On September 6, 2024, Mandelbaum Barrett filed a second amended complaint (the “Complaint”) on behalf of its client CC Ford Group West, LLC (“CC Ford”), a medical communications agency based in New Jersey. The Complaint was filed in federal court in Trenton, New Jersey (Civil Action No. 3:22-cv-04143). The Complaint added as additional defendants PharmaEssentia Corp. (TPEx: 6446) (“PharmaEssentia”), the largest publicly traded biopharmaceutical company in Taiwan, and its former President of the Americas. PharmaEssentia’s largest stakeholder is the Taiwanese government.
The Complaint alleges that defendants engaged in a conspiracy to commit, and committed, a pattern of racketeering activities (“RICO”), plus theft of trade secrets, computer fraud and abuse, tortious interference, unfair competition, breaches of the duty of loyalty and breaches of contract.
The lawsuit alleges that the conspiracy occurred around the same time that PharmaEssentia was obtaining FDA approval to take its first drug, BESREMi, to market in the U.S., and that PharmaEssentia’s then U.S. President, responsible for BESREMi’s launch and commercialization success in the United States, colluded with her close personal friend and then long term CC Ford Managing Director, and a pharmaceutical regulatory/legal consultant working for PharmaEssentia, in an illegal plot to fund a new start-up company, Project Velocity, Inc. (“Project Velocity”), as well as steal CC Ford’s clients.
The plot, allegedly condoned by PharmaEssentia, included at least two other CC Ford employees who were surreptitiously performing work for PharmaEssentia while still working at CC Ford. According to the Complaint, the employees also accessed CC Ford’s computers to steal its trade secrets and confidential and proprietary information, including strategy and pricing documents, and CC Ford’s Managing Director downloaded to a hard drive over 600 confidential CC Ford files when she ended her employment there for the purpose of saving her new, fledgling company time and money and stealing business that otherwise would have been performed by CC Ford.
The Complaint also asserts that Project Velocity was formed knowing that PharmaEssentia would fund the new, start-up venture with millions of dollars despite PharmaEssentia’s then President knowing that these former CC Ford employees had confidentiality and non-compete agreements with CC Ford and owed CC Ford a duty of undivided loyalty. In the first year alone, PharmaEssentia is alleged to have paid $5 million to Project Velocity and, during their relationship, approximately $10 million in total. The Complaint further alleges that this start-up company and the other defendants conducted its affairs through a pattern of racketeering activities and that this enabled Project Velocity to go after various CC Ford clients, in addition to PharmaEssentia, and caused CC Ford tremendous financial harm. With liquidated and/or treble damages and counsel fees, the damages could approach $100 million. PharmaEssentia has since fired its President and General Counsel, along with various other executives in the U.S. and has terminated its relationship with Project Velocity.
CC Ford is represented by Steven I. Adler, co-Chair of Mandelbaum Barrett’s Litigation and Healthcare Litigation Departments. Mandelbaum Barrett is a full-service law firm headquartered in Roseland, N.J.