Justia Drugs & Biotech Opinion Summaries

The Fourth Corner Credit Union applied for a master account from the Federal Reserve Bank of Kansas City. The Reserve Bank denied the application, effectively crippling the Credit Union’s business operations. The Credit Union sought an injunction requiring the Reserve Bank to issue it a master account. The district court dismissed the action, ruling that the Credit Union’s stated purpose, providing banking services to marijuana-related businesses, violated the Controlled Substances Act. The Tenth Circuit vacated the district court’s order and remanded with instructions to dismiss the amended complaint without prejudice. By remanding with instructions to dismiss the amended complaint without prejudice, the Court’s disposition effectuated the judgment of two of three panel members who would allow the Fourth Corner Credit Union to proceed with its claims. The Court denied the Federal Reserve Bank of Kansas City’s motion to strike the Fourth Corner Credit Union’s reply-brief addenda. View "Fourth Corner Credit Union v. Federal Reserve Bank of Kansas" on Justia Law

Plaintiff filed a shareholder derivative action on behalf of Medtronic, Inc., against current and former directors and officers of Medtronic, and against Medtronic as a nominal defendant. Plaintiff's complaint alleged various bad acts and false and misleading statements stemming from Medtronic's alleged improper promotion to physicians of the "off-label" use of its "Infuse" product. The district court dismissed the action based on a report by a special litigation committee (SLC). The court concluded that defendants' motion to terminate the litigation based on the SLC report could not be construed as a motion under Rule 12(b)(6) nor one arising under Rule 56; the court agreed with the district court and the Eleventh Circuit that the closest fit for a motion to terminate in the Federal Rules was Rule 23.1(c); the proper standard of review was for an abuse of the district court's discretion; the district court did not err in deferring to the SLC under Minnesota's business judgment rule (BJR) where the SLC possessed a disinterested independence, and the SLC's investigative methodologies and procedures were adequate, appropriate, and pursued in good faith; and the district court did not abuse its discretion by denying plaintiff's motion for discovery. Accordingly, the court affirmed the judgment. View "Kokocinski v. Collins, Jr." on Justia Law

The People filed a complaint charging defendants with causing, aiding, and abetting the illegal delivery of marijuana. The trial court granted an injunction barring defendants from further developing or marketing their marijuana delivery app. At issue on appeal is whether Proposition D, L.A. Mun. Code, 45.19.6, which City voters enacted in 2013 to regulate medical marijuana businesses, generally prohibits the delivery of marijuana by vehicles. The court concluded that the City established a likelihood of proving defendants’ app caused, aided, or abetted the violation of Proposition D because, outside of the narrow exception for designated primary caregivers, it prohibits the vehicular delivery of medical marijuana to qualified participants, identification card holders, or primary caregivers in the City. Further, defendants’ opposition to the City’s unfair competition allegations necessarily fails because the City has demonstrated a likelihood of success on its claim that defendants facilitated a violation of Proposition D. In this case, defendants made no showing at all concerning the balance of hardships, much less that the balance tipped sharply in their favor. Accordingly, the court affirmed the trial court's judgment. View "People v. Nestdrop, LLC" on Justia Law

In 2012 Schmidt, a former shareholder in Genaera, a biotechnology company that dissolved in 2009 and liquidated its assets, brought suit on behalf of himself and other former shareholders against the liquidating trustee (Argyce); the Genaera Liquidating Trust; Argyce’s CEO and Genaera’s former CFO; former major Genaera shareholders Xmark and BVF; former Genara directors and officers (D&O defendants); and the purchasers of certain Genaera assets. The complaint alleged that the liquidating trustee and the D&O defendants breached their fiduciary duties by disposing of promising drug technologies in tainted insider deals for far less than their true value and that Xmark and BVF aided and abetted this behavior so that companies they controlled could acquire Genaera’s assets at fire sale prices. Schmidt did not dispute the applicability of the two-year statute of limitations and that he filed suit more than two years after the assets were sold, but argued that the limitations period should be tolled under Pennsylvania’s discovery rule because he could not have been aware of the insider nature of the sales or that the assets were sold for below actual value until he learned the details of the sales, and subsequent market events suggested to him that the assets were quite valuable. The district court dismissed. The Third Circuit reversed in part, stating that it was premature to determine whether Schmidt exercised reasonable diligence. View "Schmidt v. Skolas" on Justia Law

Plaintiff, a former corporate officer, sued defendant, his former employer, for advancement and indemnification in connection with several proceedings that arose out of regulatory and criminal investigations at the defendant corporation following defendant's distribution of oversized morphine sulfate tablets into the market. The dispute centered around whether plaintiff succeeded on the merits of any of the proceedings at issue, thus entitling him to indemnification as a matter of law, or whether additional discovery was required to determine whether plaintiff acted in good faith, in which case he would be entitled to indemnification under the Indemnification Agreement. The court found that plaintiff was not entitled to advancement for the Jail Records Matter; was not entitled to mandatory indemnification for the Criminal Matter or the HHS Exclusion Matter; was entitled to mandatory indemnification for the FDA Consent Decree Matter; and that the evidence relevant to plaintiff's claims for permissive identification was limited to plaintiff's conduct, and the facts related to that conduct, underlying the proceedings for which indemnification was sought.View "Hermelin v. K-V Pharmaceutical Co." on Justia Law

This action arose out of a dispute between two companies involved in the development of pharmaceuticals. Plaintiff was a biodefense company engaged in the development and commercialization of medical countermeasures against biological and chemical weapons and defendant was also a biodefense company that concentrated on the discovery and development of oral antiviral and antibacterial drugs to treat, prevent, and complement vaccines for high-threat biowarfare agents. The court rejected plaintiff's claim that defendant breached a binding license agreement, but found that defendant did breach its obligations to negotiate in good faith and that defendant was liable to plaintiff under the doctrine of promissory estoppel. The court rejected defendant's claim that plaintiff breached its obligation to negotiate in good faith. The court denied plaintiff's claims for specific performance of a license agreement with the terms set forth in the time sheet or, alternatively, for a lump sum award of its expectation damages. The court concluded, however, that plaintiff was entitled to share in any profits relied on from the sale of the drug in question, after an adjustment for the upfront payments it likely would have had to make had the parties negotiated in good faith a license agreement in accordance with the terms of the term sheet. In addition, plaintiff was entitled to recover from defendant a portion of the attorneys' fees and expenses plaintiff incurred in pursuing the action.View "PharmAthene, Inc. v. SIGA Technologies, Inc." on Justia Law

The companies are direct competitors in importing and distributing pharmaceutical ingredients manufactured in China. Plaintiff claimed that defendant intentionally interfered with one of its contracts and sought damages. In court-ordered settlement negotiations, plaintiff demanded $675,000. Defendant made a counter-offer, demanding that plaintiff pay it $444,444.44 in order to settle the case and avoid a motion for sanctions and a suit for malicious prosecution. The court noted that the peculiar amount was due to the fact that the number four is considered an unlucky number in Chinese culture because it is homophonous with the Chinese word for death, but concluded that it was not a death threat and declined to impose sanctions. The court later entered summary judgment for defendant. The First Circuit affirmed the court's refusal to impose sanctions under FRCP 11. Plaintiff's claims were not patently frivolous. View "CQ Int'l Co., Inc. v. Rochem Int'l, Inc., USA" on Justia Law