2 3 Suited, LLC v. Patel, 9:23-cv-81503

Plaintiff 2 3 Suited, LLC (controlled by Leonard Tannenbaum) purchased over 26 million shares of Devi Holdings, Inc., a cannabis company, from various sellers including the Patel Defendants, Marvele, LLC, Six Groove LLC, and Weldon Development LLC.
Purchases were made during 2021 after receiving reassurances from Jigar Patel (Devi's CEO) and other defendants about Devi's sound financial condition and absence of financial problems.
Plaintiff alleges that Defendants failed to disclose approximately $13 million in unpaid tax liabilities and other adverse facts, leading Plaintiff to enter into the stock purchase agreements (SPAs) at inflated prices.
Plaintiff asserts claims for federal securities fraud, Florida securities fraud, fraudulent inducement, negligent misrepresentation, and civil conspiracy.
Defendants moved to dismiss, arguing lack of personal jurisdiction, contractual bars to reliance/fraud claims, failure to state a claim, and other grounds.
The Court dismissed the complaint, finding that the SPAs contained enforceable anti-reliance clauses under Delaware and New York law, barring all of Plaintiff’s fraud-based claims as a matter of law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Personal Jurisdiction	Jurisdiction proper via nationwide service provision (Exchange Act) or Florida long-arm statute	Plaintiff failed to allege proper basis; Exchange Act not properly pleaded; claims not colorable	Court has U.S.-wide jurisdiction under Exchange Act
Choice of Law/Effect of SPA Provisions	Florida law governs; recission is primary remedy, so anti-reliance provisions don't bar claims	Choice-of-law clauses require Delaware or NY law; Plaintiff seeks damages, which affirms SPA provisions	Delaware/NY law applies; SPA anti-reliance provisions enforced
Fraud Claims—Reasonable Reliance	Anti-reliance clauses are generic; do not cover affirmative misrepresentations/omissions	SPAs explicitly waive reliance on any non-public information or representations outside the contract	Anti-reliance provisions bar reliance—fraud claims dismissed
Civil Conspiracy	Can stand as an independent cause; rests on same factual allegations as underlying claims	No independent action for conspiracy; must have actionable underlying tort	Dismissed; no underlying viable tort claim

Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal court sitting in diversity applies forum state's choice-of-law rules)
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (facts determine fairness of personal jurisdiction)
Danann Realty Corp. v. Harris, 5 N.Y.2d 317 (1959) (specific anti-reliance disclaimers in contract bar fraud claims based on extracontractual statements)
Norton v. Poplos, 443 A.2d 1 (Del. 1982) (effectiveness of anti-reliance clauses depends on parties' sophistication and bargaining)
Prairie Capital III, L.P. v. Double E. Holding Corp., 132 A.3d 25 (Del. Ch. 2015) (anti-reliance and merger clauses bar fraud based on extracontractual misrepresentations or omissions)
Crown Ice Mach. Leasing Co. v. Sam Senter Farms, Inc., 174 So. 2d 614 (Fla. Dist. Ct. App. 1965) (recission and damages are mutually exclusive remedies for contract claims)
Raimi v. Furlong, 702 So. 2d 1273 (Fla. Dist. Ct. App. 1997) (civil conspiracy requires actionable underlying tort)