Miami-based Pillsbury litigators Jennifer Altman and Shani Rivaux won a unique and precedent-setting case in Florida, beginning with a December 28, 2018 appellate court ruling and ending with a judgment for over $370 million on July 3, 2019. The appellate court issued its second reversal of a lower court decision in the long-running litigation. Pillsbury’s clients, including Joe Samuel Bailey and Laserscopic Spinal Centers of America Inc. won disgorgement, compensatory and punitive damages and interest totaling over $370 million. The win dramatically increased the trial court’s original judgment of $1.6 million.
The dispute arose from conduct starting in late 2004 when defendants—including Dr. James St. Louis, Laser Spine Institute and certain entities related to private equity firm EFO Holdings LP—were found to have misappropriated the then cutting-edge business model of minimally invasive spine surgery. An uncommon offering at the time, the business was immediately profitable and was poised for success. During the process of obtaining potential funding, however, certain defendants, while conducting diligence, were found to have conspired with an executive inside the plaintiff to help transfer the value to defendants. The court found defendants hired away Laserscopic’s employees, used Laserscopic's business plan, confidential documents, internal forms and patient leads to launch their business.
At trial, Laserscopic Spinal presented two alternative theories of recovery: destruction of business and disgorgement. The former was $86 million, the latter was $264 million. The trial court found disgorgement was proper but awarded less than $2 million.
The appellate court reversed the damages award, holding that awarded damages were “woefully insufficient.” On remand, the trial court entered the same damages. On the second appeal, the appellate court directed to the trial court to enter the damages sought by Pillsbury’s clients, including $264 million in disgorgement damages and $6.8 million in out of pocket losses. On July 3, 2019, after defendants’ efforts for further appeal failed, the trial court entered a final judgment that, with interest, exceeded $370 million.
“We are thrilled to have achieved this important decision on behalf of our clients after years of tough litigation. Our clients will hopefully have some solace that justice has been served,” Altman said. “The meaningful framework this ruling creates for applying disgorgement to commercial disputes will hopefully help prevent other businesses from suffering a similar fate, or at least serve as a deterrent for those who believe that they can engage in such conduct with impunity.”