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 Puma Biotechnology, Inc.,
("Puma") alleging libel per se and libel per
quod [D.E. 1, 5]. On February 6, 2017, the court
denied Puma's motion to dismiss for lack of personal
jurisdiction, to dismiss for failure to state a claim, to
transfer the case, and for relief under California's
Anti-SLAPP statute [D.E. 77]. On February 21, 2017, Puma
answered Eshelman's complaint and asserted counterclaims
of libel per se and libel per quod [D.E. 86].
March 14, 2017, Eshelman moved to dismiss Puma's
counterclaims pursuant to Federal Rule of Civil Procedure
12(b)(6) and to strike Puma's counterclaims under
California's Anti-SLAPP statute [D.E. 100] and filed a
memorandum in support [D.E. 101]. On March 29, 2017, Puma
responded in opposition to Eshelman's motion to dismiss
[D.E. 104]. On April 18, 2017, Eshelman replied [D.E. 109].
As explained below, the court grants Eshelman's motion to
court discussed the details of Eshelman's factual
allegations and his claims against Puma in detail in this
court's order denying Puma's motion to dismiss for
lack of personal jurisdiction, to transfer the case, and for
relief under California's Anti-SLAPP statute. See [D.E.
77] 1-3. Essentially, Eshelman alleged that on January 7,
2016, in the course of a proxy contest Eshelman initiated,
Puma posted a link on its investor-relations website to
download an "Investor Presentation" that falsely
stated or gave the impression that Eshelman had been
personally and culpably involved in clinical-trial fraud,
when in fact Eshelman's company had been the victim of
such fraud. See id.; Compl. [D.E. 5] ¶¶
46-82. One of Puma's allegedly libelous statements in the
Investor Presentation was that "Eshelman's
misrepresentations are no surprise given his history."
Compl. ¶¶ 50, 70. Eshelman did not claim that this
statement was libelous because it falsely gave the impression
that Eshelman had made "misrepresentations."
Rather, the basis of Eshelman's libel claims was
Puma's suggestion that Eshelman's "history"
included personal, culpable involvement in clinical-trial
fraud. Id. ¶¶ 46-82.
asserts counterclaims of libel per se and libel per
quod on the basis of statements Eshelman made on
November 30, 2015, and January 4, 2016, during the same proxy
contest. See Ans. [D.E. 86] ¶¶ 25-73. Puma
counterclaims that Eshelman misrepresented the experience of
members of Puma's board of directors and falsely accused
Puma of making false and misleading statements to investors
in violation of securities law. Puma alleges that in a
November 30, 2015, presentation Eshelman libeled Puma by
falsely asserting that the "current board has limited
public company corporate governance and oversight experience,
" that the board's "Drug Development and
Regulatory" experience was limited to the experience of
one board member, that the board's experience with
mergers and acquisitions was limited to one board member,
that "the current board members have limited oncology
background, " and that "only one current board
member ha[d] significant experience" with
"[i]nvestment." Id. ¶¶ 32, 57.
Puma also alleges that, in a January 4, 2016, presentation,
Eshelman falsely asserted or suggested that Puma had lied to
shareholders and concealed information by contrasting
statements Puma made on July 22, 2014, with statements Puma
made on November 30, 2015, and claiming the statements were
inconsistent. Id. ¶¶ 26-31, 47-52.
moves to dismiss Puma's counterclaims as time-barred, or
in the alternative for failure to state a claim. This court
has subject-matter jurisdiction based on diversity
jurisdiction. Thus, the court applies state substantive
principles and federal procedural rules. See Erie R.R. v.
Tompkins. 304 U.S. 64, 78-80 (1938); Dixon v.
Edwards. 290 F.3d 699, 710 (4th Cir. 2002).
motion to dismiss under Rule 12(b)(6) tests the legal and
factual sufficiency of the complaint. See Fed.R.Civ.P.
12(b)(6); Ashcroft v. Iqbal. 556 U.S. 662, 678
(2009); Bell Atl. Corp. v. Twombly. 550 U.S. 544,
570 (2007); Coleman v. Md. Court of Appeals. 626
F.3d 187, 190 (4th Cir. 2010), affd, 566 U.S. 30 (2012);
Giarratano v. Johnson. 521 F.3d 298, 302 (4th Cir.
2008); accord Erickson v. Pardus. 551 U.S. 89, 93-94
(2007) (per curiam). The court "accepts all well-pled
facts as true and construes these facts in the light most
favorable to the plaintiff in weighing the legal sufficiency
of the complaint." Nemet Chevrolet Ltd. v.
Consumeraffairs.com. Inc.. 591 F.3d 250, 255 (4th Cir.
2009); see Burbach Broad. Co. of Del. v. Elkins
Radio Corp.. 278 F.3d 401, 405-06 (4th Cir. 2002). The
court need not, however, accept as true a complaint's
"legal conclusions, elements of a cause of action, and
bare assertions devoid of further factual enhancement."
Nemet Chevrolet Ltd.. 591 F.3d at 255. Moreover,
this court can consider documents relied on by the parties in
their briefing if they are integral to and explicitly relied
on in the complaint, and their authenticity is undisputed.
See Occupy Columbia v. Haley. 738 F.3d 107, 117 n.7
(4th Cir. 2013).
motion to dismiss under Rule 12(b)(6) "generally cannot
reach the merits of an affirmative defense, such as the
defense that the plaintiff s claim is time-barred."
Goodman v. Praxair. Inc.. 494 F.3d 458, 464 (4th
Cir. 2007) (en banc). Nevertheless, a district court may
reach the merits of an affirmative defense "if all facts
necessary to the affirmative defense clearly appear on the
face of the complaint." Id. (emphasis omitted).
"A complaint showing that the statute of limitations has
run on the claim is the most common situation in which the
affirmative defense appears on the face of the pleading,
rendering dismissal appropriate." Brooks v. City of
Winston-Salem. N.C. . 85 F.3d 178, 181 (4th Cir. 1996)
(quotation omitted). Thus, failure to comply with the statute
of limitations is "a recognized basis for
dismissal" under Rule 12(b)(6). Evans v. Trinity
Indus.. Inc.. 137 F.Supp.3d 877, 881 (E.D. Va. 2015);
see Brooks, 85 F.3d at 181; West v. ITT Cont'1 Rakinp
Co. 683 F.2d l 845, 846 (4th Cir.
motion to dismiss requires the court to consider the
parties' state-law claims, counterclaims, and defenses.
Accordingly, the court must predict how the Supreme Court of
the state in question would rule on any disputed state-law
issue. See Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt
Beverage Co. of S.C.. 433 F.3d 365, 369 (4th Cir. 2005).
In doing so, the courtmust look first to opinions of that
state's highest court. See Stahle v. CTS Corp..
817 F.3d 96, 100 (4th Cir. 2016). If there are no governing
opinions from the highest court of the relevant state, this
court "may consider lower court opinions[, ]...
treatises, and the practices of other states." Twin
City Fire Ins. Co.. 433 F.3d at 369 (quotation
omitted). In doing so, a federal court "should
not create or expand [a] [s]tate's public policy."
Time Warner Entm't-Advance/Newhouse P'ship v.
Carteret-Craven Elec. Membership Corp.. 506 F.3d 304,
314 (4th Cir. 2007) (first alteration in original) (quotation
omitted); Wade v. Danek Med.. Inc.. 182 F.3d 281,
286 (4th Cir. 1999). Moreover, in predicting how the highest
court of a state would address an issue, this court must
"follow the decision of an intermediate state appellate
court unless there is persuasive data that the highest court
would decide differently." Toloczko. 728 F.3d
determine which state's limitations period applies to a
state-law claim, a federal district court exercising
diversity jurisdiction applies the choice-of-law rules of the
forum state, in this case North Carolina. See Guaranty
Tr. Co. v. York. 326 U.S. 99, 110 (1945); MedCap
Corp. v. Betsy Johnson Health Care Sys.. Inc.. 16
F.App'x 180, 182 (4th Cir. 2001) (per curiam)
(unpublished); Snknlnwski v. Flatizer, 769 F.2d 975,
977 (4th Cir. 1985). Under North Carolina's choice-of-law
rules, North Carolina's procedural rules apply to actions
brought in North Carolina, and a statute of limitations is
considered a procedural rule. See Boudreau v.
Baughman. 322 N.C. 331, 340, 368 S.E.2d 849, 857 (1988).
In determining whether a rule is substantive or procedural
under this analysis, "the federal district court accepts
the characterization placed on the involved rule by the
[forum] state court." Sokolowski. 769 F.2d at
978; see Thornton v. Cessna Aircraft Co.. 886 F.2d
85, 88 (4th Cir. 1989). When a federal court is sitting in
diversity and the forum state would consider a statute of
limitations to be a procedural rule and would therefore apply
its own statute of limitations, the federal court also
applies the forum state's statute of limitations.
Sokolowski. 769 F.2d at 978.
North Carolina, libel suits must be filed within one year of
the libelous statement's publication. See Henderson
v. Town of Hope Mills. No. 5:13-CV-635-FL, 2013 WL
5954816, at *4 (E.D. N.C. Nov. 6, 2013) (unpublished),
affd. 549 F.App'x 195 (4th Cir. 2015) (per
curiam) (unpublished); Gordon v. Fredle. 206 N.C.
734, 734, 175 S.E. 126, 126 (1934); Philips v. Pitt Cty.
Mem.Hosp..Inc..222 N.C.App. 511, 526, 731 S.E.2d 462,
472 (2012); N.C. Gen. Stat. § 1-54(3). A one-year
statute of limitations also applies in California. See
Perfect 10. Inc. v. Visa lnt'l Serv.. Ass'n.
494 F.3d 788, 810 (9th Cir. 2007); Shively v.
Bozanich.31 Cal.4th 1230, 1246, 80 P.3d 676, 685 (Cal.
2003); Cal. Code Civ. Proc. § 340(c). Puma filed its
counterclaims on February 21, 2017, alleging that Eshelman
published libelous ...