Brooklyn, NY – A federal judge in the Eastern District of New York has denied a motion by Government Employees Insurance Co. (GEICO) to dismiss a long-running contract dispute with Capricorn Management Systems, Inc., ruling that the court retains jurisdiction despite the insurer’s challenge.

U.S. Circuit Judge Denny Chin, sitting by designation, issued the decision in a memorandum opinion addressing GEICO’s motion to dismiss for lack of subject matter jurisdiction. The case, which began in 2015, centers on Capricorn’s claims that GEICO breached a royalty and lease agreement, misused confidential information, and converted proprietary materials.

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After nearly a decade of litigation and multiple summary judgment rulings, the dispute narrowed to a single surviving claim — breach of contract — which was dismissed without prejudice in 2023 under a stipulation allowing Capricorn to refile within six months of a mandate from the U.S. Court of Appeals for the Second Circuit.

The Second Circuit later dismissed Capricorn’s appeal for lack of a final order, and the case was remanded. On the same day the appellate court issued its mandate in June 2024, Capricorn moved to reinstate the action under the agreed stipulation. GEICO opposed, arguing the court no longer had jurisdiction.

Court affirms jurisdiction under stipulation terms

Judge Chin disagreed, finding that the parties’ stipulation and the court’s prior orders clearly permitted Capricorn to refile Count I — the breach of contract claim — in the Eastern District of New York. The stipulation explicitly allowed any refiled claims to “relate back” to the original May 20, 2015 filing date, preserving compliance with applicable statutes of limitation.

GEICO’s jurisdictional motion denied by federal court
Capricorn’s breach of contract claim to proceed under prior stipulation
Case originally filed in 2015 revived for trial scheduling

The decision reopens the door for Capricorn to pursue damages stemming from its contract dispute with GEICO, a case that has been through years of procedural twists involving summary judgment rulings, appeals, and jurisdictional challenges.

Judge Chin directed the parties to proceed with pretrial preparations, including scheduling a trial date for Capricorn’s revived breach of contract claim.

Capricorn’s decade-long battle with GEICO heads back to trial court