Antitrust Law Daily Wrap Up, ANTITRUST—WDMich: Emergency Motion for Extension of Time to Support Antitrust Counterclaim Fails in Mineral Rights Acquisition Dispute, (Jan 23, 2013)

By Jeffrey May, J.D.

In a breach-of-contract case brought by energy producer Encana Oil & Gas (USA), Inc. for the return of $1.8 million in earnest money paid pursuant to a letter of intent involving the acquisition of mineral rights, the defendants were not entitled to an extension of time to respond to Encana's motion to dismiss antitrust and other counterclaims, a federal district court in Michigan has ruled (Encana Oil & Gas (USA) Inc. v. Zaremba Family Farms, Inc., January 22, 2013, Scoville, J.).

Six days before their response was due, the defendants filed an “emergency motion” for extension of time to respond to Encana's motion to dismiss the counterclaim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, as well as a motion under Rule 12(c) based on the defendants' failure to allege a valid defense to Encana’s claim. The defendants contended that extra time was needed because Encana had not produced requested documents.

The defendants’ motion for extension of time is “based on a serious misunderstanding of the nature of motions brought under Rule 12(b)(6) and Rule 12(c) of the Federal Rules of Civil Procedure,” the court explained. These motions test the formal sufficiency of the claim for relief. The defendants needed to demonstrate that the allegations of the counterclaim stated a cognizable claim under the federal antitrust laws and under state tort law. The defendants’ desire to rely on documents to be produced in discovery was irrelevant.

The court went on to say that it felt “compelled to comment on the tendency of both counsel to ignore the rules of this court.” The court noted that the defendants filed a reply brief in support of their motion for extension of time, without first seeking leave of court in violation of local rules. In addition, it detailed how Encana improperly sent a fax to the court, complaining about certain factual statements in defendants’ reply brief and asking for the court’s “guidance” concerning perceived procedural irregularities. Local rules forbid such “letter briefs,” according to the court.

“Federal court litigation is not a free-for-all,” the court stated. “Lawyers are expected to follow the rules. Future infractions by either attorney will be sanctioned.”

This is Case No. 1:12-cv-369.

Attorneys: Frederick R. Juckniess (Schiff Hardin LLP) for Encana Oil & Gas (USA) Inc. Andrew J. McGuinness for Zaremba Family Farms, Inc.

Companies: Encana Oil & Gas (USA) Inc.; Zaremba Family Farms, Inc.

Cases: Antitrust MichiganNews