Justices Reject Biolitec's $70M Contempt Appeal By Dani Kass
Law360, New York (November 30, 2015, 3:23 PM ET) -- The Supreme Court on Monday turned away Biolitec AG’s challenge to a $70 million contempt penalty and an arrest warrant for its CEO for going through with a merger expressly forbidden by a lower court’s order.
The German medical laser maker had argued in its petition that the case presented a rare opportunity for the high court to address the differences between civil and criminal contempt. The First Circuit had affirmed the sanctions, including the arrest warrant for Wolfgang Neuberger, in March.
Biolitec had asked the justices to review the decision, claiming that the First Circuit virtually eliminated the distinction between punitive criminal sanctions and coercive civil sanctions when it affirmed the lower court’s sanctions.
AngioDynamics claimed in its Oct. 16 brief that the First Circuit followed decades of legal precedent with its ruling, as Biolitec could reverse the penalties by simply undoing the merger.
“We believe the Supreme Court’s denial of certiorari reflects its agreement with AngioDynamics that the District Court and the Court of Appeals, in their thoroughly-researched and well-reasoned opinions in this case, correctly applied long-standing precedent," William E. Reynolds of Nixon Peabody LLP, who represents AngioDynamics, said in an email.
The petition was the latest chapter in a case that dates to 2009, when AngioDynamics first sued Biolitec for allegedly failing to indemnify it in two patent infringement suits over a laser treatment for varicose veins that Biolitec licensed to the company.
Afraid it wouldn’t be able to enforce a potential judgment if Biolitec completed a planned merger with a subsidiary and moved from Germany to Austria, AngioDynamics filed for a preliminary injunction, which the court granted.
Despite a pending appeal of the injunction, Biolitec completed the merger, prompting the Massachusetts court to authorize the fines against Biolitec and the arrest warrant for Neuberger. The escalating fines ballooned at one point to $160 million, but were later capped at $70 million. In a separate decision, the First Circuit upheld the lower court's ruling that Biolitec pay AngioDynamics a $75 million judgment in the underlying case.
AngioDynamics argued last month that Biolitec disregarded the lower court’s finding that the merger posed a “likelihood of harm” before it occurred and its determination that AngioDynamics was “seriously harmed” after the deal’s completion, as it complicated the company’s efforts to enforce judgments.
Counsel for Biolitec didn’t immediately respond to requests for comment Monday.
Biolitec is represented by Michael K. Callan of Doherty Wallace Pillsbury & Murphy PC and Edward Griffith of the Griffith Firm.
AngioDynamics is represented by William E. Reynolds of Nixon Peabody LLP.
The case is Biolitec AG, et al. v. AngioDynamics, Inc., case number 15-69, in the Supreme Court of the United States.
— Additional reporting by Matthew Bultman and Kevin Penton. Editing by Ben Guilfoy.
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