SAN FRANCISCO (LN) — U.S. District Judge Charles R. Breyer on Thursday denied a motion to transfer a claim related to a stock restriction agreement to Delaware, ruling that splitting the case would create piecemeal litigation, while granting a motion to dismiss the plaintiff’s fraud and declaratory judgment claims.
Dr. Andrei Gafita, a Johns Hopkins Medicine researcher, sued Nucs AI and two of its executives, alleging they conspired to deny him equity he helped develop. Gafita claims he created the concept for an AI technology to aid in prostate cancer diagnosis and treatment in 2023.
Gafita alleges that co-founders Farid Yagubbayli and Nijat Ahmadov agreed to grant him 4.7 million shares of common stock. However, after receiving the shares in May 2024, Gafita says the executives pressured him into amending his stock purchase agreement twice, citing the need for outside investment and his limited work hours.
The amendments subjected Gafita’s shares to a revesting schedule, leaving him with zero vested shares while the executives’ shares remained unchanged. Gafita alleges he was subsequently terminated for cause to avoid triggering an accelerated vesting provision in a stock restriction agreement.
Nucs AI moved to transfer the claim related to the stock restriction agreement to the District of Delaware, citing a forum selection clause in that contract. The company argued that Delaware courts were more familiar with the applicable law and that transfer served the public interest.
Breyer agreed the forum selection clause was valid but found that public interest factors weighed against transfer. The judge noted that Nucs AI had its principal place of business in San Francisco during the relevant period, creating a local interest in keeping the case in California.
The court concluded that severing and transferring a single claim arising transaction would be contrary to the federal policy favoring efficient resolution of controversies.
Having another court handle the same basic controversy in parallel proceedings would be needlessly inconvenient and burdensome, Breyer wrote.
The judge also granted Nucs AI’s motion to dismiss Gafita’s claims for declaratory judgment and fraud in the inducement. Breyer found the declaratory judgment claim duplicative of the breach of contract claim.
Regarding the fraud claim, the court ruled Gafita failed to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b). The judge found Gafita did not plead facts explaining why specific representations were false when made, nor did he identify the specific speakers or times of the alleged misrepresentations with sufficient particularity.
Breyer denied the motion to dismiss Gafita’s unjust enrichment claim, noting that alternative claims are permitted even if they arise nucleus of operative fact.
The judge ordered Gafita to amend his complaint to separate his breach of contract claims by each pertinent agreement to promote clarity.