Sharbat v. Iovance Biotherapeutics, Inc.

Background

Solomon Sharbat, Solomon Capital LLC, Solomon Capital 401k Trust, and Shelhav Raff sued Iovance Biotherapeutics, Inc. and Manish Singh. The plaintiffs alleged breach of contract, unjust enrichment, fraud, conversion, and indemnification. The dispute arose from alleged agreements and introductions that helped Lion Biotechnologies and related companies obtain financing and pursue a merger with Genesis Biopharma. The plaintiffs alleged that they were not paid all compensation due for qualified introductions and related transactions.

The case was initially filed in New York state court and was later removed to the U.S. District Court for the Southern District of New York. The plaintiffs’ amended complaint alleged several grounds for personal jurisdiction in New York, including the defendants’ business activity and transactions in the state.

The motions

Iovance and Singh each moved under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal when the court lacks personal jurisdiction over a defendant. Because there had been no jurisdictional discovery or evidentiary hearing, the court evaluated whether the plaintiffs had made a preliminary showing of jurisdiction. It treated the plaintiffs’ allegations as true and resolved factual doubts in their favor, while recognizing that unsupported conclusions were insufficient.

General jurisdiction

The court first considered general jurisdiction, which allows a court to hear any claims against a defendant because the defendant is essentially “at home” in the state. The court held that New York did not have general jurisdiction over Iovance. Iovance was incorporated in Delaware, had its principal place of business in California during the relevant period, and maintained only a small New York office with one employee after October 2016. The court concluded that this office and Iovance’s other New York connections did not make New York an exceptional place where the company was effectively at home.

The court also held that New York did not have general jurisdiction over Singh. Singh had continuously lived in California since 1997 and did not reside in New York, own real property there, hold a New York driver’s license, file New York State tax returns, or maintain a New York address or telephone listing. The court also explained that Singh’s contacts with New York through his corporate position could not establish general jurisdiction over him individually.

Specific jurisdiction

The court then considered specific jurisdiction, which applies when the claims arise from or relate to the defendant’s contacts with the forum. Under New York’s long-arm statute, the court found specific jurisdiction over Iovance because Iovance entered contractual relationships with New York corporations connected to the dispute, including Highline, Broadfin, Perceptive Advisors, Quogue, Iroquois, New World, and Roth. The New World agreement also contained New York choice-of-law and forum-selection provisions. The court further relied on allegations that Singh met potential investors in New York, that Iovance accepted investments from investors introduced by the plaintiffs, and that Singh traveled to New York to enter an agreement with Roth, Iovance’s lead placement agent.

The court also found specific jurisdiction over Singh. It relied on allegations that he traveled to New York to meet investors through Highline and to finalize Iovance’s agreement with Roth. The court found a substantial relationship between those activities and the plaintiffs’ claims against Singh, which included allegations that he tried to limit the fees the plaintiffs could collect from introductions, including the introduction to Highline.

Due process

The court held that exercising specific jurisdiction also satisfied constitutional due process. The defendants’ New York contacts were sufficiently related to the plaintiffs’ claims, and the defendants did not present arguments that exercising jurisdiction would be unreasonable. The court therefore concluded that personal jurisdiction existed under New York law and was consistent with the Constitution.

Disposition

The court denied Iovance’s motion and denied Singh’s motion to dismiss the complaint for lack of personal jurisdiction. The clerk was directed to terminate the two motions, and the parties were directed to appear for a telephone status conference.