Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.1 Page 1 of 19 1 2 3 4 5 6 7 8 COOLEY LLP Michael A. Attanasio (151529) (mattanasio@cooley.com M. Ray Hartman III (211205) (rhartman@cooley.com Megan L. Donohue (266147) (mdonohue@cooley.com 4401 Eastgate Mall San Diego, CA 92121 Telephone: (858) 550-6000 Facsimile: (858) 550-6420 Attorneys for Plaintiff Ra Medical Systems, Inc. 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 Ra Medical Systems, Inc., Plaintiff, 13 14 v. 15 Uri Geiger, individual, Strata Skin Sciences Inc. and Accelmed Growth Partners, L.P., 16 17 Case No. '19CV0920 AJB MSB PLAINTIFF RA MEDICAL’S COMPLAINT FOR DAMAGES AND DEMAND FOR JURY TRIAL Defendants. 18 19 Plaintiff Ra Medical Systems, Inc. (“Plaintiff” or “Ra Medical”), hereby brings 20 this action against Defendants Uri Geiger (“Mr. Geiger”), Strata Skin Sciences Inc. 21 (“Strata”), and Accelmed Growth Partners, L.P. (“Accelmed”) (collectively 22 “Defendants”), based on Defendants’ disparaging, false, and misleading statements to 23 Ra Medical’s financial partners and potential investors before, during, and after the 24 company’s initial public offering (“IPO”), which: 1) violates a prior settlement 25 agreement, 2) intentionally interferes with Ra Medical’s contractual relations; 26 3) intentionally interferes with Ra Medical’s prospective economic relations; and 4) is 27 trade libel, and on that basis alleges as follows: 28 COOLEY LLP ATTORNEYS AT LAW SAN DIEGO COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.2 Page 2 of 19 INTRODUCTION 1 2 1. In 2011, Ra Medical and Strata’s predecessor in interest, PhotoMedex, Inc. 3 (“PhotoMedex”), settling seven related cases involving complex intellectual property 4 claims, false marketing claims, and disputes involving Ra Medical’s FDA approvals, 5 entered into an omnibus Settlement Agreement. The parties released all claims and also 6 entered into a non-disparagement agreement that broadly prohibits any statements 7 regarding the FDA status of certain Ra Medical lasers or any purported false marketing. 8 Subsequently, Strata expressly assumed the responsibilities of the Settlement 9 Agreement. 10 2. Last year, Mr. Geiger, as an agent of Strata and on behalf of Accelmed, 11 and Strata breached the Settlement Agreement and disrupted the hard-fought peace by 12 making disparaging and independently actionable false statements to Ra Medical’s 13 banking partners and the market at large, in an attempt to derail and devalue Ra 14 Medical’s IPO. 15 3. These false statements had a substantial negative effect on Ra Medical’s 16 IPO, causing several key financial partners to back out of the IPO and delaying the IPO 17 for several critical months. These changes, which were caused by Mr. Geiger’s 18 disparaging, false, and misleading communications, substantially damaged Ra Medical. 19 PARTIES 20 4. Ra Medical develops life-saving and life-changing excimer medical lasers 21 for use in the treatment of vascular and dermatological immune-mediated inflammatory 22 diseases. Ra Medical is a Delaware corporation whose principal place of business is 23 in San Diego, California. 24 25 26 27 28 5. Strata is a Delaware corporation whose principal place of business is in Horsham, Pennsylvania. It is a successor in interest to PhotoMedex. 6. Accelmed is incorporated in the Cayman Islands. Its principal place of business is in Herzliya Pituach, Israel. 7. Mr. Geiger is an adult residing in Cresskill, New Jersey. Mr. Geiger is the COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 1. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.3 Page 3 of 19 1 managing partner of Accelmed, which is the primary shareholder of Strata, and is the 2 Chairman of the Board of Directors of Strata. JURISDICTION AND VENUE 3 8. 4 Jurisdiction and venue are proper in this Court because the action involves 5 a breach of a prior Settlement Agreement between Ra Medical and Strata, as a successor 6 in interest to PhotoMedex, which provides that the exclusive jurisdiction for such action 7 is the United States District Court, Southern District of California. See Exhibit A, 8 Section 18. Moreover, the Settlement Agreement provides that then-United States 9 Magistrate Judge Cathy Ann Bencivengo, or her appointee, has jurisdiction to interpret 10 and enforce all provisions of the Settlement Agreement. 9. 11 In addition, this Court has subject matter jurisdiction because the amount 12 in controversy exceeds $75,000 and the parties are diverse, pursuant to 28 U.S.C. § 13 1332. 14 10. Venue is also proper pursuant to 28 U.S.C. § 1391(b)(2) because a 15 substantial part of the events giving rise to the claims occurred within this judicial 16 district, including the injuries suffered by Ra Medical. 17 18 11. The Court has personal jurisdiction over Defendants because they regularly do business within the state of California. 19 FACTUAL ALLEGATIONS 20 Settlement and Strata’s assumption of the obligations therein 21 12. From 2003 through 2011, Ra Medical and PhotoMedex litigated numerous 22 claims regarding the parties’ intellectual property, marketing, advertising and Ra 23 Medical’s FDA approvals, resulting in seven separate cases being filed. Much of this 24 litigation involved claims by PhotoMedex that Ra Medical’s products exceeded its FDA 25 clearances. 26 13. On May 13, 2011, Ra Medical and PhotoMedex executed an omnibus 27 Settlement Agreement to resolve all of those claims. Specifically, the Settlement 28 Agreement released “claims brought or which could have been brought in the COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 2. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.4 Page 4 of 19 1 [l]itigation or claims which relate to actual or alleged acts of infringement by a Party 2 hereto of any patents . . . .” See Exhibit A, Section 2. It also provided a non- 3 disparagement clause to prevent this type of conduct going forward, which provides 4 “[n]o Party shall make, or encourage or cause others to make, any statement or 5 allegation, written or verbal, to any third party including, without limitation, a customer 6 of the other Party or a governmental agency, concerning or relating to the FDA status 7 of Ra Medical’s current lasers, Dean Irwin as an inventor of the first FDA-approved 8 excimer laser for dermatology, or false marketing known to be untruthful.” Id. Section 9 7. 10 14. In June 2015, Mela Sciences, Inc. (“Mela”) purchased certain assets from 11 PhotoMedex, including its XTRAC dermatology business. The XTRAC laser products 12 were, in part, the subject of the claims settled between Ra Medical and PhotoMedex. 13 15. As part of the asset purchase, Mela expressly agreed to “assume and 14 become responsible for paying, performing and discharging the Business Liabilities” as 15 defined in the Asset Purchase Agreement. 16 “Business Liabilities” include “[a]ll liabilities and obligations arising under Business 17 Contracts . . .” Id. Section 1.1, Appendix II. “Business Contracts” are defined as those 18 agreements listed in the Asset Purchase Agreement’s “Disclosure Letter.” Id., Section 19 1.2, Section 3.15(a). 20 Agreement – “Settlement and Release Agreement dated as of May 13, 2011 between 21 Ra Medical Systems, Inc. and Dean Stewart Irwin, on one hand, and [PhotoMedex], on 22 the other hand, in which [PhotoMedex] agreed not to engage in certain marketing 23 activities with regard to the products of Ra Medical Systems, Inc.*” – as a Business 24 Contract for which Mela is assuming liability. 25 3.15(a)(viii). The Asset Purchase Agreement does not provide any exception for 26 liabilities under any Business Contract, even those that are classified as excluded assets, 27 for actions arising after the date of the Asset Purchase Agreement. 28 16. See Exhibit B, Preamble Section C. The Disclosure Letter expressly identifies the Settlement Id., Disclosure Letter Section In December 2015, Mela was rebranded as Strata. COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 3. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.5 Page 5 of 19 Competitors in laser treatments 1 2 17. Ra Medical has two laser systems on the commercial market, DABRA for 3 the treatment of vascular disease and Pharos for the treatment of dermatological 4 diseases. Both use the same core technology and utilize a similar excimer laser. 5 18. Ra Medical’s Pharos laser system has been marketed since 2004 and is 6 designed for the treatment of inflammatory skin conditions. It is FDA cleared to treat 7 psoriasis, vitiligo, atopic dermatitis, and leukoderma. 8 19. In May 2017, Ra Medical received FDA 510(k) clearance to market the 9 DABRA laser system and single-use DABRA catheter in the U.S. for “crossing chronic 10 total occlusions in patients with symptomatic infrainguinal lower extremity vascular 11 disease,” describing the intended use as “[f]or use in ablating a channel in occlusive 12 peripheral vascular disease.” Ra Medical’s DABRA laser system is used by physicians 13 as a tool in the treatment of peripheral artery disease, a form of peripheral vascular 14 disease. These treatments are commonly referred to by the medical community as 15 atherectomy. 16 17 18 20. Ra Medical’s product competitors include companies owned by Accelmed and guided by Uri Geiger. 21. Strata produces the XTRAC laser system, which like Pharos, treats 19 dermatological diseases, including vitiligo. In March 2018, Accelmed filed paperwork 20 with the Securities and Exchange Commission stating that it intended to purchase 21 58.3% of Strata’s common stock upon the closing of a transaction between Accelmed 22 and Strata. On May 29, 2018, the transaction closed and Mr. Geiger immediately 23 became Chairman of Strata’s Board of Directors. 24 22. Eximo Medical is an Israeli company owned in whole or in part by 25 Accelmed. In October 2018, it obtained FDA clearance for a laser system for treatment 26 of peripheral artery disease, including atherectomy for blockages. While its B-laser 27 system and DABRA currently have different FDA clearances, they both are used by 28 physicians to treat artery blockages. COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 4. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.6 Page 6 of 19 Ra Medical prepares to go public 1 2 3 4 23. In December 2017, Ra Medical began preparing to go public on the New York Stock Exchange. 24. The IPO process is time and resource intensive, requiring that the company 5 work closely and cooperatively with financial partners, who serve as intermediaries 6 between the company and investors. Financial institutions considering underwriting an 7 IPO perform extensive due diligence on the offering company’s products, finances, and 8 potential weaknesses. For an IPO for a medical device company like Ra Medical, it is 9 crucial that underwriters have specialized expertise in the field to appropriately guide 10 11 the investing community and generate support. 25. Initially, Ra Medical partnered with UBS Investment Bank (“UBS”), to 12 serve as the lead bank as it pursued its IPO. In December 2017, Ra Medical and UBS 13 entered into a contract, whereby UBS agreed to act as the lead bookrunning manager 14 for the proposed IPO. The lead bookrunning manager coordinates the issuance of the 15 new IPO shares and is generally the firm that serves as lead underwriter. The contract 16 specified that UBS would fill this role for one year or until the IPO closed. It also gave 17 UBS a right of first refusal to act as a financial advisor to Ra Medical with regard to 18 any sale involving the company. Ra Medical and UBS intended that UBS would serve 19 as the formal lead underwriter for its IPO through the close of the transaction, and it 20 was described to the investing public as such. In addition, as is common, Ra Medical 21 also engaged other banks who would share in the risk for the offering, called the 22 underwriting syndicate. These banks are each allotted portions of the company offering. 23 Ra Medical tapped OppenheimerFunds to serve as a financial partner in the syndicate, 24 as well as a number of other financial partners, including SunTrust, Cantor, and 25 Nomura. Because, as part of any IPO, these financial partners perform extensive due 26 diligence on the offering company, their support during the entirety of the IPO process 27 is an important indicator to the market of the overall condition of the company and the 28 viability of the offering. COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 5. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.7 Page 7 of 19 1 26. Investment banks also employ research analysts. They operate 2 independently, and 25 days after the IPO closes, are permitted to produce reports 3 analyzing the company and its newly offered shares. These reports are relied on by the 4 market to determine whether the shares of the newly public company is a good 5 investment and the valuation of the shares going forward. 6 27. Moreover, the IPO process primarily relies on banks, such as UBS and 7 Oppenheimer, to sell the newly issued shares to prospective investors in the market. 8 Generally, this means that banks reach out to their established book of business in the 9 particular sector and urge those individuals or entities to invest. This process begins 10 long before the shares are available for purchase on the market, to ensure that the IPO 11 sells out quickly. Thus, UBS and Oppenheimer would have already been discussing Ra 12 Medical with prospective investors in the spring of 2018. 13 14 15 28. As of March 21, 2018, Ra Medical fully expected UBS to lead its IPO and OppenheimerFunds to serve in the syndicate, and stated as much in its SEC filings. 29. Ra Medical and their banking partners intended to close its public offering 16 in July 2018, thereby gaining significant funding to support its sales and marketing 17 efforts and taking advantage of a historically favorable market for IPO offerings. Mr. Geiger’s campaign to disparage Ra Medical 18 19 30. In or around this time period, Mr. Geiger began a campaign of disparaging 20 and misleading statements to the marketplace about Ra Medical in an effort to 21 undermine the company IPO. 22 31. Mr. Geiger initiated a misinformation campaign to the banks leading Ra 23 Medical’s offering, trying to persuade them to abandon the deal. For instance, on 24 May 22, 2018, Mr. Geiger emailed John Hagens of UBS, the banker leading the Ra 25 Medical IPO, and made several false and misleading statements regarding Ra Medical. 26 See Exhibit C. In that email, Mr. Geiger misleadingly implied that Ra Medical faced 27 impending patent infringement claims from Strata and/or Mount Sinai regarding Ra 28 Medical’s Pharos laser. In fact, any claims held by Stata had been expressly and COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 6. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.8 Page 8 of 19 1 irrevocably released as part of the 2011 Settlement Agreement. Moreover, Mount Sinai 2 has not brought any patent infringement claims against Ra Medical, despite having 3 communicated with Ra Medical as early as 2006 about the patents and entering into an 4 exclusive license with PhotoMedex, Strata’s predecessor in interest, that same year. As 5 the managing partner of Accelmed, the soon to be majority owner of Strata’s common 6 stock, and pending Chairman of Strata’s Board of Directors, Mr. Geiger would have 7 known his statements, particularly regarding Strata’s potential claims, were false. Mr. 8 Geiger would have also known that his statements would concern Ra Medical’s banks 9 in the IPO, as a successful patent claim by a Ra Medical competitor could significantly 10 threaten the company’s ability to market their products and, even if unsuccessful, would 11 consume company resources in litigation. 12 32. In addition, Mr. Geiger made several false statements regarding Ra 13 Medical’s DABRA laser and potential off-label marketing. First, Mr. Geiger falsely 14 implied that Ra Medical was encouraging physicians to improperly seek and receive 15 reimbursements for procedures using the DABRA device from government payors like 16 the Centers for Medicare and Medicaid Services (“CMS”). See Exhibit C. This is a 17 serious accusation, suggesting Ra Medical and physicians could face liability for 18 inducing improper government payments. But Mr. Geiger’s insinuation is entirely 19 false. First, physicians are not strictly limited to use of medical devices consistent with 20 FDA indications, if they determine that the device and procedure are medically 21 appropriate for a particular patient. Many physicians have determined that the DABRA 22 laser system is appropriate to treat a variety of artery blockages. Moreover, third party 23 health payers can reimburse a procedure performed by a device that is not cleared or 24 approved for a specific indication if, again, the physician determines that the device and 25 procedure are medically appropriate for a particular patient. Indeed, CMS payments 26 are predicated on the underlying treatment, e.g., atherectomy for a blocked artery, not 27 the device used to perform the treatment. Second, Mr. Geiger falsely implied that Ra 28 Medical’s device works in only 10% of the population, stating “the FDA clearance is COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 7. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.9 Page 9 of 19 1 limited to CTO (which presents only at 10% of a[]trectomy cases).” Id. In fact, Ra 2 Medical’s FDA clearance describes DABRA’s “Intended Use” as “[f]or use in ablating 3 a channel in occlusive peripheral vascular disease.” 4 DABRA’s FDA clearance, beyond chronic total occlusions, is omitted from Mr. 5 Geiger’s email altogether. Physicians use DABRA on all types of plaque, not just 6 chronic total occlusions, which are some of the most serious artery blockages. 7 Geiger, as the managing partner of Accelmed, is well acquainted with these issues as a 8 result of ownership of the Eximo company and its B-laser products and, on information 9 and belief, is aware that these statements are false or misleading. 10 33. This broader description of Mr. Mr. Geiger stated that the above issues “may result in underwrite[r] 11 liability and effect your brand,” transparently attempting to influence Ra Medical’s lead 12 bank to abandon the IPO. 13 34. This is not a case of a single email. Ra Medical has been informed, and on 14 that basis alleges on information and belief, that Mr. Geiger sent communications like 15 the one he sent to Mr. Hagens to many other banking partners involved in Ra Medical’s 16 IPO, including OppenheimerFunds, as well as other banks who considered participation 17 in the IPO. For example, Ra Medical understands that Piper Jaffray, the bank that 18 ultimately led Ra Medical’s IPO, received similar communications from Mr. Geiger. 19 Moreover, Mr. Geiger expressly threatened to withhold future business from financial 20 institutions who participated in the IPO. For instance, on information and belief, Mr. 21 Geiger informed OppenheimerFunds that if they continued with the Ra Medical IPO, 22 that he would in future withhold his business. Far from normal competition based on 23 the merits of each company’s products, Mr. Geiger engaged in a campaign of threats 24 and intimidation against the syndicate banks and potential participants in the syndicate. 25 35. Moreover, he sent the same message to multiple research analysts, in an 26 attempt to influence their view of Ra Medical’s business opportunity and impact their 27 resulting reports to the marketplace. 28 36. Mr. Geiger has compounded these false statements by further publishing COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 8. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.10 Page 10 of 19 1 them to the investing public. For instance, after Ra Medical attempted to address Mr. 2 Geiger’s false statements via a preliminary letter outlining how his statements violated 3 the Settlement Agreement to which Strata is bound, Mr. Geiger and Strata immediately 4 published the dispute on the SEC’s website. In particular, Strata filed a Form 8-K and 5 attached the entire complaint, including Mr. Geiger’s email to UBS, which contained 6 the false and misleading statements outlined above. This filing was not required by the 7 SEC, and filing the entire complaint, with Mr. Geiger’s email, is never required in an 8 SEC filing, and only serves to boost Defendants’ false statements under the guise of 9 legal action. 10 37. And Mr. Geiger’s campaign is still ongoing. For instance, in November 2, 11 2018, after Ra Medical’s IPO had already closed, Mr. Geiger contacted a banking 12 partner and once again falsely asserted that physicians would face legal liability for 13 using the device and/or seeking reimbursement. Impact on Ra Medical’s IPO 14 15 38. Ultimately, Mr. Geiger’s communications to UBS and OppenheimerFunds 16 had their intended effect, including but not limited to the adverse impacts described 17 below. 18 39. In or around June 2018, UBS and OppenheimerFunds declined to 19 participate in the IPO, and UBS terminated its engagement to serve as Ra Medical’s 20 lead bookrunning manager. The loss of two of Ra Medical’s five banks, including its 21 lead bank, so late in the process, dramatically and negatively impacted the pending IPO. 22 First, the change meant that Ra Medical’s IPO could not go forward as planned in July 23 2018. Ra Medical scrambled to find alternative banks to lead the IPO, and those banks 24 then had to complete their own due diligence. By necessity, this meant that the IPO 25 slipped into fall 2018, ultimately closing on October 1, 2018. By then, the historic IPO 26 market had passed, as most available investment funds had already been committed. 27 28 40. In addition, the loss of these banks late in the process generally undermined the market’s confidence in Ra Medical as an investment. For investors who UBS and COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 9. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.11 Page 11 of 19 1 OppenheimerFunds had already contacted, urging their investment in the IPO, the 2 sudden absence of these banks signaled, incorrectly, that Ra Medical was not a sound 3 investment. For other buyers, even if they had not been directly contacted by UBS and 4 Oppenheimer, the mere fact that these banks bowed out suggested that there was a 5 fundamental problem with the IPO. 6 41. Having suffered the extensive delay caused by Mr. Geiger’s misconduct, 7 Ra Medical’s IPO went forward on September 26, 2018. Shortly thereafter, the stock 8 market suffered serious losses, including record losses during the month of October 9 2018. During this period, Ra Medical was in a legally mandated “quiet period” and 10 could not communicate with investors during this difficult time in the market. Its shares 11 subsequently decreased in value, causing many initial investors to abandon their Ra 12 Medical shares. 13 42. The damage caused by Mr. Geiger’s false statements was thus 14 compounded – Ra Medical lost two of its key investment banks, undermining market 15 confidence and delaying its IPO unreasonably, and then suffered in a declining market 16 in which it should never have found itself but for the Defendants’ malicious and 17 intentional acts. 18 43. Moreover, Defendants’ disparaging, false and misleading statements to 19 research analysts may have negatively impacted their views of Ra Medical and their 20 resulting reports. 21 44. 22 in its initial IPO offering and decreased valuations in its shares thereafter. COUNT I BREACH OF THE SETTLEMENT AGREEMENT (AGAINST MR. GEIGER AND STRATA) 23 24 25 26 27 28 As a result, Ra Medical suffered significant damages, including a reduction 45. Ra Medical incorporates by reference all of the preceding allegations set forth above as if fully set forth herein. 46. In 2011, Ra Medical and PhotoMedex entered into the Settlement COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 10. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.12 Page 12 of 19 1 Agreement. See Exhibit A. Subsequently, as part of its purchase of PhotoMedex’s laser 2 assets, Mela expressly assumed the responsibilities in that Settlement Agreement. Mela 3 is now Strata, a successor in interest to the asset purchase and the responsibilities 4 assumed therein. The Settlement Agreement prohibits disparaging statements regarding 5 the FDA status of certain Ra Medical lasers, as well as false marketing known to be 6 untrue. 7 47. Mr. Geiger, on behalf of Strata, breached these provisions by disparaging 8 Ra Medical’s FDA clearances, suggesting to banking partners that the DABRA system 9 works in only 10% of cases, that physicians may face legal liability for using the laser 10 outside of Ra Medical’s FDA clearance and/or that reimbursement from governments 11 payors for treatments outside of the FDA clearance may be improper. Moreover, Mr. 12 Geiger falsely implied that Strata and/or Mount Sinai were pursuing patent claims 13 against Ra Medical for its Pharos laser. 14 48. These statements violate the prohibition on statements relating to the FDA 15 status of Ra Medical’s lasers, as the DABRA system uses the same core excimer 16 technology at issue in the prior litigations and Mr. Geiger is mischaracterizing the scope 17 of the FDA clearance for DABRA. Moreover, Mr. Geiger’s false and misleading 18 assertions on these issues, to all of Ra Medical’s prospective banking partners and the 19 investing community at large, constitutes false marketing known to be untrue. As a 20 result, Mr. Geiger, on behalf of Strata, is in breach of Section 7 of the Settlement 21 Agreement. 22 49. Strata’s breach, via Mr. Geiger, harmed Ra Medical, causing in whole or 23 in part, UBS, OppenheimerFunds and other banking partners to abandon the IPO. Even 24 were that not so, harm is presumed where a party breaches the Settlement Agreement’s 25 non-disparagement provisions, under the express terms of the Settlement Agreement. 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 11. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.13 Page 13 of 19 COUNT II INTENTIONAL INTERFERENCE IN CONTRACTUAL RELATIONS (AGAINST ALL DEFENDANTS) 1 2 3 4 5 6 50. Ra Medical incorporates by reference all of the preceding allegations set forth above as if fully set forth herein. 51. Ra Medical contracted with UBS to serve as the lead bookrunning manager 7 through the IPO process, a contract that was still in place in spring 2018 when Mr. 8 Geiger, on behalf of Accelmed and Strata, began making disparaging, false and 9 misleading statements regarding Ra Medical to UBS and/or threatening to withhold 10 11 future business from UBS if the bank participated in the IPO. 52. On information and belief, Mr. Geiger on his own behalf and on behalf of 12 Accelmed and Strata, was aware of this contract, as such engagements are standard in 13 an IPO process and Mr. Geiger is well acquainted with the norms for such offerings. 14 53. Defendants’ actions disrupted UBS’s performance as the lead bookrunning 15 manager for the IPO and eventually caused the termination of UBS’s contract with Ra 16 Medical. 17 54. Defendants intended and advocated for this result, as Mr. Geiger 18 specifically pointed to UBS’s involvement in Ra Medical’s IPO as the reason for his 19 communications, implying that the issues he was raising would create liability for UBS 20 and impact its brand. At the very least, Defendants knew the disruption to UBS’s 21 performance was certain or substantially certain to occur. 22 55. As a result of this interference, Ra Medical was harmed by disruption of 23 its relationship with UBS, delay in its IPO offering, damage to its reputation in the 24 market, all of which ultimately contributed to a reduction in its initial IPO offering and 25 decreased valuations in its shares thereafter. 26 56. Defendants’ disparaging, false and misleading statements were a 27 substantial factor in UBS’s decision not to participate in Ra Medical’s IPO and 28 terminate their role as the lead bookrunning manager and the resulting harm therein. COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 12. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.14 Page 14 of 19 COUNT III INTENTIONAL INTERFERENCE IN PROSPECTIVE ECONOMIC RELATIONS (AGAINST ALL DEFENDANTS) 1 2 3 4 5 6 57. Ra Medical incorporates by reference all of the preceding allegations set forth above as if fully set forth herein. 58. Ra Medical was partnering with select financial entities as part of its IPO 7 offering, including investment bank UBS as the lead bank and OppenheimerFunds as a 8 member of the syndicate. These partners offered deep expertise in medical device IPOs, 9 and Ra Medical stood to benefit from this expertise and having the company go through 10 11 a successful and seamless IPO process. 59. Mr. Geiger, on his own behalf and on behalf of Accelmed and Strata, knew 12 that Ra Medical intended to partner with these third parties as part of the underwriting 13 syndicate for Ra Medical’s IPO. For example, Mr. Geiger specifically referenced 14 UBS’s role as a potential underwriter in his May email to UBS. He similarly, on 15 information and belief, reached out to OppenheimerFunds and communicated his 16 displeasure with their role in the Ra Medical IPO. 17 60. Mr. Geiger, on his own behalf and on behalf of Accelmed and Strata, made 18 disparaging, false and misleading statements regarding Ra Medical to these banking 19 partners. 20 21 22 61. On information and belief, Mr. Geiger made similar communications to many other banks considering participation in the IPO. 62. These communications were false and misleading and also breached the 23 non-disparagement provisions in the Parties’ Settlement Agreement, provisions which 24 bound Defendant Strata and Mr. Geiger as Strata’s agent. 25 63. Mr. Geiger, on his own behalf and on behalf of Accelmed and Strata, made 26 these communications in order to disrupt Ra Medical’s relationship with its banking 27 partners, including UBS and OppenheimerFunds, or knew that disruption of those 28 relationships was certain or substantially certain. COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 13. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.15 Page 15 of 19 1 64. He succeeded, as UBS and OppenheimerFunds both withdrew from the 2 IPO, at least in part due to Mr. Geiger’s disparaging statements and false and misleading 3 implications regarding Ra Medical’s actions. 4 65. As a result of this interference, Ra Medical was harmed by disruption of 5 its relationship with UBS and OppenheimerFunds, the delay in its IPO offering, damage 6 to its reputation in the market, and ultimately, a reduction in its initial IPO offering and 7 decreased valuations in its shares thereafter. 8 9 10 66. substantial factor in these banking partner’s decisions not to participate in Ra Medical’s IPO and the resulting harm therein. COUNT IV TRADE LIBEL (AGAINST ALL DEFENDANTS) 11 12 13 14 15 16 Defendants’ disparaging, false and misleading statements were a 67. Ra Medical incorporates by reference all of the preceding allegations set forth above as if fully set forth herein. 68. Mr. Geiger’s comments about Ra Medical, made on his own behalf and on 17 behalf of Accelmed and Strata, disparaged the company’s business and accused Ra 18 Medical of acting improperly, including inducing physicians to pursue improper 19 government payments and patent infringement. This disparaged both Ra Medical’s 20 services to their physician customers and the quality of their laser products. These 21 statements, alone and in combination, portrayed Ra Medical as an unscrupulous actor 22 whose IPO could hurt prospective banking partners and investors. 23 24 69. These statements were made to UBS and, on information and belief, to OppenheimerFunds and other financial partners. 25 70. These statements were false and misleading, as described above. 26 71. Mr. Geiger knew that these statements were untrue or acted with reckless 27 disregard for the truth or falsity of his statements. For instance, Mr. Geiger would have 28 been aware that Strata no longer held patent infringement claims against Ra Medical COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 14. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.16 Page 16 of 19 1 due to the prior releases contained in the Settlement Agreement and that Mount Sinai, 2 PhotoMedex’s licensing partner since 2006, has not pursued any potential patent claims 3 against Ra Medical. Moreover, as the managing partner of Accelmed, an owner of a 4 vascular laser product produced by Eximo, Mr. Geiger would have known that 5 physicians can seek reimbursement for treatment regardless of the devices utilized 6 therein, and that they can, in appropriate circumstances elect to use devices beyond their 7 FDA clearance. Mr. Geiger would also know that Ra Medical’s clearance means that 8 its DABRA laser system can be used to treat peripheral vascular disease and that 9 physicians may determine, on that basis, to use it in a variety of treatments commonly 10 referred to as atherectomy. 72. 11 Mr. Geiger knew and intended that his disparaging statements would be 12 relied on, and that UBS, OppenheimerFunds and other financial partners would believe 13 his assertions and refuse to participate in Ra Medical’s IPO. There was no other reason 14 for his broad campaign against Ra Medical. 73. 15 16 As a result, Ra Medical suffered a reduction in its initial IPO offering and decreased valuations in its shares thereafter. 74. 17 Defendants’ disparaging, false and misleading statements were a 18 substantial factor in causing these partners not to participate in Ra Medical’s IPO and 19 the resulting harm therein. 20 21 22 /// 23 24 25 /// 26 27 28 /// COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 15. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.17 Page 17 of 19 PRAYER FOR RELIEF 1 Wherefore, Plaintiff prays for judgment against Defendants as follows: 2 3 A. An order adjudging that Defendants Mr. Geiger and Strata breached 4 Section 7 of the Settlement Agreement via Mr. Geiger’s communications to banking 5 partners and investors and awarding all available damages and relief; 6 7 8 9 10 11 12 B. An order adjudging that Defendants committed intentional interference with contractual relations and awarding all available damages and relief; C. An order adjudging that Defendants committed intentional interference with prospective economic relations and awarding all available damages and relief; D. An order adjudging that Defendants committed trade libel and awarding all available damages and relief; E. For Plaintiff’s costs and attorneys’ fees incurred in prosecuting the breach 13 of the Settlement Agreement, as provided for under Section 19 of that Settlement 14 Agreement; 15 F. For prejudgment interest; 16 G. For such other and further relief as this Court deems just and proper. 17 18 19 20 Dated: May 16, 2019 COOLEY LLP 21 22 23 By:/s/ Michael A. Attanasio Michael A. Attanasio M. Ray Hartman III Megan Donohue 24 Attorneys for Plaintiff Ra Medical Systems, Inc. 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN DIEGO 16. COMPLAINT Case 3:19-cv-00920-AJB-MSB Document 1 Filed 05/16/19 PageID.18 Page 18 of 19 CIVIL COVER SHEET JS 44 (Rev. 02/19) The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) I. (a) PLAINTIFFS RA Medical Systems, Inc. (b) DEFENDANTS Uri Geiger, Strata Skin Sciences Inc., Accelmed Growth Partners, L.P. San Diego County, CA County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) NOTE: (c) Bergen County, NJ (IN U.S. PLAINTIFF CASES ONLY) IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. Attorneys (If Known) Attorneys (Firm Name, Address, and Telephone Number) Michael A. Attanasio, M. Ray Hartman III, Megan L. Donohue '19CV0920 AJB MSB Cooley LLP 4401 Eastgate Mall, San Diego, CA 92121; (858) 550-6000 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff 1 U.S. Government Plaintiff 3 Federal Question (U.S. Government Not a Party) 2 U.S. Government Defendant 4 Diversity (Indicate Citizenship of Parties in Item III) (For Diversity Cases Only) PTF Citizen of This State 1 Citizen of Another State 2 Citizen or Subject of a Foreign Country 3 IV. NATURE OF SUIT (Place an “X” in One Box Only) CONTRACT 110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excludes Veterans) 153 Recovery of Overpayment of Veteran’s Benefits 160 Stockholders’ Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property 1 and One Box for Defendant) PTF DEF Incorporated or Principal Place 4 4 of Business In This State 2 Incorporated and Principal Place of Business In Another State 5 5 3 Foreign Nation 6 6 Click here for: Nature of Suit Code Descriptions. TORTS PERSONAL INJURY PERSONAL INJURY 310 Airplane 365 Personal Injury 315 Airplane Product Product Liability Liability 367 Health Care/ 320 Assault, Libel & Pharmaceutical Slander Personal Injury 330 Federal Employers’ Product Liability Liability 368 Asbestos Personal 340 Marine Injury Product Liability 345 Marine Product Liability PERSONAL PROPERTY 350 Motor Vehicle 370 Other Fraud 355 Motor Vehicle 371 Truth in Lending Product Liability 380 Other Personal 360 Other Personal Property Damage Injury 385 Property Damage 362 Personal Injury Product Liability Medical Malpractice CIVIL RIGHTS 440 Other Civil Rights 441 Voting 442 Employment 443 Housing/ Accommodations 445 Amer. w/DisabilitiesEmployment 446 Amer. w/DisabilitiesOther 448 Education DEF PRISONER PETITIONS Habeas Corpus: 463 Alien Detainee 510 Motions to Vacate Sentence 530 General 535 Death Penalty Other: 540 Mandamus & Other 550 Civil Rights 555 Prison Condition 560 Civil Detainee Conditions of Confinement FORFEITURE/PENALTY 625 Drug Related Seizure of Property 21 USC 881 690 Other LABOR 710 Fair Labor Standards Act 720 Labor/Management Relations 740 Railway Labor Act 751 Family and Medical Leave Act 790 Other Labor Litigation 791 Employee Retirement Income Security Act BANKRUPTCY 422 Appeal 28 USC 158 423 Withdrawal 28 USC 157 PROPERTY RIGHTS 820 Copyrights 830 Patent 835 Patent – Abbreviated New Drug Application 840 Trademark SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff or Defendant) 871 IRS—Third Party 26 USC 7609 IMMIGRATION 462 Naturalization Application 465 Other Immigration Actions OTHER STATUTES 375 False Claims Act 376 Qui Tam (31 USC 3729(a)) 400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit 485 Telephone Consumer Protection Act 490 Cable/Sat TV 850 Securities/Commodities/ Exchange 890 Other Statutory Actions 891 Agricultural Acts 893 Environmental Matters 895 Freedom of Information Act 896 Arbitration 899 Administrative Procedure Act/Review or Appeal of Agency Decision 950 Constitutionality of State Statutes V. ORIGIN (Place an “X” in One Box Only) 1 Original Proceeding 2 Removed from State Court 3 Remanded from Appellate Court 4 Reinstated or Reopened 5 Transferred from Another District (specify) 6 Multidistrict LitigationTransfer 8 Multidistrict Litigation – Direct File Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): 28 U.S.C. § 1332 VI. CAUSE OF ACTION Brief description of cause: Action for breach of settlement agreement; intentional interference with contract and prospective business advantage; and trade libel VII. REQUESTED IN COMPLAINT: CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, F.R.Cv.P. DEMAND $ CHECK YES only if demanded in complaint: JURY DEMAND: Yes No American LegalNet, Inc. www.FormsWorkFlow.com CaseCASE(S) 3:19-cv-00920-AJB-MSB Honorable Document 1 Jean Filed 05/16/19 of 19 JLS VIII. RELATED Cathy Bencivengo, see PageID.19 Page No. 19 04-cv-0024 IF ANY Notice of Related Cases filed herewith (CAB) (S.D. Cal.) (See instructions): JUDGE DATE May 16, 2019 FOR OFFICE USE ONLY RECEIPT # Joseph A. Smyth, S.J., SIGNATURE OF ATTORNEY OF RECORD AMOUNT APPLYING IFP DOCKET NUMBER No. 18-21421 (Court of Common Pleas of Montgomery Co., Pa.) /s/ Michael A. Attanasio JUDGE MAG. JUDGE American LegalNet, Inc. www.FormsWorkFlow.com