Source: http://www.cisg.law.pace.edu/cases/020821u1.html
Timestamp: 2019-04-21 10:39:22+00:00

Document:
CASE NAME: Geneva Pharmaceuticals Technology Corp v. Barr Laboratories, Inc. et al. / Apothecon, Inc. v. Barr Laboratories, Inc. et al.
The issues before the court included whether the plaintiff's claims of breach of contract, promissory estoppel, negligence and negligent misrepresentation should be dismissed on the ground that there was no genuine issue as to material fact and the alleged seller was entitled to judgment as a matter of law.
The plaintiff, a New Jersey corporation with its place of business in the United States, sought to develop, manufacture and distribute a generic anti-coagulant drug to treat blood clots. To develop the drug, the plaintiff obtained sample amounts of clathrate from defendant, a company with its place of business in Ontario, Canada. The defendant also supplied a reference letter in support of the plaintiff's application to the Federal Drug Administration for approval to manufacture and distribute the anti-coagulant drug. Prior to FDA approval, the defendant concluded an exclusive purchase agreement with a third party. Following FDA approval, plaintiff sent a purchase order to defendant for 750 kg. of clathrate. The defendant did not accept the plaintiff's order and denied that it was obligated to sell calthrate to the plaintiff. The plaintiff sued the defendant, alleging, among other claims, that the defendant had breached a contract, was estopped from rejecting the order, had been negligent and had made negligent misrepresentations. The defendant moved for summary judgment on these claims.
The court concluded that the Convention governed the breach of contract claim. The court found that the plaintiff had alleged facts, including an industry usage that buyers could rely on implied supply commitments, that would support a finding that the plaintiff's initial proposal was an offer (art. 14(1) CISG). Noting that the plaintiff alleged an industry usage that the provision of a reference letter is an acceptance, the court also found that there were sufficient facts to support a finding that the defendant had accepted the offer based on art. 18(3) CISG. The court also found that there was consideration to support the alleged contract and that the contract was therefore not invalid under applicable domestic law pursuant to art. 4(a) CISG. Under the alleged "implied-in-fact" contract, defendant was obligated to supply calthrate if the plaintiff gave it commercially reasonable notice of an order. The court declined to render summary judgment on this claim because there were material facts in dispute.
With respect to the plaintiff's claim under domestic law that it had relied on defendant's promise so that the promise was binding as if it were a contract, the court concluded that this claim was not preempted by the Convention. The court distinguished plaintiff's claim from claims specifically addressed by the Convention (art. 16(2)(b) CISG). The court declined to render summary judgment on this claim because there were material facts in dispute.
With respect to the claims of negligence and negligent misrepresentation, the court concluded that the claims were outside the scope of the Convention. Applying domestic law, the court rendered summary judgment for the defendant on these claims.
Solomon, Zauderer, Ellenhorn, Frischer & Sharp, New York, By Harry Frischer, Esq., Colin Underwood, Esq., Jennifer Scullion, Esq., Of Counsel, for Plaintiff Apothecon, Inc.
Frederick R. Dettmer, Esq., New York, Co-Counsel for Plaintiff Geneva Pharmaceuticals.
Winston & Strawn, Chicago, IL, By Kurt L. Schultz, Esq., Brant C. Weidner, Esq., Jay L. Levine, Esq., John J. Tully, Jr., Esq., Gregory C. Vamos, Esq., Richard A. Duda, Esq., Monika Blacha, Esq., Of Counsel, for Defendant Barr Laboratories.
Lord, Bissell & Brook, Chicago, IL, By Michael J. Gaertner, Esq., David G. Greene, Esq., Douglas M. Chalmers, Esq., John F. Kloecker, Esq., Stacey Y. Dixon, Esq., Of Counsel, for Defendants Brantford Chemicals, Inc., Bernard C. Sherman, Apotex Holdings Inc., Apotex Inc. and Sherman Delaware Inc.
Defendants Barr Laboratories Inc. ("Barr") and Brantford Chemicals Inc. ("Brantford") have moved for reconsideration of portions of this Court's May 10 Opinion, Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc., 201 F.Supp.2d 236 (S.D.N.Y.2002), in which their motion to dismiss the complaint of plaintiff Geneva Pharmaceuticals Inc. ("Geneva"), as successor in interest to Invamed Inc. ("Invamed") pursuant to Rule 56 of the Federal Rules of Civil Procedure was granted in part and denied in part.
For the following reasons, their motions are denied.
The parties and facts discussed herein have been described in greater detail in Geneva, 201 F.Supp.2d 236, familiarity with which is presumed.
"To succeed on a motion for reargument, the moving party must demonstrate that the court overlooked the controlling decisions or factual matters that were placed before the court in the underlying motion." Lopez v. Comm'r of Soc. Sec., 2002 U.S. Dist. LEXIS 5091, *1-*2 (S.D.N.Y. March 27, 2002) (quotations and citations omitted); see also Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir.1995) (motion for reargument "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusion reached by the court").
Rule 6.3 is intended to "ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters." Carolco Pictures, Inc. v. Sirota, 700 F.Supp. 169, 170 (S.D.N.Y.1988) (citation omitted). The parties may not present new facts or theories at this stage. Ralph Oldsmobile Inc. v. General Motors Corp., 2001 WL 55729, at *2 (S.D.N.Y. Jan. 23, 2001) (striking affidavit that was filed in support of motion to reconsider without court's permission); Primavera Familienstifung v. Askin, 137 F.Supp.2d 438, 442 (S.D.N.Y.2001) (party may not "advance new facts, issues or arguments not previously presented to the Court") (quoting Morse/Diesel Inc. v. Fidelity & Deposit Co. of Md., 768 F.Supp. 115, 116 (S.D.N.Y.1991)).
Rule 6.3 must be narrowly construed and strictly applied so as to avoid duplicative rulings on previously considered issues, and may not be employed as a substitute for appealing a final judgment. Lopez, 2002 U.S. Dist. LEXIS 5091, at *3; Shamis v. Ambassador Factors, 187 F.R.D. 148, 151 (S.D.N.Y.1999). The decision to grant or deny the motion rests in the discretion of the district court. AT & T Corp. v. Community Network Servs. Inc., 2000 WL 1174992, at *1 (S.D.N.Y. Aug. 18, 2000).
In the May 10 Opinion, the Court granted Barr summary judgment on all claims against it, with the exception of Geneva's tortious interference claims (Counts VIII and IX). Id. at 289-90. Geneva asserted these claims against Barr due to ACIC/Brantford's refusal to supply clathrate to Invamed. In the opinion, Barr's assertion of a privilege defense was rejected because there existed a factual issue with regard to whether the interference constituted an unlawful restraint of trade and thus was not privileged. Id. at 290. Barr now seeks reconsideration, claiming that the Court overlooked controlling authority that equates "restraint of trade" in the tortious interference context with "restraint of trade" under federal and state antitrust laws. Barr argues that because the Court had already concluded that Invamed failed to prove its antitrust allegations against Barr, Barr's actions were privileged.
"Under New Jersey law ... [w]hen a restraint of trade is neither intrinsically unlawful, nor violative of any other law under the circumstances, it must be shown to be wrongful (e.g. violent, fraudulent, deceitful, or threatening) in order to amount to tortious interference." In re Kentile Floors, Inc., 30 F.Supp.2d 427 (S.D.N.Y.1998) (citing EZ Sockets, Inc. v. Brighton-Best Socket Crew Mgf. Inc., 307 N.J.Super. 546, 559 (1996)). Thus, under New Jersey law, interference need not violate the federal or state antitrust laws to be an unlawful restraint of trade; if the actions are "intrinsically unlawful" the interference is not privileged.
"Invamed alleges that Barr arranged for the exclusive supply contract in order to thwart the development of other generic warfarin sodium. Moreover, it alleges that Barr demanded the confidentiality provisions as a means of further delaying Invamed's entry into the generic warfarin sodium market."
Geneva, 201 F.Supp.2d at 290. While these actions may not constitute violations of the federal and state antitrust laws, there is an issue of material fact as to whether those means were "intrinsically unlawful."
(d) his purpose is at least in part to advance his interest in competing with the other."
Rest. (Second) Torts � 768; see also Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 191, 428 N.Y.S.2d 628, 406 N.E.2d 445 (1980) (quoting Restatement); EZ Sockets, 307 N.J.Super. at 559 (quoting Restatement).
However, Comment (f) to Section 768 does not stretch as far as Barr would wish. Barr asserts that Comment (f) "makes clear the reference to 'unlawful restraint of trade' ... means a violation of state or federal antitrust law." Mem. at 4. Yet, the comment no where explicitly asserts that the only means of proving unlawful restraint of trade is to have a federal or state antitrust law violation. It states: "All of this legislation [the federal antitrust laws] ... [is] pertinent to a great number of the cases in which this Section may be applicable." The comment does not say that the legislation is pertinent to all of the cases in which Section 768 is applicable -- a phrase that would implicitly support Barr's arguments. Finally, Barr has failed to cite any New York or New Jersey case law that adopts Comment (f), even if it had the import that Barr claims.
The New York case law is no more helpful. As Geneva points out, the two cases that are cited in support of the proposition prove too little. In both Martin Ice Cream Co. v. Chipwich, 554 F.Supp. 993, 935 (S.D.N.Y.1983) and Six West Retail Acquisition Inc. v. Sony Theatre Mgmt. Corp., 2000 WL 264295, at *32 (S.D.N.Y. March 9, 2000), the courts held that a violation of federal antitrust laws constituted an unlawful restraint of trade and thus were an improper means of interference. The cases did not stand for the proposition that the only means of proving an unlawful restraint of trade was by showing a violation of federal or state antitrust laws.
Barr has failed to present controlling authority that the Court overlooked that would have altered the finding that a question of fact remains as to whether Barr's purported interference was privileged.
Barr's motion to reconsider is denied.
Brantford urges reconsideration of the denial of summary judgment with regard to Geneva's breach of contract and promissory estoppel claims against Brantford, claiming that the Court overlooked controlling decisions and material facts.
Brantford asserts that the Court neglected to discuss the issue of whether Invamed had made a sufficiently definite proposal and that there is no evidence that Brantford breached the purported contract.
Brantford asserts that its motion for reconsideration is appropriate in this instance as the Court failed to consider the element of a sufficiently definite proposal. E.g., Shamis v. Ambassador Factors Corp., 187 F.R.D. 148, 151-52 (S.D.N.Y.1999); see also Building Serv. 32B-J Pension Fund v. Vanderveer Estates Hldg. LLC, 127 F.Supp.2d 490, 494 (S.D.N.Y.2001) (motion to reconsider granted because court noted fact but did not address its legal significance).
The Court clearly addressed and considered the issue of a sufficiently definite proposal, however. First, the Court outlined that Article 14 of the Convention for the International Sale of Goods ("CISG") is comprised of two requirements, one of which is that a proposal must "be 'sufficiently definite' meaning that it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and price." Geneva, 201 F.Supp.2d at 281. The opinion then applied this definition of a sufficiently definite proposal. First, it found that the first element was satisfied as the "alleged contract clearly identifies the goods at issue, clathrate." Id. at 282. Next, it determined that a question of fact existed as to whether the contract implicitly fixed the provision for determining quantity and price by its requirement of a "commercial amount." Id. While the opinion concluded that "the contract was sufficiently definite," id. (emphasis supplied), it is apparent from the foregoing discussion that what was intended was a conclusion that the proposal was sufficiently definite.
Because the Court did consider whether the proposal was sufficiently definite, Brantford cannot base its motion for consideration on this claim.
Brantford also argues that industry custom is insufficient to establish a sufficiently definite proposal under the CISG. Brantford cites to no controlling case law concerning this issue and merely rehashes the same statutory interpretation arguments that the Court considered in determining in the summary judgment opinion that industry custom could establish a sufficiently definite proposal. Id. at 281-82. This motion is an inappropriate venue for Brantford's argument.
Brantford further claims that the breach of contract claim should be dismissed because there is no evidence that it breached the purported contract. In the Opinion, the Court determined that the contract at issue was an implied-in-fact contract for Brantford to supply clathrate to Invamed when given commercially reasonable notice or to inform Invamed that it would not be able to supply clathrate in a commercially reasonable time. Geneva, 201 F. Supp .2d at 284. Thus there was no breach in October 1997 when Brantford refused to supply clathrate as it had not been given commercially reasonably notice pursuant to the contract. Id. However, it was held that the fact that it did refuse to supply any clathrate to Invamed in the future did breach the implied-in-fact contract. Id.
Brantford argues that the Court overlooked the undisputed fact that Brantford never breached this agreement because it claims that after the unsuccessful October rejection of Invamed's clathrate order, Invamed never requested clathrate from it again. The Court did not overlook any facts that would have altered this decision. Brantford cites to an October 20, 1997 letter to Invamed in which it rejected the October 1997 purchase order. After rejecting that order, the letter states, "There is no contract or agreement between Brantford Chemicals Inc. and Invamed Inc. that requires BCI to supply this product to Invamed. ..." A jury could reasonably find that this letter constituted a refusal to supply clathrate to Invamed in the future.
The motion to reconsider the denial of Brantford's motion to dismiss Geneva's breach of contract claim is denied.
Finally, Brantford challenges the Court's denial of its motion to dismiss Geneva's promissory estoppel claim because it claims that the court failed to discuss the issue of whether Geneva relied to its detriment on a promise made by Brantford to supply clathrate to Invamed. Brantford is correct that the opinion does not address that issue although it was briefed by both parties, and it will be addressed now.
To survive summary judgment, Geneva must show that it in fact relied to its detriment on a promise made by ACIC/Brantford to supply clathrate to Invamed. Fischer v. Allied Signal Corp., 974 F.Supp. 797, 809 (D.N.J.1997); see The Malaker Corp. Stockholders Protective Comm. v. First New Jersey Nat'l Bank, 395 A.2d 222, 230 (N.J.Super.Ct.App.Div.1978). Geneva presented a material issue of fact with regard to this element of promissory estoppel in that Invamed on its ANDA cited ACIC/Brantford as its source of clathrate and had received a required DMF reference letter from ACIC/Brantford to complete its ANDA application. The fact that Invamed listed ACIC/Brantford as its source of clathrate in the ANDA application presents an issue of material fact as to whether Invamed relied on ACIC/Brantford's promises to supply clathrate. While the ANDA could have been and eventually was amended, such amendment further delayed Invamed's ability to produce and market generic warfarin sodium.
As a result, Geneva has presented an issue of material fact with regard to whether it relied in fact on ACIC/Brantford's purported promise to supply clathrate, and the claim will not be dismissed on these grounds.
For the foregoing reasons, Barr's and Brantford's motions to reconsider are denied.
1. At the time Geneva alleges the clathrate was to be supplied, it had not yet become a successor in interest to Invamed. This opinion shall refer to the plaintiff as "Geneva" except where it refers to a time when it had not yet become the successor in interest to Invamed.
2. While the parties discussed the issue of whether the means of interference was "wrongful," the issue will not be addressed here as it was not raised in the original summary judgment motion. Geneva argued only that the means of interference was not privileged because it was an unlawful restraint of trade, and that is the only argument that the opinion discussed.
3. Barr refers as "controlling authority" to an opinion from the New York Court of Appeals even though it was determined that the substantive law of New Jersey applies to the tort claims in this case as New Jersey is the situs of the injury. Id. at 287 n. 32. In a footnote, Barr refers to its arguments in its memorandum in support of its motion for summary judgment that New York law should apply as New York is Barr's residence. It does not reargue the point here, however. In any case, as discussed below, the New York Court of Appeals case does not promote Barr's argument.
4. By letter dated July 18, 2002, Geneva moved to strike the first section of Brantford's reply memorandum concerning this issue or, in the alternative, for an opportunity to reply to it. That motion is denied.
5. The FDA requires pharmaceutical companies to identify in the ANDA the supplier(s) they intend to use in manufacturing the product. Materials from a different source can be substituted only upon FDA approval of a supplement or amendment to the ANDA.

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