Miller-Rich v. Altum Pharmaceuticals Inc.

Background

Nancy Miller-Rich sued Altum Pharmaceuticals Inc., BetterLife Pharma Inc., Ahmad Doroudian, Stephen Dattels, Krisztian Toth, Joseph Mimran, unidentified individuals, and unidentified corporations. Her amended complaint asserted five claims: federal securities fraud against Altum and Doroudian; common-law fraud against all defendants based on public statements and the merger; common-law fraud against Altum and Doroudian concerning her continued employment; breach of an employment agreement against Altum; and breach of a settlement agreement against Altum.

Altum, BetterLife, Doroudian, and Dattels appeared in the case. Toth, Mimran, the unidentified individuals, and the unidentified corporations did not appear, and the opinion states that Miller-Rich had not submitted proof that those defendants had been served. In the earlier round of this case, the court dismissed the appearing defendants’ claims based on forum non conveniens. The court also clarified in this opinion that the same dismissal applied to the non-appearing defendants because the same reasons controlled those claims.

Miller-Rich moved for reconsideration of the earlier decision. A reconsideration motion asks the court to revisit a prior ruling, but the court explained that such relief is available only in rare circumstances, generally when the court overlooked controlling decisions or important information that could reasonably change the result.

Forum-Selection Clause

The court denied reconsideration of its conclusion that the release attached to the settlement agreement contains a broad forum-selection clause. That clause provides that Miller-Rich and Altum submit to the exclusive jurisdiction of the courts of British Columbia for matters arising under or related to the release.

The court rejected Miller-Rich’s argument that the clause did not apply because she was not relying on the release to establish her claims. The settlement agreement and release were attached to each other, referred to each other, were executed at the same time, and addressed the terms of Miller-Rich’s departure from Altum. The court therefore treated them as part of one transaction that must be read together.

The court concluded that the claims were sufficiently connected to those agreements. The breach-of-settlement claim directly involved the settlement agreement. The employment-related claims concerned an agreement that the settlement agreement superseded and that the release addressed. The securities-fraud claim concerned shares received under contracts superseded by the settlement agreement and could implicate the settlement agreement’s releases.

The court also rejected Miller-Rich’s argument that the settlement agreement’s provision submitting the parties to British Columbia jurisdiction made the release’s exclusive forum clause ineffective. It held that the release provision was more specific because it applied to Miller-Rich and Altum, required exclusive jurisdiction, and covered matters arising under or related to the release. That more specific provision controlled over the settlement agreement’s more general provision.

The court further rejected the argument that Miller-Rich’s request to rescind the settlement agreement eliminated the forum clause. It stated that the forum clause determines where the rescission dispute will be heard and that Miller-Rich had not shown that the clause itself was obtained through fraud or coercion. The court also noted that Miller-Rich had not cited authority establishing that rescinding an agreement automatically revives a prior agreement or invalidates the agreement’s forum clause.

The court did not reach a new argument raised for the first time in Miller-Rich’s reply brief, asserting that BetterLife and Dattels could not benefit from the forum clause because they had not consented to personal jurisdiction in British Columbia. The court stated that the argument was waived because it was raised too late, while also noting that a non-signatory may in some circumstances enforce a forum clause when closely related to a signatory.

Alternative Forum Non Conveniens Analysis

In the alternative, the court held that dismissal was justified under the conventional forum non conveniens analysis. That analysis considers the deference owed to the plaintiff’s chosen forum, whether the proposed alternative forum is adequate, and the balance of private and public interests.

The court gave Miller-Rich’s choice of New York only some, rather than substantial, deference. Although she maintained an apartment in Manhattan, the court found that New Jersey was her home forum based on her statements and numerous documents identifying New Jersey as her residence or address. The court also found that much of the relevant evidence and many potential witnesses appeared to be in British Columbia, where Altum and BetterLife were headquartered and where their relevant records were located. The court additionally noted, without deciding, that Dattels had presented an argument that the court lacked personal jurisdiction over him.

The court found British Columbia to be an adequate alternative forum. The appearing defendants had agreed to accept service of process there, and the court had no reason to doubt that British Columbia courts would permit litigation of the subject matter of the dispute. The court rejected Miller-Rich’s concerns that Dattels might contest personal jurisdiction there or that a limitations defense might bar her claims, describing those concerns as unsupported and vague.

The public-interest factors did not particularly favor either side. The court stated that the common-law principles governing the contract and fraud claims were the same in New York and British Columbia, that both jurisdictions had court congestion, and that the case did not appear to be a localized controversy. The private-interest factors, however, considerably favored the defendants because the dispute involved Miller-Rich’s former employment with a British Columbian entity and much of the relevant corporate evidence and potential witnesses were in British Columbia.

Disposition

The court held that Miller-Rich had not identified overlooked controlling decisions or information that could change the earlier result. It adhered to its decision to dismiss the action without prejudice based on the release’s forum-selection clause and alternatively concluded that dismissal was warranted under the conventional forum non conveniens analysis.

The court’s final order states: “Plaintiff's motion for reconsideration is DENIED.” The Clerk of Court was directed to terminate the motion at ECF No. 81.