Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Continuing conspiracy exception did not save cattle genetics company’s monopolization counterclaims, (Sep 24, 2015)

By Jody Coultas, J.D.

Trans Ova Genetics, LC was denied reconsideration of the federal district court in Denver’s dismissal of Sherman Act counterclaims against XY, LLC. The court held that Trans Ova was unable to clearly demonstrate manifest error of law or fact or present newly discovered evidence concerning its previous failure to show that the Sherman Act claims were barred by the statute of limitations (XY, LLC v. Trans Ova Genetics, LC, September 23, 2015, Martinez, W.).

XY is the owner of patented sex-selection technology, which it licensed to cattle genetics company Trans Ova Genetics, LC in April 2004. XY delivered a termination letter to Trans Ova in November 2007, stating that Trans Ova breached the licensing agreement. After XY filed a patent infringement suit against Trans Ova, Trans Ova filed 33 counterclaims against XY and Inguran, LLC.

The court granted XY and third party defendants Inguran summary judgment, holding that Trans Ova was barred by the Sherman Act’s four-year statute of limitations. The alleged injury arose from the November 2007 termination letter, but the counterclaims were not filed until August 2012. Under the “continuing conspiracy” exception to the statute of limitations, which Trans Ova argued applied to this case, the limitations period restarts when a plaintiff is injured anew by a defendant’s independent overt act furthering a conspiracy that began before the limitations period. The exception applies only where there was a new and independent act that was not merely a reaffirmation of a previous act and must inflict a new and accumulating injury. The court found that Trans Ova had identified numerous acts that could be construed as “new and independent,” but concluded that Trans Ova failed to identify a “new and accumulating injury” caused by those acts.

Trans Ova moved for reconsideration, arguing that the court misconstrued its arguments and evidence, particularly the deposition testimony of its damages expert.

A motion to reconsider, according to the court, will be denied unless the moving party clearly demonstrates manifest error of law or fact or presents newly discovered evidence. Courts will not allow parties to revisit issues already addressed or advance arguments that could have been raised in prior briefings.

The court found that Trans Ova failed to show an error of law to support its motion for reconsideration. Trans Ova argued that the court ignored its allegations that the termination letter was not a final act completely destroying Trans Ova’s ability to compete in the relevant markets, and instead was the first in a series of acts “that resulted in XY and Inguran’s ability to cement their monopolies.” The court’s order did not discuss the finality argument because it assumed that the termination letter was not a final act that permanently excluded it from the market, and found that Trans Ova did not show that any subsequent acts caused new injuries. Such a showing was required.

Trans Ova failed to present newly discovered evidence to support its motion for reconsideration, according to the court. For the first time in its motion for reconsideration, Trans Ova alleged “two categories of new and accumulating injury” resulting from XY’s and Inguran’s post-termination letter acts. However, Trans Ova cannot supplement its response in opposition to summary judgment in the guise of a motion for reconsideration, when such arguments should have been included in its prior briefing, the court concluded.

The court also determined that it did not err in misapprehending the testimony of Trans Ova’s expert witness by reading it out of context. Trans Ova argued that the expert’s testimony supported its argument that it was injured by exclusion from two separate markets (the technology and sorting markets), damages from each of which would be roughly the same. The court allegedly misapprehended these statements to mean that the same damages would result under an antitrust theory or a breach of contract theory. Even assuming the testimony was taken out of context, the court did not rely on the testimony as evidence that no new injury had been inflicted. The expert’s testimony did not assist Trans Ova in identifying any particular post-Termination Letter damage as a new and accumulating injury.

The case is No. 13-cv-0876-WJM-NYW.

Attorneys: Daniel Lynn Moffett (Akin, Gump, Strauss, Hauer & Feld, LLP) for XY LLC. Donald E. Lake, III (Lewis Brisbois Bisgaard & Smith, LLP) for Trans Ova Genetics, LC.

Companies: XY, LLC; Trans Ova Genetics, LC; Inguran, LLC

Cases: Antitrust ColoradoNews