Medical device company Lanx Inc. lost a bid to have 1 of at least 2 breach-of-contract lawsuits filed against it by competitor NuVasive (NSDQ:NUVA) thrown out.
The Delaware Chancery Court denied a Lanx motion to dismiss the suit accusing it of raiding NuVasive’s sales force and poaching a surgeon consultant. A separate lawsuit filed in the U.S. District Court for Southern Texas makes similar allegations against Lanx and several named defendants, but the Delaware case names only Lanx.
That was the basis for the dismissal motion (Delaware’s chancery court rules allow defendants to move for dismissal for failure to "join an indispensable party"). But vice chancellor Sam Glasscock III denied the motion, ruling that the sales reps and surgeon in question aren’t indispensable to the case.
"The plaintiff seeks injunctive relief, as well as damages. Because that injunctive relief may affect interests of the plaintiff’s former employees, they are necessary parties to this litigation. Because in equity I may take the plaintiff’s former employees’ interests into account when considering whether to grant injunctive relief as well as the scope of any such relief, I find that the plaintiff’s former employees are not indispensable to this litigation, and the Defendant’s motion to dismiss or stay is, accordingly, denied," Glasscock wrote.
In the Texas lawsuit, filed in March, NuVasive sued 2 former sales executives, James Greene and William Vanlandingham, who jumped ship for Lanx, accusing them of violating non-compete agreements.
"On or around October, 2011, Lanx began a raid on NuVasive employees across
the country," according to the lawsuit. "This raid started in western New York, where 5 NuVasive salespeople left NuVasive to work for Lanx, and a top consulting surgeon for NuVasive announced that he had become a consultant for Lanx. Two months later, 3 top California directors and managers were recruited from NuVasive to work for Lanx. After learning of Lanx’s raid on its California employees, NuVasive sent Lanx a cease and desist letter. Lanx responded dismissively, and continued to raid NuVasive employees."
"[I]n late 2011 and early 2012, Lanx targeted NuVasive’s Texas workforce, and started recruiting Mr. Greene, Mr. Vanlandingham, and others, to join the company," according to the lawsuit, which seeks legal fees, injunctions barring further contract breaches, damages, punitive damages, and pre- and post-judgment interest.