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Rosas v. Valeant Pharmaceuticals International

May 12, 2010

RODOLFO GONZALEZ ROSAS AND JACK ANDRES BLUM GABRIEL, PLAINTIFFS,
v.
VALEANT PHARMACEUTICALS INTERNATIONAL, DEFENDANT.



The opinion of the court was delivered by: Andrew J. Guilford United States District Judge

ORDER DENYING MOTION FOR SUMMARY JUDGMENT

In this case, Plaintiffs Rodolfo Gonzalez Rosas ("Rosas") and Jack Andres Blum Gabriel ("Blum") seek to hold Defendant Valeant Pharmaceuticals International ("Defendant") liable under a malicious prosecution theory for instigating criminal action against them in Mexico. Defendant filed a Motion for Summary Judgment ("Motion"), which the Court DENIES.

BACKGROUND

In this Motion, Defendant argues that it is entitled to summary judgment for two reasons. First, it argues that its subsidiaries, not it, are the entities responsible for instigating criminal action against Rosas and Blum (collectively "Plaintiffs"), and that it is not liable for the acts of its subsidiaries. Second, it argues that Plaintiffs cannot prove the elements of malicious prosecution.

The following facts are taken from the evidence submitted by the parties and are viewed in the light most favorable to Plaintiffs. These facts are stated here only to give background information on the facts of the case and the parties' arguments, and the facts relevant to the Motion are discussed in greater detail in the Court's analysis.

Defendant is an international corporation with "international commercial facilities" in many continents. (Castillo Decl., Ex. 28.) Two of its subsidiaries in Mexico were Laboratorios Grossman, S.A. ("Grossman") and Valeant Farmaceutica, S.A. de C.V. ("Farmaceutica") (collectively "Mexican Subsidiaries"). (Blott Decl. ¶ 2.)

Grossman hired Blum to be its Director of Commerce. (Blum Depo. 51:14-52:14.) One of Blum's duties was to solicit potential advertising companies and present them to his boss at Grossman, Martin Mercer ("Mercer"), who would make the ultimate decision on which advertising companies to hire. (Blum Depo. 76:5-77:21; 83:22-84:6.)

One such advertising company was Mercadeo Inteligente ("Mercadeo"), a company that Rosas helped start and partially owned. (Rosas Depo. 25:16-20.) Blum presented Mercadeo to Mercer, who hired Mercadeo to provide advertising services to Grossman. (Blum Depo. 76:5-77:21; 83:22-84:6.) Grossman and Mercadeo entered into a one-year agreement for such services. (Rosas Depo. 14:12-14.)

The parties worked well together at first. Mercer testified that he was happy with the work Blum and Mercadeo were doing for Grossman. (Mercer Depo. 79:7-11.) But after awhile, things worsened. According to Plaintiffs, Blum testified that he "was called in and advised that he had violated the Valeant Code of Conduct because of his friendship with Rosas, and he was terminated." (Opp'n 3:2-4 (citing Blum Depo. 7:22-24).) Defendant's testimony differs slightly. Mercer testified that auditors from Grossman determined that Blum was "invoicing in excess of reasonable market value," and then Blum left the company. (Mercer Depo. 45:7-10.) Regardless of the differing testimony, the parties agree that Blum stopped working for the Grossman and signed a severance agreement releasing the Mexican Subsidiaries and "Valeant Pharmaceuticals Internationals [sic], Inc." from certain liabilities relating to Blum's employment. (Castillo Decl., Ex. 20.)

Then the action moved to the Mexican courts. Mercadeo filed a civil lawsuit against Grossman to recover compensation for alleged unpaid services. (Marquez Decl. ¶ 1.) Around the same time, Grossman and Farmaceutica filed civil lawsuits against Mercadeo seeking to recover the amount it had paid for services that Mercadeo allegedly didn't perform. (Marquez Decl. ¶¶ 2-3.) Mercadeo succeeded in its lawsuit, which resulted in a "finding that Mercadeo did perform the works requested and received in conformity therewith by [Farmaceutica] y Grossman." (Marquez Decl. ¶ 1 (emphasis removed).) The Court notes that the Marquez declaration uses the Spanish word "y" in place of the English word "and," but finds that un poquito de español is okay here.

Shortly after the civil lawsuits were filed, the Mexican Subsidiaries filed a criminal accusation of fraud against Plaintiffs. (Marquez Decl. ¶ 4.) The legal action was done by Edgar Medrano ("Medrano"), who was "the only one who did not report functionally to [Mercer]," and instead "received his instructions from legal counsel corporate." (Mercer Depo. 66:21-67:2.)

An arrest warrant issued against Plaintiffs, but Plaintiffs fled and became fugitives instead of submitting to arrest. (Opp'n 6:8-12.) Plaintiffs "petitioned the Mexican Federal Courts for protection[, and] the Mexican Federal Courts held that the arrest warrant lacked grounds and violated the Mexican Constitution." (Opp'n 6:10-12.)

The criminal complaint against Plaintiffs was ultimately dismissed. Plaintiffs then filed this lawsuit, alleging that Defendant committed malicious prosecution by instigating the criminal complaint. Defendant now moves for summary judgment.

PRELIMINARY MATTERS

To support its Motion, Defendant has submitted three evidentiary objections. The Court does not rely on the evidence under objection, so the ...


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