In our last story about Alexandra Marchuk’s lawsuit against Faruqi & Faruqi and one of its top partners, Juan Monteverde, we noted the acrimonious nature of the dispute: “The case just seems so heated and so personal, and both parties are litigating it in a no-holds-barred style.”
When we last checked in on the case, Marchuk’s lawyers announced their intent to seek sanctions against the defendants. The basis for that move: the defendants’ counterclaims against Marchuk, alleging that she defamed the defendants by creating or helping to create an anonymous Gmail account that was used to disseminate her lawsuit over email. Marchuk’s lawyers denied that their client emailed her complaint around and said that they would seek sanctions from the defendants for the “frivolous and abusive” counterclaims — which sought a whopping $15 million from Marchuk.
Until now, the stakes have only gotten higher and higher. But today brings word of a possible de-escalation in this hard-fought battle….
Regarding Marchuk’s declaration of an intention to seek sanctions, I previously wrote:
What are Marchuk’s lawyers, Harry Lipman and Thomas Chase of Rottenberg Lipman Rich, going for here? It strikes me as a public relations move, a way of expressing indignation about the counterclaims to the many people following this case. I doubt that Lipman and Chase think they can actually get the defendants to drop the counterclaims; the Faruqis and Monteverde aren’t so easily cowed.
That prediction turned out to be wrong. Earlier today, the defendants moved to dismiss their counterclaims. This must come as a relief to Alexandra Marchuk, even if she never felt seriously threatened by the counterclaims; it’s not fun to be a defendant in a lawsuit.
Why are the defendants dropping their counterclaims? A cynic might say they don’t want to be hit with sanctions. But their explanation is that despite their best efforts, including the hiring of an outside firm to conduct a forensic investigation, “the computer used to create the Gmail Account and send the email and Complaint cannot be conclusively established.” For additional detail, check out the memorandum in support of the motion.
Marchuk’s lawyers filed an entertaining response. Here’s an excerpt:
After describing the background of the counterclaims and the discovery from Google that should have caused the defendants to drop the counterclaims months ago, Marchuk’s lawyers conclude:
Marchuk’s attorneys argue that the Court should “condition the voluntary dismissal of the Counterclaims on payment by Defendants to Plaintiff of a reasonable sanction.” For more, check out Harry Lipman’s declaration.
So it looks the defendants’ counterclaims are going away. But fear not, connoisseurs of law firm litigation: the original civil action is still going strong, and it can’t be kicked as easily as one of Juan Monteverde’s dubious shareholder lawsuits.
Alexandra Marchuk v. Faruqi & Faruqi: Defendants’ Memorandum In Support Of Their Motion To Voluntarily Dismiss Their Counterclaims [U.S. District Court for the Southern District of New York]
Declaration Of Harry W. Lipman In Response To Defendants’ Motion [U.S. District Court for the Southern District of New York]
Earlier: Alexandra Marchuk v. Faruqi & Faruqi: Seeking Sanctions
Alexandra Marchuk v. Faruqi & Faruqi: The ‘He Said, She Said’ Battle Rages On
Alexandra Marchuk v. Faruqi & Faruqi: The Latest Allegations
The Delaware Court Of Chancery Seems Annoyed With Juan Monteverde
Can This Litigation Get Any Uglier? Alexandra Marchuk Amends Her Complaint Against Faruqi & Faruqi
Faruqi & Faruqi: A Kinder, Gentler Law Firm?
Lawsuit of the Day: Nobody Puts Faruqi in the Corner
Lawsuit of the Day: A Super-Salacious Suit Against A ‘Legend’ of the Bar