The Legal Intelligencer LI Top Verdicts 2015 June 21, 2016 : Page 5

VerdictSearch’s Top PA Verdicts of 2015 • 5 > Continued from Page 3 The case had been scheduled to go to trial in June. In a prepared statement, FTC chairwoman Edith Ramirez said, “Today’s landmark settlement is an important step in the FTC’s ongoing effort to protect consumers from anti-competitive pay-for-delay settlements, which burden patients, American businesses and taxpayers with billions of dollars in higher prescription drug costs. Requiring wrongdoers to give up their ill-gotten gains is an important deterrent.” Goldberg had ruled on the issue of whether the FTC would be able to go after six years of profits by pursuing disgorgement—it could, he ruled. When the FTC filed its suit in 2008, it had initially only sought injunctive relief to keep Cephalon from enforcing the settlements and making new ones in the future. But, following Goldberg’s 2011 finding in a related case that Cephalon’s patent for the active ingredient in Provigil was invalid, and the entry into the market of a generic version of the drug a year later, the FTC was prompted to change course and pursue disgorgement, according to Goldberg’s opinion on that issue. “The FTC persuasively argues that the finding that Cephalon procured its patent by fraud as well as the entry of generic Provigil into the market in 2012 are ‘dramatic changes in circumstances since it brought its case’ and necessitate a change in the relief requested,” Goldberg said. Cephalon had objected to the change, making several arguments, primarily that the section of the FTC Act under which the case was brought doesn’t allow the commission to seek equitable monetary relief. That didn’t persuade the judge; he ruled the FTC would be allowed to pursue disgorgement. The question of how disgorgement should be used has not had a unified answer from the five commissioners of the FTC—three Democrats and two Republicans. Although all five voted to accept this settlement and to use disgorgement as a remedy, the two Republican commissioners wrote a separate statement. “Notwithstanding our support for obtaining disgorgement in this case, we continue to have significant concerns about the commission’s use of this powerful remedial tool without commission guidance about when it will seek this remedy,” Commissioners Maureen Ohlhausen and Joshua Wright said in their statement, calling for guidance from the FTC for the firms that it regulates on when it will seek disgorgement in antitrust cases. — The Legal Intelligencer Plaintiff Attorneys: • Kimberly A. Brown, Thomas S. Jones, Margaret C. Gleason, Kevin C. Meacham, Jones Day; Pittsburgh, PA, for Steven Savor Defense Attorneys: • Thomas R. Ajamie; Ajamie LLP; Houston, TX, for M/A-Com Inc., Tyco Electronics Corp., M/A-Com Tech Holdings Inc. • Angelica R. Shepard; K&L Gates LLP; Pittsburgh, PA, for M/A-Com Inc., Tyco Electronics Corp., M/A-Com Tech Holdings Inc. Facts: On March 30, 2001, plaintiff Steven Savor, CEO of Com-Net Critical Communications Inc., agreed to allow the company to be acquired for $280 million by Tyco Acquisition Corp. XVIII, through a stock-purchase agreement. At the time, Com-Net’s subsidiary was in the process of building and maintaining a statewide law-enforcement radio system for the State of Florida. The system was scheduled to be completed within three years and would enable the state’s law enforcement and public safety officials to communicate with each other throughout the state. When Tyco purchased Com-Net, it agreed to pay for the stock in three ways: a $180 million payment on the day the deal closed, a $20 million payment on the first anniversary of the deal, and a $100 million payment (later reduced by agreement to $80 million) when the Florida system was completed, with a possible reduction for any overspend if the project cost more than $124 million to complete. According to Savor, who was the appointed representative for Com-Net shareholders, Tyco agreed to pay $280 million for all of Com-Net’s stock, but payment of $80 million of the purchase price was deferred until completion of the Florida communications system. The closing on the sale of the Com-Net stock to Tyco occurred on May 14, 2001. At that time, Tyco and its subsidiary, M/A-Com Inc., became responsible for completing the Florida communications system. Tyco Electronic Corp. issued a guaranty for the payments and other obligations owed to the Com-Net shareholders under the stock-purchase agreement. Savor, however, claimed that Tyco refused to pay the $80 million owed to Com-Net-former shareholders under the stock-purchase agreement. He asserted that certain costs, including the costs for 30 additional radio-frequency tower sites, could not be included in the overspend calculation, because Tyco had failed to obtain his consent prior to adding them to the system. Savor sued Tyco, M/A-Com, and Tyco Electronic Corp., alleging that the companies were negligent in breach of the stock purchase agreement and a separate guaranty. (Savor also sued the companies on claims of fraud and negligent misrepresentation, but those claims were dismissed, prior to trial.) Savor’s expert in radio engineering, who evaluated what had occurred during the buildout of the system under Tyco, testified about the changes, defects, and mismanagement. According to M/A-Com and Tyco’s counsel, although Com-Net had initially estimated it would take 134 radio-frequency tower sites to meet the required 98 percent coverage, Com-Net had agreed in its contract with the State of Florida to provide as many radio-frequency sites as needed to meet the coverage commitment. Before the stock-purchase agreement was signed, Com-Net learned its initial estimate of 134 radio-frequency tower CONTRACTS Com-Net Claimed Tyco Owed It Millions Under Buyout Terms Amount: $125,751,232.88 Type: Decision-Plaintiff Venue: Allegheny County Court of Common Pleas Case Type: -Fraud, Misrepresentation, Breach of Contract Case Name: Steven Savor, individually and as attorney-in-fact for and shareholders’ representatives of the former shareholders of Com-Net Critical Communications Inc. v. M/A-Com Tech Holdings Inc. f/k/a Tyco Acquisitions Corp. XVIII, M/A-Com Inc., and Tyco Electronics Corp. Inc., Date: July 13, 2015 Court and Case Number: C.P. Allegheny, No. GD-06-008926 Continued on Page 7 > ONLY 40 $ Philadelphia County Only. PROCESS SERVER IN PHILADELPHIA AND NATIONWIDE! THE FASTEST Find out what our thousands of clients nationwide already know. No one does it faster, better or cheaper. That is why we are the fastest growing process serving company in the country. Local, national and international service Foreign/Out of State Subpoenas Document Retrieval & Skip-tracing 421 N. 7th St. Phila., PA. 19123 | 866-331-4220 | www.heavensentlegal.com

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