IT services firm Information Technology Partners (ITP) owes network infrastructure company zColo $95,000 as part of a $175,000 settlement agreement the companies entered into July 15, alleged zColo's complaint Wednesday (docket 1:24-cv-01276) in U.S. District Court for Colorado. The settlement agreement resolved claims zColo previously asserted against ITP for failing to pay for services the plaintiff provided, but ITP hasn’t paid the full amount, the complaint alleged. The defendant failed to pay $1,921,685.74 to zColo, due under eight invoices dated between Aug. 1, 2021, and May 16, 2022, comprising $316,967.04 for services zColo already provided and $1,604,718.70 for the value of the services called for under the remainder of the agreement, said the complaint. Under the agreement, ITP was obligated to pay for the remainder of the order term upon early cancellation of the agreement, but it “terminated zColo’s services early and refused to compensate” it for services the plaintiff already provided and the remaining value of the agreement, said the complaint. The plaintiff filed a breach of contract suit Nov. 8, 2022, and entered into the settlement agreement Jan. 18, 2023, under which ITP agreed to pay $175,000 by July 15, 2023. The defendant made four payments totaling $80,000 but has failed to pay the remaining amount due, it said. The breach of settlement complaint seeks amounts owed zColo, plus attorneys’ costs and legal fees.

Intrusion, a publicly traded cybersecurity company, and its then-CEO Jack Blount, began in May 2020 promoting a new cybersecurity product, Intrusion Shield, using “materially false and misleading statements” about Blount’s background and experience, Intrusion’s success in marketing Shield to participants in its beta testing program and certain Intrusion contracts with prospective customers, alleged the SEC in a securities fraud complaint Tuesday (docket 4:24-cv-00375) in U.S. District Court for Eastern Texas in Marshall. Intrusion’s board fired Blount as CEO in July 2021, and he resigned from the board a month later, said the complaint. After Shield’s commercial launch in January 2021, Intrusion offered it as an SaaS product at $20 a month per user, with no annual contract requirement, it said. During the promotional efforts behind Shield, Intrusion made numerous false and misleading statements, which Blount “authored and/or approved,” it said. A May 2020 news release announcing Blount’s appointment as CEO claimed he had been on the boards of five public companies, it said. It also said that Blount had served as chief information officer at the Department of Agriculture, it said: “Neither statement was true. Blount approved both false press releases.” Intrusion told the public that 13 companies participated in the fall 2020 beta test for Shield, said the complaint. But only six of the 13 beta testers ultimately purchased Shield, it said. Intrusion and Blount made statements over the course of several months that “misrepresented” the beta testing program, it said. For example, a “written roadshow presentation” that Blount created in October 2020 claimed that Shield had won early adopter “validation” from at least one Fortune 100 company, but “none of the beta testers was a Fortune 100 company,” it said. Intrusion and Blount also misrepresented the company’s success “in converting beta test participants into paying Shield customers,” it said. A January 2021 news release claimed that all the companies participating in the beta program had made the decision to move forward with Shield in production, it said. The disclosure sent Intrusion shares soaring 18% the next trading day, but the disclosure was false, alleged the complaint. During Intrusion’s February 2021 earnings call, Blount stated that 90% of Intrusion’s beta customers “became paying subscribers on the Shield,” it said. The day after the earnings call, Intrusion’s stock price closed at $24.38, up almost 30% from the prior day’s close, and its trading volume increased approximately 629% from the day before, it said. But all the claims regarding Shield’s beta testing success were false and misleading, alleged the complaint. In early 2021, Blount touted interest in Shield from large corporations, “referencing Fortune 100 and 500 companies that were evaluating or testing Shield,” it said. Then in March 2021, he wrote a news release announcing that Customer A had signed an agreement to protect its network using Shield, it said. But the actual terms of that agreement provided for a renewal of an existing contract with Customer A for other Intrusion services, not Shield, said the complaint. The news release referenced Customer A’s 46,000 employees worldwide but didn’t include any information regarding the specific terms of the contract, it said. The complaint names Blount as the sole defendant. It seeks civil penalties against him, plus injunctive relief, preventing him from serving as an officer or director of a public company for an indeterminate amount of time.

Plaintiff Dennis Gromov may file a response by the close of business Friday to defendant Belkin’s April 26 motion to enforce the court’s Feb. 28 order that Gromov turn over to Belkin for testing the Samsung phone he used in generating his fraud allegations, said a clerk’s docket entry Tuesday (docket 1:22-cv-06918) in U.S. District Court for Northern Illinois in Chicago. The court isn't ordering a Belkin reply, it said. The company contends that Gromov is dragging his feet on the testing order in an attempt to avoid discovery. The plaintiff’s class action alleges that Belkin advertised power banks for mobile devices in a deceptive manner, and that the chargers don’t deliver nearly the amount of power promised in those ads (see 2301300008).

Telemundo sued Sora and Company1 for withholding funds that belonged to the plaintiff under a 2022 production agreement, said a Tuesday complaint (1:24-cv-21662) in U.S. District Court for Southern Florida in Miami. Under the contract, Telemundo was to receive all incentives, subsidies and sponsorships tied to Premios Tu Musica Urbano 2022, an awards show for Latin urban music genres, said the complaint. Sora’s profit would be determined by the production fee budgeted by the parties and a portion of ticket sales, the complaint said. That stipulation “was true whether a particular revenue or credit was obtained by or in the name of Sora & Co.,” since in many cases, certain incentives, sponsorships or subsidies will only be awarded to a local production company, the complaint said. Sora was “negligent” in obtaining certain subsidies and breached the agreement by withholding funds that "rightfully belonged to Telemundo," it alleged. After informal negotiations failed, the companies had a mediation under JAMS, which concluded with a confidential settlement agreement and release stating that Sora would pay Telemundo a settlement sum. Telemundo now seeks an order requiring Sora to comply with the schedule of payments after it didn’t make a required partial payment Feb. 28, it said.

Most people who have suffered no harm don’t file “eight-figure federal racketeering lawsuits,” said defendant WCO Spectrum’s reply brief Friday (docket 2:23-cv-04347) in U.S. District Court for Central California in Los Angeles in support of its motion to dismiss T-Mobile’s fraud complaint. For T-Mobile, “the calculus is different,” said the reply. T-Mobile alleges that WCO conspired with five co-defendants to form an illegal enterprise in which they made “sham offers” to schools to buy their educational broadband service spectrum licenses (see 2306030002). T-Mobile’s 59-plus-page complaint and its opposition to the motion to dismiss, doesn’t “once allege” that it’s worse off financially than it would have been but for the defendants’ alleged actions, said the reply. T-Mobile insists that, if not for the defendants’ supposed fraud, it would never have bought the wireless spectrum licenses at issue in this case, and instead would have continued leasing them, it said. But T-Mobile doesn’t allege that the licenses “are worth less than what it paid for them, or that buying them has put it in a worse position than leasing,” it said. To the contrary, the complaint suggests that owning the licenses “has been a boon to T-Mobile, enabling it to avoid a future increase in lease rates,” it said. That “stark omission” is fatal to T-Mobile’s case, said the reply. All of T-Mobile’s claims under the RICO statute and California law “require pleading and proof that the plaintiff has suffered actual harm at the hands of the defendant,” it said. So does Article III, it said. But T-Mobile “alleges no actual harm,” it said. Its only theory of loss, that it would have been even better off if it had been induced to buy the licenses, but at a lower price, “is a nonstarter,” it said. That’s because T-Mobile “makes clear that was never going to happen,” it said. As the 9th Circuit explained earlier this month, a plaintiff can’t state a claim “by complaining that it was tricked into entering a deal in which it received exactly what it bargained for, at exactly the price it was willing to pay,” it said.

U.S. District Judge Brian Wimes for Western Missouri in Kansas City should deny the motion of a Leander, Texas, couple to intervene as of right or for permissive intervention as additional co-plaintiffs in the multidistrict litigation arising from T-Mobile’s 2022 data breach (see 2404150007), said the class plaintiffs’ opposition Friday (docket 4:23-md-03073). Clark and Rosalind Collins claim that the existing plaintiffs can’t adequately represent their interests, but there’s “no basis” to grant the motion to intervene, the opposition said. Intervention as a matter of right under Rule 24(a) is improper “when the proposed intervenor is adequately represented,” and the 8th U.S. Circuit Court of Appeals “recognizes a presumption that class representatives adequately represent members of the class,” it said. The Collinses’ “scant and conclusory allegations” don’t overcome this presumption, and the court “must therefore deny their request for intervention as a matter of right,” it said. Permissive intervention under Rule 24(b) is “equally improper,” it said. The Collinses aren't only adequately represented by the class plaintiffs, but they also won’t be able “to contribute significantly to the factual development of the record or the adjudication of the legal issues,” it said. On the contrary, it’s “foreseeable” that the couple's intervention “would likely cause undue delay in the case” and prejudice the class plaintiffs, said the opposition. Nothing prevents the Collinses “from filing and prosecuting their own lawsuit over this matter,” it said. To the extent they are seeking to be named representatives in the pending consolidated complaint, that’s a matter under the “sole purview” of the interim co-lead counsel, it said. If this case settles or is otherwise resolved and the Collinses believe that their interests weren’t protected, they’re always free to opt out at that time, it said.

U.S. District Judge Susan Brnovich for Arizona in Phoenix granted Globalgurutech’s (GGT) Dec. 22 motion to compel Xfinity Mobile’s production of private investigator documents, said her Thursday order (docket 2:22-cv-01950). Xfinity Mobile’s Nov. 11, 2022, trademark infringement lawsuit alleges GGT and owner Jakob Zahara are phone traffickers selling improperly procured Xfinity Mobile (XM) cellphones. GGT’s motion to compel stems from a discovery dispute where the defendants requested that the court compel XM to produce “all communication, including emails, letters and texts” between the plaintiff and an undercover investigator it referenced in its amended complaint. Xfinity’s counsel hired Ina Xhoxhaj of Stumar Investigations to investigate GGT before it filed the complaint and plans to have her testify at trial, said the order. Xfinity included her declaration in support of its motion for expedited discovery. Xhoxhaj outlined what she believes is GGT’s “scheme of selling XM phones overseas,” including many facts XM alleges in its amended complaint, the order said. GGT requested that XM produce the communications between Stumar Investigations and XM. Xfinity declined, instead submitting one invoice from Stumar and a supplemental response claiming the rest of the requested documents were “privileged,” it said. XM also did not produce a privilege log for the request until it's “narrowly tailored in time and scope and defined in relevance,” the order said. GGT defendants seek the rest of the requested documents they need for trial. The court disagreed with XM’s assertion that Arizona Revised Statutes § 32-2455(A) prohibits the disclosure of a private investigator’s report to anyone other than the client. “A plain reading of the statute is that the person(s) or company conducting the licensed investigation may not divulge information gathered during the investigation to anyone other than a client," said the order, but it doesn't state or imply that a client "may not divulge this information as needed once they are the ones in possession of the information." In asserting that its communications with the investigator are protected under attorney-client privilege, XM “failed to establish” how the statute “carte blanche protects private investigator reports from discovery," and failed to meet its burden of establishing privilege without the statute, said the order. XM instead submitted a “boilerplate” refusal to provide the requested documents, the order said. Plaintiffs “have failed to establish the work-product doctrine or attorney-client privilege by failing to produce even a threadbare privilege log or persuade the Court that there is an outright ban on disclosure via statute,” said the order. The court won’t allow XM to use a “privileged report as a sword to prevent Defendant from adequately defending against the claims,” it said. The court finds that the private investigator documents aren’t privileged; but to “balance” XM’s concerns over future investigations with GGT defendants’ needs to defend themselves now, the court will order the parties to meet and confer on a protective order, the judge said.

The 9th U.S. Circuit Appeals Court is weighing for August or September oral argument in San Francisco plaintiff-appellant Narciso Fuentes' appeal against Dish Network, said its text-only docket notice Thursday (docket 23-15989). Fuentes is challenging Dish’s alleged violations of California’s Home Solicitation Sales Act for its refusal to provide “in-kind language translations” of its contracts and cancelation right disclosures (see 2312200012). Fuentes is asking the 9th Circuit to affirm the district court’s summary judgment order in his favor and to reverse the denial of his motion for remand.

The SEC seeks the entry of a final judgment by consent against Andy Bechtolsheim, co-founder and chief architect of Arista Networks, to settle insider trading fraud allegations against him, said the commission’s administrative motion Tuesday (docket 5:24-cv-01845) in U.S. District Court for Northern California in San Jose. Bechtolsheim agreed last month to pay a $923,740 penalty, without admitting or denying the allegations in the SEC’s complaint (see 2403270009). He also agreed to be barred from serving as an officer or director of a public company for five years. The SEC alleges Bechtolsheim “misappropriated material nonpublic information” about the impending acquisition of Acacia Communications and used it to trade Acacia securities the day before the announcement of the company's purchase by Cisco Systems. Entry of the proposed final judgment, to which Bechtolsheim consented, “would fully resolve the SEC’s claims” against him “and conclude this case by giving effect to the parties’ settlement,” said the commission’s motion. The proposed final judgment and consent “are fair as they are the result of arm’s-length negotiations” between counsel for the SEC and Bechtolsheim, it said.

Plaintiff Linda Surrency and defendant AT&T agreed to withdraw Surrency’s April 2 motion to compel discovery from AT&T (see 2404040035) and AT&T’s April 16 opposition to that motion (see 2404170003), said their joint notice and stipulation Tuesday (docket 8:23-cv-02323) in U.S. District Court for Middle Florida in Tampa. Surrency’s motion sought an order compelling AT&T to provide “complete answers” in discovery to her 10 interrogatories and 13 document requests. She contended she issued discovery requests to AT&T covering “central factual issues” in the case, but that AT&T refused to fully provide "responsive information and documents." Surrency’s Fair Credit Reporting Act complaint alleged that AT&T, Equifax and the National Consumer Telecom & Utilities Exchange (NCTUE) were “plainly deficient” in their investigations of Surrency’s credit reporting dispute over identity theft (see 2310160035). Surrency contends she learned that she was the victim of identity theft when she was informed that a credit reporting agency was associating her with a DirecTV account that was fraudulently opened in Texas under her name. She since settled her claims against Equifax and the NCTUE.