94875.1 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

____________________________________ 

 ) 

LAWRENCE OBSTFELD, ) 

individually and derivatively ) 

on behalf of TOEV MEDICAL ) Civ. No. 07-5847 (DAB) 

CORPORATION, and ) 

IGNITION VENTURES, INC., ) ECF Case 

 ) 

Plaintiffs, ) 

 ) 

v. ) 

 ) 

ARTHUR SCHWARTZ, ) 

RONALD SOLAR, ) 

RENAISSANCE BIOMEDICAL, INC., ) 

GLEN LIEBER, and ) 

THERMOPEUTIX, INC., ) 

 ) 

Defendants. ) 

____________________________________) 

________________________________________________________________________ 

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS 

RONALD SOLAR, RENAISSANCE BIOMEDICAL, INC., 

GLEN LIEBER, AND THERMOPEUTIX, INC.’S MOTION TO DISMISS 

________________________________________________________________________ 

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TABLE OF CONTENTS 

Page

PRELIMINARY STATEMENT .................................................................................................... 1 

STATEMENT OF FACTS ............................................................................................................. 1 

1. The Parties .............................................................................................................. 1 

2. Overview of Plaintiffs' Claims................................................................................ 2 

3. Alleged Bases for Subject Matter Jurisdiction........................................................ 5 

4. Alleged Basis for Asserting a Shareholder's Derivative Claim .............................. 6 

5. Facts Relating to Personal Jurisdiction over Glen Lieber....................................... 7 

ARGUMENT.................................................................................................................................. 8 

I. THE COURT LACKS SUBJECT MATTER JURISDICTION............................. 8 

A. The Parties Are Not Completely Diverse ................................................... 8 

B. There Are No Claims Arising Under the Patent Laws ............................. 10 

II. THE AMENDED COMPLAINT VIOLATES RULE 23.1 ................................. 13 

III. THE COURT LACKS PERSONAL JURISDICTION OVER GLEN 

LIEBER................................................................................................................. 15 

A. New York’s Long-Arm Statute Does Not Reach Glen Lieber ................. 15 

B. Exercise of Jurisdiction Over Glen Lieber Would Violate Due 

Process ...................................................................................................... 16 

IV. COUNTS TWO AND FIVE DO NOT STATE ACTIONABLE 

CLAIMS ............................................................................................................... 18 

A. Count Two Does Not State A Claim......................................................... 18 

B. Count Five Does Not State A Claim......................................................... 19 

V. COUNTS TWO, FOUR, FIVE, AND SEVEN ARE TIME-BARRED............... 20 

A. Count Two Is Barred By New York’s Statute of Limitations .................. 20 

B. Count Four Is Barred by New York’s State of Limitations...................... 21 

C. Counts Five and Seven Are Barred By New York’s Statute of 

Limitations ................................................................................................ 21 

CONCLUSION............................................................................................................................. 23 

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TABLE OF AUTHORITIES 

FEDERAL CASES 

 Page

AT & T Co. v. Integrated Network Corp., 972 F.2d 1321 (Fed. Cir. 1992)...................................12 

Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 

 305 F.3d 120 (2d Cir. 2002).........................................................................................16, 17 

Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 

 2001 WL 893362 (S.D.N.Y. 2001)....................................................................................17 

Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 296 (2d Cir. 2004) .......................................11 

Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988)..............................................11 

D’Addario v. Geller, 264 F. Supp. 2d 367 (E.D. Va. 2003) ..........................................................14 

Diduck v. Kaszycki & Sons Contractors, Inc., 737 F. Supp. 792 (S.D.N.Y. 1990).......................14 

Doctor’s Assoc., Inc. v. Distajo, 66 F.3d 438 (2d Cir. 1995) ..........................................................8 

Duffey v. D.C. Wheeler, 820 F.2d 1161 (11th Cir. 1987) ................................................................9 

Guaranty Trust Co. of N.Y. v. York, 326 U.S. 99 (1945)...............................................................19 

Hawes v. Oakland, 104 U.S. 450 (1882) .......................................................................................14 

Helicopteros Nacionales De Columbia, S.A. v. Hall, 466 U.S. 408 (1984) ..................................16 

IT Litigation Trust v. D’Aniello, 2005 WL 3050611 (D. Del. 2005).............................................18 

Iacobelli Constr., Inc. v. County of Monroe, 32 F.3d 19 (2d Cir. 1994) .......................................19 

Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).......................................................................16 

Kartub v. Optical Fashions, 158 F. Supp. 757 (S.D.N.Y. 1958)...................................................10 

Lewis v. Odell, 503 F.2d 445 (2d Cir. 1974)....................................................................................9 

Liddy v. Urbanek, 707 F.2d 1222 (11th Cir. 1983)........................................................................10 

Markowitz v. Brody, 90 F.R.D. 542 (S.D.N.Y. 1981)....................................................................13 

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McCall v. Pataki, 232 F.3d 321 (2d Cir. 2000) .............................................................................18 

Metro. Life Ins. Co. v. Robertson-Ceco, Corp., 85 F.3d 560 (2d Cir. 1996).................................17 

In re NSSE Specialists Sec. Litig., 405 F. Supp. 281 (S.D.N.Y. 2005)..........................................18 

Netwolves Corp. v. Sullivan, 2001 WL 492463 (S.D.N.Y. 2001) .............................................9, 10 

Phansalkar v. Andersen Weinroth & Co., L.P., 175 F. Supp. 2d 635 (S.D.N.Y. 2001)................19 

Rosemeier v. Schenker Int’l, Inc., 895 F. Supp. 65 (S.D.N.Y. 1995) ............................................21 

Smachlo v. Birkelo, 576 F. Supp. 1439 (D. Del. 1983) .................................................................14 

Smith v. Sperling, 354 U.S. 91 (1957) .............................................................................................9 

Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100 (2d Cir. 2006).................15 

Speigel v. Quality Brokers of Am. Coop., Inc., 

 1992 WL 349799 (S.D.N.Y. Nov. 10, 1992).....................................................................19 

Taylor v. Swirnow, 80 F.R.D. 79 (D. Md. 1978) ...........................................................................10 

Thomas v. Ashcroft, 470 F.3d 491 (2d Cir. 2006)..........................................................................15 

U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135 (2d Cir. 2001) .................17 

Uroplasty, Inc. v. Advanced Uroscience, Inc., 239 F.3d 1277 (Fed. Cir. 2001)......................11, 12 

In re Vecco Instruments, Inc., 434 F. Supp. 2d 267 (S.D.N.Y. 2006) ...........................................13 

ZB Holdings, Inc. v. White, 144 F.R.D. 42 (S.D.N.Y. 1992)...........................................................9 

STATE CASES 

Andrew Greenberg, Inc. v. Svane, Inc., 36 A.D.3d 1094, 1098 (3d Dept. 2007)..........................21 

H&P Rsch., Inc. v. Integra Realty, Inc., 685 N.Y.S.2d 43 (1st Dept. 1999) .................................21 

Ippolito v. Lennon, 542 N.Y.S.2d, 3 (1st Dept. 1989)...................................................................19 

Pourroy v. Gardner, 10 P.2d 815 (Cal. App. 1932) ......................................................................15 

Weisenthal v. Weisenthal, 40 A.D.3d 1078, 583 (2d Dept. 2007).................................................20 

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STATUTES AND RULES

Fed. R. Civ. P. 4(k)(1)(A)..............................................................................................................15 

Fed. R. Civ. P. 12(b)(1)........................................................................................................1, 12, 22 

Fed. R. Civ. P. 12(b)(2)..................................................................................................1, 15, 17, 22 

Fed. R. Civ. P. 12(b)(6)........................................................................................................1, 18, 22 

Fed. R. Civ. P. 23.1........................................................................................1, 6, 12, 13, 14, 15, 22 

28 U.S.C. § 1332(a) .........................................................................................................................8 

28 U.S.C. § 1332(a)(1)...............................................................................................................5, 10 

28 U.S.C. § 1332(c)(1).....................................................................................................................8 

28 U.S.C. § 1338..............................................................................................................................5 

28 U.S.C. § 1338(a) .........................................................................................................5, 8, 10, 11 

N.Y. C.P.L.R. § 302(a) ............................................................................................................15, 20 

N.Y. C.P.L.R. § 214(4) ............................................................................................................20, 21 

N.Y. C.P.L.R. § 214(3) ..................................................................................................................21 

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PRELIMINARY STATEMENT 

 Plaintiffs’ Amended Complaint suffers from several infirmities, each of which warrants 

dismissal of the case. Defendants ThermopeutiX, Inc. (“ThermopeutiX”), Renaissance 

Biomedical, Inc. (“Renaissance”), Ronald Solar, and Glen Lieber (collectively, “Defendants”) 

move for dismissal under Fed R. Civ. P. 12(b)(1), 12(b)(2), 12(b)(6), and 23.1 for the following 

reasons: (1) this Court lacks subject matter jurisdiction because there is not complete diversity 

nor is there a federal question; (2) plaintiff Lawrence Obstfeld failed to meet the prerequisites for 

pleading a derivative action; (3) Glen Lieber, a California resident, is not subject to personal 

jurisdiction in New York; (4) counts two and five fail to state actionable claims against any 

Defendants; and (5) counts two, three, and five are barred by the statute of limitations.

STATEMENT OF FACTS 

 Plaintiffs’ substantive allegations are entirely devoid of merit. Nevertheless, because 

Defendants’ motion arises under Rule 12, the following facts are drawn from the Amended 

Complaint – and assumed to be true – unless otherwise noted.1

1. The Parties

 Plaintiffs’ suit arises out of the alleged failure of a start-up medical company called Toev 

Medical Corporation (“Toev”). According to the Amended Complaint (“Am. Compl.”), plaintiff 

Toev was formed in 2000 for the purpose of commercializing a stroke treatment pioneered by 

defendant Arthur Schwartz, an anesthesiologist. Am. Compl. ¶ 15. The treatment relates to a 

method of selectively cooling the brain to alleviate stroke symptoms. Id. ¶ 14. Dr. Schwartz 

developed the brain cooling method while a professor at Columbia University, and Columbia 

owned certain patents in connection therewith. Id. ¶ 18. Toev purchased a license to the 

 

1

 While the facts alleged in the Amended Complaint are taken as true for purposes of this motion, 

Defendants reserve the right to challenge their accuracy if this motion is denied. 

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Columbia patents. Id. ¶ 22. Ultimately, Toev’s corporate charter lapsed and Dr. Schwartz – its 

only board member – resigned. Id. ¶¶ 34; 43-44. 

 Plaintiff Lawrence Obstfeld is a Toev shareholder and, allegedly, a Toev creditor. Am. 

Compl. ¶¶ 7; 20. Mr. Obstfeld purports to bring claims both individually and derivatively on 

Toev’s behalf. Id. at 1. Plaintiff Ignition Ventures, Inc. claims to have provided start-up 

consulting and fundraising services to Toev. Id. ¶ 27. Plaintiffs claim that defendants Arthur 

Schwartz, Ron Solar, Renaissance, and Glen Lieber are former Toev managers and consultants. 

Id. ¶¶ 10, 11, 12, 13. Solar and Renaissance ended their relationship with Toev on May 7, 2004, 

and Dr. Schwartz resigned on June 20, 2004. Id. ¶¶ 37; 43-35. Following Toev’s demise, the 

individual Defendants founded, and now manage, defendant ThermopeutiX. Id. ¶ 39. 

Defendants formed ThermopeutiX – allegedly for the purpose of benefiting from the alleged 

misappropriation of Toev’s technology – on May 27, 2004, more than three years before 

Plaintiffs filed suit. Id. ¶ 38. Plaintiffs allege that the individual Defendants left Toev and 

formed ThermopeutiX as a vehicle with which to exploit technology or other intangible property 

that Plaintiffs claim belongs to Toev. Id. ¶ 41. 

2. Overview of Plaintiffs’ Claims

 Plaintiffs filed their Complaint on June 20, 2007, and filed their Amended Complaint on 

July 25, 2007. [Dkt. Nos. 1 and 6] Plaintiffs assert seven claims against some or all of the 

defendants. 

 The first claim is for breach of fiduciary duty, and is stated against defendants Schwartz, 

Solar, Lieber, and Renaissance. Am. Compl. ¶ 54. Plaintiffs claim that these defendants 

breached fiduciary duties by (1) usurping corporate opportunities in which Toev had an interest, 

(2) forming ThermopeutiX, and (3) using their positions as officers, directors, employees, 

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shareholders, and/or consultants of Toev to engage in self-interested transactions. Id. ¶ 55. 

Since Defendants allegedly formed ThermopeutiX on May 27, 2004, id. ¶ 38, Defendants had 

allegedly breached their duties to Toev before that date, by making arrangements for 

ThermopeutiX’s formation during the time they purportedly owed duties to Toev and its 

shareholders. Id. ¶¶ 41-42. 

 Plaintiffs’ second cause of action also is stated against defendants Schwartz, Solar, 

Lieber, and Renaissance. Am. Compl. ¶ 61. It relates to these Defendants’ alleged breach of a 

fiduciary duty to Toev that allegedly prevented Toev from meeting its obligations to repay a loan 

from plaintiff Lawrence Obstfeld. Am. Compl. ¶¶ 61-63. Plaintiffs allege that on February 4, 

2000, Obstfeld loaned Toev $50,000. Id. ¶ 20. Plaintiffs claim that Toev did not repay the loan. 

Id. ¶ 61. Plaintiffs allege that Toev’s failure to meet its legal obligations to Obstfeld resulted 

from “Schwartz, Solar, Lieber, and Renaissance’s breaches of fiduciary duty.” Id. ¶ 61. As a 

result of Defendants’ breaches of fiduciary duty to Toev that allegedly caused Toev to default on 

a $50,000 loan to Obstfeld, Obstfeld claims that he personally incurred damages “in an amount 

not less than $450,000 plus attorneys’ fees, interest, costs, and disbursements.” Id. ¶ 62. 

 Plaintiffs’ third claim, stated against the same four Defendants, is for tortious interference 

with contract, based on Plaintiffs’ allegation that Schwartz, Solar, Lieber, and Renaissance 

“intentionally and unjustifiably induced Toev to breach its agreement with Ignition.” Am. 

Compl. ¶ 66. 

 Count four is a tortious interference with business relations claim, stated against the same 

four Defendants, based on the allegations that defendant Ronald Solar refused to allow Toev to 

consider offers of investment in Toev from prospective investors sourced by Ignition, and that all 

four Defendants breach their fiduciary duties to Toev by forming ThermopeutiX. Am. Compl. 

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¶¶ 73, 74. According to the Amended Complaint, the interference occurred “[i]n May 2004,” 

more than three years before Plaintiffs filed suit. Id. 

 In the fifth count, for conversion, Plaintiffs claim that “Defendants2 have wrongfully 

exercised dominion and control over the Brain Cooling Method and other proprietary 

information belonging to Toev.” Am. Compl. ¶ 78. The Amended Complaint defines “Brain 

Cooling Method” as “a putative treatment for the approximately 600,000 people per year who 

suffer strokes, as well as a novel method of cooling the brain so as to mitigate the negative 

effects of stroke.” Id. ¶ 14. 

 Count six is a claim for breach of a Stock Purchase Agreement and “violation of 

applicable corporate law” against Defendants Schwartz, Solar, Lieber, and Renaissance. Am. 

Compl. ¶¶ 82-83. Plaintiffs do not specifically identify the breaching conduct, or the legal or 

contractual duties breached, referring only to “various acts of self-dealing and oppression of 

minority shareholders, that violated the Toev shareholder agreement, Toev’s by-laws, and 

corporate law . . . .” Id. ¶ 83. 

 Plaintiffs’ seventh cause of action is for misappropriation of trade secrets against 

Defendants Schwartz, Solar, Lieber, and Renaissance, based on their alleged misappropriation of 

Toev’s intangible property. Am. Compl. ¶ 78. As discussed above, Plaintiffs allege that the 

individual Defendants misappropriated Toev’s technology and, in May 2004 (more than three 

years before suit was filed), “formed ThermopeutiX as a vehicle to profit from their 

misappropriation.” Id. ¶¶ 38; 86-87. 

 

2

 The reference to “Defendants” apparently means each and every defendant, making this the 

only claim asserted against ThermopeutiX. 

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3. Alleged Bases for Subject Matter Jurisdiction – Diversity and Patent Claims

 Plaintiffs assert diversity jurisdiction under 28 U.S.C. § 1332(a)(1), claiming “there is 

complete diversity of citizenship and the amount in controversy exceeds $75,000, exclusive of 

interest and costs.” Am. Compl. ¶ 2. Plaintiffs also allege that jurisdiction exists under 28 

U.S.C. § 1338(a) because the action “involves a dispute concerning a patent.” Id. ¶ 3. The facts 

alleged in the Amended Complaint belie both purported bases for subject matter jurisdiction. 

 In Plaintiffs’ caption, Lawrence Obstfeld claims to be suing “individually and on behalf 

of Toev Medical Corporation.” Toev is aligned as a plaintiff. Plaintiffs specifically allege that 

plaintiff Toev is a Delaware corporation, and that defendant ThermopeutiX is also a Delaware 

corporation. Am. Compl. ¶¶ 6; 9. The incomplete jurisdictional facts Plaintiffs have alleged 

suffice to destroy diversity – both Toev and ThermopeutiX are deemed citizens of Delaware. 

 Plaintiffs do not plead any facts to suggest antagonism exists between Plaintiffs and Toev 

Medical Corporation (or its current management) such that Toev should be realigned as a 

defendant for jurisdictional purposes. Plaintiffs allege that the three individual Defendants are 

former officers of Toev. Am. Compl. ¶¶ 10; 11; 13. Arthur Schwartz, the only defendant 

alleged to have been a Toev shareholder (and its sole director), resigned as director and officer 

and relinquished ownership of all his Toev stock, assigning his shares back to Toev in June 2004. 

Id. ¶ 43. Plaintiffs allege that Toev did not have a board of directors from June 2004 to the 

present. Id. ¶¶ 44; 45; 52. Plaintiffs do not allege any relationship between the individual 

defendants and Toev on or after June 2004. Nor do Plaintiffs allege that any Defendant had a 

relationship with Toev at the time Plaintiffs sought to commence this lawsuit. 

 Though they claim jurisdiction exists under 28 U.S.C. § 1338, Plaintiffs base none of 

their claims on federal patent law. Instead, the Amended Complaint contains only passing 

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references to patents. Plaintiffs allege that Toev licensed patents from Columbia University 

relating to a brain cooling method pioneered by Arthur Schwartz. Am. Compl. ¶¶ 14; 18; 22. 

Plaintiffs allege, “[u]pon information and belief, Schwartz, Solar, Lieber, and Renaissance 

misappropriated the Brain Cooling Method and other related proprietary medical technologies 

from Toev . . . .” Id. ¶ 41. Plaintiffs further allege, “[u]pon information and belief, 

ThermopeutiX has submitted an application for a patent for aspects of the Brain Cooling Method 

and other proprietary medical technologies that have been misappropriated from Toev by 

Schwartz, Solar, Lieber, and Renaissance.” Id. ¶ 51. 

 Nowhere do Plaintiffs allege that they own any patents, or that they have the right to 

bring claims to enforce any patents. Instead, Plaintiffs assert claims for misappropriation of 

trade secrets and for conversion of “the Brain Cooling Method and other proprietary information 

belonging to Toev” – claims firmly grounded in state law. Am. Compl. ¶¶ 77-79; 85-87. 

4. Alleged Basis for Asserting a Shareholder’s Derivative Claim

Plaintiff Lawrence Obstfeld purports to assert claims against the defendants “derivatively 

on behalf of Toev Medical Corporation.” In an apparent effort to comply with Fed. R. Civ. P. 

23.1 and state law requirements for bringing a shareholder’s derivative action, Plaintiffs allege as 

follows: 

Schwartz was the sole member of the board of directors of Toev. Accordingly, 

the requirement that a demand be made to the Toev board of directors to 

commence an action to assert the claims that Obstfeld has asserted on behalf of 

Toev on this action should be excused on the basis of futility. 

Am. Compl. ¶ 52 (emphasis added). According to the Amended Complaint, Arthur Schwartz 

relinquished his shares at the same time he resigned from Toev’s board of directors (leaving the 

board vacant), more than three years ago. Id. ¶ 43. The Amended Complaint does not allege any 

factual basis for the conclusory assertion that it would have been futile for Mr. Obstfeld to make 

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a demand on Toev in the intervening three years between Dr. Schwartz’s resignation and the 

filing of this action. 

5. Facts Relating to Personal Jurisdiction Over Glen Lieber

 Plaintiffs make no allegation whatsoever connecting Glen Lieber to the state of New 

York. The only references to New York in the Amended Complaint are the following: 

(1) plaintiff Lawrence Obstfeld resides in New York (Am. Compl. ¶ 6); (2) defendant Arthur 

Schwartz is a former Columbia University professor (id. ¶ 17); (3) Toev licensed patents from 

Columbia University, a non-party (id. ¶ 21); and (4) Toev, Arthur Schwartz, Lawrence Obstfeld, 

Joseph Gottesman (non-party), and Stanley Gewirtz (non-party) signed a stock purchase 

agreement that was to be governed by New York law and disputes resolved in New York (id.

¶ 23). 

 Glen Lieber has been, at all relevant times, a resident of California. Am. Compl. ¶ 13; 

Declaration of Glen Lieber, ¶ 4. Glen Lieber has no bank accounts or other assets in New York. 

Lieber Decl. ¶ 4. During the time relevant to the Amended Complaint – May 2003 through May 

20053

 – Glen Lieber traveled to New York a total of three times. Id. ¶ 5. His only trip to New 

York connected with Toev business occurred in June 2003, when he met with Ronald Solar and 

representatives of Ignition Ventures, Inc. at the W Hotel. Id. All other work performed by Mr. 

Lieber in connection with Toev took place in the form of telephone conferences. Id. On those 

occasions, Ignition would provide Mr. Lieber a toll free number that he could dial to participate 

in the call. Id. Mr. Lieber would call the number from California, and he did not know the 

location of the other conference participants. Id. 

 

3

 According to the Amended Complaint, Glen Lieber was appointed as an officer of Toev in May 

2003. Am. Compl. ¶ 30. The latest date referenced in the Complaint is May 24, 2005. Id. ¶ 47. 

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 Mr. Lieber’s only other contacts with New York are unrelated to Toev. Mr. Lieber 

traveled to New York in June 2004 to attend a cardiology conference in connection with his 

work for ThermopeutiX. Lieber Decl. ¶ 6. Mr. Lieber’s only other visit to New York in the last 

five years was in June 2006, when he appeared for a deposition in a lawsuit between Guidant 

Sales Corporation and X Technologies, a company with which Mr. Lieber previously was 

affiliated. Id. 

ARGUMENT 

I. THE COURT LACKS SUBJECT MATTER JURISDICTION. 

 The allegations in Plaintiffs’ Amended Complaint, taken as true, foreclose federal 

jurisdiction. First, the parties are not completely diverse, because Delaware corporations are 

aligned on both sides of the action. Second, jurisdiction cannot exist under 28 U.S.C. § 1338(a), 

because Plaintiffs have asserted no claims arising under U.S. patent law. 

A. The Parties Are Not Completely Diverse. 

 Plaintiffs’ invocation of diversity jurisdiction is unfounded, because plaintiffs’ own 

allegations reveal that plaintiff Toev and defendant ThermopeutiX are both Delaware 

corporations. Am. Compl. ¶¶ 6; 9. The diversity statute, 28 U.S.C. § 1332(a), confers federal 

jurisdiction over civil actions between “citizens of different states.” For diversity purposes, “a 

corporation shall be deemed to be a citizen of any State by which it has been incorporated and of 

the State where it has its principal place of business . . . .” 28 U.S.C. § 1332(c)(1). Section 

1332(a) requires complete diversity, i.e., that no plaintiff be a citizen of the same state as any 

defendant. See Doctor’s Assoc., Inc. v. Distajo, 66 F.3d 438, 445 (2d Cir. 1995). 

 Assuming the truth of Plaintiffs’ allegations, complete diversity is lacking, because of 

Toev’s and ThermopeutiX’s shared state of incorporation. The existence of Lawrence Obstfeld’s 

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purported derivative claims does not cure the problem. “[T]he general rule is that the 

corporation in a derivative suit should be aligned as a plaintiff since it is the real party in 

interest.” See ZB Holdings, Inc. v. White, 144 F.R.D. 42, 45 (S.D.N.Y. 1992) (citing Duffey v. 

D.C. Wheeler, 820 F.2d 1161, 1163 (11th Cir. 1987)). The U.S. Supreme Court has recognized 

an exception to this general rule that applies when aligning the corporation as a plaintiff would 

not provide a “real collision” of interests. Smith v. Sperling, 354 U.S. 91, 97 (1957). Such 

realignment is only proper, however, when “[the] corporation is actively antagonistic to 

plaintiff’s interests.” See ZB Holdings, 144 F.R.D. at 45 (citing Duffey at 1163). 

 Plaintiffs have not alleged any facts that would support the application of the exception 

and the realignment of plaintiff Toev as a defendant. Rather, taken as true, the allegations in the 

Amended Complaint compel the opposite conclusion. See Smith, 354 U.S. at 97 (1957) 

(alignment of the corporation to be determined “by the pleadings and the nature of the dispute”). 

Mr. Obstfeld admits that the parties who committed the acts he complains of have not been 

involved in Toev’s management for more than three years. Am. Compl. ¶¶ 43-45; 52. Indeed, 

Plaintiffs allege that Toev has no current management. Therefore, the Amended Complaint 

reveals no basis for any present antagonism between Mr. Obstfeld and Toev. 

 “[A]ntagonism has generally not been found where the corporation does not, would not, 

or cannot express opposition to the initiation of the lawsuit.” Netwolves Corp. v. Sullivan, 2001 

WL 492463, at *6 (S.D.N.Y. 2001). Indeed, the Second Circuit has already found that the 

exception does not apply (and, therefore, the corporation should be aligned as a plaintiff) under 

circumstances parallel to those alleged in the Amended Complaint. In Lewis v. Odell, 503 F.2d 

445, 446 (2d Cir. 1974), the plaintiff brought a derivative action against a board member. The 

corporation went into bankruptcy, at which time bankruptcy trustees took over its management. 

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Id. at 446-47. The Court held that the corporation should be aligned as a plaintiff, because the 

defendant director was no longer in office and the bankruptcy trustees were not accused of any 

wrongdoing. Id. See also Kartub v. Optical Fashions, 158 F. Supp. 757, 758-59 (S.D.N.Y. 

1958) (finding no antagonism between derivative plaintiff and corporation that is subject of 

derivative action when one director had died and the other two had resigned, rendering the 

corporation unable to act); Taylor v. Swirnow, 80 F.R.D. 79 (D. Md. 1978) (no antagonism 

between derivative plaintiff and corporation when defendants did not control corporation at the 

time of suit); Liddy v. Urbanek, 707 F.2d 1222, 1224-25 (11th Cir. 1983) (no antagonism 

between derivative plaintiff and corporation when plaintiff was the controlling official and 50% 

shareholder); Netwolves Corp, 2001 WL 492463, at *6 (aligning corporation as a plaintiff and 

dismissing derivative action for lack of subject matter jurisdiction when management is 

deadlocked and cannot vote to support litigation). 

 In sum, because Plaintiffs’ Amended Complaint fails to identify any antagonism between 

Mr. Obstfeld and Toev, Toev must be aligned as a plaintiff. Because Toev and ThermopeutiX 

are not diverse, the case must be dismissed for lack of subject matter jurisdiction under 28 U.S.C. 

§ 1332(a)(1). 

B. There Are No Claims Arising Under the Patent Laws. 

 Plaintiffs cannot use phantom patent claims to conjure up an alternative basis for federal 

jurisdiction. Plaintiffs mischaracterize the relevant statute, claiming that 28 U.S.C. § 1338(a) 

supports federal jurisdiction because this case “involves a dispute concerning a patent.” Am. 

Compl. ¶ 2. The cited statute, however, does not extend to every claim that merely mentions a 

patent, but instead limits jurisdiction to “civil action[s] arising under any Act of Congress 

relating to patents.” 28 U.S.C. § 1338(a) (emphasis added). In other words, jurisdiction under 

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section 1338(a) extends only to those cases in which the plaintiff “establishes either that the 

federal patent law creates the cause of action or that the plaintiff’s right to relief necessarily 

depends on resolution of a substantial question of federal patent law, in that patent law is a 

necessary element of one of the well-pleaded claims.” Christianson v. Colt Indus. Operating 

Corp., 486 U.S. 800, 808-09 (1988). See Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 

296, 303-04 (2d Cir. 2004) (applying Christianson in the copyright context). 

 Plaintiffs’ Amended Complaint contains no allegations that suffice to invoke jurisdiction 

under 28 U.S.C. § 1338(a). Instead, Plaintiffs plead their claims, even those relating to 

intellectual property, solely as state law claims of breach of fiduciary duty, tortious interference 

with contract and with business relations, conversion, breach of contract, and misappropriation 

of trade secrets. Am. Compl. ¶¶ 52-87. Plaintiffs do not identify a single patent statute (other 

than the jurisdictional statute), nor do they allege that their right to relief necessarily depends on 

resolution of a substantial question of federal patent law. Given Plaintiffs’ failure to allege that 

they own any patents, that they have the right to enforce any patents, or that any patents have 

been infringed, and given their decision to plead only state law causes of action, they have no 

basis for invoking the patent jurisdictional statute. 

 In nearly identical circumstances, the Federal Circuit held that allegations that one party 

used and divulged another party’s trade secrets by acts that included applying for a patent were 

insufficient to invoke federal patent jurisdiction. See Uroplasty, Inc. v. Advanced Uroscience, 

Inc., 239 F.3d 1277, 1280 (Fed. Cir. 2001). In Uroplasty, the plaintiff’s CEO left the plaintiff for 

a competitor, filing patent applications relating to technology allegedly belonging to the plaintiff. 

Id. at 1279. The plaintiff sued in state court for “misappropriation of trade secrets, breach of 

fiduciary duty, and breach of contract alleging that [the defendant] improperly used and divulged 

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trade secrets and confidential information.” Id. Following the defendant’s removal of the case 

to federal district court and a grant of summary judgment, the Federal Circuit remanded the case 

to the federal district court with instructions to dismiss the case for lack of subject matter 

jurisdiction. Id. at 1280. The Court explained as follows: 

The only mention of a patent in Uroplasty’s well-pleaded complaint are the 

allegations that [the former CEO] used and divulged Uroplasty’s trade secrets and 

confidential information by acts that included the preparation and filing of the 

application for the ‘406 patent and his involvement in the testing of urological 

bulking agents described in the patent. The ‘406 patent may be evidence in 

support of Uroplasty’s allegations, but the mere presence of the patent does not 

create a substantial issue of patent law. 

Id. (emphasis added). See also AT & T Co. v. Integrated Network Corp., 972 F.2d 1321, 1324 

(Fed. Cir. 1992) (claims of misappropriation of proprietary information, breach of fiduciary duty, 

and breach of contract did not present a substantial question of patent law). As the Federal 

Circuit noted, because the burden of proving claims such as the claims alleged in this case, i.e.

that involve only “the mere presence of a patent,” “can be met without requiring the resolution of 

a substantial issue of patent law,” federal jurisdiction may not be invoked under the patent 

statute. Uroplasty, 239 F.3d at 1280. Accordingly, Plaintiffs may not invoke this Court’s 

jurisdiction under the federal patent laws.

 In sum, the very face of Plaintiffs’ Amended Complaint demonstrates that both purported 

bases of federal subject matter jurisdiction are unfounded. Complete diversity of citizenship is 

absent, and the pleaded claims fail to raise any question of federal patent law. The Court must 

dismiss Plaintiffs’ lawsuit under Fed. R. Civ. P. 12(b)(1). 

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II. THE AMENDED COMPLAINT VIOLATES RULE 23.1. 

 The Amended Complaint fails to comply with the pleading requirements for bringing a 

shareholder’s derivative action in federal court. Federal Rule of Civil Procedure 23.1 states in 

relevant part as follows: 

In a derivative action brought by one or more shareholders or members to enforce 

a right of the corporation . . . the corporation . . . having failed to enforce a right 

which may be properly asserted by it, the complaint shall be verified and shall 

allege (1) that the plaintiff was a shareholder . . . at the time of the transaction of 

which the plaintiff complains . . . and (2) that the action is not a collusive one to 

confer jurisdiction on a court of the United States which it would not otherwise 

have. The complaint shall also allege with particularity the efforts, if any, made 

by the plaintiff to obtain the action the plaintiff desires from the directors or 

comparable authority and, if necessary, from the shareholders or members, and 

the reasons for the plaintiff’s failure to obtain the action or for not making the 

effort. 

Fed. R. Civ. P. 23.1 (emphasis added). Complaints are subject to dismissal for failure to comply 

with the pleading requirements of Fed. R. Civ. P. 23.1. See Markowitz v. Brody, 90 F.R.D. 542, 

548 (S.D.N.Y. 1981). 

 In this case, Plaintiffs’ entire allegation as to demand and futility centers on Arthur 

Schwartz’s former position on the Toev board of directors. Am. Compl. ¶ 52. But Plaintiffs fail 

to allege anything about efforts to make a demand on Toev after Dr. Schwartz resigned from 

Toev. Plaintiffs themselves admit that Dr. Schwartz relinquished his shares and resigned from 

Toev’s board of directors (leaving the board vacant) more than three years ago. Id. ¶¶ 43-44. 

Other than the conclusory assertion that a demand on the Toev board would be futile because Dr. 

Schwartz sat on that board until three years ago (Am. Compl., ¶ 51), Plaintiffs have not pleaded 

any facts regarding attempts to obtain the desired action from the corporation. Rule 23.1 

requires a derivative plaintiff to describe specifically his efforts to obtain the desired action from 

the directors or comparable authority, or from other shareholders. The purpose of the demand 

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requirement is to give the corporation “the opportunity to take over a suit which has been 

brought on the corporation’s behalf.” Diduck v. Kaszycki & Sons Contractors, Inc., 737 F. Supp. 

792, 800 (S.D.N.Y. 1990). 

 The law of the state of incorporation governs the pre-suit demand requirement and the 

related futility exceptions. In re Vecco Instruments, Inc., 434 F. Supp. 2d 267, 273 (S.D.N.Y. 

2006). Whether Plaintiffs’ allegations of futility “are sufficient to excuse demand depends on 

the particular facts of each case and lies within the discretion of the district court.” D’Addario v. 

Geller, 264 F. Supp. 2d 367, 394 (E.D. Va. 2003). 

 Plaintiffs’ demand and futility allegation addresses the wrong time period. Because the 

demand requirement permits the corporation’s management “to determine whether in their 

opinion a suit on behalf of the corporation would comport with the best interest of the 

corporation” (Smachlo v. Birkelo, 576 F. Supp. 1439, 1443 (D. Del. 1983)), it is irrelevant 

whether the derivative plaintiff has made a demand on former management, much less a director 

who left the company more than three years ago. Instead, the demand “must be made upon those 

fiduciaries who are who are in office at the time the suit is brought.” Diduck, 737 F. Supp. at 

800-01 (emphasis added). 

 The Amended Complaint does not allege anything about Mr. Obstfeld’s efforts to obtain 

action from his fellow Toev shareholders, in light of the apparent absence of Toev management 

personnel after Dr. Schwartz’s departure. The Federal Rules expressly require that the derivative 

plaintiff make a demand on the board or “comparable authority,” as well as “on the 

shareholders.” Fed. R. Civ. P. 23.1. Moreover, under Delaware law (which governs derivative 

actions involving Delaware corporations, such as Toev) the shareholder’s demand obligation is 

“more than pro forma”: 

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[B]efore the shareholder is permitted in his own name, to initiate and conduct a 

litigation which usually belongs to the corporation, he should show, to the 

satisfaction of the court, that he has exhausted all the means within his reach to 

obtain within the corporation itself, the redress of his grievances, or action in 

conformity to his wishes. He must make an earnest, not a simulated effort, with 

the managing body of the corporation, to induce remedial action on their part, 

and that must be made apparent to the court. 

Smachlo, 576 F. Supp. at 1443-44 (emphasis added) (quoting Hawes v. Oakland, 104 U.S. 450, 

460-61 (1882)). Other courts have applied the same requirement in circumstances nearly 

identical to this case. See Pourroy v. Gardner, 10 P.2d 815, 817-18 (Cal. App. 1932) 

(dismissing derivative claim for failure to comply with demand requirement where corporation 

had been without a board of directors for several months and plaintiff shareholders were “in a 

position to elect a board of directors and other officers of their own choosing, and to proceed in 

the name of the corporation”). Plaintiffs’ bare allegation of futility is insufficient to comply with 

Fed. R. Civ. P. 23.1 and with Delaware corporate law. This deficiency alone warrants dismissal 

of all Plaintiffs’ derivative claims. 

III. THE COURT LACKS PERSONAL JURISDICTION OVER GLEN LIEBER. 

 Even if the Court had subject matter jurisdiction, Plaintiffs’ claims against Glen Lieber 

must be dismissed under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction. Mr. Lieber 

does not have sufficient contacts with New York to subject him to general personal jurisdiction, 

nor does he have sufficient contacts with New York relating to Plaintiffs’ claim to justify his 

being “haled into court” in this forum. Accordingly the exercise of jurisdiction over Glen Lieber 

in this case violates New York law as well as due process. 

A. New York’s Long-Arm Statute Does Not Reach Glen Lieber. 

 The amenability of an out-of-state party to suit in a federal district court “is determined 

by the law of the state in which the district court sits.” Sole Resort, S.A. de C.V. v. Allure Resorts 

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Mgmt., LLC, 450 F.3d 100, 102-03 (2d Cir. 2006) (citing Fed. R. Civ. P. 4(k)(1)(A)). New 

York’s long-arm statute permits the Court to exercise personal jurisdiction ever Glen Lieber in 

these circumstances only if he “transacts any business within the state,” “commits a tortious act 

within the state,” or “commits a tortious act without the state causing injury to person or property 

within the state,” as long as the particular cause of action is one “arising from” any of those acts. 

See Thomas v. Ashcroft, 470 F.3d 491, 495-96 (2d Cir. 2006); N.Y. C.P.L.R. § 302(a). 

 There is no allegation that Glen Lieber committed an act causing injury to Toev (a 

Delaware corporation) in New York. With the exception of a single meeting in New York (which 

is not the “act” for which Mr. Lieber is being sued), all of Mr. Lieber’s participation in Toev’s 

affairs was carried out in California. Moreover, ThermopeutiX is a Delaware corporation, and it 

is based in San Diego, California. Among the alleged breaches of fiduciary duty, conversion, 

and misappropriation of trade secrets pleaded in the Amended Complaint, there are no factual 

allegations linking Mr. Lieber to any conduct with a New York nexus. Accordingly, the Court 

lacks personal jurisdiction over Glen Lieber as a matter of New York law. 

B. Exercise of Jurisdiction Over Glen Lieber Would Violate Due Process. 

 Even if the Court were to find New York’s long-arm statute satisfied, requiring Glen 

Lieber to litigate in New York would be unconstitutional. When “there is a statutory basis for 

jurisdiction, the court must then determine whether New York’s extension of jurisdiction in such 

a case would be permissible under the Due Process Clause of the Fourteenth Amendment.” Bank 

Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002). The Due 

Process Clause “operates to limit the power of a State to assert in personam jurisdiction over a 

nonresident defendant.” Helicopteros Nacionales De Columbia, S.A. v. Hall, 466 U.S. 408, 414 

(1984). In order to satisfy due process requirements, a defendant must have “certain minimum 

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contacts with [the forum] such that the maintenance of the suit does not offend traditional 

notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945). 

 In deciding whether the exercise of jurisdiction comports with federal due process, courts 

examine whether there is specific personal jurisdiction or general personal jurisdiction. 

Helicopteros Nacionales, 466 U.S. at 414. Specific personal jurisdiction exists only when the 

claim “arises out of, or relates to, the defendant’s contacts with the forum” and the defendant 

“purposefully availed itself of the privilege of doing business in the forum and could foresee 

being haled into court there.” Bank Brussels Lambert, 305 F.3d at 127. Mr. Lieber attended a 

single meeting in New York in connection with his work for Toev, a meeting which has no 

special significance to Plaintiffs’ claims against him. Lieber Decl. ¶ 5. As discussed above, the 

only connection between the allegations in the Amended Complaint and this forum is the stock 

purchase agreement (Am. Compl. ¶ 24), which has absolutely nothing to do with Mr. Lieber or 

the claims against him. Because the claims against Mr. Lieber have no nexus with New York, 

specific personal jurisdiction is not present. 

 Nor does this Court have general personal jurisdiction over Mr. Lieber. “Because general 

jurisdiction is not related to the events giving rise to the suit, courts impose a more stringent 

minimum contacts test” than that applicable to specific jurisdiction. Metro. Life Ins. Co. v. 

Robertson-Ceco, Corp., 85 F.3d 560, 568 (2d Cir. 1996). General jurisdiction exists only when 

the defendant’s contacts with the forum are “ongoing and systematic.” U.S. Titan, Inc. v. 

Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 152 (2d Cir. 2001). Mr. Lieber does not have 

ongoing and systematic contacts with New York that would subject him to general personal 

jurisdiction here. Lieber Decl. ¶ 5. Mr. Lieber has no bank accounts or other assets, such as real 

property, in New York. Id. ¶ 4. Mr. Lieber’s isolated visits to New York are insufficient to 

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confer general jurisdiction. See Bank Brussels Lambert, 305 F.3d at 127 (agreeing with district 

court’s conclusion that general jurisdiction could not be maintained even though defendant 

maintained an apartment in New York, transmitted newsletters and mailings into New York, and 

earned $1 million annually representing New York clients) (citing Bank Brussels Lambert v. 

Fiddler Gonzalez & Rodriguez, 2001 WL 893362, at *6-7 (S.D.N.Y. 2001)). Accordingly, the 

Court should dismiss the Amended Complaint against Mr. Lieber under Fed. R. Civ. P. 12(b)(2). 

IV. COUNTS TWO AND FIVE DO NOT STATE ACTIONABLE CLAIMS. 

Even if the Court had jurisdiction, the Court should dismiss counts two and five of the 

Amended Complaint because they fail to state claims upon which relief can be granted. See Fed. 

R. Civ. P. 12(b)(6). Motions under Rule 12(b)(6) assume the truth of the plaintiff’s factual 

allegations and test the legal sufficiency of the claim. McCall v. Pataki, 232 F.3d 321, 322 (2d 

Cir. 2000). “[T]he sufficiency of a complaint is a matter of law that the court is capable of 

determining based on its own reading of the pleading and knowledge of the law.” Id. at 323-24. 

A. Count Two Does Not State A Claim. 

 The Court should dismiss count two of the Amended Complaint because Plaintiffs’ 

allegations, even if true, do not give rise to an actionable fiduciary duty claim. A breach of 

fiduciary duty claim requires the existence of a fiduciary relationship. See In re NSSE Specialists 

Sec. Litig., 405 F. Supp. 281, 302 (S.D.N.Y. 2005); IT Litig. Trust v. D’Aniello, 2005 WL 

3050611, at *13 (D. Del. 2005). Obstfeld does not allege that Defendants breached, much less 

owed, a fiduciary duty to him as a Toev creditor. 

 In count two of the Amended Complaint, Obstfeld seeks to recover damages from 

Defendants based on Toev’s failure to repay a $50,000 loan to Obstfeld. Am. Compl. ¶¶ 61-63. 

Obstfeld does not allege that Defendants were signatories on the promissory note or that they 

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owed him a duty as a Toev creditor. The only allegation is that Defendants owed and breached a 

fiduciary duty to Toev. Id. ¶ 54. The alleged beneficiary of the fiduciary duty, Toev, was not 

harmed by its own alleged failure to pay Defendant Obstfeld $50,000 – much less the $450,000 

Obstfeld now claims to be owed. Accordingly, count two fails to state a fiduciary duty claim and 

must be dismissed. 

B. Count Five Does Not State A Claim. 

 Plaintiffs’ conversion claim is not recognized under New York law. Here, the “property” 

allegedly converted is “a treatment” and “other proprietary information.” Am. Compl. ¶¶ 14; 78. 

That is, Plaintiffs allege that “Defendants have wrongfully exercised dominion and control over 

the Brain Cooling Method and other proprietary information belonging to Toev.” Id. ¶ 78. The 

Amended Complaint defines “Brain Cooling Method” as “a putative treatment for the 

approximately 600,000 people per year who suffer strokes, as well as a novel method of cooling 

the brain so as to mitigate the negative effects of stroke.” Id. ¶ 14. 

 “Under New York law, the general rule is that a claim for conversion does not lie for the 

withholding of indefinite, intangible, and incorporeal species of property.” Phansalkar v. 

Andersen Weinroth & Co., L.P., 175 F. Supp. 2d 635, 639 (S.D.N.Y. 2001). See also Speigel v. 

Quality Brokers of Am. Coop., Inc., 1992 WL 349799, at *6 (S.D.N.Y. 1992) (conversion not 

applicable to a provision in a non-exclusive license); Ippolito v. Lennon, 542 N.Y.S.2d, 3, 6 (1st 

Dept. 1989) (conversion does not apply to musician’s intangible property interest in concert 

performance). Plaintiffs’ conversion claim relates to the very sort of “indefinite, intangible, and 

incorporeal property” for which New York law provides no conversion remedy. The Court 

should dismiss the claim. 

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V. COUNTS TWO, FOUR, FIVE, AND SEVEN ARE TIME-BARRED. 

 The allegations in Plaintiffs’ Amended Complaint conclusively establish that counts two, 

four, five, and seven are barred by the applicable statutes of limitation. Recovery in a federal 

diversity action premised on a state-created right is barred if the applicable state statute of 

limitations has expired. See Guaranty Trust Co. of N.Y. v. York, 326 U.S. 99, 112 (1945). In 

diversity cases, federal courts in this District “must apply New York’s statute-of-limitations 

rules.” Iacobelli Constr., Inc. v. County of Monroe, 32 F.3d 19, 27 (2d Cir. 1994). 

A. Count Two Is Barred By New York’s Statute of Limitations. 

 The Court should dismiss the second count of the Amended Complaint – for breach of 

fiduciary duty – because it is untimely under New York’s statute of limitations. Under New 

York law, “a cause of action for breach of fiduciary duty is governed by a six-year statute of 

limitations where the relief sought is equitable in nature, or by a three-year statute of limitations 

where the only relief sought is money damages.” Weisenthal v. Weisenthal, 40 A.D.3d 1078, 583 

(2d Dept. 2007) (emphasis added) (citing N.Y. C.P.L.R. § 214(4)). 

 As discussed above, in count two Plaintiff Obstfeld seeks only money damages relating 

to Toev’s alleged failure to repay his $50,000 loan, triggering the three year statute of limitations 

under N.Y. C.P.L.R. § 214(4). Am. Compl. ¶¶ 62-63. The alleged breaches of fiduciary duty are 

Defendants’ purported usurpation of corporate opportunities in which Toev had an interest, 

forming ThermopeutiX for the purpose of benefiting from trade secrets and proprietary 

information belonging to Toev, and using their positions as officers, directors, employees, 

shareholders, and/or consultants of Toev to engage in self-interested transactions. Id. ¶ 55. 

Defendants formed ThermopeutiX on May 27, 2004. Id. ¶ 38. Defendants had allegedly 

breached duties to Toev before May 2004, by making arrangements for ThermopeutiX’s 

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formation during the time they owed duties to Toev and its shareholders. Id. ¶¶ 41-42. Solar and 

Renaissance ended their relationship with Toev on May 7, 2004. Id. ¶¶ 32-33, 37. All of these 

alleged breaches occurred in or before May of 2004. Thus, assuming the truth of Plaintiffs’ 

allegations, the complaint was not filed (much less served) within three years of the alleged 

breach of fiduciary duty. Accordingly, count two is time-barred and must be dismissed. 

B. Count Four Is Barred by New York’s State of Limitations. 

 The Court should dismiss count four – tortious interference with business relations – 

because it is untimely under New York’s statute of limitations. Under New York law, tortious 

interference claims must be brought within three years. See N.Y. C.P.L.R. § 214(4); H&P Rsch., 

Inc. v. Integra Realty, Inc., 685 N.Y.S.2d 43, 43-44 (1st Dept. 1999). The cause of action 

accrues “at the time the injury is sustained.” Rosemeier v. Schenker Int’l, Inc., 895 F. Supp. 65, 

66 (S.D.N.Y. 1995). 

 Count four is based on the allegation that “[i]n May 2004, despite the fact that Ignition 

had found prospective investors willing to invest in Toev, [Ronald] Solar abruptly and without 

explanation refused to allow Toev to consider offers of investment in Toev from prospective 

investors sourced by Ignition.” Am. Compl. ¶ 74. Because Plaintiffs commenced this action 

more than three years later, the Court should dismiss count four. 

C. Counts Five and Seven Are Barred By New York’s Statute of Limitations. 

 The Court should dismiss counts five and seven – conversion and trade secret 

misappropriation, respectively – because they are untimely under New York’s statute of 

limitations. New York’s statute of limitations for a conversion claim is three years. See N.Y. 

C.P.L.R. § 214(3). Claims for misappropriation of trade secrets also must be brought within 

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three years. See N.Y. C.P.L.R. § 214(4); Andrew Greenberg, Inc. v. Svane, Inc., 36 A.D.3d 

1094, 1098 (3d Dept. 2007). 

 As discussed above, count five is the conversion claim based on Defendants’ alleged 

exercise of dominion and control over Toev’s intangible property. Am. Compl. ¶ 78. Plaintiffs 

allege that the individual Defendants misappropriated Toev’s technology and, in May 2004, 

“formed ThermopeutiX as a vehicle to profit from their misappropriation.” Id. ¶¶ 38; 41-42. 

According to the allegations in the Amended Complaint, the alleged conversion occurred more 

than three years before Plaintiffs commenced this action. 

 Similarly, Plaintiffs’ misappropriation of trade secrets claim is purportedly based upon 

Plaintiffs’ allegation that Defendants “misappropriated trade secrets and other proprietary 

information belonging to Toev and founded ThermopeutiX for the purpose of profiting from 

their misappropriation . . . .” Am. Compl. ¶ 86. Such alleged misappropriation, culminating in 

the May 2004 formation of ThermopeutiX, occurred, if at all, more than three years before 

Plaintiffs commenced this action. Id. ¶¶ 38; 42-42. Accordingly, the Court should dismiss 

counts five and seven. 

// 

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CONCLUSION 

 Based on the foregoing, Defendants respectfully request that the Court grant their motion 

and dismiss Plaintiffs’ Amended Complaint in whole and in part, under Fed R. Civ. P. 12(b)(1), 

12(b)(2), 12(b)(6), and 23.1, for all of the reasons set forth above. Defendants also respectfully 

request oral argument on their motion. 

Dated: New York, New York 

 August 24, 2007 

CONSTANTINE CANNON LLP 

 By: s/ Kerin E. Coughlin___ 

 Kerin E. Coughlin 

 Stacey Anne Mahoney 

 450 Lexington Avenue, 17th Floor 

 New York, New York 10017 

 Phone: (212) 350-2700 

 Fax: (212) 350-2701 

 kcoughlin@constantinecannon.com 

 FREDRIKSON & BYRON, P.A. 

 Laurie J. Miller (pro hac vice pending) 

 200 Sixth Street, Suite 4000

Minneapolis, Minnesota 55402

Phone: (612) 492-7000 

 Fax: (612) 492-7077 

 lmiller@fredlaw.com 

Attorneys for Defendants Ronald Solar, 

Renaissance Biomedical, Inc., Glen Lieber 

and ThermopeutiX, Inc.

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