United States District Court, E.D. North Carolina, Southern Division
HEALTH & BEAUTY TECHNOLOGIES, INC.; and MEDI-BUILD INTERNATIONAL, CORP., Plaintiffs,
MERZ PHARMA GMBH KGAA; and MERZ NORTH AMERICA, INC., Defendants.
W. FLANAGAN, UNITED STATES DISTRICT JUDGE.
matter comes before the court on plaintiffs' motion to
amend or alter the judgment, pursuant to Federal Rule of
Civil Procedure 59(e). (DE 241). The issues raised have been
fully briefed, and in this posture are ripe for ruling. For
the reasons that follow, plaintiffs' motion is granted in
part and denied in part.
OF THE CASE
initiated this action on June 26, 2017, in the United States
District Court for the Southern District of Florida, alleging
they are owed compensation for providing defendants with
certain confidential and proprietary analysis on acquisition
targets in or around December 6, 2013. On March 23, 2018, the
Southern District of Florida found that it lacked personal
jurisdiction over defendants but transferred the case to this
district pursuant to 28 U.S.C. § 1406(a).
transfer, the court granted plaintiffs' first motion for
leave to amend their complaint. After several attempts to
amend their pleading, the court allowed leave for plaintiffs
to file their second amended complaint on November 28,
2018. Plaintiffs alleged defendants are liable for breach of
contract, unjust enrichment, fraud, and tortious interference
weeks after plaintiffs filed their complaint, defendant Merz
North America, Inc. (“Merz NA”) filed its motion
to dismiss for failure to state a claim upon which relief can
be granted, seeking dismissal of plaintiffs' complaint in
its entirety. Defendant Merz Pharma GMBH KGAA (“Merz
Pharma”) joined defendant Merz NA's motion. On
September 26, 2019, the court granted defendants' motion
to dismiss, holding that each of plaintiffs' causes of
action failed to state a claim upon which relief can be
entry of judgment, plaintiffs timely filed the instant
motion. Plaintiffs do not seek to amend the allegations in
their complaint, and they do not seek to revive their fraud
or tortious interference with contract claims. Plaintiffs
solely ask the court to vacate its judgment to allow their
breach of contract and unjust enrichment claims to proceed.
OF THE FACTS
facts alleged in the complaint may be summarized as follows.
During a conference held from September 18, 2013, to
September 21, 2013, in France, Michael Polakov
(“Polakov”), president of both plaintiffs in this
action, met with Matthew Likens (“Likens”), then
president and chief executive officer of Ulthera, regarding
the possibility of Ulthera being acquired by a pharmaceutical
company. (Compl. ¶¶ 11-13). Likens advised Polakov
that although Ulthera had expressed interest in being
acquired to several companies, no substantive discussions or
active negotiations were ongoing. (Id. ¶¶
13, 15). Thereafter, Likens and Polakov agreed at the
conference that plaintiffs had a nonexclusive engagement to
market Ulthera to potential acquiring companies in the
pharmaceutical companies, and that plaintiffs would be
entitled to a fee commensurate with a standard industry fee
ranging from one to five percent of the acquisition price.
(Id. ¶¶ 14, 16). Likens and Polakov shook
hands to confirm their oral agreement. (Id. ¶
to meeting Likens, plaintiffs had prepared and maintained
extensive confidential and proprietary analysis of the
medical aesthetics industry, including Ulthera, with which
Polakov had maintained a relationship for nearly a decade.
(Id. ¶ 18). Both before and following
discussion with Likens, Polakov performed an extensive
analysis of the synergies and market potential of Ulthera for
prospective acquirers. (Id. ¶¶ 19, 20).
days after Polakov's discussion with Likens, he spoke
with Jean-Yves Coste (“Coste”), the healthcare
director of Michel Dyens & Co. (“Michel
Dyens”), an investment banking company that represents
acquirers within the healthcare and cosmetic medical field.
(Id. ¶ 21). Coste indicated defendant Merz
Pharma was interested in acquiring a company, and together
plaintiffs and Michel Dyens agreed to provide defendants with
various targets for acquisition. (Id. ¶ 22).
Plaintiffs provided Coste with Polakov's detailed
personal opinions, along with proprietary and confidential
analysis, on several acquisition companies, including
Ulthera. (Id. ¶¶ 23, 24).
September 26, 2013, Coste sent his initial email to Hans-Jorg
Bergler (“Bergler”), defendant Merz Pharma's
director of corporate development, providing a profile on
Ulthera and other companies. (Id. ¶ 25). Coste
asked whether he would be interested in meeting with Likens.
(Id.). In October 2013, Ulthera and defendant Merz
Pharma signed a non-disclosure agreement to allow exchange of
information, but no active negotiations with Ulthera occurred
at any time in 2013. (Id. ¶¶ 26, 27).
Coste engaged in further communications with Bergler and
Philip Burchard (“Burchard”), defendant Merz
Pharma's chief executive officer, including an October
30, 2013, email where he again discussed possible target
companies such as Ulthera. (Id. ¶ 28). Bergler
forwarded Coste's email to Michael Parrish
(“Parrish”), an employee of defendant Merz NA
recruited by defendant Merz Pharma to assist in acquisition
efforts, and Parrish encouraged Bergler to go forward with
discussing the target companies with Coste by telephone on
November 8, 2013. (Id. ¶¶ 30-33).
met with defendant Merz Pharma's employees by phone on
November 8, 2013. (Id. ¶¶ 36-37). At
defendant Merz Pharma's request, Coste sent
plaintiffs' private confidential and written material
regarding Ulthera and other potential target companies that
had been discussed. (Id. ¶¶ 38-39).
Bergler then arranged to have Polakov and Coste travel to
defendant Merz Pharma's headquarters in Frankfurt to make
a business presentation and proposal regarding acquiring
companies including Ulthera. (Id. ¶ 40). In
preparation for that meeting, Polakov prepared an extensive
presentation, including previous and new information from
confidential and proprietary sources on each of the
acquisition targets that would be presented to defendants
during the meeting. (Id. ¶ 44).
December 6, 2013, Polakov and Coste met with Bergler and
Parrish, and Polakov provided confidential information and
analysis on each of the target companies. (Id.
¶¶ 45, 48). Defendants allegedly agreed that, in
exchange for information and analysis as well as applicable
merger and acquisition advisory services, plaintiffs would
receive industry standard compensation of between one to five
percent of the acquisition price if defendant or any related
entity purchased any of the target companies. (Id.
¶¶ 48, 57, 61). Plaintiffs allege they were
promised a guaranteed one percent of the purchase price paid
to acquire the target company, with the opportunity for that
percentage to be enhanced up to five percent in accordance
with industry standards, to be paid by defendant Merz NA or
Merz Pharma or both. (Id. ¶¶ 49, 50, 60).
During the meeting, Bergler and Parrish asked specific and
detailed questions about each of the prospective acquisition
targets and expressed concerns that Ulthera was not a good
fit for defendants. (Id. ¶¶ 51, 52). In
response, Polakov gave an extensive and detailed proprietary
presentation about how acquiring Ulthera would be
advantageous to defendants because investing in medical
devices would produce significant returns. (Id.
¶¶ 54, 55). After hearing Polakov's
explanation, Bergler and Parrish stated they had been
educated by Polakov as to these points and would reassess
their views on Ulthera. (Id. ¶ 56).
close of the meeting in December 2013, which Merz entity that
might make the acquisition was unknown, but Bergler and
Parrish acknowledged the insightful and unique points made by
Polakov. (Id. ¶ 58). Plaintiffs allegedly would
undertake merger and acquisition services in connection with
the Merz organization to the extent that defendants or a
related entity went forward with the merger. (Id.