State of N.Y. ex. rel. Cavallino Consulting, LLC v Stryker Corp.

State of N.Y. ex. rel. Cavallino Consulting, LLC v Stryker Corp. 2021 NY Slip Op 07500 Decided on December 28, 2021 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered: December 28, 2021
Before: Kern, J.P., Moulton, Mendez, Shulman, Higgitt, JJ.
Index No. 100825/18 Appeal No. 14911 Case No. 2020-04561

[*1]State of New York ex rel. Cavallino Consulting, LLC, et al., Plaintiffs-Appellants,

v

Stryker Corporation etc., et al., Defendants-Respondents.

Morrison Cohen LLP, New York (David A. Piedra of counsel), for appellants.

Gibbons P.C., New York (Daniel S. Weinberger of counsel), for respondents.

Order, Supreme Court, New York County (James E. D'Auguste, J.), entered on or about May 1, 2020, which granted defendants' motion to dismiss the complaint, unanimously affirmed, without costs.

The contract between these sophisticated parties is ambiguous as to whether "shipping costs" refers to the actual amount paid by defendants or the amount they charged based on the standard list prices for shipping by various carriers (see Ashwood Capital, Inc. v OTG Mgt., Inc., 99 AD3d 1, 7 [1st Dept 2012]).

As defendants were therefore acting according to a reasonable interpretation of their legal obligations, relator cannot show scienter for purpose of the False Claims Act (Finance Law § 188 et seq.) (United States ex rel. Purcell v MWI Corp., 807 F3d 281, 287-288 [DC Cir 2015], cert denied __ US __, 137 S Ct 625 [2017]).

As relator cannot state a cause of action under the False Claims Act, the court

correctly dismissed the complaint without leave to replead.THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: December 28, 2021