48 F. Supp. 3d 186
D. Conn.2014Background
- From 1998–2008, Glenn Beckworth managed Plastic Plus, a Louisiana partnership, with Bizier’s Old DTC and MPI structures; merger discussions led to a 2008 merger creating DTC, with a Shareholder Agreement allocating ownership among the parties.
- Post-merger, Bizier and Barbara King Bizier allegedly violated merger-related agreements, including salary manipulations, lease cancellations, and withholding DTC books; MPI distributions to Bizier’s children allegedly harmed other shareholders.
- Plaintiffs filed Beckworth I in NC state court (later removed) alleging breach of contracts, fiduciary breaches, access to books, and other corporate wrongdoing; that case was dismissed with prejudice, and no appeal followed.
- The present suit reasserts derivative and individual claims against Marcel Bizier and Barbara King Bizier, invoking federal jurisdiction and asserting several Connecticut and Delaware-law-inspired claims.
- Court applies Rule 12(b)(1)/(6) standards and various state-law preclusion rules to determine standing, res judicata, collateral estoppel, abstention, and the viability of each asserted cause of action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to pursue derivative claims | Beckworth plaintiffs allege fair representation for DTC and MPI. | Defendants argue lack of fair and adequate representation under Conn. Gen. Stat. § 33-721 and 52-572j; Rule 23.1. | Plaintiffs lack standing; derivative claims (First, Second, Third, Fourth, Fifth, Sixth, Seventh, Fourteenth, Sixteenth) dismissed. |
| Preclusion of prior actions (res judicata/collateral estoppel) | Claims should be analyzed for transactional similarity to Beckworth I. | Prior Beckworth I judgment bars related later claims. | Eighth, Tenth, Twelfth, Sixteenth barred by res judicata or collateral estoppel; Thirteenth and Fourteenth not barred by these theories. |
| Civil conspiracy viability | Fraud/other underlying tort supports conspiracy liability. | No actionable underlying tort identified in complaint. | Thirteenth Cause of Action is dismissed for lack of a viable underlying tort. |
| CUTPA applicability | Distractive corporate actions affect commerce; CUTPA applies. | Intracorporate disputes not subject to CUTPA. | Fourteenth Cause of Action dismissed as intracorporate; CUTPA not applicable. |
| Abstention and inspection rights | Involuntary dissolution and book/records inspection claims proceed in federal court. | Burford abstention applies to dissolution; Ninth/Eleventh handled accordingly. | Eleventh Cause abstained and dismissed; Ninth Cause retained jurisdiction but dismissed without prejudice for inspection demand failures. |
Key Cases Cited
- Fink v. Golenbock, 238 Conn. 183 (1996) (defines fair and adequate representation; complex corporate interest conflicts.)
- Twombly, 550 U.S. 544 (2007) (pleading must contain plausible claim, not mere conclusory statements.)
- Iqbal, 556 U.S. 662 (2009) (raises standard from Twombly for plausibility.)
- Barrett v. S. Connecticut Gas Co., 172 Conn. 362 (1977) (derivative standing and equitable representation framework.)
- Makarova v. United States, 201 F.3d 110 (2d Cir.2000) (standard for considering extrinsic materials on 12(b)(6).)
- Street v. Smart Corp., 157 N.C.App. 303 (2003) (illustrates dismissal with prejudice under certain grounds.)
- Aliff v. Joy Mfg. Co., 914 F.2d 39 (4th Cir.1990) (res judicata considerations and claim preclusion.)
- Laurel Sand & Gravel, Inc. v. Wilson, 519 F.3d 156 (4th Cir.2008) (broader res judicata/transactional approach.)
- Sartin v. Macik, 535 F.3d 284 (4th Cir.2008) (collateral estoppel require identity/adequacy criteria.)
- Clodfelter v. Republic of Sudan, 720 F.3d 199 (4th Cir.2013) (final judgment on the merits and identity of causes.)