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Tortious Interference: Albany Molecular Research Inc. v. Schloemer

U.S. District Court, NDNY

Tortious Interference

Fiduciary Duties — Consultants

Albany Molecular Research Inc. v. Schloemer
Judge Kahn

Background: On Jan. 8, plaintiff Albany Molecular Research Inc., a Delaware corporation with a principal place of business in Albany, N.Y., filed this action in the State of New York Supreme Court. AMRI’s complaint asserts four causes of action against defendant George C. Schloemer: 1) breach of fiduciary duty; 2) fraudulent omissions; 3) tortious interference with a contract; and 4) tortious interference with prospective economic relations. The case was moved to federal court based on diversity jurisdiction (the defendant lives in Florida) and the amount of damages.
The instant dispute centers around a March 14, 2007 contract between AMRI and Clinical Data Inc., and its successor, PGxHealth. The contract required AMRI to provide research synthesis, analysis and batch production of Vilazodone, a chemical product that PGx intends to sell as a new, federally-approved drug for the treatment of depression. According to the complaint, once the development phase was complete, AMRI expected that it would enter into further agreements with PGx to produce Vilazodone on an ongoing basis. In October 2007, PGx hired Schloemer, a chemist consultant, to assist with the development of Vilazodone; unbeknownst to AMRI, Schloemer was simultaneously consulting ScinoPharm Taiwan Ltd., an AMRI competitor. Schloemer’s position with PGx allegedly led him to visit AMRI facilities, speak with AMRI personnel, and keep apprised of AMRI’s progress.
According to the complaint, during these visits and interactions, Schloemer became “privy to AMRI technology and know-how.” The plaintiff alleges that it provided Schloemer access to its facilities and its intellectual property because it “believed that Schloemer was an independent consultant . . . and trusted Schloemer to provide AMRI with honest and unconflicted advice.” The complaint alleges that, instead, Schloemer actively undermined and disparaged AMRI while promoting ScinoPharm to PGx as a more capable, reliable and cost-effective long-term supplier of Vilazodone.

Ruling: Under New York law, “‘[a]n agent cannot be held liable for inducing his principal to breach a contract with a third person, at least where he is acting on behalf of his principal and within the scope of his authority.’” However, the factual allegations are sufficient at this stage of the litigation to state a plausible claim for relief. They indicate that the defendant was working outside the scope of his PGx employment, in furtherance of his and/or ScinoPharm’s interests, with knowledge of the AMRI/PGx contract and with the intent to induce PGx to breach that contract.
Tortious interference with business relations claims involve defendant conduct that was motivated solely by malice or dishonest motives. The plaintiff’s complaint does not allege that the defendant’s actions were motivated solely by malice. In fact, the plaintiff even admits that defendant informed PGx of certain strengths that distinguished AMRI from other competitors including ScinoPharm. The plaintiff instead relies upon allegations that the defendant employed dishonest, unfair or improper means to interfere with a future AMRI/PGx relationship. The court finds that the same allegations supporting one or more of the plaintiff’s other causes of action are sufficient to maintain its tortious interference with business relations claim.
The defendant’s motion to dismiss is granted only to the extent that the plaintiff’s claims for breach of fiduciary duty and fraudulent omission are dismissed.

George F. Carpinello for the plaintiff; J. Michael Naughton for the defendant