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Monday, July 15, 2024 | Back issues
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Biotech Accused of Fraud Must Drop Counterclaims

SAN DIEGO (CN) - Two investors who sued a biotech startup for allegedly conning them out of more than $1 million worth of shares cannot be countersued for fraud, a federal judge ruled.

After Immunosyn claimed the investors had breached their agreement to hold them harmless for the investment deal, the investors moved to dismiss the counterclaims under the anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) doctrine.

"The court finds defendants have not sufficiently established a probability of prevailing on the merits of their breach of contract claim to survive plaintiffs' anti-SLAPP motion," U.S. District Dana M. Sabraw ruled on Jan. 19. "Although defendants allege the existence of each of the necessary elements of a breach of contract claim, they do not submit adequate proof of each element."

Though Immunosym asserted that the investors had made false representations to indemnify them when signing the agreement, Sabraw found "they in no way allege how these representations were false, how defendants relied upon them, or how such representations have caused defendants damages."

"Since defendants' fraud counterclaim is based, at least in part, on plaintiffs' privileged claims asserted in the instant action, defendants cannot prevail on this claim and plaintiffs' anti-SLAPP motion is granted as to it," Sabraw continued.

Immunosym's claims for intentional and negligent interference, as well for attorneys' fees, survived the motion for now, but Sabraw added that he will rule on them after Immunosym conducts some limited discovery and supplemental briefing.

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