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(RC) 2 Pharma Connect LLC v. Mission Pharmacal Co.

Allegations of NDA's Breach Were Based on Speculation, Rule 11 Sanctions Appropriate

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OPINION AND ORDER Defendant Mission Pharmacal Company (“Defendant” or “Mission”) moves for sanctions pursuant to Federal Rule of Civil Procedure 11, 28 U.S.C. §1927, and the Court’s inherent power against Plaintiff (RC) 2 Pharma Connect, LLC (“Plaintiff” or “(RC) 2″). Dkt. No. 36. Defendant argues that sanctions are appropriate because Plaintiff filed an amended complaint based on allegations it knew to be untrue and then, after Defendant asked Plaintiff to withdraw its complaint, Plaintiff refused to do so, forcing Defendant to make its successful motion to dismiss the action. For the reasons that follow, the motion for sanctions is granted in part and denied in part.1 BACKGROUND Familiarity with the Court’s prior opinion and order dismissing the amended complaint for failure to state a claim for relief is assumed. Dkt. No. 87. The Court states only those facts necessary to resolve the motion for sanctions. (RC) 2 is a pharmaceutical broker that “specializes in sourcing and developing chemicals, pharmaceutical ingredients, and pharmaceutical products in cooperation with manufacturing partners.” Dkt. No. 8 1. Mission is a pharmaceutical company that develops and manufactures pharmaceuticals as a contract partner for third parties. Id. 2. In January and March 2019, the parties entered into two agreements relating to the development of docosanol 10 percent cream, a generic version of a topical medication: a non-disclosure agreement effective January 2019 (“NDA”) and a proposal agreement dated March 13, 2019 and re-executed on May 17, 2019 (“Proposal Agreement”). Id.

29-32, 47-48. The NDA permitted the parties to share confidential information with each other regarding docosanol 10 percent cream, Dkt. No. 8-1 §3(a), (b); the Proposal Agreement required Defendant to perform specified activities to support the development of a formulation and process for the commercial launch of docosanol 10 percent cream and to assist with the submission of an Abbreviated New Drug Application (“ANDA”), id.

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