Justia Business Law Opinion Summaries

This dispute centers on the competitive conduct between United Therapeutics Corporation (UTC), the manufacturer of the brand-name drug Remodulin, and Sandoz, Inc. and its marketing partner RareGen, LLC, which sought to launch a generic version of treprostinil for treating pulmonary arterial hypertension. After Sandoz received FDA approval to market injectable generic treprostinil, UTC and Smiths Medical took steps to restrict the supply of cartridges necessary for subcutaneous administration, ultimately requiring specialty pharmacies to distribute cartridges exclusively for Remodulin. As a result, Sandoz was unable to launch its generic drug for subcutaneous use until an alternative cartridge was developed and FDA-approved several years later. Sandoz and RareGen alleged that UTC’s conduct violated federal antitrust and state tort laws and breached a settlement agreement arising from prior patent litigation.The U.S. District Court for the District of New Jersey dismissed the antitrust and state-law tort claims, granted summary judgment in favor of Sandoz as to liability on its breach-of-contract claim, and awarded damages after a bench trial. The court also denied UTC’s motion to exclude Sandoz’s damages expert. RareGen was dismissed from the case following the grant of summary judgment, and both UTC and Sandoz appealed various rulings.The United States Court of Appeals for the Third Circuit reversed the grant of summary judgment in favor of Sandoz on liability for the breach-of-contract claim, finding the relevant provisions ambiguous and remanding for trial. It also reversed the grant of summary judgment in favor of UTC on the tortious interference claim, instructing the District Court to analyze it independently from the antitrust claims. The Third Circuit affirmed the dismissal of the antitrust and unfair and deceptive trade practices claims, concluding that UTC demonstrated procompetitive justifications for its conduct. The appellate court affirmed the denial of UTC’s Daubert motion to exclude the damages expert, and vacated the damages award, remanding for further proceedings. View "Sandoz Inc v. United Therapeutics Corporation" on Justia Law

Investors in an e-commerce company alleged they were defrauded by the founder and former CEO, claiming that their decisions to purchase preferred shares in early 2021 were based on false representations about the company’s profitability and financial health. The founder repeatedly refused to provide audited financial statements before closing, and pressured the investors to move quickly, warning that their allocation would be lost to other parties if they delayed for due diligence. The investors relied on unaudited financial statements and entered into two stock purchase agreements in February and March 2021. After the transactions, the company failed to provide audited financial statements by the contractual deadline, and the founder sold significant personal stock. In June 2022, the investors finally received audited statements revealing substantial losses and inconsistencies with previous unaudited reports.The investors initially filed suit in New Jersey in August 2024. After enforcement of the Delaware forum-selection clause, they dismissed the New Jersey action and refiled in the Superior Court of the State of Delaware in April 2025, asserting claims for fraud, negligent misrepresentation, unjust enrichment, and a New Jersey statutory claim. The Superior Court dismissed the complaint, holding that the claims accrued no later than March 2021 and were barred by Delaware’s three-year statute of limitations. The court found no basis for tolling under fraudulent concealment or inherently unknowable injury doctrines, reasoning the investors were on inquiry notice when they executed the agreements without the requested information.On appeal, the Supreme Court of the State of Delaware reviewed the statute of limitations question de novo. The Court held that, regardless of tolling doctrines, inquiry notice was triggered in April 2021 when the company breached its obligation to provide audited financials. Because the investors filed more than three years later, their claims were time-barred. The Supreme Court affirmed the Superior Court’s dismissal. View "Cornice Ventures I LLC v. Silberstein" on Justia Law

The dispute centers on real property originally acquired by John and Constance Clark as part of a family farming operation. In 1988, two parcels were conveyed to their son, Jay Clark, who subsequently transferred the properties to Clover Hollow Farms, Inc., a corporation formed shortly before the conveyance with John Clark as its sole shareholder. Jay Clark served as vice-president and director of Clover Hollow. According to Jay Clark, his parents promised that Clover Hollow would hold the property in trust for him as a premarital asset, to be returned upon demand or subject to his exclusive control. Years later, Jay Clark assigned his interests in one of the properties to C & H Properties, LLC, operated by his children.After John Clark was placed under a conservatorship, the conservator, Judith Appleby, adopted corporate resolutions nullifying Jay Clark’s authority and authorizing the corporation to join litigation seeking a declaration that Jay Clark had no interest in the corporate stock, real property, or tangible property. Jay Clark filed counterclaims challenging the validity of these resolutions and seeking to regain title to the properties. The District Court of the Third Judicial District, Canyon County, granted summary judgment to the Estates and Clover Hollow. It ruled that judicial estoppel barred Jay Clark’s claims due to his failure to disclose the properties in bankruptcy and found that his claims under constructive trust, promissory estoppel, and unjust enrichment failed as a matter of law. The court also upheld the corporate resolutions enacted by Appleby.The Supreme Court of the State of Idaho reviewed the district court’s rulings. It held that Ms. Appleby, as executor, lacked authority under Clover Hollow’s bylaws and the Idaho Business Corporation Act to convene a special shareholder meeting and enact corporate resolutions, rendering those actions invalid. Consequently, Clover Hollow was never properly joined in the litigation. The Supreme Court vacated the judgment, reversed the grant of summary judgment on Jay Clark’s sixth counterclaim, and remanded the case with instructions to allow reasonable time for proper joinder of Clover Hollow as a party. View "Estate of Clark v. Clark" on Justia Law

Investors in a small publicly traded pharmaceutical company claimed that the company and its CEO made false statements regarding finances and accounting controls over several years. These statements allegedly included manipulated financial forecasts, misleading quarterly reports, and improper accounting for revenues from a major collaboration agreement. The company later restated its financial statements for fifteen quarters, admitting they were materially misstated due to weaknesses in internal controls, and several key finance personnel either resigned or were terminated.After the company’s stock price dropped following the restatement disclosure, the investors filed a class action in the U.S. District Court for the Eastern District of Pennsylvania, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5. The District Court dismissed the complaint with prejudice, focusing solely on two corrective disclosures—the August 2023 report and the April 2024 restatement—and concluded that these were not materially false or actionable. For materiality, the District Court relied on Third Circuit precedents establishing a categorical rule that immateriality could be proven if the stock price rebounded quickly after disclosure.Upon appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s dismissal de novo, taking all facts in the complaint as true. The Third Circuit held that categorical rules based on post-disclosure stock price movements are inappropriate for materiality analysis under the securities laws, in light of Supreme Court precedent. The proper standard is a fact-specific inquiry focusing on whether a reasonable investor would consider the omitted or misstated information significant at the time of investment. The Third Circuit vacated the District Court’s judgment and remanded the case for further proceedings using the correct standard. View "Beig v. Ocugen Inc" on Justia Law

A Swedish private equity firm specializing in veterinary products sought to acquire a company that manufactured orthopedic implants for animals. At the time of negotiations, the target company was involved in ongoing patent litigation initiated by a third party, which posed significant financial risk. To address this uncertainty, the parties included a broad indemnification provision in their agreement, requiring the sellers to cover losses “as a result of, or in connection with” the patent litigation. After the sale closed, the litigation expanded to include additional products and patents, culminating in a $70 million settlement and a license for one of the company’s products. The buyer financed the settlement with a loan. Most former owners settled indemnity claims, but the company’s founder did not, prompting the new owners to sue for enforcement of the indemnity.The Superior Court of the State of Delaware initially granted summary judgment to the buyers on certain defenses but otherwise denied both parties’ motions, proceeding to trial. Following trial, the court held that the founder was required to indemnify the buyers for damages arising from the patent litigation, but not for the cost of the patent license. It awarded only half of the requested attorneys’ fees for patent litigation, citing allocation challenges, and also denied recovery of fees incurred to enforce the indemnification provision. The court did, however, award prejudgment interest, including on the loan interest expense.On appeal, the Supreme Court of the State of Delaware affirmed in part and reversed in part. It held that the indemnification provision covered losses arising from post-transaction conduct and did not violate public policy, and that the implied covenant defense was inapplicable. The court found error in awarding prejudgment interest on the loan-interest expense, which resulted in a double recovery. For the cross-appeal, it held that the buyers were entitled to the license cost and the full amount of attorneys’ fees from the patent litigation, but not fees for enforcing the indemnification provision. The case was remanded for further proceedings. View "Gendreau vs Movora LLC" on Justia Law

A bankruptcy liquidator acting on behalf of a group of not-for-profit hospitals alleged that a company providing healthcare data and repricing services conspired with major health insurers to fix and suppress reimbursement rates for out-of-network (OON) medical services. The complaint described an industry practice in which insurers send OON claims to the company, whose proprietary algorithm, based on claims data from hundreds of insurers, sets suggested reimbursement rates. The liquidator claimed that these rates were consistently and artificially low, that insurers nearly always adopted them, and that the company openly promoted its universal adoption among leading insurers. The alleged scheme was said to harm providers by suppressing both OON and in-network rates, and to constitute unlawful horizontal price fixing, price tampering, and unlawful exchange of competitively sensitive information.After the insurers were ordered to arbitration and dismissed from the action, the Superior Court of the City and County of San Francisco sustained the remaining defendant company’s demurrer without leave to amend. The court reasoned that OON reimbursements were not subject to the Cartwright Act’s prohibition on price fixing because they were not standalone products or services but merely reflected fulfillment of insurers’ contractual obligations to subscribers. The court also ruled that the unlawful exchange of information and unfair competition claims depended on the price-fixing theory and thus failed for the same reason.The California Court of Appeal, First Appellate District, Division Three, reversed the judgment. It held that payments for OON medical services by insurers are “prices” within the meaning of the Cartwright Act and are not exempt from antitrust scrutiny merely because they arise from insurers’ obligations to their subscribers. The court found that both state and federal antitrust law permit claims for price fixing in this context and remanded the case for further proceedings. View "VHS Liquidating Trust v. MultiPlan Corp." on Justia Law

A fraudulent investment scheme orchestrated by Martin Silver and a co-conspirator caused millions of dollars in losses to several entities, including two investment funds and a bank. Silver, who was a managing partner at an investment advisory firm, pled guilty to conspiracy and substantive counts of wire and securities fraud. As part of his sentence, the United States District Court for the Southern District of New York ordered him to pay over $300 million in restitution, specifying a $40,000 lump-sum payment before incarceration and subsequent monthly payments equal to 10% of his income after release. At sentencing, Silver reported significant assets, which later increased in value post-release, although his income remained small.After his release, Silver made only minimal payments as required by the restitution schedule. The government, supported by the victims, moved in the district court to compel immediate turnover of Silver’s appreciated assets for restitution and to modify his payment schedule. The district court ordered Silver to liquidate and pay the appreciated value of his assets but declined to order turnover of the full asset value or further modify the payment schedule, reasoning that the statutory requirements for such modifications were not met.The petitioners sought review in the United States Court of Appeals for the Second Circuit under the Crime Victims’ Rights Act, arguing that the district court should have ordered turnover of all of Silver’s assets. The Second Circuit held that under the Mandatory Victims Restitution Act, where a restitution judgment does not make payment due immediately and includes a fixed payment schedule, and the defendant is in compliance, the government is not entitled to enforce a turnover order for assets beyond the payment schedule. As a result, the court denied the petition for a writ of mandamus, affirming the district court’s decision. View "In re: IIG Structured Trade Fin. Fund, Ltd." on Justia Law

A New Jersey car dealership, part of a group of businesses owned by the same individual, applied for and received a Paycheck Protection Program (PPP) loan under the CARES Act. The dealership, along with other affiliated entities, collectively received PPP loans that exceeded the aggregate cap imposed by the Small Business Administration’s (SBA) Corporate Group Rule for second-draw loans. Despite acknowledging that it violated this rule, the dealership sought forgiveness for the portion of its loan that did not exceed the cap, arguing that it was entitled to partial forgiveness.After the dealership's loan forgiveness application was denied by the SBA—due to the loan exceeding the corporate cap—the dealership filed an administrative appeal, which was also denied. Subsequently, the dealership sued the SBA in the United States District Court for the District of New Jersey, asserting that the SBA’s denial was arbitrary, capricious, and contrary to law under the Administrative Procedure Act. The District Court granted summary judgment in favor of the SBA, finding that the agency acted within its statutory and regulatory authority.The United States Court of Appeals for the Third Circuit reviewed the District Court’s grant of summary judgment de novo and evaluated the SBA’s decision for arbitrariness or abuse of discretion. The Third Circuit held that neither the CARES Act nor the implementing regulations required partial forgiveness where the corporate group loan cap was exceeded. Furthermore, the SBA did not abuse its discretion or act arbitrarily in denying forgiveness. The court affirmed the District Court’s summary judgment in favor of the SBA, confirming that loans obtained in violation of the Corporate Group Rule are not eligible for forgiveness, even in part. View "Celebrity of Springfield LLC v. SBA" on Justia Law

Three principals of an investment firm received approximately $141.5 million in distributive shares from the firm for the 2016 and 2017 tax years. The firm, organized as a Delaware limited partnership, did not include these distributive shares as self-employment income, asserting that the principals were "limited partners" within the meaning of the Internal Revenue Code, which exempts limited partners’ distributive shares from self-employment tax. The Internal Revenue Service audited the firm and determined that, because the principals worked full-time and exercised managerial control over the partnership, they were not limited partners. The IRS issued adjustments to increase the firm’s taxable income for both years, including the distributive shares as self-employment income.The firm challenged the IRS adjustments in the United States Tax Court, arguing both that the principals qualified for the limited partner exemption and that the Tax Court lacked jurisdiction to decide the adjustments under the TEFRA partnership-level procedures. The Tax Court found that the principals, despite their formal status as limited partners, functionally exercised managerial control and therefore did not qualify for the exemption. The Tax Court also held it had jurisdiction to review the adjustments as partnership-level items under TEFRA and upheld the IRS’s adjustments.On appeal, the United States Court of Appeals for the Second Circuit affirmed the Tax Court’s decisions. The court held that the Tax Court properly exercised jurisdiction and that the principals were not “limited partners” within the meaning of § 1402(a)(13) because they actively managed the partnership’s business. The distributive shares received by the principals were therefore subject to self-employment tax. The Tax Court’s orders and decisions were affirmed. View "Soroban Capital Partners LP v. Commissioner of Internal Revenue" on Justia Law

A Delaware corporation specializing in data analytics software was acquired in December 2023 through a merger valued at $48.25 per share, totaling approximately $4.4 billion. The merger was orchestrated by funds affiliated with Insight Venture Management, LLC and Clearlake Capital Group, L.P. Prior to the merger, the company’s controlling stockholder held significant voting power through legacy Class B shares. The board formed a special committee to oversee the sales process, which involved multiple bidders and was influenced by disappointing financial results and market conditions. Ultimately, the merger was approved by a significant majority of stockholders, with the controlling stockholder not receiving any special consideration.The plaintiffs, representing a putative class, initiated litigation in the Delaware Court of Chancery, alleging breaches of fiduciary duty against the board, the controlling stockholder, the chief legal officer, and a claim for aiding and abetting against Insight Venture Management, LLC. The defendants moved to dismiss under Rule 12(b)(6), arguing that the merger was approved by a fully informed, uncoerced stockholder vote, invoking the protections of Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015).The Court of Chancery granted the motion to dismiss. It held that none of the alleged disclosure deficiencies raised by the plaintiffs were material, and the stockholder vote was both fully informed and uncoerced. Under Corwin, this vote cleansed the transaction, and the business judgment rule insulated the merger from attacks other than waste, which was not claimed. As a result, all counts—including breach of fiduciary duty and aiding and abetting—were dismissed. View "Wisconsin Laborers' Pension Fund v. Joshi" on Justia Law