Et Seq: '20CV1058 LL LAB

Case 3:20-cv-01058-LAB-LL Document 1 Filed 06/09/20 PageID.
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1 Todd A. Boock (SBN 181933)

tboock@goodwinlaw.com
2 GOODWIN PROCTER LLP
601 S. Figueroa St., 41st Floor
3 Los Angeles, California 90017-5704
Tel.: +1 213.426.2500
4 Fax.: +1 213.623.1673
5 Noah M. Jennings (SBN 307234)
njennings@goodwinlaw.com
Three Embarcadero Center
7 San Francisco, California 94111
Tel.: +1 415.733.6000
8 Fax.: +1 415.677.9041
9 James A. Lassart (SBN 40913)
jlassart@mpbf.com
10 Adrian G. Driscoll (SBN 95468)
adriscoll@mpbf.com
11 MURPHY, PEARSON, BRADLEY &
FEENEY, P.C.
12 580 California Street, Suite 1100
San Francisco, California 94104
13 Tel.: +1 415.788.1900
Fax.: +1 415.393.8087
14
Attorneys for Plaintiff
15 EPICENTRX, INC.
16 UNITED STATES DISTRICT COURT
17 SOUTHERN DISTRICT OF CALIFORNIA
18
19 EPICENTRX, INC., a Delaware '20CV1058 LAB LL
Case No. ___________________
Corporation,
20 COMPLAINT FOR:
Plaintiff,
21 1. MISAPPROPRIATION OF TRADE
v. SECRETS IN VIOLATION OF THE
22 DEFEND TRADE SECRETS ACT
Corey A. Carter, M.D., an individual, (18 U.S.C. § 1836, ET SEQ.);
23 2. VIOLATION OF THE
Defendant. ELECTRONIC
24 COMMUNICATIONS PRIVACY
ACT OF 1986 (18 U.S.C. §§ 2511,
25 2520, ET SEQ.)
3. VIOLATION OF THE
26 CALIFORNIA INVASION OF
PRIVACY ACT (CAL. PENAL
27 CODE §§ 632, 637.2, ET SEQ.);
4. BREACH OF CONTRACT;
28 ///
COMPLAINT
Case 3:20-cv-01058-LAB-LL Document 1 Filed 06/09/20 PageID.2 Page 2 of 39
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5. BREACH OF THE COVENANT OF
2 GOOD FAITH AND FAIR
DEALING;
3 6. BREACH OF FIDUCIARY DUTY
AND THE DUTY OF LOYALTY
4 7. NEGLIGENT
MISREPRESENTATION;
5 8. FRAUD AND INTENTIONAL
MISREPRESENTATION;
6 9. INTENTIONAL INTERFERENCE
WITH PROSPECTIVE ECONOMIC
7 RELATIONS; AND
10. UNFAIR COMPETITION IN
8 VIOLATION OF CALIFORNIA
BUSINESS AND PROFESSIONS
9 CODE § 17200 ET SEQ.
10 DEMAND FOR JURY TRIAL
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COMPLAINT
1 Plaintiff EpicentRx, Inc. (“EpicentRx,” “Plaintiff” or the “Company”) hereby

2 complains and alleges against Defendant Corey A. Carter, M.D. (“Dr. Carter” or
3 “Defendant”) as follows:
4 INTRODUCTION
5 1. This case is about a destructive and unscrupulous doctor, who failed
6 upward into a coveted Chief Executive Officer position at a clinical cancer
7 immunotherapy company, where he continued his path of destruction. Defendant
8 Corey A. Carter failed to honor the most basic canon of medical ethics, to “first, do
9 no harm,” especially as it pertained to his employer, his colleagues and the many
10 patients who rely on EpicentRx to develop effective cancer treatments. This did not
11 matter to Dr. Carter, as his greed and irresponsible behavior took precedence over
12 anything else.
13 2. Dr. Carter concealed his long and problematic history of malfeasance
14 when he was hired by EpicentRx as a Consultant, serving in the role of Chief
15 Executive Officer in 2018; and then made excuses for his issues when they were
16 discovered before he was officially transitioned to full-time at-will employee as
17 Chief Executive Officer in 2019. EpicentRx did not discover the extent of the
18 damage that Dr. Carter caused until he was terminated for cause in May 2020.
19 3. In late 2019, EpicentRx discovered multiple websites purporting to sell
20 its flagship product, RRx-001, without any authorization to do so. At least one of
21 these websites is registered by an entity in China, and the formulation described is
22 identical to the one developed by EpicentRx.
23 4. After several incidents of inappropriate professional conduct, including,
24 but not limited to, attempted data manipulation, financial improprieties, backchannel
25 dealings, sexual harassment, bullying, improperly dispensing prescriptions, and
26 regularly failing to adhere to company policies, several EpicentRx employees filed
27 complaints with human resources, followed by a majority of EpicentRx’s employees
28 signing a vote of no confidence in Dr. Carter continuing as CEO of the Company.
1
COMPLAINT
1 He was terminated for cause by the Board shortly thereafter, primarily due to the
2 data manipulation and harassment.
3 5. It was only after Dr. Carter was gone that EpicentRx discovered the
4 depth of his depravity. While gathering up Dr. Carter’s belongings and cleaning out
5 his office, EpicentRx was shocked to discover that Dr. Carter had surreptitiously
6 installed an audio-visual recording system in his office and two common areas. One
7 of the devices faced the laboratory, where EpicentRx’s scientists and medical staff
8 spent considerable time developing oncology treatments. The devices were
9 inconspicuously placed and connected to a cloud storage account registered to Dr.
10 Carter’s personal e-mail. There was no legitimate purpose for any of the these
11 devices, none of the executives or employees were aware of them and no one gave
12 consent to be recorded.
13 6. Dr. Carter’s installation and use of these devices was not only a
14 significant violation of privacy, confidentiality and trust – it is also a crime under
15 California law. Rather than focusing his efforts on treating cancer patients, it was
16 clear that Dr. Carter viewed the Company as his ticket to steal valuable proprietary
17 information for his own personal gain and to support his pattern of employee
18 harassment and manipulation.
19 7. A clear inference can be made that Dr. Carter intended to unlawfully
20 acquire and misappropriate EpicentRx’s proprietary information and trade secrets
21 for his own personal gain. There is no other reasonable explanation for his secretive
22 backchannel dealings, his attempted data manipulation, his surreptitious installation
23 of cameras connected to a personal cloud storage account and the RRx-001 website
24 registered to a Chinese entity.
25 8. This is an action for violation of the California Invasion of Privacy Act
26 and misappropriation of trade secrets related to EpicentRx’s development of
27 valuable therapies for patients suffering from cancer. Founded in 2002, EpicentRx
28 has invested countless personnel hours and significant amounts of money in
2
COMPLAINT
1 developing these treatments and anticipates significant progress and success in the
2 biotech industry. Other companies and countries are competing with EpicentRx to
3 develop a successful cancer treatment, and Dr. Carter stands to profit handsomely by
4 misappropriating, using and/or selling EpicentRx’s trade secrets.
5 9. This case is also about Dr. Carter’s many breaches of his employment
6 agreements and fiduciary duties as CEO of the Company. Dr. Carter failed to meet
7 the expectations and standards of his position, engaged in wildly inappropriate
8 conduct and violated numerous human resources policies. He was paid a significant
9 salary but failed to deliver on his promises to the Company. Instead, when he
10 learned that he was going to be fired (via the cameras he installed), he tried to avoid
11 the consequences of his actions by making false accusations of malfeasance against
12 other executives. These fraudulent claims were apparently part of a last-ditch effort
13 by Dr. Carter to set up a wrongful termination lawsuit, which would have no legal or
14 factual basis whatsoever.
15 10. EpicentRx brings this action to obtain damages, restitution and
16 injunctive relief for Dr. Carter’s violation of the California Invasion of Privacy Act;
17 breaches of contract; breaches of fiduciary duty and duty of loyalty; negligent,
18 reckless and intentionally fraudulent conduct; and unfair and unlawful business
19 practices.
20 THE PARTIES
21 11. Plaintiff EpicentRx is a Delaware corporation with its principal place of
22 business in San Diego, California. EpicentRx is a patient-driven clinical cancer
23 immuno-oncology company with minimally toxic therapies that work across diverse
24 patient populations and tumor types for the best possible quality of life during
25 treatment.
26 12. On information and belief, Dr. Carter is an individual and resident of
27 Del Mar, California. Dr. Carter was paid by EpicentRx as an independent contractor
28 Consultant, acting in the role of Chief Executive Officer, from March 1, 2018
3
COMPLAINT
1 through April 18, 2019. Dr. Carter became EpicentRx’s Chief Executive Officer on
2 or about April 19, 2019, and he was terminated for cause on or about May 8, 2020.
3 JURISDICTION AND VENUE
4 13. This Court has subject matter jurisdiction over this action pursuant to
5 28 U.S.C. § 1331, because Plaintiff’s claims against Dr. Carter for violations of the
6 Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq., and the Electronic
7 Privacy Act of 1986 (18 U.S.C. §§ 2511, 2520, et seq.) raise a federal question.
8 Plaintiff’s remaining claims arising under state law fall within this Court’s
9 supplemental jurisdiction pursuant to 28 U.S.C. § 1367(a) because they are so
10 related to the federal claim that they form part of the same case or controversy.
11 14. This Court has personal jurisdiction over Defendant Corey A. Carter,
12 M.D., because he is a resident of the State of California and resides within this
13 District.
14 15. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2)
15 because a substantial part of the events or omissions giving rise to this dispute
16 occurred in this District.
17 FACTUAL ALLEGATIONS
18
A. EpicentRx’s Targeted Patient-Driven Approach to Cancer
19 Immuno-therapies.
20 16. EpicentRx was founded in 2002 and is based in San Diego, California.
21 It is a patient-driven immuno-oncology company with minimally toxic therapies that
22 work across diverse patient populations and tumor types for the best possible quality
23 of life during treatment. Through two complementary technology platforms that
24 each activate and mobilize a different half of the immune system, innate (non-
25 specific) and adaptive (specific) immunity, the Company is developing drug
26 candidates that are specifically toxic to tumor cells, not normal cells.
27 17. EpicentRx’s lead program, RRx-001, has been tested in several clinical
28 trials, including an ongoing Phase 3 study in small cell lung cancer. It is among a
4
COMPLAINT
1 portfolio of small molecule compounds that favorably alter the tumor

2 microenvironment and activate tumor associated macrophages (TAMs) of the innate
3 immune response. The Company is also advancing multiple programs through its
4 smart virus platform, including personalized cancer vaccines that have been shown
5 to eradicate tumors and prevent them from returning.1
6 18. RRx-001 is among a portfolio of immunotherapeutic compounds that
7 normalize the tumor microenvironment, activate the tumor associated macrophages
8 (TAMs) of the innate immune system, and sensitize solid tumors to standard
9 therapies in small cell lung cancer (SCLC), glioblastoma, colorectal cancer and
10 additional cancers. RRx-001 is a next generation, small molecule anticancer
11 immunotherapeutic that downregulates the CD47/SIRPα axis and repolarizes TAMs
12 and other immunosuppressive cells in the tumor microenvironment to an
13 immunostimulatory phenotype. RRx-001 is designed to be used either as a
14 monotherapy or in combination with chemotherapy, radiation therapy or
15 immunotherapy.
16 19. RRx-001 emerged from the aerospace industry and is developed from
17 an ingredient in rocket fuel (a similar concept was used for nitroglycerin and
18 hydralazine). The materials used to form RRx-001 are highly explosive and, as
19 such, highly regulated by the United States government. Due to the potential danger
20 inherent in the use of the materials, the formation of RRx-001 requires a laboratory
21 inside of an underground bunker.
22 20. EpicentRx has been in Phase 3 of its clinical trials for RRx-001 since
23 2018, while Dr. Carter was acting as a Consultant/CEO and full-time CEO.
24 B. EpicentRx’s Efforts to Protect Its Trade Secrets
25 21. To maintain its position as a leading developer of cancer
26 immunotherapies, EpicentRx expends substantial time, resources, and expenses
27
28 1
EpicentRx is also using its technologies to develop a vaccine for Covid-19.
5
COMPLAINT
1 developing and safeguarding its confidential business information and trade secrets.
2 EpicentRx’s business and success depends on the protection of its trade secrets and
3 other confidential information.
4 22. EpicentRx’s proprietary information and trade secrets include, among
5 other things: (1) the development and formulations for therapies and vaccines; (2)
6 pricing strategies, formulas, and algorithms; (3) product plans; (4) proprietary
7 methods of product development and supply; (5) clinical trial processes, data and
8 results; and (6) Covid-19 treatments and vaccines.
9 23. EpicentRx made a significant financial investment and expended
10 substantial resources to develop these trade secrets. EpicentRx’s confidential trade
11 secrets are not generally known in the oncology therapy industry or outside of the
12 Company, and could not be learned by others, if at all, without considerable
13 expenditure of time, effort, or expense; or, as was the case here, through the
14 unlawful misappropriation of those trade secrets.
15 24. Such confidential trade secrets are highly valuable to EpicentRx in the
16 course of conducting its business, because EpicentRx derives economic value from
17 the information not being made public, and any competitor who acquired such
18 information would be given an unfair competitive advantage.
19 25. The confidential and proprietary information to which Dr. Carter had
20 access during his employment constitutes trade secrets that are essential to
21 EpicentRx’s competitive position in the cancer treatment industry.
22 26. EpicentRx carefully monitors and restricts access to its confidential
23 trade secret information. For example, EpicentRx employs numerous mechanisms
24 for securing its office, including key card access at the office entrance, additional
25 key card and code access, with further restrictions, at the laboratory and
26 development sites, and monitoring of the entire premises by security personnel
27 employed by the office complex. Similarly, EpicentRx has several mechanisms in
28 place to secure its computer network and systems, including requiring passwords
6
COMPLAINT
1 and other security verifications for computer access, and limiting access to
2 electronic resources only to those employees who need to access them within the
3 scope of their employment.
4 27. In the capacity of his role as CEO, Dr. Carter had frequent access to
5 and developed intimate knowledge of all of EpicentRx’s highly confidential product
6 development and clinical trial data, among other proprietary information, which are
7 essential to EpicentRx’s business success. The confidential information to which
8 Dr. Carter was granted access during his EpicentRx employment constitutes trade
9 secrets that are integral to EpicentRx’s competitive position.
10 28. Despite the Company’s efforts to protect its trade secrets, foreign
11 entities have appear to have gained access to EpicentRx’s proprietary information.
12 EpicentRx discovered in late 2019 at least two websites purporting to sell its
13 flagship treatment, RRx-001. Both sites describe RRx-001 using the same
14 formulation and terms used by EpicentRx. At least one of these websites is
15 registered to an entity located in China.
16 29. EpicentRx’s competitive position would be gravely harmed if one of its
17 competitors or a foreign nation were to gain access to its trade secrets, as this would
18 allow the competing company to exploit many years’ worth of highly valuable
19 knowledge and information.
20 C. EpicentRx Hires Dr. Carter as a Consultant/CEO.
21 30. Dr. Carter was a Physician Officer and oncologist in the United States
22 Navy from 1999 through 2018, when he ignominiously left the military under a
23 cloud of suspicion and accusations related to, among other things, drug abuse,
24 illegal prescriptions, impaired performance, unprofessional conduct and conflicts of
25 interest. Dr. Carter has contended that none of the accusations were true and that
26 they were largely driven by his ex-wife as part of an acrimonious divorce. Attached
27 hereto as Exhibit “A” is a true and correct copy of a document that Dr. Carter
28 created to explain away the allegations made against him by the Navy. However,
7
COMPLAINT
1 the military allegations are entirely consistent with Dr. Carter’s performance at
2 EpicentRx, and the Company never would have hired him had it known the truth.
3 31. EpicentRx hired Dr. Carter as an independent contractor Consultant on
4 or about March 1, 2018. His duties were described in his employment agreement as,
5 “Chief Executive Officer Functions and Duties.” Attached hereto as Exhibit “B” is
6 a true and correct copy of Dr. Carter’s March 1, 2018 Consulting Agreement (“2018
7 Consulting Agreement.”)
8 32. On or about July 9, 2018, EpicentRx’s Board granted Dr. Carter two
9 million, eighty-nine thousand, four hundred and seventy-three (2,089,473) options
10 of EpicentRx stock on a two year (no cliff) vesting schedule. Pursuant to Dr.
11 Carter’s Incentive Stock Option Grant Notice Under the EpicentRx, Inc. 2018 Stock
12 Option and Grant Plan, should Dr. Carter be terminated for cause, all of his options
13 “shall terminate immediately and be null and void upon the date of the Optionee’s
14 termination and shall not thereafter be exercisable.” As discussed below, EpicentRx
15 subsequently terminated Dr. Carter for cause, so his options have been terminated in
16 full.
17 D. EpicentRx Hires Dr. Carter as its Chief Executive Officer.
18 33. On or about April 17, 2019, EpicentRx promoted Dr. Carter to a full-
19 time position and hired him as its highly-compensated Chief Executive Officer. His
20 employment was explicitly at-will, and he was required to sign an Employment
21 Agreement (“2019 Employment Agreement”) and Proprietary Information and
22 Inventions Agreement (“PIIA”). A true and correct copy of Dr. Carter’s 2019
23 Employment Agreement, with the PIIA integrated therein and attached as an exhibit,
24 is attached hereto as Exhibit “C.”
25 34. Dr. Carter’s 2019 Employment Agreement, among other things,
26 prohibited him from engaging in, “any other employment, consulting or other
27 business activity (whether full-time or part-time) that would create a conflict of
28 interest with the Company.”
8
COMPLAINT
1 35. Dr. Carter’s PIIA required him to hold in the strictest confidence and
2 take all reasonable precautions to prevent any unauthorized use or disclosure of
3 Company Proprietary Information and Inventions (as defined in the PIIA), and that
4 he will not, “disclose or, except within the scope of my employment, use any
5 Proprietary Information.” Exhibit C, (PIIA), ¶ 4. The PIIA defined “Proprietary
6 Information” as:
7
8 all Inventions and all other business, technical and
9 financial information (including, without limitation, the
10 identity of and information relating to customers or
11 employees) I develop, learn or obtain during the term of
12 my employment that relate to Company or the business
13 or demonstrably anticipated business of Company or that
14 are received by or for Company in confidence.
15
16 Exhibit C (PIIA), ¶ 4.
17 36. Dr. Carter also agreed in the PIIA that he had no expectation of privacy
18 as to:
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20 Company’s telecommunications, networking or
21 information processing systems (including, without
22 limitation, stored computer files, email messages and
23 voice messages) and that my activity and any files or
24 messages on or using any of those systems may be
25 monitored at any time without notice.
26
27 Id.
28 ///
9
COMPLAINT
1 37. In addition, Dr. Carter agreed in the PIIA, upon termination of his
2 employment, to “promptly return to Company all items containing or embodying
3 Proprietary Information to return all Company property.” Id.
4 E. Dr. Carter Agrees to Abide by the EpicentRx Employee Handbook
5 38. On June 1, 2019, Dr. Carter signed an Acknowledgment of Receipt for
6 Employee Handbook (“Acknowledgment”). The operative version at that time was
7 EpicentRx’s January 2018 Employee Handbook (“Handbook”). Attached hereto as
8 Exhibits “D” and “E,” respectively, true and correct copies of Dr. Carter’s signed
9 Acknowledgment and the Handbook.
10 39. Although previously stated in his 2019 Employment Agreement, the
11 Acknowledgment reiterated that Dr. Carter’s employment was explicitly at will:
12
13 I understand and accept that my employment with the
14 company is at-will. I have the right to resign at any time
15 with our without cause, just as the company may
16 terminate my employment at any time with or without
17 cause or notice, subject to applicable laws. I understand
18 that my at-will employment cannot be altered by any
19 verbal statement or alleged verbal agreement made by
20 company personnel. It can only be changed by a legally
21 binding, written contract covering employment status.
22
23 Exhibit D (Acknowledgment).
24 40. The Handbook also emphasized the at-will nature of Dr. Carter’s
25 employment. Exhibit E (Handbook), p. 7.
26 41. The Handbook included a Code of Conduct, prohibiting, among other
27 things: (1) unauthorized use or taking of EpicentRx property, equipment, or
28 materials; and (2) violation of EpicentRx’s policies. Violations of the Code of
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COMPLAINT
1 Conduct may subject an employee to “disciplinary action, up to and including

2 termination of employment.” Exhibit E (Handbook), p. 10.
3 42. The Handbook also required employees not to ever, “publish or
4 disclose information that would violate the privacy rights of coworkers, customers,
5 employer business partners, and other third parties.”
6 43. EpicentRx’s Handbook contained an explicit Antiharassment,
7 Retaliation and Bullying Policies, prohibiting, among other things:
8
9 employees from engaging in workplace harassment that
10 is based on age, ancestry, citizenship, color, marital or
11 parental status, national origin, political affiliation,
12 pregnancy, race, religion (including religious dress and
13 grooming practices), sex or gender, perceived sex or
14 gender, gender identity, gender expression, sexual
15 orientation, military or veteran status, physical or mental
16 disability, or medical condition unrelated to the person’s
17 ability to perform the job. In addition, EpicentRx policy
18 prohibits discrimination and harassment on any other
19 basis protected by federal, state, or local law, ordinance,
20 or regulation.
21
22 Exhibit E (Handbook), p. 16.
23 44. EpicentRx also described “misconduct” in its Handbook, including
24 minor and major violations. Major violations that “may preclude an employee’s
25 continued employment” include, but are not limited to, stealing EpicentRx’s
26 property, disclosure of EpicentRx’s confidential information or trade secrets to
27 unauthorized persons, verbal slander to or regarding an EpicentRx employee,
28 willfully disregarding policies and procedures, fraud or misappropriation against
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COMPLAINT
1 EpicentRx, any intentional act that unlawfully damages EpicentRx’s reputation,

2 and/or sexual harassment towards other employees. Exhibit E (Handbook), p. 22.
3 45. The Handbook also contained a rigorous policy pertaining to,
4 “Confidentiality and trade secrets; noninterference; intellectual property; No
5 disclosure of confidential information and trade secrets.” The policy was clear that
6 the nature of EpicentRx’s business and, “the economic well-being of our company
7 depend on protecting and maintaining proprietary company information. Misuse or
8 unauthorized disclosure of financial data or other nonpublic, proprietary information
9 is cause for disciplinary action, up to and including termination.” Exhibit E
10 (Handbook), p. 34.
11 46. The Handbook contains numerous other policies, including routine
12 expense and travel policies, calling for reimbursement for authorized travel and
13 work-related expenses. See, e.g., Exhibit E (Handbook), pp. 28 and 38.
14 47. As described below, Dr. Carter violated each and every one of the
15 policies enumerated above.
16 F. Dr. Carter’s Attempted Data Manipulation.
17 48. Data integrity is critical to the success of a biotech company engaged in
18 clinical trials. In addition, data collection in a randomized clinical trial must be
19 blind to eliminate bias. Dr. Carter was well aware of this while he was employed at
20 EpicentRx.
21 49. Nonetheless, in or about the Fall of 2019, Dr. Carter unsuccessfully
22 attempted to manipulate EpicentRx’s clinical trial data to his benefit, even though he
23 knew it was contrary to EpicentRx’s mission, could compromise the integrity of the
24 data and might ultimately harm the Company’s ability to help cancer patients. Dr.
25 Carter was instead focused on how positively the data would reflect on him and the
26 amount of his potential bonus if the data appeared more favorable than it actually
27 was.
28 ///
12
COMPLAINT
1 50. Clinical trial protocols require an independent board to assess and

2 monitor data safety and integrity. Dr. Carter staffed this board with three people to
3 whom he was connected, which compromised the board’s independence and
4 objectivity.
5 51. Clinical trial protocols also require that data transfers from the trial
6 come directly from a secure database to the biostatisticians analyzing and reporting
7 the results. Dr. Carter inserted himself into this process so that he was able to
8 review, manipulate and send the data, rather than having a data transfer directly
9 from the database.
10 52. Fortunately, Dr. Carter’s conduct was flagged, EpicentRx was able to
11 stop Dr. Carter’s attempts before they caused any damage, and none of the data was
12 compromised. However, due to Dr. Carter’s fraudulent and unprofessional attempt
13 to manipulate the data, EpicentRx has been forced to engage in much additional
14 work at its own expense to move forward with the trial.
15 G. Dr. Carter’s Financial Improprieties.
16 53. Dr. Carter had no intention of effectively managing EpicentRx’s budget
17 if it did not benefit him, and he lacked the knowledge and experience to do so.
18 54. For example, in 2019, the Board agreed to a two million dollar
19 ($2,000,000) budget for the Phase 3 clinical trials. Dr. Carter acknowledged and
20 agreed to this budget in several subsequent meetings.
21 55. Despite his agreement, Dr. Carter communicated on multiple occasions
22 to executives of EpicentRx and an affiliated company, Prothex, that the budget was,
23 in fact, three million dollars ($3,000,000). These communications were not
24 mistakes or typographical errors. Dr. Carter intentionally inflated the budget to
25 avoid the appearance of incompetence and mismanagement.
26 56. Consistent with his inflated view of the budget and contrary to the
27 dictates of the Board, the cost of the clinical trials under Dr. Carter’s
28 mismanagement exceeded two million dollars ($2,000,000) by November 2019,
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COMPLAINT
1 with only five (5) patients enrolled. In January 2020, the company estimated that it
2 would cost close to four million dollars ($4,000,000) to reach the twenty patient
3 target.
4 57. Dr. Carter also lied to the Company so that it would fund his travel
5 expenses. For example, in September 2019, Dr. Carter advised that he was going to
6 Europe for a lung cancer conference. When executives questioned the need to
7 attend the conference, Dr. Carter then tried to set up a meeting with Austrian-based
8 investors as his excuse for traveling to Europe. All of these excuses turned out to be
9 false, as the real reason for the trip was Dr. Carter’s marriage proposal to his
10 girlfriend. He remained in Europe for an additional week to celebrate the
11 engagement. EpicentRx also questions whether Dr. Carter was in Europe for other
12 reasons, including self-dealings and pursuit of his own interests against those of the
13 Company.
14 58. In another instance, EpicentRx management weighed the positives and
15 negatives of purchasing a sequencing machine, ultimately determining that it was
16 impractical and against Company interests to do so. Undeterred, Dr. Carter moved
17 forward with the purchase anyway, which cost the Company approximately one
18 hundred and thirty thousand dollars ($130,000). To date, the machine has never
19 been used.
20 H. Dr. Carter’s Backchannel Communications.
21 59. Dr. Carter also maintained improper backchannel communications with
22 third parties engaging in business with the Company. In so doing, on information
23 and belief, Dr. Carter disclosed Company proprietary information using
24 unauthorized means, including his personal e-mail. EpicentRx is informed and
25 believes that Dr. Carter did so to facilitate kickbacks and other benefits for himself.
26 60. For example, in or around September 2019, Dr. Carter terminated
27 EpicentRx’s relationship with its existing accountants and hired another company,
28 Lohman & Dehner, Inc. (“L&D”) to oversee day-to-day finances and prepare for an
14
COMPLAINT
1 annual audit. L&D clearly had neither the experience nor personnel to handle a job
2 of this scale for a biotech company, but Dr. Carter hired them anyway. Until Dr.
3 Carter’s termination, L&D communicated with Dr. Carter, often via his personal e-
4 mail, instead of his EpicentRx e-mail account. EpicentRx alleges on information
5 and belief that Dr. Carter and L&D did so to avoid detection and to facilitate
6 kickbacks to Dr. Carter for fees generated by the engagement. EpicentRx also
7 contends on information and belief that Dr. Carter instructed and/or authorized L&D
8 to churn and over-bill to generate additional fees.
9 61. In or about March 2020, L&D advised that costs incurred to date
10 exceeded five hundred thousand dollars ($500,000) and that it would cost
11 approximately five hundred thousand dollars ($500,000) more to complete the job.
12 After some investigation, EpicentRx determined that L&D had not completed any
13 work product whatsoever, and it was churning the file and over-billing.
14 Consequently, EpicentRx immediately terminated the engagement. The Company
15 retained another accounting firm and learned that the entire job should have cost less
16 than fifty thousand dollars ($50,000). EpicentRx has filed a lawsuit against L&D
17 for professional negligence and fraud, among other claims, in San Diego County
18 Superior Court.2
19 62. Dr. Carter generally excluded other executives and employees from his
20 business discussions with third parties about EpicentRx and its initiatives.
21 EpicentRx learned after the fact that he did this to engage in business for the benefit
22 of himself and contrary to the interests of the Company.
23 63. EpicentRx engages in the highly competitive market for cancer
24 treatments, and its proprietary information and trade secrets are extremely valuable.
25 In 2019, the Company began engaging in negotiations with various foreign entities
26 to facilitate the licensing and usage of its treatments in China and elsewhere. Dr.
27 2
EpicentRx, Inc. v. Lohman & Dehner, Inc., San Diego County Superior Court Case
28 No. 37-2020-00016445-CU-BT-CTL.
15
COMPLAINT
1 Carter insisted on handling these negotiations privately and often to the exclusion of
2 other executives. He quickly focused solely on one Chinese company in the
3 negotiations and eliminated all other entities from the process, over the objections of
4 his colleagues.
5 64. Dr. Carter had extensive private discussions with that company over the
6 ensuing months, without the involvement of anyone else from EpicentRx. He kept
7 these discussions very quiet, often refused to let anyone else participate and rarely
8 gave updates on progress or explained why he was focused solely on that company.
9 EpicentRx now alleges, on information and belief, that Dr. Carter was trying to
10 negotiate a private personal deal with that company for EpicentRx’s confidential
11 and proprietary information.
12 65. Shortly after Dr. Carter’s termination, Dr. Carter’s contact at the
13 company with which he had been communicating abruptly ended all communication
14 with EpicentRx.
15 I. Dr. Carter’s Erratic and Unacceptable Behavior and Violations of
16 Company Policies, Including Harassment.
17 66. Dr. Carter began behaving erratically and inappropriately shortly after
18 he was hired as an at-will full time CEO for the Company in 2019.
19 67. Examples of his inappropriate behavior included the use of
20 intimidation, threats and improper fear-based tactics, as well as unpredictable
21 outbursts witnessed by many employees. Dr. Carter’s behavior created an
22 uncomfortable work environment for certain employees of the Company.
23 68. At some point after he signed the 2019 Employment Agreement, Dr.
24 Carter began an inappropriate sexual relationship with a subordinate who directly
25 reported to him. When the relationship began to sour, Dr. Carter belittled,
26 questioned and intimidated the employee. He also engaged in loud screaming and
27 cursing rants directed at this employee. Dr. Carter’s behavior became so
28 inappropriate that the employee ultimately left the Company. She never reported
16
COMPLAINT
1 the relationship and refused to cooperate with the Company’s investigation, which
2 the Company was forced to conduct without her involvement.
3 69. Dr. Carter also used his medical background inappropriately and
4 illegally dispensed prescriptions without a California medical license. In or around
5 June 2016 or earlier, Dr. Carter began dispensing prescriptions to at least one
6 individual without performing any medical assessment. The individual was
7 unaware that Dr. Carter had no California license or that it would be illegal for Dr.
8 Carter to write a prescription. He relied on Dr. Carter, who told him that the
9 prescription was proper.
10 J. Dr. Carter Learns of His Impending Termination and Makes
11 Fraudulent Accusations.
12 70. In or about January 2020, EpicentRx’s senior employees and some
13 Board members began having serious discussions about terminating Dr. Carter. In
14 the ensuing months, as the result of changes to Company leadership, including the
15 addition of a new Chief Financial Officer and Human Resources contact, employees
16 began disclosing disturbing allegations about Dr. Carter’s behavior. Some of those
17 allegations are described above.
18 71. As alleged in detail below, EpicentRx believes that Dr. Carter was
19 privy to these discussions due to the audio-visual recording devices he had secretly
20 installed in his office and in common areas of EpicentRx’s facilities.
21 72. Once Dr. Carter learned of his potential termination, he began making
22 unfounded accusations against the Company, other executives and third parties, in a
23 misguided attempt to protect his job.
24 73. None of these allegations were true, and they were based on either
25 forged documents or no evidence whatsoever. Nonetheless, the Company has been
26 forced to take steps at considerable expense to protect its reputation and investigate
27 these claims to clear its name.
28 ///
17
COMPLAINT
1 K. Dr. Carter’s Termination and the Discovery of his Secret Audio-

2 Visual Recording Devices.
3 74. On or about May 8, 2020, EpicentRx terminated Dr. Carter for cause
4 and barred him from entering Company facilities. The Company terminated Dr.
5 Carter primarily based on his attempted data manipulation and harassment.
6 75. Previously, on or about May 6, 2020, a majority of EpicentRx’s
7 employees issued to the Board a formal vote of no confidence regarding Dr. Carter’s
8 role as CEO of the Company. While indicative of the Company’s lack of faith in
9 Dr. Carter, this was not the basis for his termination. Attached hereto as Exhibit “F”
10 is a true and correct copy of the employees’ May 6, 2020 letter to the Board.
11 76. The Company had been discussing the vote of no confidence for weeks
12 leading up to the formal letter. Dr. Carter likely was aware of this, due to his the
13 recording devices he had installed around the company. The no confidence vote
14 was based on the following grounds:
15
16 Under Corey’s leadership in his position as CEO of the
17 company over a period of 3+ years, Corey has
18 implemented a unilateral structure of control and silence
19 of which we the undersigned have been victim to. This
20 system of control and silence includes patterns of staff
21 manipulation, hostile actions, irrational and erratic
22 behavior, in addition to several other more serious
23 personal allegations against him, which we, the
24 undersigned, believes is not in the best interest of the
25 company.
26
27 With recent changes to the company leadership, which has
28 effectively lifted the structure of control and silence,
18
COMPLAINT
1 including the addition of CFO Franck Brinkhaus and

2 removal of General Counsel Sarah Hibbard, along with
3 establishing a new HR contact within the company (under
4 Allison Pratt), several employees have come forward with
5 a multitude of egregious allegations against Corey, which
6 began on April 29, 2020.
7
8 The undersigned asks the Board to take these complaints
9 made by several staff seriously and support our request
10 for the vote of no confidence against Corey. We believe
11 this will ensure and preserve the future success of the
12 company and ultimately our livelihoods.
13
14 Exhibit F (May 6, 2020 No Confidence Letter [emphasis in original]).
15 77. Shortly after Dr. Carter’s termination, EpicentRx employees discovered
16 to their shock that Dr. Carter had surreptitiously installed three audio-visual
17 recording devices in the Company’s facilities.
18 78. Without any consent, Dr. Carter installed a Canary Home Security
19 Camera System (“CHSCS”), including at least three (3) audio-video recording
20 devices, in his office and in common areas of the Company’s facilities. The
21 recordings made by these devices were saved to a Canary Cloud Storage account
22 linked to the e-mail address corey.carter33@gmail.com. EpicentRx has been unable
23 to access the cloud storage account.
24 79. EpicentRx located a receipt for the purchase of the CHSCS, indicating
25 that Dr. Carter used his personal debit card to purchase the system on June 8, 2019.3
26
27
28 3
He did not seek reimbursement for that purchase.
19
COMPLAINT
1 Consequently, it had likely been installed for nearly one year before Dr. Carter’s
2 termination.
3 80. The locations of the cameras were especially troubling. One camera
4 was located in Dr. Carter’s office, where significant confidential information was
5 routinely discussed; a second camera was located in the reception area and facing a
6 computer, so it recorded the comings and goings of employees and third parties, as
7 well as confidential information; and the third camera faced the laboratory and
8 additional computers, so it also recorded proprietary and confidential information.
9 The cameras were inconspicuous and not easily detected. There may be additional
10 devices, but EpicentRx has not discovered them to date.
11 81. On May 14, 2020, EpicentRx’s attorneys wrote to Dr. Carter’s attorney,
12 advising that it had discovered the CHSCS. Among other things, EpicentRx
13 demanded that Dr. Carter turn over all recordings and other proprietary information.
14 82. On May 21, 2020, Dr. Carter’s attorney responded with Dr. Carter’s
15 fabricated explanation for the cameras: According to Dr. Carter, the Company was
16 aware that his office had been broken into, and that he had purchased the camera
17 system as a stop-gap security system until a full security system would be installed.
18 83. Dr. Carter’s excuse was entirely false. One would think that a break-in
19 at the Chief Executive Officer’s office in a small company handling highly sensitive
20 trade secrets, proprietary information and private patient data would be a significant
21 issue known by the executive team. It would also require swift action, including
22 security upgrades and reports to the relevant authorities, particularly as to the
23 potential theft of private patient data. However, no one at the Company is aware of
24 any break-in at Dr. Carter’s office, any authorized attempt to increase security
25 and/or any reports made regarding this purported crime. The security company
26 responsible for EpicentRx’s location also has no record of an office break-in or
27 theft.
28 ///
20
COMPLAINT
1 84. The story also defies credulity, since Dr. Carter had the recordings sent
2 to a cloud server connected to a private e-mail address, corey.carter33@gmail.com,
3 rather than to a Company server, e-mail address or security personnel; and since he
4 did not have the Company pay for and install the system. These facts lead to the
5 reasonable and natural conclusion that Dr. Carter secretly installed the CHSCS to
6 record confidential and proprietary Company information and trade secrets for
7 unauthorized purposes.
8 85. Dr. Carter’s story also fails to ameliorate the fact that none of the
9 people he recorded authorized him to do so.
10 86. To date, Dr. Carter has refused to return any recordings created by the
11 CHSCS, in violation of his 2019 Employment Agreement, PIIA and the Handbook.
12 FIRST CAUSE OF ACTION
13 Misappropriation of Trade Secrets in Violation of Defend Trade Secrets Act
14 (18 U.S.C. § 1836, et seq.)
15 87. Plaintiff hereby incorporates by reference each of the allegations in the
16 preceding paragraphs as though fully set forth herein.
17 88. EpicentRx owns and possesses certain confidential, proprietary, and
18 trade secret information, as alleged above. Their trade secrets include, but are not
19 limited to, non-public proprietary and confidential information pertaining to: (1) the
20 development and formulations for therapies and vaccines; (2) pricing strategies,
21 formulas, and algorithms; (3) product plans; (4) proprietary methods of product
22 development and supply; (5) clinical trial processes, data and results; and (6) Covid-
23 19 treatments and vaccines.
24 89. The development of these trade secrets required EpicentRx to expend
25 significant funds, resources, time and effort.
26 90. EpicentRx’s confidential, proprietary, and trade secret information
27 relates to the Company’s products used, sold, shipped and/or ordered in, or intended
28 to be use used, sold, shipped and/or ordered in, interstate or foreign commerce. As
21
COMPLAINT
1 alleged above, EpicentRx sells and intends to sell products throughout the United
2 States and elsewhere, and the confidential trade secrets obtained by Dr. Carter
3 relates to such products. For example, EpicentRx’s confidential trade secret
4 information includes, but is not limited to, the development and formulation of RRx-
5 001 and other therapies, Company operations, clinical trial information and internal
6 pricing and strategies related to the development of its products.
7 91. EpicentRx is informed and believes that Dr. Carter is engaged in a
8 concerted effort to use and/or recreate the proprietary formulations of its therapies
9 that are essential to EpicentRx’s business. EpicentRx is also informed and believes
10 that Dr. Carter has been in contact with entities in China and elsewhere in an effort
11 to secure a deal for these trade secrets and other information.
12 92. EpicentRx is also informed and believes that Dr. Carter has engaged in
13 the unlawful acquisition and/or unauthorized disclosure of Company trade secrets to
14 third parties for his own benefit.
15 93. In late 2019, EpicentRx discovered multiple websites purporting to sell
16 its flagship product, RRx-001, without any authorization to do so. At least one of
17 these websites is registered to an entity in China, and the formulation described is
18 identical to the one developed by EpicentRx.
19 94. EpicentRx has taken reasonable measures to keep its confidential,
20 proprietary, and trade secret information secret. These efforts include, but are not
21 limited to, requiring its employees to sign confidentiality agreements as conditions
22 of their employment, maintaining confidential information on a secure server, and
23 restricting access to and protecting confidential information and trade secrets.
24 95. Due to these security measures, EpicentRx’s confidential and
25 proprietary trade secret information is not available to others in the biotech industry,
26 or any other industry, through any legitimate means.
27 96. EpicentRx’s confidential, proprietary, and trade secret information
28 derives independent economic value from not being generally known to, and not
22
COMPLAINT
1 being readily ascertainable through proper means by, another person or company
2 who could obtain economic value from the disclosure or use of the information.
3 97. On information and belief, in violation of EpicentRx’s rights, Dr.
4 Carter unlawfully acquired and/or misappropriated Plaintiff’s confidential,
5 proprietary, and trade secret information in the improper and unlawful manner as
6 alleged herein. He illegally recorded Company trade secrets and presently is and
7 has been using these trade secrets to directly compete with EpicentRx and act in his
8 own self-interest. On information and belief, Dr. Carter continues to utilize
9 EpicentRx’s trade secrets.
10 98. Dr. Carter’s illegal acquisition and misappropriation of EpicentRx’s
11 confidential, proprietary, and trade secret information was intentional, knowing,
12 willful, and malicious.
13 99. On information and belief, if Dr. Carter is not enjoined from doing so,
14 he will continue to misappropriate and use EpicentRx’s trade secret information for
15 his own benefit and to EpicentRx’s detriment.
16 100. As a direct and proximate result of Dr. Carter’s conduct, EpicentRx has
17 been and continues to be injured irreparably and otherwise, and if Dr. Carter’s
18 conduct is not stopped, EpicentRx will continue to suffer severe competitive harm,
19 irreparable injury, and significant damages in an amount to be proven at trial.
20 101. In addition to damages, EpicentRx seeks preliminary and permanent
21 injunctive relief to recover and protect its confidential, proprietary, and trade secret
22 information and to protect its other legitimate business interests. EpicentRx’s
23 business operates in a competitive market and will continue to suffer irreparable
24 harm absent injunctive relief.
25 102. EpicentRx is entitled to the seizure and return of its property and trade
26 secrets information pursuant to 18 U.S.C. § 1836(b)(2)(A) to prevent any further
27 actual or threatened misappropriation of their trade secrets.
28
23
COMPLAINT
1 103. EpicentRx is entitled to an injunction pursuant to 18 U.S.C.

2 § 1836(b)(3)(A) to prevent any further actual or threatened misappropriation of its
3 trade secrets.
4 104. EpicentRx is entitled to damages, including compensatory damages,
5 unjust enrichment damages and royalties, pursuant to 18 U.S.C. § 1836(b)(3)(B), for
6 actual loss and unjust enrichment caused by the misappropriation of its trade secrets.
7 105. EpicentRx entitled to exemplary damages pursuant to 18 U.S.C.
8 § 1836(b)(3)(C) for Dr. Carter’s willful and malicious misappropriation of its trade
9 secrets.
10 106. EpicentRx is entitled to recovery of its attorneys’ fees pursuant to 18
11 U.S.C. § 1836(b)(3)(D).
12 SECOND CAUSE OF ACTION
13 Violation Of The Electronic Communications Privacy Act Of 1986
14 (18 U.S.C. §§ 2511, 2520, et seq.)
17 108. On or about June 8, 2019, Dr. Carter secretly installed three audio-
18 visual recording devices in his office and in common areas of Company facilities.
19 109. Dr. Carter installed these devices without any authorization to do so or
20 any knowledge by the Company, its executives or its employees.
21 110. From June 8, 2019 through the date the CHSCS was discovered, Dr.
22 Carter intentionally used and/or endeavored to use an electronic and/or mechanical
23 device to intercept and record oral and electronic communications that were
24 intended to be private in his office and throughout Company facilities. These
25 recordings were made without consent from the individuals being recorded, the
26 Company or anyone whose information was visible on Company computers.
27 111. The recordings were made by devices that were affixed to, or otherwise
28 transmitted a signal through, a wire, cable, or other like connection used in wire
24
COMPLAINT
1 communication, and directed to cloud storage that was linked to Dr. Carter’s
2 personal e-mail address. The recordings are not accessible via any Company server,
3 and Dr. Carter has refused to return the recordings.
4 112. Dr. Carter intentionally used, or endeavored to use, the contents of
5 these oral and/or electronic communications, and he knew or had reason to know
6 that the information was obtained through the interception of an oral or electronic
7 communication.
8 113. Dr. Carter intentionally disclosed, or endeavored to disclosed, the
9 contents of these oral and/or electronic communications, and he knew or had reason
10 to know that the information was obtained through the interception of an oral or
11 electronic communication.
12 114. Pursuant to 18 U.S.C. Section 2511(4)(a), it is a crime to knowingly
13 intercept oral and/or wire communications as described above. Punishment may
14 include fines and/or jail time.
15 115. Pursuant to 18 U.S.C. Section 2520(2), any person (including a
16 corporation) whose communication is intercepted may bring a civil action and be
17 entitled to the greater of “the sum of the actual damages suffered by the plaintiff and
18 any profits made by the violator as a result of the violation,” or “statutory damages
19 of whichever is the greater of $100 a day for each day of violation or $10,000.”
20 116. Dr. Carter has admitted to installing the recording devices and
21 recording conversations with individuals and data from computers in view of the
22 cameras. He did not obtain consent from any of the implicated persons.
23 117. As a direct and proximate result of the conduct alleged herein,
24 EpicentRx has sustained damages in an amount to be proven at trial. Pursuant to 18
25 U.S.C. Sections 2511 and 2520(2), EpicentRx is entitled to the greater of its actual
26 damages or statutory damages to be determined at trial.
27 ///
28 ///
25
COMPLAINT
1 THIRD CAUSE OF ACTION

2 Violation of California Penal Code Sections 632(a) and 637.2, et seq.
5 119. On or about June 8, 2019, Dr. Carter secretly installed three audio-
6 visual recording devices in his office and in common areas of Company facilities.
7 120. Dr. Carter installed these devices without any authorization to do so or
8 any knowledge by the Company, its executives or its employees.
9 121. From June 8, 2019 through the date the CHSCS was discovered, Dr.
10 Carter regularly recorded conversations that were intended to be private in his office
11 and throughout Company facilities. These recordings were made without consent
12 from the individuals being recorded, the Company or anyone whose information
13 was visible on Company computers.
14 122. The recordings were directed to cloud storage that was linked to Dr.
15 Carter’s personal e-mail address. They are not accessible via any Company server,
16 and Dr. Carter has refused to return the recordings.
17 123. California is a two-party consent state for audio or visual recordings.
18 Pursuant to California Penal Code Section 632, it a crime to record or eavesdrop on
19 any confidential communications, including a private conversation or telephone call,
20 without the consent of all parties to the conversation. Punishment may include fines
21 and/or jail time.
22 124. Pursuant to California Penal Code Section 637.2(a), “[a]ny person who
23 has been injured by a violation of this chapter may bring an action against the
24 person who committed the violation,” for the greater of five thousand dollars per
25 violation, or three times the amount of actual damages.
26 125. Penal Code Section 637.2(b) permits a victim to seek injunctive relief
27 to restrain the perpetrator from further violations of the statute.
28 ///
26
COMPLAINT
1 126. Dr. Carter has admitted to installing the recording devices and
2 recording conversations with individuals and data from computers in view of the
3 cameras. He did not obtain consent from any of the implicated persons.
4 127. As a direct and proximate result of the conduct alleged herein,
5 EpicentRx has sustained damages in an amount to be proven at trial. Pursuant to
6 California Penal Code Section 637.2(a), EpicentRx is entitled to the greater of three
7 times those damages, or five thousand dollars per each of Dr. Carter’s violations
8 during the eleven-month period in which the cameras were recording.
9 128. As a direct and proximate result of Dr. Carter’s conduct, EpicentRx has
10 been and continues to be injured irreparably and otherwise, and if Dr. Carter’s
11 conduct is not stopped, EpicentRx will continue to suffer severe competitive harm,
12 irreparable injury, and significant damages in an amount to be proven at trial.
13 Pursuant to California Penal Code Section 637.2(b), EpicentRx is entitled to an
14 injunction pursuant to prevent any further recordings without consent and for the
15 return of any recordings in Dr. Carter’s possession, custody and control.
16 FOURTH CAUSE OF ACTION
17 Breach of Contract
20 130. EpicentRx is informed and believes that Dr. Carter breached the
21 contractual obligations set forth in his 2019 Employment Agreement and PIIA by,
22 among other things:
23 a. Failing to keep Proprietary Information confidential;
24 b. Refusing to return Company Proprietary Information and
25 property; and
26 c. Acting in his own self-interest and in conflict with the interests
27 of EpicentRx, by, among other things, engaging in data
28 manipulation, financial improprieties, backchannel arrangements
27
COMPLAINT
1 and private negotiations to his own benefit.

2 131. EpicentRx performed all of its obligations under the 2019 Employment
3 Agreement and PIIA (the “Agreements”), or obligations were excused, and all
4 conditions precedent to the performance of EpicentRx under the Agreements have
5 occurred and/or been satisfied.
6 132. As a direct and proximate result of Dr. Carter’s breach of the
7 Agreements, EpicentRx has been and continues to be irreparably harmed and has
8 sustained significant damages in an amount to be determined in accordance with
9 proof at trial.
10 FIFTH CAUSE OF ACTION
11 Breach of the Implied Covenant of Good Faith and Fair Dealing
14 134. EpicentRx and Dr. Carter entered into the Agreements, a contract in
15 which Dr. Carter promised (among other things) to provide certain services and
16 abide by certain policies in exchange for monies paid by EpicentRx.
17 135. Under the law, the Agreements include an implied covenant of good
18 faith and fair dealing, pursuant to which the parties to the Agreements are precluded
19 from (among other things) taking any action that would interfere with the right of
20 any other party to receive the benefits of the contract.
21 136. EpicentRx performed all of its obligations under the Agreement, and/or
22 any obligations that were not performed have been excused. All conditions
23 precedent to the performance of EpicentRx under the Agreements have occurred
24 and/or been satisfied.
25 137. Dr. Carter breached the implied covenant of good faith and fair dealing
26 by, among other things:
27 a. Failing to keep Proprietary Information confidential;
28 ///
28
COMPLAINT
1 b. Refusing to return Company Proprietary Information and

2 property;
3 c. Acting in his own self-interest and in conflict with the interests
4 of EpicentRx, by, among other things, engaging in data
5 manipulation, financial improprieties, backchannel arrangements
6 and private negotiations to his own benefit, and making false
7 accusations against the Company;
8 d. Violating numerous Company policies, as described above,
9 including, but not limited to: human resources policies,
10 confidentiality and trade secrets policies and the code of conduct;
11 and
12 e. Implementing a unilateral structure of control and silence,
13 including staff manipulation, hostile actions, irrational and
14 erratic behavior and other improper conduct.
15 138. As a result, Dr. Carter has wrongfully interfered with and deprived
16 EpicentRx of the benefits due to EpicentRx under the terms of the Agreements.
17 139. Dr. Carter’s breach of the implied covenant of good faith and fair
18 dealing has caused EpicentRx to suffer damages in an amount to be proven at trial.
19 SIXTH CAUSE OF ACTION
20 Breach of Fiduciary Duty and the Duty of Loyalty
23 141. During the course of his employment with EpicentRx, Dr. Carter was
24 an officer of the Company and occupied a position of substantial trust and authority.
25 As a result of his position as the Chief Executive Officer, Dr. Carter owed fiduciary
26 duties to EpicentRx during his employment, including but not limited to, duties of
27 loyalty, good faith, and care.
28 ///
29
COMPLAINT
1 142. EpicentRx is informed and believes that Dr. Carter breached his
2 fiduciary duties of loyalty, good faith, and care to the Company by taking actions
3 that were in his own best interest and directly against the best interests of
4 EpicentRx, as described above, and including but not limited to the following:
5 a. Refusing to return Company Proprietary Information and
6 property;
7 b. Engaging in data manipulation, financial improprieties,
8 backchannel arrangements and private negotiations to his own
9 benefit;
10 c. Making false accusations against the Company to avoid
11 termination;
12 d. Violating numerous Company policies, as described above,
13 including, but not limited to: human resources policies,
14 confidentiality and trade secrets policies and the code of conduct;
15 e. Implementing a unilateral structure of control and silence,
16 including staff manipulation, hostile actions, irrational and
17 erratic behavior and other improper conduct; and
18 f. Installing an audio-visual recording system to illegally acquire,
19 retain and disclose private conversations and Company data.
20 143. These breaches also unjustly enriched Dr. Carter, who was
21 compensated handsomely during — and as a result of — his disloyal acts. Dr.
22 Carter’s unjust enrichment includes, but is not limited to, his receipt of a substantial
23 salary from EpicentRx.
24 144. Dr. Carter performed the foregoing acts, conduct, and omissions,
25 maliciously, oppressively, and fraudulently, with the intent and design to damage
26 EpicentRx. By reason of this conduct, EpicentRx is entitled to recover punitive
27 damages in an amount to be determined at trial.
28 ///
30
COMPLAINT
1 SEVENTH CAUSE OF ACTION

2 Negligent Misrepresentation
5 146. Before entering into the Agreements, Dr. Carter represented that he was
6 an experienced and knowledgeable medical professional and that he was able to
7 effectively fulfill the role of Chief Executive Officer.
8 147. Dr. Carter falsely represented to the Company, its investors, the
9 independent board and biostatisticians that the clinical trial data had been
10 maintained in a manner that protected its integrity and credibility.
11 148. Dr. Carter falsely represented to the Company and its affiliates that the
12 budget for the Phase 3 clinical trials was three million dollars, when he knew it was
13 two million dollars.
14 149. Dr. Carter falsely represented to EpicentRx that he traveled to Europe
15 in 2019 on Company business, when the basis for trip was entirely personal.
16 150. All of the above representations were clearly false and intended by Dr.
17 Carter for his own benefit and to help him retain his highly-compensated position as
18 Chief Executive Officer. Dr. Carter failed to tell the truth and he was neither
19 equipped nor capable of performing his position at EpicentRx.
20 151. Dr. Carter knew or should have known that his representations were
21 false when he made them. He knew or should have known that EpicentRx would
22 rely on them to its detriment.
23 152. EpicentRx reasonably relied on Dr. Carter’s representations when
24 entering into the Agreements, employing him as CEO and continuing to work with
25 him in an executive role.
26 153. EpicentRx was harmed by the representations made by Dr. Carter. It
27 entered into the Agreements, paid Defendants a salary of four hundred thousand
28 dollars ($400,000) per year and did not receive what it paid for. It also has been
31
COMPLAINT
1 forced to expend significant sums to correct the damage caused by Dr. Carter’s
2 falsehoods. In addition, EpicentRx has been forced to search for a new CEO.
3 154. Dr. Carter’s negligent misrepresentations proximately caused
4 EpicentRx to suffer damages in an amount to be proven at trial.
5 EIGHTH CAUSE OF ACTION
6 Fraud and Intentional Misrepresentation
9 156. Before entering into the Agreements, Dr. Carter represented that he was
10 an experienced and knowledgeable medical professional and that he was able to
11 effectively fulfill the role of Chief Executive Officer.
12 157. Dr. Carter falsely represented to the Company, its investors, the
13 independent board and biostatisticians that the clinical trial data had been
14 maintained in a manner that protected its integrity and credibility.
15 158. Dr. Carter falsely represented to the Company and its affiliates that the
16 budget for the Phase 3 clinical trials was three million dollars, when he knew it was
17 two million dollars.
18 159. Dr. Carter falsely represented to EpicentRx that he traveled to Europe
19 in 2019 on Company business, when the basis for trip was entirely personal.
20 160. Dr. Carter knew that its representations were false and did not intend to
21 perform the above promises when he made them, and he knew that his allegations
22 about the Company were fabricated. He made these misrepresentations
23 intentionally and knowing them to be false, and intending for EpicentRx to rely on
24 them to its detriment.
25 161. EpicentRx reasonably relied on Dr. Carter’s representations when
26 entering into the Agreements, employing him as CEO and continuing to work with
27 him in an executive role.
28 ///
32
COMPLAINT
1 162. EpicentRx was harmed by the representations made by Dr. Carter. It

2 entered into the Agreements, paid Defendants a salary of four hundred thousand
3 dollars ($400,000) per year and did not receive what it paid for. It also has been
4 forced to correct the damage caused by Dr. Carter’s falsehoods. In addition,
5 EpicentRx has been forced to search for a new CEO.
6 163. Dr. Carter’s intentional misrepresentations proximately caused
7 EpicentRx to suffer damages in an amount to be proven at trial.
8 164. The conduct of Dr. Carter was intended to cause injury to EpicentRx
9 and was fraudulent, malicious, and oppressive. Accordingly, EpicentRx seeks, and
10 is entitled to receive, an award of punitive and/or exemplary damages in an amount
11 to be determined at trial.
12 NINTH CAUSE OF ACTION
13 Intentional Interference With Prospective Economic Relations
16 166. EpicentRx has been engaging in negotiations for business relationships
17 with numerous entities, including those in China, that, if those negotiations had
18 continued, would have benefitted EpicentRx.
19 167. Dr. Carter knew of EpicentRx’s longstanding relationship and
20 discussions with entities in China and elsewhere.
21 168. Dr. Carter used EpicentRx’s misappropriated trade secret information
22 to unfairly compete against EpicentRx and impede its existing relationship with
23 entities in China and elsewhere.
24 169. On information and belief, Dr. Carter intended to disrupt EpicentRx’s
25 business and economic relationships through his backchannel negotiations for his
26 own personal gain, and by pitching against EpicentRx using EpicentRx’s
27 confidential information.
28 ///
33
COMPLAINT
1 170. As a direct result of Dr. Carter’s wrongful conduct, a significant contact

2 at a Chinese entity terminated its negotiations with EpicentRx (after Dr. Carter had
3 already stalled negotiations with all other Chinese entities). EpicentRx will have to
4 re-start negotiations and compete against the confidential information and trade
5 secrets that Dr. Carter has unlawfully acquired and misappropriated.
6 171. Dr. Carter’s conduct was a substantial factor in causing EpicentRx’s
7 harm.
8 172. As a direct and proximate result of Dr. Carter’s interference with
9 EpicentRx’s prospective economic relationship with a foreign entity and others,
10 EpicentRx has been and continues to be injured irreparably and otherwise, and has
11 sustained significant damages, in an amount to be determined by the evidence at
12 trial. Additionally, Dr. Carter has been and will be unjustly enriched in an amount
13 to be proven at trial. Dr. Carter’s unjust enrichment includes, but is not limited to,
14 any agreements it enters into with foreign entities and his receipt of business
15 opportunities that rightly belong to EpicentRx.
16 173. Dr. Carter performed the foregoing acts, conduct, and omissions
17 maliciously, and oppressively, with the intent to damage EpicentRx. By reason of
18 this conduct, EpicentRx is entitled to recover punitive damages in an amount to be
19 determined at trial.
20 TENTH CAUSE OF ACTION
21 Violation of California Business and Professions Code § 17200 et seq.
24 175. California Business and Professions Code Section 17200 prohibits
25 unfair competition in the form of any unlawful, unfair, or fraudulent business
26 practice.
27 176. As alleged above, Dr. Carter has engaged in unlawful, unfair, and/or
28 fraudulent acts, including but not limited to, engaging in attempted data
34
COMPLAINT
1 manipulation and financial improprieties; using EpicentRx’s misappropriated,

2 confidential and proprietary information and trade secrets to unfairly compete
3 directly with EpicentRx; unlawfully acquiring and misappropriating those trade
4 secrets; interfering with and sabotaging EpicentRx’s relationships with third parties
5 with which it intended to engage in business relationships; harassing, bullying and
6 intimidating employees; and illegally dispensing prescriptions without a state
7 medical license.
8 177. Dr. Carter undertook the acts described in this complaint, and such
9 other acts as may be established at trial, with the intent to injure EpicentRx, gain an
10 unfair competitive advantage in the oncology immuno-therapy industry and exercise
11 control over EpicentRx for his own personal gain.
12 178. The natural, probable, and foreseeable result of Dr. Carter’s conduct
13 has been and will continue to be to injure EpicentRx’s business, including but not
14 limited to compromising its product development and business relationships,
15 including that which it had developed with a Chinese company and other foreign
16 entities.
17 179. As a proximate and direct result of Dr. Carter’s unlawful conduct,
18 EpicentRx has suffered and will continue to suffer substantial actual losses in an
19 amount to be proven at trial.
20 180. As a proximate and direct result of the conduct alleged herein, Dr.
21 Carter has been and will be unjustly enriched in an amount to be proven at trial. For
22 example, Dr. Carter has been unjustly enriched by receiving an exorbitant salary and
23 business opportunities that rightly belong to EpicentRx.
24 181. As a result of the conduct alleged herein, EpicentRx is entitled to
25 disgorgement of profits and restitution of all sums unfairly and unjustly obtained by
26 Dr. Carter.
27 ///
28 ///
35
COMPLAINT
1 182. Due to the egregious nature of Dr. Carter’s conduct, and the potential
2 harm he may cause to the public, EpicentRx is entitled to attorneys’ fees pursuant to
3 California Business & Professions Code Section 17205.
4
5 PRAYER FOR RELIEF
6 WHEREFORE, Plaintiff prays for the following relief:
7 1. Judgment against Dr. Carter on all causes of action alleged herein;
8 2. Compensatory damages, including lost profits and lost business value,
9 in an amount to be proven at trial;
10 3. Statutory damages, as called for by the statutes cited herein;
11 4. Unjust enrichment damages commensurate with how much Dr. Carter
12 has profited from his unlawful conduct, in an amount to be proven at trial;
13 5. Reasonable royalties for Dr. Carter’s unlawful disclosure and misuse of
14 Plaintiff’s trade secrets;
15 6. The seizure and return of EpicentRx’s property and trade secret
16 information;
17 7. Punitive damages in an amount to be proven at trial;
18 8. Injunctive relief;
19 9. Restitution and disgorgement of profits under California Business and
20 Professions Code Section 17200;
21 10. Attorneys’ fees and costs of suit incurred herein as allowed by law and
22 contract; and
23 11. Any other relief the Court deems just and proper.
24 ///
25 ///
26 ///
27 ///
28 ///
36
COMPLAINT
1
2 DEMAND FOR JURY TRIAL
3 Plaintiff hereby demands a trial by jury.
4
Dated: June 9, 2020 Respectfully submitted,
5
By: /s/ Todd A. Boock_________
6 Todd A. Boock (SBN 181933)
tboock@goodwinlaw.com
601 S. Figueroa St., 41st Floor
8 Los Angeles, California 90017
Tel.: +1 213.426.2500
9 Fax.: +1 213.623.1673
10 Noah M. Jennings (SBN 307234)
njennings@goodwinlaw.com
Three Embarcadero Center
12 San Francisco, California 94111
Tel.: +1 415.733.6000
13 Fax.: +1 415.677.9041
14 James A. Lassart (SBN 40913)
jlassart@mpbf.com
15 Adrian G. Driscoll (SBN 95468)
adriscoll@mpbf.com
16 MURPHY, PEARSON,
BRADLEY & FEENEY, P.C.
17 580 California Street, Suite 1100
San Francisco, California 94104
18 Tel.: +1 415.788.1900
Fax.: +1 415.393.8087
19
Attorneys for Plaintiff
20 EpicentRx, Inc.
21
22
23
24
25
26
27
28
37
COMPLAINT

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Case 3:20-cv-01058-LAB-LL Document 1 Filed 06/09/20 PageID.

1 Todd A. Boock (SBN 181933)

1 Plaintiff EpicentRx, Inc. (“EpicentRx,” “Plaintiff” or the “Company”) hereby

1 portfolio of small molecule compounds that favorably alter the tumor

1 Conduct may subject an employee to “disciplinary action, up to and including

1 EpicentRx, any intentional act that unlawfully damages EpicentRx’s reputation,

1 50. Clinical trial protocols require an independent board to assess and

1 K. Dr. Carter’s Termination and the Discovery of his Secret Audio-

1 including the addition of CFO Franck Brinkhaus and

1 103. EpicentRx is entitled to an injunction pursuant to 18 U.S.C.

1 THIRD CAUSE OF ACTION

1 and private negotiations to his own benefit.

1 b. Refusing to return Company Proprietary Information and

1 SEVENTH CAUSE OF ACTION

1 162. EpicentRx was harmed by the representations made by Dr. Carter. It

1 170. As a direct result of Dr. Carter’s wrongful conduct, a significant contact

1 manipulation and financial improprieties; using EpicentRx’s misappropriated,

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