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New Cases of Interest - February 18, 2014
Asahi Kasei Pharm Corp. v. Actelion Limited (2013) 222 Cal.App.4th 945. This case bears strong resemblance to Hong v. CJ CGV America Holdings, Inc. (2013) 222 Cal.App.4th 240, reported on in my earlier memo of February 11, 2014. A drug called Fasudil was originally formulated and found to be effective for use in a particular type of stroke. Plaintiff secured regulatory approval to use the drug in China, and also acted to protect the intellectual property rights it held in the pharmaceutical. Asahi considered that development of Fasudil for additional medical uses could be commercially attractive, but only if done expeditiously.
In order to gain regulatory approval for new medical uses, Plaintiff entered into a license agreement with CoTherix.
Defendant marketed another pharmaceutical called Tracleer. Defendant acquired CoTherix. Plaintiff contended that defendant acquired CoTherix specifically because it saw Fasudil as a significant threat to its market dominance with Tracleer, and thereafter used unlawful methods to stop the development of Fasudil, thereby interfering with the license agreement. The Court of Appeal held that the jury was properly instructed that corporate officers and executives are not immune from liability for interfering with a subsidiary's contractual obligations merely because they have an economic interest, and can assert only a qualified privilege with respect to any allegation of interference. In this case, substantial evidence supported the finding that each executive had actively participated in tortious conduct resulting in personal liability with respect to those executive officers.
Hui v. Sturbaum (2014) 222 Cal.App.4th 1109. This is a SLAPP case in which a chiropractor sued a claims investigator for defamation, claiming that that investigator had made false statements to a personal injury lawyer's assistant about services performed by the chiropractor. The investigator's SLAPP motion was granted which the Court of Appeal affirmed. The Court of Appeal held that the chiropractor could not establish a probability of prevailing because the common interest privilege in Civil Code §47(c) protected the investigator's statements to the personal injury lawyer's assistant. The investigator's insurance company employer shared a business relationship with that lawyer. Both the investigator and the lawyer shared a common interest in resolving the claim, and the investigator's comments were reasonably calculated to further that interest. The court also found that the chiropractor had not presented any evidence of malice.
Optional Capital, Inc. v. DAS Corporation (2014) 222 Cal.App.4th 1388. Plaintiff filed a complaint seeking judgment based on conversion and fraudulent transfer, and alleged that defendant in conspiring with other parties converted the funds of plaintiff. Defendant filed a SLAPP motion contending that the claim arose from the settlement of litigation which was protected activity within the SLAPP statute. The Court of Appeal found that the SLAPP statute did not apply, and that Plaintiff's claims did not arise from protected activity. Plaintiff was not suing the Defendant for settling its dispute with other parties. Rather, plaintiff was seeking to recover monies which had been looted from it and wrongfully obtained from the defendant. The only connection with the settlement was that the settlement was used as a device that permitted the defendant to persuade the Swiss government which held funds to release those funds, thereby depriving the plaintiff of funds necessary to satisfy plaintiff's judgment. Plaintiff also was able to establish a reasonable probability of prevailing on the merits because it could trace the funds which had been taken from it. The litigation privilege also did not apply in Civil Code §47(b) because plaintiff alleged an independent, noncommunicative wrongful act, the defendant's conspiracy with other parties to take control over funds in which plaintiff had a judgment lien.
Tourgeman v. Nelson & Kennard (2014) 222 Cal.App.4th 1447. A consumer brought an action alleging unlawful, unfair and fraudulent debt collection practices and sought injunctive relief. He voluntarily dismissed that action after a SLAPP motion was filed by the defendant. The trial court awarded attorney's fees and costs to the defendant. The Court of Appeal reversed the award of the trial court finding that the attorney's fees and costs award was in error because the action was exempt from application of the SLAPP statute under the public interest exception, CCP §425.17(b) and concluded that the defendant's SLAPP motion would not have been successful. The voluntary dismissal did not provide a basis for a fee award because the trial court was required to rule on the merits of the SLAPP motion in making a prevailing party determination.