At a pre-motion hearing on Monday, November 4, attorneys for Barnes & Noble told federal judge John G. Koeltl that they planned to proceed with a motion for summary judgment on two of the three claims filed against them by fired CEO Demos Parneros. But the judge responded with a warning: "It's a risky motion," Koeltl repeatedly observed.
In the brief 20 minute conference, Koeltl spoke frankly with the parties, telling them that once he decides a motion for summary judgment, the position for both parties will be dramatically different, "for better or worse." And more than once over the course of the hearing, Koeltl suggested the parties take this opportunity to seek mediation and to revive their settlement talks.
"Both sides will never be in as good a position as they are right now to resolve the case," Koeltl said.
Attorneys for both sides conceded they had spoken generally about mediation, but that no talks were currently scheduled.
The short hearing came after B&N attorneys last month told the court they would move for summary judgment on the two most contentious and potentially costly claims filed by the retailer's former CEO in his lawsuit against the company—the claims for defamation and for “breach of good faith.”
Specifically, B&N attorneys argued that summary judgment is appropriate on both counts because now that discovery is complete, they believe the facts do not support a judgment for Parneros on either of those counts.
Attorneys for Parneros, meanwhile, said they remained confident that the claims in the fired CEO's bombshell lawsuit would stand up, stressing that many facts remain in dispute following discovery. In a letter filed with the court this week, Parneros' attorneys said the former CEO was clearly defamed and that considering the facts for both a motion for summary judgment and then again at trial would be "wasteful."
Koeltl noted that he couldn't stop B&N attorneys from seeking summary judgment, acknowledging the upside for B&N would be knocking out the biggest claims in Parneros' case ahead of a forthcoming trial. But he warned that winning would be a difficult task. "It's not straightforward. It's not easy," Koeltl warned of winning summary judgment. "And the downside, is an adverse decision on the motion."
In a letter to the court last month, B&N attorneys said that defeating Parneros' two major claims via summary judgment would leave only Parneros’s claim that B&N breached his employment contract, for which Parneros, the filing states, seeks “approximately $6.4 million. Parneros is seeking “approximately $70 million” in damages for the defamation claim alone.
B&N is also countersuing Parneros, alleging that the former CEO purposely botched a potential deal for the company in 2018, and that his abusive behavior, including a claim of sexual harassment, violated company policy.
Pending a final order to be filed in the coming days, Koeltl approved a schedule proposed by the parties that would have B&N's motion for summary judgment filed by November 22; Parneros' response is due by January 15, 2020; and a B&N reply is due by February 12, 2020.
