Supreme Court Rules Investor Lawsuit Can Continue in Tennessee Courts

November 26, 2013

The Tennessee Supreme Court unanimously decided today that a lawsuit filed by an investor against a Tennessee movie start-up company could proceed in state court.

The case involves a lawsuit first filed in a California state court by Jeffrey R. Cooper against Phillip, Richard and David Glasser, claiming that they misrepresented facts to induce Mr. Cooper to invest $500,000 in their production company, Hi-Def Entertainment.

Richard Glasser moved to dismiss the suit because a portion of the contract stated that any conflicts had to be resolved in a court in Williamson or Davidson counties. Mr. Cooper voluntarily dismissed the suit and filed it in federal court in Middle Tennessee, including both federal and state claims. Then defendant Phillip Glasser moved to dismiss the suit because the deadline for filing Mr. Cooper’s federal claims had passed. Mr. Cooper again voluntarily dismissed the suit.

Mr. Cooper next filed an action in Tennessee state court on several claims that were included in both earlier suits. The defendants sought a judgment in the case based on a federal rule that precludes proceeding on a claim after two voluntary dismissals. Mr. Cooper argued that he relied on Tennessee’s rule that allows for three dismissals before barring a claim.

The Tennessee Supreme Court addressed whether state or federal law controlled in this instance. The Court determined that the voluntary federal dismissals did not decide the case on the merits and that the claims were still viable in Tennessee. Tennessee procedural rules allow for a case to be dismissed two times “without prejudice.”

“Moreover, we find no discernible reason why permitting Mr. Cooper to pursue his claims in our courts would be ‘incompatible with federal interests,’” wrote Justice Janice M. Holder.

Read the unanimous opinion in Jeffrey R. Cooper v. Phillip Glasser et al., authored by Justice Holder.