.
15, 2018, Defendants filed a Motion for Summary Judgment and
Alternatively Judgment on the Pleadings (Rec. Doc. 74-1). On
July 19, 2018, Plaintiffs filed a Response and Memorandum in
Opposition (Rec. Doc. 78). On August 2, 2018, Defendants
filed a Reply Memorandum (Rec. Doc. 80).
October 15, 2018, this Court entered an Order and Reasons,
granting summary judgment in favor of Defendants and thereby
dismissing all of Plaintiffs' claims (Rec. Doc. 122). On
November 13, 2018, Plaintiffs filed a Motion for New Trial,
seeking reconsideration of summary judgment in favor of
Defendants (Rec. Doc. 129). On November 27, 2018, Defendants
filed an Opposition to Motion for New Trial (Rec. Doc. 134).
On December 5, 2018, Plaintiffs filed a motion for leave to
file a reply, but the motion was denied (Rec. Doc. Nos. 135,
54(b) states that “. . . any order . . . that
adjudicates fewer than all the claims . . . does not end the
action . . . and may be revised at any time before the entry
of a judgment adjudicating all the claims . . ..”
Accordingly, a district court possesses inherent power to
reconsider, rescind, or modify an interlocutory order for
cause seen by it to be sufficient. See Melancon v.
Texaco, Inc., 659 F.2d 551, 553 (5th Cir. 1981).
Fifth Circuit, Rule 54(b) motions to reconsider interlocutory
orders are analyzed and decided as Rule 59(e) motions to
alter or amend final judgments. See NUSSLI US, LLC v.
Motorsports Host Comm., Inc., 2016 U.S. Dist. LEXIS
152915 *1, *19 (E.D. La. 2015). Specifically, in the Eastern
District of Louisiana, courts generally analyze four factors.
See Bernard v. Grefer, 2015 U.S. Dist. LEXIS 71039
*1, *16 (E.D. La. 2015). The four factors are
(1) the motion is necessary to correct a manifest error of
law or fact upon which the judgment is based; (2) the movant
presents newly discovered or previously unavailable evidence;
(3) the motion is necessary in order to prevent manifest
injustice; or (4) the motion is justified by an intervening