UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

_______________________________________________________________

Lee Michael Pederson, Appeal No. 18-3195

Plaintiff / Appellant,

v. PLAINTIFF / APPELLANT'S

Phillip Frost, OPKO Health, Inc., Brian REPLY TO DEFENDANTS'

Keller, and CoCrystal Pharma, Inc. OPPOSITION

Defendants / Appellees.

_______________________________________________________________

Plaintiff / Appellant's Reply to Defendants' Opposition

to Appellant's Motion to Supplement the Record

The only issue on appeal is whether the Defendants are subject to personal

jurisdiction in Minnesota under the Minnesota long-arm statute for the tortious

actions alleged in the complaint. The issue will be reviewed de novo by this Court

of Appeals, and the review will be based solely on the record. The record as it

stands contains a purposely misleading narrative put forth by the Defendants.

Supplementation of the record with newly available information (Exhibits 1-6) is

needed to provide the Court a more complete and accurate perspective of the

Plaintiff's complaint so that the Court can perform a proper due process analysis.

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 In the District Court, the Defendants put forth a false narrative that the

Plaintiff's allegations are implausible and unreasonable by citing Twombly and

Iqbal and employing the phrases "threadbare accusations," "threadbare recitals,"

"mere conclusory statements," and "unsupported conclusions, unwarranted

inferences and sweeping legal conclusions cast in the form of factual allegations”

in connection with the Plaintiff's complaint.

The Defendants furthered this narrative by implying that the character of

Defendant Phillip Frost is above reproach.

"Dr. Frost is an executive with a company called Opko Health

located in Miami, Florida. He's a billionaire. He made most of his
money through a company that manufactured generic pharmaceutical
drugs to compete with name-brand pharmaceutical products and then
he's had numerous other investments over the years. He's a very well-
known person in Miami, an entrepreneur, a philanthropist. The Science
Museum, for example, is named after him in Miami." (transcript,
District Court document 79 at pp. 8-9)

The Plaintiff and the Defendants have put forth two very different versions

of the underlying events. The SEC has recently added its own version. Here are

the three stories.

Story Number One - Plaintiff. The Plaintiff's general story is that Frost and

the other Defendants are fraudsters. They organized and participated in a securities

fraud conspiracy that produced tens of millions of dollars in illegal profits. They

committed many other frauds along the way, and some of those frauds harmed the

Plaintiff.
2

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 Story Number Two - Defendants. The general story the Defendants

conveyed to the District Court is that the Plaintiff is making false accusations

against a person of impeccable character (Frost). Why would a billionaire

philanthropist lie and cheat and steal? It's simply not believable. Therefore, the

Court should not have to "view the facts alleged in the complaint in the light most

favorable to the plaintiff" and the Court should make the Plaintiff's case go away.

Story Number Three - SEC. The SEC's newly available story is essentially

the same as the Plaintiff's story - that Frost and the other Defendants are fraudsters

who organized and participated in a securities fraud conspiracy that produced tens

of millions of dollars in illegal profits (Exhibits 1 and 2).1

At the time of the District Court proceedings, the SEC was conducting a

confidential investigation and had not yet filed SEC v Honig et al (Exhibit 2) or

issued their press release about the litigation (Exhibit 1). John Ford, a defendant in

SEC v Honig, had not yet consented to judgment against himself (Exhibit 6). The

other Exhibits were not available then, either. Because of this timing, the District

Court was unaware of information that would have exposed the Defendants'

misleading story, and Story Number Three does not appear in the record.2

1
By opposing Plaintiff's motion, Defendants seek to exclude evidence of Story
Number Three from the record of this proceeding.
2
At page 4 of their Opposition, Defendants argue, "The documents Mr. Pederson
hopes to add were not presented to the District Court and they address events that
arose after the briefing and oral arguments in that forum." First, the documents
3

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 The Minnesota long-arm statue says in relevant part:

543.19 PERSONAL JURISDICTION OVER NONRESIDENTS.

§Subdivision 1. Personal jurisdiction. As to a cause of action arising
from any acts enumerated in this subdivision, a court of this state with
jurisdiction of the subject matter may exercise personal jurisdiction
over any foreign corporation or any nonresident individual, or the
individual's personal representative, in the same manner as if it were a
domestic corporation or the individual were a resident of this state.
This section applies if, in person or through an agent, the foreign
corporation or nonresident individual: …

(4) commits any act outside Minnesota causing injury or property

damage in Minnesota, subject to the following exceptions when no
jurisdiction shall be found:

(i) Minnesota has no substantial interest in providing a forum; or

(ii) the burden placed on the defendant by being brought under the
state's jurisdiction would violate fairness and substantial justice.

The Plaintiff has alleged that the Defendants committed acts "outside

Minnesota causing injury or property damage in Minnesota." Unless this Court

finds sua sponte that Minnesota has no substantial interest in providing its

residents with a forum for addressing frauds perpetrated by numerous defendants

from multiple out-ot-state jurisdictions, the only issue is due process.

Due process requires that the defendant have certain minimum contacts with

the state, such that the maintenance of the suit does not offend “traditional notions

were not presented to the District Court because they were not publicly available
until after the briefing and oral arguments were concluded. Second, the documents
address events that happened between 2013 - 2018 (see the clear language in the
second paragraph of Exhibit 2, for example).
4

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of fair play and substantial justice.” Int’l Shoe Co. v. Wash., 326 U.S. 310, 316

(1945). Defining the sufficient minimum contacts plays a key role in this analysis,

and this in turn involves a close look at the allegations. The nature of the Plaintiff's

allegations also affects the concept of “traditional notions of fair play and

substantial justice.”

Citing Twombly and Iqbal, the Defendants argued to the District Court that

Plaintiff failed to state a claim under Rule 12(b)(6).3 This hypocritical ploy was

clearly intended by the Defendants to generally undermine the Plaintiff's

allegations, with the Defendants' full knowledge that their attack on the Plaintiff's

credibility was groundless. The Plaintiff's allegations are plausible and credible,

and the exhibits related to Story Number Three help to prove this.

To survive a motion to dismiss for lack of personal jurisdiction brought

under Fed. R. Civ. P. 12(b)(2), plaintiff must make a prima facie showing of

personal jurisdiction by pleading sufficient facts to support a “reasonable inference

that the defendants can be subjected to jurisdiction within the state.” K-V Pharm.

Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591-92 (8th Cir. 2011). The court

must view the evidence in a light most favorable to the plaintiff and resolve factual

conflicts in the plaintiff’s favor; however, plaintiff carries the burden of proof and

3
Defendants' Memorandum of Law in Support of Their Motion to Dismiss
Plaintiff's Amended Complaint, District Court document 62, pp. 34-35.
5

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that burden does not shift to defendants. Epps v. Stewart Info. Servs. Corp., 327

F.3d 642, 647 (8th Cir. 2003).

Plaintiff has met this burden with his complaint and declaration, so the

Defendants' Rule 12(b)(2) Motion should fail. However, if a court doubts the

credibility of plaintiff's allegations because of a lack of relevant information, the

court may find it difficult to view the allegations in a light most favorable to the

plaintiff. Further, human beings may be distracted from clear reasoning if they are

misled by an intentionally false but superficially believable story. This is exactly

what the Defendants intended. Defendants' groundless attacks on the Plaintiff's

credibility are still on the record. The record should now be supplemented to show

that the Defendants' attacks are groundless.

On pages 5-6 of the Defendants' opposition they argue,

"This is not an extraordinary case that merits supplementation.

As described above, the supplemental documents are irrelevant to the
issue on appeal – personal jurisdiction. They will not assist the Court
in answering this question. Instead, they will muddy the waters and
unfairly prejudice Appellees by forcing them to address irrelevant
issues and allegations. Thus, equity and fairness counsel against
allowing supplementation and the Court should deny Mr. Pederson’s
Motion."

The Defendants' statements would be laughable if they did not involve such

a serious matter. The Plaintiff's allegations are that billionaire Frost leads a gang

that specializes in securities fraud. The SEC alleges the same set of facts. The

Defendants' have misleadingly implied that Plaintiff's allegations are "threadbare

6

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recitals" and then gone on to say that equity and fairness are on their side.

However, if the Plaintiff's allegations are merely "threadbare recitals," it is

extremely unlikely that the SEC Complaint would exist and contain the same

allegations. After misleading the District Court, the Defendants' say they do not

want to "muddy the waters" with the factual existence of the SEC Complaint.

They say that the existence of the SEC Complaint is "irrelevant" when their own

intentionally misleading story to the District Court is still a part of the record.

The Defendants even argue that their own public statements (Exhibits 3 and

4) should be excluded because " the accuracy of press releases and news reports

can certainly be questioned, making them an improper “source” for judicial

notice."4 The laughs just keep on coming.

A.B.A. Model Rule of Professional Responsibility 3.3 is entitled "Candor

Toward the Tribunal." Most if not all states have adopted some version of this

rule.5 The model rule says in part,

"(b) A lawyer who represents a client in an adjudicative proceeding

and who knows that a person intends to engage, is engaging or has
engaged in criminal or fraudulent conduct related to the proceeding
shall take reasonable remedial measures, including, if necessary,
disclosure to the tribunal.
(c) The duties stated in paragraphs (a) and (b) continue to the
conclusion of the proceeding, and apply even if compliance requires
disclosure of information otherwise protected by Rule 1.6."

4
Page 5 of Defendants' opposition.
5
Minnesota Rule of Professional Conduct 3.3 is essentially the same as the A.B.A.
model rule.
7

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 The Attorneys for the Defendants knew that their narrative to the District

Court was false and misleading. In late December of 2017, the Plaintiff provided

detailed Rule 26 disclosures to Defendants' attorney Joe Dixon, among others.

Those Rule 26 disclosures comprised 70 documents and three pictures supporting

every aspect of the Plaintiff's case. The disclosures made it clear that the Plaintiff's

complaint is not just the start of a fishing expedition. In fact, the evidence in those

Rule 26 disclosures is more than sufficient by itself to obtain judgments against

each and every Defendant. Any attorney familiar with those Rule 26 disclosures

could not truthfully argue that the Plaintiff's allegations are implausible.

The attorneys for the Defendants crossed outside the boundaries of zealous

advocacy by misleading the District Court with their false narrative. This was

unfair to the District Court, and it was unfair to the Plaintiff. The attorneys got

caught when the SEC filed charges against their clients. Now, by opposing

Plaintiff's motion, the same attorneys are opposing their own affirmative duty

under the Rules of Professional Responsibility to "take reasonable remedial

measures" to correct their actions of misleading the District Court.

Several months will pass before arguments on Plaintiff Pederson's appeal are

heard. In this intervening time, it is possible that more public documents that bear

on the issue of due process in Plaintiff's appeal will appear. Plaintiff requests leave

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of the Court to request further supplementation of the record if such potential

documents become public.

Plaintiff Pederson seeks to supplement the record with newly available

public documents that bear on due process - the sole issue of Plaintiff's appeal.

Without having to decide on the truth of the SEC's Story Number Three, this Court

should allow supplementation of the record to include documents related to Story

Number Three so that the Court can be informed by the existence and content of

these documents. There is no unfair prejudice to the Defendants in supplementing

the record with the newly available and highly relevant public documents (Exhibits

1-6) whose existence refutes the Defendants' intentionally misleading story to the

District Court.

For these reasons, the Plaintiff respectfully requests that the Motion to

Supplement the Record by Judicial Notice be granted.

Date: October 30, 2018 Plaintiff/Appellant’s Signature

/s/ Lee Pederson

Lee Michael Pederson

Pro se
MN Atty. No. 225605
2126 Lyndale Ave S #6
Minneapolis, MN 55405
952-836-7949
LeeMPete@aol.com

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 UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

_______________________________________________________________

Lee Michael Pederson, Appeal No. 18-3195

Plaintiff / Appellant,

v. PLAINTIFF / APPELLANT'S

Phillip Frost, OPKO Health, Inc., Brian CERTIFICATE OF

Keller, and CoCrystal Pharma, Inc. COMPLIANCE

Defendants / Appellees.

_______________________________________________________________

CERTIFICATE OF COMPLIANCE

I certify that Plaintiff / Appellant's Reply to Defendants' Opposition to

Plaintiff's Motion to Supplement the Record, filed on October 31, 2018, conforms

to type-volume limitations for Motions filed under Rule 27. The length of the

Motion is 2,100 words. The Motion was prepared using Microsoft Word 2010 and

the word processing program has been applied specifically to include all text,

including headings, footnotes, and quotations for word count purposes.

Appellate Case: 18-3195 Page: 1 Date Filed: 10/31/2018 Entry ID: 4721043
Date: October 31, 2018 Plaintiff/Appellant’s Signature
/s/ Lee Pederson

Lee Michael Pederson

Pro se
MN Atty. No. 225605
2126 Lyndale Ave S #6
Minneapolis, MN 55405
952-836-7949
LeeMPete@aol.com

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