Link Motion Inc. v DLA Piper LLP (US) 2025 NY Slip Op 30568(U) February 14, 2025 Supreme Court, New York County Docket Number: Index No. 653322/2022 Judge: Andrew Borrok has an unusual opening line stating that the only question really before the court is whether to sanction plaintiff or not.

“Upon the foregoing documents as discussed on the record (trs. 2.6.25, 2.14.25) and for the reasons set forth below, the question is not whether DLA Piper LLP (US) and Caryn G. Schechtman (collectively, DLA)’s motion (Mtn. Seq. No. 003) to dismiss the Amended
Complaint (the AC; NYSCEF Doc. No. 29) should be GRANTED. There is no question that
under New York law, it must be. The crucial issue is only whether the branch of DLA’s motion (Mtn. Seq. No. 004) seeking sanctions against Link Motion Inc. (Link Motion) under Rule 130-1.1 should be granted. Two federal jurists have answered this question affirmatively under Rule 11. Upon further review after oral argument and following the additional questions asked of Link Motion (tr. 2.14.25), this Court is compelled to grant the branch of the motion seeking reasonable attorney’s fees and costs in having to defend this litigation. Simply put, it would be an improvident exercise of discretion not to award sanctions under the circumstances (see Ray v Ray, 232 AD3d 497, 499 [1st Dept 2024]).”

“Plaintiff filed this legal-malpractice, shareholder-derivative complaint, on behalf
of Link Motion Inc. (“Link Motion”), on December 20, 2021. See ECF No. 1
(“Compl.”) ¶¶ 1-2. The legal-malpractice allegations in the Complaint relate to
conduct by Defendants that occurred in a separate lawsuit filed by Wayne Baliga
against Link Motion and several of its officers and directors, including Dr.
Vincent Wenyong Shi (“Shi”). See ECF No. 1 ¶¶ 1-2, No. 18-CV-11642.
Baliga commenced his suit on December 13, 2018, alleging that Shi and others
were looting the company of its most valuable assets and seeking the appointment of an independent receiver to prevent further dissipation of the company’s
assets. Id. ¶¶ 15-22, 31, 37. That same day, Baliga notified Schechtman and DLA
Piper via e-mail of the filing of the complaint and of Baliga’s intent to file an
Order to Show Cause (“OSC”) the next day, seeking a Temporary Restraining
Order (“TRO”). See ECF No. 37-1; Compl. ¶ 50. On December 13, Schechtman
forwarded the e-mail from Baliga’s counsel to Shi and another Link Motion
director, asking them to “[p]lease instruct DLA if you would like us to respond.”
ECF No. 37-1 at 2. Schechtman also stated that they “should have a call
immediately to discuss—as action will be taking place tomorrow,” and she added
that “DLA has still not received a retainer so we would need to receive that as
well.” Id. Later that same day, Schechtman followed up, asking Shi, “[d]id you
see the lawsuit that was filed. They are going into court in 12 hours to get a
restraining order against the company.” ECF No. 37-2 at 5. The next day,
December 14, Schechtman asked Dr. Shi, “Do you want me to send an
associate?” Id. at 4. Shi responded, “OK, thanks.” Id. Schechtman subsequently
told Shi in an e-mail that DLA Piper would “send an associate to Court in 12
hours to advise the Court that we have received no instruction from the Company
due to the time difference and language barriers. It is possible that the Court will
grant the application anyway.” See ECF No. 37-3 at 2. Schechtman added, “How
would you like us to handle?” Id.
On December 14, Baliga filed an OSC, seeking a TRO. See ECF No. 7, No. 18-
CV-11642; see also Compl. ¶ 48. Defendants appeared on behalf of Link Motion
at the hearing before the Court. Compl. ¶¶ 52, 58. On December 14, the Court
entered a TRO, restraining and enjoining Link Motion, Dr. Shi, and the other
defendants, from liquidating, transferring, or dissipating any assets of the
company. ECF No. 7, No. 18-CV-11642.”

[Many additional facts and events are omitted here for lack of space, but can be reviewed in the linked case]

“Defendants are correct that sanctions under Rule 11 are appropriate here. In
commencing the instant action, neither Plaintiff nor its counsel could have
reasonably believed that the allegations in the Complaint—concerning Link
Motion’s purported inability to transfer the FL Mobile shares because of the
appointment of the Receiver—had evidentiary support. Likewise, Plaintiff’s
legal-malpractice claims suffers from multiple deficiencies that viewed
collectively should have led counsel to conclude that the claim had no chance of
success. Finally, Defendants raised all of these grounds in a letter to Plaintiff’s
counsel on March 7, 2022. See ECF No. 16. Plaintiff nevertheless declined to voluntarily withdraw the action until six months later, in September
2022, see ECF No. 22, but only after Plaintiff’s counsel filed a similar lawsuit,
this time on behalf of Link Motion, against Defendants in state court. See ECF
No. 1, No. 22-CV-8313. Then, after the direct legal-malpractice claim by Link
Motion was dismissed with prejudice by Judge Marrero, Plaintiff baselessly
argued that it should be permitted to withdraw its voluntary dismissal of this
action and amend the Complaint. Simply put, Plaintiff’s decision to continue
pursuing this legal-malpractice claim against Defendants is objectively
unreasonable and can only be viewed as an attempt to harass Defendants and
cause reputational harm.”