Biolitec (ETR:BIB) is appealing an arrest warrant for its CEO and the $63 million sanction a Massachusetts federal judge levied against it in a long-running legal dispute with erstwhile partner AngioDynamics (NSDQ:ANGO).

AngioDynamics claimed that Biolitec defied court orders to produce several key witnesses, including Biolitec CEO Wolfgang Neuberger, and effected a so-called "downstream merger" to move its incorporation to Austria to escape jurisdiction in U.S. courts.

Judge Michael Ponsor of the U.S. District Court for Massachusetts in 2012 granted AngioDynamics a preliminary injunction barring Biolitec from carrying out the downstream merger. Neuberger was ordered arrested a year later when Ponsor ruled that Biolitec had failed to comply with his orders after enacting the merger and failing to produce its CEO. Last fall AngioDynamics asked for further sanctions over Biolitec’s alleged refusal to produce 2 other key witnesses.

In January, Ponsor granted an AngioDynamics motion for sanctions, ruling in a strongly worded opinion that Biolitec is liable in the lawsuit.

"Defendants’ primary argument is that Neuberger cannot attend his deposition given the outstanding warrant for his arrest based on the contempt sanction issued against him for proceeding with the Austrian merger in defiance of the court’s preliminary injunction. They argue, in essence, that Neuberger is relieved of any obligation to attend his deposition since the magistrate judge issued an erroneous order, never appealed, that denied his motion for a protective order," Ponsor wrote. "This argument is typical of the looking-glass logic employed by defendants for more than a year now. First, the contention is based entirely on the happenstance that Neuberger is – for the moment, but probably not forever – outside the physical grasp of the court and therefore in a position to defy its orders. If Neuberger were a citizen of the United States, living within the boundaries of this country, he would have long ago been taken into custody and held until he made reasonable efforts to comply with the court’s injunction, or until this court reconsidered, or a higher court reversed, the order holding him in contempt. It is only Neuberger’s own misconduct in defying the injunction and then refusing to appear at the hearing on plaintiff’s motion for contempt – out of fear that he might have to face the consequences of his own gross misconduct – that has placed him in the awkward position he now finds himself."

AngioDynamics subsequently asked for $74.9 million in damages and interest, according to court documents.

Now Biolitec is asking the U.S. Court of Appeals for the 1st Circuit to schedule a hearing on its argument that the "only practical effect of the downstream merger has been to relocate Biolitec AG’s corporate domicile from Germany to Austria."

"The merger that was actually completed on March 15, 2013, however, did not involve the relocation of any German assets out of Germany. The assets were not moved to Austria, as originally proposed, in order to comply with the preliminary injunction’s stated purpose of preserving Germany as a potential jurisdiction in which ADI could attempt to enforce a judgment in this action," according to the documents.

Biolitec also argued that Ponsor "committed distinct errors" in the case, "they all arise from the district court’s disregard or insensitivity for foreign law." And Ponsor exceeded his authority in issuing the arrest warrant for Neuberger, according to Biolitec, "because the sanctions imposed under the contempt order, although mistakenly labeled as ‘civil,’ are, in fact, ‘criminal.’"

AngioDynamics in October 2012 won a $16.5 million award in a separate lawsuit when a judge ruled that Biolitec, which provided laser vein ablation technology to AngioDynamics, failed to defend and indemnify the medical device company in lawsuits filed against it by Biomed and Covidien (NYSE:COV) subsidiary VNUS Medical Technologies. The judge further ruled to deny Biolitec’s request for an interlocutory appeal and ordered his memorandum sealed for 1 year.