Fischkoff v. Iovance Biotherapeutics, Inc.

339 F. Supp. 3d 408
District Court, S.D. Illinois·Decided October 17, 2018·No. 17 Civ. 5041 (AT) (GWG)·Published·Cited by 20 cases

Opinion

GABRIEL W. GORENSTEIN, United States Magistrate Judge

Steven Fischkoff brought this suit against Iovance Biotherapeutics, Inc. and Maria Fardis (collectively "Iovance") alleging that Iovance breached a contractual employment agreement, failed to pay him wages, and retaliated against him. Iovance counterclaimed asserting that Fischkoff violated his employment agreements and that he misappropriated trade secrets. Iovance now moves to amend its answer to add counterclaims for conversion, trespass to chattels, violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and violation of New Jersey's Theft and Related Offenses Act, N.J.S.A. § 2C:20-7 ; 20-20.1 For the reasons stated below, Iovance's motion is denied.

I. BACKGROUND

A. Factual Allegations in the Proposed Counterclaims

Because the resolution of Iovance's motion turns on whether its proposed counterclaims state a claim for relief, we "accept[ ] all factual allegations [in its proposed counterclaims] as true and draw[ ] all reasonable inferences in favor of the [counterclaimant]." Empire Merchants, LLC v. Reliable Churchill LLLP, 902 F.3d 132, 139 (2d Cir. 2018) (citation and internal quotation marks omitted). We also consider all "documents attached to *412the [proposed amended answer] as exhibits, and documents incorporated by reference in the [proposed amended answer]." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). We thus ignore the lengthy counter-recitation of facts contained in Fischkoff's opposition to the motion to amend. See P. Opp. at 2-5.

The proposed counterclaims allege in pertinent part as follows:

Iovance is a bio-pharmaceutical company with offices in California, Florida, and New York, that specializes in the development of drugs to treat cancer. Proposed Amended Answer and Counterclaims (annexed as Ex. A to Lunetta Decl.) ("PAA"), ¶¶ 12-13, 16. In February 2016, Fischkoff began working at Iovance as Chief Medical Officer and signed multiple documents and agreements reflecting the "importance of maintaining the confidentiality" of Iovance proprietary information. Id. ¶¶ 20-22. "[E]arly in his tenure," Fischkoff failed to meet certain "fundamental" employment obligations, including missing "operations goals, provid[ing] low quality outputs," and failing to "adequately manage clinical operations activities." Id. ¶ 25. Iovance terminated his employment on March 28, 2017. Id. ¶ 31.

Iovance alleges that, before his termination, Fischkoff sent a number of confidential Iovance documents to his personal email addresses and also mounted a personal hard drive onto his work computer that he used to receive uploaded confidential files. Id. ¶¶ 32-33. Included in these files were tax materials that contained "approximately 285 files" containing social security numbers of others, as well as the entire contents of Fischkoff's email inbox. Id. ¶ 35. Iovance alleges that Fischkoff never had authorized access to the documents he copied, and that he violated the Company Employee Handbook and the Employee Conduct Policy, which limited Fischkoff's access to company documents. Id. ¶¶ 36-38.

Iovance alleges that the copied files include materials that "represent a significant portion of the intangible value of the Company, as they relate to its two most important clinical trials as well as its overall strategy and business." Id. ¶ 41. It alleges that Fischkoff was later hired by a competitor and that his possession of company materials "would likely have resulted" in their disclosure to the competitor. Id. ¶ 45. "Despite numerous requests and obligations to do so, Plaintiff did not return all Confidential Materials and Human Resources, Finance, and Personal Information ... for a period of at least 15 months." Id. ¶ 58; accord id. ¶ 60.

B. Procedural History

The case began in June 2017 when Fischkoff filed breach of contract and New York Labor Law claims against Iovance in New York state court. See Complaint, Steven Fischkoff v. Lion Biotechnologies, Inc. et al., Index No. 653231/2017 (N.Y. Sup. Ct.) (annexed as Ex. A to Notice of Removal) (Docket # 1). After Iovance removed the action to federal court, it filed an answer that included counterclaims for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) breach of fiduciary duty/duty of loyalty; and (4) misappropriation of trade secrets under 18 U.S.C. § 1836 and New York common law. See Defendants' Partial Answer and Defenses to Plaintiff's Complaint and Lion's Counterclaims Against Steven Fischkoff, filed July 13, 2017 (Docket # 7).

Iovance's proposed amended answer includes four additional counterclaims: conversion; trespass to chattels; violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 ; and violations of New Jersey's Theft and Related Offenses Act, *413N.J.S.A. §§ 2C:20-7 ; 20-20. See PAA ¶¶ 84-111.

II. LAW GOVERNING MOTIONS TO AMEND

Fed. R. Civ. P. 15(a)(2) provides that leave to amend a pleading should be "freely give[n] ... when justice so requires." See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). A court must have "good reason" to deny leave to amend. See Acito v. IMCERA Grp., 47 F.3d 47, 55 (2d Cir. 1995). Leave to amend may be denied in situations of "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, [or] undue prejudice to the opposing party." Foman, 371 U.S. at 182

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Fischkoff v. Iovance Biotherapeutics, Inc., 339 F. Supp. 3d 408 (S.D. Ill. 2018).

339 F. Supp. 3d 408 (Fischkoff v. Iovance Biotherapeutics, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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