Todd Mortier v. LivaNova USA, Inc., No. 22-2125 (8th Cir. 2023)
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Plaintiff and his colleague secured provisional patents for a medical device and created a new company, Caisson Interventional, LLC. He sold it to LivaNova USA, Inc. in order to develop and bring it to market. When LivaNova shut down the project, he sued. The district court granted summary judgment for LivaNova. Plaintiff appealed, arguing that LivaNova breached section 4.3 of the UPA. The parties dispute the meaning of LivaNova’s obligation to be “consistent with the efforts and level of care and business decisions [LivaNova] and its affiliates employ generally.” Plaintiff emphasized the obligation to act “consistent with” the (1) efforts, (2) levels of care, and (3) business decisions employed in LivaNova’s other projects. LivaNova stressed the authorization to act as it “generally” does.
The Eighth Circuit affirmed. The court explained that evidence that LivaNova treated similarly situated companies differently than it treated Caisson might carry Plaintiff’s claim past summary judgment. But Plaintiff points to no such evidence in the record—Caisson’s particularities undercut Plaintiff’s premise that a “general approach” to its development can be inferred from LivaNova’s other projects. When Plaintiff argued that Caisson was treated differently than other projects, LivaNova presented evidence that Caisson was different than other projects. With only apples-to-oranges comparisons available on this record, Plaintiff cannot establish a “general” approach to developing the unique Caisson device and thus cannot show inconsistency with the UPA’s requirements. In short, the court held that the device did not work well enough to trigger a contractual obligation.
Court Description: [Benton, Author, with Loken and Colloton, Circuit Judges] Civil case - Contracts. Under the parties' Unit Purchase Agreement, defendant did not breach the agreement when it shuttered the operations of plaintiff's company, Caisson, after it ran into significant setbacks in the development of a new medical device; claim that defendant did not meet its contractual obligation to use the level of care and effort it generally used in its business in making this decision was not supported by the record; plaintiff's claim that defendant breached the Agreement by failing to maintain the capital it promised was not supported by the record; arguments regarding implied contract clauses rejected.
This opinion or order relates to an opinion or order originally issued on June 2, 2023.
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