A federal judge in California rejected a bid by NuVasive (NSDQ:NUVA) to overturn its $28 million loss in a sales poaching lawsuit with 1 of its distributors.
Earlier this year a jury in the U.S. District Court for Southern California awarded $41.8 million to Nevada-based distributor Madsen Medical, which had sued San Diego-based NuVasive in September 2013, after being fired in 2012.
Owner Kris Madsen alleged that NuVasive breached its contract when it lured 6 Madsen Medical reps to sell directly to their former Madsen clients, according to court documents. (Judge Barry Ted Moskowitz later cut the award to $27.8 million, cutting $14 million in damages for unjust enrichment, according to court documents.)
NuVasive moved for judgment as a matter of law, arguing that the jury’s lost profits award should have been limited to the profits lost when 3 reps moved from Madsen to NuVasive. Moskowitz disagreed, ruling that there was sufficient evidence for the jury to decide that NuVasive’s intentional interference was an essential component of its plan to spike the deal with Madsen and take over its customers, and that NuVasive wouldn’t have spiked the deal at all if it wasn’t sure that the Madsen reps would jump ship.
“In other words, there was a legally sufficient basis for the jury to conclude that NuVasive’s intentional interference with the sales representatives’ contracts caused the termination of the [distribution agreement],” the judge wrote in the June 7 ruling.
Moskowitz also shot down NuVasive’s argument that damages calculation was flawed, backing the method used by an expert witness for Madsen to calculate profits lost when NuVasive backed out of their deal.
