United States District Court, E.D. North Carolina, Southern Division
FREDRIC N. ESHELMAN, Plaintiff,
PUMA BIOTECHNOLOGY, INC., Defendant.
C. DEVER, III Chief United States District Judge
February 2, 2016, Fredric N. Eshelman ("Eshelman")
filed a complaint against Alan. H. Auerbach
("Auerbach") and Puma Biotechnology, Inc.
("Puma") alleging libel per se and libel per
quod [D.E. 1, 5]. On April 4, 2016, Puma and Auerbach
moved to dismiss Eshelman's complaint for lack of
personal jurisdiction and failure to state a claim upon which
relief can be granted, moved to transfer the case, moved for
relief under California's Anti-SLAPP statute [D.E. 20],
and filed a memorandum in support [D.E. 21]. On May 2, 2016,
Eshelman voluntarily dismissed Auerbach as a defendant [D.E.
27], responded in opposition to Puma's motion [D.E. 28],
and filed a cross-motion concerning Puma's motion for
relief under the Anti-SLAPP statute [D.E. 29]. On May 19,
2016, Puma replied [D.E. 31]. On November 23, 2016, with
leave of the court, Eshelman responded to Puma's reply
[D.E. 55, 62]. On December 7, 2016, Puma replied to
Eshelman's supplemental response [D.E. 69]. As explained
below, the court denies Puma's motion to dismiss for lack
of personal jurisdiction, denies Puma's motion to
transfer, denies Puma's motion to dismiss for failure to
state a claim, denies Puma's motion for relief under
California's Anti-SLAPP statute, and dismisses as moot
Eshelman's cross-motion concerning the Anti-SLAPP
resides in Wilmington, North Carolina. Compl. [D.E. 5] ¶
5. Eshelman founded Pharmaceutical Product Development
("PPD"). Id. Puma is a Delaware
corporation based in Los Angeles, California. Id.
¶ 6. More than 50 Puma stockholders (including Eshelman)
reside in North Carolina. See Id. ¶ 10.
November 1, 2001, PPD contracted with Aventis Pharmaceuticals
("Aventis") for research services concerning
"a clinical study... to determine the safety and
effectiveness" of the drugKetek. Id.
¶¶ 22-23. During the Ketek trial, a clinical
investigator falsified documents. Id. ¶¶
24-25. Eshelman was the CEO of PPD when these events
May 18 and June 4, 2015, Eshelman acquired stock in Puma.
[D.E. 28-1] ¶ 19. On October 28, 2015, Eshelman
solicited proxy votes for a proposal to increase Puma's
board of directors from five to nine directors, and proposed
that Eshelman and three others be nominated to the new board
positions. Compl. ¶ 29; [D.E. 20-6, 22]. On December 10,
2015, Puma responded to Eshelman's proxy solicitation by
mailing a consent revocation to stockholders, including those
in North Carolina, which directed stockholders to the
homepage of Puma's investor-relations website for further
consent-revocation materials. Compl. ¶ 10; [D.E. 20-5]
January 7, 2016, Puma posted a link on the homepage of
Puma's investor-relations website to download a .pdf file
of an "Investor Presentation" addressing
Eshelman's proposal. Compl. ¶ 33. Three slides of
the Investor Presentation were titled "Eshelman
Continues to Demonstrate a Lack of Integrity."
Id.; [D.E. 5-1] 13-15. One of those slides stated
that "Eshelman's misrepresentations are no surprise
given his history, " that Eshelman was the CEO of PPD
"when it managed a clinical trial during the development
of the antibiotic drug Ketek, " that "[f]raud was
uncovered in this trial by the FDA's Office of Criminal
Investigation, " that "[a]s [CEO] of PPD, Eshelman
was forced to testify before Congress regarding PPD's
involvement in this clinical trial fraud in2008, " and
that "Eshelman was replaced as CEO for PPD in
2009." Compl. ¶ 33; [D.E. 5-1] 14 (emphasis
omitted). Another slide with the same title stated that
"Puma's Board does not believe that someone who was
involved in clinical trial fraud that was uncovered by the
FDA should be on the Board of Directors of a public company;
particularly a company that is in the process of seeking FDA
approval." Compl. ¶ 33; [D.E. 5-1] 15.
January 20, 2016, Eshelman sent a letter to Puma and its
board of directors, demanding that Puma apologize for and
retract the statements in the Investor Presentation, which
Eshelman said were defamatory. Compl. ¶¶ 34-36. On
January 27, 2016, Puma posted a document titled
"[a]dditional proxy soliciting materials" to their
investor-relations homepage. Id. ¶¶ 36-37.
In the document, Puma disclosed the contents of
Eshelman's January 20th letter, stated that the Investor
Presentation "included certain factual and publicly
available information regarding Eshelman's background,
" and rejected Eshelman's demands. Id.;
[D.E. 5-2] 5-10.
statements in the Investor Presentation and the January 27th
rej ection of Eshelman's demands harmed Eshelman's
professional reputation. Compl. ¶¶ 39-45.
February 2, 2016, Eshelman filed a complaint alleging
state-law claims of libel per se and libel per
quod against Puma and Auerbach. On April 4, 2016,
Puma and Auerbach moved to dismiss Eshelman's complaint
for lack of personal jurisdiction and failure to state a
claim upon which relief can be granted, moved to transfer the
case, moved for relief under California's Anti-SLAPP
statute [D.E. 20], and filed a memorandum in support [D.E.
21]. On May 2, 2016, Eshelman voluntarily dismissed Auerbach
as a defendant [D.E. 27], responded in opposition to
Puma's motion [D.E. 28], and filed a cross-motion
concerning Puma's motion for relief under the Anti-SLAPP
statute [D.E. 29]. On May 19, 2016, Puma replied [D.E. 31].
On November 23, 2016, with leave of court, Eshelman responded
to Puma's reply [D.E. 55, 62]. On December 7, 2016, Puma
replied to Eshelman's supplemental response [D.E. 69].
moves to dismiss under Federal Rule of Civil Procedure
12(b)(2) for lack of personal jurisdiction. To defeat a Rule
12(b)(2) motion, a plaintiff typically must prove by a
preponderance of the evidence that the court can exercise
personal jurisdiction. See Grayson v. Anderson, 816
F.3d 262, 268 (4th Cir. 2016); Combs v. Bakker, 886
F.2d 673, 676 (4th Cir. 1989). If a court rules on a motion
to dismiss for lack of personal jurisdiction without an
evidentiary hearing, the plaintiff need only establish a
prima facie case. Combs, 886 F.2d at 676. When
determining whether the plaintiff has met this burden, courts
resolve all factual disputes and draw all reasonable
inferences in the light most favorable to the plaintiff.
Id.; see Mylan Labs.. Inc. v. Akzo. N.V., 2
F.3d 56, 60 (4th Cir. 1993). However, an evidentiary hearing
need not include live testimony, but merely the opportunity
for the parties to present evidence and argument on the
question of jurisdiction. Grayson. 816 F.3d at 268.
After the court has considered such evidence and argument, it
determines whether a plaintiff have proven by a preponderance
of the evidence that the court has personal jurisdiction over
the defendant. Id.
federal court may exercise personal jurisdiction over a
person to the extent allowed by state law in the state where
the federal court sits. See Fed.R.Civ.P. 4(e)(1), (h)(1)(A).
The North Carolina long-arm statute extends personal
jurisdiction over out-of-state defendants in all cases in
which the Fourteenth Amendment's Due Process Clause
permits. See Dillon v. Numismatic Funding Corp., 291
N.C. 674, 676, 231 S.E.2d 629, 630-31 (1977); Century
Data Sys., Inc. v. McDonald,109 N.C.App. 425, 427, 428
S.E.2d 190, 191 (1993). To determine whether the North
Carolina long-arm statute reaches a particular defendant,
courts analyze whether the defendant has sufficient minimum
contacts with North Carolina such that "maintenance of
the suit does not offend ...