United States District Court, D. Hawaii
IAN BELL, Derivatively on Behalf of ECO SCIENCE SOLUTIONS, INC., Plaintiff,
JEFFERY TAYLOR, DON LEE TAYLOR, L. JOHN LEWIS, S. RANDALL OVESON, and GANNON GIGUIERE, Defendants, and ECO SCIENCE SOLUTIONS, INC., a Nevada corporation, Nominal Defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS OR,
ALTERNATIVELY, TO STAY ACTION
E. Kobayashi United States District Judge.
the Court is Defendants Jeffrey Taylor (“J.
Taylor”), Don Lee Taylor (“D. Taylor” and
collectively “the Taylors”), L. John Lewis, S.
Randall Oveson, Gannon Giguiere (collectively
“Individual Defendants”), and Eco Science
Solutions, Inc.'s (“Eco Science” and all
collectively “Defendants”) Motion to Dismiss or,
Alternatively, to Stay Action (“Motion”), filed
on March 16, 2018. [Dkt. no. 35.] On March 19, 2018,
Defendants filed a correction to the Motion, containing two
exhibits inadvertently not attached to the Motion
(“Correction”). [Dkt. no. 37.] Plaintiffs Ian
Bell, Derivatively on Behalf of Eco Science Solutions, Inc.
(“Bell”); and Marc D'Annunzio, Derivatively
on Behalf of Eco Science Solutions, Inc.
(“D'Annunzio” and collectively
“Plaintiffs”) filed their memorandum in
opposition on April 25, 2018, and Defendants filed their
reply on May 11, 2018. [Dkt. nos. 46, 47.] This matter came
on for hearing on June 4, 2018. Defendants' Motion is
hereby denied for the reasons set forth below.
action commenced on October 20, 2017. [Dkt. no. 1.] On
February 23, 2018, Plaintiffs filed their Verified
Consolidated Stockholder Derivative Complaint for Breach of
Fiduciary Duty, Aiding and Abetting, Waste of Corporate
Assets, and Unjust Enrichment (“Amended
Complaint”). [Dkt. no. 34.] Plaintiffs allege the
Individual Defendants profited by wrongfully manipulating the
share price of Eco Science. Plaintiffs assert four claims
under Nevada law: 1) breach of fiduciary duty (“Count
I”); [id. at ¶¶ 122-28;] 2) aiding
and abetting breach of fiduciary duty (“Count
II”); [id. at ¶¶ 129-33;] 3) waste
of corporate assets (“Count III”); [id.
at ¶¶ 134-38;] and 4) unjust enrichment
(“Count IV”), [id. at ¶¶
2017, a derivative action based on same the conduct as
alleged in the Amended Complaint was filed in the First
Judicial District Court of the State of Nevada in and for
Carson City (“Nevada state action” and
“Nevada state court”).The Nevada state action is
similar, but not identical, to the instant action. The Nevada
state action does not name Gannon Giguiere as a defendant,
and in addition to the four claims asserted in the Amended
Complaint, also asserts claims for abuse of control and gross
instant Motion seeks stay or dismissal of this action in
favor of the Nevada state action under the Colorado
Colorado River doctrine provides an exception to the
rule that, “‘[g]enerally, as between state and
federal courts, . . . the pendency of an action in the
state court is no bar to proceedings
concerning the same matter' in a federal court.”
R.R. St. & Co. v. Transp. Ins. Co., 656 F.3d
966, 975 (9th Cir. 2011) (emphasis and some alterations in
R.R. St.) (quoting Colorado River, 424 U.S.
at 817, 96 S.Ct. 1236).
Ninth Circuit has stated:
Under “exceedingly rare” circumstances, Smith
[v. Cent. Ariz. Water Conservation Dist.], 418 F.3d
[1028, ] 1033 [(9th Cir. 2005)], “considerations of
wise judicial administration, giving regard to conservation
of judicial resources and comprehensive disposition of
litigation, ” may counsel in favor of abstention,
Colo. River, 424 U.S. at 817, 96 S.Ct. 1236
(alteration omitted) (internal quotation marks omitted).
Colorado River and its progeny provide a
multi-pronged test for determining whether “exceptional
circumstances” exist warranting federal abstention from
concurrent federal and state proceedings. We evaluate eight
factors in assessing the appropriateness of a Colorado
River stay or dismissal:
(1) which court first assumed jurisdiction over any property
at stake; (2) the inconvenience of the federal forum; (3) the
desire to avoid piecemeal litigation; (4) the order in which
the forums obtained jurisdiction; (5) whether federal law or
state law provides the rule of decision on the merits; (6)
whether the state court proceedings can adequately protect
the rights of the federal litigants; (7) the desire to avoid
forum shopping; and (8) whether the state court proceedings
will resolve all issues before the federal court.
R.R. St., 656 F.3d at 978-79. . . .
Seneca Ins. Co., Inc. v. Strange Land, Inc., 862
F.3d 835, 841-42 (9th ...