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FCM, LLC Wins Dismissal of Lawsuit by Ortho-Clinical Diagnostics
- Client News
- July 6, 2017
Practices
Paul, Weiss secured the dismissal of a lawsuit against clients FCM, LLC and Mitchell Habib, FCM’s CEO. FCM and Habib were sued by Ortho-Clinical Diagnostics, a healthcare company that had hired FCM as an information technology consultant after Ortho was spun out of Johnson & Johnson. In early 2015, when Ortho became dissatisfied with the IT project, the parties negotiated a settlement that included a release of “known claims.” A few months after the settlement, Ortho brought suit, alleging breach of contract, fraud, negligent misrepresentation, unjust enrichment, tortious interference with prospective economic advantage, and breach of a covenant of good faith and fair dealing.
Judge Naomi Buchwald of the Southern District of New York ordered briefing first on the issue of the settlement release. In September 2016, she granted defendants’ first motion to dismiss in part, finding that the release barred certain claims, but granting plaintiffs leave to file an amended complaint as to other claims. After extensive briefing (including a sur-sur-reply) and a second oral argument, Judge Buchwald dismissed the amended complaint in its entirety with prejudice. Judge Buchwald held, among other things, that FCM had never promised to provide the services that Ortho alleged to have been withheld, that Ortho failed to allege any false statement by FCM or Habib, and that Ortho failed to allege reasonable reliance. Judge Buchwald also rejected Ortho’s argument (raised in its sur-reply) that, if the court rejected Ortho’s interpretation of the settlement, then the settlement would be void for lack of a “meeting of the minds.”
The Paul, Weiss team included litigation partner Aidan Synnott, who argued both motions to dismiss, and counsel Daniel Crane.