Brightman v. InMode Ltd

Background

Dr. Lori A. Brightman brought six claims against InMode Ltd. arising from an alleged stock-option arrangement connected to a clinical trial. Brightman alleged that, in 2009, she agreed to conduct the trial in exchange for 7,500 stock options. The parties later signed a Notice of Stock Option Award and a Stock Option Award Agreement in 2010. The written agreement stated that Brightman was entitled to 7,000 options and included expiration terms. It also contained an exclusive forum-selection clause requiring lawsuits arising from or relating to the agreement to be brought in the competent court in Haifa, Israel, with the parties submitting to that court’s exclusive jurisdiction.

Brightman alleged that she signed the agreement after an InMode representative told her it was only a placeholder and that a revised agreement would follow. No revised agreement was sent. She later learned that InMode had completed an initial public offering and asked about the options. InMode told her that the options had expired under the written agreement. Brightman also alleged that she could not exercise additional options she claimed to have earned under oral agreements for extra work.

Motion and arguments

InMode moved to dismiss primarily on the ground of forum non conveniens, a doctrine allowing a court to decline to hear a case when another available forum is more appropriate. The parties did not dispute that the forum-selection clause was subject to a presumption of enforceability. The court therefore considered whether Brightman made a sufficiently strong showing that enforcing the clause would be unreasonable or unjust.

Brightman argued that she was fraudulently induced to sign the 2010 Agreement because she was told it was a placeholder. The court explained that alleged fraud in inducing someone to sign an agreement generally does not defeat a forum-selection clause unless the alleged fraud specifically concerns that clause. The amended complaint and Brightman’s declaration did not allege that she objected to the clause or that InMode made a promise about it. The court also declined to consider new allegations raised for the first time in Brightman’s opposition brief. It added that, even if those allegations were considered, they lacked the details required to challenge a forum-selection clause based on fraud.

Brightman also argued that litigating in Israel would be unfair and inconvenient because of the cost of travel and retaining an Israeli attorney, and because many important witnesses were in the United States. The court acknowledged that New York would be more convenient for Brightman, but reasoned that one party would face inconvenience regardless of whether the case proceeded in Israel or New York. It concluded that the ordinary expense and inconvenience of litigating abroad were insufficient to overcome the clause.

Ruling and disposition

Judge Mary Kay Vyskocil granted InMode’s motion to dismiss. The action was dismissed without prejudice to being refiled in the proper forum, and the Clerk of Court was directed to close the pending motions and the case. Because the court dismissed the action based on the forum-selection clause, it did not reach InMode’s alternative arguments under Federal Rule of Civil Procedure 12(b)(6), including that the claims were time-barred or failed to state a claim.

Classification

This is a procedural order because the court dismissed the action on forum non conveniens grounds without deciding the underlying stock-option, contract, or fraud claims.