Organovo Holdings, Inc. v. Dimitrov, 162 A.3d 102

Background

Organovo sued anonymous "Simeon Research" after Simeon published two detailed negative reports and tweeted about Organovo, alleging defamation, tortious interference, and negligence; Simeon later defaulted and a default judgment enjoined Simeon from republishing the material.
Organovo identified Simeon’s operator as Georgi Dimitrov and sued him in Chancery, seeking damages, disgorgement of trading profits, and a permanent injunction barring future defamatory publications and requiring removal of prior posts.
Organovo acknowledged Simeon’s website and tweets had been removed before filing; Organovo attempted service on Dimitrov by multiple means and obtained service by publication; Dimitrov failed to appear and was held in default.
After default, the court required briefing on damages and whether the proposed injunction would be an unconstitutional prior restraint; Organovo sought large market-capitalization damages and later a reduced sum plus disgorgement; the court ordered disgorgement discovery.
Dimitrov later appeared and moved to vacate the default judgment, arguing lack of subject-matter and personal jurisdiction; the court concluded it need only decide subject-matter jurisdiction.
The Court of Chancery held it lacked equitable jurisdiction because (1) defamation and related torts normally have adequate legal remedies (damages), (2) the requested permanent injunction against future defamatory speech is generally barred (the no-injunction rule and First Amendment concerns), and (3) disgorgement is not an available equitable remedy to convert a legal tort into a chancery matter.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Chancery had subject-matter jurisdiction	Organovo argued its request for a permanent injunction and disgorgement made the case equitable and therefore within Chancery jurisdiction	Dimitrov argued the claims were legal (defamation/tort) and Chancery lacked jurisdiction	Court: No subject-matter jurisdiction; default vacated
Whether injunctive relief against future defamation justified Chancery jurisdiction	Organovo claimed future injunction necessary to prevent recurrence and justified equitable forum	Dimitrov argued injunction is unavailable or impermissible as prior restraint; past compliance negated reasonable apprehension of future harm	Court: Injunction unavailable here—adequate legal remedy existed and no reasonable apprehension of future wrongdoing; anti-injunction rule and constitutional concerns foreclose jurisdiction
Whether trade-libel / tortious-interference allegations supported equitable relief	Organovo contended tortious interference could ground equity jurisdiction (trade-libel exception)	Dimitrov argued Organovo pleaded only vague interference and failed to allege the required specifics or intent	Court: Claim for tortious interference was inadequately pleaded; could not support equitable jurisdiction
Whether disgorgement of trading profits supports chancery jurisdiction	Organovo sought disgorgement of Dimitrov’s short-sale profits as equitable restitution	Dimitrov said disgorgement is not a remedy for defamation and profits were not at Organovo’s expense	Court: Disgorgement is not a recognized remedy for defamation here and cannot establish jurisdiction

Key Cases Cited

Hauspie v. Stonington P’rs, Inc., 945 A.2d 584 (Del. 2008) (default judgment deems well-pleaded facts admitted)
Candlewood Timber Grp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989 (Del. 2004) (standards for Chancery jurisdiction)
Int’l Bus. Mach. Corp. v. Comdisco, Inc., 602 A.2d 74 (Del. Ch. 1991) (equitable jurisdiction assessed from complaint face)
Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) (defamation remedies and First Amendment context)
Near v. Minnesota ex rel. Olson, 283 U.S. 697 (1931) (prior restraint doctrine; injunctions against publications)
Ins. Corp. of Ireland v. Compagnie des Bauxietes de Guinee, 456 U.S. 694 (1982) (defendant may later challenge jurisdiction despite default)