Wednesday, December 4, 2013

Jinro America, Inc. v. Secure Investments, Inc. case brief

Jinro America, Inc. v. Secure Investments, Inc. case brief summary
266 F.3d 993 (9th Cir. 2001)

Plaintiff corporations sued defendants, corporations and individuals, alleging breach of contract, fraud, and racketeering regarding a business deal that unraveled. The trial was bifurcated to address defendants' sham contract allegation. After a jury determined that the transaction was a sham, the United States District Court for the District of Arizona granted summary judgment to defendants. Plaintiffs appealed.

Plaintiffs, Korean and Washington corporations, alleged that defendants breached a contract for the buying and selling of frozen chicken. Defendants alleged that the contract was a sham used as a cover for the parties' underlying roll program, an illegal investment scheme in Korea. During the portion of the bifurcated trial involving whether the contract was a sham, defendants' expert testified that Korean companies had a propensity to engage in fraudulent activity.


  • On appeal, the court reversed the district court's grant of summary judgment to defendants. 
  • Defendant's expert, a private investigator, should not have been allowed to testify as he did because his testimony was unreliable under Fed. R. Evid. 702 and was unduly prejudicial under Fed. R. Evid. 403. 
  • The court also determined that: 
  • (1) bifurcation was proper, 
  • (2) the parole evidence rule allowed the admission of evidence to prove that the written agreement was actually a cover-up for fraudulent or illegal activity, and 
  • (3) the district court acted appropriately in fashioning the foreign law jury instructions.

Summary judgment in favor of defendants was reversed.

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