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Punjabi Cinema Investor Must Amend Lawsuit

(CN) - An investor must amend his claims that a film company misled him about finding a home in the U.S. market for Punjabi broadcasting, a federal judge ruled.

Harjot Khalsa claims that Suni Hali and his broadcast company Cinemaya Media misled him into investing $100,000 for the broadcasting venture Punjabi Media Inc., abbreviated in court filings as PMI.

India and Pakistan both have neighboring provinces called Punjab, which were united under British India. India's Punjab is the only state with a majority Sikh population in the country.

A failure by the defendants to timely respond to the complaint helped Khalsa secure a default against the defendants in San Jose, Calif., but U.S. District Judge Paul Grewal set that judgment aside last week.

"While culpable to a degree in the default entered against him, Hali was not entirely culpable in that he was acting on his own during this period and unfamiliar with the legal system," Grewal wrote.

To "mitigate any prejudice," the judge ordered the defendants "to pay $1,4526 for the fees incurred by Khalsa up until the moment that Hali contacted Khalsa regarding this lawsuit on September 30, 2013."

In finding personal jurisdiction over Cinemaya and Hali, Grewal noted that the defendant company undisputedly operated an office in California and that Hali made the alleged misrepresentations to Khalsa in San Jose.

Khalsa has also sufficiently established that the scheme cost him more than $75,000, thus satisfying the requirement for subject-matter jurisdiction, according to the ruling.

Grewal saw no reason to dismiss Khalsa's fraud claim under the statute of limitations, but was less forgiving on the conversion count.

Khalsa claims that he only came to know the grounds for the conversion claim after a 2012 audit of PMI's funds, but Grewal noted that Khalsa also stated "somewhat inconsistently that he either assigned his interest in PMI to a third party, or that he maintains an interest and is also a creditor."

"In light of this inconsistency Khalsa's claim is not plausible, especially considering that the entirety of the conversion claim is based on PMI's alleged loss from Hali's retaining the proceeds of PMI's sale," the 11-page opinion states.

Khalsa can try to salvage this claim in an amended complaint, however, "because the court cannot say with certainty that an amendment of Khalsa's dismissed conversion claim would be futile," according to the ruling.

The amended complaint is due Jan. 16.

Both parties must also file a joint case management statement so that the court may issue a timely scheduling order, Grewal added.

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