Leon v. Shmukler, 992 F. Supp. 2d 179

Plaintiffs sue Shmukler, Thinomenon, and Mednikov under New York contract and tort law and federal copyright law for misappropriation of OS Research assets and information.
Arbitration in 2011 (Leon, ABL, OS Research vs. Shmukler) addressed ownership and control of OS Research assets; the award found ABL owned 71.59% and Shmukler had no right to OS Research assets.
OS Research was formed by ABL, Shmukler, and Lebovic; ABL holds majority in OS Research; Thinomenon is an Illinois corporation founded after Shmukler exited OS Research.
Mednikov is identified as Thinomenon’s agent, president, and secretary in Illinois records; Thinomenon began selling Elusiva-derived products in 2011.
Plaintiffs allege Thinomenon uses OS Research’s Elusiva assets and that Shmukler transferred assets to Thinomenon and Mednikov, who allegedly owe distributions and fiduciary duties.
Plaintiffs request declaratory relief, injunctive relief, and damages for breach of contract, fiduciary duties, misappropriation, and copyright infringement.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether res judicata bars the claims	Arbitration involved different parties and issues; claims post-arbitration arose from different conduct.	2011 arbitration bars subsequent related claims under res judicata.	Res judicata does not bar these claims; distinctions in privity and post-arbitration misconduct undermine application.
Whether Mednikov has personal jurisdiction based on successor liability	Mednikov as successor to Shmukler should be bound by OS Research assets and obligations.	Insufficient allegations of Mednikov’s acts or obligations to justify successor liability.	Insufficient prima facie showing of successor liability; discovery not denied but needed to establish basis.
Whether Mednikov is subject to New York long-arm jurisdiction under CPLR 302	As Thinomenon’s President, Mednikov’s involvement subjects him to NY jurisdiction for torts committed via Thinomenon.	No concrete facts showing Mednikov’s personal involvement; agency theory insufficient.	No prima facie jurisdiction under CPLR 302(a)(1) or (a)(3) without discovery; limited jurisdictional discovery warranted.

Allen v. McCurry, 449 U.S. 90 (U.S. 1980) (res judicata requires adjudication on the merits and privity considerations)
Burgos v. Hopkins, 14 F.3d 787 (2d Cir. 1994) (transactional analysis bars later claims arising from same facts)
Monahan v. N.Y.C. Dep’t of Corr., 214 F.3d 275 (2d Cir. 2000) (test for res judicata applicability post-judgment)
Dorchester Fin. Secs., Inc. v. Banco BRJ, S.A., 722 F.3d 81 (2d Cir. 2013) (claims bar by res judicata requires prior adjudication on the merits)
Ippolito v. TJC Development, LLC, 83 A.D.3d 57 (N.Y. App. Div. 2011) (privity analysis in res judicata context)
On-Tel Prods., Inc. v. Grand Rent A Car Corp., 71 N.Y.2d 460 (N.Y. 1988) (agency-based approach to personal jurisdiction)
LaMarca v. PaK-Mor Mfg. Co., 95 N.Y.2d 210 (N.Y. 2000) (long-arm jurisdiction and effects-based analysis)
Transfield ER Cape Ltd. v. Indus. Carriers, Inc., 571 F.3d 221 (2d Cir. 2009) (alter ego/successor theories may bind individuals)
Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3d Cir. 1978) (personal liability of corporate officers for torts)
Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13 (N.Y. 1970) (minimum contacts considerations for jurisdiction)
Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 933 F.2d 131 (2d Cir. 1991) (alter ego/successor jurisdiction considerations)
Giannone v. York Tape & Label, Inc., 2007 WL 1521500 (E.D.N.Y. 2007) (see prior discussion on res judicata involving similar issues)