On November 22, 2021, Justice Borrok of the New York County Commercial Division issued a decision in Knowyourmeme.com Network, Inc. v. Elraviv, 2021 NY Slip Op. 51110(U), holding that the interpretation of a forum selection clause in an earlier action was binding on the plaintiff in a new action even though the new action included new defendants, explaining:
In the SDNY, the Plaintiffs sought either remand of the Prior Action arguing that Literally Media Ltd. was Brooklyn based and that there was no diversity or to add additional defendants which would destroy diversity and the defendants in the Prior Action moved to dismiss arguing, inter alia, that the action was barred by a forum selection clause in a letter of intent, dated September 17, 2018 by and between Liveleak Global Internet, Inc. and Literally Media Ltd., as amended (the LOI) mandated that the claims be brought in Israel.
The SDNY by Memorandum Decision and Order dated September 28, 2021 and adopting the Report and Recommendation dated August 30, 2021 rejected the argument that Literally Media Ltd. was a New York entity and dismissed the case pursuant to the doctrine of forum non-convenience based on the forum selection clause contained in the LOI. In doing so, the SDNY interpreted the forum selection clause in the LOI and held that the scope of the forum selection clause was not limited solely to claims for breach of the contract and included tort based claims citing Fagbeyiro v Schmitt-Sussman Enterprises, Inc., No. 17-CV-7056 (VSV), 2018 WL 4681611, at * 2 [SDNY Sept. 28, 2018] (quoting Cfirstclass Corp. v Silverjet PLC, 560 F Supp2d 324, 329 [SDNY 2008].
This action also arises out of the LOI. Here, the Plaintiffs also assert claims sounding in fraudulent inducement or fraud misrepresentation, negligent misrepresentation, interference with contractual relationship, intentional interference with prospective business advantage, unjust enrichment, declaratory relief under GBS § 130, declaratory relief under GBS §133 and seeks, among other things, damages in the amount of $64,500,000.
It is of no moment that now the Plaintiffs have added the defendants that the Plaintiffs sought (but were not permitted) to add in the Prior Action. The Plaintiffs had a full and fair opportunity to litigate whether they could maintain this action in the United States and the SDNY determined they can not. Stated differently, it does not matter that these defendants did not have an opportunity to litigate this issue. The Plaintiffs did and these claims which are, in sum and substance, the same claims asserted in the Prior Action (i.e., in that they are predicated on the LOI) must therefore be litigated in Israel. That is the holding of the Prior Action by the SDNY.
(Internal quotations and citations omitted) (emphasis added).