United States District Court, N.D. California
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT SUBJECT TO
William Alsup Judge
partnership agreement between two persons provided that no
lawsuit would be maintained without the approval of both.
Over the objection of one, the other brought a lawsuit in the
name of the partnership against third parties, who now move
to dismiss the suit as unauthorized. Subject to certain
conditions, their motion is Granted.
Total Recall Technologies.
Total Recall Technologies (“TRT”) is a general
partnership of Thomas Seidl and Ron Igra formed in 2010 in
Hawaii for the purpose of developing virtual reality
technology. Seidl and Igra entered into a written partnership
agreement to govern TRT. Paragraph 19 of the partnership
Thomas Seidl or Ron Igra has the right to Vito [sic]. This
means that for any decision regarding the company Ron Igra
and Thomas Seidl have to agree on any action with the
exception of an event laid out in point 20.
partnership agreement did not define the uncapitalized word
“company”; however, there is no dispute that
Paragraph 19 referred to decisions involving TRT. The
exception detailed in Paragraph 20 concerned a buy-out, which
all agree is not applicable here. The partnership agreement
contained an integration clause and stated that it could be
amended “only by the written agreement” of all
partners (Exh. A ¶¶ 16, 19-20).
August 2011, Seidl entered into an agreement with defendant
Palmer Luckey pursuant to which Luckey was to make a
prototype for a head-mounted virtual reality display
according to certain specifications supplied by Seidl. That
agreement included various provisions relating to
confidentiality and exclusivity. Although Seidl negotiated
the agreement with Luckey and ultimately signed it in his own
name, Igra provided the funding for materials for
Luckey’s prototype. This order presumes for the sake of
argument that Seidl made the agreement on behalf of TRT.
April 2012, without informing anyone at TRT, Luckey formed
Oculus LLC (later re-registered as defendant Oculus VR, LLC),
and he raised more than one hundred million dollars through
crowd-funding and venture financing in order to commercialize
head-mounted virtual reality displays.
complaint herein contends that Luckey violated the
confidentiality and exclusivity terms of the agreement
between Seidl and Luckey and misappropriated Seidl’s
Oculus and its fabulous financing became public, a running
dispute ensued between Seidl and Igra over whether to sue
Luckey for supposedly stealing their prototype ideas. Igra
wanted to sue. Seidl did not. Here are the details.
requested that Seidl provide him with a copy of his agreement
with Luckey. Seidl complied, via email, as follows (Exh. E)
(emphasis in original):
Here is the [P]almer contract.
DO NOT CONTACT HIM OR START ANY LEGAL ACTION WITHOUT TALKING
TO ME FIRST.
We need him. Much more useful as an ally.
months later, Seidl repeated that admonition in the following
exchange on Skype, a text messaging platform (Exh. F at
16038) (errors in original):
[IGRA]: Hi Tom. As I mentioned on Friday, I need to talk to
you about our case with Palmer Luckey. The matter is urgent
and I’ve waited for over 3 weeks to hear from you, I
can wait no longer. I’ve hired a litigation lawyer
[REDACTION]. Please send me copies of the emails or skype
conversations you had with him concerning the [head-mounted
display]. I’m going to give you until 5 pm tomorrow to
respond to me and if I don’t get your cooperation, I
will take legal action against you as well.
[SEIDL]: Sure take legal action aghainst me and see what
happens [SEIDL]: what you going to sue me for?
[SEIDL]: as I told you don’t sue palmer
March 2014, Facebook Inc. announced that it would acquire
Oculus for more than two billion dollars. Igra then followed
up with Seidl, again seeking his cooperation in a lawsuit
against Luckey so they could “both get rich, ”
but Seidl responded, “my views on taking [P]almer to
court are the same as before that it makes bad financial
sense for you and me” (Exh. F at 16042). Nevertheless,
Igra retained counsel.
April 2014, Igra commenced an action against Seidl in Hawaii
state court (where TRT was founded and based) seeking the
production of certain documents and information pertaining to
the agreement with Luckey. Igra dismissed that action without
prejudice once Seidl provided documents. Then, Igra wrote the
following email to Seidl (Exh. I at 8658-59):
I hope you will cooperate with me on this and withdraw your
veto and give us your support so that Robert [Stone of Quinn
Emanuel, Igra’s counsel, ] and I can continue working
on getting us the damage settlement.
The way I see it is that you have a choice to make between 2
1. If you cooperate with us on this case against Palmer we
can get rich from a damage settlement and I promise to make
it worthwhile for you in the future business we will be doing
2. You choose not to cooperate - in which case I will go to
great effort to get what I feel belongs to me and we will
both waste time and money fighting against each other in
court and veto actions. The chances of our business
succeeding together would be slim to none and eventually I