Light Field Lab v. Jones, 4:23-cv-05344

Plaintiff Light Field Lab, a Delaware corporation operating in California, terminated defendant Alan Jones, a Washington resident, from employment in June 2023.
Jones, a former at-will software engineer, was granted vested and unvested stock options under Light Field Lab’s 2017 Stock Incentive Plan ("the Plan"), with exercised options expiring three months after termination.
After his termination, Jones did not attempt to exercise his options before the expiry deadline.
Light Field Lab filed a single-count action for declaratory judgment, asserting an ongoing dispute over Jones’s entitlement to company equity and alleging Jones “threatens to sue” for equity interests in contravention of the Plan.
In pre-litigation correspondence, Jones (through counsel) threatened employment-related claims, demanding damages including the value (not the existence) of the options, and a possible extension of the exercise deadline, but not a dispute over the Plan itself.
The case is before the court on motions to dismiss, including a challenge to subject matter jurisdiction under the Declaratory Judgment Act (DJA).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there is an actual case or controversy under the DJA	There is a live dispute about the parties’ rights under the Plan regarding options/equity.	The dispute is about alleged employment claims and damages (value of options), not a contractual dispute over the Plan.	No live case or controversy exists; the dispute was over damages, not Plan interpretation.
Whether subject matter jurisdiction exists for declaratory judgment	Cites adverse claims regarding the scope of rights and obligations under the Plan.	Settlement discussions and pre-litigation documents show only employment-based claims, not a contract dispute.	Subject matter jurisdiction lacking; DJA claim not supported as required.
Whether the court should consider later motions to dismiss by Jones after he obtained counsel	Earlier pro se filings should act as a bar to successive motions.	Later, counseled motions address dispositive issues not reached in pro se filings; should be considered.	Court exercises discretion to consider subsequent (counseled) motions and denies earlier pro se motions as moot.
Whether the alleged potential harm to Light Field Lab is sufficiently immediate and real	Potential inability to grant options to others or raise funds.	Only cash value of options was sought by Jones, not equity interests; no real, immediate harm regarding equity exists.	Plaintiff failed to show immediacy/reality of harm; immediacy requirement not met.

Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (the Declaratory Judgment Act does not itself confer jurisdiction; underlying federal question or diversity required)
Wilton v. Seven Falls Co., 515 U.S. 277 (district courts have discretion to accept or reject DJA claims even if jurisdictional prerequisites are met)
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (courts should avoid resolving declaratory actions that constitute forum shopping or duplicative litigation)
Rhoades v. Avon Prod., Inc., 504 F.3d 1151 (DJA case or controversy requirement is identical to Article III)
Principal Life Ins. Co. v. Robinson, 394 F.3d 665 (court must ensure actual controversy exists before granting DJA relief; outlines test)
City of Reno v. Netflix, Inc., 52 F.4th 874 (a preemptive declaratory action must "borrow" the defendant's threatened claim as the underlying cause of action)
Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (declaratory judgments proper when parties dispute contract obligations before litigation)