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Exobox Technologies Corp. v. Tsambis

United States District Court, D. Nevada

January 6, 2015

ZACHARY TSAMBIS, et al., Defendant.


RICHARD F. BOULWARE, District Judge.


Exobox Technologies Corp. ("Exobox"), a Nevada Corporation, has filed suit against Zachary Tsambis, a Pennsylvania resident, in the District of Nevada, alleging Intentional Interference with Prospective Economic Advantage and Civil Conspiracy for Tsambis's role in interrupting a deal to acquire a majority equity interest in another company. Claiming that he lacks contacts with Nevada sufficient to subject him to personal jurisdiction, Tsambis has, in the instant motion, moved for Summary Judgment under Fed.R.Civ.P. 12(b)(2). This Court, however, for the reasons discussed below, finds that Tsambis is subject to personal jurisdiction in Nevada.


A. Facts

Exobox is a Nevada corporation publicly traded on the over-the-counter market. Exobox has a principle place of business in Long Beach, California and conducts business in Clark County, Nevada.

Zachary Tsambis is a resident of Allegheny County, Pennsylvania and claims to have been an Exobox shareholder at all relevant times; Exobox claims Tsambis was not a shareholder. Tsambis is a moderator on the Investorshub ("iHub") website and regularly participates in online messages boards discussing investments, including investments in Exobox. Exobox claims Tsambis has claimed to be a custodian of records for Exobox and that Tsambis offered Exobox's former CEO $20, 000 to step down and appoint Tsambis CEO. Tsambis does not reside in Nevada and does not do business in Nevada. Tsambis registered two corporations in Nevada, which he claims never materialized into operating businesses.

In early 2014, Exobox announced publicly in a Form 8-K Current Report that it was going to acquire a majority of the equity interests in Cherubim Builders Group, LLC from PDX Partners, Inc. ("Share Exchange"). Exobox claims that the Share Exchange would have raised significant and much-needed funds and that Exobox shareholders would maintain their interest in Exobox through the new public company and would also be given shares of the emergent, publicly traded Cherubim Builders Group company. Tsambis claims the transaction served no legitimate business purpose and violated a shareholders' vote. The Share Exchange deal was set to close by February 28, 2014.

Tsambis used the iHub and other message boards to make statements about Exobox and threatened to file a lawsuit to enjoin Exobox from consummating the Share Exchange. Tsambis stated on the iHub forums, "I'm of the opinion that this transaction will not go through as it is stated, " Compl. ¶ 14, ECF No. 1, "our holdings will become burnt toast if we don't stop this (dilution) deal, " and "I'm of the strong belief that some fireworks may go off real soon that may stop the proposed [deal], " Compl. ¶ 15 (alteration in original). Tsambis also contacted Exobox's CEO directly, saying, "But know there is a die-hard group of large shareholders who I believe would rather see this ship sink then [sic] to see someone else make off with any of the leftover goods...." Compl. ¶ 16 (alteration in original). Later, Tsambis used iHub to solicit and obtain funds from other Exobox shareholders to finance the threatened lawsuit. On or about February 28, 2014, Tsambis used these solicited funds to file a lawsuit seeking to enjoin the Share Exchange, in Harris County, Texas. The Share Exchange was cancelled; Exobox claims this caused it monetary damages.

B. Procedure

On April 3, 2014, Exobox filed the Complaint in the present case in the District of Nevada. In its Complaint, Exobox claims two causes of action. First, Exobox claims Tsambis intentionally interfered with prospective economic advantage by taking actions which resulted in the termination of the Share Exchange. Compl. ¶ 31-40. Second, Exobox claims Tsambis and other to-be-named Exobox shareholders joined in a civil conspiracy to finance litigation intended to disrupt and prevent the Share Exchange. Compl. ¶ 41-47.

On June 13, 2014, Tsambis filed the instant Motion to Dismiss for lack of personal jurisdiction. ECF No. 8.

III. Motion to Strike

Nestled in Exobox's response to Tsambis's Motion to Dismiss is what appears to be a motion to strike the instant Motion to Dismiss for failure to comply with District of Nevada Local Rule IA 10-2. Opp'n to Mot. to Dismiss 2:16-24, ECF No. 15. Local Rule IA 10-2(a) states, "An attorney who is not a member of the Bar of this Court, who has been retained or appointed to appear in a particular case, may do so only with permission of this Court." The Local rules go on to require that "[a]n attorney whose verified petition is pending shall take no action in this case beyond filing the first pleading or motion." D. Nev. R. IA 10-2(c). Local Rule IA 10-2(k) provides that "[f]ailure to comply timely with this Rule may result in the striking of any and all documents previously filed by such attorney, the imposition of other sanctions, or both."

Here, Tsambis filed motions on behalf of himself that Exobox claims were "ghostwritten" by Suzanne J. DuBose, an attorney who is not licensed to practice law in Nevada. Opp'n to Mot. to Dismiss 2:20-23. This claim is supported by, among other things, the curious "Certificate of Conference" attached to Tsambis's instant Motion. Mot. to Dismiss 17. However, the language of Local Rule IA 10-2 clearly and narrowly contemplates restrictions only on who may "appear" before this Court in a particular case and not broader questions about who may practice law in the State of Nevada. This Court declines to consider whether the alleged ghostwriting implicates any Nevada laws, and it declines, at this time, to inquire into this matter in the context of deciding the instant motion. Local Rule IA 10-2 is a discretionary rule as to discipline and sanctions. The Court declines to exercise such discretion at this time.

Exobox's motion to strike is ...

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