BIOPOINT VS CATAPULT SOLUTIONS GROUP: NONCOMPETE CASE OF THE YEAR

Inside job yields a $5,061,444 damage award - ruling pending on $2,503,457 attorneys' fee claim

The largest damage awards in unfair competition cases usually involve some form of trade secret misappropriation, and this one is no exception. The last one I wrote about ($3,640,132 award) provided an interesting insight into the lucrative world of international legal recruiting.

This is not a traditional noncompete case arising out of an employee departure. Rather, it is about an existing Biopoint employee, Leah Attis, feeding information to her fiancé at Catapult, Andrew Dickhaut, who was named as a co-defendant and was found jointly liable on the award.

The Parties

The 29-page Order (attached below) by Judge D. J. Stearns of the Federal District of Massachusetts reads a bit like a novel, and sets the scene as follows:

1. Plaintiff BioPoint is a Massachusetts-based company founded in 2011. BioPoint is a life sciences consulting firm that recruits consultants and short-term labor for pharmaceutical companies, biopharmaceutical companies, and medical device companies.
2. Defendant Catapult is a Texas-based company founded in 2013. Catapult opened a Boston office in 2017. Catapult provides consulting services similar to those of BioPoint, though originally not to the life sciences industry.
3. Defendant Dickhaut is an employee of Catapult. Dickhaut served as the Managing Director of Catapult’s Boston office, which he was hired to open in April of 2017. At the time, Dickhaut was engaged to Leah Attis, a BioPoint employee to whom he is now married.

In a footnote, the Court foreshadowed what was to come:

Attis is not a named defendant in this case but has a starring role in the events giving rise to the litigation. Attis was employed as a business development manager at BioPoint from May of 2015 to December of 2019. She now works in a similar position at Catapult.

The procedural history of the case is complicated, involving both a jury trial on some claims and a bench trial on others. In a nutshell, Biopoint claimed that confidential information supplied by Attis to Dickhaut enabled Catapult to enter the biotech staffing field and make a large number of placements that it otherwise would have never made. In the end, the Court was clearly not pleased with the conduct of Catapult and Dickhaut, and he trebled the damages to arrive at the very large award:

The court also determines that Catapult and Dickhaut’s conduct was unfair and deceptive within the meaning of Chapter 93A. The court further finds that Dickhaut’s collusion with Attis with respect to BioPoint’s trade secrets was knowing and willful. Dickhaut was aware that surreptitiously obtaining BioPoint’s confidential information from Attis was illegal because Attis told him as much.

Dickhaut’s conduct and culpable state of mind is imputable to Catapult as his employer under the long-established principles of vicarious liability. Consequently, BioPoint will be awarded treble damages jointly against both Dickhaut and Catapult.

Because defendants’ conduct violated Chapter 93A, BioPoint is also entitled to reasonable costs and attorneys’ fees.

BioPoint’s total damage award is $5,061,444 ...

The Defendants have appealed, and the appeal will be heard by the United States Court of Appeals for the First Circuit later this year or next. We will keep an eye out for the ruling.

Lessons learned

Pretty obvious - no business law lecture required here.

Otherwise, I will note that there is a reason that cases like this are usually settled, and it is surprising that this one went as far as it did. We do not know, and probably will never know, what the settlement posture of each party was. However, there is evidence that Catapult took a very aggressive approach from the beginning of the litigation, even filing a Counterclaim against Biopoint claiming that by filing the lawsuit, Biopoint caused Catapult to lose its ill-gotten client! That's pretty cheeky, and it's didn't fly with Judge Stearns, who dismissed the claim for lack of evidence.

It also wasn't a good look that after Biopoint fired Attis, Catapult hired her to perform in the same role, as noted in the quoted footnote above: "Attis was employed as a business development manager at BioPoint from May of 2015 to December of 2019. She now works in a similar position at Catapult."

It also did not help that the Court found "affirmative evidence that Catapult executives knew of Dickhaut’s unfair acts," as follows:

The record supports the inference that Catapult executives knew of and yet allowed Dickhaut’s solicitation of confidential information from Attis. See, e.g., Ex. 72 (Dickhaut emailing Salustri that Attis was helping him with the search for a Vedanta placement); Dickhaut Test., Jury Trial Day 3 Tr. at 165-166 (confirming that Dickhaut stated, “I positioned our capability using the Vedanta story and Shire projects I learned from Leah” in a weekly report to Salustri); Salustri Test., Jury Trial Day 4 Tr. at 79 (Catapult executive stating he had no intention to discipline Dickhaut for his actions with respect to BioPoint).

The attached Order is well-written and makes interesting reading for those who want the gory details of this unusual case.