Orrick Team Secures California Appeals Court Ruling Setting Aside $62 Million Judgment Against Four Tech Companies

January.02.2020

A California appeals court this week reversed a $62.2 million judgment in a lengthy litigation battle involving shareholder claims and IP rights, siding overwhelmingly with an Orrick team’s arguments that there was no evidentiary basis for the trial court’s findings against our technology company clients.

The Second District Court of Appeal issued its decision in a case brought nearly a decade ago by Christopher Adams, an alleged shareholder investor in a now-defunct company, EXPL, a venture to develop and market educational technology in China. The plaintiff maintained in his lawsuit that he was entitled to millions of dollars as a result of his long-ago investment in EXPL, claiming four other companies (Cirrus Education Inc, Cirrus (Beijing) Co. Ltd., Cirrus Ltd and iQ-Hub Pte Ltd.) were liable for the damages as so-called “successor entities” because Cirrus Education secured certain IP assets from EXPL during liquidation proceedings.

A Los Angeles Superior Court judge agreed with Adams, entering the massive judgment against the four entities without even giving them notice of the proceedings or an opportunity to defend themselves. An Orrick team, led by partner Michael Tu, then took on the appeal of the judgment on behalf of the four companies.

The Second District struck the judgment against our clients in its entirety, declining to remand the matter for further proceedings and concluding no retrial is warranted. The appeals court unanimously found the evidence at trial was insufficient as a matter of law to support the damages award.

In addition to Michael, the Orrick team included associates Kevin Askew and Sunny Hwang.