Judge grants Patheon $18.5M in fees following win in 'unpleasant and nasty' antitrust lawsuit

By Karen Kidd | Sep 25, 2017

MIAMI — A Florida federal court recently granted pharmaceutical manufacturer Patheon Inc.'s request for approximately $18.5 million in attorneys' fees and defense costs following the company's win in an antitrust lawsuit late last year.

The U.S. District Court for Florida's Southern District approved Patheon's request after it prevailed in a $255 million antitrust lawsuit related to its former joint venture partner, Procaps SA's, according to the court's order and judgment, which were handed down in August. The litigation had been "especially unpleasant and nasty," the court's order said.

"Counsel routinely launched personal attacks against each other, and the motions and memoranda were routinely riddled with insults, allegations of bad faith and unprofessionalism, and, in general, purple prose," the order said.

Neither Procaps' attorneys nor Patheon responded to requests for comment.

The U.S. Court of Appeals for the  11th Circuit upheld a lower court's dismissal in late December of Procaps' $255 million lawsuit, saying that Patheon Inc. had not made its joint venture with Procaps SA anti-competitive when it bought a rival company in the soft-gel capsule business because no actual harm was caused in that acquisition.

Procaps alleged in its 2012 lawsuit, Procaps v. Sobel USA, that Patheon’s acquisition of Banner Pharmacaps Europe BV made a previous collaboration a restraint on trade. The 11th Circuit ruled Procaps hadn't proven the level of harm required under the Sherman Act. 

"We have held that a contract can serve as the basis for a Section 1 claim only if it embodies an agreement to unlawfully restrain trade," the 11th Circuit said in its decision, referring to the Sherman Act. "Were this not the case, contractual partners would potentially be on the hook for any future conduct the other party engages in under color of the contract. Such a rule could dissuade firms from pursuing joint ventures in the first place."

With the end of the lawsuit, "which has generated 1,165 docket entries and an appeal," the district court ruled that Patheon was entitled to attorney’s fees and non-taxable costs under Florida's Deceptive and Unfair Trade Practices Act (FDUTPA), according to the order. 

To reach that conclusion, the district court had to consider whether Patheon’s motions for the fees and costs under that act authorized an award to a prevailing defendant when most of the claim involved the same facts and transactions at issue.

"The issue is whether Procaps, which had an adverse summary judgment entered against it affirmed on appeal, is required to pay fees and costs when its FDUTPA claim is what Procaps deems a so-called 'tag-along' claim - i.e., based mostly (though not entirely) on the same circumstances at issue in its federal Sherman Act antitrust claim (which does not authorize fees and non-taxable costs to Patheon even though it prevailed)," the order said.

In the end, the district court determined that the fees were warranted.

"For more than 4.5 years, Patheon has been defending a lawsuit it should not have needed to defend in the first place," the court said in its opinion.

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