E-Sports Companies, Officers Nix Lawsuit by Black Former Lawyer

A Black former in-house lawyer for an e-sports company failed to link alleged racial bias, false statements she said induced her to leave Gibson, Dunn & Crutcher LLP, and other alleged misdeeds to New York, a federal court in the state ruled.

The only business-related transactional activity identified by Karen Suber that might have supported exercising personal jurisdiction over Stratton Sclavos, Amit Raizada, VVP Services LLC, and three related companies was the men’s alleged solicitation of funds from the New York Yankees and other New York investors, the U.S. District Court for the Southern District of New York said.

But the “conspiracy theory of jurisdiction” Suber asserted against the companies only applies to tort claims, not business transactions under New York’s long-arm jurisdiction statute, the court said. Suber’s allegations against the companies were also too “vague and conclusory” to adequately plead the alleged conspiracy, the court said.

Her allegations regarding Sclavos and Raizada failed to satisfy the business-transactions section of the long-arm statute because Suber’s claims didn’t arise out of their alleged investment solicitations in New York, Judge Alison J. Nathan said Monday.

Suber was recruited away from Gibson Dunn to be VVP’s lead transactional attorney. The job was based in California and she relocated there about a month after starting.

Her lawsuit claimed she was fraudulently induced to accept the position, that the company breached its contract with her, and that she was constructively discharged. She also alleged that Sclavos defamed her after she left, that Raizada used racial slurs, and that the two men engaged in unfair business practices and civil conspiracy.

Only Suber’s constructive discharge claim was even remotely related to Sclavos’ and Raizada’s alleged New York-based investment solicitations, Nathan said. But that was asserted under California law under which only employers may be liable, the judge said.

Suber didn’t allege that either man was her employer, the court said.

Personal jurisdiction was also lacking under other sections of New York’s long-arm statute, Nathan said.

The tort section didn’t apply because none of the defendants’ were ever physically present in New York. And the $38 million that was solicited from the Yankees and others there didn’t amount to revenue derived from the state because that section only concerns funds generated from the sale of goods or services, the judge said.

Amos Jones Law Firm represented Suber. Olshan Frome Wolosky LLP and Genovese, Joblove & Battista PA represented Sclavos, Raizada, and the companies.

The case is Suber v. VVP Servs., LLC, 2021 BL 365642, S.D.N.Y., No. 20-cv-08177, 9/27/21.