E-Sports Company Sheds Majority of Black Attorney’s Bias Lawsuit

An E-sports company and two officers defeated the majority of a Black former in-house attorney’s bias and fraud claims for now, with a ruling by a California federal court.

Karen Suber, a former lead transactional attorney for VVP Services LLC until her departure in January 2018, initially sued the company, three affiliated businesses, Amit Raizada, and Stratton Sclavos in the Southern District of New York. Suber alleged discriminatory and abusive behavior, exclusion from meetings, being prohibited from direct contact with “important clients of color,” and the use of a racial slur by Raizada following her resignation, Garnett said.

The New York federal court dismissed the case for lack of personal jurisdiction since the alleged misconduct wasn’t primarily connected to the state. After the Second Circuit upheld the lower court’s decision, Suber filed a petition for certiorari with the US Supreme Court, which remains pending. Subsequently, she filed the lawsuit here in the US District Court for the Central District of California, which the defendants moved to dismiss saying it was “improperly duplicative, time-barred, and inadequately pled,” Judge Sherilyn Peace Garnett said in an opinion docketed Thursday.

Many of Suber’s claims were timely due to equitable tolling, the court said. The court rejected the defendants’ argument that tolling didn’t apply to those claims because Suber acted in bad faith. “The Court declines to assume that Plaintiff acted in bad faith by filing her action in the District in which she resides, and where, as she represented during the hearing, she has previously practiced law.”

But most of Suber’s claims were dismissed, though all of the dismissals were without prejudice. A defamation claim against Sclavos, and fraud in the inducement, intentional misrepresentation, negligent misrepresentation, and intentional misrepresentation by promissory fraud claims against Raizada remain.

Sclavos allegedly told several people that Suber was terminated for cause, Garnett said regarding the defamation claim. Suber said the statements were allegedly made over several weeks through at least October 2019, and the comments injured her “reputation because they were made to important people in her field of work,” Garnett said. The allegations were enough only to state a claim against Sclavos.

For the fraud in the inducement claim, Suber sufficiently pleaded allegations against Raizada. He allegedly falsely represented that VVP was “well-funded and that she would receive equity in the new venture,” Garnett said.

Suber’s intentional misrepresentation, negligent misrepresentation, and intentional misrepresentation by promissory fraud claims were adequately alleged against Raizada for similar reasons to the fraud in the inducement claim, Garnett said.

Suber’s promissory estoppel, wrongful termination in violation of public policy, and violation of California law claims were dismissed, without prejudice to allow her to attempt to show a basis for tolling, Garnett said. Her remaining claims were also dismissed.

Suber represented herself. Aim Law Group PC and Venable LLP the defendants.

The case is Suber v. VVP Serv. LLC, C.D. Cal., No. 23-cv-02932, 10/25/23.